Q2 2024 Tradeweb Markets Inc Earnings Call
[music].
Good morning, and welcome to trade webs second quarter 'twenty 'twenty four earnings conference call.
Minder today's call is being recorded and will be available for playback.
Speaker Change: To begin I'll turn the call over to head of Treasury S. P. N a N investor relations actually surround please go ahead.
Speaker Change: Thank you and good morning.
Speaker Change: Joining me today for the call are CEO, Billy Hult, who will review our business results and key growth initiatives and our CFO, Sarah Ferber, 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'll 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.
Speaker Change: Statements related to among other things our guidance and the IGT acquisition afford looking statements.
Speaker Change: Actual results may differ materially from these forward looking statements information concerning factors that could cause actual results to differ from forward. Looking statements is contained in our earnings release earnings presentation, and periodic reports filed with the SEC.
Speaker Change: 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 in our earnings release and earnings presentation information regarding market and industry data, including sources is in our earnings presentation.
Speaker Change: Let me turn the call over to Billy.
Billy: Thanks, Ashley good morning, everyone and thank you for joining our second quarter earnings call.
Billy: This was another outstanding quarter, our central banks step back private sector intermediation continues to be invoke from evolving inflation prints to snap elections across Europe, and the U K. The macro debate continues to flourish globally and our one stop solution is resonating with our clients.
Speaker Change: At our core we are a technology company that caters to the financial service industry. We have a simple job how can we continue to see if our clients time and money and provide them with more efficient means of trading and the financial markets change is constant and we are focused on being on the forefront of that change the techno.
Speaker Change: A logical market structure or behavioral.
Speaker Change: As the markets and our clients evolve we continue to position trade web for the future. After closing our acquisition of yield broker in rates and we are pleased to have announced the signing of an agreement to acquire ICD. In April we are on track to close ICD, shortly which will add corporates as our fourth client channel.
Speaker Change: Diving into the second quarter, we achieved our best second quarter in our history, specifically strong client activity share gains and risk on environment drove 34% year over year revenue growth on a reported basis, we continue to balance investing for growth and profitability.
Speaker Change: <unk> as adjusted EBITDA margins expanded by 98 basis points relative to the second quarter of 2023.
Speaker Change: Turning to slide five rates and credit led the way accounting for 61% and 29% of our revenue growth respectively.
Speaker Change: Pacifically the rates business was driven by continued organic growth across global government bonds swaps and mortgages and was also supplemented by the addition of rates and Youll broker.
Speaker Change: Credit was led by strong U S and European corporate credits with record quarterly market share in electronic U S investment grade and aided by strong growth across municipal bonds, China bonds and credit derivatives.
Speaker Change: Money markets was led by continued growth in institutional repos equities posted low single digit revenue growth despite challenging industry volumes in our core ETF business.
Speaker Change: Finally market data revenues were driven by growth in our <unk> markets out of contract and proprietary data products.
Speaker Change: Turning to slide six I will provide a brief update on two of our focus areas U S treasuries and Etfs and then I will dig deeper into U S credit and global interest rate swaps.
Speaker Change: Starting with U S treasuries record second quarter revenues increased by 28% year over year led by records across all of our client channels, our institutional business saw record adoption of our streaming protocol and growing usage of our RF Q plus offering.
Speaker Change: Leading indicators of the institutional business remains strong we gained share and achieved record quarterly market share of U S treasuries versus Bloomberg crossing the 50% threshold for the first time, which we have maintained.
Speaker Change: Client engagement was healthy with institutional average daily trades up 45% year over year automation continues to be an important theme with institutional U S. Treasury Aix's average daily trades, increasing by nearly 100% year over year.
Speaker Change: Our wholesale business produced record volumes led by our streaming offering.
Speaker Change: Our other protocols also saw strong growth, particularly our club, which has begun to trend higher our recent acquisition of race fan is off to a strong start contributing approximately two 3% to our overall U S treasury market share complementing our club and streaming protocols.
Speaker Change: The team remains focused on Onboarding more club liquidity providers over the coming quarters as they deliver on a holistic strategy across our wholesale protocols.
Speaker Change: Within equities, our ETF revenues grew mid single digits, but faced a tougher industry backdrop, given lower equity market volatility.
Speaker Change: Other initiatives to expand our equity brand beyond our flagship ETF franchise continued to bear fruit with second quarter convertible bond revenues, increasing by 10% year over year looking ahead. The client pipeline remains strong as the benefits of our electronic solutions continue to resonate we believe we are.
Speaker Change: We're well positioned to capitalize on the long term secular ETF growth story, not just in equities, but across our fixed income business.
Speaker Change: Turning to slide seven for a closer look at another strong quarter for credit.
Speaker Change: Strong double digit revenue growth was driven by 33% and 29% year over year revenue growth across U S and European credit respectively.
Speaker Change: We also achieved strong double digit growth across munis, China bonds and credit derivatives automation continued to surge with global credit AI ex average daily trades, increasing by about 45% year over year.
Speaker Change: We set another fully electronic quarterly market share record in U S. I G helped by a record I G block market share of 9%. We also achieved our second highest fully electronic market share in U S high yield.
Speaker Change: Our institutional business continues to scale as clients adopt our diverse set of protocols to improve liquidity price transparency and efficiency.
Speaker Change: Our primary focus on growing institutional RQ continues to pay off with average daily volume growing 30% year over year with strong double digit growth across both I G and high yield. Moreover portfolio trading average daily volume rose, 100% year over year with I G.
Speaker Change: Trading reaching record levels.
Speaker Change: We continue to focus on leading with innovation and this is resonating with our clients. We saw portfolio trading users grow by over 20% year over year, a record number of line items traded in the quarter and our largest ever portfolio trade in excess of 3 billion.
Speaker Change: Retail credit revenues were up over 20% year over year.
Speaker Change: Actual advisers continue to allocate investments towards credit to complement their buying of U S treasuries and retail certificate of deposits.
Speaker Change: All trade produced a solid quarter with nearly 190 billion in volume up over 45% year over year, specifically, our all to all volumes grew over 20% year over year and our dealer RQ offering grew over 10% year over year. The team continues to be focused on.
Rodney: Rodney out our network and increasing the number of responders on the all trade platform in the second quarter. The average number of responses for all to all inquiry rose by 35% year over year. We also continued to increase our engagement and wallet share with ETF market makers.
Rodney: Finally, our sessions average daily volume grew over 60% year over year and produced the second highest quarterly average daily volume ever.
Rodney: 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 for growth with ample opportunity to innovate alongside our clients.
Speaker Change: Our strategy is focused on expanding our network, increasing our wallet share enhancing our pre and post trade analytics and continuously improving our protocols and client experience in the second quarter, we enhanced our RQ offering with our rollout of <unk> edge, where we're already seeing over 25% of our RF <unk> users.
Speaker Change: Utilizing our F Q edge.
Rodney: Our FQ edge takes the traditional RF you lift ticket and incorporates real time trading data charting functionality and execution cost analysis.
Rodney: We also remain very focused on chipping away at high yield and we believe we are well positioned to replicate the success. We've had in I G. Specifically, we're making progress in our Aladdin integration with the goal of improving the client experience and increasing electronic vacation in these markets. We're still on phase two which is folk.
Rodney: Based on all traded RQ, but our teams are already out on the road meeting with respective clients and walking them through all of the enhancements made to date.
Rodney: With our Aladdin integration closing, a gap and providing a foundation for growth, we expect high yield growth from here to be driven by the expansion of our client network led by strategic sales hires functionality enhancements and stronger penetration with the ETF market makers.
Rodney: Beyond U S credit our E. M expansion efforts continue with growing adoption of our portfolio trading and RF SKU offerings and early positive signs across wholesale E M.
Rodney: On the product side, we are focused on leveraging our diverse product expertise enhancing our integration with ethics, all and continuing to build out functionality for multi asset package trading.
Rodney: Moving to slide eight global swaps produced record revenues driven by a combination of strong client engagement in response to the macro environment and continued market share gains strength here was partially offset by a 3% reduction in duration and elevated quarterly compression activity.
Rodney: All in global swaps revenues grew 56% year over year and market share rose to 23, 6% with record share across dollar G 11, and E M denominated currencies.
Rodney: Central to our ethos is our focus on helping clients by connecting the dots across fixed income products given the heightened market volatility across many markets. Our repo clients have been increasingly referencing swap curves when evaluating fixed rate repo trades, yet their process was cumbersome and our.
Rodney: Clients asked for a better solution during the quarter, we became the first electronic trading platform to make overnight index swap curves available during their repo trade negotiation process, helping institutional clients assess the price competitiveness of different repo rates across different currencies and maturities.
Rodney: Finally, we continue to make progress across the emerging market swaps and our rapidly growing RF M protocol, our second quarter E. M swaps revenues more than doubled year over year and we believe there is still significant room to grow given the low levels of electronic vacation.
Rodney: Our RF and protocols saw average daily volume rise over 115% year over year with adoption picking up.
Rodney: Looking ahead, we believe the long term swaps revenue growth potential is meaningful with the market's still about 30% of electronic side. We believe there remains a lot. We can do to help digitize our clients manual workflows, while the global fixed income markets and broader swaps market grow.
Rodney: And with that let me turn it over to Sarah to discuss our financials in more detail.
Sarah: Thanks, Billy and good morning.
Sarah: Go through the numbers all comparisons will be to the prior year period, unless otherwise noted.
Sarah: Slide nine provides a summary of our quarterly earnings performance.
Sarah: As Billy Recapped earlier this quarter, we saw record second quarter revenues of $405 million that were up 34% year over year on a reported basis and 38% on a constant currency basis we.
Sarah: We derived approximately 38% of our second quarter revenues from international clients and recall that approximately 30% of our revenue base is denominated in currencies other than dollars predominantly in euros.
Sarah: Our variable revenues increased by 40% and total trading revenues increased by 31%.
Sarah: Total fixed revenues related to our four major asset classes were up four 2% on a reported and four 5% on a constant currency basis fixed.
Sarah: Fixed revenue growth was primarily driven by previously disclosed dealer fee increases in credit that were instituted at the start of the third quarter of 2023.
Sarah: And other trading revenues were up 9% as a reminder, this line fluctuates as it reflects revenues tied to periodic technology enhancements perform for our retail clients.
Sarah: Year to date adjusted EBITDA margin of 53, 6% increased by 117 basis points on a reported basis when compared to the 2023 full year margins.
Sarah: Moving onto fees per million on slide 10, and highlight the key trends for the quarter.
Sarah: You can see on slide 16 of the earnings presentation for additional detail regarding our fee per million performance this quarter.
Sarah: For cash rates products fees per million were up 4%, primarily due to an increase in European and Australian government bond fees per million.
Sarah: For a long tenor swaps fees per million were down 2%, primarily due to a slight increase in compression as well as a 3% decline in duration.
Sarah: For cash credit average fees per million decreased 12% due to a mix shift away from munis and sessions trading.
Sarah: For cash equities average fees per million were flat due to lower U S. ETF fees per million given an increase in notional per share traded.
Sarah: For calling the U S. We charge per share and not for notional value traded this was offset by a mix shift towards higher fee per million EU ETS.
Sarah: And finally within money markets average fees per million decreased 8% driven by a mix shift away from higher fee per million U S C DS and towards our growing institutional repo business.
Sarah: Slide 11 details our adjusted expenses at.
Sarah: 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 have maintained a consistent philosophy here.
Sarah: Adjusted expenses for the second quarter increased 25, 8% on a reported basis and 27% on a constant currency basis.
Sarah: Adjusted compensation costs increased 32, 2% due to increases primarily in performance related compensation head count and severance.
Sarah: Excluding $2 $9 million related to severance compensation costs increased 29, 4%.
Sarah: Technology and communication costs increased 29, 6%, primarily due to our previously communicated investments in data strategy and infrastructure.
Sarah: Adjusted professional fees increased 6%, mainly due to an increase in consulting costs. We expect professional fees to continue to grow over time as we spend more on technology consulting to support our organic growth.
Sarah: General and administrative costs increased due to a pickup in travel and entertainment, which on a reported basis was partially offset by FX gains year on year.
Sarah: Favorable movements in FX resulted in a $1 $7 million gain in the second quarter of <unk> 24 versus $150000 loss in the second quarter of 'twenty three.
Sarah: Slide 12 details capital management and our guidance.
Sarah: On our cash position and capital return policy, we ended second quarter in a strong position with a $1 $17 billion in cash and cash equivalents and free cash flow reached approximately $722 million for the trailing 12 months.
Sarah: Recall, we intend to pay $785 million in cash consideration for ICD once it closes.
Sarah: Our net interest income of $21 million increase due to a combination of higher cash balances and interest yields. This was primarily driven by the higher interest rate environment and more efficient management of our cash.
Sarah: With this quarter's earnings the board declared a quarterly dividend of 10 cents per class, a and class B shares.
Sarah: Turning to updated guidance for 2024.
Sarah: Strong business momentum and the anticipated closing of ICD. Shortly we are increasing our adjusted expense guidance from $805 million. We now expect to be in the 832 $816 million range for 2024.
Sarah: Including the anticipated closing of ICD. We are currently trending towards the midpoint of this range, which would represent an approximate 22% increase versus our 2023 adjusted expenses.
Sarah: Focusing on organic growth the midpoint of this range would represent approximately 16% increase.
Sarah: Bridging the gap from 805 million to the midpoint of our new range, 63% of this increase is coming from the inclusion of ICD with 30% and 7% coming from better business momentum and the recently announced management changes respectively.
Sarah: Provided that ICD closes shortly revenue from ICD is expected to be approximately $40 million over the next five months.
Sarah: Recall, we plan to invest in technology and marketing during the first 12 months post closing, which we expect may temporarily pushed icd's adjusted EBITA margin down to 47% to 49%.
Sarah: All in primarily factoring in the better business momentum, we now expect our 2024 adjusted EBITDA margin expansion to slightly exceed 2023 levels.
Sarah: At the same time, we expect to capitalize on the anticipated healthy revenue environment by accelerating investments to support our current and future organic growth.
Sarah: This includes infrastructure related investments such as further enhancements to our global credit Tech stack, expanding our integration capabilities to allow for cloud based Python integration and retail platform enhancements to support the growth in trading activity, we've seen in recent years.
Sarah: We are also selectively making small investments in emerging digital technologies, such as blockchain and digital assets in order to leverage and benefit from their technical expertise without having to make significant investment to experiment in house.
Sarah: We now expect our Capex and capitalized software development to be about $77 million to $85 million for 2024.
Sarah: Acquisition, and refinish transaction related D&A, which we adjust out due to the increase associated with push down accounting is now expected to be $158 million.
Sarah: We continue to expect 2024, and 2025 revenues generated under the new Master data agreement with <unk> to be approximately $80 million and $90 million respectively.
Sarah: Now I will turn it back to Billy for concluding remarks.
Billy: Thanks Sarah.
Billy: Trade web thrives on change and we look forward to solving complex problems change can happen very fast or very slowly, but we want to be that trusted partner that our clients look towards to drive innovation in the market. It's a great time to be in the risk intermediation business I feel good about our future growth outlook.
Sarah: With a couple of important month and trading days left in July which tend to be our strongest revenue days average daily revenue growth is trending at a high teens growth rate relative to July 2023.
Sarah: The diversity of our growth remains a theme, we're seeing strong volume growth across global government bonds mortgages interest rates swaps corporate credit in repos.
Sarah: <unk> and high yield share are trending above, 18% and 7% respectively in July.
Speaker Change: I would also like to welcome Amy clock to the team who will be joining trade web in August as chief administrative officer, and as a member of the Executive Committee Amy brings more than 25 years of experience and will oversee operations business integration risk and corporate services.
Speaker Change: Finally, 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 the best second quarter revenues and volumes that trade web with that I will turn it back to Ashley for your questions.
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.
Speaker Change: Thank you at this time, we will conduct a question and answer session to ask a question you will need to press star one one telephone and wait for your name to be announced to which I have your question. Please press star one again, please stand by while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Craig Siegenthaler of Bank of America. Your line is now open.
Craig William Siegenthaler: Good morning, Billy Hope everyone's doing well.
Craig William Siegenthaler: How are you.
Craig William Siegenthaler: I'm. Good. So we had a question on a key competitive advantage trade with <unk> ability to provide a one stop shop platform across multiple asset classes. So how important is the wide asset class offering to your sales pitch.
Speaker Change: <unk> ability to penetrate traders on the buy side.
Speaker Change: And also to what degree has multi asset trading become more or less common overtime.
Speaker Change: Greg Good to hear your voice.
Greg: Hear you on the question I've been saying this like pretty clearly for a while that technology.
Greg: <unk> is making the markets more connected than ever and trade web is really well positioned because of our product.
Speaker Change: That being this kind of like one stop shop, I said it on CNBC.
Speaker Change: And Ashley was like that sounds amazing, maybe just I'll say shop say platform.
Speaker Change: This isn't like the 90 is youre not going to go home and watch Seinfeld at night.
Speaker Change: The thesis I think you understand really well and so when we think about this for a moment I would say kind of part of the part of the company's history Forever. So let me just say this very clearly like for sure being.
Speaker Change: Being in government bonds way back when and helped US get into for example, TBA mortgages being in European government bonds helped us get into European swaps, then there as you sort of like more kind of seismic moments, where we want it to get into interest rate swaps at a point in time, where the where the fed was cutting rates and mortgage originators.
Speaker Change: In this massive consumer of interest rate swaps and kind of kind of quote unquote kind of put us on them on the map. So you can kind of feel the history in.
Speaker Change: In terms of what I'm, describing in terms of our commitment to multi asset class trading.
Speaker Change: When we think about like today for a moment.
Speaker Change: From our perspective, the stats are basically 16% of global AUM is now sitting in multi asset funds that's up from about 10%.
Speaker Change: In 2018, we think that's going to kind of trend continuing really higher.
Speaker Change: From our perspective, Craig for a second on our firm level I think the stats are around 60% of our clients.
Craig William Siegenthaler: Trade at least two products.
Craig William Siegenthaler: And about one in five trades at least five products. So those are pretty kind of interesting numbers on a trader level, it's even a little bit more interesting 30% of our traders.
Craig William Siegenthaler: We're now trading three products with us we can understand that if you think about the macro businesses that makes a lot of sense.
Craig William Siegenthaler: And over 10%.
Craig William Siegenthaler: All of our traders trade over five products right I think.
Speaker Change: Samir that gave me a stat that we actually have one trader.
Samir: Who is now trading like cycle, Theres 11 different markets with us.
Samir: That guy needs like at least five.
Speaker Change: Please.
Samir: From a trade web.
Samir: But those are the stats and I would say just very very straightforward from me.
Speaker Change: Thats matter and then there is the kind of the ethos piece of this which is which is part of how we build and grow businesses here. So when we wanted to get into Friday. When we saw that there was a door opener for us to compete in credit.
Speaker Change: If the question is when you walk into pimco.
Speaker Change: And your partner to them in terms of building a mortgage business does it help us to make a sale into credit.
Speaker Change: 100%, because I think that there is a reality that credibility.
Speaker Change: Leads to opportunity.
Speaker Change: That's a straightforward common credibility and leads to opportunity.
Speaker Change: And then the balance of the world when we think about the firm's relationships with the sell side and you think about the big banks and we think about how the firm interfaces with the with the Jimmy <unk> of the world or the Detroit JP Morgan or a show.
Speaker Change: At Goldman.
Speaker Change: I can't leave out Andy Morton.
Speaker Change: No.
Speaker Change: Look we interface really well I think were partly that's because we have a very strategic.
Speaker Change: Residents with Dan when you think about the businesses that we're in and when you think about how those businesses.
Speaker Change: Touch their P&L.
Speaker Change: And so thats been.
Speaker Change: A big advantage for us in a certain way forever.
Speaker Change: And you've kind of you've been heard.
Speaker Change: What we're doing for example, if you think about the money market business and how it sort of funnel through.
Speaker Change: All of the markets that we are and the ability for us to connect kind of our repo world into interest rate swaps you are talking about two wells that had been kind of historically.
Speaker Change: Sleep and now we're showing like NASA of innovation in terms of how those markets are operating so my instinct is it's big it's been a big advantage for us and the very strong instinct is given the trend of technology and the way. These markets are sort of more connected than ever it's a further advantage.
Speaker Change: As we continue to grow our market share and build and build ourselves into new markets. So that's the view I. Appreciate the question Greg. Thank you.
Greg: Thank you Billy.
Speaker Change: Yeah.
Speaker Change: Thank you one moment for our next question.
Samir: Yeah.
Speaker Change: Our next question comes from the line of Ben Parrish of Barclays. Your line is now open.
Unknown Attendee: Hi, Good morning, and thank you for taking the question Bill in your prepared remarks, you called out a number of stats on portfolio trading and the growth in Adv.
Speaker Change: Increasing number of line items, the largest portfolio trade ever.
Ben: On your platform I was wondering if you could talk about kind of your medium to longer term outlook for the protocol. How is usage changing what are these new types of firms, including engaging with portfolio trades that are yeah that werent before and how are some of the newer market makers. The large trading firms that are joining the platform recently how are they engaging with the protocol. Thank you. Yes. So it's a good question Ben how are you.
Speaker Change: So we're positive on portfolio trading and because the thesis is and you guys have kind of heard me say this very clearly.
Speaker Change: We stand for balance right. So we love the concept.
Speaker Change: Ultimately the buy side acting like the buy side and the banks acting as market makers, we think that theres going to be.
Speaker Change: Significant volume that goes through in that basic direction.
Speaker Change: And so from our perspective.
Samir: Portfolio trading now.
Samir: Presents.
Samir: A little bit less than 10% of trace in the second quarter of 2004, that's up from 5% in the second quarter of 'twenty three we're getting a lot of sort of opinions that that can land in that sort of like 20% to 25% zone of total trade volume.
Speaker Change: I have an instinct that it can be higher.
Speaker Change: Again thinking about the concept of balanced the banks coming back into the equation.
Speaker Change: From an.
Speaker Change: Chronic perspective.
Speaker Change: And then the concept of of kind of risk risk trading really kind of entering into that protocol is a big deal right. So when we think about the progression of it all right. Originally if you remember the protocol was sort of built for asset managers for kind of month or quarter.
Speaker Change: Order and rebalancing kind of period.
Speaker Change: It's shifted and changed a lot from there right. So now you have hedge fund clients using the protocol for how we think about risk on trades tactical trades.
Speaker Change: More recently, we've seen insurance firm using it for asset liability management. These are like pretty big.
Speaker Change: Kind of progression in terms of in terms of behavior.
Speaker Change: Your second part of the question is quite interesting right. Because now we are seeing and we're talking about the emergence of how we think about.
Speaker Change: Sort of the alternative market makers, I think thats still the right way to describe them, but the alternative market makers kind of entering the space with a lot of emphasis around technology, we think about sort of the <unk> of the world.
Speaker Change: The change of the world that are doing an excellent job in terms of warehousing risk.
Speaker Change: Virtue, it's been very clear about their plans I think Doug used to word Switzerland to describe himself in terms of.
Doug: His relationship between trade web and market access I'm going to I always thought we were kind of Switzerland, but I'll.
Speaker Change: I will have that conversation with him offline.
Speaker Change: But they are they are very very important players in the space right you have.
Speaker Change: You have these kind of firms filling a void do not have the sort of legacy kind of traditional way of doing business kind of issues.
Speaker Change: And then you have companies that have significant DNA and expertise and experience on the anonymous side of the trading world.
Speaker Change: Into disclosed trading.
Speaker Change: And the Wallowed around disclose trading and that's a big deal. So my instinct is theyre going to take the.
Speaker Change: The concept and the premise of portfolio trading very seriously.
Speaker Change: And that's a big deal for us in terms of how we partner with them going forward.
Speaker Change: Feeling quite good about Directionally, where wherewithal with portfolio trading and thanks for the question.
Speaker Change: Great. Thanks for the detailed response.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question comes from the line of Tyler <unk> of William Blair. Your line is now open.
Christopher John Allen: Good morning. This is Tyler <unk> on for Jeff Schmidt.
Christopher John Allen: We were curious what are the client response been to the rollout of <unk>.
Speaker Change: With the additional functionality and analytics, helping penetration of larger block trades.
Speaker Change: Sure Hey, Tyler good question by the way love the sort of thing.
Mark: Mark <unk> I think that's a great kind of marketing.
Speaker Change: Protocol for the company, it's early days and it's a good question.
Speaker Change: The initial feedback has been quite positive.
Speaker Change: From our perspective, the enhancements are all about kind of adding analytics real time chartering entered the arch ticket.
Speaker Change: We think that like Directionally investing in clients more upstream is important that's a very kind of strong kind of strategic move for us.
Speaker Change: <unk> edge enhancements, they basically reflects similar analytics to what we provide to our clients across portfolio trading. It allows you to trade with multiple dealers in the all to all market all at once again, it's all about sort of enhancing and investing into the client experience.
Speaker Change: We have a few clients who are utilizing it like a portfolio trade, where theyre going to fewer dealers, sending larger size trades fewer dealers larger size trades that concept of sort of.
Speaker Change: Information leakage minimizing information leakage. These are like very very important principles and something that we've invested in for a long time really understanding client flow I think in a very straightforward way that that's the ultimate edge for us. So we're feeling good about that protocol early days.
Speaker Change: More to come on it and I appreciate the question.
Speaker Change: Okay.
Speaker Change: Thank you our next question.
Speaker Change: Our next question comes from the line of Chris Allen of Citi. Your line is now open.
Chris Allen: Good morning, everyone. Thanks for taking the question wanted.
Chris Allen: I wanted to talk about the third party market data business, a little bit I'm wondering what the kind of key growth drivers are here.
Speaker Change: New products.
Speaker Change: Able to introduce you may be able to expand the penetration of existing products.
Speaker Change: So can you just kind of remind us of the mix today between different data offerings and how much they contribute.
Sarah: Sure Hey, Chris It's Sarah.
Speaker Change: Thank you for the question.
Speaker Change: Market data has been a great business for us.
Speaker Change: I think as we always talk about first and foremost our top priority with utilizing market data has improved the execution for our clients.
Speaker Change: Obviously, we have direct monetization of market data as well in the second quarter, we had about $29 million of revenue overall for market data the bulk of that about 20 coming from <unk> 9 million in the quarter from the third party.
Speaker Change: Data line that Youre asking about.
Chris Allen: That line, obviously, a much smaller base, but it's growing really nicely for us about 17% over the last five years on average.
Chris Allen: If you think about what's in that bucket there.
Chris Allen: A few components.
Chris Allen: Element driving that third party line is really pricing products so pricing.
Chris Allen: About 60% of that $9 million, and it's really things like benchmark and reference products. So think about our ability to have a closing price on U K gilt our U S. Treasury newer products like <unk> are in today ETF type of pricing.
Chris Allen: AI pricing this concept of creating benchmarks and then ultimately.
Chris Allen: In terms of our growth strategy as they get further adopted at ads growth in two ways one directly from licensing fees as you create indices as people consume clothing in reference prices, but also increased trading floor, which obviously is great for our other lines.
Chris Allen: That's the biggest bucket that's the biggest growth driver. The thing. We're most excited about obviously partnered with FTSE, which is owned by al If I could do a lot of that.
Chris Allen: Other components in that line are really around analytics and post trade regulatory type products things like PCA. So I think overall, we're quite bullish in our ability to grow the opportunity here theres new types of licensing reference data that we can great in some ways, it's limitless any asset class.
Chris Allen: We're trading we can help create a closing price of our benchmark for it doesn't happen overnight, but you can see in terms of that model you can create more products and then as it gets further and further entrenched in the network more adoption and then theres inherent growth and we're seeing the benefit of both of those things in that line today.
Speaker Change: Thanks for the question.
Chris Allen: Thanks.
Chris Allen: Thank you Juan for next question.
Speaker Change: Our next question comes from the line of Alex <unk> of Goldman Sachs. Your line is now open.
Alex: Hey, good morning, Bill and everybody else.
Alex: I wanted to talk a little bit more about the interest rate swap business I know, it's a topic that.
Speaker Change: Come up a bunch in the past and I've asked you guys. This numerous times in the past as well but.
Speaker Change: It seems like this business just kind of continues to set new records in the second quarter wasn't with an exception of that so.
Speaker Change: What drove the strength in the second quarter, that's one and maybe you can just kind of zoom out and talk broadly how you're thinking about the revenue growth algorithm in this business over the next couple of years because it seems like it continues to do much better than what the baseline.
Speaker Change: It's been a great great kind of environment for Us obviously, Alex it's a very good question somewhat kind of like the.
Alex: Second quarter is almost like a perfect microcosm of what our clients care about the most is there's geopolitical geopolitical uncertainty.
Speaker Change: Bearing inflation prints changing election odds all of that stuff and our business has really been kind of clicking in.
Speaker Change: It's primarily been a market market share story for us I would say.
Alex: As you know very well our swaps business, we think about it as a sort of almost like a complementary complementary to our global government bond business and our mortgage franchise and made the point I want us to kind of keep thinking about this when the when the fed gets into.
Speaker Change: Rate cut mood, our instinct is.
Speaker Change: Sort of mortgage originators are really going to kind of step into the equation around swaps.
Speaker Change: But we have gained market share and growing revenue really kind of in three ways, It's first and foremost by adding new customers and migrating them from voice to <unk>. That's like trade web kind of 101 stuff and Thats been a big driver of our of our market share I would say second.
Speaker Change: Always buy kind of building new products and that from our perspective would be.
Speaker Change: And then I think very very importantly, and I've used the expression before.
Speaker Change: Micro trading protocols. So the example of that would be like request for market.
Speaker Change: We call it or a family or somebody like code words of trade web, but request for market we are aware.
Speaker Change: Buy side clients can go to one deal or ask for a two sided market and then and then trade on one side of the marketplace. It really ultimately replicate the exact behavior that large kind of macro macro funds trade big size in the market and those kind of trades would happen on the phone or.
Speaker Change: Through Bloomberg's messaging and now they are happening.
Speaker Change: Trade web as we kind of plot the plot the future a little bit it's going to be about continued sort of success around <unk> swaps, we feel bullish on inflation swaps I think swaption as a very kind of interesting.
Speaker Change: Not to crack for us and then there's going to be again, we talked about sort of technology and this kind of concept of multi asset package swaps. So a lot more for us to do in the in the area.
Speaker Change: And feeling really really good about how we've continued to perform gained market share in swaps.
Speaker Change: As you know, Alex very well and I, sometimes feel like a little bit like the trade web Ive made a joke. The trade rep. Historian this was the sort of back alley of all the rates markets have all the mark of all the macro markets for a long time and to see this business flourish.
Speaker Change: <unk> an interesting environment has been quite rewarding for the company and feeling really good about where it's going from here. So thanks for the question.
Alex: Thank you Alex.
Speaker Change: Okay.
Speaker Change: Thank you our next question.
Patrick Malcolm Moley: Our next question comes from the line of Patrick <unk> of Piper Sandler Your line is now open.
Patrick: Yes. Good morning, Thanks for taking the question.
Patrick: I had a question <unk> is launching in September I understand that a lot of the conversation with Fms has been around the futures business, but they do have a club treasury business that you compete with currently.
Speaker Change: So I understand that it's not a huge part of your business, but was just curious to get your thoughts on FX broadly and what this new consortium of dealers in the right space means for competition in the industry and then if I could add a follow on to that you mentioned in your prepared remarks that the club was starting to trend higher for you I know that's been a business that you haven't been completely.
Speaker Change: Slide with since you.
Speaker Change: Bought it from NASDAQ a few years ago. So maybe if you could just expand on the strength, you're seeing there and your expectations for.
Speaker Change: That business going forward, Thanks, Yes, hey.
Speaker Change: Patrick.
Patrick: Good to hear your voice hope Youre doing youre doing really well.
Speaker Change:
Speaker Change: I made the comment about.
Speaker Change: Sort of Switzerland, before I was watching CNBC yesterday with Mr. Duffy kind of talking about this business and thinking myself, there's like there's no Switzerland.
Speaker Change: Kind of in this moment.
Speaker Change: Howard has a big personality kind of everyone knows that I think.
Speaker Change: We've known them well and we have a very respectful relationship both with him.
Speaker Change: And with the CMA My instinct is that kind of clear goal is to.
Speaker Change: Fms's perspective is to take on the incumbent in the futures market.
Speaker Change: That's our business model.
Speaker Change: And we'll see how all of that will play out I think <unk> got it.
Speaker Change: Play out a bit on <unk>.
Speaker Change: On television and it'll be an interesting kind of story to watch.
Speaker Change: We feel to make an obvious point and it's a good question, we feel really really good about the strength of our treasury business. Both on the client side and on the wholesale side I have a very strong message that I delivered to the company, which is b super conscious and Super aware of the competitive <unk>.
Speaker Change: Unscathed, and so to make an obvious point very well aware of everything that Howard has done in this space and continues to try to do in this space is super aware of the competitive landscape, but live and breathe with your clients.
Speaker Change: And always make that the most straightforward focus.
Speaker Change: No.
Speaker Change: Our wholesale business on the Treasury side continues to do extremely well.
Speaker Change: From from your question about the cloud versus the streaming business.
Speaker Change: We continue to do exceptionally well in terms of growing our streaming business. The right fit acquisition has been helpful to us not surprisingly and all of that.
Speaker Change: I think we do still have work to do on the club and I think that is an important piece of the market there have been market share shifts in the cloud world.
Speaker Change: And this company.
Speaker Change: Sort of executes and from our perspective, we want the company to continue to kind of click on all cylinders and Thats an area, where we tend to roll up our sleeves, a little bit and make sure that we're pressing the right buttons in the club and investing there correctly and hiring the right people and moving that business forward.
Speaker Change: As you know very well this is a company that face quite focused and there's enough news out there is the good is the good piece of it.
Speaker Change: We're going to stay very very focused we're going to kind of sit back and see what happens around the kind of futures market in terms of all of that and then stick to our knitting.
Speaker Change: We stay close with our clients, who continue to do really well in our wholesale business.
Speaker Change: Thanks for the question good to hear your voice.
Speaker Change: Thank you Ron for next question.
Speaker Change: Our next question comes from the line of Brian Bedell of Deutsche Bank. Your line is now open.
Brian Bertram Bedell: Great. Thanks, good morning folks.
Brian Bertram Bedell: Maybe just not to focus too much on the short term here, but just.
Unknown Attendee: Comments for July Billy on.
Speaker Change: Investment grade and high yield market share looks like a little lower than June.
Speaker Change: Maybe just if you can comment on what you think maybe driving that is it more of a shift in the business mix.
Unknown Attendee: Either environmental or or or due to portfolio trading or in within the.
Speaker Change: The client base dealer to institutional.
Speaker Change: Yeah. Good question and fully get you don't read too much into that into those numbers, yes, I mean generally speaking we tend to kind of wind up outperforming.
Speaker Change: From a market share perspective in that arena around.
Speaker Change: Some of those portfolio trading protocol is towards the end of the month.
Speaker Change: I think we're going to wind up.
Speaker Change: Very good place.
Speaker Change: You see our all in July numbers, I think youre going to see continued sort of growth of portfolio trading which is from our perspective.
Speaker Change: <unk>.
Speaker Change: Or kind of go to protocol and something that we kind of thrive and so I don't I don't think youre going to see a big kind of disconnect. When all is said and done.
Speaker Change: Feeling really good about where we are.
Speaker Change: Credit and I think that's important to say that the the Aladdin integration remains a high priority for us as a company on boarding the REIT market makers.
Speaker Change: In high yield when we get into the open trading environment. That's an important concept for us we've talked about that a lot and we're going to continue to thrive in that portfolio trading world, where we talk about the balance of it all.
Speaker Change: The big buy side clients.
Speaker Change: Acting like the buy side and the dealers investing in market makers, the alternative market makers, arriving on the scene from our perspective. These are quite good forward trends for our credit business and Thats, where our focus is going to stay.
Speaker Change: Good question and thank you. Thank.
Speaker Change: Thank you.
Speaker Change: Thank you gentlemen for next question.
Speaker Change #101: Our next question comes from the line of Ken Worthington from Jpmorgan. Your line is now open.
Kenneth Brooks Worthington: Hi, good morning, Thanks for taking the question.
Kenneth Brooks Worthington: I wanted to focus on business environment, maybe part one.
Kenneth Brooks Worthington: As you mentioned to Alex's question its been election season globally, how has the election season impacted.
Speaker Change #103: Activity levels, given some changes in Europe already and are there any clear takeaways from Harris or Trump presidency for trade web.
Speaker Change: The us markets and then maybe part two is we've seen the bond issuance and net sales into fixed income funds increased substantially in 24 versus 23 levels.
Kenneth Brooks Worthington: Should we expect higher issuance in sales to translate into investment grade or high yield trading volume from trade web from a timing and magnitude perspective.
Speaker Change: Sure you got it's been just like Ken like an incredible kind of.
Speaker Change: Six weeks.
Speaker Change #105: I feel like the story is changing constantly.
Speaker Change: As we said before I think healthy debate in the market.
Speaker Change: It's good for our business and so obviously, we saw some record revenue days in June.
Speaker Change: You talked about the concept of geopolitical uncertainty.
Speaker Change: During inflation trends.
Speaker Change: I think and look you always get the straight answer for me to start with I'm not an economist I think the fed is going to the fed's going to cut no matter, who the president is I will say that I think thats going to wind up being quite good for our business.
Speaker Change #100: I think youre going to get sort of.
Speaker Change: Different policy, obviously, but my instinct is.
Speaker Change: Global Global debt is rising and I talked about the concept of I think very importantly, the fed playing a lesser role in the markets that trade web lives and breathes and so that leaves us with this.
Speaker Change: Feeling.
Speaker Change: Sort of no matter no matter of the election results that private sector risk intermediation is is back in Vogue.
Speaker Change: I do think youre going to see continue.
Speaker Change: Continued strong levels of issuance of debt issuance going forward and my instinct is.
Speaker Change: Markets like high yield are going to have a pickup in volume a pickup of activity as we get into <unk>.
Kenneth Brooks Worthington: 25.
Kenneth Brooks Worthington: Not to make you laugh that those are my thoughts.
Speaker Change #107: I feel like I've had 10 different thoughts about what was going to happen over the last month and I'm sure everyone. On this call has too so it's been it's been a little bit.
Speaker Change #107: Human way I can say this it's been a little bit of a of.
Kenneth Brooks Worthington: Of a challenging time with all the things happening in the world.
Kenneth Brooks Worthington: And so we remind ourselves how lucky we are sometimes but it's been it's been a it's been a tough couple of couple of months just in terms of all the events in the world.
Kenneth Brooks Worthington: Great.
Speaker Change #102: That's a great question. Thank you.
Speaker Change #104: I appreciate your perspective.
Speaker Change #113: Thank you one moment for our next question.
Speaker Change #106: Our next question comes from the line of Daniel Fannon of Jefferies. Your line is now open.
Daniel Thomas Fannon: Good morning, Thanks for taking my question within high yield you mentioned in your prepared remarks, expanding your client network is kind of key to growth can you unpack where your current strengths are today and what client segments, you're targeting to actually get that future growth and maybe how does the Aladdin partnership accelerate that yes.
Dan: That's a good question Dan.
Speaker Change #125: Straightforward strengths, probably not surprising to you at all we would say are like the long only asset managers.
Speaker Change #119: I'm going to push the team with Sarah around continuing to form deeper relationships with the with the ETF market makers. They are obviously.
Dan: STREAMWAY important in the high yield business I think we've done very well with them their critical so we're going to keep kind of extremely focus there.
Daniel Thomas Fannon: Hedge funds and private banks in terms of like liquidity taking.
Daniel Thomas Fannon: Very important kind of institutions in the space we're focused on.
Daniel Thomas Fannon: And because we think it's going to help kind of round out that responder network in a way that's going to work for us.
Daniel Thomas Fannon: The perception around making sure that we have best in class liquidity and high yield and I say this to you because.
Daniel Thomas Fannon: Because it's always sort of a two pronged approach as we do that there's going to be a continued message around the benefits of.
Daniel Thomas Fannon: Portfolio trading, which we think we're going to see continued growth, particularly in the high yield area.
Daniel Thomas Fannon: Around portfolio trading so we want to make sure we're kind of thinking about that marketplace from from two different protocols. The right way and then we're going to be very focused always on the client base.
Daniel Thomas Fannon: So deeper relationships inside of that ETF money market.
Speaker Change #111: <unk> market maker World.
Speaker Change #111: And make sure we have the right responders and which is partly why that Aladdin integration and so much to us.
Speaker Change #111: And then maybe just one other area we've talked about in the past as well when we think about the client base.
Speaker Change #111: A lot of time and energy on continuing to focus on building out our platform. That's another area I think we see some benefit in terms of high yield expansion.
Speaker Change #129: Overlap there in some of those traders yes. Thank you Sir.
Speaker Change #118: For the question.
Speaker Change #109: Thank you.
Speaker Change #146: Thank you one moment for our next question.
Speaker Change #114: Our next question comes from the line of Kyle Voigt of <unk>. Your line is now open.
Kyle Kenneth Voigt: Hi, good morning, everyone.
Speaker Change #120: So with ICD likely to close within the next week or so.
Kyle Kenneth Voigt: Just wondering if you can update us on your appetite for incremental M&A from here, especially given that you still have a significant amount of balance sheet flexibility post close and.
Speaker Change #112: And with respect to ICD can you just remind us of the integration timeline there it sounds like there may be some incremental investment upfront.
Speaker Change #112: So how should we think about the margin trajectory after that.
Speaker Change #121: Yes, that's great.
Speaker Change #126: So I was laughing thinking what really is the answer to this M&A question.
Speaker Change #117: Last quarter.
Speaker Change #115: Look M&A, let me start with the first part of your question, we think M&A as a tool just like organic growth of the total partnerships investments or tools to implement our strategic objectives.
Speaker Change #115: We've done three acquisitions, if you don't create ICD in the last 18 months and we're focused on doing those wow, which means executing and integrating that obviously like top of mind and I'll talk a little bit more specifically around the plans of ICD that said, while we do that we constantly are focused on achieving our strategic.
Speaker Change #115: <unk> objective, so we're going to be disciplined about looking at other opportunities, but we're going to continue to look at that tool and balance.
Speaker Change #115: Executing well with continue to be opportunistic and grow our company. We think we're on but we have a.
Speaker Change #112: Great balance sheet, we have a great stock.
Speaker Change #112: But we're going to be very disciplined about it and hopefully you've seen that in a few ones that we pursued so far.
Speaker Change #112: ICD is specifically, we expect to close shortly.
Speaker Change #122: In terms of where we are I think we've talked a little bit about the margin expectation for ICD out of the gate is probably a little bit lower than where ours is right. Now 47, 9% I think is the range that we've talked about that's really reflecting our increased investment.
Speaker Change #122: And in that platform strategically the business is performing very well.
Speaker Change #112: And in the client dialogues that we've had we've been really pleased that our thesis around their desire for our types of products really that receptivity and that strength of the client relationship. The ICD client managers have has been really strong.
Speaker Change #112: So in terms of where we're headed.
Speaker Change #112: The opportunity for us in the near term and medium term, it's really around driving those revenue synergies.
Speaker Change #112: Really taking our international footprint, introducing ICD into that client base and then obviously it was going to take a little bit longer but it's certainly on our 12 to 18 months technology Road map and some of it will happen sooner if not a big Bang is introducing connectivity to our platform. So those corporate treasurers and buy.
Speaker Change #112: Our products they've had interests, we will likely start with U S treasuries, which we think we're very well placed to deal, but you can see how one is here.
Speaker Change #123: On that portal of actually transacting in these corporate treasurer, our transaction today and our product U S. Treasuries concluded Cds conclude SEPA can go to corporate bonds. There is a whole range of outcomes that we see over the medium term and we're quite excited about that opportunity and Sarah we talk a lot about sort of the importance of.
Sarah: So the management team and the cultural fit maybe just a minute from you just on how impressed we've been with that management team starting with Tori, Yes, I mean, the management teams start inventories as CEO of ICD, we have been able as a broader team to spend a great deal of time with not only in the diligence process.
Speaker Change #128: One of the benefits.
Speaker Change #132: It's obviously time consuming but one of the benefits of having done. These three acquisitions in a short time period is we've really honed our playbook and then able to connect with the management teams.
Speaker Change #132: CDN for you guys at every level, so Joey mentioned Tory, but it goes from the heads of product.
Speaker Change #132: CMO and obviously through the finance in broader parts of the organization. So the talent that we are bringing onboard as partners to grow our platform. We are really excited about and I think.
Speaker Change #116: Having been on and part of a number of acquisition at cultural fit the mindset that focus on clients.
Speaker Change #116: That's one of the things that makes acquisition even more successful. So I think it's right to point out the talent is high but the cultural fit and the way that we approach serving our clients is actually a tremendous fit that makes sense.
Speaker Change #116: Even more enthusiastic than we were.
Speaker Change #135: On steel.
Speaker Change #116: Yeah.
Speaker Change #124: That's great. Thank you very much youre.
Speaker Change #127: Youre welcome.
Speaker Change #127: Thank you Paul Willmott for next question.
Speaker Change #140: Our next question comes from the line of Michael <unk> from Morgan Stanley. Your line is now open.
Christopher John Allen: Great. Thanks, so much for squeezing me in here I just wanted to circle back to your earlier comments on the investments Youre, making and emerging technology I was hoping you could elaborate a little bit on that what are your aspirations there and if successful what does that look like I think one of the things you were articulating was block chain. So I guess just related to that how do you see the potential for a blockchain.
Christopher John Allen: In your markets and your business over the long term.
Speaker Change #133: Sure. Thanks for the question.
Speaker Change #134: I think digital.
Speaker Change #127: Assets in emerging technologies are really interesting.
Speaker Change #127: Point in the cycle, we've spent years really looking at the space and being very disciplined about how we spend our capital, but increasingly part of our strategy is to partner and invest those technologies don't have to be born free.
Speaker Change #127: Created in house for us to really avail ourselves of it and blockchain is a perfect example.
Speaker Change #127: From our seat leveraging distributed ledger technology like blockchain, obviously has a lot of impact in trading businesses in terms of eliminating manual reconciliation is reducing cost of transaction.
Speaker Change #127: And we want to be on our front foot about figuring out how that gets leveraged in how we learn.
Speaker Change #127: Those things also have ecosystem, just like arrow markets today in the more traditional space have ecosystems. So.
Speaker Change #127: Two investments that we've done recently, one with Cantor and network, which is a blockchain network.
Speaker Change #127: Other around Alpha Ledger, which is actually blockchain infrastructure, both are giving us different seats at the table and seeing how that technology can be utilized for either issuance or trading securities and Alpha ledgers cases around brokerage Cds and canton, which is like a much more well understood network.
Speaker Change #127: Really around how that ecosystem.
Speaker Change #127: Scale and create interoperability for digital assets. So I think it's still early days around these emerging technologies, but certainly we're positioning ourselves to be an important player as that market evolves.
Speaker Change #139: Whether it's a digital asset trading on the blockchain or or some more traditional and Michael Sara Sara described that perfectly I would say like.
Speaker Change #145: When you when you build markets you learn sort of an aspect of pragmatism.
Speaker Change #145: Pretty quickly and so we're always sort of thinking about like how some of these things pragmatically can live and fit in our marketplace.
Speaker Change #130: Sarah and I talk about this all the time, we're going to describe for you sort of two markets that feel like they have sort of.
Speaker Change #131: The type of market or the type of settlement process that could really kind of benefit from some of these technologies that are clearly so important and you specifically mentioned blockchain, we would sort of pointed out obviously first to start with the repo market and then the second market that we would probably point out and we think this market is going to become more and more important over the.
Speaker Change #131: Next couple of years as you think about how the TBA market kind of traditionally settles I think the feeling is there are going to be sort of blockchain technologies that could create more efficiencies in that market over time.
Speaker Change #142: The key and most important kind of words around that would be over time, because I do think.
Speaker Change #142: It will take time for that kind of technology to get applied pragmatically into our world, but the opportunity in a really interesting way is there.
Speaker Change #142: An excellent question Michael Thanks.
Michael: Great. Thank you.
Speaker Change #141: Thank you one moment for our next question.
Speaker Change #143: Our next question comes from the line of Alex Kramm of UBS. Your line is now open.
Alexander Kramm: Yes, Hello, everyone.
Speaker Change #136: And as you come back to portfolio trading and credit one more time.
Speaker Change #154: When when when I talk to some of your largest biotech clients they totally agree that.
Speaker Change #152: That's in our protocol is going to get bigger so that sounds great, but at the same time, obviously very dominant market share in that business and when I talked to those clients definitely saying like look overtime.
Speaker Change #147: We do like competition, we're going to have to spread all love a little bit more so considering that that is a very concentrated market right now.
Speaker Change #151: I don't think it has as much network effect, then maybe I'll ask you all to all is is that something that worries you and how do you think you can defend that.
Speaker Change #136: As again, maybe maybe it's a little bit more of a workflow than a real network liquidity is a good question. It's a really good question.
Speaker Change #138: I think like.
Speaker Change #150: Really in a certain way kind of agree with a lot of your thesis first of all with like the way that the buy side clients are embracing that protocol I think thats like spot on.
Speaker Change #156: I think you hear me loud and clear around the importance of the FERC balanced around the ecosystem, we're going to do sort of exactly what you would expect us to do which is to sort of continue to enhance and innovate.
Speaker Change #150: And do things around technology to enhance the clients.
Speaker Change #150: Experience with portfolio trading, we're also going to remind our bank partners that.
Speaker Change #138: Not that we created this portfolio for you guys, but absolutely we went out of our way in a very straightforward concept to bring the big banks back into the equation and we do think we've gotten a lot of support as we've done that.
Speaker Change #138: So I think the forward trend is going to be continued sort of market share growth around portfolio trading I think we have our ways to sort of defend that for it.
Speaker Change #138: A big focus for the company to make sure we stay.
Speaker Change #138: And we will stay as the leading.
Speaker Change #138: Than you for portfolio trading so we're focused on it.
Speaker Change #138: And my General feeling is were going to show continued market share strength and portfolio trading.
Speaker Change #153: Fair enough thanks, guys.
Speaker Change #153: Yeah.
Speaker Change #153: Thank you. This concludes our question and answer session I would now like to turn it back to CEO, Billy Holt for closing remarks.
William E. Hult: Thank you all very much for joining us this morning, great questions as always.
Speaker Change #148: Any follow up please obviously feel free to reach out to Ashley Samir and our great team.
Speaker Change #157: Thank you all have a great day bye.
Speaker Change #148: Bye bye thank you.
Speaker Change #155: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Speaker Change #138: Yes.
Speaker Change #138: Okay.
Speaker Change #138: [music].
Speaker Change #136: Okay.
Speaker Change #136: Okay.
Speaker Change #136: Okay.
Speaker Change #136: Sure.
Speaker Change #136: [music].
Speaker Change #136: [music].
Speaker Change #136: Yes.