Tradeweb Markets Announces Launch of Follow-On Offering and Preliminary Third Quarter 2019 Financial Results

NEW YORK--(BUSINESS WIRE)--Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced the launch of an underwritten offering of 14,800,000 shares of its Class A common stock, subject to market conditions and other factors. Tradeweb expects to grant the underwriters a 30-day option to purchase up to an additional 2,220,000 shares of Class A common stock at the public offering price, less the underwriting discounts and commissions.

Tradeweb intends to use the net proceeds from the offering to purchase equity interests from certain existing owners. Refinitiv will continue to own a controlling interest in Tradeweb following the offering. J.P. Morgan, Barclays, Citigroup, Goldman Sachs & Co. LLC and Morgan Stanley are acting as the joint book-running managers for the offering.

Preliminary Third Quarter 2019 Financial Results

The preliminary prospectus included in the registration statement filed by Tradeweb in connection with the proposed offering contains Tradeweb’s preliminary unaudited financial results for the three and nine months ended September 30, 2019, which have also been included in a Current Report on Form 8-K furnished today with the SEC. Tradeweb is currently in the process of finalizing its financial results for the three and nine months ended September 30, 2019. Because Tradeweb’s consolidated financial statements for these periods are not yet available, the preliminary financial results included in the preliminary prospectus and set forth below are based on current estimates and remain subject to completion.

Set forth below are management’s estimates for expected gross revenue, total expenses, net income, net income attributable to Tradeweb Markets Inc., diluted earnings per share, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income and Adjusted Diluted EPS for the three and nine months ended September 30, 2019:

	Successor	Predecessor
	Three Months Ended September 30, 2019	Three Months Ended September 30, 2018	$ Change	% Change
	(dollars in thousands)
Revenue
Rates	$115,505	$92,592	$22,913	24.7%
Credit	39,578	33,642	5,936	17.6%
Equities	12,333	8,484	3,849	45.4%
Money Markets	10,480	8,667	1,813	20.9%
Market Data	16,914	15,770	1,144	7.3%
Other	6,171	6,098	73	1.2%
Gross Revenue	200,981	165,253	35,728	21.6%
Total expenses	142,723	114,973	*	*
Net Income	48,578	45,955	*	*
Net income attributable to Tradeweb Markets Inc.	29,612	-	-	-
Diluted earnings per share ^(1)	0.20^(b)	0.21^(a)	*	*
Non-GAAP Financial Measures
Adjusted EBITDA ^(2)	$93,449	$66,583	26,866	40.3%
Adjusted EBITDA Margin ^(2)	46.5%	40.3%	+620bps
Adjusted EBIT ^(2)	$83,096	$56,734	26,362	46.5%
Adjusted EBIT Margin ^(2)	41.3%	34.3%	+701bps
Adjusted Net Income ^(2)	$61,627	$42,252	19,375	45.9%
Adjusted Diluted EPS^(2)(3)	$0.27	$0.19	0.08	38.6%
	Successor	Predecessor
	Nine Months Ended September 30, 2019	Nine Months Ended September 30, 2018	$ Change	% Change
	(dollars in thousands)
Revenue
Rates	$326,658	$281,641	45,017	16.0%
Credit	118,612	102,452	16,160	15.8%
Equities	35,247	28,347	6,900	24.3%
Money Markets	30,364	25,248	5,116	20.3%
Market Data	51,361	47,059	4,302	9.1%
Other	16,016	21,024	(5,008)	-23.8%
Gross Revenue	578,258	505,771	72,487	14.3%
Total expenses	442,768	338,607	*	*
Net Income	115,746	130,160	*	*
Net income attributable to Tradeweb Markets Inc.	42,440	-	-	-
Diluted earnings per share ^(1)	0.19^(a)/0.28^(b)	0.60^(a)	*	*
Non-GAAP Financial Measures
Adjusted EBITDA ^(2)	$260,721	$214,091	46,630	21.8%
Adjusted EBITDA Margin ^(2)	45.1%	42.3%	+276bps
Adjusted EBIT ^(2)	$229,915	$184,859	45,056	24.4%
Adjusted EBIT Margin ^(2)	39.8%	36.5%	+321bps
Adjusted Net Income ^(2)	$170,446	$137,327	33,119	24.1%
Adjusted Diluted EPS^(2)(3)	$0.74	$0.64	0.10	16.0%

*	As a result of the Refinitiv Transaction and pushdown accounting, certain financial information for the period beginning on October 1, 2018, and through and including September 30, 2019, which we refer to as the “Successor period,” and certain financial information for the periods prior to, and including, September 30, 2018, referred to as the “Predecessor period,” are not comparable. See “Basis of Presentation” in Appendix A attached hereto.
(1)	As a result of the Reorganization Transactions and the IPO completed in April 2019, certain earnings information is being presented separately for Tradeweb Markets LLC and Tradeweb Markets Inc.
	(a) Presents information for Tradeweb Markets LLC (pre-IPO period).
	(b) Presents information for Tradeweb Markets Inc. (post-IPO period).
	For more information for pre-IPO period and post-IPO period earnings per share information, see “Basis of Presentation,” “Note 16 — Earnings Per Share” to the unaudited consolidated financial statements of Tradeweb Markets Inc. included in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019. and “Note 18 — Net Income Per Share” to the audited consolidated financial statements of Tradeweb Markets LLC, included in Tradeweb’s Current Report on Form 8-K dated June 18, 2019.
(2)	For the definitions of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income and Adjusted Diluted EPS and for reconciliations to their most directly comparable financial measures presented in accordance with GAAP, see the tables included in Appendix A attached hereto.
(3)	Adjusted Diluted EPS includes certain tax related adjustments to reflect an assumed effective tax rate for all periods presented and, for the three and nine months ended September 30, 2019, assumes all LLC Interests are exchanged for shares of Class A or Class B common stock. As a result, management believes that Adjusted Diluted EPS for Tradeweb Markets Inc. and Tradeweb Markets LLC are comparable.

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. A copy of the preliminary prospectus is available at https://www.sec.gov/Archives/edgar/data/1758730/000110465919054160/tv529956-s1.htm.

Alternatively, copies of the preliminary prospectus may be obtained from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by email at [e-mail] or toll-free at [phone]; Barclays Capital Inc., Attention Barclays Capital Inc. c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by email at [e-mail], or by telephone at [phone]; Citigroup Global Markets Inc., Attention: Prospectus Department, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at [phone]; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, by email at [e-mail] or by telephone at [phone]; or Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, Second Floor, New York, New York 10014.

These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, the proposed offering and plans regarding the use of proceeds therefrom, our outlook and future performance, the industry and markets in which we operate, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions and future events are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the heading “Risk Factors” in documents of Tradeweb Markets Inc. on file with or furnished to the SEC, may cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. In particular, the preliminary financial results for the third quarter of 2019 are subject to the completion of management’s final review and our other financial closing procedures and therefore are subject to change. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this release are not guarantees of future performance and our actual results of operations, financial condition or liquidity, and the development of the industry and markets in which we operate, may differ materially from the forward-looking statements contained in this release. In addition, even if our results of operations, financial condition, or liquidity, and events in the industry and markets in which we operate, are consistent with the forward-looking statements contained in this release, they may not be predictive of results or developments in future periods. Any forward-looking statement that we make in this release speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this release.

About Tradeweb Markets

Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 40 products to clients in the institutional, wholesale and retail markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves approximately 2,500 clients in more than 60 countries. On average, Tradeweb facilitated more than $700 billion in notional value traded per day over the past four fiscal quarters.