Q4 2024 Tradeweb Markets Inc Earnings Call
Good morning, and welcome to trade webs fourth quarter 'twenty 'twenty four 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.
Speaker Change: Please go ahead.
Ashley Serrao: 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 can remind you that certain statements in this presentation and during the Q&A may relate to feature a Bachelor 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 are forward looking statements actual results may differ materially from these forward looking statements information concerning factors that could cause actual results to differ from forward. Looking statements is contained in our earnings release earnings presentation, and periodic reports filed with the SEC.
Speaker Change: In addition on today's call, we love 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.
Speaker Change: Information regarding market and industry data, including sources is in our earnings presentation now, let me turn the call over to Billy.
Billy Hult: Thanks, Ashley good morning, everyone.
Billy Hult: Thank you for joining our fourth quarter earnings call I'm extremely proud of the trade web team that helped produce the best revenue year in quarter in our history as I look back at 2024, it was filled with healthy debate and continued market share gains across our core products.
Billy Hult: Our IPO in 2019, we have more than doubled our revenues and more than tripled our quarterly adjusted EPS as well as our free cash flow, we want to honor that past build upon our scrappy culture continue to expand our presence across the fixed income ecosystem and diligently accelerate our revenue growth.
Billy Hult: <unk>.
Billy Hult: We are a technology company with the core focus of electronic filing markets by efficiently connecting our buy side clients with their most important liquidity providers central to our strategy is always remembering to strike the right balance where innovation not only helps the buy side, but also benefits our dealer clients in 2020.
Four we expanded our developed market footprint globally across rates credit money markets and equities. We also continued to make inroads into emerging markets and we are now run rating at over $60 million in E M revenues annually.
Billy Hult: Additionally, we have deepened and expanded our client relationships with our acquisitions of yield broker and read fan and moved into the corporate Treasury space with ICD, something we believe will collectively pay dividends for years to come.
Billy Hult: Looking ahead, we continue to evaluate more opportunities to plant more flags and deepen our multi asset network.
Billy Hult: Diving into the fourth quarter on slide four strong client activity share gains and a risk on environment drove 25, 2% year over year revenue growth on a reported basis, we continue to balance investing for growth and profitability as fourth quarter adjusted EBITDA margins expanded by.
Billy Hult: 40 basis points relative to the 2023 full year margins.
Billy Hult: Turning to slide five our rates business produced a record revenue quarter, driven by continued organic growth across swaps global government bonds and mortgages and was also supplemented by the addition of rate for an annual broker credit was led by strength in U S and European corporate bonds with our second highest quarterly market share.
Billy Hult: Across fully electronic U S high grade and record market share across fully electronic high yield and further supported by growth across credit derivatives.
Billy Hult: Money markets was led by the addition of ICD and aided by record quarterly revenues across global Repos equities posted double digit revenue growth led by growth in our global ETF and equity derivatives business. Finally market data revenues were driven by growth in our L. Sag market data contract.
Billy Hult: And proprietary data products.
Billy Hult: Turning to slide six our record fourth quarter capped off a record revenue year in 2024 record volumes across most asset classes translated into 29% revenue growth on a reported basis. The scale generated by our strong top line results drove 91 basis points of adjusted EBITDA.
Billy Hult: EBITDA margin expansion and 29% adjusted EPS growth as our growth initiatives continue to scale, we maintain our tradition of constant and focused investment.
Billy Hult: Broadly, we enhanced our existing product capabilities, adding new clients and forge new partnerships on the capability front, we completed our integration of rate finial broker made meaningful progress across our mortgage specified pool platform and we rolled out our new <unk> offering and global cash credit.
Billy Hult: On the client side, we continue to scale, our credit mortgage and swaps platform as we make inroads with our largest clients. Finally on the collaboration front, we made meaningful progress on the second phase of our integration with Blackrock Aladdin and expanded our partnership with FTSE indices. Additionally, we became the <unk>.
Billy Hult: Strategic partner for Goldman Sachs's, New G S digital assets platform and announced a partnership with the Tokyo stock Exchange, we believe our investments have not only positioned us well for the future, but also helped to make 2020 for another banner year for trade web.
Billy Hult: Moving to slide seven 2020 for continued the streak of robust revenue growth that we have worked hard to deliver for multiple years now specifically, while the majority of our revenue still come from rates and 46% of our revenue growth came from our other businesses in 2024 and.
Billy Hult: In fact over the past six years over 50% of our revenue growth came from non res businesses over the same period, 40% of our revenue growth was attributable to our international business.
International revenues have grown on average 20% per year since 2016.
Billy Hult: Our international business is anchored by our European business, but our Asia Pacific product suite continues to scale, our APAC business spans rates credit and equities and money markets and volumes more than doubled year over year, we have seen strong active client growth across our APAC products with <unk>.
Billy Hult: Global active APAC product users up over 20% year over year over 20% of our APAC product variable revenues in 2024 came from products that were generating revenues on the platform in 2019, a testament to the growing product diversity across.
Ross: Ross, our APAC business as we scale our presence across the APAC region. This is also driving strong APAC client engagement across non APAC products. For example, we saw strong APAC active client growth across U S and European swaps U S government bonds.
Billy Hult: In European credit.
Billy Hult: 2025 marks our 20th anniversary of being in the Japan market and we have made meaningful progress in scaling our offering our Japanese government bond volumes have grown at an average of over 30% since 2020, while our greater than one year yen swap volumes have increased at an average of.
Billy Hult: 45% over that same timeframe.
Billy Hult: Looking ahead, we believe Asia Pacific and more broadly emerging markets will continue to become a larger component of our growth story over the next few years as we expand our client and product network across the region.
Billy Hult: Relentless innovation has been critical to our success.
Billy Hult: Throughout our history, we have prioritized being first to market, which requires constant investment in the last nine years, we've invested over $780 million in technology to help shape the future of electronic markets growing those investments at an average of 15% since 2016.
Billy Hult: And as our investments bear fruit adjusted EBITDA margins have expanded consistently.
Billy Hult: Starting with U S treasuries on slide eight record fourth quarter market share of 25% drove revenue growth of 23% year over year.
Billy Hult: Our institutional business saw record revenues in the leading indicators of the business remains strong we gained share and achieved record quarterly market share of over 50% in institutional U S treasuries versus our main electronic competitor, our third consecutive quarter above 50%.
Billy Hult: Automation continues to be an important theme with institutional U S. Treasury AI acts average daily trades, increasing by over 20% year over year.
Billy Hult: Turning to our U S Treasury wholesale business, we achieved our second best revenue quarter in our history.
Billy Hult: This was led by record streaming activity growing adoption of our sessions protocol and continued contribution from read fan wholesale.
Billy Hult: Continues to remain a key area of focus as we prioritize onboarding more liquidity providers and enhancing our various liquidity pools as we deliver on our holistic strategy.
Billy Hult: Within equities, our ETF business produced record fourth quarter revenues, our efforts to expand our equity brand beyond our flagship ETF franchise continued to bear fruit with record equity derivative revenues, increasing 20% year over year.
Billy Hult: Looking ahead, we continue to make inroads by integrating new clients and the client pipeline remains strong as the benefits of our electronic solutions continue to resonate. We believe we are well positioned to capitalize on the long term secular ETF growth story, not just in equities, but across our fixed income business.
Billy Hult: Turning to slide nine for a closer look at another strong quarter for credit revenue growth was driven by 14% and 7% year over year revenue growth across U S and European credit respectively.
Billy Hult: We also achieved strong double digit revenue growth across credit derivatives automation continued to grow with global credit Aix's average daily trades, increasing over 10% year over year.
We achieved our second highest fully electronic quarterly market share across U S AG and the highest fully electronic quarterly market share across U S high yield.
Billy Hult: We also crossed the 1000 client count threshold in the fourth quarter as clients gravitate towards our deepening liquidity pool and premium client experience our institutional business continues to scale as clients adopt our diverse set of protocols are institutional RFG average daily volume grew.
Billy Hult: Over 30% year over year with strong double digit growth across both IAG and high yield are RFG volumes as a percentage of trace touched a new high in the fourth quarter across both IGN high yield. Moreover, portfolio trading average daily volume rose over 20% year over year.
Billy Hult: With growth of over 30% across <unk> portfolio trading.
Billy Hult: Retail credit revenues produced another solid quarter, but revenues were down 11%, primarily due to outsized muni tax loss selling in the fourth quarter of 2023.
Billy Hult: All trade produced a solid quarter with over 180 billion in volume up over 15% year over year, specifically, our all to all average daily volume grew over 10% year over year, and our dealer or a <unk> offering grew low single digits year on year.
Billy Hult: Team continues to be focused on broadening out our network and increasing the number of responders on the all trade platform in the fourth quarter. The average number of responses per all tall inquiry rose over 15% year on year.
Billy Hult: Finally, our sessions average daily volume grew over 20% year over year.
Billy Hult: It was a year of innovation and growth with a focus on redefining our diverse set of all weather protocols, we enhanced our portfolio trading offering to incorporate ETF analytics rolled out <unk> and further enhanced our algorithmic capabilities since 2020, we have grow.
Our fully electronic <unk> share by more than double and we have more than tripled our high yield share stepping back 20% of our Iga share growth was driven by <unk> with 35% and 40% coming from portfolio trading and sessions respectively.
Billy Hult: The high yield front, 50% of our share growth was driven by <unk> with 40% and 10% being driven by PT in sessions respectively.
Billy Hult: Looking ahead U S credit remains a key focus area and we like the way we're positioned across our client channels for this asset class. We believe we have a long runway for growth with ample opportunity to innovate alongside our clients. We are focused on further upgrades to our leading P. T offering new tools to further penetrate.
Billy Hult: Trade block trading workflows enhanced analytics through the trading lifecycle, and then improved client user interface experience.
Billy Hult: We also remain very focused on chipping away at high yield or average high yield response rate hit a new record in the fourth quarter and remain very focused in 2025 on expanding our client network. We're near the end of phase two of our Aladdin integration and both teams are formulating plans on the next deliverables with a goal to.
Billy Hult: To deliver real differentiated liquidity solutions over pure workflow efficiency.
Billy Hult: Beyond U S credit we are focused on our E. M expansion efforts, we expect to go live with our Saudi Arabian offering in the coming quarters, and we are working through regulatory approvals for our Indian offering strategically we're looking to build a robust trading solution and expand our local network leveraging our global.
Billy Hult: Mobile product suite.
Billy Hult: Moving to slide 10 global swaps produced record revenues driven by a combination of strong client engagement in response to the macro environment better mix shift towards risk trading and stable weighted average duration all in global swaps revenue grew 37% year over year core risk.
Billy Hult: <unk> share, which excludes compression trading set a new record in the fourth quarter, increasing by over 210 basis points year over year.
Billy Hult: Overall market share decreased to 28%, primarily due to a significant drop in European swap client related compression volumes, which carries a significantly lower fee rate during the quarter. We also achieved record share across <unk> and M denominated currencies and the.
Billy Hult: Second highest share in our history across Sterling swaps.
Billy Hult: The fourth quarter exemplified the diversity of our global swaps revenue growth, we achieved a record institutional swap revenues across European and E M swaps and our second highest quarterly revenues across dollar and APAC swaps.
Billy Hult: Across our 27 currencies, we saw the biggest market share increases in 2024 across Taiwan dollar Swiss franc, and Hong Kong dollar with each gaining over 900 basis points of market share year over year.
Billy Hult: And this over 60% of our currencies saw at least 500 basis points of market share gains in 2024, yet many remain below 25% market share highlighting the opportunity ahead of us.
Billy Hult: Finally, we continue to make progress across emerging market swaps and our rapidly growing RF M protocol, our fourth quarter Em's swaps revenue rose over 80% year over year, and we believe there is still significant room to grow given the low levels of electronic vacation R. R. F M Pro.
Billy Hult: Recall saw average daily volume rise over 140% year over year with adoption picking up.
Billy Hult: Looking ahead, the global macro backdrop continues to be in flux and we believe the long term swaps revenue growth potential is meaningful as we build solutions for our clients adoption can take time, but when it does happen the upside potential could be significant for example, we rolled out our electronic inflation swaps offering.
Billy Hult: 2017 adoption was slow out of the gate. However, since 2020 industry inflation swaps volume is up 85% are risk related inflation swaps volumes are up nearly 600% over that same timeframe. We are looking forward to providing more solutions for more parts of the swaps market.
Billy Hult: With the overall swaps market is still about 30% of electronic five we believe there remains a lot. We can do to help digitize our clients manual workflows, while the global fixed income markets and broader swaps markets grow.
Billy Hult: And with that let me turn it over to Sarah to discuss our financials in more detail.
Sarah Ferber: Thanks, Billy and good morning, as I go through the numbers all comparisons will be to the prior year period, unless otherwise noted.
Sarah Ferber: Slide 11 provides a summary of our quarterly earnings performance.
Sarah Ferber: Billy Recapped earlier this quarter, we saw record revenues of $463 million that were up 25, 2% year over year on a reported basis and 25, 5% on a constant currency basis.
Sarah Ferber: We derived approximately 40% of our fourth quarter revenues from international clients and recall that approximately 30% of our revenue base is denominated in currencies other than dollars predominantly.
Sarah Ferber: <unk> in euros.
Sarah Ferber: Our variable revenues increased by 30% and total trading revenues increased by 26%.
Sarah Ferber: Fixed revenues related to our four major asset classes are up 10, 9% on a reported basis and 11, 1% on a constant currency basis.
Sarah Ferber: Rates fixed revenue growth was primarily driven by the movement of a dealer to a more fixed schedule and by the addition of dealers to our mortgage and U S government bond platforms.
Sarah Ferber: Credit fixed revenue growth was primarily driven by increases to our subscription fees and by the movement of dealers to a more fixed plan this year.
Sarah Ferber: In other trading revenues were up 21% as a reminder, this line fluctuate as it reflects revenues tied to periodic technology enhancements performed for our retail clients.
Sarah Ferber: Full year 2024, adjusted EBITDA margin of 53, 3% increased by 91 basis points on a reported basis when compared to our 2023 full year margins.
Sarah Ferber: Moving onto fees per million on slide 12, and a highlight of the key trends for the quarter.
Sarah Ferber: You can see slide 18 of the earnings presentation for additional detail regarding our fee per million performance this quarter.
Sarah Ferber: For cash rates products average fees per million were down 4%, primarily due to lower fee per million across U S government bonds.
Sarah Ferber: For long tenor swaps average fees per million were up 55%, primarily due to a decline in compression activity and greater risk taking volumes.
Sarah Ferber: For cash credit average fees per million decreased 12% due to a mix shift away from munis and a change in dealer fee plans from variable to fixed.
Sarah Ferber: For cash equities average fees per million increased 4% due to a mix shift towards EU, Etfs, which carry relatively higher fee per million.
Sarah Ferber: Finally, with money markets average fees per million increased 55% due to the inclusion of ICD.
Sarah Ferber: Slide 13 details our adjusted expenses 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 Ferber: Adjusted expenses for the fourth quarter increased 25% on both a reported basis and constant currency basis.
Sarah Ferber: Given the strong environment to invest for long term growth during the fourth quarter, we continued investments in marketing digital assets consulting and client relationship development.
Sarah Ferber: Adjusted compensation costs grew 21%.
Sarah Ferber: The vast majority related to variable or discretionary components.
Sarah Ferber: Over 50% of the increase came from performance related compensation and the addition of ICD.
Sarah Ferber: Technology and communication costs increased 34%, primarily due to our previously communicated investments in data strategy and infrastructure.
Adjusted professional fees grew 47%, mainly due to an increase in tech consultants as we augment our onshore technology operations and build incremental scalability.
Sarah Ferber: Adjusted General and administrative costs increased 34% due to a pickup in travel and entertainment as well as marketing, which was offset by favorable movements in FX that resulted in approximately a $1 $1 million gain in the fourth quarter of 24 versus a $500000 loss in the fourth quarter of 2000.
Sarah Ferber: Three.
Sarah Ferber: Slide 14 details capital management and our guidance.
Sarah Ferber: On our cash position and capital return policy.
Sarah Ferber: We ended fourth quarter in a strong position with $1 $3 billion in cash and cash equivalents and free cash flow reached approximately $809 million for the trailing 12 months.
Sarah Ferber: Our net interest income of $14 2 million decreased due to lower cash balances as we funded our recent ICD acquisition with $771 million of cash on hand.
Sarah Ferber: With this quarter's earnings the board declared a quarterly dividend of 12 cents per class, a and class b shares up 20% year over year.
Sarah Ferber: Turning to our guidance for 2025.
Sarah Ferber: We will continue to invest in the business in 2025 and are expecting adjusted expenses to range from 970 million to 1.03 billion.
Sarah Ferber: The midpoint of this range would represent an approximate 15% increase year over year.
Sarah Ferber: Excluding the impact of acquisitions the midpoint of this range would represent an approximately 11% increase year over year.
Sarah Ferber: Relatively in line with our average expense growth since 2016.
Sarah Ferber: We believe we can drive adjusted EBITDA and operating margin expansion compared to 2024 at either end of this range. Although we expect the incremental margin expansion to be more muted as overall margins are higher and we continue to focus on balancing margin expansion with investing for the future.
Sarah Ferber: Specifically, we continue to invest in credit rates emerging markets and ICD as key focus areas with a long runway for growth.
Sarah Ferber: We also continue to invest in technology that allows us to sustain and build our leading platform.
Sarah Ferber: Some of these investments will take time to drive revenue growth, but we continue to prize innovation and scale our technology pipeline.
We expect 2025 quarterly run rate technology, and communication expenses to grow from the fourth quarter of 'twenty four levels and we continue to invest in our data strategy and infrastructure to support the growth of our platform and new product initiatives.
Sarah Ferber: We expect annual G&A expenses to grow in the mid single digits with seasonally higher levels in the second and fourth quarters due to normal cyclicality in peony.
Sarah Ferber: We expect 2025 quarterly run rate professional fee expenses to be at the fourth quarter 'twenty four levels as we continue to augment our technology effort with consultants.
Sarah Ferber: We expect annual occupancy expenses to increase approximately 40% year over year, primarily due to the move to our New New York City headquarters, an overall expansion of our geographic footprint.
Sarah Ferber: We expect the first half of 2000 and twenty-five occupancy expenses to rise approximately 30% year over year and second half 2025 expenses to rise 55% year over year, which includes approximately $1 $5 million in duplicate rent related expenses.
Sarah Ferber: For forecasting purposes are assumed non-GAAP tax rate ranges from 24, 5% to 25, 5% for the year.
Sarah Ferber: We expect Capex and capitalized software development to range between $99 million and $109 million.
Sarah Ferber: We estimate that approximately 50% will be spent on software development to support our growth initiatives and approximately 50% will be related to growth and maintenance capex.
Sarah Ferber: The midpoint of our Capex guidance implies a roughly 17% year over year increase.
Sarah Ferber: Primarily driven by building out our New New York City office, and the ICD acquisition.
Sarah Ferber: Acquisition, and refinish transaction related D&A, which we adjust out due to the increase associated with push down accounting is expected to be $176 million in 2025.
Sarah Ferber: Lastly, we continue to expect 2025 revenues generated under the master data agreement with <unk> to be approximately $90 million.
Sarah Ferber: Of the $90 million, we expect to generate $28 million in revenue in the first quarter of 'twenty five.
Billy Hult: Now I'll turn it back to Billy for concluding remarks.
Billy Hult: Thanks, Sara as I embark on my 25th year of trade web in my third year as CEO I have never been more excited about the opportunities ahead of us the ethos of the company has not changed and we constantly ask ourselves what can we do to bring a differentiated offering to the market that.
Billy Hult: The overall ecosystem for our clients ahead.
Billy Hult: Ahead of our IPO, we were known as a leading rates company that had ambitions to grow outside of rates.
Billy Hult: We believe we are now known as one of the leading financial technology companies that helps to provide innovative solutions to our clients across the fixed income ecosystem. Looking ahead I am excited to continue to build upon our leading multi asset class footprint. It's a good time to be in the risk intermediation.
Billy Hult: <unk> business, but it's an even better time to shape, the electronic vacation of a growing fixed income ecosystem.
Billy Hult: That note we reported strong January volumes this morning, which translated into revenue growth in January of 23% year on year, excluding the 8 million contractual payment related to the <unk> market data agreement that we recognized in January revenue growth would have been 17% year over year.
Before I conclude.
Billy Hult: I would like to welcome Troy Dixon to trade Web who previously was a member of the trade Web Board Troy in conjunction with Enrico Bruni will be co heads of global markets. They will share responsibility for overseeing execution of the company's global market strategy, including pursuing both organic and inorganic growth opportunities.
Billy Hult: Across products geographies, and our four client channels I look forward to our ongoing work together to maximize our current potential and to continue to build upon the next legs of our growth.
Billy Hult: 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 record quarterly and annual revenues and volumes I trade web.
Speaker Change: With that I will turn it back to Ashley for your questions.
Ashley Serrao: 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.
Ashley Serrao: Thank you.
Ashley Serrao: If you'd like to ask a question. Please press star one on your telephone you will then hear an audit message advising your hand is raised whereas well ask that you. Please wait for your name and company to be announced before proceeding with your question.
Ashley Serrao: One moment for our first question is.
Speaker Change: And our first question will come from the line of Chris Allen of Citi. Your line is open.
Yes.
Chris Allen: Good morning, everyone. Thanks for taking the question I wanted to talk about interest rate swaps billions you noted the macro backdrops.
Speaker Change: Is it a flux right now so maybe.
Speaker Change: Maybe you could frame out flush out the current environment as conducive risk on trade.
Speaker Change: Our compression activity moderate as a percentage of activity is that a function of less opportunities of compression trading more risk risk based trading by clients or something.
Speaker Change: Yeah, Hey, Chris Good question. Thank you good to hear your voice a little late to say happy new year, but happy new year, and I know, we're going to try to get through as many questions. Obviously as possible I know there's another call. It 10 $30 like you guys have like a little bit of like a double feature today. So.
Speaker Change: Appreciate that and good question, Chris when I kind of step back a little bit on your kind of theme just a little bit of like a quick context around it when we think about like cadence of volatility in the rates market just think about it this way for a second Chris since I became CEO think about them as sort of like the major volatility events that have impacted our busy.
Speaker Change: Initiatives like the Russian invasion of Ukraine in 'twenty to collapse of SPD in 'twenty, three which was a little bit more of a credit event, but massive amplifications into rates and then even like the sort of Japanese stock route in early August of last year and so these are like headline almost like stressful moments in the market.
That test the participants around the ecosystem prices moving in ways that are unexpected in some ways almost like challenging to rationalize and for us and from our perspective.
Speaker Change: These become moments when as a leading platform for swaps.
Speaker Change: My perspective, we become almost like the destination of choice.
Speaker Change: Sort of a trusted marketplace, where our biggest clients our biggest buy side firms can feel comfortable sort of reshuffling exposure.
Speaker Change: And that's a part of this kind of like I talked about the global brand that we have.
Speaker Change: In the business and these are ultimately.
Speaker Change: Moments that are sort of building blocks of credibility and so when you enter into a different environment. You now have that ability to grow market share through orientation and micro trading protocols that capture.
Speaker Change: Real risk transfer, which is kind of as you know that's sort of like the Holy Grail of at all in the electronics, the electronic vacation world and so the data tells US that this environment is I think very conducive for what we think of as like risk on trading.
Speaker Change: Fourth quarter active users was up 15% year over year January up almost 10% year on year.
Speaker Change: First in January we saw our total swaps revenue increased by I think it's like 30% year over year.
Speaker Change: And so I don't have a crystal ball I know no one has a crystal ball, but we are for sure.
Speaker Change: Bullish on the forwards given the fact that there is plenty of headline debate in the market geopolitical uncertainty rising trade war risks inflation concerns and you know about this sort of better than I do.
Speaker Change: I say this all the time the market is going to be the market, but as a company. We are laser focused on building out solutions for our clients and so as you mentioned I highlighted in the script.
Speaker Change: Adoption takes time, but we believe we have a higher success rate with our innovations in part because we go down this path of that sort of hand in hand, with our buy side and sell side clients that type of communication and partnership and.
Speaker Change: So looking ahead.
Speaker Change: We see a long runway for growth in the areas of the market, where we can front end center continue to innovate and go after more parts of the voice market and onboard clients.
Speaker Change: And from my perspective, I remain very optimistic about the swaps business going forward I think it's a great time to be in that business today as you know very well.
Speaker Change: The technique.
Speaker Change: The tactics that we've had around compression trading was to get into risk transfer and I think that technique and tactic has worked out very well for us. So we feel really good about the performance of our swaps business.
Speaker Change: And the leadership role that we play in that.
Speaker Change: And thanks very much for your question Chris.
Speaker Change: Yeah.
Speaker Change: The next question.
Speaker Change: And our next question will be coming from the line of.
Speaker Change: Benjamin.
Speaker Change: Excuse me bullish of Barclays. Your line is open.
Speaker Change: Hey, good morning, Thanks for taking my question.
Speaker Change: Bill in your prepared remarks, you talked a lot about technology innovation I was wondering if you could talk about digital assets for a moment, there's been a couple of announcements coming from trade web partnering I think with Goldman Sachs's spin out digital assets platform can you kind of talk about what you're doing here, how do you see blockchain technology crypto any any and all of the above sort of fitting into the broader trade web business or what have you.
Speaker Change: And what are you thinking that may come from this over the next many years.
Speaker Change: How are you good question and I think Youre right when you sort of talked about like the <unk>.
Speaker Change: Now that we've made I would say like front and center and you know us very well our approach in this space quite bluntly is not about creating headlines right. It's about.
Speaker Change: Adding value and so I've kind of talked about this a lot which is you know like the bones and the ethos of this companies about using technology to remove friction and our clients' workflows across the trade lifecycle.
Speaker Change: That's who we are that's been in our DNA since day one.
Speaker Change: As we've created this sort of one stop shop across asset classes and so we are very focused kind of in the space. Because we're an ambitious company as you know and so we always want to be front foot around.
Speaker Change: Around change.
Speaker Change: And so some of the things that we've kind of seen lately I'll highlight for you.
Speaker Change: Bed, which as you know it wasn't at Davos, but I watched it on CNBC, So Larry think talking about that.
Speaker Change: <unk> have ruled assets treasuries fixed income equities.
Speaker Change: The concept of how sort of transformative and democratizing that will be I think thats, an important concept and something to be aware of.
Speaker Change: Obviously, I think we're all kind of sitting in hearing.
Speaker Change: Thats sort of the strong movements that are coming from Apollo and obviously, they announced that they are lifting their diversified credit fund via securitize. We think that's important and we've been defending that space very well with how we partnered with securitized and then I think another thing I would just mentioned is obviously circle.
Speaker Change: Announced their acquisition of hash note.
Speaker Change: This month, and we think thats important in terms of yielding on chain money market instruments to complement where they are with stable coin. So a lot.
Speaker Change: <unk>.
Speaker Change: Our perspective to your question as we kind of step back and we are very smart very strong people at the company very focused on our digital asset strategy.
Speaker Change: Essentially laser focus in three areas, one is kind of trusted <unk> data.
Speaker Change: The second I would describe to you as kind of smart contracts, because we see by utilizing smart contracts, we can automate operations among multiple parties.
Speaker Change: <unk> faster and lower cost asset transfers and lifecycle events and these are kind of very important things as we think about.
Speaker Change: The ecosystem of our World and then <unk> and synchronize data and those are the sort of like three big areas.
Speaker Change: Our focus for us as a company and so we've been busy.
Speaker Change: A lot of partnerships.
Speaker Change: Over the last year.
Speaker Change: I mentioned securitize.
Speaker Change: In may of 'twenty, four we made our first strategic investment with them, we think they're very smart and very important players in the space.
Speaker Change: We also followed that up with a commercial agreement with Alpha Ledger.
Speaker Change: And then in July this past July we joined the Canton network and I know you know that we think the canton network is important.
Speaker Change: Obviously, Don Wilson and Dr. W is a firm that historically, we've been close to for a while.
Speaker Change: I'll kind of say this with a little bit of a giggle he's smart money.
Speaker Change: And we think being investing and partnering with him is a good idea. So we're doing kind of what you would expect us to do in the space, which is kind of keeping our options open being front footed about the best partners to invest in and quite excited about this next evolution.
Speaker Change: In this space and how they affect our markets and this is something that we feel very comfortable and continuing to innovate.
Speaker Change: And I think we are very well positioned in this space.
Speaker Change: Good question and thank you.
Speaker Change: Thanks for the color.
Speaker Change: Yes.
Speaker Change: Thank you, we'll now move to the next question.
Speaker Change: Yeah.
Speaker Change: And our next question will be coming from.
Speaker Change: Global <unk> of Goldman Sachs. Your line is open.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Alex you maybe on mute.
Alex: Sorry, guys the phone broke up a little but I couldn't hear him whether it was my name somebody else's.
Speaker Change: Good morning.
Speaker Change: Question for Sarah just kind of turning to the guidance for a minute.
Speaker Change: So encouraging you kind of put a comment in there around still delivering positive operating leverage this year, albeit I guess at a lower pace than what you saw last year can you just talk a little bit about your ability to pivot the expense base given that there's clearly some uncertainty around the revenue environment and you guys coming off a really strong growth last year or so.
Speaker Change: If you're at a slower pace of revenue growth could you be below the guide on to still deliver kind of this positive operating leverage or how would that how would those two things work together.
Great Good morning, Alex.
Speaker Change: Great question happy to talk about that.
Speaker Change: From our perspective, we have significant operating leverage within the business and that operating leverage let us navigate even in a weaker revenue environment. So I think I've talked about this before 50% of our expense base generally is variable or discretionary which provides a lot of built in flexibility in different revenue.
Speaker Change: So by variable I'm talking about things like performance linked compensation emission volume driven costs like exchange fees that are going to scale up and down based on the revenue environment and by discretionary things like marketing Genie and obviously the pace of hiring or we have a lot of flexibility on how we want to manage that.
Speaker Change: Overall, our approach has been pretty consistently manage those costs dynamically and we calibrate based on a number of things, including what the market opportunities are in front of us.
Speaker Change: I meant that we're in but also making sure that we continuously invest in the things that we think are strategic important through the cycle. I think you don't really have to look further than going back to the first half of 2023 and kind of see the proof in the putting we had a weaker revenue environment revenue topline was.
Speaker Change: Mid single digits, and we managed to maintain and grow our margins in that environment.
Speaker Change: Maybe not exactly your question, but I would say equally important if you look at last year of top line, 29%, you thought able to accelerate spend to take advantage of the environment and momentum and still balance delivering margin improvement.
Speaker Change: Intimately I think we've shown a willingness and we have the flexibility and track record to both invest for the long term, but also to be nimble and I think that gives you a good sense of our ability to deliver operating leverage regardless of the environment.
Speaker Change: Thanks for the question now thank you.
Speaker Change: Thank you wanted to move to the next question.
Speaker Change: And our next question will be coming from the line of.
Speaker Change: Dan Fannon of Jefferies. Your line is open.
Dan Fannon: Great. Thanks, Billy was hoping you could talk about just kind of at a high level, you've got looser regulation potentially coming from banks and as you think about the elektron vacation trends that have been so strong.
Dan Fannon: Do you see that changing at all banks are going to be using more balance sheet or taking on more risk or potentially keep a little bit more in house versus some of the trends that have been so prevalent in the last couple of years.
Speaker Change: How are you. Good question. It is kind of amazing like how quickly sort of the pendulum can swing in certain ways and particularly around.
Dan Fannon: Sort of how regulation has been framed it does feel like quick kind of.
Speaker Change: And a quick pendulum.
Speaker Change: <unk> I would say like headline like.
Speaker Change: The onward March of electronic vacation from our perspective is not a pendulum that swings back and forth, we think thats kind of like one way.
Speaker Change: And as I kind of think about your question, where Mike where my brain goes is pretty interesting it's kind of like if you think about it like the horizon.
Speaker Change: And the banks.
Speaker Change: And they are in their market business revenues really like since almost like we wanted to define it Dan is like the pandemic, it's almost become like like the new normal.
Speaker Change: And this concept of like private sector Intermediation, we say this a lot like private sector intermediation being back.
Speaker Change: From our perspective is like very very good for our business.
Speaker Change: No because we see ourselves I think we are the trusted electronic intermediary between the banks and.
Speaker Change: Their most important clients in that business thriving.
Speaker Change: Is quite good for us so.
Speaker Change: Thanks, with sophisticated and invested flow trading up our operations.
Speaker Change: Providing from our perspective, almost like that consistent consistent presence for their most important clients, while warehousing and the right way warehousing and then efficiently recycling risk.
Is good for us as the leading as the leading platform in both the institutional side, but then a little bit to your point kind of also having that mirrored liquidity.
Speaker Change: In our wholesale business.
Speaker Change: So I kind of said this before like not anticipating at all it's a really good question.
Speaker Change: The move towards electronic vacation is going to be slow at all as a consequence of the bank's feeling healthy.
Speaker Change: And vibrant and strong and the businesses that we live and breathe then I think that the table stakes around efficiency or kind of here to stay and we think we benefit from the banks being both strong and efficient and thats and that winds up being.
Speaker Change: Quite a good outcome for us.
Speaker Change: But the good question interesting just like the switches that wind up happening around the topics of regulation are quite interesting and thanks. Thanks for your questions.
Speaker Change: Thank you.
Speaker Change: Thank you one moment for the next question is.
Speaker Change: And our next question will be coming from the line of Craig Siegenthaler of Bank of America. Your line is open.
Bob: Good morning, Billy Hope everyone's doing well and I think my name went out a little bit like Alex its Bob here.
Speaker Change: Okay.
Craig Siegenthaler: Good morning, how are you Craig yes, we can hear you.
Speaker Change: I'm. Good. So our question is on streaming and session trading volumes in U S. Treasuries. So there is some industry data out there that is pointing towards an accelerating adoption of streaming session trading in rates over just the last few quarters.
Speaker Change: What are you seeing in terms of protocol usage in treasuries.
Speaker Change: It's a good question, it's really really interesting dynamic it's almost like a micro.
Speaker Change: Sort of structure shift thats happening and we kind of see it that way too I think there is a shift happening.
Speaker Change: Across what we think about it is that sort of wholesale kind of GTT marketplace that sort of professional.
Speaker Change: Kind of marketplace, where protocols are taking away market share from that kind of traditional almost out of central casting kind of club protocol that we all kind of first understood.
Speaker Change: As being central to that to that <unk> market.
Speaker Change: Our instinct is part of the move away from that that club is really due to obviously like the lower volatility environment that we've seen in rates.
Speaker Change: Our instinct is.
Speaker Change: The streaming business in this session business tends to outperform.
Speaker Change: And a lower volatility environment and so.
Speaker Change: Pretty basic way our strategy is very straightforward, which is like always.
Speaker Change: Can we be better positioned to deliver an integrated product and product suite across.
Speaker Change: The entire U S treasury marketplace and so.
Speaker Change: From our perspective, we've been a driver of that change with our comprehensive protocol offering streams.
Speaker Change: Claude.
Speaker Change: Sweep and race fan and I do think it is important to be.
Speaker Change: <unk> in that club world, but.
Speaker Change: But absolutely there's been a shift around approach and usage. So in 2024, the wholesale streaming average daily volume from our perspective was up 35% year over year.
And the wholesale sessions business was up almost actually a little bit over 25%.
Speaker Change: <unk> continues to be a sort of important business for us that sort of when I say race fan.
Speaker Change: The best way to describe it I think is that algorithmic based spreading and aggregation technology.
Speaker Change: We think that that facilitates the most sophisticated clients usage around features and related cash legged trades.
Speaker Change: That's a that's a driver for us and something very important for us. So that's continued to grow as a very high percentage of U S trade since our ownership I think it's about.
Speaker Change: About 40% 40 basis points higher than in 2024, So we feel good about where we're at in terms of that treasury business, what that comprehensive offering those shifts that are occurring those micro shifts that are occurring in this environment set up well for us because we've been the leaders in those.
Speaker Change: And those new emerging protocols and as I describe that and you guys know me very well.
Speaker Change: Still very focused on gaining market share in the club.
Speaker Change: We don't think the cob is going away, we think Thats, a table stakes and important protocol.
Speaker Change: The combination of myself and fera and as you know we hired Troy Dixon, we continue to push that gene.
Speaker Change: <unk> increased market share gains in the club because we think thats, an important complement to where the market feels like it's going.
Greg: And great question, Greg and thanks, very much for asking it.
Speaker Change: Thank you one moment for the next question.
And the next question will be coming from the line of Alex Kramm of UBS. Your line is open.
Speaker Change: Yeah, Hey, good morning, everyone.
Speaker Change: Really when you walked through the investment priorities earlier in your prepared remarks credit again was number one and I'm just wondering how.
Speaker Change: How much youre, increasing the focus there I think some people think that into 2025 with all the tailwind that you have you're really going to dial up the competitiveness and be more disruptive. So just wondering if this is right how much more of a focus corrado could even become and what are you going to do in particular to continue that market share.
Speaker Change: Sure.
Speaker Change: And then of course, how much price I will have to ask them that how much price will be a factor as well.
Speaker Change: Yes, I mean, it's a good question it's like.
Speaker Change: I talk about the concept of like laser focus.
Speaker Change: And I mentioned that.
Speaker Change: Around a couple of the initiatives in a couple of the things that we're working on the right space, but like.
Speaker Change: No one no one will mistake the companies like extreme focus on credit because we see that as a huge opportunity for the company kind of period.
Speaker Change: And we started with this basic premise that the market wanted competition in this space and now as you know very well, it's up to us to continue to differentiate ourselves and innovate in that marketplace along the right themes. So we feel good how we're set up we're going to continue to invest like across the board.
Speaker Change: Like around portfolio trading and making sure that we maintain and feeling really good about the leadership position that we have in portfolio trading we are invested in our partnership with Aladdin in terms of bringing in more responders into the all to all network I've talked about the concept.
Speaker Change: Of getting more into that's a little bit of a question that was asked about regulation I've talked about the concept a lot about getting into a little bit more of.
Speaker Change: Bank slashed dealer inventory.
Speaker Change: And getting into kind of dealer axes and getting those axes.
Speaker Change: Communicated the right way too.
Speaker Change: Banks' biggest and most important clients in a timely electronic efficient fashion I think that's like a really big theme and something that we are kind of invested invested towards.
Speaker Change: Price is not not the lead horse.
Speaker Change: You've heard me say that we think the client base wants.
Speaker Change: Innovation first and foremost and we think we are positioned to deliver that for our clients and we're not going to go down the path of that sort of price adjustments to pick up share. We just don't we don't feel like that's the right step.
Speaker Change: But from an investment perspective.
Speaker Change: Have it at the top of the list because we feel like that opportunity in that wallet and.
Speaker Change: The ability to differentiate ourselves and provide that value to our client base is 100% there.
And a very good question and thanks for asking it.
Speaker Change: Of course, thank you.
Speaker Change: Thank you wanted to be for the next question.
Speaker Change: And our next question will be coming from the line of Patrick Molly of Piper Sandler Your line is open.
Patrick Molly: Yeah. Good morning, Thanks for taking the question.
Speaker Change: It's been about seven months now since you closed the ICD acquisition. So Bill I was hoping you could maybe just given the state of the union on how the integration has gone.
Speaker Change: Any success that you've seen in cross selling their capabilities to your.
Speaker Change: Client network and.
Speaker Change: Just any kind of milestones that maybe we should be on the lookout for in 2025, yes really.
Patrick Molly: Really good question Patrick sure, let me hand that you can still front and center on this sure. Thanks.
Speaker Change: I think we've been really quite pleased with the team at the progress on ICD.
Speaker Change: First and foremost our core business continues to perform out of the gate.
Speaker Change: And whether we're looking at revenue client growth balanced.
Speaker Change: Retention, which is at 99%.
Speaker Change: Client growth at 13% all of the core metrics that we expect to see are on plan and we're really quite excited about that.
Speaker Change: As we think about going ahead from our perspective some of the milestones it's not a classic integration. The tech platform. The core Tech platform that ICD operates on largely will run independently and so it's less about those types of milestones and really about the long term revenue opportunities that we've talked about that you're referencing around.
Speaker Change: The building I would say a comprehensive solution for treasurers particular, icd's corporate treasurer around investing and liquidity needs and so when we think about those buckets. It's really two different things one is expanding their footprint by leveraging our client relationships our sales force.
Speaker Change: Chile internationally and with financial institutions, which is something we bring to the table and we're already seeing momentum there internationally leverage our infrastructure in particular in Asia to allow the ICD sales force to kind of operate from a regulatory perspective and from a time zone and client reach perspective more efficiently.
Speaker Change: And begun doing joint meetings, and engaging with prospects and so early days. This isn't a sprint. This is a bit of a marathon, but we're seeing really good engagement and I think our ability to drive that part of the business.
Speaker Change: Will materialize in 2025, I would say the other side of the coin, which also has made good progress is around expanding icd's product offering in particular by bringing our core products onto their platform that obviously takes a little bit longer. So we're expecting this year sort of by the middle of the year to start with U S.
Speaker Change: Treasuries and have those be available on Icd's platform I think once that's there we expect to see good reception and all of our engagement with clients and we've gotten formal surveys.
Speaker Change: 5% of the client base has been asking for treasuries and obviously, we think we have a leading platform. There. So I think we're set up to do.
Speaker Change: Well, but again, we want to set this up in a really thoughtful way and we're focused on the long term.
Speaker Change: We're seeing good engagement good momentum and obviously, we'll report more as the year goes on I would think just while we're on ICT I think the other thing that we're focused on as we look forward is on a more macro level.
Speaker Change: Particularly with their client base, we're seeing strong levels of corporate cash and we're expecting that to continue as our clients continue in there.
Speaker Change: Family profitable so.
Speaker Change: All all things pointing in a positive direction as it relates to ICD.
Speaker Change: Thanks.
Speaker Change: Yes.
Speaker Change: Thank you one moment for the next question.
Speaker Change: Okay.
Speaker Change: And the next question will be coming from the line of Jeff Schmidt of William Blair. Your line is open.
Speaker Change: Hi.
Speaker Change: Jeff Schmitt here, so in the institutional channel for treasuries.
Speaker Change: You continue to see strong growth in automated trades.
Speaker Change: Whats changed in that market or with your automated protocol, that's driving such strong client adoption and how much of your treasury mixes automated today.
Jeff Schmitt: Yeah, Hey, Jeff It's really good question so.
Speaker Change: I think we've done gotten a bunch of things right.
Speaker Change: I say that look very hopefully not everything right, but I think we've gotten a bunch of things right I think.
Speaker Change: We've kind of approached this sort of AI X space, the kind of more algorithmic space with our clients I would say, it's probably one of the things that we've gotten like.
Speaker Change: The most or right in the past and I'll make a kind of a little joke as you guys go to your kind of 10 to 30.
Speaker Change: Double header.
Speaker Change: They've gotten it right too and they've done a really good job in terms of this type of functionality as well it's like the first sort of the first evolution was the phone to the mouse the phone to the keyboard. This next evolution is.
Speaker Change: <unk> keyboard to the algorithms and a more sophisticated way of <unk>.
Speaker Change: Finding liquidity I think it's resonating now, particularly because that search for liquidity.
So important.
Speaker Change: How do I find liquidity with leaving the least amount of footprint in the marketplace. I think that trend is like one way and then you layer on the kind of concept of how do I do more with less.
Speaker Change: Do I continue to approach and attract and find liquidity in the marketplace.
Speaker Change: In a in a sophisticated way and act as a client to my liquidity providers. There is so much good vibrations in so many ways where this protocol.
Speaker Change: Resonates sort of across the board from our perspective, and I think it's been the lead differentiator for us in the rates space generally as we've looked at sort of competing there from day, one essentially with Bloomberg.
Speaker Change: It's sticky.
Speaker Change: And so the concept of sort of breaking down like large risks trades into smaller and more digestible trades and then those trades finding execution in a seamless way theres something just very intuitive about that and I think as we've gotten obviously now well.
Speaker Change: Through those dark days of the pandemic the concept of the buy side continuing to invest in all of this technology is one way.
And so it took some thought process from our perspective in terms of a willingness to sort of see some space around the desktop and really understand.
Speaker Change: We're like client behavior was going to go but getting on the right side of that trend I think has done enormous favors to our rates.
Speaker Change: <unk> franchise in terms of a differentiator.
Speaker Change: And we think it's probably the best thing that we've done in the right space.
Speaker Change: And thanks very much Jeff for your question.
Speaker Change: Great. Thank you.
Speaker Change: Thank you the next question.
Speaker Change: And the next question will be coming from the line of Kyle.
Speaker Change: <unk> Your line is open.
Speaker Change: Hi, good morning, everyone. So after completing both the right thing in ICD in 2024.
Speaker Change: Just curious if I could check in on your appetite for additional M&A in 2025, what capabilities. What you look to add and is there any way to frame, whether we should still expect more bolt on type deals or whether large scale. M&A is also on the table yeah very good question.
Speaker Change: Yeah.
Speaker Change: I was asked a question earlier about like focus and I, specifically talked about the focus of the company Hasnt credit and you've kind of heard us and kind of understand the way, we operate and so I would start by saying the company's focus.
Speaker Change: And my focus on the organic business is extremely strong and the confidence that we have around the growth in those business is extremely strong I would start there.
Speaker Change: Second thing I would say is.
Speaker Change: I do feel good about the concept and Sarah and I have worked very closely on this.
Speaker Change: You said at two deals in 'twenty four with rates been in ICD 10.
Speaker Change: Three years.
Speaker Change: Using these three deals in the sort of tenure as CEO I think it's important to show the marketplace that we know how to do deals.
Speaker Change: We know how to integrate and we know how to assess value I think those are important concepts.
Speaker Change: When we think about this.
Speaker Change: Pretty basic is it is it a culture of a company that we not like that we love.
Speaker Change: And then is there is there a network out there you know, we're a network business and that's something hugely important to US is there a network out there that we can get through through an acquisition and I say this a lot like we have incredible technologists.
Speaker Change: But is there a piece of technology is there an algorithm is there something happening.
Speaker Change: Through technology that it's better for us to acquire and so we look at it.
Speaker Change: Basically through those through those criteria through that lens culture.
Speaker Change: Network and technology, and we feel like if it's.
Speaker Change: As it was with the two assets in 'twenty four we feel like if those things add up for US then we're going to have excitement around it. So I think doing something well. It gives you credibility. It gives you more opportunity and I think it's been a pretty important thing for us as a company that has largely gotten here.
Speaker Change: Our organic business to be able to do deals and <unk> been a very big part of that I know I totally I mean building.
Speaker Change: Building upon what you said I think our ambition provided that we think the strategic fit for these types of acquisitions.
Speaker Change: Is strong we have ambition that isn't limited to just bolt on acquisitions, but we also have an extreme focus on being disciplined particularly financially. So we've talked about financial metrics and the framework that matters to us, but we think the strategy the culture expansion, particularly around client networks are important.
Billy Hult: And financially we're looking at acquisitions that really amplify what we're doing so are accretive to our earnings within a couple year than either helping accelerate growth or profitability. So I think that combination of what Billy said is we are an ambitious company, but we want to fill the credibility to do things well and then we're going to be very disciplined.
Speaker Change: About how we look at it.
Speaker Change: Great question important topic. Thank you.
Thank you.
Speaker Change: Thank you one moment for the next question. Please.
Speaker Change: And our next question will be coming from the line of Michael Cyprus of Morgan Stanley. Your line is open.
Michael Cyprus: Oh, Hey, Thanks for squeezing me in here.
Michael Cyprus: You talked about emerging markets, that's going to be a larger part of the growth story for trade up can you just talk about some of your initiatives and steps you're thinking about taking there to accelerate growth. How do you see this part of the business contributing over time and what sort of products countries. You think could be most meaningful yes, absolutely. Good question so like.
Michael Cyprus: Big believers and sort of start with strength and thats been from the beginning as we've thought about the E M World Thats been.
Michael Cyprus: Kind of start with what we're good at so we wanted to start with the <unk> swaps the Emirates World, but I think as we've done really well there obviously we are.
Michael Cyprus: Pretty focused on building out our presence in the E M credit, where we see some of the same tenants that we saw in the U S around an appetite for competition.
Michael Cyprus: In the space. So in an overall way I would say, we see our emerging markets business as a multi product offering across rates and credit period.
Michael Cyprus: And so our emerging markets business is now I think it's run rating at a little bit over $60 million $60 million annually.
Michael Cyprus: And those revenues are up about 85% year over year. So we're feeling good about the progress that we've made there, but obviously seeing a lot more possibility and potential in both the rates world in terms of electronic buying that swaps world plus.
Michael Cyprus: The ability to deliver innovation and efficiency specifically speaking.
Michael Cyprus: In credit.
Michael Cyprus: That we call it like that sort of like hard local currency provided close to 10% of that total year revenue growth in 2004, so plenty of room for us to go there and confidence that we're kind of on the right track when we think about that sort of total addressable revenue opportunity.
Michael Cyprus: We see the overall kind of E wallet as well over $1 billion.
Michael Cyprus: And so those are those are big headline kind of numbers for us there I think 20% of it is around that kind of interest rate swap business.
Michael Cyprus: Maybe 40% of it comes from Ian cash and then the rest of it kind of it can come from that kind of China bond world, but it's a very big opportunity, it's something that as a company again I use the word focus as a company. We are focused on we feel like we've made a lot of progress already on the swap side and the right side, they're big continue.
Michael Cyprus: You push for us into.
Michael Cyprus: <unk> credit.
Michael Cyprus: And that's a good question and thank you for asking it.
Michael Cyprus: Great. Thank you.
Michael Cyprus: Thank you so much we've run over on the call and we'd now like to turn the call of what Chipotle Holt for closing remarks. Please go ahead sure. Thank you all very much for joining us. This morning, great questions. As always if you have any follow up questions. Please feel free to reach out to our great team Ashley Samir.
Michael Cyprus: Have a great day enjoy the second feature of the movie. Thank you.
Michael Cyprus: Thank you for joining today's conference call you may all disconnect.
Michael Cyprus: Okay.
Michael Cyprus: [music].
Michael Cyprus: Okay.
Michael Cyprus: Okay.
Michael Cyprus: Okay.