Tradeweb Markets Inc. (TW) Earnings & Analysis

Latest quarter

Tradeweb reported adjusted earnings of $0.97 per share for Q2 FY2026, above the $0.96 consensus. Revenue as counted for the consensus was $559.0 million, below the $564.0 million estimate.

The company reported quarterly revenue of $558.9 million, up from $513.0 million a year earlier, and diluted earnings per share of $0.85, compared with $0.71. CEO Billy Hult said client activity and a risk-on environment supported growth, with international clients contributing 65% of the overall revenue increase.

Hult said rates revenue benefited from swaps, government bonds and mortgages, while corporate bonds and credit derivatives helped credit revenue. He said retail credit revenue fell 22% year over year, primarily because other products offered better relative yields, and wholesale U.S. Treasury revenue declined 1% as streaming weakness outweighed gains in the sweep protocol.

Tradeweb’s operating margin rose to 43.9% from 39.0% a year earlier. The company reported free cash flow of $366.9 million, compared with $387.1 million in the prior-year quarter.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Billy Hult attributed the quarter’s growth to deeper client engagement, broader electronic trading adoption and years of investment in technology and connectivity, rather than a single episode of market volatility. He said international clients grew across all four asset classes, while June revenue rose more than 20% year over year.

Hult said global swaps revenue rose 13% year over year as clients managed interest-rate risk across currencies. In credit, he said growth in U.S. institutional and international business was offset by declines in municipal bonds and retail credit. He also said institutional credit request-for-quote average daily volume grew 15% year over year, while portfolio-trading average daily volume increased more than 30%.

CFO Sara Furber said average fees per million for long-tenor swaps fell 10.3%, primarily because of currency mix and lower duration. She said cash-credit fees per million decreased 11.4%, primarily as trading shifted away from higher-fee municipal and retail credit toward lower-fee European credit and portfolio trading.

On investment, Hult said Tradeweb introduced Terra, an AI-powered trading assistant, and enhanced Snap+ to help clients identify liquidity providers. Furber said technology and communication costs rose 38.9%, primarily reflecting data infrastructure and software spending, including AI. She said adjusted expenses rose 9.4% in the quarter, while adjusted EBITDA margin increased relative to the prior-year quarter.

Asked about incremental investment and flexibility, Furber identified data infrastructure, client-facing AI, digital markets, swaps and emerging markets as priorities. She said about 45% of the expense base remained variable and discretionary and that Tradeweb had flexibility to slow investment.

Asked about a competitor’s announced acquisition, Hult said competition in credit was already present and that Tradeweb was investing in technology, data and client decision-making. For the quarter ahead, Hult said preliminary July average daily revenue growth was in the low teens against July 2025, with two month-end trading days remaining.

Guidance

In its October 29 release, Tradeweb said it expects FY2026 adjusted expenses of $1.155 billion to $1.175 billion, trending toward the middle of the range. On the Q2 call, CFO Sara Furber had said expenses would trend toward the top half of the initial $1.1 billion to $1.16 billion range.