Tradeweb has reported an average daily volume (ADV) US$897.8 billion for the first quarter of 2020, a quarterly record and an increase of 39% year-on-year including a US$1 trillion ADV record in March. It reported quarterly records for ADV in US treasuries, European government bonds, mortgages, long tenor swaps, US and European credit, credit derivatives, repos, US and European exchange traded funds (ETFs), and equity derivatives. Consequently the firm delivered US$234.6 million quarterly record gross revenues which increased 25.6%, with US$62.5 million net income increasing by 47.5% from the prior year period.
Lee Olesky, CEO of Tradeweb Markets, said, “As the human and economic impact of COVID-19 continues to be felt around the world, we remain focused on keeping our people safe, helping our clients find liquidity, and discovering new ways for markets to operate more efficiently. We see the long-term trend towards more electronic markets accelerating, which is reflected in both client behavior and record trading volumes.”
Revenues from rates were US$126 million in the first quarter of 2020 increasing by 21.1% compared to the first quarter of 2019. ADV in rates of US$590.8 billion for the first quarter of 2020 increased 37.6% due mainly to record trading volume in long-tenor interest rate swaps, mortgages, US Treasuries and European government bonds, as well as year-over year growth in short-tenor interest rate swaps and swaptions.
Revenues from credit of US$54 million in the first quarter of 2020 were up 36.9% compared to the first quarter of 2019 while ADV in credit of US$33 billion for the first quarter of 2020 increased 101.4% due mainly to record volume in European credit, US high-grade, US high-yield, and credit default swaps.
Equity revenues reached US$19.4 million in the first quarter of 2020 rose 64.7% compared to the first quarter of 2019.
Money market revenues hit US$11.2 million in the first quarter of 2020 up 17.2% compared to the first quarter of 2019. ADV in money markets of $256.2 billion for the first quarter of 2020 rose 33.3% due to record volume in repurchase agreements.
The firm also saw revenues from market data of $18.6 million in the first quarter of 2020 increase 9.8% compared to the first quarter of 2019 due to delivery of additional data under its market data license agreement with Refinitiv.
Higher employee costs drove operating expenses of US$157 million in the first quarter of 2020 up 11.7% compared to the first quarter of 2019 due higher compensation expenses, including US$3.5 million related to non-cash stock-based compensation expense and payroll taxes, which were related to the Special Option Award and post-IPO options awarded in 2019.
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