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Dec 31, 2019
Tradeweb Q4 2019 Earnings Report
Tradeweb reported a strong fourth quarter and full-year financial results, driven by diversification and increased electronic trading adoption.
Key Takeaways
Tradeweb Markets Inc. reported a strong fourth quarter with a 10.5% increase in revenues to $197.3 million and a 95.4% increase in net income to $57.3 million. The company achieved record quarterly ADV in US high-grade and high-yield credit and record market share for US high-grade TRACE volume. Full-year ADV and revenues also reached record levels.
Average daily volume (ADV) of $684.6 billion for the quarter increased 16.3%.
Revenues of $197.3 million increased 10.5%.
Net income of $57.3 million for the quarter compared to $29.3 million for the prior year period.
Adjusted EBITDA margin of 46.9% for the quarter compared to 36.6% for the prior year period.
Revenue by Segment
Forward Guidance
Tradeweb provided full-year 2020 guidance, including adjusted expenses of $495 - $510 million, an assumed non-GAAP tax rate of 22.0%, capital expenditures and capitalization of software of $45 - $50 million, and acquisition and Refinitiv Transaction related depreciation and amortization expense of $110 million.
Positive Outlook
- Adjusted expenses of $495 - $510 million
- Includes approximately $5 million of new investments, primarily in data strategy and cybersecurity
- Includes approximately $3 million of duplicative rent expense
- Assumed non-GAAP tax rate of 22.0%
- Capital expenditures and capitalization of software of $45 - $50 million
Challenges Ahead
- GAAP operating expenses and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement of foreign currency rates.
- Unpredictability in the movement of foreign currency rates
- Potential impacts from new investments in data strategy and cybersecurity
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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