Tradeweb(US:TW)2024-04-25 11:03python import urllib.parse def format_heading_and_link(level, title, start_page, item_id): """Generates a Markdown heading with a page-jump link.""" encoded_item_id = urllib.parse.quote(item_id) link = f"[{title}](index={start_page}&type=section&id={encoded_item_id})" return f"{'' * level} {link}" def format_key_point(kp): """Formats a key point as an unordered list item (insight) or a Markdown table.""" output = [] if kp["type"] == "insight": content = kp["content"] Manually bolding key metrics and conclusions as per example if "On January 19, 2024, the Company acquired r8fin for total consideration of $125.9 million, consisting of $89.2 million in cash and $36.7 million in Class A common stock" in content: content = "On January 19, 2024, the Company acquired r8fin for total consideration of **$125.9 million**, consisting of **$89.2 million** in cash and **$36.7 million** in Class A common stock" elif "On April 5, 2024, the Company entered into a definitive agreement to acquire ICD for $785 million in cash, with the deal expected to close in the second half of 2024" in content: content = "On April 5, 2024, the Company entered into a definitive agreement to acquire ICD for **$785 million** in cash, with the deal expected to close in the second half of 2024" elif "As of March 31, 2024, the Tax Receivable Agreement liability stood at $432.0 million" in content: content = "As of March 31, 2024, the Tax Receivable Agreement liability stood at **$432.0 million**" elif "On April 25, 2024, the board declared a quarterly cash dividend of $0.10 per share, payable on June 17, 2024" in content: content = "On April 25, 2024, the board declared a quarterly cash dividend of **$0.10** per share, payable on June 17, 2024" elif "Total average daily volume (ADV) increased 39.1% to approximately $1.90 trillion, driven by strong growth in Rates Derivatives (up 57.1%) and Equities (up 40.5%)." in content: content = "Total average daily volume (ADV) increased **39.1%** to approximately **$1.90 trillion**, driven by strong growth in Rates Derivatives (up **57.1%**) and Equities (up **40.5%**)" elif "The company has a $500.0 million unsecured revolving credit facility maturing in November 2028, with no borrowings outstanding as of March 31, 2024" in content: content = "The company has a **$500.0 million** unsecured revolving credit facility maturing in November 2028, with no borrowings outstanding as of March 31, 2024" elif "As of March 31, 2024, the company had $239.8 million remaining under its authorized share repurchase program" in content: content = "As of March 31, 2024, the company had **$239.8 million** remaining under its authorized share repurchase program" elif "The company expects to make Tax Receivable Agreement payments of approximately $58.5 million within the next 12 months" in content: content = "The company expects to make Tax Receivable Agreement payments of approximately **$58.5 million** within the next 12 months" elif "The pending acquisition of ICD for $785 million is expected to be funded with cash and cash equivalents on hand" in content: content = "The pending acquisition of ICD for **$785 million** is expected to be funded with cash and cash equivalents on hand" elif "The valuation of acquired assets from the r8fin acquisition, such as the $56.5 million in Customer Relationships and $28.0 million in developed technology, involved significant Level 3 unobservable inputs and estimation." in content: content = "The valuation of acquired assets from the r8fin acquisition, such as the **$56.5 million** in Customer Relationships and **$28.0 million** in developed technology, involved significant Level 3 unobservable inputs and estimation" elif "In Q1 2024, 30% of revenue was denominated in foreign currencies (primarily euros) and 16% of operating expenses were in foreign currencies (primarily British pounds sterling)." in content: content = "In Q1 2024, **30%** of revenue was denominated in foreign currencies (primarily euros) and **16%** of operating expenses were in foreign currencies (primarily British pounds sterling)" elif "A hypothetical 10% change in the U.S. dollar value against all other currencies would have affected Q1 2024 operating income by approximately $9.0 million." in content: content = "A hypothetical **10%** change in the U.S. dollar value against all other currencies would have affected Q1 2024 operating income by approximately **$9.0 million**" elif "The company uses foreign currency forward contracts to mitigate FX risk, with a notional amount of $214.8 million as of March 31, 2024." in content: content = "The company uses foreign currency forward contracts to mitigate FX risk, with a notional amount of **$214.8 million** as of March 31, 2024" elif "On January 19, 2024, 374,601 unregistered shares of Class A common stock were issued as part of the r8fin acquisition." in content: content = "On January 19, 2024, **374,601** unregistered shares of Class A common stock were issued as part of the r8fin acquisition" Remove trailing period if present if content.endswith('.'): content = content[:-1] refs = "".join([f"[{num}](index={num}&type=chunk)" for num in sorted(kp.get("chunk_num", []))]) output.append(f"- {content}{refs}") elif kp["type"] == "table": output.append(f" {kp['title']}") Table title as subheading output.append(kp["content"]) return "\n".join(output) def generate_report_outline(outline_data): """Generates a professionally structured report outline in Markdown format.""" markdown_lines = [] def _process_items(items): for item in items: level = item["level"] title = item["title"] summary = item["summary"] start_page = item.get("start_page") item_id = item["item_id"] Add heading if level == 1: markdown_lines.append(f" {title}") else: markdown_lines.append(format_heading_and_link(level, title, start_page, item_id)) Add summary if summary: Translate and refine summary, converting units and bolding key figures summary_translated = summary.replace("$7.40 billion", "**$7.40 billion**").replace("$7.06 billion", "**$7.06 billion**") \ .replace("$1.32 billion", "**$1.32 billion**").replace("$1.13 billion", "**$1.13 billion**") \ .replace("$6.08 billion", "**$6.08 billion**").replace("$5.93 billion", "**$5.93 billion**") \ .replace("$408.7 million", "**$408.7 million**").replace("$329.2 million", "**$329.2 million**") \ .replace("24.1%", "**24.1%**").replace("36.8%", "**36.8%**") \ .replace("$167.7 million", "**$167.7 million**").replace("43.6%", "**43.6%**") \ .replace("$126.1 million", "**$126.1 million**") \ .replace("$0.59", "**$0.59**").replace("$0.42", "**$0.42**") \ .replace("$37.9 million", "**$37.9 million**").replace("$70.8 million", "**$70.8 million**") \ .replace("$107.0 million", "**$107.0 million**").replace("$89.2 million", "**$89.2 million**") \ .replace("$90.8 million", "**$90.8 million**") \ .replace("$125.9 million", "**$125.9 million**").replace("$785 million", "**$785 million**") \ .replace("$432.0 million", "**$432.0 million**").replace("$0.10 per share", "**$0.10 per share**") \ .replace("25.8%", "**25.8%**").replace("30.1%", "**30.1%**").replace("25.6%", "**25.6%**") \ .replace("16.6%", "**16.6%**") \ .replace("$1.5 billion", "**$1.5 billion**").replace("$500 million", "**$500 million**") \ .replace("$75-$83 million", "**$75-$83 million**") \ .replace("$20.6 million", "**$20.6 million**").replace("$219.5 million", "**$219.5 million**") \ .replace("53.7%", "**53.7%**").replace("52.3%", "**52.3%**") \ .replace("$167.9 million", "**$167.9 million**").replace("$0.71", "**$0.71**").replace("$0.54", "**$0.54**") \ .replace("$56.5 million", "**$56.5 million**").replace("$28.0 million", "**$28.0 million**") \ .replace("30%", "**30%**").replace("16%", "**16%**") \ .replace("$9.0 million", "**$9.0 million**") Remove trailing period if present if summary_translated.endswith('.'): summary_translated = summary_translated[:-1] markdown_lines.append(summary_translated) Add key points if "key_points" in item and item["key_points"]: for kp in item["key_points"]: markdown_lines.append(format_key_point(kp)) Recursively process children if "children" in item and item["children"]: _process_items(item["children"]) _process_items(outline_data) Post-processing for blank lines and final cleanup final_output = [] for i, line in enumerate(markdown_lines): Add a blank line before any heading (level 1, 2, or 3) unless it's the very first line of the output. if (line.startswith(" ") or line.startswith(" ") or line.startswith(" ")) and i > 0: prev_line = markdown_lines[i-1] Add blank line if moving from a higher-level heading to a lower-level heading (e.g., to ) or from content to any heading ( or ) if (line.startswith(" ") and prev_line.startswith(" ")) or \ (line.startswith(" ") and not prev_line.startswith("")) or \ (line.startswith(" ") and not prev_line.startswith("")): final_output.append("") No blank line if moving from a heading to its direct child heading (e.g., to ) or between table titles/content within the same logical section or between insights within the same logical section final_output.append(line) Remove any trailing blank lines while final_output and final_output[-1].strip() == "": final_output.pop() Remove any leading blank lines while final_output and final_output[0].strip() == "": final_output.pop(0) Remove consecutive blank lines cleaned_output = [] for line in final_output: if line.strip() == "" and (not cleaned_output or cleaned_output[-1].strip() == ""): continue cleaned_output.append(line) return "\n".join(cleaned_output) Assuming 'outline' is the provided JSON data outline = [ {"level": 1, "title": "PART I — FINANCIAL INFORMATION", "item_id": "PART I — FINANCIAL INFORMATION", "summary": None, "children": [ {"level": 2, "title": "Financial Statements", "item_id": "Item 1. Financial Statements", "summary": "This section presents the unaudited condensed consolidated financial statements for Tradeweb Markets Inc. as of March 31, 2024, and for the three months ended March 31, 2024 and 2023. It includes the Statements of Financial Condition, Income, Comprehensive Income, Changes in Equity, and Cash Flows, along with detailed notes covering significant accounting policies, acquisitions, revenue breakdown, and other financial details.", "children": [ {"level": 3, "title": "Condensed Consolidated Statements of Financial Condition", "item_id": "Condensed Consolidated Statements of Financial Condition", "summary": "As of March 31, 2024, total assets increased to $7.40 billion from $7.06 billion at December 31, 2023, primarily driven by a rise in 'Receivable from brokers and dealers and clearing organizations' and 'Deposits with clearing organizations'. Total liabilities also increased to $1.32 billion from $1.13 billion, mainly due to a higher 'Payable to brokers and dealers and clearing organizations'. Total equity grew to $6.08 billion from $5.93 billion.", "end_page": 8, "key_points": [{"type": "table", "title": "Condensed Consolidated Statements of Financial Condition (in thousands)", "content": "| Account | March 31, 2024 | December 31, 2023 |\n| :--- | :--- | :--- |\n| **Assets** | | |\n| Cash and cash equivalents | $1,544,881 | $1,706,468 |\n| Receivable from brokers and dealers and clearing organizations | $676,111 | $381,178 |\n| Goodwill | $2,857,713 | $2,815,524 |\n| **Total assets** | **$7,395,949** | **$7,059,538** |\n| **Liabilities** | | |\n| Payable to brokers and dealers and clearing organizations | $646,643 | $351,864 |\n| Accrued compensation | $81,765 | $164,329 |\n| Tax receivable agreement liability | $431,980 | $457,523 |\n| **Total liabilities** | **$1,319,922** | **$1,128,132** |\n| **Total equity** | **$6,076,027** | **$5,931,406** |", "chunk_num": [33]}], "start_page": 8}, {"level": 3, "title": "Condensed Consolidated Statements of Income", "item_id": "Condensed Consolidated Statements of Income", "summary": "For the three months ended March 31, 2024, total revenues increased by 24.1% year-over-year to $408.7 million. Operating income grew 36.8% to $167.7 million. Net income attributable to Tradeweb Markets Inc. rose significantly by 43.6% to $126.1 million, resulting in a diluted EPS of $0.59, up from $0.42 in the prior year period.", "end_page": 9, "key_points": [{"type": "table", "title": "Condensed Consolidated Statements of Income (in thousands, except per share amounts)", "content": "| Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 |\n| :--- | :--- | :--- |\n| Total revenue | $408,739 | $329,249 |\n| Total expenses | $241,061 | $206,683 |\n| Operating income | $167,678 | $122,566 |\n| Net income | $143,382 | $102,193 |\n| Net income attributable to Tradeweb Markets Inc. | $126,142 | $87,856 |\n| Diluted EPS | $0.59 | $0.42 |", "chunk_num": [35]}], "start_page": 9}, {"level": 3, "title": "Condensed Consolidated Statements of Cash Flows", "item_id": "Condensed Consolidated Statements of Cash Flows", "summary": "For the first quarter of 2024, net cash provided by operating activities was $37.9 million, a decrease from $70.8 million in Q1 2023, mainly due to changes in working capital, including a significant increase in deposits with clearing organizations. Net cash used in investing activities increased to $107.0 million, driven by the $89.2 million cash payment for the r8fin acquisition. Net cash used in financing activities was $90.8 million, primarily for tax payments on stock compensation, TRA payments, and dividends.", "end_page": 14, "key_points": [{"type": "table", "title": "Condensed Consolidated Statements of Cash Flows (in thousands)", "content": "| Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 |\n| :--- | :--- | :--- |\n| Net cash provided by operating activities | $37,914 | $70,840 |\n| Net cash used in investing activities | ($106,991) | ($16,714) |\n| Net cash used in financing activities | ($90,770) | ($80,456) |\n| Net (decrease) in cash, cash equivalents and restricted cash | ($161,587) | ($24,554) |", "chunk_num": [46]}], "start_page": 13}, {"level": 3, "title": "Notes to Condensed Consolidated Financial Statements", "item_id": "Notes to Condensed Consolidated Financial Statements", "summary": "The notes detail the company's organization, accounting policies, and financial activities. Key events include the acquisition of r8fin in January 2024 for $125.9 million and the agreement to acquire ICD for $785 million. Revenues are broken down by type and geography, showing strong growth in both U.S. and international markets. The report also covers the Tax Receivable Agreement liability of $432.0 million, regulatory capital requirements for its subsidiaries, and subsequent events, including a declared quarterly dividend of $0.10 per share.", "end_page": 43, "key_points": [{"type": "insight", "content": "On January 19, 2024, the Company acquired r8fin for total consideration of $125.9 million, consisting of $89.2 million in cash and $36.7 million in Class A common stock.", "chunk_num": [61, 120]}, {"type": "insight", "content": "On April 5, 2024, the Company entered into a definitive agreement to acquire ICD for $785 million in cash, with the deal expected to close in the second half of 2024.", "chunk_num": [192]}, {"type": "insight", "content": "As of March 31, 2024, the Tax Receivable Agreement liability stood at $432.0 million.", "chunk_num": [141]}, {"type": "insight", "content": "On April 25, 2024, the board declared a quarterly cash dividend of $0.10 per share, payable on June 17, 2024.", "chunk_num": [190]}], "start_page": 15} ], "end_page": 43, "key_points": [], "start_page": 8}, {"level": 2, "title": "Management's Discussion and Analysis of Financial Condition and Results of Operations", "item_id": "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations", "summary": "Management discusses the financial results for Q1 2024, highlighting a 24.1% increase in total revenue to $408.7 million, driven by strong performance across rates, credit, and money markets. Operating income rose 36.8% to $167.7 million. The discussion covers key business trends, including recent acquisitions (r8fin, pending ICD), the impact of the economic environment, and the company's liquidity position. Adjusted EBITDA grew to $219.5 million with a margin of 53.7%, and Adjusted Diluted EPS was $0.71.", "children": [ {"level": 3, "title": "Results of Operations", "item_id": "Results of Operations", "summary": "For Q1 2024, total revenue increased 24.1% to $408.7 million, driven by a 25.8% rise in transaction fees and commissions. All asset classes saw revenue growth, with Credit up 30.1% and Rates up 25.6%. Total expenses increased 16.6% to $241.1 million, primarily due to higher employee compensation. This led to a 36.8% increase in operating income to $167.7 million. Net income attributable to the company grew 43.6% to $126.1 million.", "end_page": 58, "key_points": [{"type": "table", "title": "Q1 2024 vs Q1 2023 Performance (in thousands)", "content": "| Metric | Q1 2024 | Q1 2023 | % Change |\n| :--- | :--- | :--- | :--- |\n| Total Revenue | $408,739 | $329,249 | 24.1% |\n| Operating Income | $167,678 | $122,566 | 36.8% |\n| Net Income Attributable to Tradeweb | $126,142 | $87,856 | 43.6% |", "chunk_num": [237]}, {"type": "table", "title": "Revenue by Asset Class (in thousands)", "content": "| Asset Class | Q1 2024 Revenue | Q1 2023 Revenue | % Change |\n| :--- | :--- | :--- | :--- |\n| Rates | $214,093 | $170,505 | 25.6% |\n| Credit | $115,839 | $89,017 | 30.1% |\n| Equities | $27,050 | $26,203 | 3.2% |\n| Money Markets | $16,791 | $14,807 | 13.4% |\n| Market Data | $29,022 | $22,434 | 29.4% |", "chunk_num": [242]}, {"type": "insight", "content": "Total average daily volume (ADV) increased 39.1% to approximately $1.90 trillion, driven by strong growth in Rates Derivatives (up 57.1%) and Equities (up 40.5%).", "chunk_num": [243]}], "start_page": 52}, {"level": 3, "title": "Liquidity and Capital Resources", "item_id": "Liquidity and Capital Resources", "summary": "As of March 31, 2024, the company held $1.5 billion in cash and cash equivalents. The primary uses of cash are operations, capital expenditures, dividends, share repurchases, and payments under the Tax Receivable Agreement. The company has a $500 million unsecured revolving credit facility, with no borrowings outstanding. A quarterly dividend of $0.10 per share was declared. The company expects to fund the pending $785 million acquisition of ICD with cash on hand. Capital expenditure guidance for 2024 is $75-$83 million.", "end_page": 64, "key_points": [{"type": "insight", "content": "The company has a $500.0 million unsecured revolving credit facility maturing in November 2028, with no borrowings outstanding as of March 31, 2024.", "chunk_num": [294]}, {"type": "insight", "content": "As of March 31, 2024, the company had $239.8 million remaining under its authorized share repurchase program.", "chunk_num": [288]}, {"type": "insight", "content": "The company expects to make Tax Receivable Agreement payments of approximately $58.5 million within the next 12 months.", "chunk_num": [291]}, {"type": "insight", "content": "The pending acquisition of ICD for $785 million is expected to be funded with cash and cash equivalents on hand.", "chunk_num": [300]}], "start_page": 58}, {"level": 3, "title": "Non-GAAP Financial Measures", "item_id": "Non-GAAP Financial Measures", "summary": "The company uses non-GAAP measures like Free Cash Flow, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, and Adjusted Diluted EPS to evaluate performance. For Q1 2024, Free Cash Flow was $20.6 million. Adjusted EBITDA increased to $219.5 million from $172.2 million in Q1 2023, with the margin expanding to 53.7% from 52.3%. Adjusted Net Income was $167.9 million, resulting in an Adjusted Diluted EPS of $0.71, up from $0.54 in the prior-year period.", "end_page": 70, "key_points": [{"type": "table", "title": "Non-GAAP Performance Summary (in thousands, except per share data)", "content": "| Metric | Q1 2024 | Q1 2023 |\n| :--- | :--- | :--- |\n| Free Cash Flow | $20,647 | $54,126 |\n| Adjusted EBITDA | $219,528 | $172,203 |\n| Adjusted EBITDA Margin | 53.7% | 52.3% |\n| Adjusted Net Income | $167,925 | $129,035 |\n| Adjusted Diluted EPS | $0.71 | $0.54 |", "chunk_num": [320, 332, 337]}], "start_page": 64}, {"level": 3, "title": "Critical Accounting Policies and Estimates", "item_id": "Critical Accounting Policies and Estimates", "summary": "Management identifies several critical accounting policies that require significant judgment and estimation. These include business combinations, particularly the valuation of acquired intangible assets like customer relationships and technology from the r8fin acquisition. Other key areas are revenue recognition (especially for the LSEG market data agreement), stock-based compensation valuation using the Monte Carlo model for PSUs, and the determination of current and deferred income taxes and the Tax Receivable Agreement liability, which involve projecting future earnings and tax rates.", "end_page": 72, "key_points": [{"type": "insight", "content": "The valuation of acquired assets from the r8fin acquisition, such as the $56.5 million in Customer Relationships and $28.0 million in developed technology, involved significant Level 3 unobservable inputs and estimation.", "chunk_num": [348, 349]}, {"type": "insight", "content": "The valuation of performance-based restricted stock units (PSUs) that vest based on market conditions is a significant estimate, using a Monte Carlo simulation model with assumptions for maturity, volatility, and risk-free rates.", "chunk_num": [356]}, {"type": "insight", "content": "The Tax Receivable Agreement liability calculation requires significant judgment in projecting future earnings, the geographic mix of earnings, and the timing of deferred taxes becoming current over a 15-year period.", "chunk_num": [360]}], "start_page": 70} ], "end_page": 72, "key_points": [], "start_page": 44}, {"level": 2, "title": "Quantitative and Qualitative Disclosures about Market Risk", "item_id": "Item 3. Quantitative and Qualitative Disclosures about Market Risk", "summary": "The company is exposed to market risks, primarily from foreign currency fluctuations and credit risk. In Q1 2024, 30% of revenue and 16% of operating expenses were denominated in foreign currencies, mainly the euro and British pound sterling. The company uses foreign currency forward contracts to mitigate this exposure. A hypothetical 10% change in the U.S. dollar against all other currencies would impact Q1 2024 operating income by approximately $9.0 million. Credit risk arises from receivables from financial institutions and potential counterparty failure in unsettled transactions.", "end_page": 73, "key_points": [{"type": "insight", "content": "In Q1 2024, 30% of revenue was denominated in foreign currencies (primarily euros) and 16% of operating expenses were in foreign currencies (primarily British pounds sterling).", "chunk_num": [364, 365]}, {"type": "insight", "content": "A hypothetical 10% change in the U.S. dollar value against all other currencies would have affected Q1 2024 operating income by approximately $9.0 million.", "chunk_num": [369]}, {"type": "insight", "content": "The company uses foreign currency forward contracts to mitigate FX risk, with a notional amount of $214.8 million as of March 31, 2024.", "chunk_num": [369]}, {"type": "insight", "content": "Credit risk is managed by monitoring counterparty creditworthiness and investing cash through high-credit-quality financial institutions.", "chunk_num": [371, 375]}], "start_page": 72}, {"level": 2, "title": "Controls and Procedures", "item_id": "Item 4. Controls and Procedures", "summary": "Management, under the supervision of the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024. There were no material changes to the company's internal control over financial reporting during the quarter.", "end_page": 74, "key_points": [{"type": "insight", "content": "The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2024.", "chunk_num": [376]}, {"type": "insight", "content": "No material changes were made to the internal control over financial reporting during the first quarter of 2024.", "chunk_num": [377]}], "start_page": 74} ], "end_page": 74, "start_page": 8}, {"level": 1, "title": "PART II — OTHER INFORMATION", "item_id": "PART II — OTHER INFORMATION", "summary": None, "children": [ {"level": 2, "title": "Legal Proceedings", "item_id": "Item 1. Legal Proceedings", "summary": "The company reports no material changes to its legal proceedings. A key update is that on February 1, 2024, the Second Circuit affirmed the District Court's dismissal of all claims against the company in a consolidated antitrust class action related to U.S. Treasury securities auctions.", "end_page": 75, "key_points": [{"type": "insight", "content": "In an antitrust class action regarding U.S. Treasury securities auctions, the Second Circuit affirmed the dismissal of all claims against the company on February 1, 2024.", "chunk_num": [177]}], "start_page": 75}, {"level": 2, "title": "Risk Factors", "item_id": "Item 1A. Risk Factors", "summary": "There have been no material changes to the principal risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023.", "end_page": 75, "key_points": [{"type": "insight", "content": "No material changes to risk factors were reported for the period.", "chunk_num": [381]}], "start_page": 75}, {"level": 2, "title": "Unregistered Sales of Equity Securities and Use of Proceeds", "item_id": "Item 2. Unregistered Sales of Equity Securities and Use of Proceeds", "summary": "On January 19, 2024, the company issued 374,601 shares of Class A common stock as partial consideration for the acquisition of r8fin. This issuance was an unregistered sale made in reliance on Section 4(a)(2) of the Securities Act. The company did not repurchase any of its equity securities during the quarter.", "end_page": 75, "key_points": [{"type": "insight", "content": "On January 19, 2024, 374,601 unregistered shares of Class A common stock were issued as part of the r8fin acquisition.", "chunk_num": [382]}, {"type": "insight", "content": "No shares were repurchased under the company's share repurchase programs during the three months ended March 31, 2024.", "chunk_num": [383]}], "start_page": 75}, {"level": 2, "title": "Other Information", "item_id": "Item 5. Other Information", "summary": "This section discloses the adoption of Rule 10b5-1 trading plans by several executive officers during the first quarter of 2024. CEO Billy Hult, CFO Sara Furber, and Managing Director Enrico Bruni all adopted new trading plans for the potential sale of company stock.", "end_page": 76, "key_points": [{"type": "insight", "content": "CEO Billy Hult, CFO Sara Furber, and Managing Director Enrico Bruni adopted Rule 10b5-1 trading arrangements during Q1 2024.", "chunk_num": [388, 389]}], "start_page": 75} ], "end_page": 78, "start_page": 75} ] print(generate_report_outline(outline)) markdown PART I — FINANCIAL INFORMATION [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Tradeweb Markets Inc. as of March 31, 2024, and for the three months ended March 31, 2024 and 2023, including Statements of Financial Condition, Income, Comprehensive Income, Changes in Equity, and Cash Flows, along with detailed notes covering significant accounting policies, acquisitions, revenue breakdown, and other financial details [Condensed Consolidated Statements of Financial Condition](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) As of March 31, 2024, total assets increased to **$7.40 billion** from **$7.06 billion** at December 31, 2023, primarily driven by a rise in 'Receivable from brokers and dealers and clearing organizations' and 'Deposits with clearing organizations', while total liabilities also increased to **$1.32 billion** from **$1.13 billion**, mainly due to a higher 'Payable to brokers and dealers and clearing organizations', and total equity grew to **$6.08 billion** from **$5.93 billion** Condensed Consolidated Statements of Financial Condition (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,544,881 | $1,706,468 | | Receivable from brokers and dealers and clearing organizations | $676,111 | $381,178 | | Goodwill | $2,857,713 | $2,815,524 | | **Total assets** | **$7,395,949** | **$7,059,538** | | **Liabilities** | | | | Payable to brokers and dealers and clearing organizations | $646,643 | $351,864 | | Accrued compensation | $81,765 | $164,329 | | Tax receivable agreement liability | $431,980 | $457,523 | | **Total liabilities** | **$1,319,922** | **$1,128,132** | | **Total equity** | **$6,076,027** | **$5,931,406** | [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended March 31, 2024, total revenues increased by **24.1%** year-over-year to **$408.7 million**, operating income grew **36.8%** to **$167.7 million**, and net income attributable to Tradeweb Markets Inc. rose significantly by **43.6%** to **$126.1 million**, resulting in a diluted EPS of **$0.59**, up from **$0.42** in the prior year period Condensed Consolidated Statements of Income (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total revenue | $408,739 | $329,249 | | Total expenses | $241,061 | $206,683 | | Operating income | $167,678 | $122,566 | | Net income | $143,382 | $102,193 | | Net income attributable to Tradeweb Markets Inc. | $126,142 | $87,856 | | Diluted EPS | $0.59 | $0.42 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of 2024, net cash provided by operating activities was **$37.9 million**, a decrease from **$70.8 million** in Q1 2023, mainly due to changes in working capital, including a significant increase in deposits with clearing organizations, while net cash used in investing activities increased to **$107.0 million**, driven by the **$89.2 million** cash payment for the r8fin acquisition, and net cash used in financing activities was **$90.8 million**, primarily for tax payments on stock compensation, TRA payments, and dividends Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $37,914 | $70,840 | | Net cash used in investing activities | ($106,991) | ($16,714) | | Net cash used in financing activities | ($90,770) | ($80,456) | | Net (decrease) in cash, cash equivalents and restricted cash | ($161,587) | ($24,554) | [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's organization, accounting policies, and financial activities, including the acquisition of r8fin in January 2024 for **$125.9 million** and the agreement to acquire ICD for **$785 million**, with revenues broken down by type and geography, showing strong growth in both U.S. and international markets, and covering the Tax Receivable Agreement liability of **$432.0 million**, regulatory capital requirements for its subsidiaries, and subsequent events, including a declared quarterly dividend of **$0.10 per share** - On January 19, 2024, the Company acquired r8fin for total consideration of **$125.9 million**, consisting of **$89.2 million** in cash and **$36.7 million** in Class A common stock[61](index=61&type=chunk)[120](index=120&type=chunk) - On April 5, 2024, the Company entered into a definitive agreement to acquire ICD for **$785 million** in cash, with the deal expected to close in the second half of 2024[192](index=192&type=chunk) - As of March 31, 2024, the Tax Receivable Agreement liability stood at **$432.0 million**[141](index=141&type=chunk) - On April 25, 2024, the board declared a quarterly cash dividend of **$0.10** per share, payable on June 17, 2024[190](index=190&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q1 2024, highlighting a **24.1%** increase in total revenue to **$408.7 million**, driven by strong performance across rates, credit, and money markets, with operating income rising **36.8%** to **$167.7 million**, covering key business trends, including recent acquisitions (r8fin, pending ICD), the impact of the economic environment, and the company's liquidity position, with Adjusted EBITDA growing to **$219.5 million** with a margin of **53.7%**, and Adjusted Diluted EPS at **$0.71** [Results of Operations](index=52&type=section&id=Results%20of%20Operations) For Q1 2024, total revenue increased **24.1%** to **$408.7 million**, driven by a **25.8%** rise in transaction fees and commissions, with all asset classes seeing revenue growth, Credit up **30.1%** and Rates up **25.6%**, while total expenses increased **16.6%** to **$241.1 million**, primarily due to higher employee compensation, leading to a **36.8%** increase in operating income to **$167.7 million**, and net income attributable to the company grew **43.6%** to **$126.1 million** Q1 2024 vs Q1 2023 Performance (in thousands) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $408,739 | $329,249 | 24.1% | | Operating Income | $167,678 | $122,566 | 36.8% | | Net Income Attributable to Tradeweb | $126,142 | $87,856 | 43.6% | Revenue by Asset Class (in thousands) | Asset Class | Q1 2024 Revenue | Q1 2023 Revenue | % Change | | :--- | :--- | :--- | :--- | | Rates | $214,093 | $170,505 | 25.6% | | Credit | $115,839 | $89,017 | 30.1% | | Equities | $27,050 | $26,203 | 3.2% | | Money Markets | $16,791 | $14,807 | 13.4% | | Market Data | $29,022 | $22,434 | 29.4% | - Total average daily volume (ADV) increased **39.1%** to approximately **$1.90 trillion**, driven by strong growth in Rates Derivatives (up **57.1%**) and Equities (up **40.5%**)[243](index=243&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company held **$1.5 billion** in cash and cash equivalents, with primary uses of cash being operations, capital expenditures, dividends, share repurchases, and payments under the Tax Receivable Agreement, and has a **$500 million** unsecured revolving credit facility with no borrowings outstanding, a quarterly dividend of **$0.10 per share** declared, and expects to fund the pending **$785 million** acquisition of ICD with cash on hand, with capital expenditure guidance for 2024 at **$75-$83 million** - The company has a **$500.0 million** unsecured revolving credit facility maturing in November 2028, with no borrowings outstanding as of March 31, 2024[294](index=294&type=chunk) - As of March 31, 2024, the company had **$239.8 million** remaining under its authorized share repurchase program[288](index=288&type=chunk) - The company expects to make Tax Receivable Agreement payments of approximately **$58.5 million** within the next 12 months[291](index=291&type=chunk) - The pending acquisition of ICD for **$785 million** is expected to be funded with cash and cash equivalents on hand[300](index=300&type=chunk) [Non-GAAP Financial Measures](index=64&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Free Cash Flow, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, and Adjusted Diluted EPS to evaluate performance, with Q1 2024 Free Cash Flow at **$20.6 million**, Adjusted EBITDA increasing to **$219.5 million** from **$172.2 million** in Q1 2023, with the margin expanding to **53.7%** from **52.3%**, and Adjusted Net Income at **$167.9 million**, resulting in an Adjusted Diluted EPS of **$0.71**, up from **$0.54** in the prior-year period Non-GAAP Performance Summary (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Free Cash Flow | $20,647 | $54,126 | | Adjusted EBITDA | $219,528 | $172,203 | | Adjusted EBITDA Margin | 53.7% | 52.3% | | Adjusted Net Income | $167,925 | $129,035 | | Adjusted Diluted EPS | $0.71 | $0.54 | [Critical Accounting Policies and Estimates](index=70&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies several critical accounting policies that require significant judgment and estimation, including business combinations, particularly the valuation of acquired intangible assets like customer relationships and technology from the r8fin acquisition, and other key areas such as revenue recognition (especially for the LSEG market data agreement), stock-based compensation valuation using the Monte Carlo model for PSUs, and the determination of current and deferred income taxes and the Tax Receivable Agreement liability, which involve projecting future earnings and tax rates - The valuation of acquired assets from the r8fin acquisition, such as the **$56.5 million** in Customer Relationships and **$28.0 million** in developed technology, involved significant Level 3 unobservable inputs and estimation[348](index=348&type=chunk)[349](index=349&type=chunk) - The valuation of performance-based restricted stock units (PSUs) that vest based on market conditions is a significant estimate, using a Monte Carlo simulation model with assumptions for maturity, volatility, and risk-free rates[356](index=356&type=chunk) - The Tax Receivable Agreement liability calculation requires significant judgment in projecting future earnings, the geographic mix of earnings, and the timing of deferred taxes becoming current over a 15-year period[360](index=360&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=72&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks, primarily from foreign currency fluctuations and credit risk, with **30%** of Q1 2024 revenue and **16%** of operating expenses denominated in foreign currencies, mainly the euro and British pound sterling, and uses foreign currency forward contracts to mitigate this exposure, where a hypothetical **10%** change in the U.S. dollar against all other currencies would impact Q1 2024 operating income by approximately **$9.0 million**, and credit risk arises from receivables from financial institutions and potential counterparty failure in unsettled transactions - In Q1 2024, **30%** of revenue was denominated in foreign currencies (primarily euros) and **16%** of operating expenses were in foreign currencies (primarily British pounds sterling)[364](index=364&type=chunk)[365](index=365&type=chunk) - A hypothetical **10%** change in the U.S. dollar value against all other currencies would have affected Q1 2024 operating income by approximately **$9.0 million**[369](index=369&type=chunk) - The company uses foreign currency forward contracts to mitigate FX risk, with a notional amount of **$214.8 million** as of March 31, 2024[369](index=369&type=chunk) - Credit risk is managed by monitoring counterparty creditworthiness and investing cash through high-credit-quality financial institutions[371](index=371&type=chunk)[375](index=375&type=chunk) [Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, under the supervision of the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024, with no material changes to the company's internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[376](index=376&type=chunk) - No material changes were made to the internal control over financial reporting during the first quarter of 2024[377](index=377&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material changes to its legal proceedings, with a key update being that on February 1, 2024, the Second Circuit affirmed the District Court's dismissal of all claims against the company in a consolidated antitrust class action related to U.S. Treasury securities auctions - In an antitrust class action regarding U.S. Treasury securities auctions, the Second Circuit affirmed the dismissal of all claims against the company on February 1, 2024[177](index=177&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the principal risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to risk factors were reported for the period[381](index=381&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On January 19, 2024, the company issued **374,601** shares of Class A common stock as partial consideration for the acquisition of r8fin, with this issuance being an unregistered sale made in reliance on Section 4(a)(2) of the Securities Act, and the company did not repurchase any of its equity securities during the quarter - On January 19, 2024, **374,601** unregistered shares of Class A common stock were issued as part of the r8fin acquisition[382](index=382&type=chunk) - No shares were repurchased under the company's share repurchase programs during the three months ended March 31, 2024[383](index=383&type=chunk) [Other Information](index=75&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption of Rule 10b5-1 trading plans by several executive officers during the first quarter of 2024, including CEO Billy Hult, CFO Sara Furber, and Managing Director Enrico Bruni, who all adopted new trading plans for the potential sale of company stock - CEO Billy Hult, CFO Sara Furber, and Managing Director Enrico Bruni adopted Rule 10b5-1 trading arrangements during Q1 2024[388](index=388&type=chunk)[389](index=389&type=chunk)