Tradeweb Markets Inc.

Good morning, and welcome to TradeWeb's fourth quarter 2024 earnings conference call. As a reminder, today's call is being recorded and will be available for playback. To begin, I'll turn the call over to Head of Treasury, FP&A, and Investor Relations, Ashley Sorrell. Please go ahead.

Thank you, and good morning. Joining me today for the call are CEO Billy Hult, who will review our business results and key growth initiatives, And our CFO, Sarah Ferber, will review our financial results. We intend to use the website as a means of disclosing material, nonpublic information, and complying with our disclosure obligations under Regulation FD. I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. statements related to, among other things, our guidance, our forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release, earnings presentation, and periodic reports filed with the SEC. In addition, on today's call, we will reference certain non-GAAP measures, as well as certain market and industry data. Information regarding these non-GAAP measures, including reconciliations to GAAP measures, is in our earnings release and earnings presentation. Information regarding market and industry data, including sources, is in our earnings presentation. Now, let me turn the call over to Billy.

Thanks, Ashley. Good morning, everyone, and thank you for joining our fourth quarter earnings call. I'm extremely proud of the TradeWeb team that helped produce the best revenue year and quarter in our history. As I look back at 2024, it was filled with healthy debate and continued market share gains across our core products. Since our IPO in 2019, we have more than doubled our revenues and more than tripled our quarterly adjusted EPS, as well as our free cash flow. We want to honor that past, build upon our scrappy culture, continue to expand our presence across the fixed income ecosystem, and diligently accelerate our revenue growth. We are a technology company with the core focus of electronifying markets by efficiently connecting our buy side clients with their most important liquidity providers. Central to our strategy is always remembering to strike the right balance where innovation not only helps the buy side, but also benefits our dealer clients. In 2024, we expanded our developed market footprint globally across rates, credit, money markets, and equities. We also continue to make inroads into emerging markets and we are now run rating at over 60 million in EM revenues annually. Additionally, we have deepened and expanded our client relationships with our acquisitions of YieldBroker and RateFin and moved into the corporate treasury space with ICD, something we believe will collectively pay dividends for years to come. Looking ahead, we continue to evaluate more opportunities to plant more flags and deepen our multi-asset network. Diving into the fourth quarter on slide four, strong client activity, share gains, and a risk-on environment drove 25.2% year-over-year revenue growth on a reported basis. We continue to balance investing for growth and profitability as fourth quarter adjusted EBITDA margins expanded by 40 basis points relative to the 2023 full-year margins. Turning to slide five, our rates business produced a record revenue quarter driven by continued organic growth across swaps, global government bonds, and mortgages, and was also supplemented by the addition of RateFin and YieldBroker. Credit was led by strength in U.S. and European corporate bonds with our second highest quarterly market share across fully electronic U.S. high-grade and record market share across fully electronic high yield, and further supported by growth across credit derivatives. MoneyMarkets was led by the addition of ICD and aided by record quarterly revenues across global repos. Equities posted double-digit revenue growth led by growth in our global ETF and equity derivatives business. Finally, market data revenues were driven by growth in our LSEG market data contract and proprietary data products. Turning to slide six, Our record fourth quarter capped off a record revenue year in 2024. Record volumes across most asset classes translated into 29% revenue growth on a reported basis. The scale generated by our strong top line results drove 91 basis points of adjusted EBITDA margin expansion and 29% adjusted EPS growth. As our growth initiatives continue to scale, we maintain our tradition of constant and focused investment. Broadly, we enhanced our existing product capabilities, adding new clients and forged new partnerships. On the capability front, we completed our integration of rate, fin, and yield broker, made meaningful progress across our mortgage-specified pool platform, and we rolled out our new RFQ edge offering and global cash credit. On the client side, we continue to scale our credit, mortgage, and swaps platform as we make inroads with our largest clients. Finally, on the collaboration front, we made meaningful progress on the second phase of our integration with BlackRock's Aladdin and expanded our partnership with FTSE Indices. Additionally, we became the first strategic partner for Goldman Sachs' new GS Digital Assets platform and announced a partnership with Tokyo Stock Exchange. We believe our investments have not only positioned us well for the future, but also helped make 2024 another banner year for TradeWeb. Moving to slide 7, 2024 continued the streak of robust revenue growth that we have worked hard to deliver for multiple years now. Specifically, while the majority of our revenues still come from rates, 46% of our revenue growth came from our other businesses in 2024. In fact, over the past six years, over 50% of our revenue growth came from non-rates businesses. Over the same period, 40% of our revenue growth was attributable to our international business. International revenues have grown on average 20% per year since 2016. Our international business is anchored by our European business, but our Asia-Pacific product suite continues to scale. Our APAC business spans rates, credit, equities, and money markets, and volumes more than doubled year over year. We have seen strong active client growth across our APAC products with global active APAC product users up over 20% year over year. Over 20% of our APAC product variable revenues in 2024 came from products that weren't generating revenues on the platform in 2019. A testament to the growing product diversity across our APAC business. As we scale our presence across the APAC region, this is also driving strong APAC client engagement across non-APAC products. For example, we saw strong APAC active client growth across US and European swaps, US government bonds, and European credit. 2025 marks our 20th anniversary of being in the Japan markets, and we have made meaningful progress in scaling our offering. Our Japanese government bond volumes have grown at an average of over 30% since 2020, while our greater than one year yen swap volumes have increased at an average of 45% over that same timeframe. Looking ahead, we believe Asia Pacific and more broadly emerging markets will continue to become a larger component of our growth story over the next few years as we expand our client and product network across the region. Relentless innovation has been critical to our success. Throughout our history, we have prioritized being first to market, which requires constant investment. In the last nine years, we've invested over $780 million in technology to help shape the future of electronic markets, growing those investments at an average of 15% since 2016. And as our investments bear fruit, adjusted EBITDA margins have expanded consistently. Starting with U.S. Treasuries on slide eight, record fourth quarter market share of 25% drove revenue growth of 23% year over year. Our institutional business saw record revenues and the leading indicators of the business remain strong. We gained share and achieved record quarterly market share of over 50% in institutional U.S. Treasuries versus our main electronic competitor, our third consecutive quarter above 50%. Automation continues to be an important theme, with institutional U.S. Treasury AIX average daily trades increasing by over 20% year-over-year. Turning to our U.S. Treasury wholesale business, we achieved our second-best revenue quarter in our history. This was led by record-streaming activity, growing adoption of our Sessions Protocol, and continued contribution from Raidfin. Wholesale continues to remain a key area of focus as we prioritize onboarding more liquidity providers and enhancing our various liquidity pools as we deliver on our holistic strategy. Within equities, our ETF business produced record fourth quarter revenues. Our efforts to expand our equity brand beyond our flagship ETF franchise continue to bear fruit with record equity derivative revenues increasing 20% year over year. Looking ahead, we continue to make inroads by integrating new clients and the client pipeline remains strong as the benefits of our electronic solutions continue to resonate. We believe we are well positioned to capitalize on the long-term secular ETF growth story, not just in equities, but across our fixed income business. Turning to slide nine for a closer look at another strong quarter for credit, Revenue growth was driven by 14% and 7% year-over-year revenue growth across U.S. and European credit, respectively. We also achieved strong double-digit revenue growth across credit derivatives. Automation continued to grow with Global Credit AIX average daily trades increasing over 10% year-over-year. We achieved our second highest fully electronic quarterly market share across USIG and the highest fully electronic quarterly market share across U.S. high yield. We also crossed the 1,000 client count threshold in the fourth quarter as clients gravitate towards our deepening liquidity pool and premium client experience. Our institutional business continues to scale as clients adopt our diverse set of protocols. Our institutional RFQ average daily volume grew over 30% year-over-year with strong double-digit growth across both IG and high yield. Our RFQ volumes as a percentage of trace touched a new high in the fourth quarter across both IG and high yield. Moreover, portfolio trading average daily volume rose over 20% year over year with growth of over 30% across IG portfolio trading. Retail credit revenues produced another solid quarter but revenues were down 11% primarily due to outsized muni tax loss selling in the fourth quarter of 2023. All trade produced a solid quarter with over 180 billion in volume, up over 15% year over year. Specifically, our all-to-all average daily volume grew over 10% year over year, and our dealer RFQ offering grew low single digits year on year. The team continues to be focused on broadening out our network and increasing the number of responders on the all-trade platform. In the fourth quarter, the average number of responses per all-to-all inquiry rose over 15% year-on-year. Finally, our sessions average daily volume grew over 20% year-over-year. It was a year of innovation and growth with a focus on redefining our diverse set of all weather protocols. We enhanced our portfolio trading offering to incorporate ETF analytics, rolled out RFQ edge, and further enhanced our algorithmic capabilities. Since 2020, we have grown our fully electronic IG share by more than double, and we have more than tripled our high yield share. Stepping back, 20% of our IG share growth was driven by RFQ with 35% and 40% coming from portfolio trading and sessions respectively. On the high yield front, 50% of our share growth was driven by RFQ with 40% and 10% being driven by PT and sessions respectively. Looking ahead, U.S. credit remains a key focus area, and we like the way we're positioned across our client channels for this asset class. We believe we have a long runway for growth with ample opportunity to innovate alongside our clients. We are focused on further upgrades to our leading PT offering, new tools to further penetrate block trading workflows, enhanced analytics through the trading lifecycle, and an improved client-user interface experience. We also remain very focused on chipping away at high yield. Our average high yield response rate hit a new record in the fourth quarter and remain very focused in 2025 on expanding our client network. We're near the end of phase two of our Aladdin integration, and both teams are formulating plans on the next deliverables with a goal to deliver real differentiated liquidity solutions over pure workflow efficiency. Beyond US credit, we are focused on our EM expansion efforts. We expect to go live with our Saudi Arabian offering in the coming quarters, and we are working through regulatory approvals for our Indian offering. Strategically, we're looking to build a robust trading solution and expand our local network, leveraging our global product suite. Moving to slide 10, Global swaps produced record revenues driven by a combination of strong client engagement in response to the macro environment, better mixed shift towards risk trading, and stable weighted average duration. All in, global swaps revenue grew 37% year over year. Core risk market share, which excludes compression trading, set a new record in the fourth quarter, increasing by over 210 basis points year over year. Overall market share decreased to 20.8%, primarily due to a significant drop in European swap client-related compression volumes, which carries a significantly lower fee rate. During the quarter, we also achieved record share across G11 and EM-denominated currencies, and the second highest share in our history across sterling swaps. The fourth quarter exemplified the diversity of our global swaps revenue growth. We achieved record institutional swap revenues across European and EM swaps and our second highest quarterly revenues across dollar and APAC swaps. Across our 27 currencies, we saw the biggest market share increases in 2024 across Taiwan dollar, Swiss franc, and Hong Kong dollar. with each gaining over 900 basis points of market share year over year. Beyond this, over 60% of our currencies saw at least 500 basis points of market share gains in 2024, yet many remain below 25% market share, highlighting the opportunity ahead of us. Finally, we continue to make progress across emerging market swaps and our rapidly growing RFM protocol. Our fourth quarter EM swaps revenue rose over 80% year-over-year, and we believe there's still significant room to grow given the low levels of electronification. Our RFM protocol saw average daily volume rise over 140% year-over-year, with adoption picking up. Looking ahead, the global macro backdrop continues to be in flux, and we believe the long-term swaps revenue growth potential is meaningful. As we build solutions for our clients, adoption can take time, but when it does happen, the upside potential could be significant. For example, we rolled out our electronic inflation swaps offering in 2017. Adoption was slow out of the gate. However, since 2020, industry inflation swaps volume is up 85%. Our risk-related inflation swaps volumes are up nearly 600% over that same time frame. We are looking forward to providing more solutions for more parts of the swaps market. With the overall swaps market still about 30% electronified, we believe there remains a lot we can do to help digitize our clients' manual workflows while the global fixed income markets and broader swaps markets grow. And with that, let me turn it over to Sarah to discuss our financials in more detail.