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Welcome to Tradeweb's first quarter 2026 earnings conference call. As a reminder, today's call is being recorded and will be available for playback. To begin, I'll turn the call over to Head of Treasury, FP&A, and Investor Relations, Ashley Serrao. Please go ahead.

Thank you and good morning. Joining me today for the call are our CEO, Billy Hult, who will review our business results and key growth initiatives, and our CFO, Sara Furber, who will review our financial results. We intend to use the website as a means of disclosing material, non-public information and complying with our disclosure obligations under Regulation FD.

I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements related to, among other things, our guidance are forward-looking statements.

Actual results may differ materially from these forward-looking statements. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release, earnings presentation, and periodic reports filed with the SEC.

In addition, on today's call, we will reference certain non-GAAP measures as well as certain market and industry data. Information regarding these non-GAAP measures, including reconciliations to GAAP measures, is in our earnings release and earnings presentation. Information regarding market and industry data, including sources, is in our earnings presentation. Now, let me turn the call over to Billy.

Thanks, Ashley. Good morning, everyone, and thank you for joining our first quarter earnings call. We delivered another record quarter, surpassing $600 million in quarterly revenue for the first time in our history.

As I noted last quarter, we entered the year with a constructive macro backdrop featuring strong private sector intermediation, robust global issuance, and elevated levels of market debate alongside early signs of diversification away from U.S. assets.

That backdrop evolved quickly. What began as a market conversation centered on the pace of rate cuts in 2026 shifted meaningfully as geopolitical tensions in the Middle East drove an increase in oil prices and renewed concerns around inflation across the global economy. Our clients actively repositioned risk and navigated this dynamic environment, driving record quarterly average daily volumes on the platform, including 17 of our 22 products that we report in our monthly activity report.

While periods of elevated volatility tend to naturally drive wider bid-ask spreads, markets remained orderly throughout the quarter. Our clients engaged with the platform at record levels and increasingly capitalized on our automation solution, AiEX. Equally important, our dealer partners flourished as our continued investment in consistent two-way electronic liquidity benefited clients during heightened market stress.

We move into the aftermath of the volatility spike, history has shown that activity can moderate as clients digest the forward outlook. More importantly, this macro shock has left our clients in a healthy position, and we expect them to resume trading actively across our global franchise. Diving into the first quarter, strong client activity and a risk-on environment drove 21.2% year-over-year revenue growth on a reported basis.

Our international business continued to set new records with 29% revenue growth as our strategic initiatives across Europe, APAC, and EM continued to pay off. We continued to balance investing for growth and profitability as Adjusted EBITDA margins expanded by 40 basis points relative to the first quarter of 2025.

Our international business really continued to fire on all cylinders for us this quarter, contributing to nearly 60% of our overall revenue growth. Importantly, that strength was broad-based as we saw double-digit growth across all four asset classes with our international clients. Even though international clients are naturally focused on non-U.S. products, they're increasingly trading outside their home markets. That really speaks to the strength of our platform.

To put some numbers around it, our international clients drove 60% of our dollar swaps growth, and we also saw double-digit contributions from them across U.S. Treasuries, cash credit, CDS, and ETFs. On the product side, internationally, we had double-digit growth across European, Aussie, and Japanese government bonds. European swaps was a standout, but we also saw a very strong performance across APAC and EM swaps.

It wasn't just rates, as our European credit and CDS produced strong revenue growth. Not to be overshadowed, we also saw over 20% growth in both our European ETF and repo businesses. On the flip side, it's not just international clients driving this activity. Our U.S. clients are increasingly active in international products, contributing over 20% of our international product revenue growth.

When you step back, what you're really seeing is the flywheel of the platform at work, where our global clients are trading across regions and asset classes, and we believe this advantage will only grow as we expand our presence across regions. Turning to slide 5, our rates business produced a record revenue quarter driven by continued organic growth across swaps, global government bonds, and mortgages.

Record credit revenues were led by strength across global corporate bonds and credit derivatives. Money markets revenue growth was led by record quarterly revenues across global repos and ICD.

Equities also produced record revenues led by growth in global ETFs and equity derivatives. Other revenues grew over 56% year-over-year, driven by our digital assets initiatives. Finally, market data revenues were down approximately 5% year-over-year, driven by a timing shift in how certain historical data sets are delivered under our amended LSEG agreement.

Recall, we recorded $8 million in January of 2025 tied to the delivery of data sets to LSEG. The revenue recognition of these data sets in 2026 shifted to $2 million being recognized in the first month of every quarter. Adjusting for the timing difference, market data revenues grew 13% year-over-year, driven by growth in our recently renewed LSEG market data contract and proprietary data products.

Turning to slide 6, I will provide a brief update on two of our focus areas, U.S. Treasuries and ETFs, and then I will dig deeper into U.S. credit and global interest rate swaps. Starting with U.S. Treasuries, after 8 months of below-average intraday volatility, we saw a significant pickup in March intraday volatility. While March volatility rose over 50% from the December lows, it was still nearly 40% below what we saw in April of 2025.

Our first quarter market share of 22% drove record revenues, up nearly 10% year-over-year, as double-digit revenue growth in our institutional channel was partially offset by weaker retail trends. Market share was down year-over-year, mainly due to lower wholesale market share, we remain optimistic on a re-acceleration in our U.S. Treasury business as we penetrate additional parts of the voice market, coupled with continued strong government debt issuance.

Our competitive position remains strong. On a relative basis, we exceeded 50% share for the eighth consecutive quarter in electronic institutional U.S. Treasuries versus our main electronic competitor. Wholesale remains a strategic priority with continued focus on expanding our liquidity network, deepening client relationships, and driving growth through differentiated protocols and products across our integrated platform.

Turning to equities, this year marks the 10-year anniversary of our institutional U.S. ETF platform, an important milestone that reflects both the evolution of the ETF ecosystem and Tradeweb's role at its center. Since launch, our platform has scaled significantly, surpassing $4 trillion in notional traded, including more than $1 trillion in the past 12 months alone.

What began with just a handful of participants a decade ago has grown into a broad and diverse global network of close to 200 institutional clients and over 20 dealers. Our ETF business posted revenue growth in excess of 35% year-over-year as we continue to deepen integration with our clients, coupled with a pickup in market volatility.

Our AiEX automation solution continues to be a key differentiator with our ETF clients, with average daily trades increasing over 70% year-over-year, with double-digit growth across European and U.S. ETFs.

Our efforts to broaden our equity presence beyond our flagship ETF franchise continue to pay off, with record institutional equity derivatives revenues up nearly 20% year-over-year. Looking ahead, the pipeline remains strong as the benefits of our electronic solutions continue to resonate with our clients.

We believe we are well-positioned to capitalize on the long-term secular ETF growth story, not just in equities, but across our fixed income business. Shifting to global credit on slide 7, double-digit revenue growth for global credit was driven by strong double-digit revenue growth in European credit, EM credit, and credit derivatives, which more than offset weakness in municipal bonds.

U.S. credit produced low single-digit revenue growth led by strong double-digit revenue growth in our institutional business, but partially offset by continued weakness in our retail corporate credit channel, where revenues were down over 20% year-over-year, primarily reflecting the better relative yields our clients were getting outside of U.S. credit. U.S. credit remains a key growth priority, and we are focused on expanding our penetration within RFQ markets to complement our leadership in portfolio and session-based trading.

Despite more than one decade of innovation, RFQ continues to be the primary execution protocol for institutional clients in U.S. credit, driven by its transparency and competitive pricing dynamics. However, clients are often reluctant to expose larger trades broadly, given the trade-off between minimizing information leakage and achieving optimal pricing. In response, we are focused on enhancing workflows that better align with client needs.

To that end, we have continued to invest in our enhanced dealer selection tool, SNAP+, which enables our clients to dynamically target dealers most likely to engage and win a given inquiry based on both historical and real-time trading data. This innovation builds on our broader strategy of expanding the range of pre-trade execution and post-trade solutions we offer.

We remain focused on the block market, with overall U.S. credit block share up 20 basis points year-over-year in the first quarter, with block average daily volume growth of over 30% year-over-year across IG and high yield. Our volume growth was driven by continued adoption of our portfolio trading, RFQ, and sessions protocols. Institutional RFQ average daily volume grew over 30% year-over-year, with double-digit growth in both IG and high yield.

Our efforts to expand into RFQ are seeing continued signs of success, with our RFQ share of overall TRACE up over 50 basis points year-over-year. Portfolio trading produced record average daily volume increasing over 30% year-over-year with double-digit growth across both U.S. and international PT. AllTrade had a strong quarter with over $230 billion in volume, with average daily volume up over 5% year-over-year.

Our all-to-all average daily volume grew over 65% year-over-year. Our dealer RFQ average daily volume grew over 40% year-over-year. We saw record responder rates in high yield as the team remains focused on expanding our network and increasing the number of responders on the AllTrade platform. Electronification remains a key focus, especially in U.S. credit, where underlying trends are strong.

Investment-grade volumes have been increasingly impacted by affiliate trades, which are internal transfers within a dealer that occur after a transaction in the institutional market. These are double-counted, non-economic trades that don't interact with electronic platforms, distorting reported market share and electronification and creating artificial pressure on both.

If you adjust for that activity, the underlying picture looks better. Based on our estimates, first quarter market share in IG would have increased 5 basis points versus our reported decline of 33 basis points, and electronification also would have moved higher. The core trend hasn't changed, electronification in U.S. credit is continuing to build, and we feel very good about our positioning as that plays out. Looking ahead, global credit remains a key area of focus with a long runway for growth.

While U.S. credit continues to anchor performance through ongoing innovation, differentiated liquidity, and investment in our platform, we are also scaling European credit by expanding RFQ adoption and liquidity and advancing munis through increased electronification, transparency, and connectivity in a fragmented market.

In EM credit, where we are still early in our expansion, we are building momentum by leveraging our established presence in developed markets alongside a holistic EM product offering across rates and credit. Our EM credit revenues grew over 40% year-over-year in the first quarter, signaling strong momentum.

Moving to slide 8, over the past two decades, electronic interest rate swaps trading has evolved from an emerging concept into an ecosystem defined by transparency, efficiency, and ongoing innovation. That continued evolution was evident this quarter, including in moments of heightened volatility where clients leaned further into electronic workflows.

Global swaps delivered record quarterly revenues up over 45% year-over-year, driven by strong client engagement across our global suite of currencies. Our quarterly core risk market share, which drives revenues and excludes compression trading, reached a record rising 190 basis points year-over-year. Total market share increased from 21% in the first quarter 2025 to 24.1% in the first quarter 2026, reflecting a combination of strong risk and compression volume growth.

During the quarter, we achieved record share across sterling and other G11 currencies and our second-highest share across EM-denominated currencies. First quarter performance was driven by record revenues across U.S., Europe, APAC, and emerging markets. This quarter underscored the value of our breadth across the swaps market, particularly as clients' interest can ebb and flow across products over time.

Specifically, as inflation concerns re-emerged and rate expectations shifted this quarter, activity picked up in our inflation swaps business, driving record volumes. It is a product area we entered in 2017, where adoption was initially gradual, but where the opportunity in the market expanded materially after 2020, and we currently hold over 95% electronic market share.

That trajectory makes periods like this especially meaningful as they reinforce the value of our continuous investments towards building a more holistic swaps offering across products and geographies over time. Beyond inflation swaps, the nature of trading we saw in March evidenced a broader pattern in how electronic trading continues to evolve.

Even as market conditions became more challenging, automation remained robust. We saw clients not only lean into inherently electronic protocols, but use them in a more sophisticated way through sending their trades out to multiple dealers amidst an environment where we have historically seen that pullback. It's a testament to the sophistication clients have built into their workflows and to the growing value of electronic trading across market conditions.

Overall, our RFM protocol saw average daily volume growth of over 150% year-over-year in the first quarter, with growth accelerating in March. We continue to make progress across emerging market swaps. Our first quarter EM swaps revenues delivered another strong growth period, delivering another record. We believe there remains significant runway given the still relatively low levels of electronification. Looking ahead, we continue to see significant long-term growth potential in swaps.

On a DV01 basis, electronification has grown at an average annual rate of 160 basis points since the first quarter 2020 as dealers and clients move a greater share of their workflows electronically.

That progress is reflected in the continued strong revenue performance of our swaps business, and we see substantial opportunity to further digitize workflows alongside our clients. In collaboration with them, we expect to drive continued workflow innovation across both cleared and bilateral swaps markets. With that, let me turn it over to Sara to discuss our financials in more detail.

Thanks, Billy, and good morning. As I go through the numbers, all comparisons will be to the prior year period, unless otherwise noted. Slide 9 provides a summary of our quarterly earnings performance. As Billy recapped earlier, this quarter, we saw record revenues of $618 million that were up 21.2% year-over-year on a reported basis, and 17.5% on a constant currency basis, given the weakening dollar.

We derived approximately 44% of our first quarter revenues from international clients and recall that approximately 30% of our revenue base is denominated in currencies other than dollars, predominantly in euros. Total trading revenues increased 23%, comprised of 25% variable trading revenue growth and 14% growth across fixed trading revenue.

Rate fixed revenue growth was primarily driven by an increase in minimum fee floors for certain dealers and by the addition of dealers to our mortgage and U.S. government bond platforms. Credit fixed revenue growth was primarily driven by the previously disclosed introduction of minimum fee floors and the migration of certain dealers to subscription fees.

Other revenues of $10 million for the first quarter increased by 56%, primarily driven by growth in our digital initiatives related to our commercial relationship with the Canton Network.

Overall, the other revenue line will remain variable quarter to quarter, reflecting fluctuations in a number of variables, including the number of Canton Coins earned, Canton Coin value, the number of super validators in the network, and periodic tech enhancements for our retail clients.

We expect total other revenues in 2026 to be roughly in line with 2025. First quarter Adjusted EBITDA margin of 55% increased by 101 basis points on a reported basis when compared to our 2025 full year margins. Our net interest income of approximately $17 million increased due to higher cash balances, which offset lower interest yields.

Lastly, this quarter's GAAP results were impacted by both realized and unrealized gains and losses across our strategic investments. Specifically, we recorded $1.2 million in net loss this quarter, including $2.9 million of unrealized losses reflecting the mark-to-market of our Canton Coins holdings. As a reminder, these losses are only included in GAAP EPS and are excluded from our non-GAAP adjusted diluted EPS.

Moving on to fees per million on slide 10, we provide a highlight of the key trends for the quarter. You can see slide 17 of the earnings presentation for the full detail regarding our fee per million performance this quarter. That said, I will spend more time talking about cash credit fee per million, given the movements are slightly more nuanced. Cash credit fee per million decreased 15% this quarter based largely on 2 drivers, the prior introduction of variable and fixed fee mix changes and business mix changes.

Specifically, the introduction of minimum fee floors and migration of certain dealers from fully variable to more fixed plans in 2025, a mix shift away from municipal bonds and retail this quarter, which carry a relatively higher fee per million, as well as a mix shift towards non-comp PT, which carries a relatively lower fee per million.

Excluding the impact of our previously disclosed fee changes and this quarter's impact of product protocol mix shifts, fee per million would be down approximately 1%. Slide 11 details our adjusted expenses. At a high level, the scalability and variable nature of our expense base allows us to continue to invest for growth and grow margins. We have maintained a consistent philosophy here. Adjusted expenses for the first quarter increased 20.2% on a reported basis and 15.3% on a constant currency basis.

During the first quarter, we continued investments in tech and communications, digital assets, consulting, and client relationship development. Adjusted compensation costs grew 12%, with nearly 30% of the increase from higher discretionary and performance-related compensation, more than 25% due to higher headcount, which was up 11.4% year-over-year, and 25% due to higher payroll taxes.

Technology and communication costs increased 37.7%, primarily due to our continued investments in data strategy and infrastructure and increased software costs. Approximately $5 million of the increase was driven by higher reference data costs and investments in our data and infrastructure strategy, both of which began in the second half of 2025. Adjusted professional fees grew 18.8% due to an increase in tech consultants as we continue to augment our offshore technology operations.

Occupancy expenses increased 61.5%, primarily from increased rent due to the move to our new New York City headquarters, which came into effect in the third quarter of 2025. Adjusted general and administrative costs increased 85.2%, primarily due to $8.1 million of unfavorable movements in FX and a pickup in travel and entertainment.

Unfavorable movements in FX resulted in a $5.1 million loss in the first quarter of 2026 versus approximately a $2.9 million gain in the first quarter of 2025. Excluding FX, adjusted general and administrative costs grew 11.4%. Slide 12 details capital management and our guidance.

On our cash position and capital return policy, we ended the first quarter in a strong position with approximately $1.9 billion in cash and cash equivalents, and free cash flow exceeding $1 billion for the trailing 12 months, representing strong year-over-year growth of approximately 31%.

We also held 1.6 billion Canton Coins with a fair value of approximately $243 million. With this quarter's earnings, the board declared a quarterly dividend of $0.14 per Class A and Class B shares, up 17% year-over-year. During the quarter, we repurchased approximately 483,000 shares for $51 million. There is $523 million of aggregate share repurchase authorization remaining. Turning to guidance for 2026.

In light of continued strong business momentum, we now expect adjusted expenses to trend towards the top half of the initial guidance range of $1.1 billion-$1.16 billion. We believe we can drive Adjusted EBITDA and operating margin expansion compared to 2025 at either end of this range.

Although we expect the incremental margin expansion to be more muted as we continue to focus on balancing margin expansion with investing for the future. Specifically, we continue to invest in credit, rates, international markets, ICD, and digital assets as key focus areas with a long runway for growth.

We also continue to invest in technology that allows us to sustain and build on our leading platform. Some of these investments will take time to scale, but we continue to prize innovation and create durable long-term revenue growth opportunities. I'll turn it back to Billy for concluding remarks.

Thanks, Sara. Before I get into the broader outlook, I want to spend a minute on some of our frontier markets. We've made solid progress there in a relatively short period of time through targeted partnerships and investments. From our work with the Canton Network, to our new partnerships with Kalshi in prediction markets, to Crossover Markets in crypto execution, these partnerships build directly on what we've already established, a broad network, execution infrastructure, and a central role in trading activity.

With tokenization, we're focused on the evolution of settlement, particularly around capital efficiency and collateral mobility. We've already executed trades in this space alongside a variety of market participants utilizing Canton's distributed ledger infrastructure. We are working alongside both existing and new clients who are driving demand for instant settlement.

In institutional crypto, the opportunity is to bring more standardized electronic execution to a market where demand is growing, but broadly adopted infrastructure remains nascent. Alongside our investment and partnership with Crossover Markets, we are building a more comprehensive execution offering, including over time, leveraging Ratefin's technology to incorporate spreading functionality.

In prediction markets, through our partnership with Kalshi, we're working to integrate event-driven data into our rates and credit platforms while working with market participants to support the longer-term development of an institutional-grade execution environment.

Across all three, the focus is on extending our network and execution capabilities while closely partnering with our clients and the broader ecosystem as these markets evolve. The environment to start the year has been defined by a lot of debate, and if anything, that uncertainty has only increased as we move forward.

We did see clients take a bit of a breather in April as they stepped back and recalibrated their forward strategies, but importantly, what came through clearly was the durability of our business. Intraday volatility in April to date was down more than 50% year-over-year. This was not an easy backdrop. Even after a record 1st quarter, April 25 still ranks as the 3rd-best revenue month in our history after clients rapidly repositioned their portfolios post the announcement of tariffs.

Looking ahead to April of 2026, despite a tougher comparison and a different volatility environment, we are trending toward another top 5 revenue month based on internal estimates. I think that really underscores what we've been talking about for some time now. The breadth of the model and the strength of the recurring activity we're able to build irrespective of the volatility environment.

As we focus on delivering more durable, workflow-driven solutions for our clients, we're seeing that translate into sustained engagement. In fact, April average daily volume is currently running ahead of April 2025, which tells you that while the mix of activity may shift, the level of client connectivity on our platform remains very healthy.

With two important month-end trading days left in April, which tend to be some of our strongest revenue days, overall and average daily revenues are trending down by a low single-digit percentage relative to April 2025.

The diversity of our growth remains a theme as we are seeing preliminary positive average daily volume growth across global swaps, mortgages, European government bonds, European credit, EM credit, CDS, equity derivatives, repos, and ICD. Our IG share is tracking in line with March levels, while our high-yield share is tracking above.

I would like to conclude my remarks by thanking our clients for their business and partnership in the quarter. I want to thank my colleagues for their efforts that contributed to the record quarterly revenues and volumes at Tradeweb. With that, I will turn it back to Ashley for your questions.

Thanks, Billy. As a reminder, please limit yourself to one question only. Feel free to hop back in the queue and ask additional questions at the end. Q&A will end at 10:30 A.M. Eastern time. Operator, you can now take our first question.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Craig Siegenthaler of Bank of America. Your line is now open.

Good morning, Billy, Sara. Hope everyone's doing well. Sorry about that. I just switched to speaker because the headset was a little messy. Good morning, Billy, Sara. Hope you guys are doing well.

Morning.

Our question is on swaps, and congrats on that 45% year in your growth. We wanted your perspective on the good versus bad volatility debate in the swaps market, given recent strength, and especially curious on what you saw in Europe.

Yeah. Craig, how are you? Can you hear me loud and clear? Glad you're doing well. It's a good question. You know, as I kinda think about that for a quick second, and like maybe before I kinda parse like the kinda the porridge is too hot, the porridge is too cold, you know, around volatility for a second, just like a moment maybe just like on the environment in general, 'cause I remember you kinda heard me loud and clear on the last earnings call say, you know, I was really, you know, very amped about the macro and the setup.

You know, the truth is, and the reality is, I think a couple of months later, the world changes really quick, like still, like really, really amped. We're still really amped here at Tradeweb. I think, you know, from my perspective, we are in how we would describe like a really sweet spot for our business.

When I say that, to make an obvious point, that doesn't mean that we don't have, as you know very well, like complex and difficult things ultimately to get right. When you just step back for a quick second and you think about the combination of, you know, fiscal stimulus, monetary stimulus, debate on Fed timing, you know, we're in this like technology, obviously, investment super cycle, this like big deregulatory unwind.

You know, the legacy banks, the partner banks of Tradeweb had a great quarter in the global markets business. The numbers from Jane Street were like off the charts, obviously, this week. We're in like a, you know, a pretty, you know, prime environment. I wanna start with that.

When we think about, you know, to your question, how we parse kind of good volatility and then bad volatility, like think about obviously always like good volatility as like, you know, strong two-way markets, active price discovery, you know, from our perspective, something really important, which is like that AiEX algorithmic searches like running really well.

You know, we're realists, so we always understand there's always this concept of like markets moving into more of a bad vol market. Think about that as obviously like a dislocated market environment, thinner liquidity, less liquid areas of the market, you know, generally, kind of parts of the off-the-run Treasury market sometimes fit that description perfectly.

To your kind of point, I would say like, you know, the volatility across the, you know, the sterling and European markets, I think they were 2 times higher than the U.S. rates market, you know, in March. Given that rapid repricing of rate cuts, you know, to potential rate hikes, I think the markets moved, you know, extremely orderly and consistent with how we think about, you know, healthy price discovery process rather than how we think about like stresses in the system.

You know, from my perspective, I think I would say something important, which I think it speaks to how these markets have evolved. I think that's an important kind of comment. You know, both buy-side and dealer communities today are just like significantly better ultimately positioned to navigate these environments electronically, you know, stress or no stress. That's important.

I think we saw that in the data, increased usage of electronic protocols, you know, particularly, RFM and Incomp trading. This protocol, Craig, that we've launched in Europe, our request for market got up to like 45% of flow. Incomp trading moved north of 80%. That's kind of what you wanna see, you know, very specifically in periods like this.

As the shift becomes more automated, you know, from our perspective, protocol-driven trading tends to make ultimately something very, very important, which is liquidity becomes, you know, more resilient even as volatility rises. That's kinda how we think about the context.

I think in a very interesting way, you know, the distinction almost between how we think about and talk about good and bad volatility, the porridge is too hot, the porridge is too cold, becomes almost, I don't wanna say irrelevant, but I think in a certain way it becomes kind of less relevant because the market structure today is much more kind of designed ultimately to perform and generate activity across a wide range of conditions. That from our perspective, I think is a really important point.

You've heard me because you know me well, you've heard me talk about sort of like this kind of like how we talk about sort of like the light switch moment, when a client behaviors change, they go from using or engaging the market one way to a better way, like this kind of like light switch moment.

I think increasingly we're thinking about volatility in a certain way as its own version of a light switch moment, where ultimately, you know, technology allows the participants to thrive. I think that's a really important and kind of interesting concept. From my perspective, when I think about thriving, which is like what we're in the business to do, which is to thrive, as you know very well, we have our own version of a really high bar.

One thing I would kind of say as we're thinking about context and where we're going from here, you know, if you take April—this past April, revenues, this month of April revenues, and you look at it versus May and June of this past year, you know, we're up over 10%. That's an important stat, an important, I think stat for me to make sure I get very clear to you.

That makes me feel, I think, quite optimistic. We for sure think about macro volatility as a tailwind. From my perspective, I think more importantly, as you know very well, you know, the electronic runway remains quite significant in our space. You add those things together, and you feel like you're in this kind of sweet spot moment. Thanks as always for the question. Good to hear your voice, Craig.

Thank you, Billy.

Thank you. Our next question comes from the line of Michael Cyprys of Morgan Stanley.

Hey, good morning, Billy, Sara. Thanks for taking the question. Just curious to hear your views around how you're thinking about AI's role in increasing automation across workflows, particularly in credit and rates, and what are some of the KPIs you think we should be tracking?

Great question. Super timely, Michael Cyprys. Appreciate it as always. I thought for a second when I was listening to my recording, I thought it was like an AI version of my voice or something. It sounded so different, which is kind of funny. Great question, timely. You know, for one quick moment, like core principle, like, I want to say this just like very loud and clear, like Tradeweb Markets, as you know very well, we're in the business of serving our clients, period.

Everything we do around AI always has to be kind of triggered off that. Our goal and Sara Furber's goal and my goal and the management team's goal at Tradeweb Markets, as you know, is to be the most client-centric firm in the electronic marketplace, period.

I think in a really interesting and exciting way, AI gives us that opportunity constantly to prove that. You know, not that we're all like historians, but I would say like the history of technology, as you know very well, is that it tends to make smart people smarter, right? Productive people more productive, right?

Without question, you know, big picture AI is this like massive accelerant of all of that, right? Expanding the scope, you know, of what people do, expanding people's impact. That's like really, really kind of like, you know, important stuff. We have a very strong feeling that data is the moat. I think that's an important kind of thing to say.

Our proprietary data, which we draw, as you know very well, from like live markets, executable pricing, RFQ behavior, execution outcomes, client decision-making protocols across all of these assets, I think gives our AI foundation something that maybe, you know, competitors can't quite come as close to.

I say that like humbly. I think that's an advantage for us. You know, on the generative AI side, our goal is, you know, pretty simple. You know, move clients from data retrieval into this thing that's really important, which is like insight generation.

You know, in markets that obviously like never slow down, that's important. We did something I think really cool, very proud of. We have our own kind of AI-powered assistant named, we're calling it Terra. I think we have to kind of keep thinking about the name.

It's kind of a cool name, but it's, you know, Tradeweb AI research assistant, which is in beta with our clients, some of our smartest, most important clients. We're on track to launch that in 2Q, which gives traders like a single natural conversation to surface insights around liquidity conditions, market participation, historical execution behavior, and relative pricing dynamics.

These are like really, really important things, and you can hear from me the focus that we have as a company. On the predictive side, we're tracking, tackling and working on, I think one of the fixed income's probably hardest problems, which is price discovery. We're launching what we call Ai-Price 2.0 at the end of 2Q.

As you know very well, corporate bonds can go hours or days without a print, and the true economics of a transaction can be obscured by like this complexity piece of it all. I think it's worth as a company, us, you know, spending a lot of time on that in that setting.

You know, in its simplest form, and I like to take the kind of like half step back as you know really well, it's gonna be always about, you know, getting really smart people access to this amazing technology inside of the company, and really proud of how many smart people work at Tradeweb, like expanding, you know, productiveness.

I'll say this just like very clearly and maybe like a little bit personally, like as CEO, what's interesting to me is not just, you know, doing more with less people. It's not just like saving money. Sara and I are always like just like amazingly on the same page around all of this. It's about like reimagining like process really, right?

How do we have the ability to continue to invest, you know, more in our future of growth? cause we have a lot of potential out there, and we're really excited about that. And that's a pretty cool thing. All of this stuff has to be top-down all of the time. I think we're still in a very important way at the beginning.

You know this very well, you know, dealing with this at your own firm. I think there's going to be some hard choices kind of along the way around all of this. Data advantage, I think reinforces network effects, and I think that opens up new revenue opportunities. Smarter, faster ways for our clients to trade and execute in the marketplace, and that's the focus and I think the intensity that we're bringing to the space around all of that. Thanks very much for the question.

Thank you. Our next question comes from the line of Simon Clinch of Rothschild & Co Redburn. Your line is now open.

Hi. Hi, Billy. Hi, Sara. Thanks for taking my question. Actually, this one's probably more for Sara. Following on nicely from the last question about AI investments generally for growth, Sara, could you expand on your philosophy for expense growth in terms of the flexibility and willingness you have to adjust investment up or down in environments of volume upside or in fact downside? How we should be thinking about that kind of flex, please? That'd be great. Thanks.

Sure. Hi, Simon. Great question. Definitely sort of a good follow on from a conversation Billy just had. Look, regardless of whether we're in a high or low volume environment, and I know we've said this before, we believe and I think we've evidenced we have significant operating leverage and expense flexibility in our model.

Big picture, roughly 55% of our expenses are fixed and 45% are variable or discretionary. Specifically in your question when you're asking about volume-driven expenses, within that variable bucket, most of those expenses are more directly tied to revenue or EBITDA growth versus volume. Think of things like performance-driven comp, commissions.

There are some smaller components that correlate more directly to pure volume, such as exchange and clearing fees and those are pretty small, like in terms of the total expense base we have, call it low single digits, like something like 3% of our total expense base, which leaves us a lot of flexibility in terms of how we manage expenses and deliver operating leverage.

More broadly, I would say when you think about higher volume as a proxy for higher revenue environments, you should think about our expense growth as really following our track record of, as you were kind of getting at, accelerating discretionary spend while still delivering margin expansion. I think we have this flexibility to accelerate and decelerate. You know, if you looked at last year, top line grew 19%, expenses grew 17%.

I've talked before how that probably wasn't our budget at the beginning of the year, but we accelerated discretionary spend and still delivered 64 basis points of margin improvement. If you contrast that with, you know, an environment like 2023 where we had multiple quarters of single-digit top line growth, we still delivered margin expansion of just under 50 basis points while investing in our platform.

That shows two things. It shows our ability, but also our willingness, to your point, to accelerate and decelerate. You know, this quarter's another example. We delivered almost 100 basis points of margin improvement on a constant currency basis, including facing, you know, significant step-ups or swings from FX and step-ups from the office and other data infrastructure spend. I think we've seen in any environment, we have the ability to manage our expense base.

I'd say, you know, at the highest level, the great thing about our business is that as revenue and our business keeps scaling, we continue to see natural operating leverage, and that allows us to calibrate expenses while still delivering margin, but still being able to invest for discretionary and opportunistic things like Billy was just talking about, whether it be AI or opportunities in EM. That, you know, for us is like our North Star in being able to deliver durable long-term revenue growth, that ability to invest through the cycle. Thanks so much.

Thank you. Our next call comes from the line of Jeff Schmitt of William Blair. Your line is now open.

Hi. Good morning. You've talked about EM and EM swaps in particular being one of your key revenue growth opportunities. You know, I know it's still a small part of the mix, but could you talk about what you're doing on that front and what type of growth you're seeing?

Yeah. Good question. You know, it is a small part of our growth, but it's a growing and a really important kind of story for us. I think it was like 6% of our revenues in the first quarter of 2026, and that's basically up from like almost like, you know, a little bit over 1% in 2022.

We're still scratching the surface of it, right? Like, find the wallet, that's really kind of an important thing, right? I think the overall EM revenue wallet exceeds like a little bit over $1.5 billion annually, so it's a big market, significant kind of opportunity for us there.

It's not to say that you have to pick your day job, but I think it's a little bit of a continuation that I was saying before, just about like, you know, how do you wind up servicing your clients, around the focus of, you know, building solutions.

This efficient search for liquidity and, you know, on some level, that holds true for whatever market we're talking about. We think we have a really strong leadership position across obviously our legacy, you know, U.S. and European businesses. We're really proud of what we've been able to accomplish in a short period of time as a public company, you know, in EM. Start with this.

It's a, you know, from our perspective, and we talk about like plotting for growth, it's a multi-year growth opportunity rather than how we think about, and Sara described this perfectly, like a single investment cycle. I do think we're building on this like pretty strong foundation in place, you know, vis-à-vis the developed marketplaces.

If we were thinking about the EM swaps market for one second, I think similar structural growth around that EM countries continue to finance their growth through this like very big, healthy global debt issuance. We're starting to see something really important, which is the velocity of these markets increase. I would point out something I think just like very important, which is the cleared EM swaps market has grown at an over 20% CAGR over the last five years.

It's still only 20% electronified. The market is only a fraction of the size of the dollar and euro and sterling markets. I probably just mangled that, which is okay. You guys hear, as I describe that, the beginning of a market really picking up velocity and beginning to go electronic, which is one of the reasons why we're so focused, you know, in this area.

I think we're starting to see very early success from our perspective around EM hard and local currency credit. That's still, I think, from my perspective, a bigger lift. Excited about kind of how we're thinking, our participation in the Middle East. Index inclusion in markets like Saudi Arabia are important. There's obviously continuing evolving, you know, clearing frameworks happening there.

Something very important, which is increasing participation from both kind of global and regional investors there. We're busy. Recent launches, we've done like Mexican repos, asset swaps. I think those are good examples of how something that we really focus on, which is how do you deploy capital ultimately incrementally, do something very, very important, which is establish liquidity, and then ultimately do this thing, which is the magic around it, which is scale participation across dealers and clients, quote-unquote, buy-in.

You know, really important stuff. A lot more work to do, you know, but we feel pretty good about the trajectory. Feel really, really good about the forward opportunity, the wallet, the general trend of direction there. I think, focused on something that's important, which is the long-term health of our EM franchise. That's what you're going to get from us. Thanks for the question.

Thank you. Our next question comes from the line of Patrick Moley of Piper Sandler. Your line is now open.

Yes, good morning. Thanks for taking the question. The DTCC's tokenized Treasury pilot is going to go live on Canton in the next couple of months. It's a network that you've obviously been running infrastructure on for some time.

How are you thinking about the potential impact of real-time intraday collateral mobility on fixed income volumes and rates in particular? If you could maybe just talk about the broader opportunity and risks as it relates to tokenization and, you know, anything you could also share maybe on client conversations and client demand for this type of tokenized trading. Thanks.

Yes. How are you, Patrick? Good to hear your voice. Sometimes I feel like we're like the best spokesperson out there in the world for Canton, and I say that in a good way. You know, because, you know, we're behind them, and we think that they're onto something really important. I think you nailed it in your question, around the DTCC pilot and how important and meaningful that is.

Maybe like not a half step back, a quarter step back. I think for a second, let's just understand ultimately what tokenization is an upgrade to market infrastructure. It does a few things that are very important. It makes settlement faster, more transparent, and ultimately has the potential to enable kind of real-time 24/7, you know, collateral movement. Those are like really important kind of concepts.

I say this again, I think the pilot's like meaningful step because it's bringing U.S. Treasuries on-chain within a trusted market structure. I think that concept of market, a trusted market structure is important. There's no question that, like, once you do that, you're starting to do something important, which is like broader industry momentum.

These things are kind of coming together. You know, we've been active in the space, to your point, through our tokenized repo activity on our friends at Canton. I think that participant set is continuing to grow and becoming more diverse.

I would say, not that Tradeweb needs to have a, you know, a big sales pitch around this, but, you know, we do bring our own role, you know, around this, I think, in terms of helping the industry feel comfort around, you know, change. I think we bring a lot of credibility into this. We're excited about it and excited to do it. It doesn't disintermediate us.

We see risks everywhere, as you would expect us to. We're in the business of always seeing risks, but I don't see the disintermediation around this for us here. I think the execution layer always is going to remain ultimately the most valuable part of the market, that's where, as you know very well, liquidity is formed, prices discovered, and that's where we operate and live and thrive.

As assets become tokenized, think about it this way. As assets become tokenized, they're gonna continue to trade through these, like, electronic workflows, and that execution is, you know, our bread and butter. Excited about it.

I've made the point before, I'm, you know, I'm trying to get that light bulb to ring off with our friends at Canton. I think the mortgage market, given how important that market is, has a settlement process that has the ability to really change. That's gonna be a marketplace that we're gonna stay focused on.

We're always looking to have markets have more participants in them, and when you think about a more streamlined and efficient settlement process, that's one of those things that allows, you know, more participants to flourish in this kinda changing world and changing market environment. Thanks a lot for the question, Patrick.

Thank you. Our next question comes from the line of Benjamin Budish of Barclays. Your line is now open.

Hey, good morning, and thank you for taking the question. I wanted to ask about ICD. I think it's been about two years, or almost two years since you completed that acquisition. I was wondering if you could just give us an update. You know, where are you in terms of cross-selling? What do balances look like? You know, what's on the product roadmap after the addition of T-bills? Any update there would be helpful. Thank you.

Sure. Hey, good morning. We're really pleased with how ICD has performed. You know, we think it's performed well, and it's definitely complemented our overall business. It's been a good fit, I'd say, culturally, strategically, and financially. Specifically this quarter, ICD delivered, and I think we said this in the script, record revenues and balances, year-over-year growth around 8%.

Even in April, we're seeing revenue and average daily balance growth rates that are trending higher than that figure in the first quarter. It's certainly volatile times in terms of, like, we're seeing large issuances by corporates, and then obviously quite a bit of spending. That generally has benefited the business because we're seeing those large corporate issuances translate to those balances on ICD. Away from that activity, generally, like corporate cash, you know, corporates remain healthy, momentum and new client wins.

We're seeing that high client retention, which was really important to us when we did the acquisition, remain. In terms of, like, our original thesis, certainly around cross-selling, we had two focus areas. One was cross-selling our products to ICD clients on their portal, taking the ICD offering to our client base, particularly internationally.

That international opportunity has proven compelling. In Asia, in particular, we think is a white space long-term for us. Corporates are sitting on a lot of cash there, we think we have a great brand. You know, as we think about where we've put our resources, we've completed our Singapore regulatory approvals, we've moved more salespeople into that market.

As we continue to expand our presence, which Billy's been talking about in Asia and EM more broadly, we think ICD is a complementary and other high-quality product to sell into those relationships. That's, you know, one of the pieces we're really excited about. On T-bills, which has been on our roadmap, we completed that last year, and cross-selling, you know, generally speaking, other Tradeweb products.

We've completed the core functionality to be able to do that, and we're working through some of the adjacent integrations with things like client treasury management platforms to drive easier adoption. It's been slower, but we're making steady progress. Overall, I'd say just in terms of the cross-selling, we think the international opportunity is probably more in focus for us right now on the roadmap.

One other point, what I was alluding to is one of our original thesis points was around creating enhanced durability for Tradeweb and how ICD has this hedge-like quality when you think about our portfolio across different market environments.

Whether that be risk-off environments where people are, you know, more apt to keep cash, we see benefits on ICD. In the corporate bond examples that I was talking about where we've seen heavy issuance, that historically weighed on something like our U.S. credit business, where we saw more muted near-term trading activity.

When you put all those things together through ICD, at that same time you might see more muted trading activity, you're seeing larger cash balances on the platform, and it's nice to see that hedge-like impact happen as we think about building a really durable portfolio from which we grow. Overall, I'd say we feel really good about how ICD has performed, and we're looking forward to continuing to drive growth ahead.

Thank you. Our next call comes from the line of Alexander Blostein of Goldman Sachs. Your line is now open.

Good morning, everyone. Thanks for taking the question. Billy, I was hoping to go back to one of the comments you made around Kalshi and sort of some of the innovation you guys are pursuing there. Interesting partnership.

You gave us sort of a high-level view of what that could look like, but any more specificity you could provide on the revenue opportunities for your firm over time when it comes to Kalshi and prediction markets, as well as how you guys might deal with regulatory uncertainty that keeps kind of popping up related to this market?

Yeah. Good question, Alex. Missed you in Boca. It's good to hear your voice. I hear your question. I think I'll answer it, like, in, in the blunt way that you know me. I think it's still early. I think that's important for me to say. I think there's momentum, but it's early, and I wanna make sure I kinda say that the right way.

I have a very strong view that I think all predictive markets are not created equally. We are, you know, exceptionally interested and oriented towards financially oriented predictive markets. You know, when Taylor Swift does or doesn't get married is less of an interesting data point to us, as you know. They're incredible marketers, though, by the way.

Like, they're just kind of everywhere in terms of their marketing. What I would say, just, like, extremely specifically, is interest is there, and when you see it's pretty impressive. We are seeing, like, just very genuinely, very broad interest between, you know, this combination of hedge funds, the systematic shops, Alex, that you would expect, non-bank liquidity providers.

I think we're starting to get actually, like, very real interest from some of the long-only investors. They're kind of asking about visibility into these contracts. I think some of the timing's been honestly helped by some of the Fed research, the demand was already building. I have a very strong view that you know very well, which is I think the definition of macro markets in general is continuing to evolve.

I think clients are looking at prediction markets, crypto markets, other non-traditional sources to support their core macro strategies in very, very different ways than they were a year ago. We're gonna be on top of that trend from the beginning. We started simple, and I think we are quite early.

We're launching a free viewer in the second quarter, and having clients see select economic and financial event contracts in real time, right alongside swaps and treasuries, and we think that's, like, the absolute correct first start. It's pretty low friction, and ultimately it's about discovery and kinda learning. And I think that's important. The feedback's been positive. The next step I think is super important, which is, like, this normalized.

basically a normalized API feed. Clients can pull this data directly into their OMS, EMS, and analytics kind of workflows. When we have a bank pricing risk, Alex, on our platform in the forward curve, they're gonna be using data that's important around some of these predictive markets to price that risk.

I think we have a very strong view that that's how the market is going to evolve. From my perspective, let's stay kind of thoughtful and, and disciplined on this. I think there's, you know, a lot of headlines, as you know very well, you know, particularly on the regulatory side, and we're gonna have to see how things play out.

I have a, you know, I have a core belief that these are the kind of partnerships that lead to, you know, strong innovation, and we're the kinda company that are gonna place the right bets, you know, around these evolutions, and I'm very, very willing to kinda continue down that path. Thanks a lot, Alex. Good question. Good to hear your voice.

Thank you. Our next question comes from the line of Chris Allen of KBW. Your line is now open.

Yeah. Morning, everyone. I think most stuff has been covered. Wanted to ask quickly just on the February announcement of the partnership with MAXEX within U.S. resi mortgages. Wondering if you're seeing any early returns so far? Zooming out a bit, how does the go forward look in mortgage MBS trading into the back half of this year in 2027?

Yeah. It's the same theme, and you guys are kinda like hearing this from Sara and I, like, I think, like, loud and clear. You know, we're placing bets on further evolution, and we're doing that, you know, with a clear eye, and I think the right amount of discipline and a good vision for how things are gonna continue to evolve in the future, and I think that's really important. MAXEX is a big piece of this.

It's early still and feeling really good about a very different kind of partnership now that we're talking with MAXEX versus, you know, Alex's question in predictive. You know, we entered into this like, commercial collaboration with this, I think, very straightforward objective of helping to expand, you know, institutional access across the, you know, U.S. residential, you know, private credit, you know, marketplace. MAXEX has this great reputation.

They've been a leading digital exchange for whole loans, you know, for a long time, and they connect this very broad network of originators within the, within the institutional buyers of the centralized clearinghouse, which is unique in a highly fragmented market. They're the kind of company that we like to partner with. I think the mortgage market, and you guys have heard me say this, I think the mortgage market stands out there as this extremely important market within the rates complex.

You know, you guys heard about, obviously, Jamie Dimon talking about a bond crisis yesterday and talking about the treasury market. You know, the importance of the mortgage market, as everyone on this call knows, is a big deal. We're gonna continue to invest in that area of the marketplace.

You know, more participants, more velocity of trading, more investments around changing the settlement of that asset class. We have a historic leadership position in the mortgage market that I think is something that the company is quite proud of, and we're gonna take that leadership position into further innovation because that's what makes us excited and charged constantly as a company.

A lot of focus on MAXEX, also I think a lot of, you know, forward bullishness on the continued evolution and the velocity of trading that exists within one of our very first market, markets. I made the joke on the last call that was my favorite child. It still is my favorite child.

We're, like, entering into that child going to a really good college. The market is doing, you know, quite well from a, from an activity perspective. We're excited about all of that. Thanks, thanks a lot for your question.

Thank you. This concludes the question and answer session. I would now like to turn it back to Billy Hult for closing remarks.

Thank you all very much for joining us this morning. Appreciate the questions as always. Any follow-ups, as always, please feel free to reach out to Ashley, Samir, and the amazing team that we have. Thank you all. Have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good morning. And welcome to Tradeweb Markets Inc.'s Fourth Quarter 2025 Earnings Conference Call. As a reminder, today's call is being recorded and will be available for playback. To begin, I will turn the call over to head of treasury FP&A and investor relations, Ashley Serrao. Please go ahead. Thank you, and good morning. Joining me today for the call are our CEO, Billy Hult, who will review our business results and key growth initiatives, and our CFO, Sara Furber, who will review our financial results. We intend to use the website as a means of disclosing non-public information and complying with our disclosure obligations under Regulation FD. I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements related to, among other things, our guidance are forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release, earnings presentation, and periodic reports filed with the SEC. In addition, on today's call, we will reference certain non-GAAP measures, as well as certain market and industry data. Information regarding these non-GAAP measures, including reconciliations to GAAP, is in our earnings release and earnings presentation. Information regarding market and industry data, including sources, is in our earnings presentation. Now let me turn the call over to Billy.

Thanks, Ashley. Good morning, everyone, and thank you for joining our fourth quarter earnings call. I am extremely proud of the Tradeweb Markets Inc. team, which helped produce the best revenue year and quarter in our history, crossing $2 billion in annual revenue for the first time. Our 2025 performance continues our seventh consecutive year as a public company, producing double-digit revenue growth and the twenty-sixth consecutive year of record annual revenues. As I look back at 2025, a few thoughts that come to mind are our clients' focus on data-driven tools for larger and more complex trades, the acceleration of automation, and the growing interconnectedness of global markets. As we look ahead, our ethos stays the same: continue to put forth rigor and discipline to help drive more innovation across our expanding markets. Our clients are now operating with an increased level of integration and sophistication across our markets. We saw real traction in the extension of electronic trading into areas that had previously been mostly manual, from uncleared swaps and swaptions to block trading in global credit. Liquidity has become more interconnected across assets, regions, and time zones, essentially breaking down those historical silos that used to dominate our clients' workflows. At the same time, we have made significant strides alongside our key partners in moving digital assets from something built on a whiteboard to real advancement in market infrastructure and how our clients are thinking about trading and settlement. As we sit here at the intersection of TradFi and DeFi, we will continue to partner and invest across the digital asset landscape to deepen our network and drive more workflow efficiency solutions for our clients. Diving into the fourth quarter on slide four, despite tough comparisons, strong client activity, share gains, and a risk-on environment drove 12% year-over-year revenue growth on a reported basis. We continue to balance investing for growth and profitability as fourth quarter adjusted EBITDA margins expanded by 39 basis points relative to 2024. Turning to slide five. Rates produced a record revenue quarter driven by continued organic growth across swaps, global government bonds, and mortgages. Credit growth was led by strength across European credit, munis, CDS, and emerging market credit. Money markets revenue growth was led by record quarterly revenues across global repos. ICD balances continued to recover post the tariff volatility, and ICD revenues were up 11% relative to the third quarter of 2025. Equity saw growth of almost 10% year-over-year led by growth in global ETFs and equity derivatives. Other revenues grew over 90% year-over-year as our emerging digital initiatives continue to scale. Finally, market data revenues were driven by growth in our recently renewed LSAG market data contract and proprietary data products. Turning to slide six. Our record fourth quarter capped off a record revenue year in 2025. Record volumes across all asset classes translated into 19% annual revenue growth on a reported basis. The scale generated by our strong top-line results drove 64 basis points of adjusted EBITDA margin expansion, 19% adjusted EPS growth, and 32% free cash flow growth. As our growth initiatives continue to scale, we maintained our tradition of constant and focused investment. Broadly, we enhanced our existing product capabilities, added new clients, and forged new partnerships. On the capability front, we achieved many firsts. We completed the first-ever fully electronic bilateral swaptions and US multi-asset package trade across the swaps market. We launched the first electronic platform for Saudi Royal Bonds and Mexican repos, and we launched portfolio trading in the European government bond market. We expanded our ICD clients, allowing them to buy treasury bills directly through the platform. Additionally, we enhanced our RFQ offering across US credit and ETFs and rolled out our dealer algo solutions within US treasuries. Beyond our core markets, we've been very focused on the future, especially the digital asset space. We have partnered with numerous start-ups and thought leaders and we completed the first-ever on-chain US treasury repo transaction done over a weekend and the first-ever on-chain auction for brokered CDs. We believe our investments in our core and frontier markets position us well for the future and also help to make 2025 another banner year for Tradeweb Markets Inc. Moving to slide seven. 2025 continued the streak of robust revenue growth that we have worked hard to deliver for multiple years now. Specifically, while the majority of our revenues still come from rates, 42% of our annual revenue growth came from our other businesses in 2025. In fact, since the IPO, almost 50% of our revenue growth has come from non-rates businesses, with 45% of that growth from our rapidly expanding international business which grew at 20% CAGR over the same period. Our European business continues to anchor our international presence but our Asia Pacific product suite continues to scale. In 2025, our Asian client revenues grew over 35% and European client revenues grew over 25%. Strong momentum across Europe and Asia comes from connecting a global client base to local international markets. Relentless innovation has been critical to our success. Throughout our history, we have prioritized being first to market, which requires constant investment. The last five years, we've invested over $600 million in technology, to help shape the future of electronic markets, growing these investments at an average of 16% since 2020. As our investments bear fruit, adjusted EBITDA margins have expanded consistently. Turning to slide eight, This quarter saw yet another meaningful decline in intraday volatility from the elevated levels seen in prior periods. Specifically, volatility was down 27% year-over-year and 15% quarter-over-quarter. Despite the lowest intraday volatility that we have seen in the last four years, our US treasury revenues increased modestly by 1% year-over-year as continued strength in our institutional channel was offset by weaker retail trends. Our quarterly market share increased sequentially with December market share reaching the highest levels since February 2025. As we look forward, we are optimistic on a reacceleration in US treasury business as we penetrate additional parts of the voice market coupled with continued strong government debt issuance and normalization in rate volatility. Our competitive position remains strong on a relative basis. Exceeded 50% for the seventh consecutive quarter in electronic institutional US treasuries, versus our main electronic competitor. Turning to wholesale US treasuries, revenues were flat, mainly driven by lower volumes across our wholesale streaming protocol, partially offset by growth across our sessions protocol. Wholesale remains a strategic priority as we focus on onboarding additional liquidity providers and strengthening our liquidity pools in support of our multi-protocol holistic platform strategy. In equities, ETFs posted strong double-digit revenue growth as we continue to deepen integration with our clients. During the quarter, we continue to leverage client workflow connectivity by delivering a more automated ETF trading solution in partnership with ION. Our AIX automation solution has been a key differentiator with our ETF clients with average daily trades increasing over 70% year-over-year. While AIX is deeply penetrated across European ETFs, we continue to see strong adoption across US ETFs. With AIX average daily trades up 28% quarter-over-quarter. Our efforts to broaden our equity presence beyond our flagship ETF franchise continue to pay off. With record institutional equity derivative revenues up 18% year-over-year. Looking ahead, the pipeline remains strong as the benefits of our electronic solutions continue to resonate with our clients. We believe we are well-positioned to capitalize on the long-term secular ETF growth story, not just in equities, but across our fixed income business. Turning to slide nine for a closer look at credit. Low single-digit revenue growth for the quarter was driven by strong double-digit revenue growth across European credit, municipal bonds, credit derivatives, China bonds, and EM credit, which more than offset weakness in US credit, where revenues fell year-over-year mainly due to retail corporate credit revenues that were down nearly 30% year-over-year, primarily reflecting the better relative yields our clients were getting across money markets and munis. US credit remains a key growth initiative. We are focused on maintaining our leadership position and our pioneering portfolio and session trading protocols and increasing our block market share. Perhaps most importantly, we continue to increase our RFQ share which we expect to be the number one driver of revenue growth in US credit going forward. Our deepening liquidity pool and continuously improving client experience is resonating. As we attract more clients and experience talent across the board. Our efforts to expand into RFQ are seeing early signs of success with our RFQ share of overall TRACE achieving a new quarterly record. Institutional RFQ average daily volume grew over 10% year-over-year. With growth across both IG and high yield. Also saw continued block share growth in fully electronic US investment grade and US high yield of over 130 basis points and 65 basis points, respectively. This growth was broad-based, driven by continued adoption of our portfolio trading RFQ, and sessions protocols. More broadly, we saw active user growth of 18% year-over-year during the quarter, as we continue to strengthen our US credit client network. Portfolio trading average daily volume also increased 10% year-over-year with over 20% growth across international PT. Portfolio trading has become a widely used, reliable method for executing trades and managing risk. We particularly during periods of market volatility. As the market continues to evolve, we expect adoption to expand as it further embeds itself as an essential part of Credit Trader's toolkits. Altrade had a strong quarter with over $200 billion in volume. With average daily volume up over 14% year-over-year. Our all-to-all average daily volume grew over 45% year-over-year while our sessions average daily volume rose by nearly 10% year-over-year. The team remains focused on expanding our network and increasing the number of responders on the AllTrade platform, In the fourth quarter, we saw the fourth highest level of ETF market maker participation ever across our institutional credit business. Beyond US credit, we're continuing to prioritize our emerging markets credit expansion efforts. We continue to broaden out our liquidity provider set across key markets, work with our OMS partners on key integrations, and expand the functionality around key differentiators such as asset swaps. While still early in the journey, EM credit revenues grew 25% year-over-year in the fourth quarter signaling strong momentum. Moving to slide 10. 2025 represents the twentieth anniversary of our electronic interest rate swaps platform. Back in 2005, electronic swaps trading was still an emerging idea. Two decades later, it has become an ecosystem defined by transparency, efficiency, and ongoing innovation. Our leading position in the swaps market has been built upon two decades helping to shape global regulations, maintaining a regulated global footprint, cultivating a deep client ecosystem, and expanding a broad suite of adjacent global rates products. Global swaps delivered record quarterly revenues up over 25% year-over-year, driven by a combination of strong client engagement, across our global suite of currencies that drove strong risk trading growth. And a 7% increase in weighted average duration. Our quarterly core risk market share which drives revenues and excludes compression trading, was a record rising over 70 basis points year-over-year. Total market share increased from 20.8% in 2024 to 23.3% in 2025. Due to a combination of strong risk and compression volume growth. During the quarter, we achieved the highest share in our history across Euro, other G11, and EM denominated currencies. The fourth quarter performance was driven by record revenues across Europe, APAC, and emerging market swaps, while we produced double-digit revenue growth across dollar swaps. We continue to make progress across emerging market swaps and our rapidly growing RFM protocol. In EM IRS, structural challenges like geographic dispersion, pricing opacity, and operational inefficiencies have historically made voice trading the norm. We're helping to drive more discrete, transparent, and efficient execution, especially through innovations like RFM and AIX. Our fourth quarter EM swaps revenue produced another strong growth quarter and we believe is still significant room to grow given the low levels of electronification. Our RFM protocol, which is seeing strong adoption across currencies also saw average daily volume grow more than 90% year-over-year, with further adoption picking up. Looking ahead, we continue to believe the long-term growth potential for swaps remains significant. On a DVO1 basis, electronification has continued to increase with 2025 DVO1-based electronification up more than 90 basis points year-over-year. And growing at an average rate of over 150 basis points annually since 2020 as dealers and clients move a greater share of their workflows electronically. That progress is evident in the performance of our swaps business, which has continued to deliver strong revenue growth in the fourth quarter. On a notional basis, the cleared swaps market remains approximately 30% electronic and we see significant opportunity to continue digitizing workflows alongside our clients. In collaboration with them, we expect to drive further workflow innovation in 2026, across both cleared and bilateral swaps markets. And with that, let me turn it over to Sarah to discuss our financials in more detail.

Thanks, Billy, and good morning. As I go through the numbers, all comparisons will be to the prior year period unless otherwise noted. Slide 11 provides a summary of our quarterly earnings performance. As Billy recapped earlier, this quarter, we saw record revenues of $521 million that were up 12.5% year-over-year on a reported basis and 9.9% on a constant currency basis, given the weakening dollar. We derived approximately 42% of our fourth quarter revenues from international clients. And recall that approximately 30% of our revenue base is denominated in currencies other than dollars, predominantly in euros. Total trading revenues increased 11%, comprised of 10% variable trading revenue growth, and 18% growth across fixed trading revenues. Rate fixed revenue growth was primarily driven by an increase in minimum fee floors for certain dealers and by the addition of dealers to our mortgage and US government bond platforms. Credit fixed revenue growth was primarily driven by the previously disclosed introduction of minimum fee floors and the migration of certain dealers to subscription fees. Other revenues of $13 million for the fourth quarter increased by 94%, primarily driven by growth in our digital initiatives. Specifically, we earned $6.6 million from our commercial relationship with the Canton network. From our role as a super validator on the network. We are compensated in Canton coins. Assuming similar Canton coin pricing as in January 2026, and based on our current estimate of earned coins, we would expect 2026 Canton-related revenue to be similar to 2025, which was approximately $11 million but this can vary. Overall, the other revenue line will remain variable quarter to quarter. Reflecting fluctuations in the number of Canton coins earned, Canton coin value, the number of super validators in the network, and periodic tech enhancements for retail clients. 2025 annual adjusted EBITDA margin of 54% increased by 64 basis points on a reported basis when compared to our 2024 full-year margins. Our net interest income of $18.8 million increased due to higher cash balances. Despite lower interest yields. Lastly, this quarter's GAAP results were impacted by both unrealized and realized gains across our strategic investments. Specifically, we recorded $207 million in net gains this quarter. Including $180 million of unrealized gains reflecting the mark-to-market of our Canton coin holdings and $25 million in realized gains related to our exchange of Canton coins for warrants in the digital asset treasury company, TheraMune. As a reminder, these gains are only included in GAAP EPS. And are excluded from our non-GAAP adjusted diluted EPS. Moving on to fees per million on slide 12 and a highlight of the key trends for the quarter. You can see slide 18 of the earnings presentation for additional regarding our fee per million performance this quarter. For cash rates products, average fees per million were down 5%. Primarily due to a mix shift away from US government bonds which carry a comparatively higher fee per million. For long tenor swaps, average fees per million were up 2%, primarily due to higher duration. For cash credit, average fees per million decreased 14% due to the migration of certain dealers from fully variable plans to fixed plans across institutional and wholesale US credit. And a mix shift away from retail within US credit. Which carries a higher fee per million. For cash equities, average fees per million decreased 10% due to a mix shift away from European ETFs which carry relatively higher fee per million a reduction in US ETF fee per million, given an increase in notional per share traded. Recall in The US, we charge per share and not for the notional value traded. Finally, within money markets, average fees per million decreased 6% primarily due to a mix shift away from retail CDs, which carry a comparatively higher fee per million. Slide 13 details our adjusted expenses. At a high level, the scalability and variable nature of our expense base allows us to continue to invest for growth, and grow margins. We have maintained a consistent philosophy here. Adjusted expenses for the fourth quarter increased 12% on a reported basis, and 9% on a constant currency basis. During the fourth quarter, we continued investments in tech and communications, digital assets, consulting, and client relationship development. Adjusted compensation costs grew 5%, driven primarily by an 11% year-over-year increase in headcount. Partially offset by lower accruals for performance-related variable compensation. Technology and communication costs increased 24%, primarily due to our continued investments in data strategy and infrastructure, and increased software costs. Adjusted professional fees grew 17% due to an increase in tech consultants as we augment our offshore technology operations, and due to episodic advisory fees, related to legal, tax, and consulting services. Occupancy expenses increased 59% primarily from increased rent due to the move to our new New York City headquarters. Adjusted general and administrative costs increased 27%, primarily due to unfavorable movements in FX and a pickup in travel and entertainment and marketing expenses. Unfavorable movements in FX resulted in a $37 million loss in 2025, versus approximately a $1.1 million gain in 2024. Excluding FX, adjusted general and administrative costs grew 3%. Slide 14 details capital management and our guidance. On our cash position and our capital return policy. We ended the fourth quarter in a strong position. With approximately $2.1 billion in cash and cash equivalents and free cash flow exceeding $1 billion for the year. We delivered strong free cash flow growth of approximately 32% year-over-year, or 22% excluding a timing benefit related to the deferral of certain 2025 tax payments into 2026. We also held approximately $1.6 billion of Canton coins, with a fair value of approximately $243 million. Which is recorded on our balance sheet under digital assets and other investments at fair value. With this quarter's earnings, the Board declared a quarterly dividend of 14¢ per class A and class B shares. Up 17% year-over-year. During the quarter, as part of our 2022 share repurchase program, we repurchased approximately 990,000 shares at $106 million. Additionally, we have repurchased approximately 483,000 shares for approximately $51 million in January. There is currently $23 million remaining to be purchased under the 2022 share repurchase program. Finally, this morning, the board of directors approved the 2026 share repurchase program, which authorizes the repurchase of up to $500 million of the company's class A common stock once the remaining authorization under the 2022 share repurchase program is exhausted. Turning to guidance for 2026. We will continue to invest in the business in 2026 and are expecting adjusted expenses to range between $1.1 billion and $1.16 billion. The midpoint of this range would represent an 11% increase year-over-year. Relatively in line with our average expense growth since 2016. We believe we can drive adjusted EBITDA and operating margin expansion compared to 2025 at either end of this range. Although, we expect the incremental margin expansion to be more muted, as overall margins are higher, and we continue to focus on balancing margin expansion with investing for the future. Specifically, we continue to invest in credit, rates, international markets, ICD, and digital assets. As key focus areas with a long runway for growth. We also continue to invest in technology that allows us to sustain and build on our leading platform. Some of these investments will take time to scale, but we continue to prize innovation in creating durable long-term growth opportunities. Within adjusted non-comp expenses, we expect our quarterly tech and communications expenses to grow in the mid to high teens over our fourth quarter run rate. As we continue to invest in our data strategy and infrastructure, to support the growth of our platform and new product initiatives. We expect annual G&A expenses to be impacted by continued FX losses, primarily impacting 2026 given current FX rates. We expect the 2026 professional fees to step down sequentially by approximately $2 million from 2025 related to the previously mentioned episodic expenses. We expect annual occupancy expenses to increase approximately 35% year-over-year primarily due to the full-year effect of our new New York City headquarters and the overall expansion of our geographic footprint. For 2026, we expect net interest income of approximately $15 million which reflects the current interest rate environment, and a seasonally lower cash balance driven by annual bonus payments and the expected purchase of approximately $70 million of transferable tax credits in Q1 2026. For modeling purposes, we view 2026 as a good starting point for the rest of the year. For forecasting purposes, our assumed non-GAAP tax rate ranges from 23.5% to 24.5% for the year. We expect CapEx and capitalized software development to range between $107 million and $117 million. The midpoint of our CapEx guidance implies a roughly 9% year-over-year increase. We estimate that approximately 60% of the total spend will be on software development to support our growth initiatives, approximately 40% will be related to growth and maintenance CapEx. Acquisition and Refinitiv transaction-related DNA, which we adjust out due to the increase associated with push-down accounting, is expected to be $160 million in 2026. Lastly, we expect 2026 revenue generated under the master data agreement with LSAG to be approximately $105 million spread evenly throughout the four quarters. Now I'll turn it back to Billy for concluding remarks.

Thanks, Sarah. Looking toward 2026, we see a constructive market environment taking shape. Even with lower volatility, issuance activity remains strong across governments, corporates, and increasingly AI-driven infrastructure investment. Supporting relative value trading and hedging flows across markets. Alongside the current regulatory backdrop, coupled with growing cross-border activity, these dynamics play directly to our strengths. With a global multi-asset platform and deep client connectivity, we're well-positioned to support the next phase of market structure evolution and to continue delivering scalable, resilient workflow solutions for our clients. On that note, we reported record volumes and revenues in January, which translated into total revenue growth of 17% year-over-year. Recall, January 2025 had one extra trading day and also benefited from an $8 million boost in market data tied to the delivery of datasets to LSEG. The revenue recognition of these datasets in 2026 will shift to $2 million being recognized in the first month of every quarter. Adjusting for these two factors, average daily revenue growth was 26% year-over-year. Showcasing how our sophisticated clients and dealers continue to be very active across our global markets. I would like to conclude my remarks by thanking our clients for their business and partnership in the quarter. I want to thank my colleagues for their efforts that contributed to the record quarterly and annual revenues and volumes at Tradeweb Markets Inc. With that, I will turn it back to Ashley for your questions.

Thanks, Billy. As a reminder, please limit yourself to one question only. Feel free to hop back in the queue and ask additional questions at the end. Q&A will end at 10:30 AM Eastern Time. Operator, you can now take our first question. Thank you. We also ask that you please wait for your name and company to be announced before proceeding with your question. The first question today comes from the line of Patrick Moley of Piper Sandler. Your line is open.

Yes. Good morning, and thanks for taking the question. So, Billy, I was hoping you could elaborate a little bit on your comments there you made at the end of your prepared remarks on the outlook for the market in 2026? What are some of the major themes that you're focused on this year? And then, also, I think the 17% year-over-year revenue growth in January was a lot better than people were expecting. So any color you could give on what drove the strength there would be much appreciated. Thanks.

Yeah. Absolutely, Patrick. Thanks for the question. Know, we're working hard, so appreciate your voice on this. It's a really good setup. For our business. And maybe for a quick second, Patrick, like, let me give a moment of context. Like, even over the last, like, kinda, like, five, six years, we've gone from kinda zero rate, zero inflation market to this kind of post-pandemic world where there was the kind of roof on rates you know, on the back of that, like, big inflation burst. You know, to kinda where we are now which is around this kind of what feels like this kind of general rates you know, framework. Like, we're you know, we're in the 4% on ten-year notes. Right? What we have is this you know, obviously, it's been a you know, a conducive Fed. I think the feeling that we have here is that there's more to do. But, you know, there still is, I think, something very important, which is it's like, you know, real debate know, on the timing of it all. And those are, you know, good outcomes for us. And then you take a little bit of a step back from there, debt markets are growing. Right? And, you know, we have this very active kind of, you know, primary activity issuance world now. You know, public sector and the private sector need funding. Right? So even this past week, as you know well, Oracle you know, $25 billion in bonds this week. You know, that leads you know, to rates trading. As investors hedge out fixed exposure. I'll make the most obvious point of the day. AI is real. Right? The hyperscalers will be selling bonds. And so when you think about the big picture of it for a second, you know, the numbers that are you know, that we're talking about, $600 billion of AI infrastructure spent. Right? That's going to lead to more rates trading. And those things from our perspective, you know, are good. You know, as the, you know, as the leading rates, you know, trading platform those are good outcomes for us, and those are things that we feel good about. So you know, as you know, for example, in January, our GlobalSwap platform was up over 40% on revenue. A really strong month for our treasury platform. Platform. Right? You can see how these things kinda work to our favor. The, you know, the geopolitical complexity kinda slash drama or not we wanna think about, like, the debasement trade or diversification away from, you know, US assets at a minimum what we're talking about, obviously, is, you know, central bank policy divergence. You know, from our perspective, what's that going to do? It's going to spur you know, more cross-border trading, more global activity. And we have, as you know well, you know, a global enterprise. You know? And our international business is exceptionally strong. So in January, we saw exceptionally good results. From our European swaps business, European government bonds, very strong numbers. Coming out of European credit. The revenues there were up 40%. Big news, obviously, happening this month in Japan. Our JGP revenues were up 30% in January. So the international business that we bring to the table that we work very hard on building, I think, is an advantage for us kinda going forward. You know, getting very just quickly into into a version of kinda what's happening with with equities doesn't take a a big leap to understand that, you know, perhaps, like, the index is full. We could be looking at at a world where there's more kind of drawdowns there. It's gonna be about kinda allocating resource into kind of more sector exposure. More country exposure. Those kinds of thoughts and that kind of theme, I think, plays extremely well to the ETF business that we've worked very hard here on building. And so our globally ETF revenues were up 40%, in January. So these are, like, good outcomes for us you know, and a good setup. And then I think as we think about maybe one of the more important components to kinda how we're thinking about '26, you know, sometimes things are kind of in our control and things can be a little bit out of our control. As you know well, there's this concept, obviously, I think is really important just around you know, the deregulation of the banks and the way that ultimately that's going to and has led to, you know, these extremely strong kinda trading operations coming out of you know, how we think about you know, the legacy banks, but really from our perspective, kind of like the partner banks. You know, for us. You know? And so I kinda say this with a little bit of humor. Like, the you know, the swag is back. You know, for for these firms, and the numbers kind of prove it. And, you know, for from my perspective, and from Tradeweb Markets Inc.'s perspective, these are great outcomes for us. These are you know, in a lot of ways, you know, twenty-five-year relationships that we've had you know, with firms like Goldman and firms like Morgan Stanley, JPMorgan, and Citi. And so as risk-taking kind of is back in vogue, and the profitability of the business for these partners of ours is, you know, high level. I think the you know, the quote that I the quote that I looked at was, you know, between Goldman, Morgan Stanley, JPMorgan, and Citi. In FICC in 2025. They made over $55 billion. Right? As a trusted partner in the markets with those kind of firms, it's an incredibly good outcome for us to see the profitability of those businesses. And so that's an important thing as we think about the outcome and setup for know, for twenty-six. Then the other thing I would just say is, like, you know, this concept of risk events is always gonna be a part of our world. And it's pretty interesting. If you think about just the way the market kinda tended to shrug off some real risk events and kinda December and January. As you know, the tenure kinda stayed between, like, 04/01/1942. You know, around some pretty big headline news whether or not that was, like, you know, the justice department with actions against Powell, or military action in Iran, these are pretty big headlines. I think there's a there's a thought process sometimes that the has the ability to only price in what's right in front of it. There are moments from our perspective where that kinda ends. And so the concept of living with exogenous risk is a part of the cadence of how markets develop And so the last piece of kind of secret sauce around how we think think things will develop is ultimately gonna be the return of good you know, risk orientation into our world. And so I step back and I say, a very good rates framework for activity going forward, kinda green light there. Continued cross-border global activity green light there. Diversified equities exposure, green light there. And then a business environment that's keyed positively in the marketplaces off of deregulation. You know? And I don't love to kinda root for, obviously, exogenous events, but we know that you know, risk comes back into the system, and that's part of you know, the cadence of our world. So I take these things, and I add them up. You know? And I think the reality is is that we form you know, a strong a strong picture you know, for our business. And so I'm pumped. You know, I'm excited for what's in store, you know, for the markets. I'm gonna excited about Tradeweb Markets Inc.'s leadership role around all of the things I just described. And we're looking forward to a, you know, to a really good '26 on the heels of a very strong January and, obviously, very early stage, but a really strong start to February. So it's a it's a good outcome for us in a good marketplace. And thanks for the question.

Very helpful, Billy. Thank you.

One moment for the next question. And our next question is coming from the line of Craig Siegenthaler of Bank of America.

Good morning, Billy, Sarah. Hope everyone's doing well. We had a question on AI. And, you know, we know automation is a key component of your AIX solution. As you take a step back and look across the entire Tradeweb Markets Inc. platform, can you talk about your utilization of AI and also differentiate between both generative AI and predictive AI models?

Absolutely. And great question. You know, I'll make you kind of laugh for a quick second. As a kinda ex-English major, it's always like a pinch me moment on an earnings call to kinda have a conversation about AI. You know? So it's kinda really fun for me. But, you know, my view and the company's view is always gonna be shaped, I think, ultimately by pragmatism. You expect us to be, and we will be always kind of commercially focused. We think about AI and how it's tightly linked, you know, truthfully to how we make money. And it's always, you know, from my perspective, very specifically a bit about this kind of transition from how we think about efficiency gains to ultimately the most important thing, which I think is, like, effectiveness gains and, ultimately, what is that kind of client impact engine kind of thing. And those are really kind of important thoughts. And so as you know very well, we have this, like, very deep high-quality real-time market data. From my perspective, that's the real strength of Tradeweb Markets Inc. Our proprietary data comes from running and operating kind of markets first and foremost. And so we see extensive executable pricing RFQ response behavior, execution outcomes, and client decision-making across protocols and asset classes as key to all of this. We've always been built around providing ultimately more efficient workflow tools for our clients. And I think we would say clearly that AI is a natural extension of that. And so we, you know, as an English major, again, with pride, I'll say, you know, we we really employ a very deep bench now of the strongest kinda data scientists, the strongest minds you know, inside of Tradeweb Markets Inc. And one of the things that we, I think, have done well, and Sarah and I talk about this a lot, is the collaboration between those minds and our business. And they sit directly with our product team and working on helping ultimately deliver better analytics and smarter tools. And these are really important kind of behavior patterns, I think, for companies to do those kinds of integrations. And so on the, you know, on the predictive AI side, I would say we are kind of looking at our proprietary datasets to help unlock what we describe as, like, the next frontier of electronification. Something we find particularly valuable across how we would describe less liquid markets. And larger notional trades. So that's a focus for us where pricing signals tend to be the weakest. And that's a that's a kinda big area of focus. And so I'll go back a little bit as we're talking about kind of you know, AI or how we think about, like, superintelligence. Know, I make a point all the time which is you know, all intelligence is really ultimately about learning. And as a company, you have to be kinda continuously on this kinda learning journey, this journey about learning and getting better. And so one of the things I know that Sarah and I talk about and our XCOM talks about a lot is the ability to keep learning. I think you have to be willing to make mistakes. You have to be willing to push things into new outcomes. And that's the mindset ultimately that a company needs to continue to move forward on this amazing new path around learning. We can all get smarter. I'm very excited for Tradeweb Markets Inc. to play a very strong leadership role around how AI continues to be applied into the financial markets. And thanks a lot.

One moment for the next question. And the next question is coming from the line of Alexander Blostein of Goldman Sachs. Your line is open.

Hey, Billy. Hey, Sarah. Good morning, everybody. Sarah, one for you. I was hoping you can talk us through how you're thinking about the interplay between Tradeweb Markets Inc.'s sort of annual expense growth, trajectory and margins. So just taking the guidance you provided this morning. Obviously, the revenue backdrop started off really well this year. But as you sort of think about the goal for operating leverage for 2026, Is that still the case if revenue moderates? And if it does moderate, maybe talk a little bit about the flex you have in the expenses in order to still drive positive operating leverage.

Thanks, Alex. Great question. You know, I think when we talk about operating leverage and margins expenses, I think it's actually a really important reminder in terms of what's our top priority. And our top priority is investing for revenue growth through various cycles. And so when you think about that, the way we've designed our expense base is to support that and to deliver and be able to deliver positive operating leverage across all these different revenue environments and through the cycles. And so, like, what does that really mean? Means when you think about our expense base, roughly 55%, so a little bit more than half, is fixed. And the remainder, so about 45%, a meaningful portion, are variable or discretionary. So variable being things that automatically right-size with revenues, commissions, performance-driven compensation, exchange fees, Discretionary being things more like marketing T&E, the pace of hiring, philanthropy, things that are within our control. And that balance allows us to maintain operating leverage through different environments. And we can do things in both directions. We can accelerate the pace of spend, and we can decelerate the pace of spend. We can do that with the flexibility while still protecting, which I think is really that first priority, investment strategies that are often multiyear that drive long-term revenue growth. Through the cycle. And so obviously, as the size of the company has scaled and as our revenues have scaled, there's also natural operating leverage that falls to the bottom line. Billy talked about being pragmatic earlier. I would say all of this is great. Flexibility is great a theoretical point, but the reality is I think we've already demonstrated our willingness and ability to execute on that flexibility. So if you think back and you've got to think back a little bit, but if you think back to the first 2023, the environment was such that the top-line revenue for Tradeweb Markets Inc. grew about 5%. And even in that environment, we paced expenses and were able to deliver positive margins, so 43 basis points of margin expansion for EBITDA. Contrast that with just a year later in 2024, you'll remember the top line grew 29%. We were able to accelerate our investments and expenses significantly and therefore margin expansion was around 90 basis points. Last year, same thing. You had a really different environment in the first half of the year, the second half of the year. So I think we've proven our ability and flexibility. But most importantly, like our strategic lens is on continuing to invest, continuing to innovate, and having that flexibility to do it when our clients need it which means doing it through the cycle. Thanks for the question. Hopefully that helps.

It does. Thank you.

One moment for the next question. And our next question is coming from the line of Ken Worthington of JPMorgan. Your line is open.

Hi. Good morning, and thanks for taking the question. My question's on mortgage. So Tradeweb Markets Inc.'s mortgage business was one of its slower-growing businesses in 04/2025. As one of Tradeweb Markets Inc.'s most dominant legacy and most electronic markets how do you think about the outlook for mortgage trading in 2026? Particularly if primary and refi activity rebounds? And then maybe as a second part to this, are the innovations that we're seeing at firms like ICE and others in mortgage tech are these innovations, possibly gonna have, an impact positive impact on your business over time? What are you sort of thinking there?

Hey, Ken. I feel I feel like you almost complimented and insulted us at the at the same time with that very And it's always great to hear your voice. I mean, you you've known us for for a while, and, obviously, you know me as a as a CEO. But to make you laugh for a quick second, I'm also a father too. And so you you also, I think, understand very well, like, that expression that all of us parents have. Which is kind of like, you know, all of our children are smart. All of our children are the most beautiful. We love all our children the same. All of our children are our favorite children. I think there's a possibility that, like, the mortgage business might be my actual favorite child. Which I haven't told anyone that yet until right this second. Because in a lot of ways, it kinda represents some of the best things about the company for a long time. It's the, you know, it's the most electronic market that we have. It's the market that we have the highest you know, market share in. It's the first market that we were in to have what I would describe to you something, like, very important, which is, like, real risk flow. We talk about risk, like, all of the time, the elusive risk in credit. The mortgage market, I think, for a bunch of reasons, one of which was kinda like the ethos of kinda how mortgage bankers kinda dealt in the market, was always very comfortable trading real risk electronically in comp. And those are the kinds of characteristics that play very well to electronified marketplaces. And then it was the first market that we were in that actually we wound up kind of expanding into wholesale. It was the was the starting point for us to ultimately move into the wholesale side of the market. And build out, you know, these really important near kinda liquidity pools. So it's got the kind of favorite the favorite childness around all those things. But the reality is, which you which you framed properly, is that that market can go you know, sleepy. At times. You know? It could be a sleepy market depending on where rates are. And then when it wakes up, it can wind up being one of the you know, sort of two or three most important kinda coupons ultimately in global markets. So there's very big different levels of activity depending on where we are in the in the in the rate cycle. I think the reality is we are kinda out of sleepy zone. We have primary issuance increasing. Have actively managing kind of pipeline risk adjustments around duration, and convexity exposure kinda happening. And so the market is you know, without question, kinda coming to life. We also, as you know, I think had, you know, pretty big headlines in January. You know, with the GSE commentary, you know, coming out of the administration. You know, the administration wants lower mortgage rates, and they you know, tend to get sometimes what they want. So there was a material pickup in activity in January, Our revenues were up know, 15%. I think the outlook for that business is quite strong. Particularly if we break lower on rates. And I think the future of it is gonna have ultimately I think, and very importantly, a larger group of players as participants. If you really think about it, it's kinda interesting. You know, the the systematic players that are very strong companies as you know, Ken, very well in adjacent marketplaces like government bonds. Have largely think because of the of the cycles that the business goes through, have largely stayed out of the of the mortgage market. But we see those types of companies ultimately coming into that market. And from our perspective, I think that kind of pushes things know, towards a more, you know, velocity-driven marketplace, which is good for business. I follow pretty closely things that Jeff does on the mortgage servicing side. I think he's been kinda right on his thesis all along. Tough to time it, I would say. But, ultimately, as he makes you know, origination and he makes the servicing aspect of the marketplace more efficient. Those become good aspects of know, secondary trading, and we feel like we'll ultimately also be ironically you know, the beneficiary of that as well. So in an interesting way, kinda rooting for him, you know, on the efficiency play that he's been working on, we think directionally, he's been right in terms of you know, that area of the business needing a step up in technology. But I appreciate the question, and thanks very much, Ken.

K. Thank you.

Moment for the next question. And our next question will be coming from the line of Alex Kramm of UBS. Your line is open.

Hey. Good morning, everyone. Billy, I I saw you on a panel on tokenization a few weeks back. Sounds like you're doing a lot on that topic, a lot of initiatives. So maybe today, can you talk a little bit more specifically what you're doing and maybe some of the timing of those initiatives that you have going, going right now? Also, you know, since I'm sure there's a lot going on, where do you actually see the biggest revenue opportunities coming out of this? And then on the other side of the coin, because I need to ask, since you're kinda pretty critical connecting buy and sell side today, as those, you know, underlying markets potentially change here and get digitized or tokenized. How do you ensure that you're not gonna get this intermediated as, you know, people may be looking for new rails, etcetera?

Yeah. All good questions, Alex. Appreciate it very much. I'm sure you heard me kind of on the panel, confusing everyone, let me, just for a quick second, I'm gonna I'm gonna actually kick this to this to Sarah who's been spending a ton of time on this. And I'm really looking forward to kinda hearing you, Sarah, kinda describe this, like, perfectly. So you you take it.

You know, as a I'll start just kind of where you left off, which is a little bit of a big picture and, you know, how do we think about disintermediation. On tokenization, we don't really view it as disintermediating what we do. We think of it as an infrastructure upgrade. It's not replacing market structure. And in particular, it doesn't really impact price discovery. So as we see things evolve, we think people still need platforms to connect buyers sellers. They need to be supported in terms of price discovery. They need to manage that risk transfer. And importantly, deeply integrate into institutional workflows which are things that we think we are still well-positioned to do given how long we've been investing in this space. And can do it, whether it be traditional rails or on these digitized, more modern rails. What we do see tokenization impacting are things like settlement and collateral mobility. And I know, Bill, you talked about this on the panel. Which we think frees up capital, increases velocity of trading over time. We've talked about potential for 24/7 trading before. All positives from RC. In terms of the big picture. More specific to us, and Billy and I and Chris Brunner here have been spending a lot of time on this, We've been at this for a while. So for the last three years, and I would add know, with my CFO hat on, in a remarkably capital-efficient way we've built out a leadership position. Whether it be digital assets, blockchain networks, or tokenization. And today, I'll give you one specific example. We feel like we are positioned to be the premier venue for tokenized trading for US Treasuries. We've talked about this, I think, on other earnings calls. We've completed multiple rounds of fully on-chain repo trades utilizing tokenized treasuries as collateral and, you know, versus stablecoins with the notion of expanding for other forms of collateral like digital cash. So that's already been in the works since the third quarter of last year. More recently, which I think is interesting and a little bit to your timing point, we think we're sitting in a unique position during what you would argue might be a milestone year. The SEC delivered a no-action letter to DTCC this December. And Tradeweb Markets Inc. is positioned as the non-venue really leading the charge for their pilot program where trillions of assets that sit at DTCC will now be tokenized on an opt-in basis from their clients. And so if you think about what that means, that program can launch at the second half of this year. That opens up a real opportunity. And we think tokenized treasuries, given what we've already put into the market, will be a place start. And from there, we'll grow. I don't think anything changes overnight. You know, Billy and I talk about that. We think clients, as we know better than anyone, take time to change. We do see interest. But I think the reality is the tokenized rails digitization blockchain will operate side by side with a lot traditional rails in the marketplace, and we think we can bridge that quite well for clients. As a result, I think from a revenue opportunity, it's early to say how it plays out, but we see opportunities to drive revenue in our traditional trading business. As a result, as well as new opportunities given our leadership position on some of these networks developing apps, and bringing other market participants, given our institutional and dealer network, onto some of these digitized rails. But And I think that's spot on, Sarah. And then for a quick second, Alex, kinda like almost like tying, you know, your question a little bit in an interesting way back to kinda what what Ken was asking about. Like, if you just think about for one one second just about the concept of, obviously, you know, the guardrails of collateral management and and and ultimately problem solving around kind of settlement. I was talking about my favorite child before, the the mortgage market, which has in a lot of ways within the fixed income complex you know, the most onerous you know, settlement cycle. And I think that settlement cycle in a lot of ways is one of the reasons why know, there are you know, the types of entities that have been performing well in other markets have tended to either stay away from or have a lower impact in that market. And for sure, as we see you know, the continued advancement of, know, of blockchain, and we've talked a lot about our partnership with Canton, As we see that continued advancement there, we've identified the you know, the mortgage market as one of those businesses where, from our perspective, a great commercial outcome would be onboarding more participants, and we see a streamlined settlement process as a very important outcome there. So that's an area of focus and attention for us. That has a good commercial outcome. And good to hear your voice, Alex. Thanks.

You.

Thank you. One moment for the next question. The next question will be coming from the line of Tyler Moore of William Blair. Your line is open.

Hi. I'm on for Jeff Schmitt. We have one question on share buybacks. Given the strength in the quarter in January and new authorization. So their stock down a fair amount over the last six months. I think it's now trading here near the lowest PE since going public. Is there potential for you to increase your buybacks at all?

Thanks, Jeff. We're definitely giving more thoughts to buybacks. I think you've heard us talk about our positioning and view of the forward market and the macro environment and our business performance. Not only in January, but that momentum continuing in February. So we remain confident in what we can drive and deliver. And we do think that you've seen the stock dislocate from some of those fundamentals. You've already seen us, and I think you're aware of this. You've already seen us be more aggressive. So in the fourth quarter and through January, we've repurchased about $150 million of stock and the board authorized an additional $500 million plan. So we think we have the flexibility to continue to do it. I think from our seat, it's one piece of our capital allocation framework. So it's one that we definitely have in our arsenal, but we also feel quite strongly that we have a lot of opportunity to grow the business organically. Have the opportunity to pursue inorganic investments and M&A and obviously share repurchases, particularly when the stock dislocates from what we think is our fundamental growth opportunity, we'll use that tool as well. Thank you.

Thank you. One moment for the next question.

And the next question will be coming from the line of Simon Alistair Clinch of Rothschild. Your line is open.

I was wondering if you could characterize the competitive environment in credit today? This is, you know, clearly a focus of investment community. Particularly given they have the market share data out there all the time. So what's see is the biggest catalyst for improvement in share for Tradeweb Markets Inc. going forward from this point and how that sort of competitive dynamic shapes up over the next one year to five years?

Yeah. Good question. I would agree completely. Know, it's competitive. And I would agree completely with you that it's a focus you know, of the of the analyst world and the investor world. I wouldn't go so far to say it's an obsession, but it's it's it's a focus for sure. And, you know, I would start by saying just a as a reiteration, like, we feel very, very comfortable competing. It's part of who we are. We've been competing day one, as we built this company over twenty-five twenty-seven years with Bloomberg. The competitive framework is is something that's comfortable to us. I think the the path forward on continuing to grow revenue and grow share is gonna be pretty straightforward. You have to be on side with the banks I described that, you know, before when I was talking about the you know, the framework going forward to '26. You know, if you're on the wrong side with the banks as this next leg of of of evolution occurs in credit, you're on the wrong side. And we think our relationships with the banks is a is a game changer for us there. You have to continue to be able to link markets. And so, again, we feel like our footprint in treasuries is kind of important there. Obviously, you know, the cross-asset piece of how we approach the market, I think, is important. Data, pre-trade data, you know, the ability to present clients with the best data, I think, is again, very important principles for us to keep in mind. And then, ultimately, I'm gonna get into kind of the two things that we feel very strongly about, which is solving for risk and solving for what we would describe to you as you know, banks' inventories and banks' trading access. And to make an obvious point, if you don't do the first three things I described at the highest level, which is partnership, the ability to bring in other other marketplaces, and ultimately have the best data, then you cannot solve for ultimately what is risk trading and what is what is complexity. And so, you know, month to month quarter to quarter, we are focused on the credit business. We grew revenues, as you know, quite well. In the month of in the month of January, so we're feeling good direct directionally about how we're positioned there. It is an enormous focus for me and for the company to continue in a competitive environment to be best in class there. And that's that's the mandate for us as a company. And appreciate it. Good question. Thank you.

Thank you. One moment for the next question. Our next question is coming from the line of Bill Katz of TD Cowen. Your line is open.

Hi. It's Bradley Hayes on for Bill Katz. Following up on tokenization as assets increasingly become tokenized, how are you thinking about the impact for the swaps market? In particular, is there risk to volume from smart contract functionality?

Sure. Why don't I jump in with that? I think similar to how we talked about tokenization, smart contracts really takes away the friction in the swaps market potentially that sits downstream past execution in terms of the value chain that we're in. So it really streamlines affirmations, confirmations, clearing that post-trade life cycle management, which we think is really helpful and only furthers electronification and the trading velocities in the space. But from our seat, it doesn't, you know, disintermediate or really impact the value that we are offering in terms of our markets.

Okay. That's perfect. Thanks.

Thank you. And at this time, I would like to go ahead and turn the call back over to Billy Hult, CEO, for closing remarks. Please go ahead.

Great. I know Sarah and I both appreciate a very busy day for everyone on the call. Appreciate your time. Thank you all very much for joining us. Any follow-up questions, obviously, please feel free to reach out to Ashley, Sameer, and our great team. Everyone, have a great day. Thanks very much.

Thank you all for attending today's program. You may now disconnect.