Tradeweb Markets Inc (NASDAQ:TW) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 08:30 am ET


Tradeweb Markets Inc (NASDAQ:TW) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Tradeweb's Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

To begin, I will turn the call over to Head of US Corporate Development and Investor Relations, Ashley Serrao. Please go ahead.

Ashley Serrao

Thank you, and good morning. Joining me today for the call are our Chief Executive Officer, Lee Olesky who will review the highlights for the quarter and provide a business update. Our President, Billy Hult will dive a little deeper into some of the growth opportunities and Bob Warshaw, our Chief Financial Officer, will review our financial results.

Our third quarter earnings release, accompanying presentation and October volumes report, are available on the Investor Relations portion of our website. 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. 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 and periodic reports filed with the SEC.

In addition, on today's call, we will reference certain non-GAAP measures, including free cash flow, adjusted EBIT, adjusted EBITDA, adjusted net income, adjusted expenses and certain measures presented on a constant currency basis. More information regarding these non-GAAP measures, including reconciliations to the most comparable GAAP measures as applicable, are included in our earnings release and earnings presentation posted on our website and will be included in the Form 10-Q to be filed with the SEC.

To recap, this morning's results were consistent with our recent earnings pre-announcement. Specifically, we reported GAAP earnings per diluted share of $0.20. Excluding certain non-cash stock-based compensation expense, acquisition and Refinitiv-related D&A and certain FX items and assuming an effective tax rate of 26.4%, we reported adjusted net income per diluted share of $0.27. Please see the earnings release and the Form 10-Q to be filed with the SEC for additional information regarding the presentation of our historical results.

Now, let me turn the call over to Lee.

Lee Olesky

Thanks, Ashley. Good morning, everyone and thank you for joining our third quarter earnings call.

Turning to slide 4, we reported record third quarter results and set multiple new volume records as the secular drivers of our business and various investments continue to fuel growth. Serial innovation has been a reoccurring theme at Tradeweb since our inception. We will continue to invest to drive growth and make it easier for our clients to enhance their workflows.

Specifically record gross revenues of $201 million during the third quarter were up 22% year-on-year on a reported basis and 23% on a constant currency basis, which is supported by strong growth, both domestically and internationally. We're especially pleased by our international growth and see a lot of potential ahead in both Europe and Asia. This translated to improved profitability as our adjusted EBITDA margins expanded by over 600 basis points