Tradeweb Markets (TW) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenues of $448.9 million, up 36.7% year-over-year, driven by strong client activity, market share gains, organic growth, and recent acquisitions including ICD, Yieldbroker, and r8fin.

• Nearly 50% of revenue growth came from outside the core rates business, reflecting successful diversification across asset classes and geographies.

• Net income rose 16.7% to $130.2 million; adjusted net income increased 37.1% to $179.3 million; adjusted EBITDA margin expanded to 53.4%.

• Expanded global presence, including entry into India and a client base of 2,800+ in 70+ countries, with $2.2 trillion ADV in Q3 2024.

• Continued focus on investing in talent, technology, and client relationships to drive durable growth and innovation.

Financial highlights

• Q3 2024 revenue: $448.9 million (+36.7% y/y); 9M2024 revenue: $1.26 billion (+30.4% y/y); average daily volume reached $2.2 trillion in Q3 2024 (+55.3% y/y).

• Adjusted EBITDA margin for Q3 2024: 53.4% (up 154 bps y/y); adjusted EBIT margin: 49.9%; net income margin: 29.0%.

• Free cash flow (TTM): $797.4 million; cash and cash equivalents: $1.2 billion at quarter-end; $500 million undrawn revolver.

• Board declared a quarterly dividend of $0.10 per share; $25 million in share repurchases during Q3; $214.8 million remains authorized.

• Operating expenses for Q3 2024 rose 42.2% to $289.6 million, mainly due to higher compensation, acquisition-related costs, and technology investment.

Outlook and guidance

• 2024 adjusted expense guidance increased to $855–$875 million, trending toward the midpoint; adjusted EBITDA margin expansion expected to exceed 2023 levels.

• CapEx and capitalized software development projected at $77–$85 million for 2024.

• LSEG Market Data Contract Revenue expected at ~$80 million in 2024 and ~$90 million in 2025.

• October revenues trending at record levels, up ~30% year-over-year; organic growth at 25%.

• Management expects continued growth from integration of ICD, r8fin, and Yieldbroker, with cross-selling and international expansion.