Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 14, 2020 | Jun. 28, 2019 | |
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Registrant Name | Tradeweb Markets Inc. | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4.5 | ||
Entity Central Index Key | 0001758730 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | true | ||
Amendment Description | This Amendment on Form 10-K/A (the "Amended Report") amends and restates the Annual Report on Form 10-K for the year ended December 31, 2019 (the "Original Report") filed by Tradeweb Markets Inc. (the "Company") on February 21, 2020. The Company discovered that, due to a clerical error, the Original Report was inadvertently filed in lieu of the final version of the Company's Annual Report on Form 10-K. This Amended Report is the final version of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 (including exhibits) that was originally intended to be filed and corrects clerical errors included in the Original Report. Among others, these include:the inclusion of an inadvertently omitted paragraph under Part I, Item 3 "Legal Proceedings - IDC Matter;"conforming changes to the figures for total assets and total equity/members' capital as of December 31, 2019 in Part II, Item 6 "Selected Financial Data" corresponding to the amounts presented in the Consolidated Statement of Financial Condition as of December 31, 2019;the inclusion of an inadvertently omitted subsection entitled "Credit Risk" under Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk;"the deletion of "(Unaudited)" from the heading of the Consolidated Statements of Changes in Equity in Part II, Item 8 "Financial Statements and Supplementary Data;"the deletion of "(Unaudited)" from the heading of the Table of Contents for the Notes to Consolidated Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data;"a correction to the amount of the recorded right-of-use assets in "Note 2 - Summary of Significant Accounting Policies - Recent Accounting Pronouncements - Adopted" to the Company's audited consolidated financial statements;a correction to the amount of the software development costs capitalized for the year ended December 31, 2019 in "Note 8 - Software Development Costs" to the Company's audited consolidated financial statements; andcorrections to the amount of an assumed deferred tax benefit and the amount of uncertain tax positions as of December 31, 2019 in "Note 9 - Income Taxes" to the Company's audited consolidated financial statements. Previously reported amounts in the Company's audited consolidated financial statements included in the Original Report did not include any clerical errors and are identical to corresponding amounts in the Company's audited consolidated financial statements included in this Amended Report, other than the corrections to the notes to the financial statements described above. Unless expressly noted otherwise, the disclosures in this Amended Report continue to speak as of the date of the Original Report, and do not reflect events occurring after the filing of the Original Report. | ||
Class A common stock | |||
Entity Common Stock, Shares Outstanding | 70,212,713 | ||
Class B common stock | |||
Entity Common Stock, Shares Outstanding | 96,933,192 | ||
Class C common stock | |||
Entity Common Stock, Shares Outstanding | 7,389,983 | ||
Class D common stock | |||
Entity Common Stock, Shares Outstanding | 49,873,346 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | ||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Successor |
Cash and cash equivalents | $ 410,104 | $ 460,711 | $ 460,711 | $ 410,104 |
Restricted cash | 1,200 | 1,000 | 1,000 | 1,200 |
Receivable from brokers and dealers and clearing organizations | 174,591 | 30,641 | 30,641 | 174,591 |
Deposits with clearing organizations | 11,427 | 9,724 | 9,724 | 11,427 |
Accounts receivable, net of allowance | 87,192 | 92,814 | 92,814 | 87,192 |
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 38,128 | 40,405 | 40,405 | 38,128 |
Right-of-use assets | 24,504 | 24,504 | ||
Software development costs, net of accumulated amortization | 170,582 | 173,086 | 173,086 | 170,582 |
Goodwill | 2,694,797 | 2,694,797 | 2,694,797 | 2,694,797 |
Intangible assets, net of accumulated amortization | 1,380,848 | 1,281,441 | 1,281,441 | 1,380,848 |
Receivable from affiliates | 3,243 | 2,525 | 2,525 | 3,243 |
Deferred tax asset | 256,450 | 256,450 | ||
Other assets | 25,027 | 27,236 | 27,236 | 25,027 |
Total assets | 4,997,139 | 5,095,334 | 5,095,334 | 4,997,139 |
Liabilities | ||||
Payable to brokers and dealers and clearing organizations | 171,214 | 30,452 | 30,452 | 171,214 |
Accrued compensation | 120,158 | 119,415 | 119,415 | 120,158 |
Deferred revenue | 27,883 | 23,990 | 23,990 | 27,883 |
Accounts payable, accrued expenses and other liabilities | 42,548 | 32,834 | 32,834 | 42,548 |
Employee equity compensation payable | 24,187 | 1,048 | 1,048 | 24,187 |
Lease liability | 30,955 | 30,955 | ||
Payable to affiliates | 5,009 | 1,506 | 1,506 | 5,009 |
Deferred tax liability | 19,627 | 21,572 | 21,572 | 19,627 |
Tax receivable agreement liability | 240,817 | 240,817 | ||
Total liabilities | 410,626 | 502,589 | 502,589 | 410,626 |
Commitments and contingencies (Note 17) | ||||
Mezzanine Capital | ||||
Class C Shares and Class P(C) Shares | 14,179 | 14,179 | ||
Stockholders' Equity/Members' Capital | ||||
Members’ capital | 4,573,200 | 4,573,200 | ||
Preferred stock, $.00001 par value; 250,000,000 shares authorized; none issued or outstanding | ||||
Additional paid-in capital | 3,329,386 | 3,329,386 | ||
Accumulated other comprehensive income (loss) | (866) | 1,366 | 1,366 | (866) |
Retained earnings | 47,833 | 47,833 | ||
Total stockholders' equity attributable to Tradeweb Markets Inc./members' capital | 4,572,334 | 3,378,588 | 3,378,588 | 4,572,334 |
Non-controlling interests | 1,214,157 | 1,214,157 | ||
Total equity | 4,572,334 | 4,592,745 | 4,592,745 | 4,572,334 |
Total liabilities and stockholders' equity/members' capital | $ 4,997,139 | 5,095,334 | 5,095,334 | $ 4,997,139 |
Class A common stock | ||||
Stockholders' Equity/Members' Capital | ||||
Common stock | 1 | 1 | ||
Total equity | 1 | 1 | ||
Class B common stock | ||||
Stockholders' Equity/Members' Capital | ||||
Common stock | 1 | 1 | ||
Total equity | 1 | 1 | ||
Class D common stock | ||||
Stockholders' Equity/Members' Capital | ||||
Common stock | 1 | 1 | ||
Total equity | $ 1 | $ 1 | ||
Tradeweb Markets LLC | ||||
Assets | ||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 250,000,000 | 250,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 1,000,000,000 | |
Common stock, shares outstanding | 66,408,328 | |
Class B common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 450,000,000 | |
Common stock, shares outstanding | 96,933,192 | |
Class C common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 350,000,000 | |
Common stock, shares outstanding | 8,328,983 | |
Class D common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 300,000,000 | |
Common stock, shares outstanding | 50,853,172 |
Consolidated Statements of Inco
Consolidated Statements of Income $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Revenues | |
Financial Designation, Predecessor and Successor [Fixed List] | Successor |
Gross revenue | $ 775,566 |
Net revenue | 775,566 |
Expenses | |
Employee compensation and benefits | 329,457 |
Depreciation and amortization | 139,330 |
Technology and communications | 39,285 |
General and administrative | 34,960 |
Professional fees | 28,029 |
Occupancy | 14,686 |
Total expenses | 585,747 |
Operating income | 189,819 |
Tax receivable agreement liability adjustment | 33,134 |
Net interest income | 2,373 |
Income before taxes | 225,326 |
Provision for income taxes | (52,302) |
Net income | 173,024 |
Net income attributable to Tradeweb Markets Inc. and non-controlling interests | 130,672 |
Less: Net income attributable to non-controlling interests | 46,903 |
Net income attributable to Tradeweb Markets Inc. | $ 83,769 |
EPS calculations for pre-IPO and post-IPO periods | |
Basic | $ / shares | $ 0.57 |
Diluted | $ / shares | $ 0.54 |
Weighted average shares outstanding | |
Basic | shares | 148,013,274 |
Diluted | shares | 156,540,246 |
Transaction fees | |
Revenues | |
Gross revenue | $ 423,583 |
Subscription fees | |
Revenues | |
Gross revenue | 138,731 |
Commissions | |
Revenues | |
Gross revenue | 149,365 |
Refinitiv market data fees | |
Revenues | |
Gross revenue | 55,635 |
Other | |
Revenues | |
Gross revenue | 8,252 |
Tradeweb Markets LLC | |
Expenses | |
Less: Pre-IPO net income attributable to Tradeweb Markets LLC | 42,352 |
Net income attributable to Tradeweb Markets Inc. | $ 42,352 |
EPS calculations for pre-IPO and post-IPO periods | |
Basic | $ / shares | $ 0.19 |
Diluted | $ / shares | $ 0.19 |
Weighted average shares outstanding | |
Basic | shares | 222,222,197 |
Diluted | shares | 223,320,457 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor | Successor | Predecessor |
Net income attributable to Tradeweb Markets | $ 83,769 | |||
Foreign currency translation adjustments attributable to non-controlling interests | 1,441 | |||
Total comprehensive income | $ 127,096 | 85,210 | $ 86,533 | |
Net income attributable to non-controlling interests | 46,903 | |||
Foreign currency translation adjustments attributable to noncontrolling interests | 298 | |||
Comprehensive income attributable to non-controlling interests | 47,201 | |||
Tradeweb Markets LLC | ||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | |||
Net income attributable to Tradeweb Markets | $ 29,307 | 130,160 | 42,352 | 83,648 |
Foreign currency translation adjustments attributable to non-controlling interests | (866) | (3,064) | 988 | 2,885 |
Total comprehensive income | $ 28,441 | $ 127,096 | $ 43,340 | $ 86,533 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Equity Incentive PlanClass A common stock | Members' Capital | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings | Non-Controlling Interests | Class A common stock | Class B common stock | Class C common stock | Class D common stock | Total |
Increase (Decrease) in Stockholders' Equity | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | ||||||||||
Members' capital beginning of period at Dec. 31, 2016 | $ 1,040,911 | $ (16,152) | $ 1,024,759 | ||||||||
Comprehensive income: | |||||||||||
Adjustment to Class C Shares and Class P© shares in mezzanine capital | (2,109) | (2,109) | |||||||||
Capital distributions | (152,000) | (152,000) | |||||||||
Net income | 83,648 | 83,648 | |||||||||
Foreign currency translation adjustments | 2,885 | 2,885 | |||||||||
Total comprehensive income | 83,648 | 2,885 | 86,533 | ||||||||
Capital contributions | 29,285 | 29,285 | |||||||||
Members' capital end of period at Dec. 31, 2017 | 999,735 | (13,267) | $ 986,468 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | ||||||||||
Comprehensive income: | |||||||||||
Adjustment to Class C Shares and Class P© shares in mezzanine capital | 456 | $ 456 | |||||||||
Capital distributions | (139,350) | (139,350) | |||||||||
Net income | 130,160 | 130,160 | |||||||||
Foreign currency translation adjustments | (3,064) | (3,064) | |||||||||
Vesting of contingent consideration | 150,495 | 150,495 | |||||||||
Total comprehensive income | 130,160 | (3,064) | 127,096 | ||||||||
Members' capital end of period at Sep. 30, 2018 | 1,141,496 | (16,331) | $ 1,125,165 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||||||
Members' capital beginning of period at Dec. 31, 2017 | 999,735 | (13,267) | $ 986,468 | ||||||||
Members' capital end of period at Dec. 31, 2018 | 4,573,200 | (866) | 4,572,334 | ||||||||
Equity at end of period at Dec. 31, 2018 | (866) | $ 4,572,334 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||||||
Members' capital beginning of period at Sep. 30, 2018 | 1,141,496 | (16,331) | $ 1,125,165 | ||||||||
Comprehensive income: | |||||||||||
Net income | 29,307 | ||||||||||
Members' capital end of period at Dec. 31, 2018 | 4,573,200 | (866) | 4,572,334 | ||||||||
Equity at end of period at Dec. 31, 2018 | (866) | 4,572,334 | |||||||||
Members' capital beginning of period at Oct. 01, 2018 | 4,562,154 | 4,562,154 | |||||||||
Comprehensive income: | |||||||||||
Adjustment to Class C Shares and Class P© shares in mezzanine capital | (1,333) | (1,333) | |||||||||
Capital distributions | (36,000) | (36,000) | |||||||||
Net income | 29,307 | 29,307 | |||||||||
Foreign currency translation adjustments | (866) | (866) | |||||||||
Total comprehensive income | 29,307 | (866) | 28,441 | ||||||||
Conversion of certain cash-settled PRSUs to equity-settled PRSUs | 19,072 | 19,072 | |||||||||
Members' capital end of period at Dec. 31, 2018 | 4,573,200 | (866) | 4,572,334 | ||||||||
Equity at end of period at Dec. 31, 2018 | (866) | $ 4,572,334 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||||||
Comprehensive income: | |||||||||||
Adjustment to Class C Shares and Class P© shares in mezzanine capital | (2,369) | $ (2,369) | |||||||||
Capital distributions | (20,000) | (20,000) | |||||||||
Stock-based compensation | 4,674 | 4,674 | |||||||||
Net income | 42,352 | 42,352 | |||||||||
Foreign currency translation adjustments | 988 | 988 | |||||||||
Members' capital end of period at Mar. 31, 2019 | 4,597,857 | ||||||||||
Equity at end of period at Mar. 31, 2019 | 122 | $ 4,597,979 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||||||
Members' capital beginning of period at Dec. 31, 2018 | 4,573,200 | (866) | $ 4,572,334 | ||||||||
Equity at beginning of period at Dec. 31, 2018 | (866) | 4,572,334 | |||||||||
Comprehensive income: | |||||||||||
Stock-based compensation expense under the PRSU Plan | 19,100 | ||||||||||
Net income | 173,024 | ||||||||||
Total comprehensive income | 85,210 | ||||||||||
Equity at end of period at Dec. 31, 2019 | $ 3,329,386 | 1,366 | $ 47,833 | $ 1,214,157 | $ 1 | $ 1 | $ 1 | $ 4,592,745 | |||
Equity at end of period (in shares) at Dec. 31, 2019 | 66,408,328 | 96,933,192 | 8,328,983 | 50,853,172 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||||||
Members' capital beginning of period at Mar. 31, 2019 | 4,597,857 | ||||||||||
Equity at beginning of period at Mar. 31, 2019 | 122 | $ 4,597,979 | |||||||||
Comprehensive income: | |||||||||||
Capital distributions | (100,000) | (100,000) | |||||||||
Effect of the reorganization transactions | $ (4,497,857) | 4,521,132 | 23,275 | ||||||||
Issuance of common stock | (18,492) | $ 1 | $ 1 | (18,490) | |||||||
Issuance of common stock (in shares) | 301,478 | 46,000,000 | 96,933,192 | 10,006,269 | 69,282,736 | ||||||
Activities related to the follow-on offering and other exchanges of LLC Interests, net of offering costs and cancellations | $ 1 | 1 | |||||||||
Activities related to the follow-on offering and other exchanges of LLC Interests, net of offering costs and cancellations (in shares) | 20,106,850 | (1,677,286) | (18,429,564) | ||||||||
Tax receivable agreement liability and deferred taxes arising from the reorganization transactions, IPO and follow-on offering and other LLC Interest ownership changes | (4,382) | (4,382) | |||||||||
Allocation of equity to non-controlling interests | (1,607,529) | 1,607,529 | |||||||||
Adjustments to non-controlling interests | 402,424 | (197) | (402,227) | ||||||||
Distributions to non-controlling interests | (38,346) | (38,346) | |||||||||
Dividends ($0.24 per share) | (35,936) | (35,936) | |||||||||
Stock-based compensation expense under the PRSU Plan | 20,718 | 20,718 | |||||||||
Stock-based compensation expense under the Option Plan | 24,432 | 24,432 | |||||||||
Payroll taxes paid for stock-based compensation exercises | (8,917) | (8,917) | |||||||||
Net income | 83,769 | 46,903 | 130,672 | ||||||||
Foreign currency translation adjustments | 1,441 | 298 | 1,739 | ||||||||
Equity at end of period at Dec. 31, 2019 | $ 3,329,386 | $ 1,366 | $ 47,833 | $ 1,214,157 | $ 1 | $ 1 | $ 1 | $ 4,592,745 | |||
Equity at end of period (in shares) at Dec. 31, 2019 | 66,408,328 | 96,933,192 | 8,328,983 | 50,853,172 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Cash flows from operating activities | ||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor | Successor | Predecessor |
Net income | $ 29,307 | $ 130,160 | $ 173,024 | $ 83,648 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 33,020 | 48,808 | 139,330 | 68,615 |
Contingent consideration | 26,830 | 58,520 | ||
Vesting of P-1 (C) Shares | (5,728) | |||
Stock-based compensation expense | 49,824 | |||
Deferred taxes | 968 | 2,602 | 15,024 | (950) |
Tax receivable agreement liability adjustment | (33,134) | |||
(Increase) decrease in operating assets: | ||||
Receivable from/Payable to brokers and dealers and clearing organizations, net | 1,265 | (4,640) | 3,188 | (2) |
Deposits with clearing organizations | (2,248) | 726 | 1,789 | 606 |
Accounts receivable | 8,085 | (28,434) | (4,283) | 11,196 |
Receivable from/Payable to affiliates, net | (1,102) | (1,850) | (2,461) | (135) |
Other assets | (4,695) | (6,371) | (5,648) | 4,719 |
Increase (decrease) in operating liabilities: | ||||
Accrued compensation | 38,368 | (7,568) | (1,783) | 12,364 |
Deferred revenue | (396) | (1,396) | (3,905) | (12,555) |
Accounts payable, accrued expenses and other liabilities | 639 | 8,793 | (3,550) | (3,826) |
Employee equity compensation payable | 9,345 | 2,896 | (16,412) | 2,380 |
Net cash provided by operating activities | 112,556 | 164,828 | 311,003 | 224,580 |
Cash flows from investing activities | ||||
Purchase of furniture, equipment, software and leasehold improvements | (9,090) | (6,327) | (15,781) | (13,461) |
Capitalized software development costs | (7,156) | (19,523) | (28,681) | (27,157) |
Business acquisitions | 66 | |||
Purchase of investments | (5,000) | |||
Net cash used in investing activities | (16,246) | (25,850) | (44,462) | (45,552) |
Cash flows from financing activities | ||||
Mezzanine capital contributions | 82 | |||
Mezzanine capital distributions | (1,543) | |||
Pre-IPO capital distributions | (36,000) | (139,350) | (120,000) | (152,000) |
Proceeds from issuance of Class A common stock in the IPO, net of underwriting discounts | 1,161,270 | |||
Purchase of LLC Interests and Class A common stock in connection with the IPO | (1,161,270) | |||
Proceeds from issuance of Class A common stock in the follow-on offering | 809,954 | |||
Purchase of LLC Interests and Class A common stock in connection with the follow-on offering | (809,954) | |||
Offering costs from IPO and follow-on offering | (14,943) | |||
Dividends | (35,936) | |||
Distributions to non-controlling interests | (38,346) | |||
Payroll taxes paid for stock-based compensation exercises | (8,917) | |||
Net cash used in financing activities | (36,000) | (139,350) | (218,142) | (153,461) |
Effect of exchange rate changes on cash and cash equivalents | (389) | (2,043) | 2,008 | 3,157 |
Net increase (decrease) in cash and cash equivalents | 59,921 | (2,415) | 50,407 | 28,724 |
Cash and cash equivalents and restricted cash | ||||
Beginning of period | 351,383 | 353,798 | 411,304 | 325,074 |
End of period | 411,304 | 351,383 | 461,711 | 353,798 |
Supplemental disclosure of cash flow information | ||||
Interest paid | 455 | |||
Income taxes paid | 2,659 | 5,500 | 43,842 | 6,312 |
Non-cash financing activities - Items arising from the reorganization transactions, IPO, follow-on offering and other LLC Interest ownership changes: | ||||
Deferred tax asset | 968 | 2,602 | 15,024 | (950) |
Vesting of contingent consideration | 150,495 | |||
Conversion of convertible term note payable to Thomson Reuters to Class A Shares | $ 29,285 | |||
Conversion of certain cash-settled PRSUs to equity-settled PRSUs | $ 19,072 | |||
Refinitiv Transaction | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Deferred taxes | 269,569 | |||
Non-cash financing activities - Items arising from the reorganization transactions, IPO, follow-on offering and other LLC Interest ownership changes: | ||||
Establishment of liabilities under tax receivable agreement | 273,951 | |||
Deferred tax asset | $ 269,569 | |||
Vesting of contingent consideration | $ 150,495 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Statements of Cash Flows | |||||
Cash and cash equivalents | $ 460,711 | $ 410,104 | |||
Restricted cash | 1,000 | 1,200 | |||
Cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 461,711 | $ 411,304 | $ 351,383 | $ 353,798 | $ 325,074 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization | |
Organization | Tradeweb Markets Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Organization Tradeweb Markets Inc. (the “Corporation”) was incorporated as a Delaware corporation on November 7, 2018 for the purpose of completing certain reorganization transactions in order to carry on the business of Tradeweb Markets LLC (“TWM LLC”) and conducting an initial public offering (“IPO”) as described below under “—Initial Public Offering” and “—Reorganization Transactions.” The Corporation is a consolidating subsidiary of BCP York Holdings, (“BCP”) a company owned by certain investment funds affiliated with The Blackstone Group Inc. (f/k/a The Blackstone Group L.P.) (“Blackstone”), through BCP’s majority ownership interest in Refinitiv Holdings Limited (the “Parent” and, unless otherwise stated or the context otherwise requires, together with all of its subsidiaries, “Refinitiv”). Refinitiv owns a majority ownership interest in the Company (as defined below). The Corporation is a holding company whose principal asset is LLC Interests (as defined below) of TWM LLC. As the sole manager of TWM LLC, the Corporation operates and controls all of the business and affairs of TWM LLC and, through TWM LLC and its subsidiaries, conducts the Corporation’s business. As a result of this control, and because the Corporation has a substantial financial interest in TWM LLC, the Corporation consolidates the financial results of TWM LLC and reports a non-controlling interest in the Corporation’s consolidated financial statements. As of December 31, 2019, Tradeweb Markets Inc. owns 73.4% of TWM LLC and the non-controlling interest holders own the remaining 26.6% of TWM LLC. Unless the context otherwise requires, references to the “Company” refer to Tradeweb Markets Inc. and its consolidated subsidiaries, including TWM LLC, following the completion of the Reorganization Transactions (as defined below), and TWM LLC and its consolidated subsidiaries prior to the completion of the Reorganization Transactions. The Company is a leader in building and operating electronic marketplaces for a global network of clients across the institutional, wholesale and retail client sectors. The Company’s principal subsidiaries include: · Tradeweb LLC (“TWL”), a registered broker-dealer under the Securities Exchange Act of 1934, a member of the Financial Industry Regulatory Authority (“FINRA”), a registered independent introducing broker with the Commodities Future Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”). · Dealerweb Inc. (“DW”) (formerly known as Hilliard Farber & Co., Inc.). DW is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of FINRA. DW is also registered as an introducing broker with the CFTC and NFA. · Tradeweb Direct LLC (“TWD”) (formerly known as BondDesk Trading LLC), a registered broker-dealer under the Securities Exchange Act of 1934 and a member of FINRA. · Tradeweb Europe Limited (“TEL”), a Multilateral Trading Facility regulated by the Financial Conduct Authority (the “FCA”) in the UK, which maintains branches in Asia which are regulated by certain Asian securities regulators. · TW SEF LLC (“TW SEF”), a Swap Execution Facility (“SEF”) regulated by the CFTC. · DW SEF LLC (“DW SEF”), a SEF regulated by the CFTC. · Tradeweb Japan K.K. (“TWJ”), a security house regulated by the Japanese Financial Services Agency (“JFSA”) and the Japan Securities Dealers Association (“JSDA”). · Tradeweb EU B.V. (“TWEU”), a Trading Venue and Approved Publication Arrangement regulated by the Netherlands Authority for the Financial Markets (“AFM”). Acquisition of Parent Company and Presentation of Financial Statements A majority interest of Refinitiv (formerly the Thomson Reuters Financial & Risk Business) was acquired by BCP on October 1, 2018 (the “Refinitiv Transaction”) from Thomson Reuters Corporation (“TR”). The accompanying consolidated financial statements are presented for two periods: predecessor and successor, which relate to the periods preceding and succeeding the Refinitiv Transaction, respectively. The Refinitiv Transaction results in a new basis of accounting beginning on October 1, 2018 and the financial reporting periods are presented as follows: · The successor period of the Company, reflecting the Refinitiv Transaction, as of and for the year ended December 31, 2019 and as of December 31, 2018 and for the period from October 1, 2018 to December 31, 2018 (the “2018 Successor Period”) . · The predecessor period of the Company for the period from January 1, 2018 to September 30, 2018 (the “2018 Predecessor Period”) and the year ended December 31, 2017 . See Note 3 – Pushdown Accounting. Initial Public Offering On April 8, 2019, the Corporation completed its IPO of 46,000,000 shares of Class A common stock, par value $0.00001 per share, of the Corporation (the “Class A common stock”) at a public offering price of $27.00, which included 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1.2 billion in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase membership interests of TWM LLC from certain existing equity holders of TWM LLC (and the corresponding shares of common stock were cancelled as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. See Note 11 – Stockholders’ Equity. Reorganization Transactions Prior to the closing of the IPO, a series of reorganization transactions (the “Reorganization Transactions”) was completed among the Corporation, TWM LLC and the owners of TWM LLC prior to the Reorganization Transactions (collectively, the “Original LLC Owners”), including the following parties: · certain investment and commercial banks (collectively, the “Bank Stockholders”); · members of management; · the Refinitiv Direct Owner, (i) prior to June 28, 2019, a direct subsidiary of Refinitiv that owned interests in an entity that held membership interests of TWM LLC prior to the Reorganization Transactions and contributed such entity to the Corporation (the “Refinitiv Contribution”) in exchange for shares of Class B common stock, par value $0.00001 per share, of the Corporation (the “Class B common stock”) in connection with the completion of the Reorganization Transactions and (ii) on and after June 28, 2019, an indirect subsidiary of Refinitiv that owns shares of Class B common stock which shares were contributed by the direct subsidiary of Refinitiv referred to in the foregoing clause (i); and · an indirect subsidiary (the “Refinitiv LLC Owner” and, together with the Refinitiv Direct Owner, the “Refinitiv Owners”) of Refinitiv. As used herein, references to “Continuing LLC Owners” refer collectively to (i) those Original LLC Owners, including the Refinitiv LLC Owner, certain Bank Stockholders and members of management, that continued to own LLC Interests (as defined below) after the completion of the IPO and Reorganization Transactions, that received shares of Class C common stock, par value $0.00001 per share, of the Corporation (the “Class C common stock”), shares of Class D common stock, par value $0.00001 per share, of the Corporation (the “Class D common stock”) or a combination of both, as the case may be, in connection with the completion of the Reorganization Transactions, and that may redeem or exchange their LLC Interests for shares of Class A common stock or Class B common stock and (ii) solely with respect to the Tax Receivable Agreement (as defined below), also includes those Original LLC Owners, including certain Bank Stockholders, that disposed of all of their LLC Interests for cash in connection with the IPO. The following Reorganization Transactions occurred: · TWM LLC’s limited liability company agreement (the “TWM LLC Agreement”) was amended and restated to, among other things, (i) provide for a new single class of common membership interests in TWM LLC (“LLC Interests”), (ii) exchange all of the then existing membership interests in TWM LLC for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. See Note 11 – Stockholders’ Equity. · The Corporation’s certificate of incorporation was amended and restated to, among other things, provide for Class A common stock, Class B common stock, Class C common stock and Class D common stock. See Note 11 – Stockholders’ Equity. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Original LLC Owners that received LLC Interests on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (and the Corporation subsequently cancelled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). · As a result of the Refinitiv Contribution (described above), the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. See Note 11 – Stockholders’ Equity. · The Corporation’s board of directors adopted a new omnibus equity incentive plan, under which equity awards may be made in respect of shares of Class A common stock. It also assumed sponsorship of an option plan and PRSU plan formerly sponsored by TWM LLC. See Note 13 – Stock-Based Compensation Plans. · The Corporation entered into a tax receivable agreement (the “Tax Receivable Agreement”) with TWM LLC and the Continuing LLC Owners. See Note 10 – Tax Receivable Agreement. LSEG Transaction On August 1, 2019, London Stock Exchange Group plc announced that it has agreed to definitive terms with a consortium including certain investment funds affiliated with Blackstone as well as TR to acquire the Refinitiv business in an all share transaction (the “LSEG Transaction”). The LSEG Transaction is subject to customary regulatory approvals and closing conditions, and is expected to close during the second half of 2020. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies The following is a summary of significant accounting policies: Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the consolidated financial statements. Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1—Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. As a result, the consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. However, Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. As such, for periods prior to the completion of the Reorganization Transactions, the consolidated financial statements represent the historical financial condition and results of operations of TWM LLC and its subsidiaries. For periods after the completion of the Reorganization Transactions, the consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by the other members of TWM LLC. Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. Receivable from and Payable to Brokers and Dealers and Clearing Organizations Receivable from and payable to brokers and dealers and clearing organizations consists of proceeds from transactions which failed to settle due to the inability of a transaction party to deliver or receive the transacted security. These securities transactions are generally collateralized by those securities. At times, transactions executed on the Company’s wholesale platform fail to settle due to the inability of a transaction party to deliver or receive the transacted security. Until the failed transaction settles, a receivable from (and a matching payable to) brokers and dealers and clearing organizations is recognized for the proceeds from the unsettled transaction. Deposits with Clearing Organizations Deposits with clearing organizations are comprised of cash deposits. Due to the short-term nature of these deposits, the recorded value has been determined to approximate fair value. Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting (see Note 3 – Pushdown Accounting), is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment . Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350, Intangibles – Goodwill and Other . The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation (see Note 3 – Pushdown Accounting) are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting. Goodwill is also the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. In 2019, the Company changed the annual date on which goodwill is tested for impairment from July 1 st to October 1 st to align with the annual impairment testing date of the Company’s Parent. This change did not accelerate, delay, avoid or cause an impairment charge, nor did this change result in adjustments to any previously issued financial statements. Goodwill was last assessed on October 1, 2019. Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from seven to sixteen years, in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated discounted cash flows relating to the asset or asset group is less than the corresponding book value. IPO and Follow-On Offering Costs The Company began incurring costs in connection with the filing of a Registration Statement on Form S-1 for an IPO and a Registration Statement on Form S-1 for a follow-on offering in 2018 and in the third quarter of 2019, respectively. IPO and follow-on offering costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital. In accordance with ASC 505-10-25, Equity , these costs are recognized in additional paid-in capital within the consolidated statements of financial condition when the offering is effective. As of December 31, 2019, $15.9 million of deferred costs related to the IPO and $2.6 million of deferred costs related to the follow-on offering were recognized in additional paid-in capital in the consolidated statements of financial condition. See Note 11 – Stockholders’ Equity. Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. Income Tax The Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. TWM LLC is a multiple member limited liability company taxed as a partnership and accordingly any taxable income generated by TWM LLC is passed through to and included in the taxable income of its members, including the Corporation. Income taxes also include unincorporated business taxes on income earned or losses incurred for conducting business in certain state and local jurisdictions, income taxes on income earned or losses incurred in foreign jurisdictions on certain operations and federal and state income taxes on income earned or losses incurred, both current and deferred, on subsidiaries that are taxed as corporations for U.S. tax purposes. The Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes on the basis of a two-step process whereby (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the global intangible low-taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act as a current period expense when incurred. Deferred Tax Asset Correction During the fourth quarter of 2019, the Company identified and corrected immaterial errors in the calculation of the deferred tax asset associated with the Reorganization Transactions that reduced additional paid-in-capital by $10.2 million and reduced the deferred tax asset by $10.2 million. This correction relates to immaterial errors associated with inputs (including estimates) used in the calculation of the deferred tax balances related to the Refinitiv Contribution. This correction, if it had been recorded in the interim periods of 2019, would have reduced additional paid-in capital by $10.2 million and reduced the deferred tax asset by $10.2 million at June 30, 2019 and September 30, 2019 and would not have had a material impact on our net assets and would not have had a material impact on our consolidated results of operations or cash flows. Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided. Also included in subscription fees are viewer fees from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission revenue for brokerage transactions are recognized and recorded on a trade-date basis. Commission revenue is collected by the Company when the trade settles or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis, and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers , using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or recognition of revenue in any prior reporting periods. However, subsequent to the adoption, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction-based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the year ended December 31, 2019, the 2018 Successor Period and the 2018 Predecessor Period is as follows: Successor Successor Predecessor Year Ended October 1, 2018 to January 1, 2018 to December 31, 2019 December 31, 2018 September 30, 2018 (in thousands) Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 325,178 $ 98,405 $ 73,800 $ 23,330 $ 208,049 $ 65,702 Subscription Fees including Refinitiv market data fees 1,736 192,630 425 46,094 1,305 142,676 Commissions 109,995 39,370 22,608 10,232 49,367 30,463 Other 834 7,418 — 2,148 40 8,169 Gross revenue $ 437,743 $ 337,823 $ 96,833 $ 81,804 $ 258,761 $ 247,010 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation . ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for stock-based payments. Under ASC 718, the stock-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to additional paid-in capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. For periods following the Reorganization Transactions and the IPO, the fair value of new equity instrument grants is determined based on the price of the Class A common stock on the grant date. Under ASC 718, the grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of stock-based awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of stock-based awards that require both future service and the achievement of Company performance-based conditions are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. Prior to the IPO, the Company awarded options to management and other employees (collectively, the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). In accounting for options issued under the Option Plan, or which may be issued under the Tradeweb Markets Inc. 2019 Omnibus Equity Incentive Plan (the “Omnibus Equity Plan”) in the future, compensation expense is measured and recognized for all awards based on their estimated fair values measured as of the grant date. Costs related to options are recognized as an expense in the consolidated statements of income over the requisite service period, with an offsetting increase to additional paid-in capital. In conjunction with the IPO, the non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019 and will continue to be expensed over the following three years. Determining the appropriate fair value model and calculating the fair value of the stock-based awards requires the input of highly subjective assumptions, including the expected life of the stock-based awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its stock-based awards. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the related amounts recognized in the Company’s consolidated statements of income. Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average number of the Company’s shares reflects the dilutive effect that could occur if securities that qualify as participating securities were converted into or exchanged or exercised for TWM LLC’s shares, in the pre-IPO period, and the Class A or Class B common stock, in the post-IPO period, using the treasury stock method, as applicable. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not included in the calculation of basic earnings per share and are not participating securities for purposes of the computation of diluted earnings per share. Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820, Fair Value Measurement prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1: Level 2: Level 3: A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Recent Accounting Pronouncements – Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016‑13, Financial Instruments – Credit Losses . The ASU provides new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This requires a modified retrospective method of adoption. ASU 2016-13 was adopted on January 1, 2020. The adoption of this ASU di d not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other . The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The new guidance does not amend the optional qualitative assessment of goodwill impairment . ASU 2017-04 was adopted on January 1, 2020. The adoption of this ASU did not impact the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations and include additional guidance in order to reduce complexity in accounting for income taxes. ASU 2019-12 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 was early adopted on January 1, 2020 and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize a right-of-use asset and a lease liability for all leases with an initial term in excess of twelve months. The asset reflects the present value of unpaid lease payments coupled with initial direct costs, prepaid lease payments and lease incentives. The amount of the lease liability is calculated as the present value of unpaid lease payments. ASU 2016-02 was adopted on January 1, 2019 using the modified retrospective method of adoption. Upon adoption, the Company: · Recorded right-of-use assets of $31.8 million, · Recorded a lease liability of $39.6 million, · Eliminated deferred rent of $4.9 million, · Eliminated leasehold interests of $2.9 million, · Elected to take the optional package of practical expedients, which allows for no reassessment of i. whether any expired or existing contracts are or contain leases, ii. the lease classification for any expired or existing leases, and iii. initial direct costs for any existing leases. |
Pushdown Accounting
Pushdown Accounting | 12 Months Ended |
Dec. 31, 2019 | |
Pushdown Accounting | |
Pushdown Accounting | 3. Pushdown Accounting The Refinitiv Transaction was accounted for by Refinitiv in accordance with the acquisition method of accounting pursuant to ASC 805, and pushdown accounting was applied to Refinitiv to record the fair value of the assets and liabilities of Refinitiv as of October 1, 2018, the date of the Refinitiv Transaction. The Company, as a consolidating subsidiary of Refinitiv, also accounted for the Refinitiv Transaction using pushdown accounting. Under pushdown accounting, the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company is recorded as goodwill. The fair value of assets acquired and liabilities assumed was determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market for the asset or liability. The adjusted valuations resulted in an increase in depreciation and amortization expense, due to the increased carrying value of the Company’s assets and the related increase in depreciation of tangible assets and amortization of intangible assets, and a decrease in occupancy expense as a result of the recognition of a leasehold interest liability. A fair value of $168.5 million was assigned to software development costs of the Company. The excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company was recorded as goodwill. The allocation applying pushdown accounting as of October 1, 2018 is summarized in the table below (in thousands): Fair Value of the Company's Net Assets $ 4,575,000 Carrying Value of the Company's Net Assets 1,880,203 Goodwill $ 2,694,797 At December 31, 2019 and December 31, 2018, goodwill amounted to $2.7 billion. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 4. Intangible Assets and Goodwill Intangible assets and goodwill relate to the allocation of purchase price associated with the Refinitiv Transaction (see Note 3 – Pushdown Accounting). The following is a summary of intangible assets which have an indefinite useful life at both December 31, 2019 and 2018 (in thousands): Amount Licenses $ 168,800 Tradename 154,300 Total $ 323,100 Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Successor December 31, 2019 December 31, 2018 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships 12 Years $ 928,200 $ (96,687) $ 831,513 $ 928,200 $ (19,338) $ 908,862 Content and data 7 Years 154,400 (27,572) 126,828 154,400 (5,514) 148,886 $ 1,082,600 $ (124,259) $ 958,341 $ 1,082,600 $ (24,852) $ 1,057,748 Amortization expense relating to intangible assets was $99.4 million year ended December 31, 2019. Amortization expense relating to intangible assets for the 2018 Successor Period and the 2018 Predecessor Period was $24.9 million and $19.6 million, respectively. The estimated annual future amortization for existing intangible assets through December 31, 2024 is as follows (in thousands): Amount 2020 $ 99,408 2021 $ 99,408 2022 $ 99,408 2023 $ 99,408 2024 $ 99,408 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 5. Leases Effective January 1, 2019, the Company adopted ASC 842, Leases . This standard requires the Company to recognize a right-of-use asset and a lease liability for all leases with an initial term in excess of twelve months. The Company includes the term covered by an option to extend a lease when the option is reasonably certain to be exercised. The asset reflects the present value of unpaid lease payments coupled with initial direct costs, prepaid lease payments and lease incentives. The amount of the lease liability is calculated as the present value of unpaid lease payments. The Company adopted ASC 842 using a modified retrospective approach and did not restate comparative periods. The Company elected to take the package of practical expedients allowing the Company to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. The Company has elected to account for nonlease components in a contract as part of the single lease component to which they are related. Significant assumptions and judgements in calculating the right-of-use assets and lease liability include the determination of the applicable borrowing rate for each lease. On January 1, 2019, upon the adoption of ASC 842, the Company recorded, for office space and data center leases in the U.S. and U.K., right-of-use assets of $31.8 million, lease liabilities of $39.6 million and eliminated deferred rent of $4.9 million and leasehold interests of $2.9 million. The leases have initial lease terms ranging from three to 11 years. Activity related to the Company's leases for the year ended December 31, 2019 is as follows (in thousands): Year Ended December 31, 2019 Operating lease expense $ 10,265 Cash for amounts included in the measurement of operating liability $ 11,667 Right-of-use assets obtained in exchange for operating liabilities $ — At December 31, 2019, the weighted average borrowing rate and weighted average lease term are as follows: Amount Weighted average borrowing rate 2.9 % Weighted average remaining lease term (years) 5.9 The following table presents the maturity of lease liabilities as of December 31, 2019 (in thousands): Amount 2020 $ 8,516 2021 5,946 2022 4,143 2023 3,956 2024 3,558 Thereafter 7,633 Total future lease payments 33,752 Less imputed interest (2,797) Lease liability $ 30,955 At December 31, 2019, the future minimum lease payments were as follows (in thousands): Amount 2020 $ 8,516 2021 5,946 2022 4,143 2023 3,956 2024 3,558 Thereafter 7,633 Total $ 33,752 At December 31, 2018, the future minimum lease payments were as follows (in thousands): Amount 2019 $ 11,393 2020 7,580 2021 5,317 2022 4,051 2023 3,877 Thereafter 11,156 Total $ 43,374 Rent expense amounted to $2.7 million, $9.0 million and $11.8 million for the 2018 Successor Period, the 2018 Predecessor Period and the year ended December 31, 2017, respectively. One U.S. lease is secured by a letter of credit in the amount of $1.2 million, which is guaranteed by Refinitiv. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2019 | |
Restricted Cash | |
Restricted Cash | 6. Restricted Cash Cash has been segregated in a special reserve bank account for the benefit of brokers and dealers under SEC Rule 15c3-3. The Company computes the proprietary accounts of other broker-dealers (“PAB”) reserve, which requires the Company to maintain minimum segregated cash in the amount of total credits per the reserve computation. As of December 31, 2019 and December 31, 2018, cash in the amount of $1.0 million and $1.2 million, respectively, has been segregated in the PAB reserve account exceeding the requirements pursuant to SEC Rule 15c3-3. |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Revenue | |
Deferred Revenue | 7. Deferred Revenue The Company records deferred revenue when cash payments are received or due in advance of services to be performed. The recognized revenue and remaining balance is shown below (in thousands): Amount Deferred revenue balance - December 31, 2018 $ 27,883 New billings 106,153 Revenue recognized (110,046) Deferred revenue balance - December 31, 2019 $ 23,990 |
Software Development Cost
Software Development Cost | 12 Months Ended |
Dec. 31, 2019 | |
Software Development Cost | |
Software Development Cost | 8. Software Development Costs The components of Software development costs, net of accumulated amortization are as follows (in thousands): Successor Successor December 31, December 31, 2019 2018 Software development costs $ 204,336 $ 175,656 Accumulated amortization (31,250) (5,074) Software development costs, net of accumulated amortization $ 173,086 $ 170,582 Capitalized software development costs and amortization expense are as follows (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 January 1, 2018 Year Ended December 31, to to December 31, 2019 December 31, 2018 September 30, 2018 2017 Software development costs capitalized $ 28,681 $ 7,156 $ 19,523 $ 27,157 Amortization expense related to capitalized software development costs $ 26,176 $ 5,074 $ 19,962 $ 25,420 Non-capitalized software costs and routine maintenance costs are expensed as incurred and are included in employee compensation and benefits and professional fees on the consolidated statements of income. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 9. Income Taxes For the year ended December 31, 2019, total income before the provision for income taxes amounted to $225.3 million, consisting of $207.7 million in the United States and $17.6 million in foreign locations. The provision for income taxes consists of the following (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Current: Federal $ 21,373 $ — $ — $ — State and Local 11,537 1,235 5,739 4,331 Foreign 4,368 1,212 3,559 2,748 Total current tax expense 37,278 2,447 9,298 7,079 Deferred: Federal (88) 680 1,085 (433) State and local 18,194 288 1,517 (517) Foreign (3,082) — — — Total deferred tax expense 15,024 968 2,602 (950) Total provision for income taxes $ 52,302 $ 3,415 $ 11,900 $ 6,129 A reconciliation of the statutory tax rate to the effective rate is as follows: Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % 35.0 % State and local income taxes, net of federal income tax benefit 3.9 4.7 5.1 2.8 Foreign tax rate differential (1.1) 3.7 2.5 3.1 Tax Cuts and Jobs Act provisional tax charge — — — 2.2 LLC flow-through structure — (19.0) (20.2) (36.3) Non-controlling interest (7.2) — — — Tax Receivable Agreement adjustment (3.1) — — — Rate change 10.2 — — — Other (0.5) — — — Effective income tax rate 23.2 % 10.4 % 8.4 % 6.8 % The Company’s consolidated effective tax rate for the year ended December 31, 2019 was 23.2% as compared to 10.4% in the 2018 Successor Period and 8.4% in the 2018 Predecessor Period. The effective tax rate increased from prior periods due to the Reorganization Transactions. Prior to the Reorganization Transactions, income taxes consisted only of business taxes incurred by TWM LLC and certain subsidiaries for business conducted in certain state, local and foreign jurisdictions as well as federal, state and local taxes for certain subsidiaries that are taxed as corporations for U.S. tax purposes. As a result of the Reorganization Transactions, the Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. The Company’s actual effective tax rate will be impacted by the Corporation’s ownership share of TWM LLC, which is expected to continue to increase over time as Continuing LLC Owners redeem or exchange their LLC Interests for shares of Class A common stock or Class B common stock, as applicable, or the Corporation purchases LLC Interests from Continuing LLC Owners. In addition to the Reorganization Transactions, the tax impact of state apportionment rate changes on total tax expense as a result of the reduction of the Company’s net deferred asset was 10.2% in 2019 due to the reduction of the Company’s net deferred tax asset. The Company's consolidated effective tax rate will vary from period to period depending on changes in the mix of earnings, tax legislation and tax rates in various jurisdictions. The components of the Company’s net deferred tax asset (liability) are as follows (in thousands): Successor Successor Year Ended Year Ended December 31, December 31, 2019 2018 Deferred tax assets: Investment in partnership $ 226,241 $ — Net operating losses 1,753 6,810 Tax Receivable Agreement - Interest 10,395 — Employee compensation 9,888 — Tax credits 8,342 — Other 4,088 2,362 Deferred tax assets, gross 260,707 9,172 Valuation Allowance — — Total deferred tax assets, net 260,707 9,172 Deferred tax liabilities Goodwill and Intangibles (25,829) (28,799) Total deferred tax liabilities (25,829) (28,799) Total net deferred tax asset (liability) $ 234,878 $ (19,627) The Company expects to obtain an increase in its share of the tax basis of the assets of TWM LLC when LLC Interests are redeemed or exchanged by the Continuing LLC Owners and in connection with certain other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that the Corporation would otherwise pay in the future to various tax authorities. Pursuant to the Tax Receivable Agreement, the Corporation is required to make cash payments to the Continuing LLC Owners equal to 50% of the amount of U.S. federal, state and local income or franchise tax savings, if any, that the Corporation actually realizes (or in some circumstances are deemed to realize) as a result of certain future tax benefits to which we may become entitled. The Corporation expects to benefit from the remaining 50% of tax benefits, if any, that the Corporation may actually realize. See Note 10 – Tax Receivable Agreement. As a result of the Reorganization Transactions, the IPO, the October 2019 follow-on offering and LLC Interest ownership changes during the year ended December 31, 2019, the Company assumed a deferred tax benefit of $269.6 million, primarily due to an increase in amortizable tax basis that will be amortized primarily over 15 years pursuant to Section 197 of the Internal Revenue Code of 1986, as amended, offset by other factors. The tax benefit has been recognized in deferred tax asset on the December 31, 2019 consolidated statement of financial condition. As of December 31, 2019, the Company had New York State and New York City net operating loss carryforwards for income tax purposes of $15.7 million and $13.9 million, respectively. If not utilized, the state and local net operating loss carryforwards will begin to expire in 2035. The components of the Company’s uncertain tax positions are as follows (in thousands): Successor December 31, 2019 Gross unrecognized tax benefits as of January 1 $ 3,348 Increase in current year tax positions 2,162 Increase in prior year tax positions — Acquired tax positions 1,789 Settlements (787) Gross unrecognized tax benefits as of December 31 $ 6,512 The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The total amount of interest and penalties accrued as of December 31, 2019 are $2.3 million and $0.5 million, respectively. In 2019, TWM LLC settled its audits with the City of New York related to New York City Unincorporated Business Tax for years 2009 – 2011. Through the settlement, the Company reduced its uncertain tax positions by $0.8 million. TWM LLC is still under audit by the City of New York for the tax years 2012 – 2014. As a result of the Refinitiv Contribution, the Company assumed the tax liabilities of the contributed entity. The contributed entity is under audit by the State of New Jersey for the tax years 2012 - 2015 and is appealing a tax assessment from an audit by the State of New Jersey for the tax years 2008 - 2011. At December 31, 2019, the tax liability, interest and penalties related to the Refinitiv Contribution is $2.7 million and is included within accounts payable, accrued expenses and other liabilities on the consolidated statement of financial condition. The Company is indemnified by Refinitiv for tax liabilities that were assumed by the Company as a result of the Refinitiv Contribution. An indemnification asset has been recorded for this item. See Note 14 – Related Party Transactions. The above tax positions were recognized using the best estimate of the amount expected to be paid based on available information and assessment of all relevant factors. Due to the uncertainty associated with tax audits, it is possible that at some future date liabilities resulting from these audit could vary significantly from these positions. Nevertheless, based on currently enacted legislation and information currently known to us, the Company believes that the ultimate resolution of these audits will not have a material adverse impact on the Company’s financial condition taken as a whole. |
Tax Receivable Agreement
Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2019 | |
Tax Receivable Agreement | |
Tax Receivable Agreement | 10. Tax Receivable Agreement In connection with the Reorganization Transactions, the Corporation entered into the Tax Receivable Agreement with TWM LLC and the Continuing LLC Owners, which provides for the payment by the Corporation to a Continuing LLC Owner of 50% of the amount of U.S. federal, state and local income or franchise tax savings, if any, that the Corporation actually realizes (or in some circumstances is deemed to realize) as a result of (i) increases in the tax basis of TWM LLC’s assets resulting from (a) the purchase of LLC Interests from such Continuing LLC Owner, including with the net proceeds from the IPO, the October 2019 follow-on offering and any future offering or (b) redemptions or exchanges by such Continuing LLC Owner of LLC Interests for shares of Class A common stock or Class B common stock or for cash, as applicable, and (ii) certain other tax benefits related to the Corporation making payments under the Tax Receivable Agreement. Payments under the Tax Receivable Agreement are made annually based on the actual tax savings realized by the Corporation in its previous tax year. In connection with the IPO, the Company recorded an initial liability of $171.4 million related to its projected obligations under the Tax Receivable Agreement with respect to LLC Interests that were purchased by the Corporation using the net proceeds of the IPO. During 2019, the liability increased to $240.8 million primarily due to the purchase of LLC Interests by the Corporation using the net proceeds of the October 2019 follow-on offering as well as additional exchanges of LLC Interests by Continuing LLC Owners during the year ended December 31, 2019 partially offset by changes in tax rates. The Corporation accounts for the income tax effects resulting from taxable redemptions or exchanges of LLC Interests by the Continuing LLC Owners for shares of Class A common stock or Class B common stock or cash, as the case may be, and purchases by the Corporation of LLC Interests from the Continuing LLC Owners by recognizing an increase in deferred tax assets, based on enacted tax rates at the date of each redemption, exchange or purchase, as the case may be. Further, the Corporation evaluates the likelihood that it will realize the benefit represented by the deferred tax asset, and, to the extent that the Corporation estimates that it is more likely than not that it will not realize the benefit, it reduces the carrying amount of the deferred tax asset with a valuation allowance. The impact of any changes in the projected obligations under the Tax Receivable Agreement as a result of changes in the mix of the Company’s earnings, tax legislation and tax rates in various jurisdictions, or other factors that may impact the Corporation’s tax savings, are reflected in income before taxes on the consolidated statement of income in the period in which the change occurs. During the year ended December 31, 2019, the Company recognized a Tax Receivable Agreement liability adjustment of $33.1 million in the consolidated statement of income. |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholder's Equity | |
Stockholders’ Equity | 11. Stockholders’ Equity Initial Public Offering and Reorganization Transactions As described in Note 1 – Organization, in April 2019, the Corporation completed its IPO of 46,000,000 shares of Class A common stock at a public offering price of $27.00, which included 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1.2 billion in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase LLC Interests from certain of the Bank Stockholders (and the corresponding shares of common stock were cancelled as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. In connection with the IPO, the Reorganization Transactions described below were completed. Amendment and Restatement of Certificate of Incorporation On April 3, 2019, the certificate of incorporation of Tradeweb Markets Inc. was amended and restated to, among other things, provide for the authorization of (i) 250,000,000 shares of preferred stock with a par value of $0.00001 per share (ii) 1,000,000,000 shares of Class A common stock with a par value of $0.00001 per share; (iii) 450,000,000 shares of Class B common stock with a par value of $0.00001 per share; (iv) 350,000,000 shares of Class C common stock with a par value of $0.00001 per share; and (v) 300,000,000 shares of Class D common stock with a par value of $0.00001 per share. Each share of Class A common stock and Class C common stock entitles its holder to one vote on all matters presented to the Corporation’s stockholders generally. Each share of Class B common stock and Class D common stock entitles its holder to ten votes on all matters presented to the Corporation’s stockholders generally. The holders of Class C common stock and Class D common stock have no economic interests in the Corporation (where “economic interests” means the right to receive any dividends or distributions, whether cash or stock, in connection with common stock). These attributes are summarized in the following table: Class of Par Votes Economic Class A common stock $ 1 Yes Class B common stock $ 10 Yes Class C common stock $ 1 No Class D common stock $ 10 No Holders of outstanding shares of Class A common stock, Class B common stock, Class C common stock and Class D common stock will vote together as a single class on all matters presented to the Corporation’s stockholders for their vote or approval, except as otherwise required by applicable law. Holders of Class B common stock may from time to time exchange all or a portion of their shares of Class B common stock for newly issued shares of Class A common stock on a one-for-one basis (in which case their shares of Class B common stock will be cancelled on a one-for-one basis upon any such issuance). Continuing LLC Owners that hold shares of Class D common stock may from time to time exchange all or a portion of their shares of Class D common stock for newly issued shares of Class C common stock on a one-for-one basis (in which case their shares of Class D common stock will be cancelled on a one-for-one basis upon such issuance). In addition, with respect to each Bank Stockholder that holds shares of Class D common stock, immediately prior to the occurrence of any event that would cause the combined voting power held by such Bank Stockholder to exceed 4.9%, the minimum number of shares of Class D common stock of such Bank Stockholder that would need to convert into shares of Class C common stock such that the combined voting power held by such Bank Stockholder would not exceed 4.9% will automatically convert into shares of Class C common stock. Each share of Class B common stock will automatically convert into one share of Class A common stock and each share of Class D common stock will automatically convert into one share of Class C common stock (i) immediately prior to any sale or other transfer of such share by a holder or its permitted transferees to a non-permitted transferee or (ii) once the Refinitiv Owners and their affiliates together no longer beneficially own a number of shares of common stock and LLC Interests that together entitle them to at least 10% of TWM LLC’s economic interest. Holders of LLC Interests that receive shares of Class C common stock upon any such conversion may continue to elect to have their LLC Interests redeemed for newly issued shares of Class A common stock as described below (in which case their shares of Class C common stock will be cancelled on a one-for-one basis upon such issuance). In addition, the Corporation’s board of directors adopted the Omnibus Equity Plan, under which equity awards may be made in respect of shares of Class A common stock. It also assumed sponsorship of the Option Plan and a PRSU plan formerly sponsored by TWM LLC. See Note 13 – Stock-Based Compensation Plans. Recapitalization of Tradeweb Markets LLC On April 4, 2019, the TWM LLC Agreement was amended and restated to, among other things, (i) provide for the LLC Interests, (ii) exchange all of the then existing membership interests in TWM LLC for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. All of the shares of TWM LLC outstanding prior to the Reorganization Transactions were exchanged for 222,222,197 LLC Interests. TWM LLC’s outstanding shares prior to the Reorganization Transactions consisted of the following classes of shares: Shares Class A 146,333 Class C 447 Class P (A) 6,887 Class P (C) 2 Class P-1(A) 6,094 Class P-1 (C) 232 The TWM LLC Agreement requires that TWM LLC at all times maintain (i) a one-to-one ratio between the number of shares of Class A common stock and Class B common stock issued by the Corporation and the number of LLC Interests owned by the Corporation and (ii) a one-to-one ratio between the number of shares of Class C common stock and Class D common stock issued by the Corporation and the number of LLC Interests owned by the holders of such Class C common stock and Class D common stock. LLC Interests held by Continuing LLC Owners are redeemable in accordance with the TWM LLC Agreement, at the election of such holders, for newly issued shares of Class A common stock or Class B common stock, as the case may be, on a one-for-one basis (and such holders’ shares of Class C common stock or Class D common stock, as the case may be, will be cancelled on a one-for-one basis upon any such issuance). In the event of such election by a Continuing LLC Owner, the Corporation may, at its option, effect a direct exchange of Class A common stock or Class B common stock for such LLC Interests of such Continuing LLC Owner in lieu of such redemption. In addition, the Corporation’s board of directors may, at its option, instead of the foregoing redemptions or exchanges of LLC Interests, cause the Corporation to make a cash payment equal to the volume weighted average market price of one share of Class A common stock for each LLC Interest redeemed or exchanged (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the TWM LLC Agreement. Issuance and Cancellation of Common Stock · As a result of the Refinitiv Contribution, the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Original LLC Owners that received LLC Interests on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (the Corporation subsequently cancelled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). Following the completion of the Reorganization Transactions, including the IPO and the application of the proceeds therefrom as described above, (i) the investors in the IPO collectively owned 46,000,000 shares of Class A common, representing 2.7% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 20.7% of the economic interest in TWM LLC; (ii) the Refinitiv Direct Owner owned 96,933,192 shares of Class B common stock, representing 56.4% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 43.6% of the economic interest in TWM LLC; (iii) the Refinitiv LLC Owner owned 22,988,329 shares of Class D common stock, representing 13.4% of the combined voting power of all of the Corporation’s common stock, and 22,988,329 LLC Interests, representing 10.3% of the economic interest in TWM LLC, (iv) the Continuing LLC Owners (other than the Refinitiv LLC Owner) collectively owned 10,006,269 shares of Class C common stock and 46,294,407 shares of Class D common stock, representing 27.5% of the combined voting power of all of the Corporation’s common stock, and 56,300,676 LLC Interests, representing 25.3% of the economic interest in TWM LLC; and (v) the Corporation owned 142,933,192 LLC Interests, representing 64.3% of the economic interest in TWM LLC. October 2019 Follow-On Offering In the fourth quarter of 2019, Tradeweb Markets Inc. completed an underwritten follow-on offering of 19,881,059 shares of Class A Common stock at a public offering price of $42.00 per share, which included 2,593,181 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. Tradeweb Markets Inc. received net proceeds of $810.0 million, after deducting underwriting discounts and commissions but before deducting estimated offering expenses, which were used to purchase (i) 19,835,666 issued and outstanding LLC Interests from certain of the Bank Stockholders and certain of our executive officers (and the corresponding shares of Class C common stock and/or Class D common stock held by such holders were cancelled) and (ii) 45,393 issued and outstanding shares of Class A common stock from certain of our executive officers (which shares of Class A common stock were cancelled), at a purchase price per interest and share equal to the public offering price of $42.00, less the underwriting discounts and commissions payable thereon. Redemptions and Exchanges of LLC Interests In addition to the IPO and the October 2019 follow-on offering transactions described above, during the year ended December 31, 2019, certain Continuing LLC Owners exercised their redemption rights under the TWM LLC Agreement, pursuant to which 271,184 LLC Interests were exchanged for 271,184 newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, 271,184 shares of Class D common stock were surrendered by these Continuing LLC Owners and cancelled. Additionally, in connection with these exchanges, Tradeweb Markets Inc. received 271,184 LLC Interests, increasing its total ownership interest in TWM LLC. As a result of the Reorganization Transactions, the IPO, the October 2019 follow-on offering and other exchanges and equity activity, as of December 31, 2019: · The public investors collectively owned 66,408,328 shares of our Class A common stock, representing 4.3% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock and indirectly, through Tradeweb Markets Inc., owned 29.8% of the economic interest in TWM LLC; · Refinitiv collectively owned 96,933,192 shares of our Class B common stock and 22,988,329 shares of our Class D common stock, representing 77.2% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock and directly and indirectly, through Tradeweb Markets Inc., owned 53.9% of the economic interest in TWM LLC; and · The Bank Stockholders that continue to own LLC Interests collectively owned 8,328,983 shares of our Class C common stock and 27,662,354 shares of our Class D common stock, representing 18.4% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock and directly and indirectly, through Tradeweb Markets Inc., owned 16.2% of the economic interest in TWM LLC. |
Non-Controlling Interests
Non-Controlling Interests | 12 Months Ended |
Dec. 31, 2019 | |
Non-Controlling Interests | |
Non-Controlling Interests | 12. Non-Controlling Interests In connection with the Reorganization Transactions, Tradeweb Markets Inc. became the sole manager of TWM LLC and, as a result of this control, and because Tradeweb Markets Inc. has a substantial financial interest in TWM LLC, consolidates the financial results of TWM LLC into its consolidated financial statements. The non-controlling interests balance reported on the consolidated statements of financial condition represents the economic interests of TWM LLC held by the holders of LLC Interests other than Tradeweb Markets Inc. Income or loss is attributed to the non-controlling interests based on the relative ownership percentages of LLC Interests held during the period by Tradeweb Markets Inc. and the other holders of LLC Interests. The following table summarizes the ownership interest in Tradeweb Markets LLC: December 31, 2019 LLC Ownership Interests % Number of LLC Interests held by Tradeweb Markets Inc. 163,341,520 Number of LLC Interests held by non-controlling interests 59,182,155 Total LLC Interests outstanding 222,523,675 LLC Interests held by the Continuing LLC Owners are redeemable in accordance with the TWM LLC Agreement at the election of the members for shares of Class A common stock or Class B common stock, on a one-for-one basis or, at the Company's option, a cash payment in accordance with the terms of the TWM LLC Agreement. See Note 11 – Stockholders’ Equity. The following table summarizes the impact on equity due to changes in the Corporation’s ownership interest in TWM LLC (in thousands): Successor Year Ended December 31, Net Income Attributable to Tradeweb Markets Inc. and Transfers (to) from the Non-Controlling Interests 2019 Net income attributable to Tradeweb Markets Inc. $ 83,769 Transfers (to) from non-controlling interests: Allocation of equity to non-controlling interests arising from the reorganization transactions and IPO (1,607,529) Change in non-controlling interests as a result of the October 2019 follow-on offering and other ownership changes 402,227 Net transfers (to) from non-controlling interests (1,205,302) Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interests $ (1,121,533) |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | 13. Stock-Based Compensation Plans Under the Omnibus Equity Plan, the Company is authorized to issue up to 8,841,864 new shares of Class A common stock to employees, officers and non-employee directors. Under this plan, the Company may grant awards in respect of shares of Class A common stock, including performance-based restricted share units (“PRSUs”), stock options, restricted stock units (“RSUs”) and dividend equivalent rights. The awards may have performance-based and time-based vesting conditions. Stock options have a maximum contractual term of 10 years. PRSUs (Equity-Settled) PRSUs are promises to issue actual shares of Class A common stock at the end of a three-year cliff vesting period. The fair value of the equity-settled PRSUs is calculated on the grant date using the stock price of the Class A common stock. The number of shares a participant will receive upon vesting is determined by a performance modifier, which is adjusted as a result of the financial performance of the Company in the grant year. The performance modifier can vary between 0% (minimum) and 200% (maximum) of the target (100%) award amount. On December 31, 2018, certain PRSUs, which were previously cash-settled, were converted to equity-settled PRSUs. No equity-settled PRSUs were granted by the Company prior to December 31, 2018. The conversion was at fair value, using a unit price consistent with the share price of the Company, and as a result of the impact of the performance modifier on PRSUs value, 1,033.2 cash-settled PRSUs were converted into the equivalent value of 2,000,384 equity-settled PRSUs, adjusted retroactively for the recapitalization of TWM LLC described in Note 11 – Stockholders’ Equity, having vesting terms similar to the cash-settled PRSUs. As a result of the modification, which impacted 54 employees, the Company reclassified $19.1 million from employee equity compensation payable to members’ capital in the December 31, 2018 statement of financial condition. A summary of the Company’s outstanding equity-settled PRSUs is presented below: Weighted Average Equity-Settled Grant-Date PRSUs Fair Value Equity-settled PRSUs outstanding at December 31, 2018 2,000,384 $ 9.53 Grants 781,026 $ 21.08 Vests — $ — Performance adjustment 762,326 $ 21.08 Forfeitures (53,070) $ 13.48 Equity-settled PRSUs outstanding at December 31, 2019 3,490,666 $ 14.59 The following table shows a summary of equity-settled PRSU activity during the year ended December 31, 2019 (in thousands): Successor Year Ended December 31, 2019 Equity-settled PRSU compensation expense $ 25,392 Income tax benefit $ (4,781) PRSUs (Cash-Settled) The Company previously granted cash-settled PRSUs, some of which are still outstanding and are accounted for as liability awards. The Company measures the cost of employee services received in exchange for the award based on the fair value of the Company and the value of accumulated dividend rights associated with each award. The fair value of that award is remeasured subsequently at each reporting date through to settlement. Changes in the award's fair value during the requisite service period are recognized as compensation cost over that period. A summary of the Company’s outstanding cash-settled PRSUs is presented below: Weighted Cash-Settled Average PRSUs Fair Value Cash-settled PRSUs outstanding at December 31, 2018 522 $ 34,221 Grants — $ — Vests (1) (507) $ 33,842 Forfeitures — $ — Cash-settled PRSUs outstanding at December 31, 2019 15 $ 94,997 (1) The total fair value of cash-settled PRSUs vested was $17.2 million for the year ended December 31, 2019. Options Prior to the IPO, the Company awarded options to management and other employees under the Option Plan. Each option award vests one half based solely on the passage of time and one half only if the Company achieves certain performance targets. The time vesting portion of the options has a four-year graded vesting schedule, with accelerated vesting for time-based options with vesting dates of January 1, 2021 and 2022 upon the completion of an initial public offering. The Company can elect to net-settle exercised options by reducing the shares of Class A common stock to be issued upon such exercise by the number of shares of Class A common stock having a fair market value on the date of exercise equal to the aggregate option price and withholding taxes payable in respect of the number of options exercised. The Company can also elect, upon exercise, to reduce the shares to be issued by the number of shares having a fair market value on the date of exercise equal to employee payroll taxes. The Company may then pay these employee payroll taxes from the Company’s cash. In accounting for options issued under the Option Plan, or which may be issued under the Omnibus Equity Plan in the future, the Company measures and recognizes compensation expense for all awards based on their estimated fair values measured as of the grant date. Options issued under the Option Plan are exercisable following the closing of an initial public offering or during a 15‑day period following a change in control of the Company (and certain other sales of equity by the Company’s shareholders). Costs related to options are recognized as an expense in the consolidated statements of income over the requisite service period, when exercisability is considered probable, with an offsetting increase to additional paid-in capital. As a result, expense recognition commenced upon the completion of the IPO, with $18.9 million recognized as compensation expense related to options issued under the Option Plan immediately upon the completion of the IPO. The fair value of options is calculated on the grant date using the Black-Scholes model. The significant assumptions used to estimate the fair value as of grant date of the options awarded prior to the IPO did not reflect changes that would have occurred to these assumptions as a result of the IPO. A summary of the Company’s outstanding options is presented below: Weighted Average Grant-Date Options Fair Value Options outstanding at December 31, 2018 18,091,793 $ 1.85 Grants 886,115 $ 8.83 Exercises (984,585) $ 1.80 Forfeitures and adjustments (253,579) $ 2.67 Options outstanding at December 31, 2019 17,739,744 $ 2.19 Vested options outstanding at December 31, 2019 $ The total intrinsic value of options exercised in 2019 was $21.3 million. At December 31, 2018, no options were vested or exercisable. The following table shows a summary options activity during the year ended December 31, 2019 (in thousands): Successor Year Ended December 31, 2019 Options compensation expense $ 24,432 Income tax benefit $ (8,556) The significant assumptions used to estimate the fair value of the options as of the grant date were as follows: Weighted Average Expected Life (years) 5.7 Weighted Average Risk-Free Interest Rate 2.9 % Weighted Average Expected Volatility 20.0 % Weighted Average Expected Dividend Yield 3.9 % Weighted Average Share Price $ 21.62 Weighted Average Exercise Price $ 21.62 Compensation Expense The Company records stock-based compensation expense for employees and directors in the consolidated statements of income. The total stock-based compensation expense for the year ended December 31, 2019, the 2018 Successor Period, the 2018 Predecessor Period and the year ended December 31, 2017 is $50.7 million, $9.4 million, $15.9 million and $26.1 million, respectively. As of December 31, 2019, total unrecognized compensation expense related to unvested stock-based compensation arrangements and the expected recognition period are as follows (dollars in thousands): Cash-Settled Equity-Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 383 $ 31,283 $ 4,068 Weighted-average recognition period 1.0 years 1.7 years 2.8 years |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | 14. Related Party Transactions The Company enters into transactions with its affiliates from time to time which are considered to be related party transactions. Prior to the Reorganization Transactions, the Bank Stockholders were collectively considered to be related parties of the Company. As a result of the Reorganization Transactions, they are no longer considered to be related parties. As a result, the related party transactions listed below include transactions with the Bank Stockholders or their respective affiliates for pre-IPO periods only. At December 31, 2019 and 2018, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Successor December 31, 2019 December 31, 2018 Cash and cash equivalents $ — $ 283,790 Receivables from brokers and dealers and clearing organizations — 3,332 Deposits with clearing organizations — 500 Accounts receivable — 40,730 Receivable from affiliates 2,525 3,243 Other assets — 9 Payable to brokers and dealers and clearing organizations — 2,404 Deferred revenue 4,733 9,151 Payable to affiliates 1,506 5,009 The following balances with such affiliates were included in the consolidated statements of income in the following line items (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 January 1, 2018 Year Ended December 31, to to December 31, 2019 December 31, 2018 September 30, 2018 2017 Revenue: Transaction fees (1) $ 59,643 $ 59,259 $ 159,663 $ 151,695 Subscription fees (1) 5,670 5,718 16,627 37,426 Commissions (1) 16,186 12,401 34,944 43,315 Refinitiv market data fees (2) 55,635 13,467 36,851 50,125 Operating Income: (3) Net interest income (expense) 858 17 (415) Shared Services Fees (4) : Technology and communications 2,960 740 2,220 2,960 General and administrative 430 180 539 719 Occupancy 481 155 466 621 (1) For pre-IPO periods, represents fees and commissions from affiliates of the Bank Stockholders. (2) The Company maintains a market data license agreement with Refinitiv (TR in the predecessor period). Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees and royalties for these feeds. (3) For pre-IPO periods, represents interest income from money market funds invested with and savings accounts deposited with affiliates of the Bank Stockholders. (4) The Company maintains a shared services agreement with Refinitiv (TR in the predecessor period). Under the terms of the agreement, Refinitiv provides the Company with certain real estate, payroll, benefits administration, insurance, content, financial reporting and tax support. The Company reimburses affiliates of Refinitiv (TR in the predecessor period) for expenses paid on behalf of the Company for various services including salaries and bonuses, marketing, professional fees, communications, data costs and certain other administrative services. For the year ended December 31, 2019, the 2018 Successor Period, the 2018 Predecessor Period and the year ended December 31, 2017, the Company reimbursed such affiliates approximately $6.7 million, $3.8 million, $28.7 million, and $38.4 million, respectively, for these expenses. The Company is indemnified by Refinitiv for any tax liabilities that existed in the entity contributed by Refinitiv as a result of the Refinitiv Contribution. $2.7 million is included in other assets on the December 31, 2019 consolidated statement of financial condition related to this indemnification. The Company engaged Blackstone Advisory Partners L.P., an affiliate of Blackstone, to provide certain financial consulting services in connection with the IPO and the October 2019 follow-on offering for a fee of $1.0 million and $0.5 million, respectively, which fee, with respect to the October 2019 follow-on offering, was reimbursed by the underwriters. $1.5 million is included in additional paid-in capital on the December 31, 2019 consolidated statement of financial condition related to these offering costs. During 2014, the Company issued Class A Shares and unvested Class P-1(A) Shares to some of the Bank Stockholders as a result of a $120.0 million capital contribution. In connection with this investment, employees invested $5.3 million in the Company and were issued Class C Shares and unvested Class P-1(C) Shares. Certain Class P-1(A) Shares and Class P-1(C) Shares vested on July 31, 2018, based on a formula determined by the Company’s new credit platforms’ revenues and any remaining unvested Class P-1(A) Shares and Class P-1(C) Shares were cancelled and as a result no contingent consideration has been recognized related to these shares subsequent to that date. The Company recognized contingent consideration for the 2018 Predecessor Period and for the year ended December 31, 2017 of $26.8 million and $58.5 million, respectively, relating to these shares, which is included in net revenue on the consolidated statements of income. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 15. Fair Value of Financial Instruments Certain financial instruments that are carried on the consolidated statements of financial condition are carried at amounts that approximate fair value. These instruments include receivable from/payable to brokers and dealers and clearing organizations, deposits with clearing organizations and accounts receivable. The Company's money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The Company has no instruments that are classified within level 2 or level 3 of the fair value hierarchy. The fair value measurements are as follows (in thousands): Quoted Prices in active Markets Significant Significant for Identical Observable Unobservable Assets Inputs Inputs Successor (Level 1) (Level 2) (Level 3) Total As of December 31, 2019 Assets Money market funds $ 219,158 $ — $ — $ 219,158 $ 219,158 $ — $ — $ 219,158 As of December 31, 2018 Assets Money market funds $ 127,927 $ — $ — $ 127,927 $ 127,927 $ — $ — $ 127,927 |
Credit Risk
Credit Risk | 12 Months Ended |
Dec. 31, 2019 | |
Credit Risk | |
Credit Risk | 16. Credit Risk The Company may be exposed to credit risk regarding its receivables, which are primarily receivables from financial institutions, including investment managers and broker-dealers. At December 31, 2019 and December 31, 2018, the Company established an allowance for doubtful accounts of $0.2 million and $1.2 million, respectively, with regard to these receivables. In the normal course of business the Company, as agent, executes transactions with, and on behalf of, other broker-dealers. If the agency transactions do not settle because of failure to perform by either counterparty, the Company may be obligated to discharge the obligation of the non-performing party and, as a result, may incur a loss if the market value of the security is different from the contract amount of the transaction. A substantial number of the Company's transactions are collateralized and executed with, and on behalf of, a limited number of broker-dealers. The Company's exposure to credit risk associated with the nonperformance of these clients in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which may impair the clients' ability to satisfy their obligations to the Company. From time to time, the Company enters into agreements to repurchase to facilitate the clearance of securities. Credit exposure related to these agreements to repurchase, including the risk related to a decline in market value of collateral (pledged or received), is managed by entering into agreements to repurchase with overnight or short-term maturity dates and only entering into repurchase transactions with netting members of the Fixed Income Clearing Corporation (“FICC”). The FICC requires dealer netting members to maintain a minimum of $25 million in equity capital and $10 million in excess net capital. The FICC operates a continuous net settlement system, whereby as trades are submitted and compared the FICC becomes the counterparty. The FICC also marks to market collateral on a daily basis, requiring member firms to pay or receive margin amounts as part of their daily funds settlement. The Company does not expect nonperformance by counterparties in the above situations. However, the Company's policy is to monitor its market exposure and counterparty risk. In addition, the Company has a policy of reviewing, as considered necessary, the credit standing of each counterparty with which it conducts business. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 17. Commitments and Contingencies In the normal course of business, the Company enters into user agreements with its dealers which provide the dealers with indemnification from third parties in the event that the electronic marketplaces of the Company infringe upon the intellectual property or other proprietary right of a third party. The Company's exposure under these user agreements is unknown as this would involve estimating future claims against the Company which have not yet occurred. However, based on its experience, the Company expects the risk of a material loss to be remote. The Company has been named as a defendant, along with other financial institutions, in antitrust class actions (consolidated into two actions) relating to trading practices in United States Treasury securities auctions. The Company has filed a motion to dismiss the actions, believes it has substantial defenses to the other plaintiff's claims and intends to defend itself vigorously. Additionally, the Company was dismissed from a class action relating to an interest rate swaps matter in 2017, but that matter continues against the remaining defendant financial institutions. The Company is a co-defendant in a matter relating to the distribution of financial strength ratings over the Company's trading platform to one of its customers. The matter alleges that while certain business units of the client were licensed to receive the data via the Company's platform, the data was also distributed without authorization to certain end clients of the customer. The plaintiff claims to have suffered approximately $80 million in damages and also seeks punitive damages, attorneys' fees and costs. In September 2019, the Court dismissed some, but not all, of plaintiff’s claims, and rejected plaintiff’s damages theory on which it relied to support its claims for approximately $80 million in damages for its breach of contract claim. The defendants are still challenging with pre-trial motions whether the plaintiff’s $80 million damage theory is viable with respect to its tort claims, and the plaintiff has in parallel offered an alternative theory quantifying its damages at $4 million to $8 million, which it will pursue if the $80 million theory is disallowed. The matter is now scheduled for trial in October 2020 with respect to the tort claims that survived. The Company intends to continue to vigorously defend what the Company believes to be meritless claims. The Company records its best estimate of a loss, including estimated defense costs, when the loss is considered probable and the amount of such loss can be reasonably estimated. Based on its experience, the Company believes that the amount of damages claimed in a legal proceeding is not a meaningful indicator of the potential liability. At this time, the Company cannot reasonably predict the timing or outcomes of, or estimate the amount of loss, or range of loss, if any, related to its pending legal proceedings, including the matters described above, and therefore does not have any contingency reserves established for any of these matters. Revolving Credit Facility On April 8, 2019, the Company entered into a five year, $500 million senior secured revolving credit facility (“Credit Facility”) with a syndicate of banks. The Credit Facility provides additional borrowing capacity to be used to fund ongoing working capital needs, letters of credit and for general corporate purposes, including potential future acquisitions and expansions. On November 7, 2019, TWM LLC entered into an amendment to the Revolving Credit Facility among TWM LLC and the lenders party thereto, which revised the Revolving Credit Facility to permit the pending LSEG Transaction. The amendment did not otherwise impact the terms of the Revolving Credit Facility and did not impact the amount of borrowings available to TWM LLC under the Revolving Credit Facility. Under the terms of the credit agreement that governs the Credit Facility, borrowings under the Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) a base rate equal to the greatest of (i) the administrative agent’s prime rate, (ii) the federal funds effective rate plus ½ of 1.0% and (iii) one month LIBOR plus 1.0%, in each case plus 0.75%, or (b) LIBOR plus 1.75%, subject to a 0.00% floor. The credit agreement also includes a commitment fee of 0.25% for available but unborrowed amounts and other administrative fees that are payable quarterly. The Credit Facility is available until April 2024, provided the Company is in compliance with all covenants. Financial covenant requirements include maintaining minimum ratios related to interest coverage and leverage. As of December 31, 2019, there were no amounts outstanding under the Credit Facility. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share | |
Earnings Per Share | 18. Earnings Per Share In April 2019, the Company completed the Reorganization Transactions and the IPO, which, among other things, resulted in the Corporation becoming the successor of TWM LLC for financial reporting purposes. As a result, earnings per share information for the pre-IPO period is not comparable to earnings per share information for the post-IPO period. Thus, earnings per share information is being presented separately for the pre-IPO and post-IPO periods. The following table summarizes the basic and diluted earnings per share calculations for Tradeweb Markets LLC (pre-IPO period): Successor Successor Predecessor Predecessor Three Months Ended October 1, 2018 to January 1, 2018 to Year Ended March 31, December 31, September 30, December 31, EPS: Pre-IPO net income attributable to Tradeweb Markets LLC (1) 2019 2018 2018 2017 (in thousands, except share and per share amounts) Numerator: Pre-IPO net income attributable to Tradeweb Markets LLC $ 42,352 $ 29,307 $ 130,160 $ 83,648 Denominator: Weighted average LLC Interests outstanding - Basic 222,222,197 222,221,628 215,365,920 212,568,635 Dilutive effect of equity-settled PRSUs 1,098,260 22,223 — — Weighted average LLC Interests outstanding - Diluted 223,320,457 222,243,851 215,365,920 212,568,635 Earnings per share - Basic $ 0.19 $ 0.13 $ 0.60 $ 0.39 Earnings per share - Diluted $ 0.19 $ 0.13 $ 0.60 $ 0.39 (1) Earnings per share and weighted average shares outstanding for the pre-IPO periods have been computed to give effect to the Reorganization Transactions, including the amendment and restatement of the TWM LLC Agreement to, among other things, (i) provide for LLC Interests and (ii) exchange all of the then existing membership interests in TWM LLC for LLC interests. The following table summarizes the basic and diluted earnings per share calculations for Tradeweb Markets Inc. (post-IPO period): Successor Nine Months Ended EPS: Post-IPO net income attributable to Tradeweb Markets Inc. December 31, (in thousands, except share and per share amounts) 2019 Numerator: Post-IPO net income attributable to Tradeweb Markets Inc. $ 83,769 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 148,013,274 Dilutive effect of equity-settled PRSUs 2,464,137 Dilutive effect of options 6,062,835 Weighted average shares of Class A and Class B common stock outstanding - Diluted 156,540,246 Earnings per share - Basic $ 0.57 Earnings per share - Diluted $ 0.54 For the year ended December 31, 2019, there were approximately 128,125 average shares underlying equity-settled PRSUs and options that were anti-dilutive. As a result, these shares, which are still outstanding, were excluded from the computation of diluted earnings per share. For the 2018 Predecessor Period, there were approximately 5,444,566 average shares related to the contingent consideration payable that were anti-dilutive and thus excluded from the computation of diluted earnings per share. LLC Interests held by the Continuing LLC Owners are redeemable in accordance with the TWM LLC Agreement, at the election of such holders, for shares of Class A or Class B common stock of Tradeweb Markets Inc. After evaluating the potential dilutive effect under the if-converted method, the 59,182,155 LLC Interests for the assumed exchange of non-controlling interests were determined to be anti-dilutive and thus were excluded from the computation of diluted earnings per share for the post-IPO periods. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not included in the calculation of basic earnings per share and are not participating securities for purposes of the computation of diluted earnings per share. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | 19. Regulatory Capital Requirements TWL, DW and TWD are subject to the Uniform Net Capital Rule 15c3‑1 under the Securities Exchange Act of 1934. TEL is subject to certain financial resource requirements with the FCA in the UK, TWJ is subject to certain financial resource requirements with the FCA in Japan and TWEU is subject to certain finance resource requirements with the AFM in the Netherlands. At December 31, 2019 and 2018, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL, TWJ and TWEU are as follows (in thousands): As of December 31, 2019 TWL DW TWD TEL TWJ TWEU Regulatory Capital $ 42,317 $ 52,016 $ 33,807 $ 49,611 $ 11,851 $ 6,217 Regulatory Capital Requirement 2,396 2,026 664 21,856 8,565 1,701 Excess Regulatory Capital $ 39,921 $ 49,990 $ 33,143 $ 27,755 $ 3,286 $ 4,516 As of December 31, 2018 TWL DW TWD TEL TWJ Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 As SEFs, TW SEF and DW SEF are required to maintain adequate financial resources and liquid financial assets in accordance with CFTC regulations. The required and maintained financial resources and liquid financial assets at December 31, 2019 and 2018 are as follows (in thousands): As of December 31, 2019 As of December 31, 2018 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 21,303 $ 13,707 $ 31,232 $ 17,837 Required Financial Resources 10,500 5,505 10,500 5,169 Excess Financial Resources $ 10,803 $ 8,202 $ 20,732 $ 12,668 Liquid Financial Assets $ 18,168 $ 7,583 $ 16,662 $ 11,888 Required Liquid Financial Assets 5,250 2,753 5,250 2,585 Excess Liquid Financial Assets $ 12,918 $ 4,830 $ 11,412 $ 9,303 |
Business Segment and Geographic
Business Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2019 | |
Business Segment and Geographic Information | |
Business Segment and Geographic Information | 20. Business Segment and Geographic Information The Company operates electronic marketplaces for the trading of products across the rates, credit, equities and money markets asset classes and provides related pre-trade and post-trade services. The Company’s operations constitute a single business segment because of the integrated nature of these marketplaces and services. Information regarding revenue by client sector is as follows (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Net revenue: Institutional $ 453,379 $ 103,971 $ 301,918 $ 318,038 Wholesale 171,096 38,153 99,028 118,451 Retail 80,368 19,780 57,766 70,857 Market Data 70,723 16,733 47,059 55,622 Contingent consideration — — (26,830) (58,520) Net revenue 775,566 178,637 478,941 504,448 Operating expenses 585,747 146,702 338,607 415,356 Operating income $ 189,819 $ 31,935 $ 140,334 $ 89,092 The Company operates in the U.S. and internationally, primarily in the Europe and Asia regions. Revenues are attributed to geographic area based on the jurisdiction where the underlying transactions take place. The results by geographic region are not meaningful in understanding the Company's business. Long-lived assets are attributed to the geographic area based on the location of the particular subsidiary. The following table provides a breakdown of revenue by geographic area for the year ended December 31, 2019, the 2018 Successor Period, the 2018 Predecessor Period and the year ended December 31, 2017 (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Net Revenue: U.S. $ 497,316 $ 115,907 $ 324,304 $ 385,176 International 278,250 62,730 181,467 177,792 Gross revenue 775,566 178,637 505,771 562,968 Contingent consideration — — (26,830) (58,520) Total $ 775,566 $ 178,637 $ 478,941 $ 504,448 The following table provides information on the attribution of long-lived assets by geographic area (in thousands): Successor Successor December 31, December 31, 2019 2018 Long-lived assets U.S. $ 4,200,133 $ 4,276,568 International 14,100 7,787 Total $ 4,214,233 $ 4,284,355 |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Results of Operations (Unaudited) | |
Quarterly Results of Operations (Unaudited) | 21. Quarterly Results of Operations (Unaudited) The following tables set forth certain unaudited financial data for the Company’s quarterly operations in 2019 and 2018. The following information has been prepared on the same basis as the annual information presented elsewhere in this report and, in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information for the quarterly periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Tradeweb Markets Inc. (post-IPO) Tradeweb Markets LLC (pre-IPO) Successor Successor Successor Successor Successor Predecessor Predecessor Predecessor Three Months Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2019 2019 2019 2019 2018 2018 2018 2018 Revenues (in thousands, except share and per share data) Transaction fees $ 104,245 $ 112,746 $ 103,952 $ 102,640 $ 97,130 $ 92,582 $ 91,030 $ 90,139 Subscription fees 34,333 35,387 34,566 34,445 33,052 33,157 37,647 36,326 Commissions 41,165 37,590 36,413 34,197 32,840 24,394 27,553 27,883 Refinitiv market data fees 15,383 13,251 13,385 13,616 13,467 12,533 12,081 12,237 Other 2,182 2,007 2,169 1,894 2,148 2,587 2,704 2,918 Gross revenue 197,308 200,981 190,485 186,792 178,637 165,253 171,015 169,503 Contingent consideration — — — — — 2,537 (19,297) (10,070) Net revenue 197,308 200,981 190,485 186,792 178,637 167,790 151,718 159,433 Expenses Employee compensation and benefits 76,545 79,644 95,995 77,273 80,436 69,076 68,407 71,570 Depreciation and amortization 36,402 35,133 34,292 33,503 33,020 16,362 16,178 16,268 Technology and communications 10,199 9,527 9,519 10,040 9,907 9,112 9,023 8,463 General and administrative 8,999 7,507 9,365 9,089 11,837 9,386 7,153 6,517 Professional fees 7,048 7,272 6,738 6,971 8,194 7,546 7,276 5,538 Occupancy 3,786 3,640 3,621 3,639 3,308 3,491 3,519 3,722 Total expenses 142,979 142,723 159,530 140,515 146,702 114,973 111,556 112,078 Operating income 54,329 58,258 30,955 46,277 31,935 52,817 40,162 47,355 Tax receivable agreement liability adjustment 33,134 — — — — — — — Net interest income 704 636 175 858 787 673 582 471 Income before taxes 88,167 58,894 31,130 47,135 32,722 53,490 40,744 47,826 Provision for income taxes (30,889) (10,316) (6,314) (4,783) (3,415) (7,535) (1,847) (2,518) Net income $ 57,278 $ 48,578 $ 24,816 $ 42,352 $ 29,307 $ 45,955 $ 38,897 $ 45,308 Net income attributable to non-controlling interests $ 15,949 $ 18,966 $ 11,988 Net income attributable to Tradeweb Markets Inc. $ 41,329 $ 29,612 $ 12,828 Earnings per share (1) Basic $ $ $ $ $ $ $ $ Diluted $ $ $ $ $ $ $ $ Weighted average shares outstanding Basic 157,950,550 142,935,206 142,933,192 222,222,197 222,221,628 219,165,997 213,435,314 213,435,321 Diluted 167,323,520 151,362,643 150,847,183 223,320,457 222,243,851 219,165,997 213,435,314 213,435,321 (1) In April 2019, the Company completed the Reorganization Transactions and the IPO, which, among other things, resulted in Tradeweb Markets Inc. becoming the successor of Tradeweb Markets LLC for financial reporting purposes. As a result, earnings per share information for the pre-IPO period is not comparable to the earnings per share information for the post-IPO period. See Note 18 — Earnings Per Share for additional information. Earnings per share for quarterly periods are based on the weighted average common shares outstanding in individual quarters; thus, the sum of earnings per share of the quarters may not equal the amounts reported for the full year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 22. Subsequent Even On February 11, 2020, the board of directors of Tradeweb Markets Inc. declared a cash dividend of $0.08 per share of Class A common stock and Class B common stock for the first quarter of 2020. This dividend will be payable on March 16, 2020 to stockholders of record as of March 2, 2020. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies | |
Basis of Accounting | Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the consolidated financial statements. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1—Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. As a result, the consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. However, Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. As such, for periods prior to the completion of the Reorganization Transactions, the consolidated financial statements represent the historical financial condition and results of operations of TWM LLC and its subsidiaries. For periods after the completion of the Reorganization Transactions, the consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by the other members of TWM LLC. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. |
Receivable from and Payable to Brokers and Dealers and Clearing Organizations | Receivable from and Payable to Brokers and Dealers and Clearing Organizations Receivable from and payable to brokers and dealers and clearing organizations consists of proceeds from transactions which failed to settle due to the inability of a transaction party to deliver or receive the transacted security. These securities transactions are generally collateralized by those securities. At times, transactions executed on the Company’s wholesale platform fail to settle due to the inability of a transaction party to deliver or receive the transacted security. Until the failed transaction settles, a receivable from (and a matching payable to) brokers and dealers and clearing organizations is recognized for the proceeds from the unsettled transaction. |
Deposits with Clearing Organizations | Deposits with Clearing Organizations Deposits with clearing organizations are comprised of cash deposits. Due to the short-term nature of these deposits, the recorded value has been determined to approximate fair value. |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting (see Note 3 – Pushdown Accounting), is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment . |
Software Development Costs | Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350, Intangibles – Goodwill and Other . The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation (see Note 3 – Pushdown Accounting) are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. |
Goodwill | Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting. Goodwill is also the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. In 2019, the Company changed the annual date on which goodwill is tested for impairment from July 1 st to October 1 st to align with the annual impairment testing date of the Company’s Parent. This change did not accelerate, delay, avoid or cause an impairment charge, nor did this change result in adjustments to any previously issued financial statements. Goodwill was last assessed on October 1, 2019. |
Intangible Assets | Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from seven to sixteen years, in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated discounted cash flows relating to the asset or asset group is less than the corresponding book value. |
IPO and Follow-On Offering Costs | IPO and Follow-On Offering Costs The Company began incurring costs in connection with the filing of a Registration Statement on Form S-1 for an IPO and a Registration Statement on Form S-1 for a follow-on offering in 2018 and in the third quarter of 2019, respectively. IPO and follow-on offering costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital. In accordance with ASC 505-10-25, Equity , these costs are recognized in additional paid-in capital within the consolidated statements of financial condition when the offering is effective. As of December 31, 2019, $15.9 million of deferred costs related to the IPO and $2.6 million of deferred costs related to the follow-on offering were recognized in additional paid-in capital in the consolidated statements of financial condition. See Note 11 – Stockholders’ Equity. |
Translation of Foreign Currency | Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. |
Income Tax | Income Tax The Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. TWM LLC is a multiple member limited liability company taxed as a partnership and accordingly any taxable income generated by TWM LLC is passed through to and included in the taxable income of its members, including the Corporation. Income taxes also include unincorporated business taxes on income earned or losses incurred for conducting business in certain state and local jurisdictions, income taxes on income earned or losses incurred in foreign jurisdictions on certain operations and federal and state income taxes on income earned or losses incurred, both current and deferred, on subsidiaries that are taxed as corporations for U.S. tax purposes. The Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes on the basis of a two-step process whereby (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the global intangible low-taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act as a current period expense when incurred. Deferred Tax Asset Correction During the fourth quarter of 2019, the Company identified and corrected immaterial errors in the calculation of the deferred tax asset associated with the Reorganization Transactions that reduced additional paid-in-capital by $10.2 million and reduced the deferred tax asset by $10.2 million. This correction relates to immaterial errors associated with inputs (including estimates) used in the calculation of the deferred tax balances related to the Refinitiv Contribution. This correction, if it had been recorded in the interim periods of 2019, would have reduced additional paid-in capital by $10.2 million and reduced the deferred tax asset by $10.2 million at June 30, 2019 and September 30, 2019 and would not have had a material impact on our net assets and would not have had a material impact on our consolidated results of operations or cash flows. |
Revenue Recognition | Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided. Also included in subscription fees are viewer fees from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission revenue for brokerage transactions are recognized and recorded on a trade-date basis. Commission revenue is collected by the Company when the trade settles or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis, and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers , using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or recognition of revenue in any prior reporting periods. However, subsequent to the adoption, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction-based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the year ended December 31, 2019, the 2018 Successor Period and the 2018 Predecessor Period is as follows: Successor Successor Predecessor Year Ended October 1, 2018 to January 1, 2018 to December 31, 2019 December 31, 2018 September 30, 2018 (in thousands) Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 325,178 $ 98,405 $ 73,800 $ 23,330 $ 208,049 $ 65,702 Subscription Fees including Refinitiv market data fees 1,736 192,630 425 46,094 1,305 142,676 Commissions 109,995 39,370 22,608 10,232 49,367 30,463 Other 834 7,418 — 2,148 40 8,169 Gross revenue $ 437,743 $ 337,823 $ 96,833 $ 81,804 $ 258,761 $ 247,010 |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation . ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for stock-based payments. Under ASC 718, the stock-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to additional paid-in capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. For periods following the Reorganization Transactions and the IPO, the fair value of new equity instrument grants is determined based on the price of the Class A common stock on the grant date. Under ASC 718, the grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of stock-based awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of stock-based awards that require both future service and the achievement of Company performance-based conditions are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. Prior to the IPO, the Company awarded options to management and other employees (collectively, the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). In accounting for options issued under the Option Plan, or which may be issued under the Tradeweb Markets Inc. 2019 Omnibus Equity Incentive Plan (the “Omnibus Equity Plan”) in the future, compensation expense is measured and recognized for all awards based on their estimated fair values measured as of the grant date. Costs related to options are recognized as an expense in the consolidated statements of income over the requisite service period, with an offsetting increase to additional paid-in capital. In conjunction with the IPO, the non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019 and will continue to be expensed over the following three years. Determining the appropriate fair value model and calculating the fair value of the stock-based awards requires the input of highly subjective assumptions, including the expected life of the stock-based awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its stock-based awards. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the related amounts recognized in the Company’s consolidated statements of income. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average number of the Company’s shares reflects the dilutive effect that could occur if securities that qualify as participating securities were converted into or exchanged or exercised for TWM LLC’s shares, in the pre-IPO period, and the Class A or Class B common stock, in the post-IPO period, using the treasury stock method, as applicable. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not included in the calculation of basic earnings per share and are not participating securities for purposes of the computation of diluted earnings per share. |
Fair Value Measurement | Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820, Fair Value Measurement prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1: Level 2: Level 3: A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. |
Recent Accounting Pronouncements –Adopted | Recent Accounting Pronouncements – Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016‑13, Financial Instruments – Credit Losses . The ASU provides new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This requires a modified retrospective method of adoption. ASU 2016-13 was adopted on January 1, 2020. The adoption of this ASU di d not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other . The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The new guidance does not amend the optional qualitative assessment of goodwill impairment . ASU 2017-04 was adopted on January 1, 2020. The adoption of this ASU did not impact the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations and include additional guidance in order to reduce complexity in accounting for income taxes. ASU 2019-12 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 was early adopted on January 1, 2020 and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize a right-of-use asset and a lease liability for all leases with an initial term in excess of twelve months. The asset reflects the present value of unpaid lease payments coupled with initial direct costs, prepaid lease payments and lease incentives. The amount of the lease liability is calculated as the present value of unpaid lease payments. ASU 2016-02 was adopted on January 1, 2019 using the modified retrospective method of adoption. Upon adoption, the Company: · Recorded right-of-use assets of $31.8 million, · Recorded a lease liability of $39.6 million, · Eliminated deferred rent of $4.9 million, · Eliminated leasehold interests of $2.9 million, · Elected to take the optional package of practical expedients, which allows for no reassessment of i. whether any expired or existing contracts are or contain leases, ii. the lease classification for any expired or existing leases, and initial direct costs for any existing leases. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies | |
Breakdown of revenues between fixed and variable revenues | The breakdown of revenues between fixed and variable revenues, in thousands, for the year ended December 31, 2019, the 2018 Successor Period and the 2018 Predecessor Period is as follows: Successor Successor Predecessor Year Ended October 1, 2018 to January 1, 2018 to December 31, 2019 December 31, 2018 September 30, 2018 (in thousands) Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 325,178 $ 98,405 $ 73,800 $ 23,330 $ 208,049 $ 65,702 Subscription Fees including Refinitiv market data fees 1,736 192,630 425 46,094 1,305 142,676 Commissions 109,995 39,370 22,608 10,232 49,367 30,463 Other 834 7,418 — 2,148 40 8,169 Gross revenue $ 437,743 $ 337,823 $ 96,833 $ 81,804 $ 258,761 $ 247,010 |
Pushdown Accounting (Tables)
Pushdown Accounting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Pushdown Accounting | |
Schedule of allocation applying pushdown accounting | The allocation applying pushdown accounting as of October 1, 2018 is summarized in the table below (in thousands): Fair Value of the Company's Net Assets $ 4,575,000 Carrying Value of the Company's Net Assets 1,880,203 Goodwill $ 2,694,797 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets and Goodwill | |
Summary of intangible assets which have an indefinite useful life | The following is a summary of intangible assets which have an indefinite useful life at both December 31, 2019 and 2018 (in thousands): Amount Licenses $ 168,800 Tradename 154,300 Total $ 323,100 |
Intangible assets that are subject to amortization | Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Successor December 31, 2019 December 31, 2018 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships 12 Years $ 928,200 $ (96,687) $ 831,513 $ 928,200 $ (19,338) $ 908,862 Content and data 7 Years 154,400 (27,572) 126,828 154,400 (5,514) 148,886 $ 1,082,600 $ (124,259) $ 958,341 $ 1,082,600 $ (24,852) $ 1,057,748 |
Estimated annual future amortization for existing intangible assets | The estimated annual future amortization for existing intangible assets through December 31, 2024 is as follows (in thousands): Amount 2020 $ 99,408 2021 $ 99,408 2022 $ 99,408 2023 $ 99,408 2024 $ 99,408 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Activity related to the company's leases | Activity related to the Company's leases for the year ended December 31, 2019 is as follows (in thousands): Year Ended December 31, 2019 Operating lease expense $ 10,265 Cash for amounts included in the measurement of operating liability $ 11,667 Right-of-use assets obtained in exchange for operating liabilities $ — At December 31, 2019, the weighted average borrowing rate and weighted average lease term are as follows: Amount Weighted average borrowing rate 2.9 % Weighted average remaining lease term (years) 5.9 |
Schedule of maturity of lease liabilities and future minimum lease payments | The following table presents the maturity of lease liabilities as of December 31, 2019 (in thousands): Amount 2020 $ 8,516 2021 5,946 2022 4,143 2023 3,956 2024 3,558 Thereafter 7,633 Total future lease payments 33,752 Less imputed interest (2,797) Lease liability $ 30,955 At December 31, 2019, the future minimum lease payments were as follows (in thousands): Amount 2020 $ 8,516 2021 5,946 2022 4,143 2023 3,956 2024 3,558 Thereafter 7,633 Total $ 33,752 |
Schedule of future minimum lease payments | At December 31, 2018, the future minimum lease payments were as follows (in thousands): Amount 2019 $ 11,393 2020 7,580 2021 5,317 2022 4,051 2023 3,877 Thereafter 11,156 Total $ 43,374 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Revenue | |
Schedule of recognized revenue and remaining deferred revenue balance | The recognized revenue and remaining balance is shown below (in thousands): Amount Deferred revenue balance - December 31, 2018 $ 27,883 New billings 106,153 Revenue recognized (110,046) Deferred revenue balance - December 31, 2019 $ 23,990 |
Software Development Cost (Tabl
Software Development Cost (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Software Development Cost | |
Components of software development costs | The components of Software development costs, net of accumulated amortization are as follows (in thousands): Successor Successor December 31, December 31, 2019 2018 Software development costs $ 204,336 $ 175,656 Accumulated amortization (31,250) (5,074) Software development costs, net of accumulated amortization $ 173,086 $ 170,582 |
Schedule of non-capitalized software costs and routine maintenance costs | Successor Successor Predecessor Predecessor Year Ended October 1, 2018 January 1, 2018 Year Ended December 31, to to December 31, 2019 December 31, 2018 September 30, 2018 2017 Software development costs capitalized $ 28,681 $ 7,156 $ 19,523 $ 27,157 Amortization expense related to capitalized software development costs $ 26,176 $ 5,074 $ 19,962 $ 25,420 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Components of provision for income taxes | The provision for income taxes consists of the following (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Current: Federal $ 21,373 $ — $ — $ — State and Local 11,537 1,235 5,739 4,331 Foreign 4,368 1,212 3,559 2,748 Total current tax expense 37,278 2,447 9,298 7,079 Deferred: Federal (88) 680 1,085 (433) State and local 18,194 288 1,517 (517) Foreign (3,082) — — — Total deferred tax expense 15,024 968 2,602 (950) Total provision for income taxes $ 52,302 $ 3,415 $ 11,900 $ 6,129 |
Reconciliation of the statutory tax rate | Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Current: Federal $ 21,373 $ — $ — $ — State and Local 11,537 1,235 5,739 4,331 Foreign 4,368 1,212 3,559 2,748 Total current tax expense 37,278 2,447 9,298 7,079 Deferred: Federal (88) 680 1,085 (433) State and local 18,194 288 1,517 (517) Foreign (3,082) — — — Total deferred tax expense 15,024 968 2,602 (950) Total provision for income taxes $ 52,302 $ 3,415 $ 11,900 $ 6,129 A reconciliation of the statutory tax rate to the effective rate is as follows: Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % 35.0 % State and local income taxes, net of federal income tax benefit 3.9 4.7 5.1 2.8 Foreign tax rate differential (1.1) 3.7 2.5 3.1 Tax Cuts and Jobs Act provisional tax charge — — — 2.2 LLC flow-through structure — (19.0) (20.2) (36.3) Non-controlling interest (7.2) — — — Tax Receivable Agreement adjustment (3.1) — — — Rate change 10.2 — — — Other (0.5) — — — Effective income tax rate 23.2 % 10.4 % 8.4 % 6.8 % |
Components of deferred tax assets (Liabilities) | The components of the Company’s net deferred tax asset (liability) are as follows (in thousands): Successor Successor Year Ended Year Ended December 31, December 31, 2019 2018 Deferred tax assets: Investment in partnership $ 226,241 $ — Net operating losses 1,753 6,810 Tax Receivable Agreement - Interest 10,395 — Employee compensation 9,888 — Tax credits 8,342 — Other 4,088 2,362 Deferred tax assets, gross 260,707 9,172 Valuation Allowance — — Total deferred tax assets, net 260,707 9,172 Deferred tax liabilities Goodwill and Intangibles (25,829) (28,799) Total deferred tax liabilities (25,829) (28,799) Total net deferred tax asset (liability) $ 234,878 $ (19,627) |
Components of uncertain tax positions | The components of the Company’s uncertain tax positions are as follows (in thousands): Successor December 31, 2019 Gross unrecognized tax benefits as of January 1 $ 3,348 Increase in current year tax positions 2,162 Increase in prior year tax positions — Acquired tax positions 1,789 Settlements (787) Gross unrecognized tax benefits as of December 31 $ 6,512 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholder's Equity | |
Schedule of class of common stock par value, votes and economic rights | Class of Par Votes Economic Class A common stock $ 1 Yes Class B common stock $ 10 Yes Class C common stock $ 1 No Class D common stock $ 10 No |
Schedule of common units outstanding | Shares Class A 146,333 Class C 447 Class P (A) 6,887 Class P (C) 2 Class P-1(A) 6,094 Class P-1 (C) 232 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Non-Controlling Interests | |
Summary of the ownership interest in noncontrolling interest | December 31, 2019 LLC Ownership Interests % Number of LLC Interests held by Tradeweb Markets Inc. 163,341,520 Number of LLC Interests held by non-controlling interests 59,182,155 Total LLC Interests outstanding 222,523,675 |
Summary of the impact on equity due to changes in the Company’s ownership interest in noncontrolling interest | The following table summarizes the impact on equity due to changes in the Corporation’s ownership interest in TWM LLC (in thousands): Successor Year Ended December 31, Net Income Attributable to Tradeweb Markets Inc. and Transfers (to) from the Non-Controlling Interests 2019 Net income attributable to Tradeweb Markets Inc. $ 83,769 Transfers (to) from non-controlling interests: Allocation of equity to non-controlling interests arising from the reorganization transactions and IPO (1,607,529) Change in non-controlling interests as a result of the October 2019 follow-on offering and other ownership changes 402,227 Net transfers (to) from non-controlling interests (1,205,302) Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interests $ (1,121,533) |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of options issued | A summary of the Company’s outstanding options is presented below: Weighted Average Grant-Date Options Fair Value Options outstanding at December 31, 2018 18,091,793 $ 1.85 Grants 886,115 $ 8.83 Exercises (984,585) $ 1.80 Forfeitures and adjustments (253,579) $ 2.67 Options outstanding at December 31, 2019 17,739,744 $ 2.19 Vested options outstanding at December 31, 2019 $ |
Schedule of assumptions used to estimate the fair value of the options | The significant assumptions used to estimate the fair value of the options as of the grant date were as follows: Weighted Average Expected Life (years) 5.7 Weighted Average Risk-Free Interest Rate 2.9 % Weighted Average Expected Volatility 20.0 % Weighted Average Expected Dividend Yield 3.9 % Weighted Average Share Price $ 21.62 Weighted Average Exercise Price $ 21.62 |
Schedule of unrecognized compensation expense | As of December 31, 2019, total unrecognized compensation expense related to unvested stock-based compensation arrangements and the expected recognition period are as follows (dollars in thousands): Cash-Settled Equity-Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 383 $ 31,283 $ 4,068 Weighted-average recognition period 1.0 years 1.7 years 2.8 years |
Equity-settled PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of equity-settled PRSUs issued | A summary of the Company’s outstanding equity-settled PRSUs is presented below: Weighted Average Equity-Settled Grant-Date PRSUs Fair Value Equity-settled PRSUs outstanding at December 31, 2018 2,000,384 $ 9.53 Grants 781,026 $ 21.08 Vests — $ — Performance adjustment 762,326 $ 21.08 Forfeitures (53,070) $ 13.48 Equity-settled PRSUs outstanding at December 31, 2019 3,490,666 $ 14.59 |
Schedule of unrecognized compensation expense | The following table shows a summary of equity-settled PRSU activity during the year ended December 31, 2019 (in thousands): Successor Year Ended December 31, 2019 Equity-settled PRSU compensation expense $ 25,392 Income tax benefit $ (4,781) |
Cash-settled PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of equity-settled PRSUs issued | A summary of the Company’s outstanding cash-settled PRSUs is presented below: Weighted Cash-Settled Average PRSUs Fair Value Cash-settled PRSUs outstanding at December 31, 2018 522 $ 34,221 Grants — $ — Vests (1) (507) $ 33,842 Forfeitures — $ — Cash-settled PRSUs outstanding at December 31, 2019 15 $ 94,997 (1) The total fair value of cash-settled PRSUs vested was $17.2 million for the year ended December 31, 2019. |
Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of unrecognized compensation expense | The following table shows a summary options activity during the year ended December 31, 2019 (in thousands): Successor Year Ended December 31, 2019 Options compensation expense $ 24,432 Income tax benefit $ (8,556) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Schedule of balances from transactions with affiliates included in the consolidated statements | At December 31, 2019 and 2018, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Successor December 31, 2019 December 31, 2018 Cash and cash equivalents $ — $ 283,790 Receivables from brokers and dealers and clearing organizations — 3,332 Deposits with clearing organizations — 500 Accounts receivable — 40,730 Receivable from affiliates 2,525 3,243 Other assets — 9 Payable to brokers and dealers and clearing organizations — 2,404 Deferred revenue 4,733 9,151 Payable to affiliates 1,506 5,009 |
Schedule of affiliates were included in the consolidated statements of income | The following balances with such affiliates were included in the consolidated statements of income in the following line items (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 January 1, 2018 Year Ended December 31, to to December 31, 2019 December 31, 2018 September 30, 2018 2017 Revenue: Transaction fees (1) $ 59,643 $ 59,259 $ 159,663 $ 151,695 Subscription fees (1) 5,670 5,718 16,627 37,426 Commissions (1) 16,186 12,401 34,944 43,315 Refinitiv market data fees (2) 55,635 13,467 36,851 50,125 Operating Income: (3) Net interest income (expense) 858 17 (415) Shared Services Fees (4) : Technology and communications 2,960 740 2,220 2,960 General and administrative 430 180 539 719 Occupancy 481 155 466 621 (1) For pre-IPO periods, represents fees and commissions from affiliates of the Bank Stockholders. (2) The Company maintains a market data license agreement with Refinitiv (TR in the predecessor period). Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees and royalties for these feeds. (3) For pre-IPO periods, represents interest income from money market funds invested with and savings accounts deposited with affiliates of the Bank Stockholders. (4) The Company maintains a shared services agreement with Refinitiv (TR in the predecessor period). Under the terms of the agreement, Refinitiv provides the Company with certain real estate, payroll, benefits administration, insurance, content, financial reporting and tax support. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments | |
Schedule of fair value measurements | The fair value measurements are as follows (in thousands): Quoted Prices in active Markets Significant Significant for Identical Observable Unobservable Assets Inputs Inputs Successor (Level 1) (Level 2) (Level 3) Total As of December 31, 2019 Assets Money market funds $ 219,158 $ — $ — $ 219,158 $ 219,158 $ — $ — $ 219,158 As of December 31, 2018 Assets Money market funds $ 127,927 $ — $ — $ 127,927 $ 127,927 $ — $ — $ 127,927 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Schedule of basic and Diluted earnings per share | Successor Successor Predecessor Predecessor Three Months Ended October 1, 2018 to January 1, 2018 to Year Ended March 31, December 31, September 30, December 31, EPS: Pre-IPO net income attributable to Tradeweb Markets LLC (1) 2019 2018 2018 2017 (in thousands, except share and per share amounts) Numerator: Pre-IPO net income attributable to Tradeweb Markets LLC $ 42,352 $ 29,307 $ 130,160 $ 83,648 Denominator: Weighted average LLC Interests outstanding - Basic 222,222,197 222,221,628 215,365,920 212,568,635 Dilutive effect of equity-settled PRSUs 1,098,260 22,223 — — Weighted average LLC Interests outstanding - Diluted 223,320,457 222,243,851 215,365,920 212,568,635 Earnings per share - Basic $ 0.19 $ 0.13 $ 0.60 $ 0.39 Earnings per share - Diluted $ 0.19 $ 0.13 $ 0.60 $ 0.39 (1) Earnings per share and weighted average shares outstanding for the pre-IPO periods have been computed to give effect to the Reorganization Transactions, including the amendment and restatement of the TWM LLC Agreement to, among other things, (i) provide for LLC Interests and (ii) exchange all of the then existing membership interests in TWM LLC for LLC interests. The following table summarizes the basic and diluted earnings per share calculations for Tradeweb Markets Inc. (post-IPO period): Successor Nine Months Ended EPS: Post-IPO net income attributable to Tradeweb Markets Inc. December 31, (in thousands, except share and per share amounts) 2019 Numerator: Post-IPO net income attributable to Tradeweb Markets Inc. $ 83,769 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 148,013,274 Dilutive effect of equity-settled PRSUs 2,464,137 Dilutive effect of options 6,062,835 Weighted average shares of Class A and Class B common stock outstanding - Diluted 156,540,246 Earnings per share - Basic $ 0.57 Earnings per share - Diluted $ 0.54 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Capital Requirements | |
Schedule of regulatory capital requirements | At December 31, 2019 and 2018, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL, TWJ and TWEU are as follows (in thousands): As of December 31, 2019 TWL DW TWD TEL TWJ TWEU Regulatory Capital $ 42,317 $ 52,016 $ 33,807 $ 49,611 $ 11,851 $ 6,217 Regulatory Capital Requirement 2,396 2,026 664 21,856 8,565 1,701 Excess Regulatory Capital $ 39,921 $ 49,990 $ 33,143 $ 27,755 $ 3,286 $ 4,516 As of December 31, 2018 TWL DW TWD TEL TWJ Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 |
Schedule of financial resources and liquid financial resources | The required and maintained financial resources and liquid financial assets at December 31, 2019 and 2018 are as follows (in thousands): As of December 31, 2019 As of December 31, 2018 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 21,303 $ 13,707 $ 31,232 $ 17,837 Required Financial Resources 10,500 5,505 10,500 5,169 Excess Financial Resources $ 10,803 $ 8,202 $ 20,732 $ 12,668 Liquid Financial Assets $ 18,168 $ 7,583 $ 16,662 $ 11,888 Required Liquid Financial Assets 5,250 2,753 5,250 2,585 Excess Liquid Financial Assets $ 12,918 $ 4,830 $ 11,412 $ 9,303 |
Business Segment and Geograph_2
Business Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Segment and Geographic Information | |
Schedule of information regarding revenue by client sector | The Company operates electronic marketplaces for the trading of products across the rates, credit, equities and money markets asset classes and provides related pre-trade and post-trade services. The Company’s operations constitute a single business segment because of the integrated nature of these marketplaces and services. Information regarding revenue by client sector is as follows (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Net revenue: Institutional $ 453,379 $ 103,971 $ 301,918 $ 318,038 Wholesale 171,096 38,153 99,028 118,451 Retail 80,368 19,780 57,766 70,857 Market Data 70,723 16,733 47,059 55,622 Contingent consideration — — (26,830) (58,520) Net revenue 775,566 178,637 478,941 504,448 Operating expenses 585,747 146,702 338,607 415,356 Operating income $ 189,819 $ 31,935 $ 140,334 $ 89,092 |
Schedule of revenue and long-lived assets by geographic location | The following table provides a breakdown of revenue by geographic area for the year ended December 31, 2019, the 2018 Successor Period, the 2018 Predecessor Period and the year ended December 31, 2017 (in thousands): Successor Successor Predecessor Predecessor Year Ended October 1, 2018 to January 1, 2018 to Year Ended December 31, December 31, September 30, December 31, 2019 2018 2018 2017 Net Revenue: U.S. $ 497,316 $ 115,907 $ 324,304 $ 385,176 International 278,250 62,730 181,467 177,792 Gross revenue 775,566 178,637 505,771 562,968 Contingent consideration — — (26,830) (58,520) Total $ 775,566 $ 178,637 $ 478,941 $ 504,448 The following table provides information on the attribution of long-lived assets by geographic area (in thousands): Successor Successor December 31, December 31, 2019 2018 Long-lived assets U.S. $ 4,200,133 $ 4,276,568 International 14,100 7,787 Total $ 4,214,233 $ 4,284,355 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Results of Operations (Unaudited) | |
Schedule of quarterly operating results | The operating results for any quarter are not necessarily indicative of results for any future period. Tradeweb Markets Inc. (post-IPO) Tradeweb Markets LLC (pre-IPO) Successor Successor Successor Successor Successor Predecessor Predecessor Predecessor Three Months Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2019 2019 2019 2019 2018 2018 2018 2018 Revenues (in thousands, except share and per share data) Transaction fees $ 104,245 $ 112,746 $ 103,952 $ 102,640 $ 97,130 $ 92,582 $ 91,030 $ 90,139 Subscription fees 34,333 35,387 34,566 34,445 33,052 33,157 37,647 36,326 Commissions 41,165 37,590 36,413 34,197 32,840 24,394 27,553 27,883 Refinitiv market data fees 15,383 13,251 13,385 13,616 13,467 12,533 12,081 12,237 Other 2,182 2,007 2,169 1,894 2,148 2,587 2,704 2,918 Gross revenue 197,308 200,981 190,485 186,792 178,637 165,253 171,015 169,503 Contingent consideration — — — — — 2,537 (19,297) (10,070) Net revenue 197,308 200,981 190,485 186,792 178,637 167,790 151,718 159,433 Expenses Employee compensation and benefits 76,545 79,644 95,995 77,273 80,436 69,076 68,407 71,570 Depreciation and amortization 36,402 35,133 34,292 33,503 33,020 16,362 16,178 16,268 Technology and communications 10,199 9,527 9,519 10,040 9,907 9,112 9,023 8,463 General and administrative 8,999 7,507 9,365 9,089 11,837 9,386 7,153 6,517 Professional fees 7,048 7,272 6,738 6,971 8,194 7,546 7,276 5,538 Occupancy 3,786 3,640 3,621 3,639 3,308 3,491 3,519 3,722 Total expenses 142,979 142,723 159,530 140,515 146,702 114,973 111,556 112,078 Operating income 54,329 58,258 30,955 46,277 31,935 52,817 40,162 47,355 Tax receivable agreement liability adjustment 33,134 — — — — — — — Net interest income 704 636 175 858 787 673 582 471 Income before taxes 88,167 58,894 31,130 47,135 32,722 53,490 40,744 47,826 Provision for income taxes (30,889) (10,316) (6,314) (4,783) (3,415) (7,535) (1,847) (2,518) Net income $ 57,278 $ 48,578 $ 24,816 $ 42,352 $ 29,307 $ 45,955 $ 38,897 $ 45,308 Net income attributable to non-controlling interests $ 15,949 $ 18,966 $ 11,988 Net income attributable to Tradeweb Markets Inc. $ 41,329 $ 29,612 $ 12,828 Earnings per share (1) Basic $ $ $ $ $ $ $ $ Diluted $ $ $ $ $ $ $ $ Weighted average shares outstanding Basic 157,950,550 142,935,206 142,933,192 222,222,197 222,221,628 219,165,997 213,435,314 213,435,321 Diluted 167,323,520 151,362,643 150,847,183 223,320,457 222,243,851 219,165,997 213,435,314 213,435,321 (1) In April 2019, the Company completed the Reorganization Transactions and the IPO, which, among other things, resulted in Tradeweb Markets Inc. becoming the successor of Tradeweb Markets LLC for financial reporting purposes. As a result, earnings per share information for the pre-IPO period is not comparable to the earnings per share information for the post-IPO period. See Note 18 — Earnings Per Share for additional information. |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, $ in Billions | Apr. 08, 2019 | Oct. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Jun. 28, 2019 |
Weighted Weighted Average Share Price | $ 21.62 | ||||
Shares contributed by Refinitiv Owner | 96,933,192 | ||||
Class A common stock | |||||
Common Stock, par value per share | $ 0.00001 | ||||
Shares issued | 46,000,000 | ||||
Class B common stock | |||||
Common Stock, par value per share | $ 0.00001 | $ 0.00001 | |||
Shares issued | 96,933,192 | 96,933,192 | |||
Number of shares canceled | 9,993,731 | ||||
Shares contributed by Refinitiv Owner | 96,933,192 | ||||
Class C common stock | |||||
Common Stock, par value per share | $ 0.00001 | ||||
Shares issued | 10,006,269 | ||||
Shares issued to acquire TWM LLC | 20,000,000 | ||||
Number of shares canceled | 9,993,731 | ||||
Class D common stock | |||||
Common Stock, par value per share | $ 0.00001 | ||||
Shares issued | 69,282,736 | ||||
Shares issued to acquire TWM LLC | 105,289,005 | ||||
Number of shares canceled | 36,006,269 | ||||
Tradeweb Markets LLC | |||||
Ownership interest | 64.30% | 73.40% | |||
Equity interest of noncontrolling shareholders in consolidated entity | 26.60% | ||||
Weighted Weighted Average Share Price | $ 27 | ||||
Net proceeds | $ 1.2 | ||||
Initial Public Offering | Class A common stock | |||||
Common Stock, par value per share | $ 0.00001 | ||||
Shares issued | 46,000,000 | ||||
Weighted Weighted Average Share Price | $ 27 | ||||
Over allotment | Class A common stock | |||||
Shares issued | 6,000,000 | 2,593,181 |
Significant Accounting Polici_4
Significant Accounting Policies - Useful Lives of Assets (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Minimum | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Maximum | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | |
Property, Plant and Equipment, Useful Life | 7 years |
Software Development Costs | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | |
Property, Plant and Equipment, Useful Life | 3 years |
Amortization of pushdown accounting allocation | 9 years |
Significant Accounting Polici_5
Significant Accounting Policies - Useful Lives of Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Minimum | |
Intangible Assets | |
Useful life of intangible assets | 7 years |
Maximum | |
Intangible Assets | |
Useful life of intangible assets | 16 years |
Significant Accounting Polici_6
Significant Accounting Policies - Deferred IPO Cost and Deferred Tax Assets Correction (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 |
Additional paid-in capital | $ 3,329,386 | ||
Deferred tax asset | 256,450 | ||
Initial Public Offering | |||
Deferred costs | 15,900 | ||
Follow On Offering | |||
Deferred costs | 2,600 | ||
Deferred Tax Asset Correction | |||
Additional paid-in capital | 10,200 | $ 10,200 | $ 10,200 |
Deferred tax asset | $ 10,200 | $ 10,200 | $ 10,200 |
Significant Accounting Polici_7
Significant Accounting Policies - Breakdown of Revenues Between Fixed and Variable (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor | |||
Gross revenues | $ 178,637 | $ 505,771 | $ 775,566 | $ 562,968 | ||||||
Compensation expense | 9,400 | 15,900 | 50,700 | 26,100 | ||||||
Transaction fees | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 97,130 | 273,751 | 423,583 | 267,020 | ||||||
Commissions | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 32,840 | 79,830 | 149,365 | 96,745 | ||||||
Other | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | $ 2,148 | $ 8,209 | $ 8,252 | $ 4,669 | ||||||
Variable | ||||||||||
Revenue Recognition | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor | Successor | |||||||
Gross revenues | $ 96,833 | $ 258,761 | $ 437,743 | |||||||
Variable | Transaction fees | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 73,800 | 208,049 | 325,178 | |||||||
Variable | Subscription Fees including Refinitiv market data | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 425 | 1,305 | 1,736 | |||||||
Variable | Commissions | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | $ 22,608 | 49,367 | 109,995 | |||||||
Variable | Other | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | $ 40 | $ 834 | ||||||||
Fixed | ||||||||||
Revenue Recognition | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor | Successor | |||||||
Gross revenues | $ 81,804 | $ 247,010 | $ 337,823 | |||||||
Fixed | Transaction fees | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 23,330 | 65,702 | 98,405 | |||||||
Fixed | Subscription Fees including Refinitiv market data | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 46,094 | 142,676 | 192,630 | |||||||
Fixed | Commissions | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 10,232 | 30,463 | 39,370 | |||||||
Fixed | Other | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | $ 2,148 | $ 8,169 | $ 7,418 | |||||||
Tradeweb Markets LLC | ||||||||||
Revenue Recognition | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Predecessor | Predecessor | Predecessor | |||||
Gross revenues | $ 186,792 | $ 178,637 | $ 165,253 | $ 171,015 | $ 169,503 | |||||
Tradeweb Markets LLC | Transaction fees | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 102,640 | 97,130 | 92,582 | 91,030 | 90,139 | |||||
Tradeweb Markets LLC | Commissions | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | 34,197 | 32,840 | 24,394 | 27,553 | 27,883 | |||||
Tradeweb Markets LLC | Other | ||||||||||
Revenue Recognition | ||||||||||
Gross revenues | $ 1,894 | $ 2,148 | $ 2,587 | $ 2,704 | $ 2,918 |
Significant Accounting Polici_8
Significant Accounting Policies - Stock-Based Compensation (Details) | 3 Months Ended |
Jun. 30, 2019 | |
Special Mention | |
Stock-Based Compensation | |
Allocation term | 3 years |
Significant Accounting Polici_9
Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets | $ 24,504 | |
Lease liability | $ 30,955 | |
ASC 842 | ||
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets | $ 31,800 | |
Lease liability | 39,600 | |
Deferred rent | 4,900 | |
Leasehold interest | $ 2,900 | |
Package of practical expedients | true | true |
Pushdown Accounting (Details)
Pushdown Accounting (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 01, 2018 |
Entity Information [Line Items] | |||
Fair Value of the Company's Net Assets | $ 4,575,000 | ||
Carrying Value of the Company's Net Assets | 1,880,203 | ||
Goodwill | $ 2,694,797 | $ 2,694,797 | 2,694,797 |
Software development costs | |||
Entity Information [Line Items] | |||
Fair Value of the Company's Net Assets | $ 168,500 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Indefinite Lived Intangible Assets (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Intangible assets with indefinite useful lives | |
Intangible assets which have an indefinite useful life | $ 323,100 |
Licenses | |
Intangible assets with indefinite useful lives | |
Intangible assets which have an indefinite useful life | 168,800 |
Tradenames | |
Intangible assets with indefinite useful lives | |
Intangible assets which have an indefinite useful life | $ 154,300 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible assets that are subject to amortization | ||
Cost | $ 1,082,600 | $ 1,082,600 |
Accumulated Amortization | (124,259) | (24,852) |
Net Carrying Amount | $ 958,341 | $ 1,057,748 |
Customer relationships | ||
Intangible assets that are subject to amortization | ||
Amortization Period | 12 years | 12 years |
Cost | $ 928,200 | $ 928,200 |
Accumulated Amortization | (96,687) | (19,338) |
Net Carrying Amount | $ 831,513 | $ 908,862 |
Content and data | ||
Intangible assets that are subject to amortization | ||
Amortization Period | 7 years | 7 years |
Cost | $ 154,400 | $ 154,400 |
Accumulated Amortization | (27,572) | (5,514) |
Net Carrying Amount | $ 126,828 | $ 148,886 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Future Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | |
Intangible Assets and Goodwill | |||
Amortization expense | $ 24,900 | $ 19,600 | $ 99,400 |
Estimated annual future amortization for existing intangibles assets | |||
2020 | 99,408 | ||
2021 | 99,408 | ||
2022 | 99,408 | ||
2023 | 99,408 | ||
2024 | $ 99,408 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets | $ 24,504 | |
Lease liability | 30,955 | |
Activity related to the Company's leases | ||
Operating lease expense | 10,265 | |
Cash for amounts included in the measurement of operating liability | $ 11,667 | |
Weighted average borrowing rate | 2.90% | |
Weighted average remaining lease term (years) | 5 years 10 months 24 days | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Initial term of lease | 3 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Initial term of lease | 11 years | |
ASC 842 | ||
Lessee, Lease, Description [Line Items] | ||
Package of practical expedients | true | true |
Right-of-use assets | $ 31,800 | |
Lease liability | 39,600 | |
Deferred rent | 4,900 | |
Leasehold Interest | 2,900 | |
ASC 842 | Adjustment | ||
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets | 31,800 | |
Lease liability | 39,600 | |
Deferred rent | 4,900 | |
Leasehold Interest | $ 2,900 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities and Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Maturity of lease liabilities | |
2020 | $ 8,516 |
2021 | 5,946 |
2022 | 4,143 |
2023 | 3,956 |
2024 | 3,558 |
Thereafter | 7,633 |
Total future minimum lease payments | 33,752 |
Less imputed interest | (2,797) |
Lease liability | $ 30,955 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments - 2018 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Future minimum rental payments | |||
2019 | $ 11,393 | ||
2020 | 7,580 | ||
2021 | 5,317 | ||
2022 | 4,051 | ||
2023 | 3,877 | ||
Thereafter | 11,156 | ||
Total | 43,374 | ||
Rent expense | $ 2,700 | $ 9,000 | $ 11,800 |
Leases - Guaranteed (Details)
Leases - Guaranteed (Details) $ in Millions | Dec. 31, 2019USD ($) |
Refinitiv | US lease secured by letter of credit | |
Guarantor Obligations [Line Items] | |
Letter of credit guaranteed by Refinitiv | $ 1.2 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted Cash | ||
Restricted cash | $ 1,000 | $ 1,200 |
Deferred Revenue (Details)
Deferred Revenue (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Changes in deferred revenue | |
Deferred revenue balance - beginning of period | $ 27,883 |
New billings | 106,153 |
Revenue recognized | (110,046) |
Deferred revenue balance - end of period | $ 23,990 |
Software Development Cost (Deta
Software Development Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Software Development Cost | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Software development costs | $ 175,656 | $ 204,336 | $ 204,336 | $ 175,656 | |||
Accumulated amortization | (5,074) | (31,250) | (31,250) | (5,074) | |||
Software development costs, net of accumulated amortization | 170,582 | $ 173,086 | 173,086 | $ 170,582 | |||
Software development costs capitalized | 7,156 | $ 19,523 | 28,681 | $ 27,157 | |||
Amortization expense related to capitalized software development costs | $ 5,074 | $ 19,962 | $ 26,176 | $ 25,420 |
Income Taxes - Income (loss) be
Income Taxes - Income (loss) before provision for tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Total income before provision for income taxes | $ 32,722 | $ 142,060 | $ 225,326 | $ 89,777 | |||
United States | |||||||
Income Tax Disclosure [Line Items] | |||||||
Total income before provision for income taxes | 207,700 | ||||||
Foreign | |||||||
Income Tax Disclosure [Line Items] | |||||||
Total income before provision for income taxes | $ 17,600 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision (Tradeweb Markets LLC and Subsidiaries) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Federal | $ 21,373 | ||||||
State and Local | $ 1,235 | $ 5,739 | 11,537 | $ 4,331 | |||
Foreign | 1,212 | 3,559 | 4,368 | 2,748 | |||
Total current tax expense | 2,447 | 9,298 | 37,278 | 7,079 | |||
Deferred: | |||||||
Federal | 680 | 1,085 | (88) | (433) | |||
State and local | 288 | 1,517 | 18,194 | (517) | |||
Foreign | (3,082) | ||||||
Total deferred tax expense | 968 | 2,602 | 15,024 | (950) | |||
Total provision for income taxes | $ 3,415 | $ 11,900 | $ 52,302 | $ 6,129 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Rate (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of the statutory tax rate | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 21.00% | 35.00% | |||
State and local income taxes, net of federal income tax benefit | 4.70% | 5.10% | 3.90% | 2.80% | |||
Foreign tax rate differential | 3.70% | 2.50% | (1.10%) | 3.10% | |||
Tax Cuts & Jobs Act Provisional Tax Charge | 0.022 | ||||||
LLC flow-through structure | (19.00%) | (20.20%) | (36.30%) | ||||
Non-Controlling Interest | (7.20%) | ||||||
Tax Receivable Agreement adjustment | (3.10%) | ||||||
Rate Change | 10.20% | ||||||
Other | (0.50%) | ||||||
Effective tax rate | 10.40% | 8.40% | 23.20% | 6.80% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Asset (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax assets: | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Investment in partnerships | $ 226,241 | $ 226,241 | |||||
Net operating losses | $ 6,810 | 1,753 | 1,753 | $ 6,810 | |||
Tax Receivable Agreement | 10,395 | 10,395 | |||||
Employee compensation | 9,888 | 9,888 | |||||
Credits | 8,342 | 8,342 | |||||
Other | 2,362 | 4,088 | 4,088 | 2,362 | |||
Deferred tax assets, gross | 9,172 | 260,707 | 260,707 | 9,172 | |||
Total deferred tax assets, net | 9,172 | 260,707 | 260,707 | 9,172 | |||
Deferred tax liabilities | |||||||
Goodwill and Intangibles | (28,799) | (25,829) | (25,829) | (28,799) | |||
Total deferred tax liabilities | (28,799) | (25,829) | (25,829) | (28,799) | |||
Total deferred tax asset (liability) | $ 234,878 | $ 234,878 | |||||
Total deferred tax asset (liability) | $ (19,627) | $ (19,627) |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Position (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Gross unrecognized tax benefits as of January 1 | $ 3,348 | $ 3,348 | |||||
Increase in current year tax positions | 2,162 | ||||||
Acquired tax positions | 1,789 | ||||||
Settlements | (787) | ||||||
Gross unrecognized tax benefits as of December 31 | $ 3,348 | $ 6,512 | 6,512 | $ 3,348 | |||
Decrease in unrecognized tax benefits | $ 800 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Income Taxes | |||||
Effective Income Tax Rate Reconciliation, Percent | 10.40% | 8.40% | 23.20% | 6.80% | |
Reduction in deferred tax asset | 10.20% | ||||
Additional paid-in-capital adjustment | $ (4,382) | ||||
Settlements | $ 787 | ||||
Tax amortization period | 15 years | ||||
Deferred tax benefit | 269,600 | $ 269,600 | |||
Accounts payable, accrued expenses and other liabilities | |||||
Income Taxes | |||||
Tax, penalties and interest expense | 2,300 | ||||
Tax, penalties and interest provision | 500 | 500 | |||
Accrued income taxes | 2,700 | 2,700 | |||
New York state | |||||
Income Taxes | |||||
Net operating loss carryforwards | 15,700 | 15,700 | |||
New York City | |||||
Income Taxes | |||||
Net operating loss carryforwards | $ 13,900 | $ 13,900 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Apr. 08, 2019 | |
Tax Receivable Agreement | ||
Percentage of amount of U.S. federal, state and local income or franchise tax savings | 50.00% | |
Tax receivable agreement liability | $ 240,817 | $ 171,400 |
Tax receivable agreement liability adjustment | $ 33,134 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 08, 2019 | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 |
Subsidiary, Sale of Stock [Line Items] | ||||
Weighted Weighted Average Share Price | $ 21.62 | $ 21.62 | ||
LLC units | October 2019 Follow-On Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Stock Repurchased and Retired During Period, Shares | 19,835,666 | |||
Class A common stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance of common stock (in shares) | 46,000,000 | |||
Class A common stock | October 2019 Follow-On Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance of common stock (in shares) | 19,881,059 | |||
Weighted Weighted Average Share Price | $ 42 | |||
Net proceeds | $ 810 | |||
Stock Repurchased and Retired During Period, Shares | 45,393 | |||
Class A common stock | Initial Public Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance of common stock (in shares) | 46,000,000 | |||
Weighted Weighted Average Share Price | $ 27 | |||
Class A common stock | Over allotment | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance of common stock (in shares) | 6,000,000 | 2,593,181 | ||
Tradeweb Markets LLC | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Weighted Weighted Average Share Price | $ 27 | |||
Net proceeds | $ 1,200 |
Stockholder's Equity - Authoriz
Stockholder's Equity - Authorized shares (Details) | 12 Months Ended | |||
Dec. 31, 2019Vote$ / sharesshares | Jun. 28, 2019$ / shares | Apr. 08, 2019 | Dec. 31, 2018$ / sharesshares | |
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | shares | 250,000,000 | 250,000,000 | ||
Preferred stock, par value | $ / shares | $ 0.00001 | $ 0.00001 | ||
Class A common stock | ||||
Class of Stock [Line Items] | ||||
Common Stock, shares authorized | shares | 1,000,000,000 | |||
Common stock, par value | $ / shares | $ 0.00001 | |||
Number of votes per common stock | Vote | 1 | |||
Conversion ratio | 1 | |||
Class B common stock | ||||
Class of Stock [Line Items] | ||||
Common Stock, shares authorized | shares | 450,000,000 | |||
Common stock, par value | $ / shares | $ 0.00001 | $ 0.00001 | ||
Number of votes per common stock | Vote | 10 | |||
Class C common stock | ||||
Class of Stock [Line Items] | ||||
Common Stock, shares authorized | shares | 350,000,000 | |||
Common stock, par value | $ / shares | $ 0.00001 | |||
Number of votes per common stock | Vote | 1 | |||
Conversion ratio | 1 | |||
Class D common stock | ||||
Class of Stock [Line Items] | ||||
Common Stock, shares authorized | shares | 300,000,000 | |||
Common stock, par value | $ / shares | $ 0.00001 | |||
Number of votes per common stock | Vote | 10 | |||
Voting power threshold percentage to require conversion of shares | 4.90% | |||
Tradeweb Markets LLC | ||||
Class of Stock [Line Items] | ||||
Threshold percentage of economic interest for conversion | 10.00% | |||
Cancellation ratio | 1 | |||
Minimum | Class D common stock | ||||
Class of Stock [Line Items] | ||||
Voting power threshold percentage to require conversion of shares | 4.90% |
Stockholder's Equity - Common U
Stockholder's Equity - Common Units Outstanding (Details) - Tradeweb Markets LLC - shares | Apr. 04, 2019 | Dec. 31, 2019 |
LLC Interests | ||
Class of Stock [Line Items] | ||
Common units exchanged | 222,222,197 | |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common units exchanged | 146,333 | |
Class C common stock | ||
Class of Stock [Line Items] | ||
Common units exchanged | 447 | |
Class P(A) Shares | ||
Class of Stock [Line Items] | ||
Common units exchanged | 6,887 | |
Class P(C) Shares | ||
Class of Stock [Line Items] | ||
Common units exchanged | 2 | |
Class P-1(A) Shares | ||
Class of Stock [Line Items] | ||
Common units exchanged | 6,094 | |
Class P-1(C) Shares | ||
Class of Stock [Line Items] | ||
Common units exchanged | 232 |
Stockholder's Equity - Issuance
Stockholder's Equity - Issuance and Cancellation of Common Stock (Details) - shares | Apr. 08, 2019 | Jun. 30, 2019 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||
Shares contributed by Refinitiv Owner | 96,933,192 | ||
Continuing LLC Owners | |||
Class of Stock [Line Items] | |||
Percentage of combined voting power | 27.50% | ||
Refinitiv Direct Owner [Member] | |||
Class of Stock [Line Items] | |||
Shares contributed by Refinitiv Owner | 96,933,192 | ||
Class A common stock | |||
Class of Stock [Line Items] | |||
Number of shares owned | 46,000,000 | ||
Percentage of combined voting power | 2.70% | ||
Class B common stock | |||
Class of Stock [Line Items] | |||
Shares contributed by Refinitiv Owner | 96,933,192 | ||
Number of shares canceled | 9,993,731 | ||
Class B common stock | Refinitiv Direct Owner [Member] | |||
Class of Stock [Line Items] | |||
Number of shares owned | 96,933,192 | ||
Percentage of combined voting power | 56.40% | ||
Class C common stock | |||
Class of Stock [Line Items] | |||
Shares issued to acquire TWM LLC | 20,000,000 | ||
Number of shares canceled | 9,993,731 | ||
Class C common stock | Continuing LLC Owners | |||
Class of Stock [Line Items] | |||
Number of shares owned | 10,006,269 | ||
Class D common stock | |||
Class of Stock [Line Items] | |||
Shares issued to acquire TWM LLC | 105,289,005 | ||
Number of shares canceled | 36,006,269 | ||
Class D common stock | Continuing LLC Owners | |||
Class of Stock [Line Items] | |||
Number of shares owned | 46,294,407 | ||
Class D common stock | Refinitiv LLC Owner [Member] | |||
Class of Stock [Line Items] | |||
Percentage of combined voting power | 13.40% | ||
Number of LLC Interest | 22,988,329 | ||
Tradeweb Markets LLC | |||
Class of Stock [Line Items] | |||
Number of LLC Interest | 59,182,155 | ||
Ownership percentage, Continuing LLC Owners | 26.60% | ||
Number of LLC Interest held by parent | 142,933,192 | 163,341,520 | |
Ownership interest | 64.30% | 73.40% | |
Tradeweb Markets LLC | Continuing LLC Owners | |||
Class of Stock [Line Items] | |||
Number of LLC Interest | 56,300,676 | ||
Ownership percentage, Continuing LLC Owners | 25.30% | ||
Tradeweb Markets LLC | Class A common stock | |||
Class of Stock [Line Items] | |||
Percentage of economic interest | 20.70% | ||
Tradeweb Markets LLC | Class B common stock | Refinitiv Direct Owner [Member] | |||
Class of Stock [Line Items] | |||
Percentage of economic interest | 43.60% | ||
Tradeweb Markets LLC | Class D common stock | Refinitiv LLC Owner [Member] | |||
Class of Stock [Line Items] | |||
Number of LLC Interest | 22,988,329 | ||
Ownership percentage, Continuing LLC Owners | 10.30% |
Stockholder's Equity - Redempti
Stockholder's Equity - Redemptions and Exchange of LLC Interests (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 08, 2019 | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 |
Subsidiary, Sale of Stock [Line Items] | |||||
Weighted Weighted Average Share Price | $ 21.62 | $ 21.62 | $ 21.62 | ||
LLC units | October 2019 Follow-On Offering | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Stock Repurchased and Retired During Period, Shares | 19,835,666 | ||||
LLC units | Redemptions and Exchanges of LLC Interests [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of LLC Units received from the exchange transaction | 271,184 | ||||
Class A common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Issuance of common stock (in shares) | 46,000,000 | ||||
Class A common stock | October 2019 Follow-On Offering | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Issuance of common stock (in shares) | 19,881,059 | ||||
Weighted Weighted Average Share Price | $ 42 | ||||
Net proceeds | $ 810 | ||||
Stock Repurchased and Retired During Period, Shares | 45,393 | ||||
Class A common stock | Redemptions and Exchanges of LLC Interests [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Issuance of common stock (in shares) | 271,184 | ||||
Class D common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Issuance of common stock (in shares) | 69,282,736 | ||||
Class D common stock | Redemptions and Exchanges of LLC Interests [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Stock Repurchased and Retired During Period, Shares | 271,184 | ||||
Class B common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Issuance of common stock (in shares) | 96,933,192 | 96,933,192 | |||
Class C common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Issuance of common stock (in shares) | 10,006,269 | ||||
Tradeweb Markets LLC | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Weighted Weighted Average Share Price | $ 27 | ||||
Net proceeds | $ 1,200 | ||||
Ownership interest | 64.30% | 73.40% | 73.40% | 73.40% | |
Equity interest of noncontrolling shareholders in consolidated entity | 26.60% | 26.60% | 26.60% | ||
Tradeweb Markets LLC | Public Investors | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Equity interest of noncontrolling shareholders in consolidated entity | 29.80% | 29.80% | 29.80% | ||
Tradeweb Markets LLC | Bank Stockholders | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Equity interest of noncontrolling shareholders in consolidated entity | 16.20% | 16.20% | 16.20% | ||
Tradeweb Markets Inc | Public Investors | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Voting power percentage | 4.30% | 4.30% | 4.30% | ||
Tradeweb Markets Inc | Bank Stockholders | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Voting power percentage | 18.40% | 18.40% | 18.40% | ||
Tradeweb Markets Inc | Class A common stock | Public Investors | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of share owned | 66,408,328 | 66,408,328 | 66,408,328 | ||
Tradeweb Markets Inc | Class D common stock | Bank Stockholders | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of share owned | 27,662,354 | 27,662,354 | 27,662,354 | ||
Tradeweb Markets Inc | Class C common stock | Bank Stockholders | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of share owned | 8,328,983 | 8,328,983 | 8,328,983 | ||
Tradeweb Markets LLC | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Weighted Weighted Average Share Price | $ 27 | ||||
Net proceeds | $ 1,200 | ||||
Refinitiv | Tradeweb Markets LLC | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Ownership interest | 53.90% | 53.90% | 53.90% | ||
Refinitiv | Tradeweb Markets Inc | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Ownership interest | 77.20% | 77.20% | 77.20% | ||
Refinitiv | Tradeweb Markets Inc | Class D common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of share owned | 22,988,329 | 22,988,329 | 22,988,329 | ||
Refinitiv | Tradeweb Markets Inc | Class B common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of share owned | 96,933,192 | 96,933,192 | 96,933,192 |
Non-Controlling Interests (Deta
Non-Controlling Interests (Details) $ in Thousands | Apr. 08, 2019shares | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019USD ($)shares | Dec. 31, 2018 | Dec. 31, 2017 |
Non-Controlling Interests | ||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor | |
Net income attributable to Tradeweb Markets Inc. | $ 83,769 | |||||||
Allocation of equity to non-controlling interests arising from the reorganization transactions and IPO | (1,607,529) | |||||||
Change in non-controlling interests as a result of the October 2019 follow-on offering and other ownership changes | 402,227 | |||||||
Net transfers (to) from non-controlling interests | (1,205,302) | |||||||
Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interests | $ (1,121,533) | |||||||
Class A common stock | ||||||||
Non-Controlling Interests | ||||||||
Conversion ratio | 1 | |||||||
Class B common stock | ||||||||
Non-Controlling Interests | ||||||||
Conversion ratio | 1 | |||||||
Tradeweb Markets LLC | ||||||||
Non-Controlling Interests | ||||||||
Number of LLC Interests held by Tradeweb Markets Inc. | shares | 142,933,192 | 163,341,520 | ||||||
Number of LLC Interests held by non-controlling interests | shares | 59,182,155 | |||||||
Total LLC Interests outstanding | shares | 222,523,675 | |||||||
Number of LLC Interests held by Tradeweb Markets Inc. | 64.30% | 73.40% | 73.40% | |||||
Equity interest of noncontrolling shareholders in consolidated entity | 26.60% | 26.60% | ||||||
Total LLC Interests outstanding | 100.00% | 100.00% |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019USD ($)employeeshares | Sep. 30, 2018 | Dec. 31, 2019USD ($)employeeshares | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Percentage of performance modifier | 100.00% | ||||||
Number of employees impacted | employee | 54 | 54 | |||||
Amount reclassified to members capital | $ | $ 20,718 | $ 19,100 | |||||
Exercise period following a change in control | 15 days | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of performance modifier | 200.00% | ||||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of performance modifier | 0.00% | ||||||
Equity-settled PRSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||
Equity settled PRSU's issued on conversion | 2,000,384 | 2,000,384 | |||||
Cash-settled PRSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Cash settled PRSU's converted | 1,033.2 | ||||||
Total fair value of vested PRSUs | $ | $ 17,200 | ||||||
Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||
2019 Omnibus Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized | 8,841,864 | 8,841,864 | |||||
Cliff vesting period | 10 years | ||||||
Vesting period | 10 years | ||||||
Based solely on the passage of time | Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 50.00% | ||||||
If the Company achieves certain performance targets | Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Cliff vesting period | 4 years | ||||||
Vesting period | 4 years |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - (PRSUs settlement) (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Equity-settled PRSUs | |
PRSUs | |
Balance outstanding at beginning of period (in units) | shares | 2,000,384 |
Grants (in units) | shares | 781,026 |
Performance adjustment (in units) | shares | 762,326 |
Forfeitures (in units) | shares | (53,070) |
Balance options outstanding at end of period (in units) | shares | 3,490,666 |
Weighted Average Grant-Date Fair Value | |
Balance outstanding at beginning of period (in dollars per unit) | $ / shares | $ 9.53 |
Grants (in dollars per unit) | $ / shares | 21.08 |
Performance adjustment (in dollars per unit) | $ / shares | 21.08 |
Forfeitures (in dollars per unit) | $ / shares | 13.48 |
Balance outstanding at end of period (in dollars per unit) | $ / shares | $ 14.59 |
Cash-settled PRSUs | |
PRSUs | |
Balance outstanding at beginning of period (in units) | shares | 522 |
Vests (in units) | shares | (507) |
Balance options outstanding at end of period (in units) | shares | 15 |
Weighted Average Grant-Date Fair Value | |
Balance outstanding at beginning of period (in dollars per unit) | $ / shares | $ 34,221 |
Vests (in dollars per unit) | $ / shares | 33,842 |
Balance outstanding at end of period (in dollars per unit) | $ / shares | $ 94,997 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - PSRUs-settled activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-Based Compensation Plans | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Compensation expense | $ 9,400 | $ 15,900 | $ 50,700 | $ 26,100 | |||
Equity-settled PRSUs | |||||||
Share-Based Compensation Plans | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||
Compensation expense | $ 25,392 | ||||||
Income tax benefit | $ 4,781 | ||||||
Options | |||||||
Share-Based Compensation Plans | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | ||||||
Compensation expense | $ 24,432 | ||||||
Income tax benefit | $ (8,556) |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Options | |||||
Options outstanding at beginning of period (in shares) | 18,091,793 | ||||
Grants (in shares) | 886,115 | ||||
Exercises (in shares) | (984,585) | ||||
Forfeitures and adjustments (in shares) | (253,579) | ||||
Options outstanding at end of period (in shares) | 18,091,793 | 17,739,744 | 18,091,793 | ||
Vested options outstanding | 8,061,312 | 0 | |||
Weighted Average Grant Date Fair Value | |||||
Options outstanding at beginning of period (in dollars per share) | $ 1.85 | ||||
Grants (in dollars per share) | 8.83 | ||||
Exercises (in dollars per share) | 1.80 | ||||
Forfeitures and adjustments (in dollars per share) | 2.67 | ||||
Options outstanding at end of period (in dollars per share) | $ 1.85 | 2.19 | $ 1.85 | ||
Vested options outstanding (in dollars per share) | $ 1.80 | ||||
Options exercised, intrinsic value | $ 21,300 | ||||
Exercisable | 0 | 0 | |||
Compensation expense | $ 9,400 | $ 15,900 | 50,700 | $ 26,100 | |
Options | |||||
Weighted Average Grant Date Fair Value | |||||
Compensation expense | 24,432 | ||||
Initial Public Offering | |||||
Weighted Average Grant Date Fair Value | |||||
Compensation expense | $ 18,900 |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Assumptions (Details) | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Stock-Based Compensation Plans | |
Weighted Average Expected Life (years) | 5 years 8 months 12 days |
Weighted Average Risk Free Interest Rate | 2.90% |
Weighted Average Expected Volatility | 20.00% |
Weighted Average Expected Dividend Yield | 3.90% |
Weighted Weighted Average Share Price | $ 21.62 |
Weighted Average Exercise Price | $ 21.62 |
Stock-Based Compensation Plan_7
Stock-Based Compensation Plans - Compensation expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Stock-Based Compensation Plans | ||||
Compensation expense | $ 9.4 | $ 15.9 | $ 50.7 | $ 26.1 |
Stock-Based Compensation Plan_8
Stock-Based Compensation Plans - unrecognized compensation expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash-settled PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 383 |
Weighted average recognition period | 1 year |
Equity-settled PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 31,283 |
Weighted average recognition period | 1 year 8 months 12 days |
Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 4,068 |
Weighted average recognition period | 2 years 9 months 18 days |
Related Party Transactions - Ba
Related Party Transactions - Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Cash and cash equivalents | $ 283,790 | $ 283,790 | |||||
Receivables from brokers and dealers and clearing organizations | 3,332 | 3,332 | |||||
Deposits with clearing organizations | 500 | 500 | |||||
Accounts receivable | 40,730 | 40,730 | |||||
Receivable from affiliates | 3,243 | $ 2,525 | $ 2,525 | 3,243 | |||
Other assets | 9 | 9 | |||||
Payable to brokers and dealers and clearing organizations | 2,404 | 2,404 | |||||
Deferred revenue | 9,151 | 4,733 | 4,733 | 9,151 | |||
Payable to affiliates | $ 5,009 | $ 1,506 | $ 1,506 | $ 5,009 |
Related Party Transactions - Co
Related Party Transactions - Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Revenue: | |||||||
Revenue | $ 178,637 | $ 478,941 | $ 775,566 | $ 504,448 | |||
Shared Services Fees: | |||||||
Technology and communications | 9,907 | 26,598 | 39,285 | 30,013 | |||
General and administrative | 11,837 | 23,056 | 34,960 | 33,973 | |||
Occupancy | $ 3,308 | $ 10,732 | $ 14,686 | $ 14,441 | |||
Affiliated Entity | |||||||
Related Party Transactions | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor | Successor | Predecessor | |||
Operating Income: | |||||||
Net interest income (expense) | $ 17 | $ 34 | $ 858 | $ (415) | |||
Shared Services Fees: | |||||||
Technology and communications | 740 | 2,220 | 2,960 | 2,960 | |||
General and administrative | 180 | 539 | 430 | 719 | |||
Occupancy | 155 | 466 | 481 | 621 | |||
Transaction fees | Affiliated Entity | |||||||
Revenue: | |||||||
Revenue | 59,259 | 159,663 | 59,643 | 151,695 | |||
Subscription fees | Affiliated Entity | |||||||
Revenue: | |||||||
Revenue | 5,718 | 16,627 | 5,670 | 37,426 | |||
Commissions | Affiliated Entity | |||||||
Revenue: | |||||||
Revenue | 12,401 | 34,944 | 16,186 | 43,315 | |||
Refinitiv market data fees | Affiliated Entity | |||||||
Revenue: | |||||||
Revenue | $ 13,467 | $ 36,851 | $ 55,635 | $ 50,125 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2014 | |
Related Party Transactions | ||||||
Other assets | $ 25,027 | $ 27,236 | ||||
Contingent consideration recognized | $ 26,830 | $ 58,520 | ||||
Consulting service fee for IPO | $ 1,000 | |||||
Consulting service fee for follow on offering | $ 500 | |||||
Adjustment to additional paid in capital due to consulting service fee | 1,500 | |||||
Refinitiv | ||||||
Related Party Transactions | ||||||
Other assets | 2,700 | |||||
Refinitiv | Operating Expense Reimbursement | ||||||
Related Party Transactions | ||||||
Related party expense | $ 3,800 | $ 6,700 | ||||
TR | Operating Expense Reimbursement | ||||||
Related Party Transactions | ||||||
Related party expense | $ 28,700 | $ 38,400 | ||||
Banks | ||||||
Related Party Transactions | ||||||
Capital contribution | $ 120,000 | |||||
Employees | ||||||
Related Party Transactions | ||||||
Investment by employees | $ 5,300 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value of Financial Instruments | ||
Total assets measured at fair value | $ 219,158 | $ 127,927 |
Money market funds | ||
Fair Value of Financial Instruments | ||
Money market funds | 219,158 | 127,927 |
Level 1 | ||
Fair Value of Financial Instruments | ||
Total assets measured at fair value | 219,158 | 127,927 |
Level 1 | Money market funds | ||
Fair Value of Financial Instruments | ||
Money market funds | $ 219,158 | $ 127,927 |
Credit Risk (Details)
Credit Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Credit Risk | ||
Allowance for doubtful accounts | $ 200 | $ 1,200 |
Total stockholder's equity | 3,378,588 | $ 4,572,334 |
Excess Capital | 10,000 | |
Minimum | ||
Credit Risk | ||
Total stockholder's equity | $ 25,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Apr. 08, 2019USD ($) | Dec. 31, 2019USD ($)action |
Litigation relating to distribution of financial strength ratings | ||
Commitments and Contingencies | ||
Damages sought | $ 80 | |
Litigation relating to distribution of financial strength ratings | Minimum | ||
Commitments and Contingencies | ||
Damages sought | 4 | |
Litigation relating to distribution of financial strength ratings | Maximum | ||
Commitments and Contingencies | ||
Damages sought | $ 8 | |
Antitrust Actions Related To Trading Practices | ||
Commitments and Contingencies | ||
Number of actions | action | 2 | |
Revolving credit facility | ||
Commitments and Contingencies | ||
Term of debt | 5 years | |
Maximum borrowing capacity | $ 500 | |
Commitment fee (as a percent) | 0.25% | |
Amount outstanding | $ 0 | |
Revolving credit facility | Federal funds | ||
Commitments and Contingencies | ||
Spread (as a percent) | 0.50% | |
Revolving credit facility | One-month LIBOR | ||
Commitments and Contingencies | ||
Spread (as a percent) | 1.00% | |
Revolving credit facility | Base rate | ||
Commitments and Contingencies | ||
Spread (as a percent) | 0.75% | |
Revolving credit facility | LIBOR | ||
Commitments and Contingencies | ||
Spread (as a percent) | 1.75% | |
Floor (as a percent) | 0.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Income Per Share | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor | |||
Numerator: | ||||||||||
Pre-IPO net income attributable to Tradeweb Markets LLC | $ 83,769 | |||||||||
Denominator: | ||||||||||
Weighted average outstanding - Basic | 222,221,628 | 148,013,274 | 215,365,920 | 148,013,274 | 215,568,635 | |||||
Weighted average outstanding - Diluted | 222,243,851 | 156,540,246 | 215,365,920 | 156,540,246 | 215,568,635 | |||||
Earnings per share - Basic | $ 0.57 | $ 0.57 | ||||||||
Earnings per share - Diluted | $ 0.54 | $ 0.54 | ||||||||
Shares excluded from computation of diluted earnings per share | 5,444,566 | |||||||||
PRSU | ||||||||||
Denominator: | ||||||||||
Dilutive effect | 2,464,137 | |||||||||
Options | ||||||||||
Net Income Per Share | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | |||||||||
Denominator: | ||||||||||
Dilutive effect | 6,062,835 | |||||||||
Potential Dilutive | ||||||||||
Denominator: | ||||||||||
Shares excluded from computation of diluted earnings per share | 59,182,155 | |||||||||
Tradeweb Markets LLC | ||||||||||
Net Income Per Share | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Predecessor | Predecessor | Predecessor | |||||
Numerator: | ||||||||||
Pre-IPO net income attributable to Tradeweb Markets LLC | $ 42,352 | $ 29,307 | $ 130,160 | $ 42,352 | $ 83,648 | |||||
Denominator: | ||||||||||
Weighted average outstanding - Basic | 222,222,197 | 222,221,628 | 219,165,997 | 213,435,314 | 213,435,321 | 215,365,920 | 222,222,197 | 212,568,635 | ||
Weighted average outstanding - Diluted | 223,320,457 | 222,243,851 | 219,165,997 | 213,435,314 | 213,435,321 | 215,365,920 | 223,320,457 | 212,568,635 | ||
Earnings per share - Basic | $ 0.19 | $ 0.13 | $ 0.21 | $ 0.18 | $ 0.21 | $ 0.60 | $ 0.19 | $ 0.39 | ||
Earnings per share - Diluted | $ 0.19 | $ 0.13 | $ 0.21 | $ 0.18 | $ 0.21 | $ 0.60 | $ 0.19 | $ 0.39 | ||
Shares excluded from computation of diluted earnings per share | 128,125 | |||||||||
Tradeweb Markets LLC | PRSU | ||||||||||
Denominator: | ||||||||||
Dilutive effect | 1,098,260 | 22,223 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
TWL | ||
Regulatory Capital Requirements | ||
Regulatory Capital | $ 42,317 | $ 18,986 |
Regulatory Capital Requirement | 2,396 | 2,698 |
Excess Regulatory Capital | 39,921 | 16,288 |
DW | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 52,016 | 41,164 |
Regulatory Capital Requirement | 2,026 | 1,803 |
Excess Regulatory Capital | 49,990 | 39,361 |
TWD | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 33,807 | 24,042 |
Regulatory Capital Requirement | 664 | 599 |
Excess Regulatory Capital | 33,143 | 23,443 |
TEL | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 49,611 | 46,157 |
Regulatory Capital Requirement | 21,856 | 17,493 |
Excess Regulatory Capital | 27,755 | 28,664 |
TWJ | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 11,851 | 10,592 |
Regulatory Capital Requirement | 8,565 | 3,413 |
Excess Regulatory Capital | 3,286 | 7,179 |
TWEU | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 6,217 | |
Regulatory Capital Requirement | 1,701 | |
Excess Regulatory Capital | 4,516 | |
TW SEF | ||
Regulatory Capital Requirements | ||
Financial Resources | 21,303 | 31,232 |
Required Financial Resources | 10,500 | 10,500 |
Excess Financial Resources | 10,803 | 20,732 |
Liquid Financial Assets | 18,168 | 16,662 |
Required Liquid Financial Assets | 5,250 | 5,250 |
Excess Liquid Financial Assets | 12,918 | 11,412 |
DW SEF | ||
Regulatory Capital Requirements | ||
Financial Resources | 13,707 | 17,837 |
Required Financial Resources | 5,505 | 5,169 |
Excess Financial Resources | 8,202 | 12,668 |
Liquid Financial Assets | 7,583 | 11,888 |
Required Liquid Financial Assets | 2,753 | 2,585 |
Excess Liquid Financial Assets | $ 4,830 | $ 9,303 |
Business Segment and Geograph_3
Business Segment and Geographic Information - Revenue by Client Sector (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Segment and Geographic Information | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Gross revenues | $ 178,637 | $ 505,771 | $ 775,566 | $ 562,968 | |||
Contingent consideration | (26,830) | (58,520) | |||||
Net revenue | 178,637 | 478,941 | 775,566 | 504,448 | |||
Operating expenses | 146,702 | 338,607 | 585,747 | 415,356 | |||
Operating income | 31,935 | 140,334 | 189,819 | 89,092 | |||
Institutional | |||||||
Business Segment and Geographic Information | |||||||
Gross revenues | 103,971 | 301,918 | 453,379 | 318,038 | |||
Wholesale | |||||||
Business Segment and Geographic Information | |||||||
Gross revenues | 38,153 | 99,028 | 171,096 | 118,451 | |||
Retail | |||||||
Business Segment and Geographic Information | |||||||
Gross revenues | 19,780 | 57,766 | 80,368 | 70,857 | |||
Market Data | |||||||
Business Segment and Geographic Information | |||||||
Gross revenues | $ 16,733 | $ 47,059 | $ 70,723 | $ 55,622 |
Business Segment and Geograph_4
Business Segment and Geographic Information - Revenue and Long-lived Assets by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Segment and Geographic Information | |||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor |
Gross revenues | $ 178,637 | $ 505,771 | $ 775,566 | $ 562,968 | |||
Contingent consideration | (26,830) | (58,520) | |||||
Net revenue | 178,637 | 478,941 | 775,566 | 504,448 | |||
Long-lived assets | 4,284,355 | $ 4,214,233 | 4,214,233 | $ 4,284,355 | |||
U.S. | |||||||
Business Segment and Geographic Information | |||||||
Gross revenues | 115,907 | 324,304 | 497,316 | 385,176 | |||
Long-lived assets | 4,276,568 | 4,200,133 | 4,200,133 | 4,276,568 | |||
International | |||||||
Business Segment and Geographic Information | |||||||
Gross revenues | 62,730 | $ 181,467 | 278,250 | $ 177,792 | |||
Long-lived assets | $ 7,787 | $ 14,100 | $ 14,100 | $ 7,787 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) - Operating results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 08, 2019 | |
Revenues | |||||||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | Predecessor | Successor | Successor | Predecessor | ||||||||
Gross revenue | $ 178,637 | $ 505,771 | $ 775,566 | $ 562,968 | |||||||||||
Contingent consideration | (26,830) | (58,520) | |||||||||||||
Net revenue | 178,637 | 478,941 | 775,566 | 504,448 | |||||||||||
Expenses | |||||||||||||||
Employee compensation and benefits | 80,436 | 209,053 | 329,457 | 248,963 | |||||||||||
Depreciation and amortization | 33,020 | 48,808 | 139,330 | 68,615 | |||||||||||
Technology and communications | 9,907 | 26,598 | 39,285 | 30,013 | |||||||||||
General and administrative | 11,837 | 23,056 | 34,960 | 33,973 | |||||||||||
Professional fees | 8,194 | 20,360 | 28,029 | 19,351 | |||||||||||
Occupancy | 3,308 | 10,732 | 14,686 | 14,441 | |||||||||||
Total expenses | 146,702 | 338,607 | 585,747 | 415,356 | |||||||||||
Operating income | 31,935 | 140,334 | 189,819 | 89,092 | |||||||||||
Tax receivable agreement liability adjustment | $ 240,817 | $ 240,817 | 240,817 | $ 171,400 | |||||||||||
Net interest income | 787 | 1,726 | 2,373 | 685 | |||||||||||
Income before taxes | 32,722 | 142,060 | 225,326 | 89,777 | |||||||||||
Provision for income taxes | (3,415) | (11,900) | (52,302) | (6,129) | |||||||||||
Net income | $ 42,352 | $ 29,307 | $ 29,307 | $ 130,672 | $ 130,160 | 173,024 | $ 83,648 | ||||||||
Net income attributable to non-controlling interests | 46,903 | ||||||||||||||
Net income attributable to Tradeweb Markets Inc. | $ 83,769 | ||||||||||||||
Earnings per share | |||||||||||||||
Basic | $ 0.57 | $ 0.57 | |||||||||||||
Diluted | $ 0.54 | $ 0.54 | |||||||||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 222,221,628 | 148,013,274 | 215,365,920 | 148,013,274 | 215,568,635 | ||||||||||
Diluted | 222,243,851 | 156,540,246 | 215,365,920 | 156,540,246 | 215,568,635 | ||||||||||
Transaction fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | $ 97,130 | $ 273,751 | $ 423,583 | $ 267,020 | |||||||||||
Subscription fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 33,052 | 107,130 | 138,731 | 144,409 | |||||||||||
Commissions | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 32,840 | 79,830 | 149,365 | 96,745 | |||||||||||
Refinitiv market data fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 13,467 | 36,851 | 55,635 | 50,125 | |||||||||||
Other | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | $ 2,148 | 8,209 | 8,252 | 4,669 | |||||||||||
Tradeweb Markets Inc | |||||||||||||||
Revenues | |||||||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Successor | ||||||||||||
Gross revenue | $ 197,308 | $ 200,981 | $ 190,485 | ||||||||||||
Net revenue | 197,308 | 200,981 | 190,485 | ||||||||||||
Expenses | |||||||||||||||
Employee compensation and benefits | 76,545 | 79,644 | 95,995 | ||||||||||||
Depreciation and amortization | 36,402 | 35,133 | 34,292 | ||||||||||||
Technology and communications | 10,199 | 9,527 | 9,519 | ||||||||||||
General and administrative | 8,999 | 7,507 | 9,365 | ||||||||||||
Professional fees | 7,048 | 7,272 | 6,738 | ||||||||||||
Occupancy | 3,786 | 3,640 | 3,621 | ||||||||||||
Total expenses | 142,979 | 142,723 | 159,530 | ||||||||||||
Operating income | 54,329 | 58,258 | 30,955 | ||||||||||||
Tax receivable agreement liability adjustment | 33,134 | $ 33,134 | 33,134 | ||||||||||||
Net interest income | 704 | 636 | 175 | ||||||||||||
Income before taxes | 88,167 | 58,894 | 31,130 | ||||||||||||
Provision for income taxes | (30,889) | (10,316) | (6,314) | ||||||||||||
Net income | 57,278 | 48,578 | 24,816 | ||||||||||||
Net income attributable to non-controlling interests | 15,949 | 18,966 | 11,988 | ||||||||||||
Net income attributable to Tradeweb Markets Inc. | $ 41,329 | $ 29,612 | $ 12,828 | ||||||||||||
Earnings per share | |||||||||||||||
Basic | $ 0.26 | $ 0.21 | $ 0.09 | ||||||||||||
Diluted | $ 0.25 | $ 0.20 | $ 0.09 | ||||||||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 157,950,550 | 142,935,206 | 142,933,192 | ||||||||||||
Diluted | 167,323,520 | 151,362,643 | 150,847,183 | ||||||||||||
Tradeweb Markets Inc | Transaction fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | $ 104,245 | $ 112,746 | $ 103,952 | ||||||||||||
Tradeweb Markets Inc | Subscription fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 34,333 | 35,387 | 34,566 | ||||||||||||
Tradeweb Markets Inc | Commissions | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 41,165 | 37,590 | 36,413 | ||||||||||||
Tradeweb Markets Inc | Refinitiv market data fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 15,383 | 13,251 | 13,385 | ||||||||||||
Tradeweb Markets Inc | Other | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | $ 2,182 | $ 2,007 | $ 2,169 | ||||||||||||
Tradeweb Markets LLC | |||||||||||||||
Revenues | |||||||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Successor | Predecessor | Predecessor | Predecessor | ||||||||||
Gross revenue | $ 186,792 | $ 178,637 | $ 165,253 | $ 171,015 | $ 169,503 | ||||||||||
Contingent consideration | 2,537 | (19,297) | (10,070) | ||||||||||||
Net revenue | 186,792 | 178,637 | 167,790 | 151,718 | 159,433 | ||||||||||
Expenses | |||||||||||||||
Employee compensation and benefits | 77,273 | 80,436 | 69,076 | 68,407 | 71,570 | ||||||||||
Depreciation and amortization | 33,503 | 33,020 | 16,362 | 16,178 | 16,268 | ||||||||||
Technology and communications | 10,040 | 9,907 | 9,112 | 9,023 | 8,463 | ||||||||||
General and administrative | 9,089 | 11,837 | 9,386 | 7,153 | 6,517 | ||||||||||
Professional fees | 6,971 | 8,194 | 7,546 | 7,276 | 5,538 | ||||||||||
Occupancy | 3,639 | 3,308 | 3,491 | 3,519 | 3,722 | ||||||||||
Total expenses | 140,515 | 146,702 | 114,973 | 111,556 | 112,078 | ||||||||||
Operating income | 46,277 | 31,935 | 52,817 | 40,162 | 47,355 | ||||||||||
Net interest income | 858 | 787 | 673 | 582 | 471 | ||||||||||
Income before taxes | 47,135 | 32,722 | 53,490 | 40,744 | 47,826 | ||||||||||
Provision for income taxes | (4,783) | (3,415) | (7,535) | (1,847) | (2,518) | ||||||||||
Net income | $ 42,352 | 29,307 | $ 45,955 | $ 38,897 | $ 45,308 | ||||||||||
Net income attributable to Tradeweb Markets Inc. | $ 29,307 | $ 130,160 | $ 42,352 | $ 83,648 | |||||||||||
Earnings per share | |||||||||||||||
Basic | $ 0.19 | $ 0.13 | $ 0.21 | $ 0.18 | $ 0.21 | $ 0.60 | $ 0.19 | $ 0.39 | |||||||
Diluted | $ 0.19 | $ 0.13 | $ 0.21 | $ 0.18 | $ 0.21 | $ 0.60 | $ 0.19 | $ 0.39 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 222,222,197 | 222,221,628 | 219,165,997 | 213,435,314 | 213,435,321 | 215,365,920 | 222,222,197 | 212,568,635 | |||||||
Diluted | 223,320,457 | 222,243,851 | 219,165,997 | 213,435,314 | 213,435,321 | 215,365,920 | 223,320,457 | 212,568,635 | |||||||
Tradeweb Markets LLC | Transaction fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | $ 102,640 | $ 97,130 | $ 92,582 | $ 91,030 | $ 90,139 | ||||||||||
Tradeweb Markets LLC | Subscription fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 34,445 | 33,052 | 33,157 | 37,647 | 36,326 | ||||||||||
Tradeweb Markets LLC | Commissions | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 34,197 | 32,840 | 24,394 | 27,553 | 27,883 | ||||||||||
Tradeweb Markets LLC | Refinitiv market data fees | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | 13,616 | 13,467 | 12,533 | 12,081 | 12,237 | ||||||||||
Tradeweb Markets LLC | Other | |||||||||||||||
Revenues | |||||||||||||||
Gross revenue | $ 1,894 | $ 2,148 | $ 2,587 | $ 2,704 | $ 2,918 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event | Feb. 11, 2020USD ($) |
Class A common stock | |
Subsequent Event [Line Items] | |
Cash dividend declared | $ 0.08 |
Class B common stock | |
Subsequent Event [Line Items] | |
Cash dividend declared | $ 0.08 |