Tradeweb(US:TW)2022-10-27 19:36Financial Data and Key Metrics Changes - The company reported GAAP earnings per diluted share of $0.33, with adjusted net income per diluted share of $0.45, reflecting a 15% year-on-year growth [6][58] - Year-to-date adjusted EBITDA margin increased by 83 basis points to 51.0% [13][57] - Revenues for the first three quarters of 2022 reached $896 million, up 55% from the first three quarters of 2019, averaging 16% growth per year [9] Business Line Data and Key Metrics Changes - Record third quarter revenues of $287 million were up 8.2% year-on-year, with a 13.1% growth on a constant currency basis [12] - Rates and credit accounted for 40% and 27% of revenue growth, respectively, while equities contributed 22% [14] - U.S. Treasury revenues increased nearly 10% year-on-year, driven by retail business growth [15] Market Data and Key Metrics Changes - The company’s market share in U.S. Treasuries fell slightly to 19.6%, but user engagement increased by 10% year-on-year [18][19] - Average daily volume for the third quarter reached nearly $1.1 trillion, up 14% year-on-year [52] - Non-U.S. credit revenue grew 17% year-on-year, with the muni business achieving record revenues [39] Company Strategy and Development Direction - The company aims to deepen its competitive advantage through talent development and expanding its asset class and geographic footprint [26][90] - Focus on enhancing electronic solutions and cross-asset trading to capitalize on market opportunities [22][41] - Plans to consolidate broker-dealers and migrate data centers to drive future revenue growth [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the durability of growth, particularly in credit and swaps, while acknowledging FX headwinds [26][81] - The company is well-positioned to benefit from increasing interest in fixed income products as yields rise [61] - Management emphasized the importance of innovation and client collaboration in driving market changes [25][80] Other Important Information - The company ended the quarter with $1.1 billion in cash and cash equivalents, with free cash flow reaching $555 million [74] - Capital expenditures for the quarter were $12.3 million, with expectations for full-year CapEx between $62 million and $68 million [75] - The Board declared a quarterly dividend of $0.08 per share [75] Q&A Session Summary Question: Transition focus for new CEO - The new CEO emphasized talent development and maintaining the company's focus on client collaboration as key priorities moving forward [90][92] Question: All-to-all solutions in U.S. Treasuries - The CEO acknowledged the potential for all-to-all trading in U.S. Treasuries and the importance of engaging with influential market participants like PIMCO [100][102] Question: Drivers of portfolio trading decline - Management noted that while FX impacts comparisons, portfolio trading remains a critical protocol, especially in investment-grade markets [112][115] Question: SEC's proposal for central clearing of treasuries - The company views central clearing as beneficial, potentially reducing capital requirements and enhancing market electronification [120][121] Question: Growth of portfolio trading in volatile markets - Management believes portfolio trading will continue to grow, particularly in investment-grade markets, despite volatility [127]