Tradeweb Markets Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue reached $584.5 million, a 14.9% increase year-over-year (15.4% on a constant currency basis).
• Net income was $224.9 million, up 6.8% from the prior year period; adjusted net income was $238.8 million, up 15.6%.
• Diluted EPS was $0.94; adjusted diluted EPS was $1.02.
• Adjusted EBITDA was $318.9 million with a margin of 54.5%, compared to $274.4 million and 54.0% in the prior year period.
• Operating expenses increased 11.0% to $331.1 million, driven by higher employee compensation, technology investments, and professional fees.
• Adjusted expenses were $288.1 million, a 13.9% increase year-over-year.
• Free cash flow for the trailing twelve months ended September 30, 2026, was $1.1 billion, up 9.7% from the prior year period.
• Cash and cash equivalents totaled $2.1 billion with an undrawn $500 million credit facility as of September 30, 2026.

Guidance and Future Outlook:

• Updated full-year 2026 adjusted expense guidance is $1,155 million to $1,175 million, trending toward the middle of the range.
• Acquisition and Refinitiv transaction-related depreciation and amortization expense is expected to be $160 million.
• Assumed non-GAAP tax rate is projected between 23.5% and 24.5%.
• Cash capital expenditures and capitalized software development are expected to be approximately $107 million to $117 million.
• LSEG Market Data Contract Revenue is expected to be approximately $105 million.
• Guidance does not incorporate the impact of potential strategic acquisitions announced but not yet closed.

Business Segments and Product Lines:

• Rates: Revenue of $324.5 million, up 18.2% year-over-year; ADV increased 33.8%. U.S. government bond ADV rose 28.0%, while swaps/swaptions ≥1-year ADV increased 42.4%.
• Credit: Revenue of $132.9 million, up 9.6% year-over-year; U.S. credit ADV increased 23.9%, and credit derivatives ADV surged 61.3%.
• Equities: Revenue of $38.4 million, up 28.8% year-over-year; ADV increased 14.4%, driven by ETF activity.
• Money Markets: Revenue of $44.2 million, up 3.0% year-over-year; ADV increased 6.0%, driven by global repurchase agreement activity.
• Market Data: Revenue of $36.9 million, up 19.6% year-over-year, primarily due to amended LSEG market data license agreements.
• Other: Revenue of $7.6 million, down 17.3% year-over-year, due to lower digital asset revenue from the Canton Network.
• Innovation: Enhanced Tradeweb Ai-Price with more responsive corporate bond pricing; launched local-to-local trading for Saudi Riyal-denominated debt; completed first real-time transaction involving tokenized U.S. Treasuries on the Canton Network.

Market and Competitive Landscape:

• Average daily volume (ADV) for the quarter was $3.2 trillion, a 22.4% increase year-over-year, with quarterly ADV records in municipal bonds.
• Tradeweb reported a 19.9% share of fully electronic U.S. high grade TRACE (up 130 bps) and 7.9% share of fully electronic U.S. high yield TRACE (up 40 bps).
• Total share of U.S. high grade TRACE was 27.9% (up 170 bps) and total share of U.S. high yield TRACE was 9.9% (up 10 bps).
• Market share growth in U.S. High Grade was partially influenced by a FINRA rule change effective August 31, 2026, which excluded certain duplicate trades from industry volumes.

Risks and Challenges:

• Operating expenses increased due to higher incentive compensation tied to financial performance, headcount growth, and increased investment in AI and data strategy.
• Other income decreased 52.5% year-over-year, impacted by a $24.0 million unrealized loss on Canton Coin holdings, partially offset by gains from Securitize and minority equity investments.
• Average variable fees per million declined in Rates (10.5% for derivatives ≥1-year) and Credit (10.6% for cash credit) due to mix shifts toward lower-fee activities like compression and Portfolio Trading.

Management Commentary and Tone:

• CEO Billy Hult stated that revenue and volumes reflect the strength of the global, multi-asset platform despite rising Treasury yields, shifting central bank policy, and geopolitical uncertainty.
• Management emphasized a strategy of combining strategic acquisitions with organic innovation to connect trading across the entire bond lifecycle.
• The company highlighted continued investment in opportunities to drive long-term growth and bring new efficiencies to trading, settlement, and collateral mobility.

Analyst Questions and Answers:

• No specific analyst questions and answers were included in the provided press release text.

Other Key Points:

• In October 2026, Tradeweb announced a definitive agreement to acquire Trumid Holdings, LLC for approximately $1.97 billion ($1.89 billion cash, $82.0 million equity), with the transaction targeted to close in the first half of 2027.
• The Board declared a quarterly cash dividend of $0.14 per share, a 16.7% increase from the prior year period, payable on December 15, 2026.
• During the quarter, Tradeweb repurchased 2,020,555 shares of Class A common stock for $209.8 million, leaving $124.5 million in remaining authorization.
• Tradeweb participated in Capitolis' $220 million financing round at a $1.9 billion valuation.
• The company held 1.6 billion Canton Coins valued at $207.5 million, with 1.3 billion coins (valued at $163.7 million) restricted from transfer.