Tradeweb Markets Inc. [TW] Filings

10-Q 1 tw-20240930.htm 10-Q tw-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-38860

TRADEWEB MARKETS INC.

(Exact name of registrant as specified in its charter)

___________________________________________


Delaware						83-2456358
(State of other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


1177 Avenue of the Americas New York, New York						10036
(Address of principal executive offices)						(Zip Code)

(646) 430-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.00001

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No


Class of Stock						Shares Outstanding as of October 23, 2024
Class A Common Stock, par value $0.00001 per share						116,228,794
Class B Common Stock, par value $0.00001 per share						96,933,192
Class C Common Stock, par value $0.00001 per share						18,000,000
Class D Common Stock, par value $0.00001 per share						5,073,738

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TRADEWEB MARKETS INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

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		Page
INTRODUCTORY NOTE		3

USE OF NON-GAAP FINANCIAL MEASURES		4

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		6

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	8

	Condensed Consolidated Statements of Financial Condition as of September 30, 2024 and December 31, 2023	8

	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023	9

	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023	10

	Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2024 and 2023	11

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	13

	Notes to Condensed Consolidated Financial Statements	15

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	82

Item 4.	Controls and Procedures	84

PART II — OTHER INFORMATION		85

Item 1.	Legal Proceedings	85

Item 1A.	Risk Factors	85

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	85

Item 3.	Defaults Upon Senior Securities	85

Item 4.	Mine Safety Disclosures	86

Item 5.	Other Information	86

Item 6.	Exhibits	88

	Signatures	89

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INTRODUCTORY NOTE

The financial statements and other disclosures contained in this report include those of Tradeweb Markets Inc., which is the registrant, and those of its consolidating subsidiaries, including Tradeweb Markets LLC, which became the principal operating subsidiary of Tradeweb Markets Inc. on April 4, 2019 in a series of reorganization transactions (the “Reorganization Transactions”) that were completed in connection with Tradeweb Markets Inc.’s initial public offering (the “IPO”), which closed on April 8, 2019.

As a result of the Reorganization Transactions completed in connection with the IPO, Tradeweb Markets Inc. became a holding company whose only material assets consist of its equity interest in Tradeweb Markets LLC and related deferred tax assets. As the sole manager of Tradeweb Markets LLC, Tradeweb Markets Inc. operates and controls all of the business and affairs of Tradeweb Markets LLC and, through Tradeweb Markets LLC and its subsidiaries, conducts its business. As a result of this control, and because Tradeweb Markets Inc. has a substantial financial interest in Tradeweb Markets LLC, Tradeweb Markets Inc. consolidates the financial results of Tradeweb Markets LLC and its subsidiaries.

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to:

•“We,” “us,” “our,” the “Company,” “Tradeweb” and similar references refer: (i) on or prior to the completion of the Reorganization Transactions to Tradeweb Markets LLC, which we refer to as “TWM LLC,” and, unless otherwise stated or the context otherwise requires, all of its subsidiaries and any predecessor entities, and (ii) following the completion of the Reorganization Transactions to Tradeweb Markets Inc., and, unless otherwise stated or the context otherwise requires, its subsidiaries, including TWM LLC and all of its subsidiaries, and any predecessor entities.

•“Bank Stockholders” refer collectively to entities affiliated with the following clients: Barclays Capital Inc., BofA Securities, Inc. (a subsidiary of Bank of America Corporation), Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBS Securities Inc., UBS Securities LLC and Wells Fargo Securities, LLC, which, prior to the completion of the IPO, collectively held a 46% ownership interest in Tradeweb. Subsequent to August 2022, there were no LLC Interests (as defined below) held by Bank Stockholders.

•“Continuing LLC Owners” refer collectively to (i) those Original LLC Owners (as defined below), including an indirect subsidiary of Refinitiv (as defined below), certain of the Bank Stockholders and members of management, that continued to own LLC Interests after the completion of the IPO and Reorganization Transactions and that received shares of our Class C common stock, shares of our Class D common stock or a combination of both, as the case may be, in connection with the completion of the Reorganization Transactions, (ii) any subsequent transferee of any Original LLC Owner that has executed a joinder agreement to TWM LLC’s limited liability company agreement (the “TWM LLC Agreement”) and (iii) solely with respect to the Tax Receivable Agreement (as defined below), (x) those Original LLC Owners, including certain of the Bank Stockholders, that disposed of all of their LLC Interests for cash in connection with the IPO and (y) any party that has executed a joinder agreement to the Tax Receivable Agreement in accordance with the Tax Receivable Agreement.

•“Investor Group” refer to certain investment funds affiliated with The Blackstone Group Inc. (f/k/a The Blackstone Group L.P.), an affiliate of Canada Pension Plan Investment Board, an affiliate of GIC Special Investments Pte. Ltd. and certain co-investors, which prior to the LSEG Transaction (as defined below) collectively held indirectly a 55% ownership interest in Refinitiv.

•“LLC Interests” refer to the single class of common membership interests of TWM LLC. LLC Interests, other than those held by directly or indirectly Tradeweb Markets Inc., are redeemable or exchangeable in accordance with the TWM LLC Agreement for shares of Class A common stock or Class B common stock, as the case may be, on a one-for-one basis. References to LLC Interests held by Tradeweb Markets Inc. and comparable terminology refer to LLC Interests held by Tradeweb Markets Inc. directly as well as indirectly through direct, wholly-owned subsidiaries of Tradeweb Markets Inc. (which are holding companies with no independent operations).

•“LSEG Transaction” refer to the acquisition of the Refinitiv business by LSEG (as defined below), in an all share transaction, which closed on January 29, 2021. The Refinitiv business was rebranded by LSEG as LSEG Data & Analytics during the fourth quarter of 2023.

•“LSEG” refer to London Stock Exchange Group plc, and unless otherwise stated or the context otherwise requires, all of its direct and indirect subsidiaries, including Refinitiv.

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•“Original LLC Owners” refer to the owners of TWM LLC prior to the Reorganization Transactions.

•“Refinitiv,” prior to the LSEG Transaction, refer to Refinitiv Holdings Limited, and unless otherwise stated or the context otherwise requires, all of its direct and indirect subsidiaries, and subsequent to the LSEG Transaction, refer to Refinitiv Parent Limited, and unless otherwise stated or the context otherwise requires, all of its subsidiaries. Refinitiv owns substantially all of the former financial and risk business of Thomson Reuters (as defined below), including, prior to and following the completion of the Reorganization Transactions, an indirect majority ownership interest in Tradeweb, and was controlled by the Investor Group prior to the LSEG Transaction.

•“Refinitiv Transaction” refer to the transaction pursuant to which Refinitiv indirectly acquired on October 1, 2018 substantially all of the financial and risk business of Thomson Reuters and Thomson Reuters indirectly acquired a 45% ownership interest in Refinitiv.

•“Thomson Reuters” or “TR” refer to Thomson Reuters Corporation, which prior to the LSEG Transaction indirectly held a 45% ownership interest in Refinitiv.

Numerical figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. In addition, we round certain percentages presented in this Quarterly Report on Form 10-Q to the nearest whole number. As a result, figures expressed as percentages in the text may not total 100% or, when aggregated, may not be the arithmetic aggregation of the percentages that precede them.

USE OF NON-GAAP FINANCIAL MEASURES

This Quarterly Report on Form 10-Q contains “non-GAAP financial measures,” which are financial measures that are not calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The Securities and Exchange Commission (“SEC”) has adopted rules to regulate the use of non-GAAP financial measures in filings with the SEC and in other public disclosures. These rules govern the manner in which non-GAAP financial measures are publicly presented and require, among other things:

•a presentation with equal or greater prominence of the most comparable financial measure or measures calculated and presented in accordance with GAAP; and

•a statement disclosing the purposes for which the registrant’s management uses the non-GAAP financial measure.

Specifically, we make use of the non-GAAP financial measures “Free Cash Flow,” “Adjusted EBITDA,” “Adjusted EBITDA margin,” “Adjusted EBIT,” “Adjusted EBIT margin,” “Adjusted Net Income” and “Adjusted Diluted EPS,” as well as the change in revenue, Adjusted EBITDA margin and Adjusted EBIT margin on a constant currency basis, in evaluating our historical results and future prospects. For the definition of Free Cash Flow and a reconciliation to cash flow from operating activities, its most directly comparable financial measure presented in accordance with GAAP, see Part I, Item 2. – “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.” For the definitions of Adjusted EBITDA, Adjusted EBIT and Adjusted Net Income and reconciliations to net income and net income attributable to Tradeweb Markets Inc., as applicable, their most directly comparable financial measures presented in accordance with GAAP, see Part I, Item 2. – “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.” For the definition of constant currency revenue change, see Part I, Item 2. – “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.” Adjusted EBITDA margin and Adjusted EBIT margin are defined as Adjusted EBITDA and Adjusted EBIT, respectively, divided by revenue for the applicable period. For the definition of constant currency change in Adjusted EBITDA margin and Adjusted EBIT margin, see Part I, Item 2. – “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.” Adjusted Diluted EPS is defined as Adjusted Net Income divided by the diluted weighted average number of shares of Class A common stock and Class B common stock outstanding for the applicable period (including the effect of potentially dilutive securities determined using the treasury stock method), plus the weighted average number of other participating securities reflected in earnings per share using the two-class method, plus the assumed full exchange of all outstanding LLC Interests held by non-controlling interests for shares of Class A common stock or Class B common stock.

We present Free Cash Flow because we believe it is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our core operations after non-acquisition related expenditures for capitalized software development costs and furniture, equipment and leasehold improvements.

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We present Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT and Adjusted EBIT margin because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management and our board of directors use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT and Adjusted EBIT margin to assess our financial performance and believe they are helpful in highlighting trends in our core operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Further, our executive incentive compensation program is based in part on components of Adjusted EBITDA and Adjusted EBITDA margin.

We use constant currency measures as supplemental metrics to evaluate our underlying performance between periods by removing the impact of foreign currency fluctuations. We believe that providing certain percentage changes on a constant currency basis provide useful comparisons of our performance and trends between periods.

We use Adjusted Net Income and Adjusted Diluted EPS as supplemental metrics to evaluate our business performance in a way that also considers our ability to generate profit without the impact of certain items. Each of the normal recurring adjustments and other adjustments described in the definition of Adjusted Net Income helps to provide management with a measure of our operating performance over time by removing items that are not related to day-to-day operations or are non-cash expenses.

Free Cash Flow, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income, Adjusted Diluted EPS and constant currency measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations include the following:

•Free Cash Flow, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS do not reflect every expenditure, future requirements for capital expenditures or contractual commitments;

•Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS do not reflect changes in our working capital needs;

•Adjusted EBITDA and Adjusted EBIT do not reflect any interest income or expense, or the amounts necessary to service interest or principal payments on any debt obligations;

•Adjusted EBITDA and Adjusted EBIT do not reflect income tax expense, which is a necessary element of our costs and ability to operate;

•although depreciation and amortization are eliminated in the calculation of Adjusted EBITDA, and the depreciation and amortization related to acquisitions and the Refinitiv Transaction are eliminated in the calculation of Adjusted EBIT, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA and Adjusted EBIT do not reflect any costs of such replacements;

•Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS do not reflect the noncash component of certain employee stock-based compensation expense and associated payroll taxes;

•Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative, on a recurring basis, of our ongoing operations;

•constant currency measures do not reflect the impact of foreign currency fluctuations; and

•other companies in our industry may calculate Free Cash Flow, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Diluted EPS, constant currency measures or similarly titled measures differently than we do, limiting their usefulness as comparative measures.

We compensate for these limitations by relying primarily on our GAAP results and using Free Cash Flow, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Diluted EPS and constant currency measures only as supplemental information.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “will” or “would,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which we operate, including our expectations about market trends, our market opportunity and the growth of our various markets, our expansion into new markets, any pending or closed acquisitions or other strategic transactions, any potential tax savings we may realize as a result of our organizational structure, our dividend policy, our share repurchase program and our expectations, beliefs, plans, strategies, objectives, prospects or assumptions regarding future events, our performance or otherwise, contained in this Quarterly Report on Form 10-Q are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements, or could affect our stock price.

Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:

•changes in economic, political, social and market conditions and the impact of these changes on trading volumes;

•our failure to compete successfully;

•our failure to adapt our business effectively to keep pace with industry changes;

•consolidation and concentration in the financial services industry;

•our dependence on dealer clients;

•design defects, errors, failures or delays with our platforms or solutions;

•our dependence on third parties for certain market data and certain key functions;

•our inability to achieve our environmental, social and governance goals;

•our ability to implement our business strategies profitably;

•our ability to successfully integrate any acquisition or to realize benefits from any strategic alliances, partnerships or joint ventures;

•our inability to maintain and grow the capacity of our trading platforms, systems and infrastructure;

•systems failures, interruptions, delays in services, cybersecurity incidents, catastrophic events and any resulting interruptions;

•inadequate protection of our intellectual property;

•extensive regulation of our industry;

•our ability to retain the services of our senior management team;

•limitations on operating our business and incurring additional indebtedness as a result of covenant restrictions under our $500.0 million senior unsecured revolving credit facility (the “2023 Revolving Credit Facility”) with Citibank, N.A., as administrative agent, and the other lenders party thereto;

•our dependence on distributions from TWM LLC to fund our expected dividend payments and to pay our taxes and expenses, including payments under the tax receivable agreement (the “Tax Receivable Agreement”) entered into in connection with the IPO;

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•our ability to realize any benefit from our organizational structure;

•Refinitiv’s, and indirectly LSEG’s, control of us and our status as a controlled company; and

•other risks and uncertainties, including those listed under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), filed with the SEC and in other filings we may make from time to time with the SEC.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q are not guarantees of future events or performance and future events, our actual results of operations, financial condition or liquidity, and the development of the industry and markets in which we operate, may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if future events, our results of operations, financial condition or liquidity, and events in the industry and markets in which we operate, are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, they may not be predictive of events, results or developments in future periods.

Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report on Form 10-Q.

Investors and others should note that we announce material financial and operational information using our investor relations website, press releases, SEC filings and public conference calls and webcasts. Information about Tradeweb, our business and our results of operations may also be announced by posts on Tradeweb’s accounts on the following social media channels: Instagram, LinkedIn and X (formerly Twitter). The information that we post through these social media channels may be deemed material. As a result, we encourage investors, the media and others interested in Tradeweb to monitor these social media channels in addition to following our investor relations website, press releases, SEC filings and public conference calls and webcasts. These social media channels may be updated from time to time on our investor relations website.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Tradeweb Markets Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Condition

(dollars in thousands, except per share amounts)

(Unaudited)


	September 30,		December 31,
	2024		2023
Assets
Cash and cash equivalents	$	1,173,734	$	1,706,468
Restricted cash	1,000		1,000
Receivable from brokers and dealers and clearing organizations	297,842		381,178
Deposits with clearing organizations	65,277		36,806
Accounts receivable, net of allowance for credit losses of $206 and $284 at September 30, 2024 and December 31, 2023, respectively	248,615		168,407
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization	32,707		33,559
Lease right-of-use assets	26,104		25,206
Software development costs, net of accumulated amortization	305,088		131,332
Goodwill	3,149,956		2,815,524
Intangible assets, net of accumulated amortization	1,315,490		1,004,797
Receivable and due from affiliates	97		192
Deferred tax asset	634,672		684,250
Other assets	86,135		70,819
Total assets	$	7,336,717	$	7,059,538

Liabilities and Equity
Liabilities
Securities sold under agreements to repurchase	$	—	$	21,612
Payable to brokers and dealers and clearing organizations	286,179		351,864
Accrued compensation	179,142		164,329
Deferred revenue	29,580		25,746
Accounts payable, accrued expenses and other liabilities	99,828		57,501

Lease liabilities	28,590		27,463
Payable and due to affiliates	1,582		1,327
Deferred tax liability	43,018		20,767
Tax receivable agreement liability	382,407		457,523
Total liabilities	1,050,326		1,128,132

Commitments and contingencies (Note 13)

Equity
Preferred stock, $0.00001 par value; 250,000,000 shares authorized; none issued or outstanding	—		—
Class A common stock, $0.00001 par value; 1,000,000,000 shares authorized; 116,227,674 and 115,090,787 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	1		1
Class B common stock, $0.00001 par value; 450,000,000 shares authorized; 96,933,192 and 96,933,192 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	1		1
Class C common stock, $0.00001 par value; 350,000,000 shares authorized; 18,000,000 and 18,000,000 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	—		—
Class D common stock, $0.00001 par value; 300,000,000 shares authorized; 5,073,738 and 5,077,973 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	—		—
Additional paid-in capital	4,788,780		4,738,758
Accumulated other comprehensive income (loss)	1,115		(5,389)
Retained earnings	910,750		640,384
Total stockholders’ equity attributable to Tradeweb Markets Inc.	5,700,647		5,373,755
Non-controlling interests	585,744		557,651
Total equity	6,286,391		5,931,406
Total liabilities and equity	$	7,336,717	$	7,059,538

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Tradeweb Markets Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(dollars in thousands, except per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Revenues
Transaction fees and commissions	$	373,493	$	263,485	$	1,039,419	$	776,544
Subscription fees	51,206		46,361		151,633		136,483
LSEG market data fees	20,512		15,460		61,593		46,515
Other	3,704		3,051		9,960		8,677
Total revenue	448,915		328,357		1,262,605		968,219

Expenses
Employee compensation and benefits	160,161		116,016		440,484		334,433
Depreciation and amortization	57,872		46,559		157,145		137,850
Technology and communications	24,300		19,733		69,840		56,001
General and administrative	20,417		6,700		44,026		31,692
Professional fees	21,434		10,479		46,558		32,321
Occupancy	5,415		4,132		15,064		12,283
Total expenses	289,599		203,619		773,117		604,580
Operating income	159,316		124,738		489,488		363,639
Tax receivable agreement liability adjustment	(870)		—		(870)		—
Interest income	16,663		17,929		59,234		46,445
Interest expense	(1,446)		(464)		(3,706)		(1,380)
Other income (loss), net	10		(1,907)		10		(2,022)
Income before taxes	173,673		140,296		544,156		406,682
Provision for income taxes	(43,450)		(28,666)		(134,135)		(90,920)
Net income	130,223		111,630		410,021		315,762
Less: Net income attributable to non-controlling interests	16,307		13,016		50,724		40,210
Net income attributable to Tradeweb Markets Inc.	$	113,916	$	98,614	$	359,297	$	275,552

Earnings per share attributable to Tradeweb Markets Inc. Class A and B common stockholders:
Basic	$	0.53	$	0.47	$	1.69	$	1.31
Diluted	$	0.53	$	0.46	$	1.67	$	1.30
Weighted average shares outstanding:
Basic	213,206,193		211,618,475		213,026,732		210,444,082
Diluted	215,096,974		213,491,634		214,885,210		212,276,908

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Tradeweb Markets Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(dollars in thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income	$	130,223	$	111,630	$	410,021	$	315,762
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, with no tax benefit for each of the three and nine months ended September 30, 2024 and 2023	10,014		(4,456)		7,211		(623)
Other comprehensive income (loss), net of tax	10,014		(4,456)		7,211		(623)

Comprehensive income	140,237		107,174		417,232		315,139
Less: Net income attributable to non-controlling interests	16,307		13,016		50,724		40,210
Less: Foreign currency translation adjustments attributable to non-controlling interests	979		(438)		704		(24)
Comprehensive income attributable to Tradeweb Markets Inc.	$	122,951	$	94,596	$	365,804	$	274,953

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Tradeweb Markets Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Equity

(dollars in thousands, except per share amounts)

(Unaudited)


	Tradeweb Markets Inc. Stockholders’ Equity
	Par Value
	Class A Common Stock		Class B Common Stock		Class C Common Stock		Class D Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non- Controlling Interests		Total Equity
Balance at December 31, 2023	$	1	$	1	$	—	$	—	$	4,738,758	$	(5,389)	$	640,384	$	557,651	$	5,931,406
Issuance of common stock from equity incentive plans	—		—		—		—		2,807		—		—		—		2,807
Issuance of common stock for business acquisitions	—		—		—		—		36,692		—		—		—		36,692

Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans	—		—		—		—		18,358		—		—		—		18,358
Adjustments to non-controlling interests	—		—		—		—		1,333		(3)		—		(1,330)		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		(6,095)		(6,095)
Dividends ($0.10 per share)	—		—		—		—		—		—		(21,286)		—		(21,286)
Stock-based compensation expense	—		—		—		—		16,959		—		—		—		16,959
Payroll taxes paid for stock-based compensation	—		—		—		—		(43,832)		—		—		—		(43,832)
Net income	—		—		—		—		—		—		126,142		17,240		143,382
Foreign currency translation adjustments	—		—		—		—		—		(2,132)		—		(232)		(2,364)
Balance at March 31, 2024	$	1	$	1	$	—	$	—	$	4,771,075	$	(7,524)	$	745,240	$	567,234	$	6,076,027
Issuance of common stock from equity incentive plans	—		—		—		—		2,021		—		—		—		2,021


Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans	—		—		—		—		761		—		—		—		761
Adjustments to non-controlling interests	—		—		—		—		(2,198)		—		—		2,198		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		(9,963)		(9,963)
Dividends ($0.10 per share)	—		—		—		—		—		—		(21,321)		—		(21,321)
Stock-based compensation expense	—		—		—		—		24,350		—		—		—		24,350
Payroll taxes paid for stock-based compensation	—		—		—		—		(447)		—		—		—		(447)
Net income	—		—		—		—		—		—		119,239		17,177		136,416
Foreign currency translation adjustments	—		—		—		—		—		(396)		—		(43)		(439)
Balance at June 30, 2024	$	1	$	1	$	—	$	—	$	4,795,562	$	(7,920)	$	843,158	$	576,603	$	6,207,405
Issuance of common stock from equity incentive plans	—		—		—		—		1,915		—		—		—		1,915
Issuance of common stock for business acquisitions	—		—		—		—		3,333		—		—		—		3,333
Share repurchases pursuant to share repurchase programs	—		—		—		—		—		—		(25,004)		—		(25,004)
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans	—		—		—		—		(36,164)		—		—		—		(36,164)
Adjustments to non-controlling interests	—		—		—		—		(623)		—		—		623		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		(8,768)		(8,768)
Dividends ($0.10 per share)	—		—		—		—		—		—		(21,320)		—		(21,320)
Stock-based compensation expense	—		—		—		—		26,858		—		—		—		26,858
Payroll taxes paid for stock-based compensation	—		—		—		—		(2,101)		—		—		—		(2,101)
Net income	—		—		—		—		—		—		113,916		16,307		130,223
Foreign currency translation adjustments	—		—		—		—		—		9,035		—		979		10,014
Balance at September 30, 2024	$	1	$	1	$	—	$	—	$	4,788,780	$	1,115	$	910,750	$	585,744	$	6,286,391

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Tradeweb Markets Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Equity – (Continued)

(in thousands, except share and per share amounts)

(Unaudited)


	Tradeweb Markets Inc. Stockholders’ Equity
	Par Value
	Class A Common Stock		Class B Common Stock		Class C Common Stock		Class D Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non- Controlling Interests		Total Equity
Balance at December 31, 2022	$	1	$	1	$	—	$	—	$	4,577,270	$	(10,113)	$	386,632	$	592,525	$	5,546,316
Issuance of common stock from equity incentive plans	—		—		—		—		6,320		—		—		—		6,320
Share repurchases pursuant to share repurchase programs	—		—		—		—		—		—		(22,706)		—		(22,706)
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans	—		—		—		—		15,082		—		—		—		15,082
Adjustments to non-controlling interests	—		—		—		—		6,910		(4)		—		(6,906)		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		(2,283)		(2,283)
Dividends ($0.09 per share)	—		—		—		—		—		—		(18,733)		—		(18,733)
Stock-based compensation expense	—		—		—		—		11,905		—		—		—		11,905
Payroll taxes paid for stock-based compensation	—		—		—		—		(39,878)		—		—		—		(39,878)
Net income	—		—		—		—		—		—		87,856		14,337		102,193
Foreign currency translation adjustments	—		—		—		—		—		2,352		—		297		2,649
Balance at March 31, 2023	$	1	$	1	$	—	$	—	$	4,577,609	$	(7,765)	$	433,049	$	597,970	$	5,600,865
Issuance of common stock from equity incentive plans	—		—		—		—		1,262		—		—		—		1,262
Share repurchases pursuant to share repurchase programs	—		—		—		—		—		—		(7,602)		—		(7,602)
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans	—		—		—		—		27,827		—		—		—		27,827
Adjustments to non-controlling interests	—		—		—		—		72,870		(120)		—		(72,750)		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		(3,286)		(3,286)
Dividends ($0.09 per share)	—		—		—		—		—		—		(19,048)		—		(19,048)
Stock-based compensation expense	—		—		—		—		16,097		—		—		—		16,097
Payroll taxes paid for stock-based compensation	—		—		—		—		(1,870)		—		—		—		(1,870)
Net income	—		—		—		—		—		—		89,082		12,857		101,939
Foreign currency translation adjustments	—		—		—		—		—		1,067		—		117		1,184
Balance at June 30, 2023	$	1	$	1	$	—	$	—	$	4,693,795	$	(6,818)	$	495,481	$	534,908	$	5,717,368
Issuance of common stock from equity incentive plans	—		—		—		—		412		—		—		—		412
Share repurchases pursuant to share repurchase programs	—		—		—		—		—		—		(4,897)		—		(4,897)
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans	—		—		—		—		2,801		—		—		—		2,801
Adjustments to non-controlling interests	—		—		—		—		(404)		—		—		404		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		(1,963)		(1,963)
Dividends ($0.09 per share)	—		—		—		—		—		—		(19,049)		—		(19,049)
Stock-based compensation expense	—		—		—		—		17,668		—		—		—		17,668
Payroll taxes paid for stock-based compensation	—		—		—		—		(7,773)		—		—		—		(7,773)
Net income	—		—		—		—		—		—		98,614		13,016		111,630
Foreign currency translation adjustments	—		—		—		—		—		(4,018)		—		(438)		(4,456)
Balance at September 30, 2023	$	1	$	1	$	—	$	—	$	4,706,499	$	(10,836)	$	570,149	$	545,927	$	5,811,741

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Tradeweb Markets Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)


	Nine Months Ended
	September 30,
	2024		2023
Cash flows from operating activities
Net income	$	410,021	$	315,762
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	157,145		137,850
Stock-based compensation expense	66,286		44,670
Deferred taxes	30,334		70,071
Tax receivable agreement liability adjustment	870		—
Other (income) loss, net	(10)		2,022
(Increase) decrease in operating assets:
Receivable from/payable to brokers and dealers and clearing organizations, net	17,650		368
Deposits with clearing organizations	(27,692)		(2,502)
Accounts receivable	(65,548)		(22,330)
Receivable and due from affiliates/payable and due to affiliates, net	62		(8,071)
Other assets	(1,757)		(2,890)
Increase (decrease) in operating liabilities:
Securities sold under agreements to repurchase	(21,612)		—
Accrued compensation	10,191		(33,814)
Deferred revenue	3,219		8,510
Accounts payable, accrued expenses and other liabilities	36,557		(8,318)
Net cash provided by operating activities	615,716		501,328
Cash flows from investing activities
Cash paid for acquisitions, net of cash acquired	(860,407)		(69,648)
Cash paid for foreign currency call option, net of sale proceeds	—		(1,289)
Cash paid for investments	(11,585)		—
Purchases of furniture, equipment, software and leasehold improvements	(15,729)		(17,467)
Capitalized software development costs	(35,182)		(32,105)
Net cash used in investing activities	(922,903)		(120,509)
Cash flows from financing activities
Share repurchases pursuant to share repurchase programs	(24,391)		(32,874)
Proceeds from stock-based compensation exercises	6,743		7,994




Dividends	(63,927)		(56,830)
Distributions to non-controlling interests	(24,826)		(7,532)
Payroll taxes paid for stock-based compensation	(46,558)		(49,184)
Payments on tax receivable agreement liability	(76,956)		(5,724)
Net cash used in financing activities	(229,915)		(144,150)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	4,368		(488)
Net increase (decrease) in cash, cash equivalents and restricted cash	(532,734)		236,181
Cash, cash equivalents and restricted cash
Beginning of period	1,707,468		1,258,229
End of period	$	1,174,734	$	1,494,410

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Tradeweb Markets Inc. and Subsidiaries

Consolidated Statements of Cash Flows - (Continued)

(in thousands)

(Unaudited)


	Nine Months Ended
	September 30,
	2024		2023
Supplemental disclosure of cash flow information
Income taxes paid, net of (refunds)	$	70,590	$	24,624
Cash paid for interest	$	2,140	$	748
Non-cash investing and financing activities
Issuance of common stock for business acquisitions	$	40,025	$	—
Furniture, equipment, software and leasehold improvement additions included in accounts payable	$	511	$	478

Unsettled share repurchases included in other liabilities	$	613	$	2,331
Withholding taxes payable relating to stock-based compensation settlements included in accrued compensation	$	—	$	337


Items arising from LLC Interest ownership changes:
Establishment of liabilities under tax receivable agreement	$	—	$	27,976
Deferred tax asset	$	(17,045)	$	73,686

	September 30,		December 31,
Reconciliation of cash, cash equivalents and restricted cash as shown on the statements of financial condition:	2024		2023
Cash and cash equivalents	$	1,173,734	$	1,706,468
Restricted cash	1,000		1,000
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$	1,174,734	$	1,707,468

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Notes to Condensed Consolidated Financial Statements

(Unaudited)


		Page
Note 1	Organization	16
Note 2	Significant Accounting Policies	19
Note 3	Restricted Cash	27
Note 4	Acquisitions	27
Note 5	Revenue	29
Note 6	Income Taxes	31
Note 7	Tax Receivable Agreement	32
Note 8	Non-Controlling Interests	33
Note 9	Stockholders’ Equity and Stock-Based Compensation Plans	33
Note 10	Related Party Transactions	37
Note 11	Fair Value of Financial Instruments	38
Note 12	Credit Risk	41
Note 13	Commitments and Contingencies	42
Note 14	Earnings Per Share	44
Note 15	Regulatory Capital Requirements	45
Note 16	Business Segment and Geographic Information	46
Note 17	Subsequent Events	47

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Tradeweb Markets Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization

Tradeweb Markets Inc. (the “Corporation”) was incorporated as a Delaware corporation on November 7, 2018 to carry on the business of Tradeweb Markets LLC (“TWM LLC”) following the completion of a series of reorganization transactions on April 4, 2019 (the “Reorganization Transactions”), in connection with Tradeweb Markets Inc.’s initial public offering (the “IPO”), which closed on April 8, 2019. Following the Reorganization Transactions, Refinitiv (as defined below) owned an indirect majority ownership interest in the Company (as defined below).

On January 29, 2021, London Stock Exchange Group plc (“LSEG”) completed its acquisition of the Refinitiv business from a consortium, including certain investment funds affiliated with The Blackstone Group Inc. (f/k/a The Blackstone Group L.P.) (“Blackstone”) as well as Thomson Reuters Corporation (“TR”), in an all share transaction (the “LSEG Transaction”).

In connection with the LSEG Transaction, the Corporation became a consolidating subsidiary of LSEG. Prior to the LSEG Transaction, the Corporation was a consolidating subsidiary of BCP York Holdings (“BCP”), a company owned by certain investment funds affiliated with Blackstone, through BCP’s previous majority ownership interest in Refinitiv. As used herein, “Refinitiv,” prior to the LSEG Transaction, means Refinitiv Holdings Limited, and unless otherwise stated or the context otherwise requires, all of its direct and indirect subsidiaries, and subsequent to the LSEG Transaction, refers to Refinitiv Parent Limited, and unless otherwise stated or the context otherwise requires, all of its subsidiaries. Refinitiv owns substantially all of the former financial and risk business of Thomson Reuters (as defined below), including, prior to and following the completion of the Reorganization Transactions, an indirect majority ownership interest in the Company. The Refinitiv business was rebranded by LSEG as LSEG Data & Analytics during the fourth quarter of 2023.

The Corporation is a holding company whose principal asset is LLC Interests (as defined below) of TWM LLC. As the sole manager of TWM LLC, the Corporation operates and controls all of the business and affairs of TWM LLC and, through TWM LLC and its subsidiaries, conducts the Corporation’s business. As a result of this control, and because the Corporation has a substantial financial interest in TWM LLC, the Corporation consolidates the financial results of TWM LLC and reports a non-controlling interest in the Corporation’s condensed consolidated financial statements. As of both September 30, 2024 and December 31, 2023, Tradeweb Markets Inc. owned 90.2% of TWM LLC and the non-controlling interest holders owned the remaining 9.8% of TWM LLC. References to LLC Interests held by Tradeweb Markets Inc. and comparable terminology refer to LLC Interests held by Tradeweb Markets Inc. directly as well as indirectly through direct, wholly-owned subsidiaries of Tradeweb Markets Inc. (which are holding companies with no independent operations).

Unless the context otherwise requires, references to the “Company” refer to Tradeweb Markets Inc. and its consolidated subsidiaries, including TWM LLC, following the completion of the Reorganization Transactions, and TWM LLC and its consolidated subsidiaries prior to the completion of the Reorganization Transactions.

The Company is a leader in building and operating electronic marketplaces for a global network of clients across the institutional, wholesale, retail and corporates client sectors. The Company’s principal subsidiaries include:

•Tradeweb LLC (“TWL”), a registered broker-dealer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a member of the Financial Industry Regulatory Authority (“FINRA”), a member of the Municipal Securities Rulemaking Board (“MSRB”), a registered independent introducing broker with the Commodities Future Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”).

•Dealerweb Inc. (“DW”) (formerly known as Hilliard Farber & Co., Inc.), a registered broker-dealer under the Exchange Act and a member of FINRA and MSRB. DW is also registered as an introducing broker with the CFTC and a member of the NFA.

•Tradeweb Direct LLC (“TWD”) (formerly known as BondDesk Trading LLC), a registered broker-dealer under the Exchange Act and a member of FINRA and MSRB.

•Institutional Cash Distributors, LLC (“ICDLC”), acquired on August 1, 2024, a registered broker-dealer and introducing broker under the Exchange Act and a member of FINRA.

•Tradeweb Europe Limited (“TEL”), a MiFID Investment Firm regulated by the Financial Conduct Authority (the “FCA”) in the UK, and certain other global regulators, that maintains branches in Asia.

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•TW SEF LLC (“TW SEF”), a Swap Execution Facility (“SEF”) regulated by the CFTC and certain other global regulators.

•DW SEF LLC (“DW SEF”), a SEF regulated by the CFTC and certain other global regulators.

•Tradeweb Japan K.K. (“TWJ”), a security house regulated by the Japanese Financial Services Agency (“JFSA”) and the Japan Securities Dealers Association (“JSDA”).

•Tradeweb EU B.V. (“TWEU”), a MiFID Investment Firm regulated by the Netherlands Authority for the Financial Markets (“AFM”), the De Nederlandsche Bank (“DNB”) and certain other global regulators and that maintains a branch in France.

•Tradeweb Execution Services Limited (“TESL”), an Investment Firm (“BIPRU Firm”) regulated by the FCA in the UK.

•Tradeweb Information Technology Services (Shanghai) Co., Ltd is a wholly-owned foreign enterprise (WOFE) in China. Its business scope includes information, data and technology related services including development, sales, import and export and consulting. The Tradeweb offshore electronic trading platform is recognized by the People’s Bank of China (“PBOC”) for the provision of Bond Connect, CIBM Direct RFQ and Swap Connect.

•Tradeweb Execution Services B.V. (“TESBV”), a MiFID Investment Firm authorized and regulated by the AFM, with permission to trade on a matched principal basis.

•Tradeweb Australia Pty Ltd (formerly Yieldbroker Pty Limited) (“YB” or “Yieldbroker”), acquired in August 2023, a Tier 1 Australian Markets Licensee in Australia, regulated by the Australian Securities & Investments Commission (“ASIC”), that also maintains a branch in Singapore that is regulated by the Monetary Authority of Singapore (“MAS”) as a Regulated Market Operator. Tradeweb Australia Pty Ltd changed its name from Yieldbroker Pty Limited in January 2024.

•Tradeweb (DIFC) Limited (“TDIFC”), an Authorized Firm regulated by the Dubai Financial Services Authority (“DFSA”) with a license for “arranging deals in investments” for users to access the Company’s various trading venues that are also separately recognized by the DFSA.

•TW Technology and Trading Private Limited (“TTTL”), a private limited company incorporated in Mumbai, India.

•Tradeweb Brasil Ltda (“TWB”), a limited liability company incorporated in Sao Paulo, Brazil.

•Institutional Cash Distributors Limited (“ICDLT”), acquired on August 1, 2024, a firm engaged in the provision of intermediary services authorized and regulated by the FCA in the UK.

•ICD Europa - Empresa de Investimento, S.A. (“ICDEU”), acquired on August 1, 2024, an investment firm regulated by the Comissão do Mercado de Valores Mobiliários (“CMVM”) in Portugal.

On April 5, 2024, the Company entered into a definitive agreement for TWM LLC to acquire Institutional Cash Distributors (“ICD”) by purchasing all of the outstanding equity interests of each of ICD Intermediate Holdco 1, LLC, SCIC - ICD Blocker 1, Inc. and Parthenon Investors V ICD Blocker, Inc. (the “ICD Acquisition”). The ICD Acquisition closed on August 1, 2024, following the satisfaction of closing conditions and regulatory reviews. ICD is an institutional investment technology provider for corporate treasury organizations trading short-term investments. ICD’s flagship products include ICD Portal and ICD Portfolio Analytics. The portal is a one-stop shop to research, trade, analyze and report on investments across more than 40 available investment providers primarily offering money market funds and access to other short term products including deposits, fixed term funds and separately managed accounts (“SMAs”) (collectively referred to herein as “money market funds”). Portfolio Analytics is an AI-driven cloud solution for aggregating positions across a corporate treasury’s entire portfolio for analysis and reporting. With the acquisition of ICD and its proprietary technology, the Company has added a new client channel, “corporates”, serving corporate treasury professionals, complementing the Company’s existing focus on institutional, wholesale and retail clients. See Note 4 – Acquisitions for additional details on this acquisition.

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In November 2023, TWM LLC and the Corporation entered into a definitive agreement for TWM LLC to acquire all of the outstanding equity interests of R8FIN Holdings LP (together with its subsidiaries, “r8fin”). The acquisition closed on January 19, 2024, following the satisfaction of closing conditions and regulatory reviews (the “r8fin Acquisition”). r8fin provides a suite of algorithmic-based tools as well as a thin-client execution management system (EMS) trading application to facilitate futures and cash trades. The solutions complement Tradeweb’s existing Dealerweb Active Streams, Dealerweb Central Limit Order Book (CLOB), Tradeweb Request-for-Quote (RFQ) and Tradeweb AiEX (Automated Intelligent Execution) offerings. See Note 4 – Acquisitions for additional details on this acquisition.

In August 2023, the Company acquired Yieldbroker, a leading Australian trading platform for Australian and New Zealand government bonds and interest rate derivatives, covering the institutional and wholesale client sector (the “Yieldbroker Acquisition”). This acquisition combined Australia and New Zealand’s highly attractive, fast-growing markets with Tradeweb’s international reach and scale.

In June 2021, the Company acquired Nasdaq’s U.S. fixed income electronic trading platform, formerly known as eSpeed (the “NFI Acquisition”), which is a fully executable central limit order book (CLOB) for electronic trading in on-the-run (OTR) U.S. government bonds. The NFI Acquisition included the acquisition of Execution Access, LLC, (“EA”), a registered broker-dealer under the Exchange Act and a member of FINRA. In November 2022, EA merged with and into DW with DW being the surviving entity.

A majority interest of Refinitiv (formerly the Thomson Reuters Financial & Risk Business) was acquired by BCP on October 1, 2018 (the “Refinitiv Transaction”) from TR. The Refinitiv Transaction resulted in a new basis of accounting for certain of the Company’s assets and liabilities beginning on October 1, 2018. See Note 2 – Significant Accounting Policies for a description of pushdown accounting applied as a result of the Refinitiv Transaction.

In connection with the Reorganization Transactions, TWM LLC’s limited liability company agreement (the “TWM LLC Agreement”) was amended and restated to, among other things, (i) provide for a new single class of common membership interests in TWM LLC (the “LLC Interests”), (ii) exchange all of the then existing membership interests in TWM LLC for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. LLC Interests, other than those held by the Corporation, are redeemable or exchangeable in accordance with the TWM LLC Agreement for shares of Class A common stock, par value $0.00001 per share, of the Corporation (the “Class A common stock”) or Class B common stock, par value $0.00001 per share, of the Corporation (the “Class B common stock”), as the case may be, on a one-for-one basis.

As used herein, references to “Continuing LLC Owners” refer collectively to (i) those owners of TWM LLC prior to the Reorganization Transactions (the “Original LLC Owners”), including an indirect subsidiary of Refinitiv, certain investment and commercial banks (collectively, the “Bank Stockholders”), and members of management, that continued to own LLC Interests after the completion of the IPO and Reorganization Transactions and that received shares of Class C common stock, par value $0.00001 per share, of the Corporation (the “Class C common stock”), shares of Class D common stock, par value $0.00001 per share, of the Corporation (the “Class D common stock”) or a combination of both, as the case may be, in connection with the completion of the Reorganization Transactions, (ii) any subsequent transferee of any Original LLC Owner that has executed a joinder agreement to the TWM LLC Agreement and (iii) solely with respect to the Tax Receivable Agreement (as defined in Note 7 – Tax Receivable Agreement), (x) those Original LLC Owners, including certain of the Bank Stockholders, that disposed of all of their LLC Interests for cash in connection with the IPO and (y) any party that has executed a joinder agreement to the Tax Receivable Agreement in accordance with the Tax Receivable Agreement.

As of September 30, 2024:

•The public investors collectively owned 116,227,674 shares of Class A common stock, representing 10.1% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock and indirectly, through Tradeweb Markets Inc., owned 49.2% of the economic interest in TWM LLC;

•Refinitiv collectively owned 96,933,192 shares of Class B common stock, 18,000,000 shares of Class C common stock and 4,988,329 shares of Class D common stock, representing 89.9% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock and directly and indirectly, through Tradeweb Markets Inc., owned 50.8% of the economic interest in TWM LLC; and

•Other stockholders that continued to own LLC Interests also collectively owned 85,409 shares of Class D common stock, representing less than 0.1% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock. Collectively, these stockholders directly owned less than 0.1% of the economic interest in TWM LLC.

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In addition, the Company’s basic and diluted earnings per share calculations for the three and nine months ended September 30, 2024 were impacted by 126,903 and 137,252, respectively, of weighted average shares resulting from unvested or unsettled vested stock awards that were considered participating securities for purposes of calculating earnings per share in accordance with the two-class method. The Company’s diluted earnings per share calculations for the three and nine months ended September 30, 2024 also include 1,890,781 and 1,858,478, respectively, of weighted average shares resulting from the dilutive effect of its equity incentive plans. See Note 14 – Earnings Per Share for additional details.

2. Significant Accounting Policies

The following is a summary of significant accounting policies:

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1 – Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and its subsidiaries and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. The condensed consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by Continuing LLC Owners.

These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The consolidated financial information as of December 31, 2023 has been derived from audited financial statements not included herein. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to interim financial reporting and Form 10-Q. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. These unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the condensed consolidated financial statements.

Business Combinations

Business combinations are accounted for under the purchase method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”). The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. The fair value of assets acquired and liabilities assumed is determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market for the asset or liability. Determining the fair value of certain assets acquired and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates, customer attrition rates and asset lives.

Transaction costs incurred to effect a business combination are expensed as incurred and are included as a component of professional fees or general and administrative expenses in the condensed consolidated statements of income.

Table of Contents

Pushdown Accounting

In connection with the Refinitiv Transaction, a majority interest of Refinitiv was acquired by BCP on October 1, 2018 from TR. The Refinitiv Transaction was accounted for by Refinitiv in accordance with the acquisition method of accounting pursuant to ASC 805, and pushdown accounting was applied to Refinitiv to record the fair value of the assets and liabilities of Refinitiv as of October 1, 2018, the date of the Refinitiv Transaction. The Company, as a consolidating subsidiary of Refinitiv, also accounted for the Refinitiv Transaction using pushdown accounting which resulted in a new fair value basis of accounting for certain of the Company’s assets and liabilities beginning on October 1, 2018. Under the pushdown accounting applied, the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company as of October 1, 2018 was recorded as goodwill. The fair value of assets acquired and liabilities assumed was determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market for the asset or liability. The adjusted valuations primarily affected the values of the Company’s long-lived and indefinite-lived intangible assets, including software development costs.

Cash and Cash Equivalents

Cash and cash equivalents consists of cash and highly liquid investments with remaining maturities at the time of purchase of three months or less.

Allowance for Credit Losses

The Company continually monitors collections and payments from its clients and maintains an allowance for credit losses. The allowance for credit losses is based on an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific account data. Careful analysis of the financial condition of the Company’s counterparties is also performed.

Additions to the allowance for credit losses are charged to credit loss expense, which is included in general and administrative expenses in the condensed consolidated statements of income. Aged balances that are determined to be uncollectible are written off against the allowance for credit losses. An allowance for credit losses is also recognized for any credit impairment for available-for-sale debt securities. See Note 12 – Credit Risk for additional information.

Receivable from and Payable to Brokers and Dealers and Clearing Organizations

Receivable from and payable to brokers and dealers and clearing organizations consists of proceeds from transactions executed on the Company’s wholesale platform which failed to settle due to the inability of a transaction party to deliver or receive the transacted security. These securities transactions are generally collateralized by those securities. Until the failed transaction settles, a receivable from (and a matching payable to) brokers and dealers and clearing organizations is recognized for the proceeds from the unsettled transaction.

Deposits with Clearing Organizations

Deposits with clearing organizations are comprised of cash deposits.

Furniture, Eq

Tradeweb Markets Inc. [TW] Filings
10-Q	[2024-10-30]
10-Q	[2024-07-25]
10-Q	[2024-04-25]
10-K	[2024-02-09]
10-Q	[2023-10-26]
10-Q	[2023-07-27]
10-Q	[2023-04-27]
10-K	[2023-02-24]
10-Q	[2022-10-27]
10-Q	[2022-08-03]
10-Q	[2022-04-29]
10-K	[2022-02-24]
10-Q	[2021-10-29]
10-Q	[2021-07-30]
10-Q	[2021-04-30]
10-K	[2021-02-25]
10-Q	[2020-10-29]
10-Q	[2020-07-31]
10-Q	[2020-05-12]
S-1	[2020-04-20]
10-K	[2020-02-21]
10-Q	[2019-11-08]
S-1	[2019-10-15]
10-Q	[2019-08-12]
10-Q	[2019-05-20]
S-1	[2019-03-07]