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Tradeweb Markets Inc. (TW)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record quarterly revenue of $513.0M (+26.7% YoY), adjusted EBITDA of $277.9M (54.2% margin), and adjusted diluted EPS of $0.87; GAAP diluted EPS was $0.71 .
  • Versus Wall Street consensus (S&P Global), adjusted EPS beat (0.87 vs 0.859*) and revenue slightly missed ($513.0M vs $515.6M*); mix shifts and dealer plan migrations lowered cash credit fee per million while swaps benefited from reduced compression activity .
  • Management raised FY25 adjusted expense guidance to $1,000–$1,050M (from $970–$1,030M), citing momentum and accelerated investments in data, infrastructure, and growth initiatives; tax rate, D&A, capex, and LSEG market data guidance unchanged .
  • Operational highlights: record ADV across multiple products (U.S. gov’t bonds, <1Y swaps, HY credit, munis, EU ETFs, repo), and strong international revenue growth (+40.8% YoY to $215.2M) amid tariff and geopolitical volatility .
  • Catalysts: continued share gains and protocol adoption in credit and swaps, ICD cross-sell (corporate T-bills), and digital assets initiatives (Canton Network, GS DAP); expenses trend mid-range but EBITDA margins expected to exceed 2024 levels .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenues and broad-based ADV records across rates, credit, equities, and repo; adjusted EBITDA margin expanded to 54.2% (+70 bps YoY) .
  • Swaps revenue strength from higher risk trading and lower compression activity; CFO expects swaps fee per million to be maintained or modestly grow structurally due to mix (EM/RFM) .
  • International revenue reached $215.2M (+40.8% YoY) with strong Europe/APAC growth; CEO emphasized resilience and client adoption of protocols (AiEX, PT, Sessions) .
  • Quote: “Tradeweb delivered a strong second quarter, despite macro challenges… we continued to work with clients on strategic initiatives in traditional markets and the digital asset space.” — CEO Billy Hult .

What Went Wrong

  • U.S. Treasuries market share declined YoY given mix shift toward voice-centric basis/swap-spread packages during high volatility; management is building solutions (RFM, futures integration via Ratefin) to address complex workflows .
  • Cash credit fee per million declined due to migration of dealers from variable to fixed plans and mix shift away from retail; lowers variable revenue per notional despite volume strength .
  • FX losses increased ($14.6M impact within operating expenses YoY), contributing to higher GAAP and adjusted expenses; guidance for adjusted expenses raised to support growth initiatives .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$463.344 $509.677 $512.971
Diluted EPS ($)$0.66 $0.69 $0.71
Adjusted Diluted EPS ($)$0.76 $0.86 $0.87
Adjusted EBITDA ($USD Millions)$244.743 $278.219 $277.896
Adjusted EBITDA Margin (%)52.8% 54.6% 54.2%
Net Income ($USD Millions)$159.942 $168.305 $175.522
Net Income Margin (%)34.5% 33.0% 34.2%
Segment Revenue ($USD Millions)Q4 2024Q1 2025Q2 2025
Rates$240.192 $265.432 $274.517
Credit$113.572 $124.000 $124.295
Equities$28.749 $31.410 $34.252
Money Markets$44.258 $43.712 $41.636
Market Data$30.011 $38.707 $30.417
Other$6.562 $6.416 $7.854
KPIsQ4 2024Q1 2025Q2 2025
Total ADV ($USD Trillions)$2.292 $2.547 $2.550
U.S. Gov’t Bonds ADV ($USD Billions)$224.9 $244.3 $250.4
Swaps/Swaptions ≥1Y ADV ($USD Billions)$416.9 $511.0 $503.6
Mortgages ADV ($USD Billions)$226.7 $243.4 $229.7
Money Markets ADV ($USD Billions)$988.1 $1,029.0 $1,041.8
U.S. HG TRACE (fully electronic share, %)18.3% 18.0% 17.9%
U.S. HY TRACE (fully electronic share, %)7.9% 7.5% 8.2%
U.S. HG TRACE (total share, %)—25.9% 26.0%
U.S. HY TRACE (total share, %)—10.1% 10.7%
Q2 2025 Actual vs Estimates (S&P Global)ActualConsensusVariance
Revenue ($USD Millions)$512.971 $515.581*-$2.610
Primary/Adjusted EPS ($)$0.87 $0.85883*+$0.011

Note: *Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Expenses ($USD Millions)FY 2025$970–$1,030 $1,000–$1,050 (trending mid) Raised
Acquisition & Refinitiv-related D&A ($USD Millions)FY 2025$176 $176 Maintained
Assumed non-GAAP Tax Rate (%)FY 2025~24.5–25.5 ~24.5–25.5 Maintained
Cash Capex + Capitalized Software ($USD Millions)FY 2025~$99–109 ~$99–109 Maintained
LSEG Market Data Contract Revenue ($USD Millions)FY 2025~$90 ~$90 Maintained
Dividend per Share ($)Q2 2025$0.10 (prior year)$0.12 (declared; +20% YoY) Raised

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
AI/Technology & Protocol AdoptionBroadened protocol suite (RFQ Edge, PT with ETF analytics); strong AiEX gains Continued automation; AiEX trades +100% YoY in equities AiEX integral across asset classes; head of AI appointed; ICD portal-T-bill integration Improving
Tariffs/Macro VolatilityMacro in flux; swaps risk trading up; lower compression April volatility; record U.S. gov’t bond day; resilience Tariff announcements and Mideast tensions; resilient electronification Persistent headwind, resilient ops
Product Performance (U.S. Treasuries)Record share 25% in Q4; wholesale streaming/sessions growth Institutional AiEX +15% YoY; record wholesale revenues Share down YoY due to voice mix; investing in RFM and futures (Ratefin) Mixed; rebuilding share
Regional Trends (International)APAC products doubled; EM swaps up 80% YoY Intl revenue ~40% of total; EM credit +20% YoY Intl revenue +40.8% YoY; Europe/APAC strength Strong uptrend
Regulatory/LegalElectronification one-way; banks strong; regulation pendulum SLR relief would boost Treasury liquidity; positive for rates SLR reforms positive; banks warehousing risk supports electronification Constructive
Digital Assets/TokenizationGS DAP strategic partner; set groundwork Investments (Securitize, Canton); infra development Co-led Digital Asset funding; validator/super validator on Canton; tokenized MM use cases Building momentum

Management Commentary

  • “We set a new high water mark for quarterly revenues… we expect 2025 to shape up to produce another year of double-digit revenue growth.” — CEO Billy Hult (prepared remarks) .
  • “Given the strong environment to invest for long term growth… we are increasing our adjusted expense guidance to $1.0–$1.05 billion and trending to the midpoint.” — CFO Sara Furber .
  • “We introduced direct U.S. Treasury bill trading for corporate treasurers via direct connection between Tradeweb’s ICD Portal and its institutional trading platform.” — Company press release .
  • “As AI continues to shape the evolution of markets, we were pleased to welcome Sherry Marcus as Tradeweb’s Head of AI in May.” — Company press release .

Q&A Highlights

  • U.S. Treasuries share: Decline driven by voice-centric basis and swap-spread trades amid volatility; management rolling out multi-asset package solutions and RFM; gained ~250 bps vs Bloomberg on electronic side YoY .
  • Credit pricing: Buy-side fees introduced in HY; dealer migrations to fixed/subscription; institutional HY share rose; focus on innovation over price cuts .
  • ICD balances: Episodic drawdowns (buybacks/CapEx) around tariff prospects; retention high; balances rebuilding; T-bills added to ICD portal; expanding sales footprint in Europe/Asia .
  • Swaps FPM outlook: Maintain/modest growth structurally given EM/RFM mix; compression down recently; bilateral swaps electronification a revenue opportunity .
  • Digital assets: Stablecoins/tokenized MMFs seen as game-changers; building DLT ecosystem (Canton validator); partnerships (GS DAP, Securitize) .

Estimates Context

  • Q2 2025 results vs consensus (S&P Global): adjusted EPS beat (0.87 vs 0.859*), revenue slight miss ($513.0M vs $515.6M*). Drivers: swaps revenue mix (less compression), lower cash credit fee per million from dealer plan migrations and retail mix, and FX losses within expenses .
  • Forward consensus (S&P Global): Q3 2025 revenue $507.5M*, EPS $0.829*; Q4 2025 revenue $516.4M*, EPS $0.837* [GetEstimates].
    Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mix-led margin durability: Swaps risk trading and lower compression support fee per million; EBITDA margin expected to exceed 2024 despite higher opex investments .
  • Credit runway remains long: Protocol adoption (RFQ/PT/Sessions) and AllTrade network growth underpin share gains despite lower variable fees per million; focus on innovation over price .
  • International expansion is a growth lever: Europe/APAC momentum and EM swaps/credit expansion continue; international revenue up 40.8% YoY .
  • ICD cross-sell pipeline: T-bills live on corporate portal with broader fixed income additions planned; watch balances recovery and cross-sell traction .
  • Digital asset optionality: Strategic positioning (Canton validator, GS DAP, Securitize) offers medium-term upside in tokenized fixed income workflows (settlement/collateral) .
  • Near-term trading implications: Elevated macro/tariff volatility favors risk trading in swaps and protocol usage; expect continued strength in repo and mortgages .
  • Expense trajectory: Adjusted expense guidance moved higher to fund growth; monitor 2H occupancy step-up and tech/consulting run-rate increases vs margin expansion targets .

Additional detail and reconciliations are available in the Q2 2025 8-K/press release and earnings call materials .