Q4 2023 Tradeweb Markets Inc Earnings Call

Operator: Good morning, and welcome to Tradeweb's fourth quarter 2023 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 Serrao. Please go ahead.

Good morning, and welcome to trade webs fourth quarter 2023 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 F.

P N E and Investor Relations Ashley Serrao. Please go ahead.

Ashley Neil Serrao: Thank you and good morning. Joining me today for the call are our CEO, Billy Hult, who will review the highlights for the quarter and provide a brief business update, our President, Tom Pluta, who will dive a little deeper into some growth initiatives, and our CFO, Sarah Ferber, who will review our financial results. We intend to use the website as a means of disclosing material, non-public information and complying with our disclosure obligations under Regulation F-2. 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 Security Solicitation Reform Act of 1995. Statements related to, among other things, our guidance, our forward-looking statements, and actual results may differ materially from these forward-looking statements.

Ashley Neil Serrao: Thank you and good morning.

Ashley Neil Serrao: Joining me today for the call are CEO, Billy Hult, who will review the highlights for the quarter and provide a brief business update.

Ashley Neil Serrao: And Tom, Florida, who will dive a little deeper into some growth initiatives and our CFO, Sarah Ferber, who will review our financial results. We intend to use the website as a means of disclosing material nonpublic information and complying with disclosure obligations under regulation FD.

Speaker Change: I 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 are forward looking statements actual results may.

Speaker Change: 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 presentation and periodic reports filed with the SEC.

Ashley Neil Serrao: Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release, 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 presentation. Information regarding market industry data, including sources, is in our earnings presentation. Now, let me turn the call over to Billy. Thanks, Ashley.

Speaker Change: 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 presentation.

Speaker Change: Information regarding market and industry data, including sources is that our earnings presentation now, let me turn the call over to Billy.

William Hult: Thanks Ashley.

William Hult: Good morning, everyone, and thank you for joining our fourth quarter earnings call. I am extremely proud of our Tradeweb team, which generated the best revenue quarter in our history and again showcased the diversity of our revenue growth. We entered 2024 with strong momentum across our business. Many of you have heard me in the past talk about the battle against the phone as a one-way train, and in many of our businesses, that train has a long way to go. While the secular tailwinds are powerful, we also need to be focused on making a difference and creating our own waves.

William Hult: Good morning, everyone and thank you for joining our fourth quarter earnings call.

William Hult: I am extremely proud of our trade web team that generated the best revenue quarter in our history and again showcase the diversity of our revenue growth. We entered 2024 with strong momentum across our businesses. Many of you heard me in the past talk about the battle against the phone as a one way train and in many of our businesses.

William Hult: That train has a long way to go.

William Hult: While the secular tailwind as our powerful we also need to be focused on making a difference in creating our own waves relationship building is a priority in the past year as CEO I've stressed the importance of engaging regularly with our customers to understand how we can work together to move markets forward and improve their trading.

William Hult: Relationship building is a priority, and in the past year as CEO, I've stressed the importance of engaging regularly with our customers to understand how we can work together to move markets forward and improve their trading experience. Our customer skill sets are evolving as they continue to become more tech savvy and sophisticated in how they want to interact with the market. We believe the world is moving towards a more algorithmic and multi-asset class ecosystem. This puts the spotlight directly on our one-stop-shop value proposition in a good way, which we continue to take to the next level by investing in technology and adding and linking products across geographies.

William Hult: Periods, our customers' skill sets are evolving as they continue to become more tech savvy and sophisticated in how they want to interact with the markets. We believe the world is moving towards a more algorithmic and multi asset class ecosystem.

William Hult: This puts the spotlight directly on our one stop shop value proposition and a good way, which we continue to take to the next level by investing in technology and <unk>.

William Hult: Adding in linking products and geographies.

William Hult: Diving into the fourth quarter, client activity and risk appetite continued to grow, which drove strong double-digit revenue. Specifically, on slide four, record revenues of $370 million were up 26.3% year-over-year on a reported basis and 24.6% on a constant currency basis, and adjusted EBITDA margins expanded by 15 basis points on a reported basis and 122 basis points on a constant currency basis relative to the fourth quarter of 2022. Turning to slide 5, rates and credit led the way, accounting for 60% and 27% of our revenue growth, respectively. Record revenues across rates were driven by double-digit revenue growth across global government bonds, swaps, and mortgages. Similarly, the record revenues across credit were led by strong U.S. and European corporate credit and municipal trading, including record quarterly market share and electronic U.S. investment grades. Money Markets also hit a record, fueled by growth in our Retail Certificate of Deposit franchise and continued organic growth in institutional repos.

William Hult: Diving into the fourth quarter client activity and risk appetite continued to grow which drove strong double digit revenue growth.

Specifically on slide four record revenues of $370 million were up 26, 3% year over year on a reported basis and 24, 6% on a constant currency basis, and adjusted EBITDA margins expanded by 15 basis points on a reported basis and one <unk>.

William Hult: Hundred and 22 basis points on a constant currency basis relative to the fourth quarter of 2022.

William Hult: Turning to slide five recent credit led the way accounting for 60% and 27% of our revenue growth respectively.

William Hult: Record revenues across rates were driven by double digit revenue growth across global government bonds swaps and mortgages.

William Hult: Similarly, the record revenues across credit were led by strong U S and European corporate credit in Muni trading, including record quarterly market share and electronic U S investment grade.

William Hult: Money markets also had a record fueled by growth in our retail certificate of deposit franchise and continued organic growth in institutional repos equities.

William Hult: Equities revenues were driven by institutional ETFs and our efforts to diversify and grow our other equity products. Finally, market data revenues were driven by our LSEG contract and our proprietary data products, which continue to enjoy robust growth. Turning to slide six, our record fourth quarter capped off a record year in 2023; record volumes across the most asset classes translated into 12.6% and 12.2% revenue growth on a reported and constant currency basis respectively. The scale generated by our strong top-line results drove approximately 49 basis points of adjusted EBITDA margin expansion and 19% adjusted earnings growth. As our growth initiatives continue to scale, we maintain our tradition of constant and focused organic investment. 2023 was a very productive year with numerous accomplishments to highlight.

William Hult: It was driven by institutional Etfs, and our efforts to diversify and grow our other equity products.

William Hult: Finally market data revenues were driven by our <unk> contract and our proprietary data products, which continued to enjoy robust growth.

William Hult: Turning to slide six our record fourth quarter capped off a record year in 2023 record volumes across most asset classes translated into 12, 6% and 12, 2% revenue growth on a reported and constant currency basis, respectively.

William Hult: Scale generated by our strong top line results drove approximately 49 basis points of adjusted EBITDA margin expansion and 19% adjusted earnings growth.

William Hult: As our growth initiatives continue to scale, we maintain our tradition of constant and focused organic investments.

2023 was a very productive year with numerous accomplishments to highlight broadly they can be summed up as enhancing our existing product capabilities, adding new clients forging new partnerships and placing more bets on the table on.

William Hult: Broadly, they can be summed up as enhancing our existing product capabilities, adding new clients, forging new partnerships, and placing more bets on the table. On the capability front, we completed our integration of the NASDAQ Fixed Income Acquisition, made meaningful progress across our mortgage-specified pool platform, and expanded our product suite across global swaps. On the client side, we continue to scale our credit, mortgage, and swaps platform as we make inroads with our largest clients. On the collaboration front, we completed the first phase of our integration with BlackRock's Aladdin, expanded our partnership with FTSE Indices, went live with our FX All Link for FX hedging, and announced our new data licensing agreement with LSEC. Finally, we spent $205 million in a mix of cash and equity on our acquisitions of Yield Broker in August of 2030 and Raid Fin in January 2024.

William Hult: On the capability front, we completed our integration of the NASDAQ fixed income acquisition made meaningful progress across our mortgage specified pool platform and expanded our product suite across global swaps.

On the client side, we continue to scale, our credit mortgage and swaps platform as we make inroads with our largest clients on the collaboration front. We completed the first phase of our integration with Blackrock Aladdin expanded our partnership with FTSE indices went live with our FX all link for FX hedging and <unk>.

William Hult: <unk>, our new data licensing agreement with al sake.

William Hult: Finally, we spent $205 million and a mix of cash and equity on our acquisitions of yield broker in August 23, and the right fit in January 2024.

William Hult: We believe our investments have not only positioned us well for the future but also helped make 2023 another banner year for Tradeweb. Moving to slide seven, 2023 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, 40% of our revenue growth came from our other business. In fact, over the last five years, we have nearly doubled our overall revenues, over 50% of that revenue growth coming from our non-rates businesses, with nearly 40% of the revenue growth coming from our international business, which has averaged 18% since 2016. Our international revenues are anchored by our European business, but our Asian business produced fourth-quarter revenue growth in excess of 50% year-over-year.

William Hult: We believe our investments have not only positioned us well for the future, but also helped to make 2023. Another banner year for trade web moving to slide seven 2023 continued the streak of robust revenue growth that we have worked hard to deliver for multiple years now specifically.

William Hult: While the majority of our revenue is still come from rates, 40% of our revenue growth came from our other businesses in fact over the last five years, we've nearly doubled our overall revenues over 50% of that revenue growth coming from our non res businesses with nearly 40% of the revenue growth coming from our international.

William Hult: Which has averaged 18% since 2016.

William Hult: Our international revenues are anchored by our European business, but our Asian business produced fourth quarter revenue growth in excess of 50% year over year.

William Hult: Looking ahead, we believe Asia-Pacific and, more broadly, emerging markets will continue to become a larger component of our international growth story over the next few years. We are focused on expanding our client footprint across domestic markets and protocols and cross-selling our leading products. Our cross-selling initiatives continue to pay dividends with the recent yield broker acquisition, which we believe will unlock more opportunity. Relentless innovation has been critical to our success.

William Hult: Looking ahead, we believe Asia Pacific and more broadly emerging markets will continue to become a larger component of our international growth story over the next few years, we are focused on expanding our client footprint across domestic markets and protocols and cross selling our leading products our cross selling initiatives continue to.

William Hult: Dividends with the recent yield broker acquisition, which we believe will unlock more opportunities.

William Hult: 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 eight years, we've invested over $630 million in technology to help shape the future of electronic markets growing those investments.

William Hult: Throughout our history, we have prioritized being first to market, which requires constant investment. In the last eight years, we have invested over $630 million in technology to help shape the future of electronic markets, growing those investments at an average of 13% since 2016. And as our investments bear fruit, adjusted EBITDA margins have expanded methodically. Looking ahead, we expect 2024 to be another investment year. Our investments remain heavily concentrated in rates and credit, and we are in the early stages of building out our emerging markets franchise.

William Hult: At an average of 13% since 2016 and as our investments bear fruit adjusted EBITDA margins have expanded methodically.

William Hult: Looking ahead, we expect 2024 to be another investment year, our investments remain heavily concentrated in rates and credit and we are in the early stages of building out our emerging markets franchise. We are optimistic about the long term durability of our growth across the business given our market share gains and piping.

William Hult: We are optimistic about the long-term durability of our growth across the business, given our market share gains and pipeline of innovation. Turning to slide eight, I will provide a brief update on two of our main focus areas, U.S. Treasuries and ETFs, and turn it over to Tom to dig deeper into U.S. credit and global interest rate swaps. Starting with U.S. Treasuries, fourth quarter revenues achieved a new record, increasing by 18% year-over-year.

William Hult: Line of innovations.

William Hult: Turning to slide eight I will provide a brief update on two of our main focus areas U S treasuries and Etfs and turn it over to Tom to dig deeper into U S credit and global interest rate swaps.

William Hult: Starting with U S treasuries fourth quarter revenues achieved a new record increasing by 18% year over year. This was driven by our institutional business that had its best revenue quarter ever led by record Adv across our institutional streaming protocol and growing adoption of our RF <unk> plus offer.

William Hult: This was driven by our institutional business, which had its best revenue quarter ever, led by record ADV across our institutional streaming protocol and growing adoption of our RFQ Plus offer. The high-rate environment continued to propel our retail business, where fourth-quarter revenues grew 10% year-over-year. The leading indicators for the institutional business remain strong.

William Hult: Hey.

William Hult: The high rate environment continued to propel our retail business, where fourth quarter revenues grew 10% year over year.

William Hult: The leading indicators that the institutional business remains strong we gained share and we achieved record quarterly market share of long dated U S treasuries versus Bloomberg client engagement was healthy with institutional average daily trades up 55% year over year.

William Hult: We gained share, and we achieved record quarterly market share of long-dated U.S. Treasuries versus Bloomberg. Client engagement was healthy, with institutional average daily trades of 55% year-over-year. Automation continues to be an important theme with institutional U.S. Treasury AIX average daily trades increasing by more than 120% year-over-year and over 50% of our institutional tickets utilizing our AIX functionality. Our wholesale business produced its best revenue quarter in our history, led by record volumes across our Sessions Protocol and the second-best quarter for our Streaming Protocol. Our central limit order book ADV was down 1% year-over-year given tougher CLOB market conditions, though the team remains focused on onboarding more liquidity providers over the coming quarters as they deliver on a holistic strategy across our wholesale protocols.

William Hult: Automation continues to be an important theme with institutional U S. Treasury AI acts average daily trades, increasing by more than 120% year over year and over 50% of our institutional tickets utilizing our <unk> functionality.

William Hult: Our U S treasuries wholesale business produced its best revenue quarter in our history led by record volumes across our sessions protocol and the second best quarter for our streaming protocol or central limit order book Adv was down 1% year over year, given tougher club market conditions.

William Hult: Our team remains focused on onboarding more liquidity providers over the coming quarters as they deliver on a holistic strategy across our wholesale protocols.

William Hult: With equities, our ETF business outperformed the overall market with fourth quarter revenues of 10% year over year, with industry activity picking up. Other initiatives to expand our equity brand beyond our flagship ETF franchise continue to bear fruit. Fourth quarter institutional equity derivative revenues were up nearly 30% year-on-year, driven by strong double-digit growth across options and convertibles.

William Hult: Within equities, our ETF business outperformed the overall market with fourth quarter revenues up 10% year over year with industry activity picking up.

William Hult: Other initiatives to expand our equity brand.

William Hult: <unk> flagship ETF franchise continue to bear fruit.

William Hult: Fourth quarter institutional equity derivative revenues were up nearly 30% year on year, driven by strong double digit growth across options and convertibles looking ahead. The client pipeline remains strong as the benefits of our electronic solutions continue to resonate. We believe we are well positioned to capitalize.

Tom Pluta: Looking ahead, 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 businesses. With that, I will turn it over to Billy.

William Hult: Lives on the long term secular ETF growth story, not just in equities, but across our fixed income business.

William Hult: With that I will turn it over to Tom.

Tom: Thanks Billy.

Tom: Turning to slide nine for a closer look at credit.

Tom Pluta: Strong double-digit revenue growth was driven by 31 percent and 46 percent year-over-year revenue growth across U.S. and European credit, respectively. Muni has produced high single-digit growth, driven by a pickup in tax-loss harvesting, while credit derivatives continue to see softer industry trends. Automation continued to surge, with global credit AIX average daily trades increasing 90% year over year.

Tom: Strong double digit revenue growth was driven by 31% and 46% year over year revenue growth across U S and European credit respectively.

Tom: Muni has produced high single digit growth driven by a pickup in tax loss harvesting, while credit derivatives continued to see softer industry trends.

Tom: Automation continued to surge with global credit <unk> average daily trades, increasing 90% year over year.

Tom Pluta: We achieved another fully electronic quarterly market share record across US IG, helped by our highest quarterly IG block market share. Our institutional business continues to scale to new highs as we continue to provide our clients with a diverse set of protocols that meet their execution needs across a variety of market environments. Our primary focus on growing institutional RFQ continues to pay off, with ADB growing 28% year-over-year, with strong double-digit growth across both IG and high yield. Overall, portfolio trading ADV rose over 40% year-over-year, led by growth across U.S. and European PTs.

Tom: We achieved another fully electronic quarterly market share record across U S. I G helped by our highest quarterly <unk> block market share.

Tom: Our institutional business continues to scale to new highs as we continue to provide our clients with a diverse set of protocols that meet their execution needs across a variety of market environments.

Tom: Our primary focus on growing institutional RF Q continues to pay off with Adv growing 28% year over year with strong double digit growth across both <unk> and high yield.

Tom: Overall portfolio trading Adv rose over 40% year over year led by growth across U S and European P T.

Tom Pluta: In the fourth quarter, we produced record ADV across IG portfolio trading. Our clients continue to get more sophisticated in their usage of PT, with 75% of our PT volume done in comp, the highest percentage since the second quarter of 2020. Retail credit revenues were up over 20% year-over-year as financial advisors turned their focus towards more spread-based yielding products to complement buying U.S. Treasury bonds. All trade produced a record quarter with over $157 billion in volume.

Tom: In the fourth quarter, we produced record Adv across IHG portfolio trading.

Tom: Our clients continue to get more sophisticated in their usage of P. T with 75% of our PT volume done in comp the highest percentage since the second quarter of 2022.

Tom: Retail credit revenues were up over 20% year over year as financial advisors turned their focus towards more spread based yielding products to complement buying of U S. Treasuries.

Tom: All trade produced a record quarter with over $157 billion in volume our all to all volumes grew over 30% year over year. While we also saw over 40% year over year growth in our dealer RF SKU offering.

Tom Pluta: Our all-to-all volumes grew over 30% year-over-year, while we also saw over 40% year-over-year growth in our dealer RFQ offer. The team continues to be focused on broadening out our network and increasing the number of responses on the AllTrade platform. In the fourth quarter, the number of all-to-all responders rose by over 20 percent, and responses increased by 60 percent year-over-year.

Tom: The team continues to be focused on broadening out our network and increasing the number of responses on the all trade platform.

Tom: In the fourth quarter, the number of all to all responders grows by over 20% and responses increased by 60% year over year.

Tom Pluta: We also continue to increase our engagement and wallet share with ETF market makers, where inquiry and traded volume is up over 300% year over year. Finally, our sessions ADV grew over 40% year-over-year, while rematch produced 10% year-over-year growth. Looking ahead, U.S. credit remains our biggest focus area, and we like the way we are positioned across our three client channels. We believe we have a long runway of growth ahead of us and are focused on serving the growing passive markets. Investing in our autoresponding and algorithmic technology, increasing our wallet share across all-to-all and DRFQ protocols, and looking at ways to help our dealer clients more efficiently recycle their risk. Additionally, we are focused on improving the analytics around pre and post trade data. Specifically, across high yield, we have more work to do to drive increased client engagement. We believe we can replicate the success we've had across IG with a particular focus on increasing our penetration with ETF market makers and leveraging our Aladdin collaboration to grow our all-to-all network post-integration. Beyond U.S. credit, our EM expansion efforts continue to progress steadily.

Tom: We also continued to increase our engagement and wallet share with ETF market makers, where inquiry and traded volume was up over 300% year over year.

Tom: Finally, our sessions Adv grew over 40% year over year, while <unk> produced 10% year over year growth.

Tom: Looking ahead U S credit remains our biggest focused area and we like the way we are positioned across our three client channels.

Tom: We believe we have a long runway of growth ahead of us and are focused on serving the growing passive markets.

Investing in our auto responding and algorithmic technology.

Tom: Creasing, our wallet share across all to all and Dr. Acute protocols and looking at ways to help our dealer clients more efficiently recycle their risk.

Tom: Additionally, we are focused on improving the analytics around pre and post trade data specifically.

Specifically across high yield we have more work to do to drive increased client engagement.

Tom: We believe we can replicate the success we've had across <unk> with a particular focus on increasing our penetration with ETF market makers and leveraging our Aladdin collaboration to grow our ultra all network post integration.

Tom: Beyond U S credit our <unk> expansion efforts continued to progress steadily in.

Tom Pluta: In the fourth quarter, we went live with our non-deliverable forward for FX swap hedging in collaboration with FX All, and we continue to build out functionality for multi-asset package trading. Moving to slide 10, global swaps produced record revenues as a vigorous debate on the timing and direction of central bank rate moves and market share gains drove record results across U.S., European, APAC, and emerging market swaps. The fourth quarter saw continued impacts from lower duration as clients traded on the shorter end of the yield curve, and we had record compression activity in November. However, variable swaps revenues increased 65% year-over-year despite an 8% decrease in duration year-over-year.

Tom: In the fourth quarter, we went live with our non deliverable forward for FX swap hedging in collaboration with FX. All in we continue to build out functionality for multi asset package trading.

Tom: Moving to slide 10, global swaps produced record revenues as a vigorous debate on the timing and direction of Central bank rate moves and market share gains drove record results across U S European and APAC and emerging market swaps.

Tom: The fourth quarter saw continued impacts from lower duration as clients traded on the shorter end of the yield curve and we had record compression activity in November.

Tom: Variable swaps revenues increased 65% year over year, despite an 8% decrease in duration year over year.

Tom Pluta: Overall, global swaps revenues in the fourth quarter grew 51% year-over-year, and market share rose to 23.6%, with record share across all current, Additionally, over the last two years, we have produced strong double-digit active user growth across currencies, with the fastest growth happening across our early-stage penetration into EM swaps. We continue to make progress across emerging market swaps and a rapidly growing RFM protocol. Our fourth quarter EM swaps revenues increased over 150% year-over-year, and we believe there is still a lot of room to grow given the low levels of electronification. Meanwhile, our RFM protocol continued to see strong adoption, with ADD rising over 160% year-over-year. The strong fourth quarter capped off another record year for our swaps business, with overall swaps revenues increasing 18% year-over-year.

Tom: Overall global swaps revenues in the fourth quarter grew 51% year over year and market share rose to 23, 6% with record share across all currencies.

Tom: Additionally over the last two years, we have produced strong double digit active user growth across currencies with the fastest growth happening across our early stage penetration into E M swaps.

Tom: We continue to make progress across emerging market swaps and a rapidly growing RSM protocol.

Tom: Our fourth quarter M swaps revenues increased over 150% year over year, and we believe there is still a lot of room to grow given the low levels of electronic vacation.

Tom: While our RSM protocol continued to see strong adoption with Adv rising over 160% year over year.

Tom: The strong fourth quarter capped off another record year for our swaps business with overall swaps revenues, increasing 18% year over year.

Tom Pluta: Moving to slide 11, over the last five years, our variable swaps revenues have grown at a CAGR of 26%. We've produced this strong five-year revenue growth despite an evolving macro backdrop and tepid industry volume growth of 4%. From falling rates to zero rates, back to the highest short-term rates we have seen since 2001, the durability of our swap's revenue growth continued to shine through, despite COVID, elevated volatility driving a risk-off environment, and the failure of several banks. In fact, since the beginning of 2019, the swaps business has produced positive revenue growth in 18 of the last 20 quarters, with 15 of those 18 quarters producing double-digit year-over-year The two quarters with negative year-over-year revenue growth were due to extreme factors; market dislocation related to COVID in the third quarter of 2020 caused revenues to fall 2% year over year, and excess market volatility prompting clients to take risk off the table in the fourth quarter of 2022 led to a 4% drop in revenue.

Tom: Moving to slide 11 over the last five years, our variable swaps revenues have grown at a CAGR of 26%.

Tom: We produced a strong five year revenue growth, despite any evolving macro backdrop and tepid industry volume growth of 4%.

Tom: From falling rates to zero rates back to the highest short term rates, we have seen since 2001, the durability of our swaps revenue growth continued to shine through.

Tom: By Covid elevated volatility driving a risk off environment and the failure of several banks.

Tom: In fact since the beginning of 2019 the swaps business has produced positive revenue growth in 18 of the last 20 quarters with 15 of those 18 quarters, producing double digit year over year revenue growth.

Tom: The two quarters with negative year over year revenue growth were due to extreme factors.

Tom: Market dislocation related to Covid in the third quarter of 2020 cause revenues to fall, 2% year over year.

Tom: And excess market volatility, prompting clients to take risk off the table in the fourth quarter of 2022 led to a 4% drop in revenues.

Tom Pluta: As debate has picked up in the market around the level of rates and the shape of global yield curves, industry volumes rose 21% year over year. However, it's important to note that most of this increase has been driven by a pickup in short-end activity, which we monetize at very low levels. In fact, we generate over 95% of our swaps revenue from variable fees on longer-dated trades greater than one year and 82% on trades greater than two years. Based on LCH data, over the last two years since central banks started to hike rates, short-dated industry volumes, which are defined as anything less than two years, grew over 80 percent versus 2021, while longer-dated industry volumes grew only 15 percent.

Tom: As debate has picked up in the market around the level of rates and the shape of global yield curves industry volumes rose, 21% year over year.

Tom: However, it is important to note that most of this increase has been driven by a pickup in short end activity, which we monetize at very low levels.

Tom: In fact, we generate over 95% of our swaps of variable fees on longer data trades greater than one year and 82% on trades greater than two years.

Tom: Based on LCA its data over the last two years since central banks started to hike rates short dated industry volumes, which are defined as anything less than two years grew over 80% versus 2021, while longer dated industry volumes grew only 15%.

Tom Pluta: Looking ahead, from a cyclical standpoint, we believe as the yield curve normalizes, this should boost longer-dated activity. In terms of what we can control, we continue to make further inroads across products and are seeing early success across inflation swaps, swaptions, and EM swaps. We are also looking at expanding our presence across multi-asset package swaps in the coming year. The focus on building solutions that matter to clients is paying dividends

Tom: Looking ahead from a cyclical standpoint, we believe as the yield curve normalizes this should boost longer dated activity.

Tom: In terms of what we can control we continue to make further inroads across products and are seeing early success across inflation swaps swaption and E M swaps.

Tom: We are also looking at expanding our presence across multi asset package swaps in the coming year.

Tom: The focus on building solutions that matter to clients is paying dividends with.

Tom Pluta: With the market still only about 30% electronic, we believe there remains a lot that we can do to help digitize our clients' manual workflows while the global fixed income markets and the broader swaps market grow. Before I pass it on to Sarah, let me touch on compression and the impact on our swap fee per million. Compression trading is a natural part of the market. Clients put new risk on and then collapse old risk as the market environment changes. Given that we primarily charge clients for new risk put through the platform, we do not earn meaningful amounts of revenue from pure compression flow, as that activity is mainly related to clients reducing line items that they have traded in order to reduce operational costs.

Tom: But the market is still only about 30% electronic side. We believe there remains a lot that we can do to help digitize our client's manual workflows, while the global fixed income markets and broader swaps market growth.

Tom: Before I pass it on to Sarah Let me touch on compression and the impact to our swaps fee per million.

Tom: Compression trading as a natural part of the market.

Tom: Clients put new risk on and then collapse old risk as the market environment changes.

Tom: Given that we primarily charge clients for new risk put through the platform. We do not earn meaningful amounts of revenue from pure compression flow is that activity is mainly related to clients reducing line items that they have traded in order to reduce operational costs.

Tom Pluta: Stripping out compression activity, our risk fee per million has been relatively steady over the last few years, with the movement really being driven by product mix shifts and duration, which impacts the calculation of risk being put on by clients. While compression alone isn't meaningful for revenues, it has become essential to our client workflow, increased platform stickiness, and has driven higher risk trading, which we can monetize. Across our top 10 compression clients, as they have picked up their compression flow, this has also led to a material increase in the amount of risk volumes put through the platform. Additionally, our top five compression clients have maintained or improved their overall risk flow ranking over the last year. And with that, I will turn it over to Sarah to discuss our finances in more detail. Thanks, Tom, and good morning.

Tom: Stripping out compression activity, our risk fee per million has been relatively steady over the last few years with the movement really being driven by product mix shift and duration, which impacts the calculation of risk being put on by clients.

Tom: While compression alone isn't meaningful for revenues it has become essential to our client workflow increase platform stickiness and has driven higher risk trading, which we can monetize.

Tom: Across our top 10 compression clients as they have picked up their compression flow. This has also led to a material pickup in the amount of risk volumes put through the platform additions.

Tom: Additionally, our top five compression clients have maintained or improved their overall risk flow ranking over the last year.

Tom: And with that let me turn it over to Sarah to discuss our financials in more detail.

Sarah Ferber: Thanks, Tom and good morning, and then go through the numbers all comparisons will be to the prior year period, unless otherwise noted.

Sarah Ferber: As I go through the numbers, all comparisons will be to the prior year period unless otherwise noted. Slide 13 provides a summary of our quarterly earnings performance. As Billy recapped earlier, this quarter we saw record revenues of $370 million that were up 26.3% year-over-year on a reported basis and 24.6% on a constant currency basis. Specifically, we derived approximately 37% of our fourth-quarter revenues from international customers, and recall that approximately 30% of our revenue base is denominated in currencies other than dollars, predominantly in euros. Our variable revenues increased by 35%, and total trading revenues increased by 27%. Total fixed revenues related to our four major asset classes were up 7% on a reported basis and 5.5% on a constant currency basis.

Sarah Ferber: Slide 13 provides a summary of our quarterly earnings performance.

Sarah Ferber: Julie Recapped earlier this quarter, we saw record revenues of $370 million that were up 26, 3% year over year on a reported basis.

Sarah Ferber: And 24, 6% constant currency basis.

Sarah Ferber: Specifically, we derived approximately 37% of our fourth quarter revenues from international customers and recall that approximately 30% of our revenue base is denominated in currencies other than dollars.

Sarah Ferber: <unk> in euros.

Sarah Ferber: Our variable revenues increased by 35% and total trading revenues increased by 27%.

Sarah Ferber: Total fixed revenues related to our four major asset classes were up 7% on a reported and five 5% on a constant currency basis.

Sarah Ferber: Rates fixed revenue growth was driven by the addition of new dealers across our mortgage specified pools platform and our U.S. Treasury streams and CLOB protocols. Credit fixed revenue growth was driven by the previously disclosed dealer fee increases, which we instituted at the start of the fourth quarter, and other trading revenues were down 6%. As a reminder, this line fluctuates as it reflects revenues tied to periodic technology enhancements performed for our retail clients. The full year 2023 adjusted EBITDA margin of 52.4% increased by 49 basis points on a reported basis and 100 basis points on a constant currency basis from the full year 2022. Moving on to fees per million on slide 14 and a highlight of the key trends for the quarter.

Right fixed revenue growth was driven by the addition of new dealers across our mortgage specified pools platform and our U S Treasury stream protocols.

Sarah Ferber: Great sex revenue growth was driven by the previously disclosed dealer fee increases, which we instituted at the start of the fourth quarter.

Sarah Ferber: And other trading revenues were down 6%.

Sarah Ferber: As a reminder, this line fluctuates as it reflects revenues tied to periodic technology enhancements perform farm retail clients.

Sarah Ferber: Full year 2023, adjusted EBITDA margin of 52, 4% increased by 49 basis points on a reported basis and one <unk>.

Sarah Ferber: 100 basis points on a constant currency basis from the full year 2022.

Sarah Ferber: Moving onto fees per million on slide 14, and highlight the key trends for the corner you can see slide 20 of the earnings presentation for additional detail regarding our fee per million performance this quarter.

Sarah Ferber: You can see slide 20 of the earnings presentation for additional detail regarding our fee-per-million performance this quarter. Overall, our blended fees per million decreased 15 percent year over year, primarily due to a shift away from cash rates and a decrease in cash credit and cash equities fees per million. For cash rates products, fees per million were up 2 percent, primarily due to an increase in the European government bond fee per million. For long tenor swaps, fees per million were down 29%, primarily due to an 8% decline in duration year-over-year and an increase in compression trades. This was partially offset by growth in emerging markets, European swaps, and our RFM protocol. For cash credit, average fees per million decreased 4% due to a mixed shift away from munis, partially offset by an increase in European credit fees per million.

Sarah Ferber: Overall, our blended fee per million decreased 15% year over year, primarily due to a shift away from cash rate and a decrease in cash credit and cash equities fee per million.

Sarah Ferber: The cash rates products fees per million or up 2%, primarily due to an increase in the European government bond fee per million.

Sarah Ferber: For long tenor swaps Easter a million were down 29%, primarily due to an 8% decline in duration year over year and an increase in compression trades. This.

Sarah Ferber: This was partially offset by growth in emerging markets European slots and our RSM protocol.

Sarah Ferber: For cash credit average fees per million decreased 4% due to a mix shift away from <unk>, partially offset by an increase in European credit fee per million.

Sarah Ferber: For cash equities, average fees per million decreased by 6% due to a reduction in U.S. ETF fees per million, given an increase in notional per share trades. Recall that in the U.S., we charge per share and not for notional value. Finally, within money markets, average fees per million increased 3%, driven by an increase in U.S. CDs fees per million. Slide 15, Details or Adjusted Expense, At a high level, the scalability and variable nature of our expense base allows us to continue to invest for growth and grow margins. We've maintained a consistent philosophy here. Adjusted expenses for the fourth quarter increased 24.7% on a reported basis and 20.7% on a constant currency basis.

Sarah Ferber: Our cash equities average fees per million decreased by 6% due to a reduction in U S. ETF fee per million given an increase in notional personal training.

Sarah Ferber: Recall in the U S, we charge per share and not for notional value traded.

Sarah Ferber: Finally within money market average fees per million increased 3% driven by an increase in U S Cds fee per million.

Sarah Ferber: Slide 15 details our adjusted expenses.

The high level, the scalability and variable nature of our expense base allows us to continue to invest for growth and grow margins. We've maintained a consistent philosophy here.

Sarah Ferber: Adjusted expenses for the fourth quarter increased 24, 7% on a reported basis and 27% on a constant currency basis.

Sarah Ferber: Compensation costs increased 30.7% due to increases in headcount and performance-related costs. Technology and communication costs increased 24.8% primarily due to higher data fees and our previously communicated investments in data strategy and infrastructure. Professional fees decreased 18% mainly due to a decrease in legal, and adjusted general and administrative costs increased due to a pickup in marketing and philanthropy and unfavorable movements in FF. Unfavorable movements in FX resulted in a $500,000 loss in the fourth quarter of 2023 versus a $2.6 million gain in the fourth quarter of 2022, a delta of over $3.1 million between the fourth quarter of 2023 and 2022. Slide 16 details capital management and our guidance. On our cash position and capital return policy, we ended the fourth quarter in a strong position, with $1.7 billion in cash and cash equivalents. Free cash flow reached approximately $684 million for the trailing 12 months, up 19% year-over-year.

Sarah Ferber: Compensation costs increased 37% due to increases in head count and performance related compensation.

Sarah Ferber: Technology and communication costs increased 24, 8%, primarily due to higher data fees and our previously communicated investments in data strategy and infrastructure.

Sarah Ferber: Professional fees decreased 18%, mainly due to a decrease in legal fees.

Sarah Ferber: And adjusted General and administrative costs increased due to a pickup in marketing and philanthropy and unfavorable movements in FX.

Sarah Ferber: Unfavorable movements in FX resulted in a $500000 loss in the fourth quarter of 23 versus $2 $6 million gain in the fourth quarter of 'twenty two a delta of over $3 1 million between the fourth quarter of 'twenty, three and 'twenty two.

Sarah Ferber: Slide 16 details capital management and our guidance.

Sarah Ferber: Our cash position and capital return policy, we ended the fourth quarter in a strong position with $1 7 billion in cash and cash equivalents free.

Sarah Ferber: Free cash flow reached approximately $684 million for the trailing 12 months.

Sarah Ferber: 18% year over year. Please.

Sarah Ferber: We spent $90 million in cash as partial consideration for rate fin on January 19th of this year. Our net interest income of $20.3 million increased due to a combination of higher cash balances and higher interest. This was primarily driven higher by recent Fed hikes and more efficient management of our cash. Non-acquisition CapEx and capitalized software development for the quarter was $12.2 million, with a decrease driven primarily due to the timing of our investments.

Sarah Ferber: We spent $90 million in cash as partial consideration for rate on January 19th of this year.

Sarah Ferber: Our net interest income of $20 3 million increase due to a combination of higher cash balances and higher interest yields. This was primarily driven higher by recent fed hikes and more efficient management of our cash.

Sarah Ferber: Non acquisition Capex and capitalized software development for the quarter was $12 $2 million with the decrease driven primarily due to the timing of our investment spend with.

Sarah Ferber: With this quarter's earnings, the Board declared a quarterly dividend of $0.10 per Class A and Class B common stock, an increase of 11.1% year-over-year. The Board periodically evaluates our dividend along with the consistency of our earnings and free cash flow generation over time. And finally, there were no share repurchases during the fourth quarter of 2023 under our share buyback program, as we already offset equity-related dilution early in the year.

Sarah Ferber: With this quarter's earnings the board declared a quarterly dividend of 10 cents per class, a and class B common stock an increase of 11, 1% year over year.

Sarah Ferber: The board periodically evaluates our dividend along with the consistency of our earnings and free cash flow generation over time.

Sarah Ferber: And finally, there were no share repurchases during the fourth quarter of 2023 under our share buyback program as we already offset equity related dilution early in the year.

Sarah Ferber: This leaves approximately $239.8 million at the end of the quarter authorized for future deployment. Turning to guidance for 2024, We will continue to invest in 2024 and are expecting adjusted expenses to range from $755 to $805 million. Excluding the impact of acquisitions, the midpoint of this range would represent an approximate 10% increase, in line with our average expense growth from 2016. We believe we can drive adjusted EBITDA and operating margin expansion, compared to 2023, at either end of this range, although we expect the incremental margin expansion to be more modest relative to last year as overall margins are higher and we continue to focus on balancing margin expansion with investing for the future. As compared to the first half of last year, we expect to accelerate investments given the anticipated healthy revenue environment.

Sarah Ferber: This leaves approximately $239 8 million at the end of the quarter authorized for future deployment.

Sarah Ferber: Turning to guidance for 2024.

Sarah Ferber: Continuing to invest in 2024 and are expecting adjusted expenses to range from $755 million to $805 million.

Sarah Ferber: Excluding the impact of acquisitions the midpoint of this range would represent an approximate 10% increase in line with our average expense growth from 2016.

Sarah Ferber: We believe we can drive adjusted EBITDA and operating margin expansion compared to 2023 at either end of this range. Although we expect the incremental margin expansion to be more modest relative to last year. As overall margins are higher and we continue to focus on balancing margin expansion with investing for the future.

Sarah Ferber: As compared to the first half of last year, we expect to accelerate investments given the anticipated healthy revenue environment.

Sarah Ferber: We continue to invest for the future, with credit, rates, and emerging markets as key focus areas with a long runway for growth. We also continue to invest in technology that allows us to sustain and build our leading platform. Some of these investments will take some time to scale, but we continue to prize innovation and have a technology pipeline that continues to grow. We expect professional fee expenses to be above the first quarter of 23 levels as we continue to augment our technology effort with consultants. For forecasting purposes, our assumed non-GAAP tax rate ranges from 24.5% to 25.5% for the year.

Sarah Ferber: We continue to invest for the future with credit rates and emerging markets as key focus areas with a long runway for growth.

Sarah Ferber: We also continued to invest in technology that allows us to sustain and build our leading platform.

Sarah Ferber: Some of these investments will take some time to scale, but we continue to price innovation and have a technology pipeline that continues to grow.

Sarah Ferber: We expect professional fee expenses to be above the first quarter of 'twenty three levels as we continue to augment our technology effort with consultants.

Sarah Ferber: For forecasting purposes are assumed non-GAAP tax rate ranges from 24, 5% to 25, 5% for the year prior.

Sarah Ferber: The primary driver of the increase in our tax rate is related to the revenue mix skewing towards higher tax rates. We expect CapEx and capitalized software development to be about $75 to $83 million. We estimate that approximately 60% will be spent on software development to support our growth initiatives, and approximately 40% will be related to growth and maintenance capex. The midpoint of our CapEx guidance implies roughly a 28% year-over-year increase, primarily due to the acquisitions of yield broker and rate. Including these M&A-related investments and other one-time spend, the midpoint growth would be approximately 15% year-over-year. Acquisition and Refinitive Transaction-Related DNA, which we adjust out due to the increase associated with pushdown accounting, is expected to be $142 million.

A primary driver of the increase in our tax rate is related to the revenue next skewing towards higher tax states.

Sarah Ferber: We expect Capex and capitalized software development to be about $75 million to $83 million.

Sarah Ferber: We estimate that approximately 60% will be spent on software development to support our growth initiatives and approximately 40% will be related to growth and maintenance capex.

Sarah Ferber: The midpoint of our Capex guidance implies roughly a 28% year over year increase primarily due to the acquisitions of yield broker and right thing exclude.

Sarah Ferber: Excluding these M&A related investment and other one time spend the midpoint growth would be approximately 15% year over year.

Sarah Ferber: Acquisition and related transaction related DNA, which we adjust out due to the increase associated with push down accounting is expected to be $142 million.

William Hult: As we highlighted last quarter, we continue to expect 2024 and 2025 revenues generated under the new master data agreement with LSEG to be approximately $80 million and $90 million, respectively. Now I'll turn it back to Billy for his concluding remarks. Thanks, Sarah. As I embark on my 24th year at Tradeweb and my second year as CEO, we continue to see ample opportunity to grow our one Tradeweb mantra and build better markets for the future. We are focused on ensuring our DNA continues to evolve as we remain in the catbird seat as we look to innovate and find new ways to modernize the fixed income market. Innovation, collaboration, and transformation are at the core of our DNA, and I continue to be excited about the road ahead.

Sarah Ferber: As we highlighted last quarter, we continue to expect 2024, and 2000 and twenty-five revenues generated under the new Master data agreement with Al thing can be approximately $80 million and 90 million respectively.

Speaker Change: Now I'll turn it back to <unk> for concluding remarks.

Speaker Change: Thanks, Sara as I embark on my 24th year of trade Web and my second year as CEO, we continue to see ample opportunity to grow our one trade web mantra and build better markets for the future. We are focused on ensuring our DNA continues to evolve as we remain in the cat bird seat.

Speaker Change: As we look to innovate and find new ways to modernize the fixed income markets.

Innovation collaboration and transformation are at the core of our DNA and I continue to be excited about the road ahead.

William Hult: On that note, we reported strong January volumes yesterday, which translated into revenue growth in January in excess of 20% year over year. I would like to conclude my remarks by thanking our clients for their business and partnership in the quarter, and I want to thank my colleagues for their efforts that contributed to our record quarterly volumes and revenues at Tradeweb. With that, I will turn it back to Ashley for your question. Thanks, Billy.

Speaker Change: On that note, we reported strong January volumes yesterday, which translated into revenue growth in January in excess of 20% year over year.

Speaker Change: I would like to conclude my remarks by thanking our clients for their business and partnership in the quarter and I want to thank my colleagues for their efforts that contributed to our record quarterly volumes and revenues at trade web with that I will turn it back to Ashley for your questions.

Operator: As a reminder, please limit yourself to one question only. Feel free to hop back into Q and ask additional questions at the end. Q&A will end at 10:30 a.m. Eastern Time.

Ashley: Thanks, Billy as a reminder, please limit yourself to one question only feel free to hop back into queue and ask additional questions at the end Q&A will end at 10 30, a M. Eastern time, operator, you can now take our first question.

Operator: Operator, you can now take our first question. Thank you. At this time, if you would like to ask a question, please press star 11 on your telephone; you will receive an automated message saying that your hand has been raised.

Speaker Change: Thank you at this time, if you would like to ask a question. Please press star one on your telephone will have an automated.

Speaker Change: Message, saying that your hand in many ways as well. Please wait for your name to be announced before you proceed with your question one moment, while we compile the Q&A roster.

Operator: As well, please wait for your name to be announced before you proceed with your question. One moment while we compile the Q&A roster. Our first question will be from Chris Allen of Citi. Your line is open. Good morning, everyone.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Our first question will be coming from Chris Allen of Citi. Your line is open.

William Hult: Thanks for taking the question. I wanted to ask about the rate fin deal, which I think has got a little bit under the radar. I wonder if you could touch on what the opportunity set is from offering this technology to institutional clients. Is there any cross-sell opportunity to rate fins or the relative value client base? How does the offering from an EMS perspective and rate futures complement or enhance Tradeweb's current rates offer? Sure. Hey, Chris. It's Billy.

Chris Allen: Good morning, everyone. Thanks for taking the question wanted to ask about the <unk> deal, which I think has got a little bit under the radar.

Chris Allen: You touch on what the opportunity set is from offering this technology to institutional clients. So any cross sell opportunity to rate trends are relative value client base and how is the offering from an EPS perspective and rate futures complement or enhance trade with current rates offering.

Chris Allen: Sure Hey, Chris It's Billy Thanks for the question good to hear your voice.

William Hult: Thanks for the question. It's good to hear your voice. Maybe I could start for a quick second by putting a little bit of a framework on a good question. So, you know, starting with I think it's a good time to be in the rates business. I think it's actually a better time to place a really smart bet on the rates business. I love the idea conceptually of Tradeweb investing, you know, into our strength. I think that's a really important concept, so I would kind of start with that.

William Hult: Maybe let me start for a quick second with putting.

Speaker Change: A little bit of a framework and a good question. So.

William Hult: Starting with I think it's a good time to be in the rates business I think it's actually a better time to place a really smart bet in the rates business I love the idea conceptually of trade web investing.

William Hult: Into our strength I think thats, a really important concept, so I would kind of start with that.

William Hult: You know, if you think about our government bond franchise for a second, in terms of the leadership position that we have, obviously, you know, record market share, Chris, versus Bloomberg on the long-dated part of the government bond market. In the fourth quarter, our market share is now up over 20% on an overall basis, and record institutional volumes in January. So, a real kind of position of strength for us.

If you think about our government bond franchise for a second.

William Hult: Some of the leadership position that we have obviously.

William Hult: Third market share Chris.

William Hult: Versus Bloomberg onto long long dated part of the government bond market in the fourth quarter, our market share is now over.

William Hult: 20% on an overall basis record institutional volumes in January so a real kind of like position of strength for us.

William Hult: You know, the macro environment sets up really well again to kind of like push these bets, you know, into our core strength. So, when I think about, you know, the macro environment, we think about the concept, obviously, of like we're in a, you know, a real rate, you know, 10-year notes, you know, above 4%. Maybe it's going to 475. Maybe it's going to 350.

William Hult: Macro environment like sets up really well against that kind of like push these bets.

William Hult: Our core strength, so when I think about.

William Hult: The macro environment, and we think about the concept obviously of like Werner.

William Hult: Bill rate 10 year notes.

William Hult: About 4%, maybe it's going to 475, maybe its going to $3 50, thats, what sort of makes the market and we love those kinds of thoughts that are entering in about this like real kind of real rate.

William Hult: That's what sort of makes a market. And we love those kinds of thoughts that are entering in about this like a real kind of real rate environment, you know, the debt markets growing, you know, the central banks, you know, are not the buyers in the market. So from our perspective, that means that the sort of private sector piece of the market is now the real intermediaries. And so that's a really good, you know, really good environment for us. So when we think about Ratefin, obviously, there are two big themes. One is, you know, electronifying high touch flow, i.e., high touch flow is always sort of like a code word for voice business. So electronifying high-touch flow, smart leading edge, and Algorithms that our biggest and most sophisticated important clients use.

William Hult: Environment the debt market's growing the central banks are not the buyers in the market. So from our perspective that means that the sort of private sector piece of the market.

William Hult: Now the real intermediaries.

William Hult: And so that's a really good really good environment for us so when we think about rate.

William Hult: Obviously like two big themes one is <unk>.

William Hult: Electronic buying high touch flow I E high touch float was always sort of like a code word for like voice business.

William Hult: Electronic electronic buying high touch slow.

William Hult: Leading edge.

William Hult: Algorithms.

William Hult: That our biggest and most sophisticated important clients use.

William Hult: You know, these funds, as you guys know very well, tend to be kind of multi-asset in nature. We love the concept of bringing futures into our kind of backcourt, which marries really well with our products. It's been a little bit of what I would describe as sort of like a missing piece in our client experience. I love the way we're kind of servicing that part of the world. Chris, in U.S. Treasuries alone, I think we sized that market at about $50 billion in average daily volume, so it's big, it's robust. And from there, we're going to kind of do what you would expect us to do, I think, which is like, you know, how do we build things like rue acid glasses going forward?

William Hult: These funds as you guys know very well tend to be kind of multi asset in nature.

William Hult: We love the concept of bringing futures into our kind of back court.

William Hult: Which marries really well with our products, it's been a little bit of what I would describe as sort of like a missing piece in our client experience and we love the way, we're kind of servicing that part of the world.

William Hult: Chris and U S. Treasuries alone I think we size that market at about like $50 billion in average daily volume. So it's big it's robust.

William Hult: And from there we're going to kind of do what you would expect us to do I think which is like how.

William Hult: How do we build things like through asset classes going forward, So European government bonds interest rate swaps.

William Hult: So, you know, European government bonds, interest rate swaps, you know, versus futures. We think like 15 to 20 percent of that volume gets done on the phone, like, you know, like it's I use the expression like it's 1994, not 2024. Right.

William Hult: Versus futures, we think like 15% to 20% of that volume gets done like on the phone.

William Hult: I used the expression like it's 1990 for not 2024 right.

William Hult: And, you know, the last part of your question, I think, is important just in terms of EMSs. On the surface, you need an EMS to access the futures market. But the reality is, you know, we see opportunities to leverage EMSs across protocols and merge our AIX functionality along with that. So we think it fits us really well. As always, it comes down to execution.

William Hult: And the last part of your question I think is important just in terms of like <unk>.

William Hult: On the surface you need in the EMS to access the futures market.

William Hult: But the reality is we see opportunities to leverage <unk> across protocols.

William Hult: And merge our AI functionality, along with that so we think it fits us really well as always it comes down to execution and so the team is very focused on it. It is a top priority for us as we enter 2004.

William Hult: And so the team is very focused on it. It's a top priority for us as we enter 24. And thanks. It's a good question.

Speaker Change: And thanks, it's a good question thanks, Chris.

Operator: Thanks, Chris. Thank you. One moment for the next question, and our next question will be coming from Ben Buttish of Barclays. Your line is open.

Speaker Change: Thanks.

Speaker Change: Thank you one moment for the next question.

But.

Speaker Change: And our next question will be coming from Ben <unk> of Barclays. Your line is open.

William Hult: Hi, good morning, and thanks for taking the question. Billy, I was wondering if you could talk a little bit more about your international expansion plans for the next few years. You know, now that you've completed Yield Broker, you alluded in your prepared remarks to sort of digging into a little bit more Asia. Can you maybe talk a little bit, you know, tactically, about how that works from Australia to maybe the rest of the continent?

Ben: Hi, good morning, and thanks for taking the question Billy I was wondering if you could talk a little bit more about your international expansion plans for the next few years.

Ben: Now that you've completed yield broker you alluded in the prepared remarks, just sort of digging into a little bit more into Asia can you maybe talk a little bit tactically, how does that work from Australia to maybe the rest of the content and for some context could you, perhaps give just a little bit of an overview of the current exposure.

William Hult: And for some context, could you perhaps give just a little bit of an overview of the current exposure? You know, where are the key customers? What are the primary products?

Ben: Where are the key customers what are the primary products and where does that grow from here. Thank you, Yeah, Hey, Ben how are you.

William Hult: And where does that grow from here? Thank you. Yeah. Hey, Ben, how are you?

William Hult: Thanks. It's a good question. You know, let's, let's start with it this way for a second for us, very straightforward. It's always about the clients, right? It's like always, always about the clients. So, you know, our clients are, you know, global, right? So that's always formed our sort of decision-making matrix in terms of, you know, where we're going, right? So the formula, the cadence has always been, you know, how do we take advantage of this, like, very strong appetite that exists out there for, you know, the demand for US products, right? And from there, you know, it's always been okay. Now, let's build out our presence in these local markets. So it's like US governments to European governments, you know, dollar swaps to European swaps, you know, US credit to a kind of European credit.

Speaker Change: Good question.

Speaker Change: Let's start with it this way for a second trough like very straightforward, it's always about the clients.

Speaker Change: Always always about the clients. So our clients are global right. So thats always formed our sort of decision making matrix in terms of.

Ben: Where we're going right. So the formula the cadence has always been.

Ben: Do we take advantage of this like very strong appetite that exists out there for the demand for U S products right and from there.

Ben: It's always been okay, now, let's build out our presence in these local markets. So it looks like the U S government to European governments.

Ben: Swaps to European swaps.

Ben: <unk> credit.

William Hult: So that's always been our formula, our cadence of how we think about things, because we're always building things around, you know, the client experience. You know, quick shout out, which I do once in a while, just, you know, Enrico Bruni is our head of European and Asian business. He's done a great job. That team has been instrumental.

Ben: Kind of European credit so that's always been.

Ben: Our formula or cadence of how we think about things because we're always building things around the client experience.

Speaker Change: A quick shout out, which I do once in a while.

Speaker Change: And Rico Bruni, as our head of European and Asian business, you've done a great job. The team has been instrumental in driving an average.

William Hult: They've been driving an average, I think it is, of 15% revenue growth in our international business over the last five years. So, you know, we think about the business, Ben, kind of like in a straightforward way, two ways, I would say. Growing the European APAC, you know, part of the world, which has been our historical focus, and then sort of two, and it's like a big two, which would be sort of, you know, competing and really driving a business for us, kind of like in the EM region. I think, you know, that formula has worked very well for us.

Speaker Change: It is.

Speaker Change: 15% revenue growth in our international business.

Speaker Change: Over the last five years. So we think about the business then kind of like in a straightforward way two ways I would say.

Speaker Change: Growing the European and APAC.

Speaker Change: Part of the World, which has been our historical focus and then sort of too and it's like a big too which would be sort of competing and really driving a business for us kind of like in the region. I think that Formula has worked very well for us So fourth quarter revenues were.

William Hult: So fourth quarter revenues, you know, we're up over 30% year over year across these products. In Asia, we're growing our presence across ETFs, slops, government bonds. There, I'm becoming like the fat man, but their fourth quarter revenues were up over 60% year over year across those products. So this formula, you know, kind of continues to work.

Speaker Change: Up over 30% year over year across these products.

Speaker Change: In Asia, we're growing our presence across ETF swaps government bonds.

Speaker Change: They're all becoming like the stat that their fourth quarter revenues were up over 60% year over year across those products. So like this formula.

It kind of continues to work I talked about like the concept of like.

William Hult: I talked about the concept of like, you know, putting a bet, placing that bet into strength, and the same, same follows through for Yield Broker, right? You know, our acquisition of Yield Broker expands our rates, credit, and repo footprint in a big way. Revenues there are up 30% year over year. So you can feel kind of like the momentum of how I'm kind of describing this.

Speaker Change: Putting a bet placing that into strength.

Speaker Change: Same follows through four yield broker right.

Speaker Change: Our acquisition of Youll broker expands our rates credit repo footprint in a big way.

Speaker Change: Revenues, there are up 30% year over year. So you can feel kind of like the momentum of how I'm kind of describing this.

William Hult: I said it was about the client, and it is about the client, you know, on the client side, continued penetration across Europe and Asia. So Activision clients trading international products were up over 30% year over year. That's how we keep monitoring all this. North American European active clients trading international products were up 15% and 10%, respectively.

Speaker Change: I said it was about the client and it is about the client on the client side.

Speaker Change: Continued penetration across like Europe, and Asia, So activation clients trading international products were up over 30% year over year.

Speaker Change: That's how we keep monitoring all this north American and European clients trading international products were up 15% and 10% respectively. So this is like big sort of numbers and big momentum kind of headed in that direction, which we feel quite good about.

William Hult: So this is like big sort of numbers and big momentum kind of headed in that direction, which we feel, you know, quite good about. EM Again, I mentioned the focus that we'll have around rates, and EM is a huge priority for us as a company. And we feel really good about the marketplace's need and desire to support competition there. So we're focused on EM. Good question.

Speaker Change: I mentioned the focus that we'll have.

Speaker Change: Around rates and <unk> is a huge priority for us as a company and we felt really good about the marketplaces sort of need or desire to support competition. There. So we're focused on.

Operator: And thanks very much. Thanks a lot, Bill. Thank you. One moment for our next question. Our next question will be coming from Alexander Blostein of Goldman Sachs. Your line is open. Hey, everybody. Good morning.

Speaker Change: Good question and thanks very much.

Thanks, Bob.

Speaker Change: Yeah.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Our next question will be coming from Alexandra <unk> of.

Alexandra: Goldman Sachs. Your line is open.

Alexandra: Hey, everybody. Good morning, Thanks for the question.

Sarah Ferber: Thanks for the question. Lots of discussion on the call around just prospects of longer duration, and I appreciate the extra disclosure you guys put out in the deck around the swab business. Definitely pretty helpful. But when you zoom out a little bit, can you help frame the few per million opportunity broadly across the business if duration starts to expand? Sure, Alex. It's Sarah.

Alexandra: Lots of discussion on the call around just prospects of longer duration and I. Appreciate the extra disclosure you guys put out in the deck.

Alexandra: Around the swap business definitely pretty helpful. But when you zoom out a little bit can you help frame the fee per million opportunity broadly across the business if duration starts to expand.

Sarah Ferber: Nice to hear from you. And It's a great question, and I'm glad you liked the extra slides. We thought that they would be helpful. Let me frame it just with a little bit of context, because when we're talking about fee per million, you know, and I've made this point on a couple of calls, the impact on fee per million is mostly driven by, right, what businesses are doing, volume in protocols, product mix, but also, to a lesser extent, duration, which is really your question. So I'll kind of focus on that.

Alexandra: Sure Alex It's Sara please to hear from you and it's a great question and I'm glad you liked.

Sara: I thought that there would be helpful.

Sara: Let me frame it just with a little bit of context, because when we're talking about fee per million.

Sara: And I've made this point on a couple of calls.

Sara: The impact on fee per million was mostly driven by business mix right. So what businesses, we're doing volume in protocols product mix, but also to a lesser impact duration, which is really your question is what kind of focus on that the two main business areas. When you think about our portfolio where duration has the biggest impact cross revenue increase.

Sarah Ferber: The two main business areas when you think about our portfolio, where duration has the biggest impact across revenue and per million are largely swaps and investment grade credit. And the reason for this, I know you know this, but just to kind of state it for everyone's benefit, we charge based on the actual risk being traded in both of those areas. So, you know, DBO1, PBO1, it's not charged on a notional volume basis.

Sara: 2 million are largely swaps and investment grade credit and the reason for that.

Sara: But just to kind of state of for everyone's benefit we charge based on actual risk being treated in both of those areas. So <unk> not charged on a notional volume basis.

Sarah Ferber: And, you know, as we kind of talked about in the prepared remarks, clients have definitely been doing more trading on the short end, and duration in our businesses has been decreasing, particularly in swaps. And so if you think about the impact of duration, if this is a perfect world, if you try to hold everything, you know, everything else being equal and just limit the impact of duration to give you a flavor, I would say in dollar swaps, a one-year extension in duration from, say, 10 to 11 years can increase that risk being traded by 7 or 8%, which obviously has a knock-on impact on revenue, all else In credit, the same sort of one-year extension and maturity could increase institutional IG credit fees per million by 8 to 9%.

Sara: And as we kind of talked about in the prepared remarks clients have definitely been doing more trading on the short end and duration in our businesses have been decreasing particularly in swaps.

Sara: And so if you think about the impact of duration. If you. This is a perfect world. If you try to hold everything constant.

Sara: Anything else being equal and just limit the impact of duration that gives you a flavor I would say in dollar swaps a one year extension in duration from call. It 10 to 11 years and increase that risk being treated by 7% or 8%, which obviously has a knock on impact on revenue all else being equal in credit the same.

Sara: Sort of one year extension of maturity could increase institutional credit fee per million by 8% to 9%. So that gives you a little bit of that.

Sarah Ferber: So that gives you a little bit of a continuum of the impact. Probably also worth mentioning that, you know, in terms of things that move duration, it's also impacted by the level of absolute rates. And so maybe another way to kind of think about the model and kind of putting these together gets you a really nice opportunity. But if rates were to fall by 100 basis points across the curve, that same concept of the risk being traded in a 10 year dollar swap could rise by another five or 6%. And on the IG side, another 5%.

Sara: Continuum of the impact.

Sara: Probably also worth mentioning that in terms of things that move duration.

Sara: Also impacted by the level of absolute rates and so maybe another way to kind of think about the model and kind of putting these together gets you a really nice opportunity, but if rates were to fall by 100 basis points across the curve that same concept of the risk being traded in a 10 year dollar swap could rise by another five or 6% and on the <unk>.

Sara: I'd side another 5%. So there are a couple of different variables business mix always being the biggest but hopefully that gives you a little bit of.

Sarah Ferber: So there are a couple different variables, you know, business mix always being the biggest, but hopefully that gives you a little bit of context as to how to model or think about the opportunity for duration. And thanks for the questions. Great. Thank you.

Sara: Context as to how to model or think about the opportunity for duration.

Speaker Change: Okay great.

Speaker Change: Yes. Thank you.

Speaker Change: Thank you one moment for the next question.

Operator: One moment for the next question. Our next question will be from Craig Siegenthaler of Bank of America. Your line is open.

Our next question will be coming from Greg Siegle Hailer, Our bank of America. Your line is open.

Tom Pluta: Hi, thanks for taking the question. This is Eli. It looks like the RFM protocol and swaps are breaking out. Looks like volumes there have tripled since 2021. What makes this protocol a great fit for swaps?

Craig William Siegenthaler: Hi, Thanks for taking the question. This is the liability from Craig's team it looks like the RFS protocol and swaps is breaking out.

Speaker Change: It looks like volumes have tripled since 2021, what makes this protocol a great fit for swaps and have you guys evaluated maybe rolling it out in other asset classes.

Tom Pluta: And have you guys evaluated maybe rolling it out to other asset classes? Hi, it's Tom, and thanks for the question. Yeah, the RFM protocol or request for market has gained a lot of popularity in swaps, particularly in emerging markets, but also in developed market swaps. Just to remind people who may not know, this is where, rather than asking for a one-sided price on an RFQ, you ask for a two-way price. The primary benefit to a customer in receiving a two-way price is to minimize information leakage to the market by not signaling the direction that they want to trade. So in markets where you have two-way streams, continuous markets, for example, U.S. Treasuries, there's no real need or demand for RFM, but in less liquid markets or trades where there's a larger price impact, like swaps compared to cash bonds or EM generally compared to DM or larger trades compared to smaller trades, there is a benefit.

Speaker Change: Hi.

Speaker Change: Tom and thanks for the question yes.

Speaker Change: The RFS protocol, our request for market has gained a lot of popularity and swaps.

Tom: Particularly in emerging markets, but also in developed market swaps just to remind people who may not know this is where rather than asking a one sided price. It in our Q you asked for two way price.

Tom: The primary benefit to a customer and receiving a two way price is to minimize information leakage to the market not signaling the direction that they want to trade.

Tom: In markets, where you have to waste streams continuous markets for example, U S. Treasuries, there's no real need or demand for RF, but in less liquid markets or trades, where theres, a larger price impact like swaps compared to cash bonds or <unk> generally compared to DM.

Tom: Our larger trades compared to smaller trade. So there was a benefit so.

Tom Pluta: So for that reason, it has picked up as a protocol, particularly in EM. But there's also a benefit for dealers in avoiding what we call the winner's curse, right? So if a whole bunch of dealers get asked a price, and they know the direction, when you win that trade, you've got to be more cognizant of how you manage that, exiting that trade, particularly in less liquid markets. So we have been expanding the protocol as we see the demand from clients and dealers to support the protocol. For example, list trading in swaps is moving more towards RFM, so we do think that RFM can expand to other products. Yes, but we do so in a very thoughtful way.

Tom: No.

Tom: Yes.

Tom: For that reason it has picked up as a protocol, particularly in.

Tom: There is also a benefit for dealers.

Tom: And avoiding what was called the winner's curse right. So if a whole bunch of dealers get ask the price and they know the direction when that trade you got to be more cognizant of how you manage that.

Tom: Exiting that trade, particularly in less liquid market. So we have been expanding the protocol as we see the demand.

Tom: Demand from clients and dealers to support the protocol for example list trading and swaps is moving more towards RSM. So we do think that RSM can expand to other products.

Tom: Yes.

Tom: We do so in a very thoughtful way and when we see demand on the client side and support from dealers to maximize the impact on the likelihood of success.

Tom Pluta: And when we see both demand on the client side and support from dealers to maximize the impact and the likelihood of success. Thanks for the question.

Speaker Change: Thanks for the question.

Speaker Change: Great. Thank you.

William Hult: Thank you. One moment for the next question. Our next question will be from Michael Cyprys of Morgan Stanley. Your line is open. Great, thanks so much.

Speaker Change: Thank you one moment for the next question.

Speaker Change: Sure.

Speaker Change: Our next question will be coming from Michael Cyprus of Morgan Stanley. Your line is open.

William Hult: Good morning. I just have a question on ETFs. We've seen meaningful growth across the industry, particularly fixed income ETFs over the last couple years, and many expect ETFs to be a beneficiary of potential fixed income rotation. So can you just talk about how this is impacting your business and how you see this impacting market structure more broadly as fixed income ETFs continue to grow? And how do you think about best monetizing the opportunity set here? Maybe talk about some of the steps you're taking here in. Yeah Hey Michael, it's Billy.

Michael J. Cyprys: Great. Thanks, so much good morning, just a question on Etfs, we've seen meaningful growth across the industry, particularly fixed income Etfs over the last couple of years and many expect etfs to be a beneficiary of a potential fixed income rotation. So can you just talk about how this is impacting your business and how you see this impacting market structure more broadly.

Michael J. Cyprys: Fixed income Etfs continue to grow and how do you think about monetizing the opportunity set here maybe talk about some of the steps youre taking here in 'twenty four thank you.

William Hult: You know, thanks for the question. And I think, you know, ETFs are like, absolutely the right time to sort of ask a question like that. So thank you. You know, you know us very well.

Hey, Michael it's Billy.

William Hult: Yes, thanks for the question and I think Etfs.

William Hult: I think absolutely the right time to sort of ask a question like that so thank you.

William Hult: You know us very well, but from my perspective.

William Hult: But, you know, from my perspective, a little bit of like, you know, our story has always been about what I would describe as expansion, right? So it's sort of vertical across client channels and then, you know, horizontal across, you know, products, you know, and geographies, right? And so I wouldn't say it was necessarily like the elevator pitch when we went public. But when we were, you know, when we were going public, Tradeweb was, you know, very well known as, you know, a rates trading platform kind of period. You know, and in 2023, the reality is that, you know, almost half, I think it's like, I think it's actually like 48% of our revenues now come from non-rate businesses. You know, and 40% of that growth has come from non-rate businesses. In 2023, right?

William Hult: A little bit of like our story has always been about like what I would describe as expansion right. So it's sort of vertical across client channels and then.

William Hult: Horizontal across products.

William Hult: And geographies right and so I wouldn't say it was necessarily like the elevator pitch. When we went public but when we were when we were going public trade web was.

William Hult: Very well known as a rates trading platform kind of period.

William Hult: Yeah.

William Hult: In 2023, the reality is that almost half I think it's like I think it's actually at 48% of our revenues now come from non rates businesses.

William Hult: And 40% of that growth has come from non <unk> businesses in 2020, right right. That's like a big number right. So our investment and our execution in Etfs is like a huge piece of that story, but we couldnt spell Etfs in 2016, obviously.

William Hult: That's like a big number, right? So, you know, our investment and our execution in ETFs is like a huge piece of that story. It's not that we couldn't spell ETFs in 2016, obviously, like an E and a T and an F, but we didn't have unbelievable domain knowledge and expertise in 2016. I think we sensed the opportunity, and I think we were viewed as the correct kind of industry partner around building a business there. And I give our team a lot of credit for figuring all that out. So now, what we're seeing is, what I would describe as, almost like, an expansion of, you know, sophisticated market participants, obviously, including ETF market makers that are investing heavily to challenge what I would describe as the traditional manual kind of trading conventions. And my instinct is, you know, this push is sort of like this one-way train kind of thing, right?

William Hult: And <unk>, but we didn't have like unbelievable domain knowledge and expertise in 2016, I think we since the opportunity and I think we're viewed as the correct kind of industry partner around building a business there and I give our team a lot of credit for figuring all that out.

William Hult: So now what we're seeing is like what I would describe it as almost like an expansion of.

William Hult: Sophisticated market participants, obviously, including ETF market makers that are investing heavily to challenge what I would describe as the traditional manual kind of trading conventions and my instinct is.

William Hult: This push is sort of like this one way trade kind of thing right market participants are now using kind of multiple pricing sources.

William Hult: Market participants are now using kind of multiple pricing sources, modeling techniques, and market indicators to derive essentially a more accurate and up-to-date price on a bond, right? So we kind of understand all of that stuff. You know, I would say the leading ETF player expects, you know, fixed income ETF AUM to triple by 2030, right? These are like big one-way market trends now that we feel, I think, proud to be a big part of. We're going to monetize this all in a very straightforward way through our institutional ETF business globally, which is doing really well. And then I would kind of remind you for a quick second just the nature of how important these ETF market makers are in terms of credit market making in our sort of day-to-day operations of our credit business. And we feel really good that we're monetizing that piece of the market as well. They are fundamentally important and strong players for us on the credit side.

William Hult: Modeling techniques.

William Hult: And market indicators to derive a essentially a more accurate and up to date pricing on our bond right. So we kind of understand all of that stuff.

William Hult: I would say the leading ETF player expects fixed income ETF AUM to triple by 2030. These are like Big one way market trends now that we feel I think proud to be a big part of we're going to monetize this all in a very straightforward weight or institutional ETF business glue.

William Hult: Mobily, that's doing really well and then I would kind of remind you for a quick second just the nature of how important. These ETF market makers are in terms of credit market, making and our sort of day to day operations of our credit business and we feel really good that we're monetizing that piece.

William Hult: Of the market as well they are fundamentally important.

William Hult: And strong players for us on the credit side, so feeling really good about.

William Hult: So I'm feeling really good about, you know, how we've gotten here with ETFs and kind of where we're going. I think the credit piece of it is a really big one. And thank you.

William Hult: <unk> got me here with Etfs, and kind of where we're going I think the credit piece of it is a really big one.

Speaker Change: Okay, great. Thank you.

William Hult: Yeah. Thank you. One moment for our next question, and our next question will be coming from Patrick Moley of Piper Sandler. Your line is open.

Speaker Change: Yes. Thanks.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question will be coming from Patrick Morley.

William Hult: Yeah, good morning. Thanks for taking the question. I was hoping that you could share some more details on the opportunity and timeline to monetize the closing auction pricing data, how your relationship with FTSE benefits the strategy there, and then any color you can give us on, you know, how to size the TAM there will be very helpful as well. Hey, Patrick. It's Billy.

Patrick Morley: <unk> Your line is open.

Patrick Morley: Yes. Good morning, Thanks for taking the question.

Patrick Morley: I was hoping that you could share some more details on the opportunity and timeline to monetize the closing auction pricing data how your relationship with FTSE benefits. The strategy. There and then any color you can give us on how to size. The Tam there would be very helpful as well. Thanks.

William Hult: You know, real quick, congratulations on two things. First, you know, asking a straightforward question coming from Piper Sandler on the heels of our friend, Mr. Repetto. And two, congratulations, because we definitely heard you had a baby. It's the best thing in the world. So congratulations from the Tradeweb team and thanks for, you know, thanks for a really good question. You know, it's interesting, right? You're talking about trade a closer. You're asking a question about trade a closer.

William Hult: Hey, Patrick it's Billy.

William Hult: Real quick congratulations on like on two things.

William Hult: First asking a straightforward question coming from from Piper Sandler on the heels of our friend Mr. Roberto.

William Hult: And two congratulations because we definitely heard Europe had abated.

William Hult: And in the World. So congratulations from the from the trade web team.

Speaker Change: And thanks for thanks for a really good question.

Speaker Change: It's interesting right Youre talking about like trade to close Youre asking your questions about trade at close in my brain is going a little bit too.

William Hult: And my brain is going a little bit to, you know, the complexity of, for example, the government bond market. The first question was about rate thinness and about how these sort of macro hedge funds are engaging in liquidity through, you know, smart algorithms and rates. And this is almost like the other side of the coin in the government bond market, right?

Speaker Change: The complexity of for example, like the government bond market. The first question was about rates, then and about how how these sort of macro hedge funds are engaging in liquidity through.

Smart algorithms and race fan and this is almost like the other side of the coin in the government bond market right. The thread is is obviously all about like innovation and efficiency, but the other side of the coin are these obviously these large large.

William Hult: The thread is, obviously, all about innovation and efficiency. But the other side of the coin are these large, large, you know, asset managers that track, that track the benchmark that are now looking for what we would describe as moments in time where they need liquidity. And so I mentioned the concept before that it's all about the client. It's all about the client understanding those clients' needs.

Speaker Change: Asset managers that track that track the benchmark that now we're looking for.

Speaker Change: What we would describe as moments in time, where they need liquidity and so I mentioned the concept before that it's all about the client it's all about decline understanding those clients' needs and so that's how we've built.

William Hult: And so that's how we've built, you know, the protocols for us around trade a close. You know, clients are now leveraging, you know, list trading tools where we provide valuable kind of what we would describe as like post-trade data where they are filled relative to our reference prices. It's pretty straightforward.

Speaker Change: The protocols for us around trade at close.

Speaker Change: Clients are now leveraging.

Speaker Change: List trading tools.

Speaker Change: Where we provide valuable kind of like what we would describe as like post trade data.

Speaker Change: Where they are filled relative to our reference prices.

Sarah Ferber: It works exceptionally well. You know, at the end of the month, some of our biggest, most important clients are accessing that protocol now, you know, through us. We currently have an official closing price on Treasuries, UK government bonds, and European government bonds, where FTSE is our third party administrator. Not to hand you a brick, Sarah, but if you have a little more comments on our FTSE relationship and where we're going kind of around that pricing. Sure. I'm going to jump in there and congrats, Patrick, as Billy had mentioned.

Speaker Change: It's pretty straightforward.

Speaker Change: Works exceptionally well.

Speaker Change: At the end of the month, our some of our biggest most important important clients are accessing that protocol now.

Speaker Change: Through us.

Speaker Change: We currently have an official closing price on treasuries U K gilts.

Speaker Change: European government bonds.

Speaker Change: We're FTSE is our third party administrator not not hands you a brick Sarah but if you are a little more comments on our FTSE relationship and where we're going kind of around that pricing sure can jump in there and congrats Patrick.

Sarah Ferber: On the FTSE side, I would just say, look, in order to have a trusted and valued benchmark, we need, and we look to partner with third-party administrators that validate that methodology. And, you know, we have a really strong and good relationship with FTSE. It makes sense to continue to partner with them. You know, I think, as Billy referenced, we have a track record of working with them on the U.S. Treasury, UK government bonds, and European government bonds.

Speaker Change: Affiliate mentioned on the FTSE side I would just say look in order to have a trusted and valued benchmark, we need and we look to partner with third party administrators that validate that methodology and.

Speaker Change: We have a really strong and good relationship with Wuxi. It makes sense to continue to partner with them.

Speaker Change: I think as Julie referenced we have a track record of working with them on the U S Treasury.

Sarah Ferber: And as we think about going forward, we see the expansion of that relationship across new benchmark products. So there are things that we're working on, like adding bid and ask information to the mids that we already use in products. We have Muni AI pricing potential becoming a benchmark. So there are a number of other benchmarks in the works with a partner we already have had a good track record with. Establishing a benchmark doesn't happen overnight.

Speaker Change: European governments side and as we think about going forward, we see the expansion of that relationship across new benchmark products.

Speaker Change: So there are things that we're working on.

Speaker Change: Adding bid ask information into the mid <unk> that we already have new products, we have muni AI pricing potential becoming a benchmark. So there are a number of other benchmarks in the works with a partner we already have had a good track record with.

Speaker Change: And.

Speaker Change: Probably worth noting.

Wishing a benchmark doesn't happen overnight and.

Sarah Ferber: So the revenue and sales cycle for this can take some time. But certainly, we see a lot of opportunity here. And, you know, we've already realized and continue to realize strong growth in our third-party proprietary data products. And this is just going to be enhancing that. Great colors, and I appreciate the kind words.

Speaker Change: So the revenue and sales cycle for this can take some time, but certainly we see.

Speaker Change: A lot of opportunity here and we've already realized we continue to realize strong growth in our third party proprietary data products and this is just going to be enhancing to that.

Operator: Thank you. One moment for the next question. Our next question will be coming from Dan Fannon of Jeffries. Your line is open. Thanks. Good morning. My question is on high yield.

Speaker Change: And I appreciate the kind words.

Speaker Change: Thank you one moment to the next question.

Speaker Change: Okay.

Speaker Change: Our next question will be coming from Dan Fannon of Jefferies. Your line is open.

Daniel T. Fannon: Hi, Thanks, good morning.

Tom Pluta: Maybe if you could talk about the current, you know, kind of market backdrop. And as you think about your market share and opportunity within that, is there anything structural that limits your ability to grow in the way that you have in, say, the investment grade market? Hi Dan.

Daniel T. Fannon: One is on high yield maybe if you could talk about the current market backdrop and as you think about your market share and opportunity within that is there anything structural that would limit your ability to grow that the way that you have in say the investment grade market.

Speaker Change: Hi, Dan.

Tom Pluta: Good morning. So, we have made steady gains in recent years in our IG market share, for sure, and our progress in high yield has been slower, a little bit more uneven. But there are no structural impediments to making more significant gains. One thing to note, high-yield doesn't trade on spread, so the competitive advantage that we have in net spotting and net hedging isn't a factor here as it is in IG.

Daniel T. Fannon: So.

Daniel T. Fannon: We have made steady gains in recent years and our market share.

Daniel T. Fannon: For sure at our progress in high yield has been slower a little bit more uneven.

Daniel T. Fannon: But there are no structural impediments was making more significant gains.

Daniel T. Fannon: One thing to note high yield doesn't trade on spread so therefore, the competitive advantage that we have in that spotting and net hedging isn't a factor here as it is in AG.

Tom Pluta: And additionally, because high-yield is less liquid, clients tend to use all-to-all more, where we are focused on narrowing the gap in our responder network. So, what have we been doing in high-yield? A number of things.

Daniel T. Fannon: And Additionally, because high yield is less liquid clients tend to use also all more where we are focused on narrowing the gap in a responder network. So what have we been doing in high yield a number of things we've been investing in our client network and we've been making good inroads in adding significant clients to that network.

Tom Pluta: We've been investing in our client network, and we've been making good inroads and adding significant clients to that network that were absent in the past. I'm optimistic about our progress on adding large clients in 24 that hadn't been there in the past, which will help boost high-yield results. Additionally, we've been hiring credit salespeople.

Daniel T. Fannon: That were absent in the past I'm optimistic about our progress on adding large clients in 24 that hadn't been there in the past, which will help boost high yield results.

Daniel T. Fannon: Additionally, we've been hiring credit salespeople, we hired in 2003, we are hiring more in 2024 and that will continue to move the needle and expanding our client network and delivering more from our existing clients.

Tom Pluta: We hired in 23, and we're hiring more in 2024, and that will continue to move the needle on expanding our client network and delivering more from our existing clients. A third area of focus is expanding the responders on the platform, and we've seen very strong growth in responders and responses. For example, in high yield, our anonymous responses were up 30% year-over-year, so we're making gains there. And I guess the final thing I would point to is the Aladdin partnership, which should help level the playing field for us in high yield as this comes further online in 2024. We've made good progress there. We're working through the integration with Aladdin in three phases. Phase one was completed last year that was focused on getting dealer access and inventory data into Aladdin. Phase two was also recently completed, and that allows Aladdin clients to respond to all-to-all inquiries right on the Aladdin dashboard.

Daniel T. Fannon: A third area of focus is expanding the responders on the platform and we've seen.

Daniel T. Fannon: Very strong growth in responders and responses for example in high yield our anonymous responses were up 30% year over year. So we're making gains there and I guess the final thing I would point to is the Aladdin partnership, which should help level the playing field for us in high yield as this comes further online in 2024.

Daniel T. Fannon: We made good progress there we're working through the integration with Aladdin in three phases.

Daniel T. Fannon: Phase one completed last year that was focused on getting dealer axis and inventory data into Aladdin.

Daniel T. Fannon: Two we also recently completed and that allows Aladdin clients to respond to all inquiries right on the Aladdin dashboard, and then phase III clients will be able to initiate and our Q on trade web right from within Aladdin and then also use our automation tools. So those phase two and <unk>.

Tom Pluta: And in phase three, clients will be able to initiate an RFQ on Tradeweb right from within Aladdin and then also use our automation tools. So those phases two and phase three, we expect to be complete over the next few weeks. 12 months, and with all the investments, we expect to see continued progress. So, you know, while the progress in high yield has been more limited, we do have a multi-faceted plan that we are executing on, which we're optimistic will yield results going forward. Thanks for the question. Great, thanks.

Daniel T. Fannon: As III, we expect to be complete over the next.

Daniel T. Fannon: 12 months.

Daniel T. Fannon: And with all with all the investments we expect to see continued progress so.

Daniel T. Fannon: While the progress in high yield has been more limited we do have a multi faceted plan that we are executing on and which we are optimistic will will yield results going forward.

Speaker Change: Thanks for the question.

Operator: Thank you. One moment for the next question. And our next question will be coming from Andrew Bond of Rosen, excuse me, Rosen Black Securities. Your line is open. Hey, thanks. Good morning.

Speaker Change: Thank you one moment for the next question.

Speaker Change: And our next question will be coming from Andrew Bond.

Andrew Bond: Frozen excuse me with Rosenblatt Securities. Your line is open.

Andrew Bond: Hey, Thanks, good morning, so tradeoff as early and innovative and portfolio trading relative to market access and all those that didn't really see the same growth opportunity that continues to play out today that said given it continues to be on the primary drivers of credit volume growth competitors, taking a more seriously big protocol as mentioned more than 30 times on their last.

Tom Pluta: So Tradeweb is early and innovative in portfolio trading, relative to market access and others that didn't really see the same growth opportunity that continues to play out today. That said, given it continues to be one of the primary drivers of credit volume growth, competitors are taking it more seriously. I think the protocol was mentioned more than 30 times on their last call last week, and they're about market access, investing more heavily to try to win share. So just given the heightened competition, how do you feel about your positioning and the mode around your offering? And is there any potential to utilize portfolio trading in other parts of your business? Hi Andrew. Good morning.

Andrew Bond: Call last week, and they're about in market access with investing more heavily to try to win share. So just given the heightened competition. How do you feel about your positioning and the mode around your geography, and any potential to utilize portfolio trading other parts of your business.

Andrew Bond: Hi, Andrew Good morning, So yes portfolio trading continues to be a huge success story and growth area for US we had.

Tom Pluta: So, yes, portfolio trading continues to be a huge success story and growth area for us. We had, as you read and as you heard, record PT volumes in the fourth quarter, and in January, we achieved another monthly record with over $60 billion in portfolio trading volume. We're also optimistic about the growth of PT as a market protocol. As you pointed out, a lot of the growth in the market is from PT, and we do expect PT's share of the market to continue to grow given the efficiencies that it provides for clients. And remember, a lot of the gain in share is still coming from the phone, so we think that overall, the market will grow. As far as competition is concerned, we fully expect our peers to compete and to innovate, and overall, that's good for clients as the market gets more efficient and moves forward, but you asked about our moat. We do think we have a competitive moat that is strong, led by our ability to connect our leading U.S. Treasury business and provide net spotting to clients.

Andrew Bond: As you read and as you heard we had record PT.

Andrew Bond: Volumes in the fourth quarter and in January achieved another monthly record with over $60 billion in portfolio trading volume.

Andrew Bond: We're also optimistic about the growth of PT as a market protocol as you pointed out a lot of the growth in the market is from PT and we do expect PT share of the market to continue to grow given the efficiencies that it provides our clients.

Andrew Bond: And remember a lot of the gain in share is still coming from the phone. So we think that.

Andrew Bond: Overall part of the market will grow.

Andrew Bond: As far as competition.

Andrew Bond: We fully expect our peers to compete and to innovate and overall that's good for clients as the market gets more efficient and moves forward, but you asked about our moat. We do think we have a competitive moat that is strong led bar by our ability to connect our leading U S Treasury business and provide net spotting to clients.

Tom Pluta: It starts right there, and that's something that saves millions for our clients. Additionally, we continue to leverage our first mover advantage by constantly iterating on and improving the functionality that we have in PT. So I'll give a few examples. We are in the process of revamping our entire portfolio trading list infrastructure, and we're in the process of rolling it out right now. What does that do?

Andrew Bond: Starts right, there and thats something that saves.

Andrew Bond: Millions for our clients.

Andrew Bond: Additionally, we continue to leverage our first mover advantage by constantly iterating on and improving the functionality that we haven't PT. So I'll give a few examples we are in the process of revamping our entire portfolio trading lift infrastructure and we are in the process of rolling It out right now what does that do that.

Tom Pluta: That increases the speed of execution for clients. It provides greater capacity. Right now, we can accommodate portfolio trades of 2400 line items.

Andrew Bond: Increase the speed of execution for clients it provides greater capacity.

Andrew Bond: Right now we can accommodate portfolio trades of 24 100 line items that capacity will grow significantly and we're also going to be able to provide better client and dealer analytics.

Tom Pluta: That capacity will grow significantly, and we're also going to be able to provide better client and dealer analytics. Second thing, as far as innovations go, we're expanding pre-trade data that we provide to clients, as well as post-trade TCA analytics. So, again, functionality that's valuable to clients that I think will make them stick with us. And the final thing that we're working on is providing electronic solutions around residual high-touch access that occurs after a portfolio trade, where we can leverage our market-leading position in the wholesale market as well. So we call that PT residuals.

Andrew Bond: Second thing as far as innovations, we're expanding pre trade data that we provide the clients.

Andrew Bond: And as well as post trade TCA analytics, so again functionality that's valuable to clients that I think will make them sticky with us.

Andrew Bond: And the final thing that we're working on is.

Andrew Bond: Providing electronic solutions around residual high touch access that occur after a portfolio trade, where we can leverage our market leading position in the wholesale market as well so we've called out.

Tom Pluta: Think of block trades that dealers will look to execute after a PT trade goes through the market. So, you know, we're optimistic about the protocol overall. Yes, there is competition, but we're also optimistic about our ability to compete and innovate and continue to provide value to clients through this protocol going forward. And, you know, Tom's making great points.

Andrew Bond: PT residuals think of block trades.

Andrew Bond: Dealers will look to execute after.

Andrew Bond: Our pizza take us through the market so.

Andrew Bond: We are optimistic about the protocol overall.

Speaker Change: Yes, there is competition, but we're optimistic also about our ability to compete and innovate and continue to provide value to clients in this protocol and Tom's making great points.

William Hult: The last thing I would say is, you know, follow Tom for a quick second. I'm sure there were times where we, you know, mentioned something 30 times on a call. I know that there's a kind of like a competitive dynamic that obviously exists. I think a connective thread on credit is the reality that I think both companies feel very strongly that the true and real competitor is the phone.

Speaker Change: Only thing I would say.

To follow Tom for a quick second.

Speaker Change:

Speaker Change: I'm sure there were times, where we mentioned something 30 times on the call.

Speaker Change:

Speaker Change: You know.

Speaker Change: I know that there is a kind of like a competitive dynamic that obviously.

Speaker Change: I think a.

Speaker Change: Connective thread on credit is the reality that I think both both companies feel very strongly that the true and real competitors to follow and so from our perspective.

William Hult: And so from our perspective, that's always going to be where our primary focus is going to be. And we feel really strongly that the way that we've developed this, the portfolio trading protocols, has created the right balance in the market and has allowed us to play this significant leadership role. We are not relinquishing that role, and we feel really strongly about the position that we have today. Thank you.

Speaker Change: It's always going to be where our primary focus is going to be.

Speaker Change: And we feel really strongly that the way that we've developed the portfolio trading protocols has created the right balance in the market and it has.

Speaker Change: Allowed us to play this significant leadership role, we're not relinquishing that role and we feel really strongly about the position that we have today.

Speaker Change: Thanks.

Operator: One moment for the next question, and our next question will be coming from Alex Kramm of UBS. Your line is open. Yes. Hey, hello, everyone.

Speaker Change: Thank you one moment for the next question.

Speaker Change: Okay.

Speaker Change: And our next question will be coming from.

Speaker Change: Alex Kramm of UBS Your line is open.

Operator: I know it's late here, but just wanted to come back to, I think, the early part of the call. You proactively talked a lot about the cyclical outlook. And if I heard you correctly, you're actually pretty excited about what's in front of you from the cyclical perspective. So, maybe you can just double-click on that.

Alex Kramm: Yes, Hey, Hello, everyone I know, it's late here, but.

Alex Kramm: Just wanted to come back to I think the early part of the call you proactively talked a lot about the cyclical outlook and if I. If I heard you correctly, you're actually pretty excited about what's in front of Yolanda cyclical perspective. So so maybe you can just double click on that but.

William Hult: But more importantly, on the rate side, I think there's this prevailing view that as rates get cut, you know, that's bad for rate volumes. I don't necessarily share that view, but I would like to hear your thoughts on what Sarah might think about that and that notion. You know, do you think about rate cuts at all as you budget for kind of your revenues, or do you think it's just like a negligible impact on trading revenues? Thank you. Yeah, we think this is a good environment, you know, for us, and I kind of, you know, I laid out this kind of concept that I was saying before, which is like, we're into like the real rate now, right?

Alex Kramm: More importantly on the right side I think there's a prevailing view that as rates get cut.

Alex Kramm: That's bad for res volumes, I don't necessarily share that view, but.

Alex Kramm: We'd like to hear your thoughts on that and maybe for Sarah on that notion do you think about rate cuts are at all as you budget kind of like your revenues or do you think is just like a negligible impact on trading revenues.

Speaker Change: Thank you.

Speaker Change: Yes, we think this is a good environment.

For us and I kind of.

Speaker Change: I laid out this kind of concept that I was saying before which is we're in for like real right now right and again Directionally. If we go from here, two 5% or three and a half or 3% like we're talking about now like real rates.

William Hult: And again, you know, directionally, if we go from here to, you know, 5%, or, you know, three and a half or 3%, like we're talking about now, like real rates, I think, you know, the high-level concept of like, you know, debt is growing, you know, kind of period. And then this concept of, I think, in a significant way, you know, the central banks not playing that sort of, you know, counterparty role in the marketplace, I think is a really kind of really important one.

Speaker Change: The high level concept of like.

Speaker Change: That is growing kind of period.

Then this concept of I think.

Speaker Change: A significant way.

Speaker Change: Central banks, not playing that sort of.

Speaker Change: Counterparty role in the marketplace I think is a really really important one and so like we kind of cheer on the reality of sort of the private sector back as being the real kind of market risk intermediaries, we think thats. Good we love the business model of Blackrock connecting with Goldman or pimco connecting.

William Hult: And so, we kind of cheer on the reality of, you know, sort of the private sector back as being the real kind of market risk intermediaries. We think that's good. We love the business model of, you know, BlackRock connecting with Goldman or PIMCO connecting with JP Morgan. We think that's a great end result with the curves getting steeper. I mean, to make an obvious point, you know, everything has evolved differently than anyone sort of expected. So you never quite know exactly where you're going.

Speaker Change: <unk> with J P. Morgan, we think Thats a great result, the curve is getting steeper.

Speaker Change: Make an obvious point.

Speaker Change: Everything has evolved differently than anyone sort of expected. So you never quite know exactly where you're going but there's no question from our perspective that this is a sort of environment that we think plays very very well for us.

William Hult: But there's no question from our perspective that this is a sort of environment that we think will play very, very well for us. You know, and as the sort of stronger whispers or the stronger feelings that a, you know, a rate cut was kind of in the works, you could see how our business performed exceptionally well in the second half of last year in anticipation of all of that steeper curve, all of these things kind of, I think, working in the right way for us from a macro perspective. You obviously saw the really strong volumes we put up in January.

Speaker Change: And as the sort of the stronger whispers of the stronger feelings.

Speaker Change: That a.

Speaker Change: A rate cut was was kind of in the works you could see how our business performed exceptionally well in the second half of last year in that sort of anticipation of all of that steeper curve. All of these things kind of I think working in.

Speaker Change: In the right way for us from a macro perspective.

Speaker Change: Translate not even a little mix.

William Hult: And that type of debate, that type of environment really does translate quite well, probably no, no better place to see it than in our swaps business, where we're seeing revenue growth of, you know, in excess of 40% in January. So, you know, it's one month, but it does give you a sense of that environment, that type of place where we're able to add value for clients and kind of how it translates. Thanks for the extra color. Thank you.

Speaker Change: Just had a really strong volumes went up in January.

Speaker Change: That type of debate that type of environment really does translate quite well probably no better place to see it in in our swaps business, where we're seeing revenue growth.

Speaker Change: Excess of 40% in January so that's one.

Speaker Change: But it does give you a sense of that environment that type.

Speaker Change: A place, where we're able to add value for clients and kind of how it translates into the business.

Speaker Change: Thanks for the extra color.

Speaker Change: Okay.

Sarah Ferber: One moment for the next question, and our next question will be coming from Kyle Volt of KBW. Your line is open. Hi, good morning.

Thank you one moment for the next question.

Speaker Change: And our next question will be coming from Commvault of K B W. Your line is open.

Commvault: Hi, good morning.

Kyle Volt: Maybe just a question for Sarah on the margin commentary and expecting less margin expansion in 24 versus 23. Just given the start to the year that you've seen, it seems difficult to get the numbers to work out to lower margin expansion that you saw in 2023, even towards the higher end of the expense guidance range. So I'm just wondering if you can kind of help frame where you'd expect expenses to come in relative to that guidance range you laid out if we see revenue growth for the full year persist at similar levels to January's 20% rate. And are there scenarios where you'd expect to come in above the high end or below the low end of the range, depending on the revenue environment? I've got it, Kyle.

Commvault: Maybe just a question for Sarah on the margin commentary and expecting less margin expansion in 'twenty four versus 'twenty three.

Commvault: Given the start to the year that you've seen it seems difficult to get the numbers to work out to lower margin expansion that you saw in 2023, even towards the higher end of the expense guidance range. So I'm. Just wondering if you kind of help frame, where you would expect expenses to come in relative to that guidance range you laid out if we see revenue growth for the full year for SaaS persist at similar.

Commvault: Levels to January 20% rate and are there scenarios, where you would expect to come in above the high end or below the low end of the range depending on the revenue environment.

Sarah Ferber: Thanks for the question. Look, we put some thought into this range. Just kind of a reiteration for everyone's benefit. At the midpoint of the range, we're talking about 12% expense growth, which includes the acquisitions that now have closed, but excludes the acquisitions. That midpoint's about 10%, which is pretty much in line if you look at any sort of track record of the expense growth we've put up historically. When you think about how we think about margin expansion, there's really been no change in our philosophy there. We're constantly trying to balance investment through the cycle to make sure that we feel like we are putting the right bets on the table to invest in durable revenue growth. And I think 2023, if I were to play back the year, is kind of like that's the proof in the pudding.

Speaker Change: Got it thanks for the question look we put some thought into this range.

Speaker Change: Just kind of a reiteration for everyone's benefit at the midpoint of the range. We're talking about 12% expense growth, which include the acquisitions that now flows excluding the acquisitions that midpoint is about 10%, which is pretty much in line. If you looked at any sort of track record and the expense growth we've put up historically.

Speaker Change: <unk>.

Speaker Change: When you think about how we think about margin expansion is really been no change in our philosophy. There we're constantly trying to balance investment through the cycle to make sure that we feel like we are putting the right bets on the table to invest and durable revenue growth and I think 2023, if I were to play.

Back a year.

Speaker Change: That's the proof in the pudding, we had an environment in the first part of the year, where the revenue environment was more challenging for a lot of macro.

Sarah Ferber: We had an environment in the first part of the year where the revenue environment was more challenging for a lot of macro reasons. However, we were able to deliver margin expansion in that environment. And then, equally as importantly, particularly towards the back half of the year when the environment really became much more favorable and we were seeing very strong revenues in line with kind of what you're seeing for January, you saw us also be able to accelerate some of those, And so still delivering margin expansion, but obviously pacing expense growth in line with revenues. This is an environment that we like. Billy's just talked about it.

Speaker Change: We were able to deliver margin expansion in that environment and then.

Speaker Change: As importantly.

Speaker Change: Particularly towards the back half of the year when the environment really became much more favorable and we are seeing very strong revenues in line with kind of what youre seeing for January you thought also be able to accelerate some of those <unk>.

Speaker Change: And so still delivering margin expansion, but obviously pacing expense growth in line with revenues. This is an environment that we like Bill you just talked about it. This is an environment that we want to invest in.

Sarah Ferber: This is an environment that we want to invest in through the long term. We do care about margin expansion. We talked about, I think, in the prepared remarks about delivering margin expansion. We're comfortable on either end of that guidance, but kind of cherry picking exactly where you land. It's a combination of sort of what the environment is and where things land.

Speaker Change: Through the long term, we do care about margin expansion, we talked I think in the prepared remarks about delivering expansion, we're comfortable on either end of that guidance, but kind of cherry picking exactly where you land. It's a combination of sort of what's the environment.

Sarah Ferber: And obviously, if you looked at any trend we've talked about, as revenues grow, our expenses grow. We have performance incentive compensation. We have variable fees, which are about 30%. And so those correlate with revenue. So generally, as the revenue environment improves, you're going to see us have expenses that kind of trend in that direction. Hopefully, that gives you a little bit of color. But obviously, you know, we have the acquisitions too, which we could spend time on either now or later. But in the big picture, does that help give you a frame? Yeah, it's good.

Speaker Change: And where things land and obviously if you looked at any trend we've talked about as revenues grow our expenses. We have performance incentive compensation, we have variable fees, which is about 30% and so those correlate with revenues and generally as revenue environment improves youre going to see us have expenses that kind of trend in that day.

Speaker Change: Action two hopefully that gives you a little bit of color.

Speaker Change: But obviously, we have the acquisitions to what you spend time on either now or later, but big picture does that help give you a frame.

Sarah Ferber: Thank you, and that concludes today's Q&A session. I would like to turn the call back over to Billy Holt for closing remarks. Please go ahead. Hey everyone, thank you very much for joining us this morning. If you have any follow-up questions, obviously, feel free to reach out to Ashley, Sameer, and the team.

Speaker Change: Yeah. That's good thank you.

Speaker Change: Okay.

Speaker Change: Thank you and that concludes today's Q&A session I would like to turn the call back over to Billy Hall for closing remarks. Please go ahead.

Speaker Change: Okay.

Billy Hall: Hi, everyone. Thank you very much for joining us. This morning, if you have any follow up questions, obviously feel free to reach out to Ashley Samir and the team everyone have a great day and thank you so much for your time.

William Hult: Everyone have a great day and thank you so much for your time. This concludes today's conference. You may all disconnect. Title Microsoft Office Word Document MSWordDoc Word. Document.8, ?? ?? ??

This concludes today's conference you may all disconnect.

Billy Hall: Yes.

Billy Hall: Okay.

Billy Hall: [music].

Okay.

Billy Hall: Yes.

Billy Hall: [music].

Billy Hall: Thanks.

Billy Hall: Okay.

Billy Hall: [music].