Tradeweb Revenue Climbs 15% to $584.5 Million as Trading Volumes Surge 22%
Tradeweb Markets reported third-quarter revenue of $584.5 million, up 14.9% from a year earlier, as average daily trading volume surged 22.4% to $3.15 trillion across its electronic platforms.
The results are the first since Tradeweb agreed on October 19 to buy bond trading venue Trumid for about $1.97 billion, three months after Intercontinental Exchange agreed to take over MarketAxess for about $5.7 billion.
Tradeweb ended September with $2.1 billion in cash and plans to fund the $1.89 billion cash part of the deal mainly from that balance.
Rates Trading Leads Growth
Interest rate swaps and government bonds led the quarter, lifting the rates business 18.2% to $324.5 million.
Average daily volume in rates derivatives rose 46.0% to $1.35 trillion, with swaps and swaptions of one year or longer up 42.4%.
The company tied the activity to central bank policy changes, geopolitical tension and uncertainty over inflation.
US government bond volume rose 28.0%, and September was the busiest month of the year for Treasury trading on Tradeweb, when total daily volume rose 33.7% to $3.74 trillion.
Fees did not keep pace with volume, with average variable fees per million on long-dated rates derivatives falling 10.5% due to more compression trades and shorter duration.
Credit Trading and a New Target
Credit revenue rose 9.6% to $133.0 million, while US credit volume grew 23.9%.
Credit derivatives volume rose 61.3% as hedge funds and systematic accounts traded more credit default swaps on its swap execution and multilateral trading facilities.
This business overtook cash credit on Tradeweb in July.
Part of the gain in Tradeweb's share of fully electronic US high-grade bond volume reported to TRACE reflects a reporting change.
From August 31, the Financial Industry Regulatory Authority excluded certain duplicate trades between affiliates from TRACE, which lowered reported market volume and raised Tradeweb's share.
Trumid would be 'the largest acquisition in our history,' Billy Hult, CEO of Tradeweb, said in the results statement.
The target's average daily volume rose 38% to $9.6 billion in the third quarter.
The deal needs regulatory approval and is targeted to close in the first half of 2027, and Tradeweb's updated 2026 guidance leaves it out.
Crypto Loss and Share Buybacks
Other income included a $27.5 million gain booked when Tradeweb converted a note in tokenization firm Securitize into shares on July 1, and a $14.4 million gain on a minority investment.
A $24.0 million unrealized loss on its Canton Coin holdings offset part of that.
Tradeweb held 1.6 billion of the crypto tokens at the end of September, valued at $207.5 million.
It cannot freely transfer 1.3 billion of them, worth $163.7 million.
Revenue from validating transactions on the Canton Network fell, pulling the 'other' revenue line down 17.3% to $7.6 million.
Operating expenses rose 11.0% to $331.1 million.
The company bought back 2.02 million shares for $209.8 million during the quarter, at an average of $103.83, leaving $124.5 million under its authorization.
It declared a quarterly dividend of $0.14 per share, up 16.7%, payable on December 15.
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