Tradeweb Markets Inc
For the period ended Dec 31, 2024. Filed Feb 7, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 7, 2025
TW$127.73+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-09.
0001758730-24-000025
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-07.
0001758730-25-000038
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 236 previous paragraphs and 253 current paragraphs.
141 unchanged; 85 reworded; 24 added; 9 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
In our corporates client sector, we provide comprehensive investment technology and research solutions tailored to the needs of corporate treasury organizations globally. These solutions enable efficient trading of institutional money market funds and other short-term investments. We expanded into the corporate client sector through our acquisition of ICD on August 1, 2024. The addition of ICD to our network broadened our product suite, further diversified our client and revenue base and strengthened our position in the corporate treasury space, enabling us to provide a more comprehensive range of liquidity management tools and services.
Current report
From time to time, we may evaluate potential acquisitions and engage in discussions and negotiations regarding potential acquisitions. Our revenues and profitability are affected by our acquisition activity, including the speed and cost at which we successfully integrate completed acquisitions into our existing business operations.
Current report
ICD
Current report
On August 1, 2024, we completed our acquisition of ICD.
Current report
In connection with the acquisition closing, Tradeweb Markets Inc. (the “Corporation”) issued and sold 41,705 shares of Class A common stock, with a grant date fair value of $4.7 million, to an equityholder of the ICD seller, who was also an employee of ICD and is currently an employee of the Company, which shares of Class A common stock were issued and sold as restricted stock (“RSAs”). The RSAs issued are subject to a two-year vesting period and forfeiture terms, pursuant to the Tradeweb Markets Inc. 2019 Omnibus Equity Incentive Plan. Of the $4.7 million in RSAs issued, $3.3 million was allocated to consideration transferred for the business combination, relating to the pre-combination service period completed before the acquisition date, and $1.3 million will be amortized into non-cash stock-based compensation expense over the two-year service period required subsequent to the acquisition date, with such special stock-based compensation amortization expense excluded from our non-GAAP financial measures of Adjusted EBITDA and Adjusted Net Income when it is recorded as expense.
Current report
Cash paid at closing, net of cash acquired and net of the proceeds from the sale of the RSAs, totaled $773.8 million, of which $770.9 million was determined to be consideration transferred for the business combination, $1.4 million was expensed during the year ended December 31, 2024 and $1.4 million was recorded as a prepaid asset, to be expensed over a two-year period. Both of these purchase price amounts that were or will be expensed are considered merger and acquisition transaction and integration costs and will be excluded from our non-GAAP financial measures of Adjusted EBITDA and Adjusted Net Income when recorded as expense.
Current report
In connection with the ICD Acquisition, we also issued to certain key ICD employees, 92,672 restricted stock units (the “ICD RSU Awards”), with a total grant date fair value of $10.3 million, that will vest one-third each year over a three-year period. Management determined that approximately $5.2 million of the ICD RSU Awards represents market based ordinary course compensation expense for these individuals, with the remaining $5.2 million representing a special award to help ensure retention of these key ICD employees during the three-year period subsequent to the acquisition and allow sufficient time for the integration of ICD’s operations into Tradeweb. The stock-based compensation expense relating to the portion of the ICD RSU Awards determined to be a special award will also be excluded from our non-GAAP financial measures of Adjusted EBITDA and Adjusted Net Income when it is recorded as expense. See “Non-GAAP Financial Measures” below for further details on ICD Acquisition related non-GAAP adjustments.
Current report
ICD is an institutional investment technology provider for corporate treasury organizations trading short-term investments. ICD’s flagship products include ICD Portal and ICD Portfolio Analytics. Our ICD portal is a one-stop shop to research, trade, analyze and report on investments across more than 40 available investment providers primarily offering money market funds and access to other short term products including deposits, fixed term funds and separately managed accounts (“SMAs”) (collectively referred to herein as “money market funds”). Portfolio Analytics is an AI-driven cloud solution for aggregating positions across a corporate treasury’s entire portfolio for analysis and reporting.
Current report
As part of Tradeweb, our goal is to provide a comprehensive solution for corporate treasurers and asset managers worldwide to manage short-term liquidity needs, including future plans to provide ICD clients with the ability to manage short-term liquidity needs and FX risk, as well as optimize yield and duration via our existing suite of products and partnerships. ICD clients will retain the ability to fully integrate their workflows with leading third-party treasury management and accounting systems and ICD’s portfolio analytics solution. In addition to plans to cross-sell our products to ICD’s clients, we also plan to leverage our international presence with the aim to accelerate growth and expansion, including by offering money market funds to our existing network of clients globally.
Current report
From the date of the ICD Acquisition through December 31, 2024, ICD revenues of $43.2 million and operating income of $2.1 million, including $18.4 million of depreciation and amortization from acquired assets, were included in our consolidated statements of income for the year ended December 31, 2024. See Note 4 – Acquisitions to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional details of this acquisition.
Current report
On January 19, 2024, we completed our acquisition of r8fin (the “r8fin Acquisition”) in exchange for total consideration of $125.9 million, consisting of $89.2 million in cash paid at closing (net of cash acquired) and the issuance of 374,601 shares of Class A common stock of the Corporation valued as of the acquisition date at $36.7 million.
Current report
Organizational Changes
Current report
On June 20, 2024, we announced organizational changes to optimize operations for continued growth. As part of those organizational changes, Amy Clack joined the Company in August 2024 as Chief Administrative Officer and a member of the Executive Committee, overseeing operations, business integration, risk and corporate services. In addition, Thomas Pluta, our former President, left the Company and the board of directors, effective September 30, 2024. Effective in January 2025, we also named Enrico Bruni and Troy Dixon to the newly created roles of Co-Head of Global Markets. Mr. Dixon stepped down from serving on our board of directors, effective December 31, 2024, in anticipation of his new role as a member of our Executive Committee.
Current report
During the year ended December 31, 2024, we incurred $2.9 million in incremental compensation expense related to a cash severance payment to be paid to Mr. Pluta in accordance with the Company’s Executive Severance Policy with respect to Mr. Pluta’s departure in September 2024, all recorded during the three months ended June 30, 2024. As of June 17, 2024, there was also approximately $4.4 million in total unamortized stock-based compensation associated with equity awards previously granted to Mr. Pluta that were accelerated and amortized into expense over a revised estimated service period ending on September 30, 2024. Of this amount, $1.7 million represented regularly scheduled amortization that would have been recognized from June 17, 2024 through September 30, 2024 if Mr. Pluta’s employment was not terminated and $2.7 million represented accelerated stock-based compensation expense that was excluded from our non-GAAP financial measures of Adjusted EBITDA and Adjusted Net Income when it was recorded as expense during the year ended December 31, 2024. See “Non-GAAP Financial Measures” below for further details.
Current report
Interest Income
Current report
Interest Expense
Current report
Our strong results for the year ended December 31, 2024 reflected significant organic growth and solid contributions from our recent acquisitions of ICD, r8fin and Yieldbroker. We remained focused on and grew market share while also benefiting from rates market volatility around central bank moves and broad-based volume growth, which underscored our sustained momentum across asset classes. The primary driver of the $387.7 million increase in revenue was related to a $345.2 million increase in transaction fees and commissions to $1.4 billion for the year ended December 31, 2024 from $1.1 billion for the year ended December 31, 2023, primarily due to higher revenues for rates derivatives products, U.S. and European corporate bonds, U.S., European and other government bonds, repurchase agreements and mortgages, as well as the basis point commissions earned on the ADB of client money market fund investments made through the ICD Portal for the five months in 2024 subsequent to the ICD acquisition closing.
Current report
Corporates. Revenues from our corporates client sector were $43.2 million for the year ended December 31, 2024. With the August 1, 2024 acquisition of ICD and its proprietary institutional investment technology, we entered the corporates client sector. This new client channel primarily serves corporate treasury organizations worldwide in investing in money market funds. Revenues from our corporates client sector primarily includes the basis point commissions earned on the ADB of client money market fund investments made through the ICD Portal for the five months subsequent to the acquisition closing. See “—Trends and Other Factors Impacting Our Performance—Acquisitions,” above for further details about this acquisition.
Current report
Interest Income
Current report
Interest Expense
Current report
Interest expense increased by $2.2 million to $4.3 million for the year ended December 31, 2024 from $2.0 million for the year ended December 31, 2023 primarily due to interest expense incurred on payments due under the Tax Receivable Agreement.
Current report
As of December 31, 2024, our operating lease liabilities totaled $35.7 million, with payments pursuant to these obligations due within the next 12 months and thereafter totaling $13.4 million and $25.7 million, respectively. In addition, we are obligated on long-term future minimum lease payments of $159.2 million for a lease signed but not yet commenced as of December 31, 2024.
Current report
The developed technology was valued using the income approach, specifically the relief-from-royalty method (“RFRM”). The RFRM is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. The royalty rate is applied to the projected revenue over the expected remaining life of the intangible asset to estimate royalty savings. The net after-tax royalty savings are calculated for each year in the remaining economic life of the technology and discounted to present value. The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the developed technology relative to the overall business as discussed above relating to the Customer Relationships.
Current report
For PRSUs, the Company recognizes stock-based compensation based on the fair market value of our Class A common stock at the grant date and an estimate of the number of shares included in expense each period is based on management’s estimate of the probable final performance modifier for those grants, with such estimate updated each period until the performance modifier is finalized. On March 15, 2024, we granted 201,546 PRSUs at a weighted-average grant-date fair value of $104.66. For these awards, the financial performance of the Company will be determined based on the compound annual growth rate over a three-year performance period beginning on January 1 in the year of grant and the performance modifier can vary between 0% (minimum) and 250% (maximum) of the target (100%) award amount. As of December 31, 2024, a 10% decrease in the expected final share payouts would decrease the expense for the year ended December 31, 2024 by $1.5 million.
Removed paragraphs (9)
Previous report
Yieldbroker
Previous report
On August 31, 2023, we completed the acquisition of all of the outstanding equity interests of Tradeweb Australia Pty Ltd (formerly Yieldbroker Pty Limited). The all-cash purchase price of A$123.6 million ($80.1 million U.S. dollars as translated as of August 31, 2023) was net of cash acquired and prior to working capital and other closing adjustments.
Previous report
Yieldbroker is a Tier 1 Australian Markets Licensee in Australia, regulated by ASIC, that maintains a branch in Singapore that is regulated by the MAS as a Regulated Market Operator. Yieldbroker operates a leading Australian trading platform for Australian and New Zealand government bonds and interest rate derivatives covering the institutional and wholesale client sectors. This acquisition combines Australia and New Zealand’s highly attractive, fast-growing markets with Tradeweb’s international reach and scale. The Yieldbroker acquisition is not material to our consolidated financial statements and did not have a significant impact to our results of operations for the year ended December 31, 2023. See Note 4 – Acquisitions to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional details.
Previous report
2023 LSEG Market Data Agreement
Previous report
In October 2023, we signed an amended and restated two-year market data license agreement with an affiliate of LSEG (formerly referred to as Refinitiv), pursuant to which LSEG will continue to distribute certain of our data directly to LSEG customers through its flagship financial platforms, LSEG Workspace, Datascope, LSEG Pricing Service and Tick History. The 2023 agreement, which was effective on November 1, 2023, replaced an existing agreement that was initiated in 2010 and most recently renewed in 2018, and provides us with increased revenue and flexibility in growing our market data offering. We will seek to further monetize our data over time both through potential expansion of our existing market data license agreement with LSEG and through distributing additional datasets, derived data and analytics offerings through our own network or through other third-party networks. Our current revenue guidance related to the 2023 LSEG market data agreement is forecasting approximately $80 million and $90 million for the years ended December 31, 2024 and 2025, respectively.
Previous report
Net Interest Income (Expense)
Previous report
Our diversified offering across products, client sectors and geographies supported sustained growth amidst a complex macroeconomic backdrop, including historic interest rate moves, geopolitical uncertainty and sustained broader market rate volatility. The primary driver of the $149.4 million increase in revenue was related to a $128.1 million increase in transaction fees and commissions to $1.1 billion for the year ended December 31, 2023 from $950.3 million for the year ended December 31, 2022, primarily due to higher revenues for rates derivatives products, U.S. and European corporate bonds, U.S. and European government bonds and certificates of deposit.
Previous report
Net Interest Income (Expense)
Previous report
Business Combinations
Reworded paragraphs (85)
Previous wording
The following discussion includes a comparison of our results of operations, cash flows and liquidity and capital resources for the years ended December 31, 2023 and 2022, respectively. A comparison of our results of operations, cash flows and liquidity and capital resources from the years ended December 31, 2022 and December 31, 2021 may be found in Part II, Item 7. – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2022.
Current wording
The following discussion includes a comparison of our results of operations, cash flows and liquidity and capital resources for the years ended December 31, 2024 and 2023, respectively. A comparison of our results of operations, cash flows and liquidity and capital resources for the years ended December 31, 2023 and December 31, 2022 may be found in Part II, Item 7. – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
We are a leader in building and operating electronic marketplaces for our global network of clients across the financial ecosystem. Our network is comprised of clients across the institutional, wholesale and retail client sectors, including many of the largest global asset managers, hedge funds, insurance companies, central banks, banks and dealers, proprietary trading firms and retail brokerage and financial advisory firms, as well as regional dealers. Our marketplaces facilitate trading across a range of asset classes, including rates, credit, equities and money markets. We are a global company serving clients in over 70 countries with offices in North America, Europe, Asia, Australia and the Middle East. We believe our proprietary technology and culture of collaborative innovation allow us to adapt our offerings to enter new markets, create new platforms and solutions and adjust to regulations quickly and efficiently. We support our clients by providing solutions across the trade lifecycle, including pre-trade, execution, post-trade and data.
Current wording
We are a leader in building and operating electronic marketplaces for our global network of more than 3,000 clients across the financial ecosystem. Our network is comprised of clients across the institutional, wholesale, retail and corporates client sectors, including many of the largest global asset managers, hedge funds, insurance companies, central banks, banks and dealers, proprietary trading firms, retail brokerage and financial advisory firms, regional dealers and corporations. Our marketplaces facilitate trading across a range of asset classes, including rates, credit, equities and money markets. We are a global company serving clients in over 85 countries with offices in North America, South America, Europe, Australia, Asia and the Middle East. We believe our proprietary technology and culture of collaborative innovation allow us to adapt our offerings to enter new markets, create new platforms and solutions and adjust to regulations quickly and efficiently. We support our clients by providing solutions across the trade lifecycle, including pre-trade, execution, post-trade and data and analytics.
Previous wording
Our institutional client sector serves institutional investors in over 70 countries around the globe and across over 25 currencies. We connect institutional investors with pools of liquidity using our flexible order and trading systems. Our clients trust the integrity of our markets and recognize the value they get by trading electronically: enhanced transparency, competitive pricing, efficient trade execution and regulatory compliance.
Current wording
Our institutional client sector serves institutional investors in over 85 countries around the globe and across over 30 currencies. We connect institutional investors with pools of liquidity using our flexible order and trading systems. Our clients trust the integrity of our markets and recognize the value they get by trading electronically: enhanced transparency, competitive pricing, efficient trade execution and regulatory compliance.
Previous wording
In our wholesale client sector, we provide a broad range of electronic, voice and hybrid platforms to more than 300 dealers and financial institutions with more than 190 actively trading on our electronic or hybrid markets with our Dealerweb platform. This platform was launched in 2008 following the acquisition of inter-dealer broker Hilliard Farber & Co., Inc. In 2011, we acquired the brokerage assets of Rafferty Capital Markets and in June 2021, we acquired Nasdaq’s U.S. fixed income electronic trading platform (formerly known as eSpeed) (the “NFI Acquisition”). Today, Dealerweb actively competes across a range of rates, credit, money markets, derivatives and equity markets.
Current wording
In our wholesale client sector, we provide a broad range of electronic, voice and hybrid platforms to dealers and financial institutions trading on our electronic or hybrid markets with our Dealerweb platform. This platform was launched in 2008 following the acquisition of inter-dealer broker Hilliard Farber & Co., Inc. In 2011, we acquired the brokerage assets of Rafferty Capital Markets and in June 2021, we acquired Nasdaq’s U.S. fixed income electronic trading platform (formerly known as eSpeed) (the “NFI Acquisition”). Today, Dealerweb actively competes across a range of rates, credit, money markets, derivatives and equity markets.
Previous wording
In our retail client sector, we provide advanced trading solutions for financial advisory firms and traders with our Tradeweb Direct platform. We entered the retail sector in 2006 and launched our Tradeweb Direct platform following the 2013 acquisition of BondDesk Group LLC, which was built to bring innovation and efficiency to the wealth management community. Tradeweb Direct has provided financial advisory firms access to live offerings, accurate pricing in the marketplace and fast execution.
Current wording
In our retail client sector, we provide advanced trading solutions for financial advisory firms and traders with our Tradeweb Direct platform. We entered the retail sector in 2006 and launched our Tradeweb Direct platform following the 2013 acquisition of BondDesk Group LLC, which was built to bring innovation and efficiency to the wealth management community. Tradeweb Direct provides financial advisory firms access to live offerings, accurate pricing in the marketplace and fast execution.
Previous wording
On November 16, 2023, we entered into a definitive agreement to acquire r8fin in exchange for total consideration of $125 million, consisting of $90 million in cash and $35 million in shares of Class A common stock of the Corporation, subject to working capital and other adjustments. r8fin provides a suite of algorithmic-based tools as well as a thin-client execution management system (EMS) trading application to facilitate futures and cash trades. The solutions complement Tradeweb’s existing Dealerweb Active Streams, Dealerweb Central Limit Order Book (CLOB), Tradeweb Request-for-Quote (RFQ) and Tradeweb AiEX (Automated Intelligent Execution) offerings, creating a valuable and broad-based approach to trading U.S. Treasuries and related futures trading. The acquisition closed on January 19, 2024, following the satisfaction of closing conditions and regulatory reviews. The r8fin acquisition is not expected to be material to our 2024 consolidated financial statements.
Current wording
r8fin provides a suite of algorithmic-based tools as well as a thin-client execution management system (“EMS”) trading application to facilitate futures and cash trades. The solutions complement Tradeweb’s existing Dealerweb Active Streams, Dealerweb Central Limit Order Book (“CLOB”), Tradeweb Request-for-Quote (“RFQ”) and Tradeweb Automated Intelligent Execution (“AiEX”) offerings, creating a valuable and broad-based approach to trading U.S. Treasuries and related futures trading. The r8fin Acquisition is not material to our consolidated financial statements and did not have a significant impact to our results of operations for the year ended December 31, 2024. See Note 4 – Acquisitions to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional details.
Previous wording
Our business is impacted by the overall market activity and, in particular, trading volumes and market volatility. Lower volatility may result in lower trading volume for our clients and may negatively impact our operating performance and financial condition. Factors that may impact market activity in 2024 include, among other things, evolving monetary policies of central banks, economic, political and social conditions, legislative, regulatory or government policy changes, and concerns with respect to the banking industry, including as a result of any bank failures.
Current wording
Our business is impacted by the overall market activity and, in particular, trading volumes and market volatility. Lower volatility may result in lower trading volume for our clients and may negatively impact our operating performance and financial condition. Factors that may impact market activity in 2025 include, among other things, evolving monetary policies of central banks, economic, political and social conditions, legislative, regulatory or government policy changes, including the recent change in U.S. administration and Congress, which may lead to material changes to prior laws, rules and regulations, guidance and enforcement stances and concerns with respect to the banking industry, including as a result of any bank failures.
Previous wording
Because the majority of our financial assets are short-term in nature, they are not significantly affected by inflation. However, the rate of inflation may affect our expenses, such as employee compensation and benefits, technology and communication expenses and occupancy costs, which may not be readily recoverable in the prices of our services. We believe any effects of inflation on our results of operations and financial condition have not been significant during any of the periods presented in this Annual Report on Form 10-K. To the extent inflation, along with other factors, continue to result in rising interest rates and have other adverse effects on the securities markets and the overall economy, they may adversely affect our results of operations and financial condition.
Current wording
Because the majority of our financial assets are short-term in nature, they are not significantly affected by inflation. However, the rate of inflation may affect our expenses, such as employee compensation and benefits, technology and communication expenses and occupancy costs, which may not be readily recoverable in the prices of our services. We believe any effects of inflation on our results of operations and financial condition have not been significant during any of the periods presented in this Annual Report on Form 10-K. To the extent inflation, along with other factors, continues to result in elevated interest rates and has other adverse effects on the securities markets and the overall economy, it may adversely affect our results of operations and financial condition.
Previous wording
Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant regulatory risk and cause additional legal costs to ensure compliance. See Part I, Item 1. – “Business – Regulation.” The existing legal framework that governs the financial markets is periodically reviewed and amended, resulting in enforcement of new laws and regulations that apply to our business. The current regulatory environment in the United States and abroad may be subject to future legislative and regulatory changes driven by U.S. and global issues and priorities. The impact of any changes in the legal or regulatory landscape on us and our operations remains uncertain. Compliance with regulations may require us to dedicate additional financial and operational resources, which may adversely affect our profitability. In addition, compliance with regulations may require our clients to dedicate significant financial and operational resources, which may negatively affect their ability to pay our fees and use our platforms and, as a result, our profitability. However, under certain circumstances regulation may increase demand for our platforms and solutions, and we believe we are well positioned to benefit from any potential increased electronification due to regulatory changes as market participants seek platforms that meet regulatory requirements and solutions that help them comply with their regulatory obligations.
Current wording
Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant regulatory risk and cause additional legal costs to ensure compliance. See Part I, Item 1. – “Business – Regulation.” The existing legal framework that governs the financial markets is periodically reviewed and amended, resulting in enforcement of new laws and regulations that apply to our business. The current regulatory environment in the United States and abroad may be subject to future legislative and regulatory changes driven by U.S. and global issues and priorities, including the recent change in U.S. administration and Congress, which may lead to material changes to prior laws, rules and regulations, guidance and enforcement stances. The impact of any changes in the legal or regulatory landscape on us and our operations remains uncertain. Compliance with regulations may require us to dedicate additional financial and operational resources, which may adversely affect our profitability. In addition, compliance with regulations may require our clients to dedicate significant financial and operational resources, which may negatively affect their ability to pay our fees and use our platforms and, as a result, our profitability. However, under certain circumstances regulation may increase demand for our platforms and solutions, and we believe we are well positioned to benefit from any potential increased electronification due to regulatory changes as market participants seek platforms that meet regulatory requirements and solutions that help them comply with their regulatory obligations.
Previous wording
We and our competitors compete to introduce innovations in market structure and new electronic trading capabilities. While we endeavor to be a leader in innovation, new trading capabilities of our competitors are also adopted by market participants. On the one hand, this increases liquidity and electronification for all participants, but it also puts pressure on us to further invest in our technology and to innovate to ensure the continued growth of our network of clients and continued improvement of liquidity, electronic processing and pricing on our platforms. Our ability to compete is influenced by key factors such as (i) developments in trading platforms and solutions, (ii) the liquidity we provide on transactions, (iii) the transaction costs we incur in providing our solutions, (iv) the efficiency in execution of transactions on our platforms, (v) our ability to hire and retain talent and (vi) our ability to maintain the security of our platforms and solutions. Our competitive position is also influenced by the familiarity and integration of our clients with our electronic, voice and hybrid systems. When either a client wants to trade in a new product or we want to introduce a new product, trading protocol or other solution, we believe we benefit from our clients’ familiarity with our offerings as well as our integration into their order management systems and back offices. See Part I, Item 1. – “Business – Competition” for more detail on our competitors.
Current wording
We and our competitors compete to introduce innovations in market structure and new electronic trading capabilities. While we endeavor to be a leader in innovation, new trading capabilities of our competitors are also adopted by market participants. On the one hand, this increases liquidity and electronification for all participants, but it also puts pressure on us to further invest in our technology and to innovate to ensure the continued growth of our network of clients and continued improvement of liquidity, electronic processing and pricing on our platforms. Our ability to compete is influenced by key factors such as (i) developments in trading platforms and solutions, (ii) the liquidity we provide on transactions, (iii) the transaction costs we incur in providing our solutions, (iv) the efficiency in execution of transactions on our platforms, (v) our ability to hire and retain talent and (vi) our ability to pursue strategic acquisitions and alliances and (vii) our ability to maintain the security of our platforms and solutions. Our competitive position is also influenced by the familiarity and integration of our clients with our electronic, voice and hybrid systems. When either a client wants to trade in a new product or we want to introduce a new product, trading protocol or other solution, we believe we benefit from our clients’ familiarity with our offerings as well as our integration into their order management systems and back offices. See Part I, Item 1. – “Business – Competition” for more detail on our competitors.
Previous wording
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA establishes a 15% corporate alternative minimum tax (“CAMT”) effective for taxable years beginning after December 31, 2022, and imposes a 1% excise tax on the repurchase after December 31, 2022 of stock by publicly traded U.S. corporations. The 1% excise tax did not have an impact to our financial condition, results of operations and cash flows as of and for the year ended December 31, 2023. The Company will be subject to the 15% CAMT, which is expected to change the estimated period in which the tax receivable agreement liability payments will be made. However, it is not expected to have a material impact on the Company’s effective tax rate. The adoption of the IRA will also not have an impact to our non-GAAP adjusted effective tax rate used for purposes of calculating our non-GAAP measure of Adjusted Net Income.
Current wording
On August 16, 2022, former President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA establishes a 15% corporate alternative minimum tax (“CAMT”) effective for taxable years beginning after December 31, 2022, and imposes a 1% excise tax on the repurchase after December 31, 2022 of stock by publicly traded U.S. corporations. The 1% excise tax did not have an impact to our financial condition, results of operations and cash flows as of and for the years ended December 31, 2024 and 2023. The Company is subject to the current 15% CAMT. However, it is not expected to have a material impact on the Company’s effective tax rate. The IRA also has not had an impact to our non-GAAP adjusted effective tax rate used for purposes of calculating our non-GAAP measure of Adjusted Net Income.
Previous wording
On October 8, 2021, the Organization for Economic Cooperation and Development announced an accord endorsing and providing an implementation plan focused on global profit allocation, and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as the “Two Pillar Plan.” On December 15, 2022, the European Council formally adopted a European Union directive on the implementation of the plan by January 1, 2024. The Company may be subject to the provisions of the Two Pillar Plan, and related tax impacts per local country adoption, as it is a consolidating subsidiary of LSEG. The Company does not expect to have material impact of the Two Pillar Plan, but will continue to monitor legislative development.
Current wording
On October 8, 2021, the Organization for Economic Cooperation and Development announced an accord endorsing and providing an implementation plan focused on global profit allocation, and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as the “Two Pillar Plan.” On December 15, 2022, the European Council formally adopted a European Union directive on the implementation of the plan which became effective for the Company beginning on January 1, 2024. The Company falls under the provisions of the Two Pillar Plan and related tax impacts per local country adoption as it is a consolidating subsidiary of LSEG. The Company does not anticipate a material impact to its financial condition, results of operations and cash flows from the Two Pillar Plan.
Previous wording
We earn transaction fees from transactions executed on our trading platforms through various fee plans. Transaction fees are generated on both a variable and fixed price basis and vary by geographic region, product type and trade size. For most of our products, clients pay both fixed minimum monthly transaction fees and variable transaction fees on a per transaction basis in excess of the monthly minimum. For certain of our products, clients also pay a subscription fee in addition to the minimum monthly transaction fee. For other products, instead of a minimum monthly transaction fee, clients pay a subscription fee and a fixed transaction fee or variable transaction fees on a per transaction basis. For variable transaction fees, we charge clients fees based on the mix of products traded and the volume of transactions executed.
Current wording
We earn transaction fees and/or commissions from transactions executed on our trading platforms on both a variable and fixed price basis, which vary by geographic region, product type and trade size. For most of our products, clients pay both fixed minimum monthly transaction fees and variable transaction fees on a per transaction basis in excess of the monthly minimum. Clients may also pay a subscription fee in addition to or instead of the minimum monthly transaction fees. For other products, instead of a minimum monthly transaction fee, clients may pay a fixed transaction fee or only a variable transaction fee on a per transaction basis. We also earn commission revenue from our electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. For to-be-announced mortgage backed securities (“TBA-MBS”), U.S. Treasury and repurchase agreement transactions executed by our wholesale clients, we also generate revenue from fixed commissions that are generally invoiced monthly.
Previous wording
Transaction volume is determined by using either a measure of the notional volume of the products traded or a count of the number of trades. We typically charge higher fees for products that are less actively traded. In addition, because transaction fees are sometimes subject to fee plans with tiered pricing based on product mix, volume, monthly minimums and monthly maximum fee caps, average transaction fees per million generated for a client may vary each month depending on the mix of products and volume traded. Furthermore, because transaction fees vary by geographic region, product type and trade size, our revenues may not correlate with volume growth.
Current wording
For variable transaction fees and commissions, we charge clients based on the mix of products traded and the volume of transactions executed. Transaction volume is determined by using a measure of the notional volume of the products traded, a count of the number of trades or, in the case of the ICD Portal, the client’s average daily balance (“ADB”) invested in the money market funds during a calendar month. Because transaction fees and commissions are sometimes subject to plans with tiered pricing based on product mix, volume, monthly minimums and monthly maximum fee caps, average variable fees per million dollars of volume traded generated for a client may vary each month depending on the mix of products and volume traded. Furthermore, because transaction fees and commissions vary by geographic region, product type and trade size, our revenues may not correlate with volume growth.
Previous wording
We earn subscription fees primarily for granting clients access to our markets for trading and market data. For a limited number of products, we only charge subscription fees and no transaction fees or commissions. Subscription fees are generally generated on a fixed price basis.
Current wording
We earn subscription fees primarily for granting clients access to our markets for trading and market data. For a limited number of products, we only charge subscription fees and no transaction fees or commissions. Subscription fees are generally charged on a fixed price basis.
Previous wording
Employee compensation and benefits expense consists of wages, employee benefits, bonuses, commissions, stock-based compensation cost and related taxes. Factors that influence employee compensation and benefits expense include revenue and earnings growth, hiring new employees and trading activity which generates broker commissions. We expect employee compensation and benefits expense to increase as we hire additional employees to support revenue and earnings growth. As a result, employee compensation and benefits can vary from period to period.
Current wording
Employee compensation and benefits expense consists of wages, employee benefits, bonuses, commissions, stock-based compensation cost and related taxes. Factors that influence employee compensation and benefits expense include revenue and earnings growth, hiring or acquiring new employees and trading activity which generates broker commissions. We expect employee compensation and benefits expense to increase as we hire or acquire additional employees to support revenue and earnings growth. As a result, employee compensation and benefits can vary from period to period.
Previous wording
Occupancy expense consists of operating lease rent and related costs for office space and data centers leased in North America, Europe, Asia, Australia and the Middle East.
Current wording
Occupancy expense consists of operating lease rent and related costs for office space and data centers leased in North America, South America, Europe, Australia, Asia and the Middle East. We expect occupancy expense to increase as our space needs grow in line with our global expansion.
Previous wording
Interest income consists of interest earned from our cash deposited with large commercial banks and money market funds. Interest expense consists of commitment fees payable on, and, if applicable, interest payable on any borrowings outstanding under our credit facility.
Current wording
Interest expense consists primarily of any interest expense incurred or payable on our tax receivable agreement liability, commitment fees payable on, and, if applicable, interest payable on any borrowings outstanding under our credit facility and amortization of deferred financing costs.
Previous wording
In connection with the Reorganization Transactions, the TWM LLC Agreement was amended and restated to, among other things, (i) provide for LLC Interests and (ii) exchange all of the then existing membership interests in TWM LLC for LLC Interests. LLC Interests held by Continuing LLC Owners are redeemable in accordance with the TWM LLC Agreement, at the election of such holders, for newly issued shares of Class A common stock or Class B common stock, as the case may be, on a one-for-one basis. In the event of such election by a Continuing LLC Owner, we may, at our option, effect a direct exchange of Class A common stock or Class B common stock for such LLC Interests of such Continuing LLC Owner in lieu of such redemption. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in TWM LLC. Following the completion of the Reorganization Transactions and the IPO, we owned 64.3% of TWM LLC and Continuing LLC Owners owned the remaining 35.7% of TWM LLC. As of December 31, 2023, we owned 90.2% of TWM LLC and Continuing LLC Owners owned the remaining 9.8% of TWM LLC.
Current wording
LLC Interests held by Continuing LLC Owners are redeemable in accordance with the TWM LLC Agreement, at the election of such holders, for newly issued shares of Class A common stock or Class B common stock, as the case may be, on a one-for-one basis. In the event of such election by a Continuing LLC Owner, we may, at our option, effect a direct exchange of Class A common stock or Class B common stock for such LLC Interests of such Continuing LLC Owner in lieu of such redemption. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in TWM LLC. As of December 31, 2024, we owned 90.2% of TWM LLC and Continuing LLC Owners owned the remaining 9.8% of TWM LLC.
Previous wording
(1)Subscription fees for the years ended December 31, 2023 and 2022 include $64.3 million and $62.7 million, respectively, of LSEG market data fees (formerly referred to as Refinitiv market data fees).
Current wording
(1)Subscription fees for the years ended December 31, 2024 and 2023 include $82.1 million and $64.3 million, respectively, of LSEG market data fees.
Previous wording
Rates. Revenues from our rates asset class increased by $90.0 million or 14.9% to $695.4 million for the year ended December 31, 2023 compared to $605.4 million for the year ended December 31, 2022 primarily due to higher variable transaction fees and commissions on higher trading volumes for rates derivatives products and U.S. and European government bonds and an increase in fixed subscription fees.
Current wording
Rates. Revenues from our rates asset class increased by $209.5 million or 30.1% to $904.9 million for the year ended December 31, 2024 compared to $695.4 million for the year ended December 31, 2023 primarily due to higher variable transaction fees and commissions on higher trading volumes for rates derivatives products, U.S., European and other government bonds and mortgages.
Previous wording
Credit. Revenues from our credit asset class increased by $35.6 million or 10.7% to $367.4 million for the year ended December 31, 2023 compared to $331.8 million for the year ended December 31, 2022 primarily due to higher variable transaction fees and commissions on higher trading volumes for U.S. and European corporate bonds, partially offset by lower variable transaction fees and commissions on lower trading volumes for credit derivatives products.
Current wording
Credit. Revenues from our credit asset class increased by $91.6 million or 24.9% to $459.0 million for the year ended December 31, 2024 compared to $367.4 million for the year ended December 31, 2023 primarily due to higher variable transaction fees and commissions on higher trading volumes for U.S. and European corporate bonds and credit derivatives products, as well as an increase in fixed subscription fees.
Previous wording
Equities. Revenues from our equities asset class increased by $1.8 million or 1.9% to $95.3 million for the year ended December 31, 2023 compared to $93.5 million for the year ended December 31, 2022 primarily due to higher variable transaction fees and commissions on higher trading volumes for equity derivative products, partially offset by lower variable transaction fees and commissions on lower trading volumes for European ETFs.
Current wording
Equities. Revenues from our equities asset class increased by $8.9 million or 9.3% to $104.2 million for the year ended December 31, 2024 compared to $95.3 million for the year ended December 31, 2023 primarily due to higher variable transaction fees and commissions on higher trading volumes for European ETFs and equity derivatives products.
Previous wording
Money Markets. Revenues from our money markets asset class increased by $13.1 million or 26.1% to $63.0 million for the year ended December 31, 2023 compared to $50.0 million for the year ended December 31, 2022 primarily due to higher variable transaction fees and commissions on higher trading volumes for certificates of deposit and repurchase agreements.
Current wording
Money Markets. Revenues from our money markets asset class increased by $52.2 million or 82.9% to $115.2 million for the year ended December 31, 2024 compared to $63.0 million for the year ended December 31, 2023 primarily due to the August 1, 2024 acquisition of ICD and the associated basis point commissions earned on the ADB of client money market fund investments made through the ICD Portal, as well as higher variable transaction fees and commissions on higher trading volumes for repurchase agreements.
Previous wording
Market Data. Revenues from our market data asset class increased by $8.2 million or 9.5% to $94.1 million for the year ended December 31, 2023 compared to $85.9 million for the year ended December 31, 2022. The increase was derived primarily from increased proprietary third party market data fees, increased trade reporting services (APA) revenue and increased LSEG market data fees driven primarily from the amended and restated market data license agreement effective as of November 1, 2023 discussed above in “—Trends and Other Factors Impacting Our Performance—2023 LSEG Market Data Agreement.”
Current wording
Market Data. Revenues from our market data asset class increased by $23.9 million or 25.5% to $118.0 million for the year ended December 31, 2024 compared to $94.1 million for the year ended December 31, 2023. The increase was derived primarily from increased LSEG market data fees from our market data agreement that was amended effective as of November 1, 2023, as well as an increase in proprietary third party market data revenue.
Previous wording
Other. Revenues from our other asset class remained relatively flat at $23.0 million for the year ended December 31, 2023 compared to $22.2 million for the year ended December 31, 2022, with a modest increase of $0.8 million or 3.5%.
Current wording
Other. Revenues from our other asset class increased by $1.5 million or 6.7% to $24.5 million for the year ended December 31, 2024 compared to $23.0 million for the year ended December 31, 2023.
Previous wording
Institutional. Revenues from our institutional client sector increased by $77.8 million or 10.8% to $797.0 million for the year ended December 31, 2023 from $719.2 million for the year ended December 31, 2022. The increase was derived primarily from higher revenues for rates derivatives products, U.S. corporate bonds and U.S. and European government bonds, partially offset by lower revenues for credit derivatives products.
Current wording
Institutional. Revenues from our institutional client sector increased by $238.7 million or 30.0% to $1.0 billion for the year ended December 31, 2024 from $797.0 million for the year ended December 31, 2023. The increase was derived primarily from higher revenues for rates derivatives products, U.S. and European corporate bonds and U.S., European and other government bonds.
Previous wording
Wholesale. Revenues from our wholesale client sector increased by $39.4 million or 14.4% to $312.6 million for the year ended December 31, 2023 from $273.2 million for the year ended December 31, 2022. The increase was derived primarily from higher revenues for U.S. and European corporate bonds and U.S. government bonds.
Current wording
Wholesale. Revenues from our wholesale client sector increased by $73.1 million or 23.4% to $385.7 million for the year ended December 31, 2024 from $312.6 million for the year ended December 31, 2023. The increase was derived primarily from higher revenues for U.S. government bonds, including positive contributions from r8fin, as well as higher revenues for U.S. and European corporate bonds, rates derivatives products and repurchase agreements.
Previous wording
Retail. Revenues from our retail client sector increased by $24.1 million or 21.8% to $134.5 million for the year ended December 31, 2023 from $110.5 million for the year ended December 31, 2022. The increase was derived primarily from higher revenues for certificates of deposit, U.S. government bonds and U.S. corporate bonds.
Current wording
Retail. Revenues from our retail client sector increased by $8.7 million or 6.5% to $143.2 million for the year ended December 31, 2024 from $134.5 million for the year ended December 31, 2023. The increase was derived primarily from higher revenues for U.S. corporate bonds, municipals and structured products.
Previous wording
Market Data. Revenues from our market data client sector increased by $8.2 million or 9.5% to $94.1 million for the year ended December 31, 2023 from $85.9 million for the year ended December 31, 2022. The increase was derived primarily from increased proprietary third party market data fees, increased trade reporting services (APA) revenue and increased LSEG market data fees driven primarily from the amended and restated market data license agreement effective as of November 1, 2023 discussed above in “—Trends and Other Factors Impacting Our Performance—2023 LSEG Market Data Agreement.”
Current wording
Market Data. Revenues from our market data client sector increased by $23.9 million or 25.5% to $118.0 million for the year ended December 31, 2024 from $94.1 million for the year ended December 31, 2023. The increase was derived primarily from increased LSEG market data fees from our market data agreement that was amended effective as of November 1, 2023, as well as an increase in proprietary third party market data revenue.
Previous wording
U.S. Revenues from U.S. clients increased by $89.7 million or 11.8% to $850.3 million for the year ended December 31, 2023 from $760.6 million for the year ended December 31, 2022 primarily due to higher revenues for U.S. corporate bonds, U.S. government bonds, rates derivatives products and certificates of deposit.
Current wording
U.S. Revenues from U.S. clients increased by $210.4 million or 24.7% to $1.1 billion for the year ended December 31, 2024 from $850.3 million for the year ended December 31, 2023 primarily due to higher revenues for U.S. corporate bonds, U.S. government bonds, rates derivatives products, market data and money markets, including contributions from ICD.
Previous wording
International. Revenues from International clients increased by $59.7 million or 14.0% to $487.9 million for the year ended December 31, 2023 from $428.1 million for the year ended December 31, 2022 primarily due to higher revenues for rates derivatives products, European corporate bonds, European government bonds and higher market data revenue, offset by lower revenues for credit derivatives products and European ETFs.
Current wording
International. Revenues from International clients increased by $177.4 million or 36.4% to $665.3 million for the year ended December 31, 2024 from $487.9 million for the year ended December 31, 2023 primarily due to higher revenues for rates derivatives products, European and other government bonds, European corporate bonds, market data and money markets, including contributions from ICD.
Previous wording
Employee Compensation and Benefits. Expenses related to employee compensation and benefits increased by $27.9 million or 6.4% to $460.3 million for the year ended December 31, 2023 from $432.4 million for the year ended December 31, 2022. The increase was primarily due to an increase in headcount and related salaries and benefits as well as increases in incentive compensation expense and commissions tied to our operating performance, partially offset by $15.0 million in non-cash accelerated stock-based compensation expense and related payroll taxes relating to the retirement of our former CEO incurred during the year ended December 31, 2022 that did not recur during 2023.
Current wording
Employee Compensation and Benefits. Expenses related to employee compensation and benefits increased by $132.4 million or 28.8% to $592.7 million for the year ended December 31, 2024 from $460.3 million for the year ended December 31, 2023. The increase was primarily due to an increase in incentive compensation expense tied to our financial performance, as well as an increase in headcount and related salaries, bonuses and benefits to support our continued growth.
Previous wording
Depreciation and Amortization. Expenses related to depreciation and amortization increased by $6.5 million or 3.6% to $185.4 million for the year ended December 31, 2023 from $178.9 million for the year ended December 31, 2022. The increase was primarily due to increases in amortization of software development costs and hardware driven by increases in investment in our infrastructure and expense relating to the assets acquired in connection with the August 31, 2023 Yieldbroker acquisition.
Current wording
Depreciation and Amortization. Expenses related to depreciation and amortization increased by $34.6 million or 18.7% to $220.0 million for the year ended December 31, 2024 from $185.4 million for the year ended December 31, 2023. The increase was primarily due to increases in amortization of assets acquired in connection with the ICD, r8fin and Yieldbroker acquisitions on August 1, 2024, January 19, 2024 and August 31, 2023, respectively.
Previous wording
Technology and Communications. Expenses related to technology and communications increased by $11.6 million or 17.7% to $77.5 million for the year ended December 31, 2023 from $65.9 million for the year ended December 31, 2022. The increase was primarily due to investment in our data strategy and infrastructure and increased data and clearance fees driven primarily by higher trading volumes period-over-period.
Current wording
Technology and Communications. Expenses related to technology and communications increased by $21.1 million or 27.2% to $98.6 million for the year ended December 31, 2024 from $77.5 million for the year ended December 31, 2023. The increase was primarily due to investment in our data strategy and infrastructure and increased clearance and data fees driven primarily by higher trading volumes period-over-period.
Previous wording
General and Administrative. Expenses related to general and administrative costs increased by $4.9 million or 10.6% to $51.5 million for the year ended December 31, 2023 from $46.6 million for the year ended December 31, 2022. The increase was primarily due to an increase in realized and unrealized foreign currency losses, which increased by $3.4 million to $0.8 million in losses for the year ended December 31, 2023 compared to $2.6 million in gains for the year ended December 31, 2022. The change was primarily driven by the change in fair value of our foreign currency forward contracts used in connection with our foreign currency risk management program, partially offset by a decrease in foreign currency re-measurement losses on transactions in nonfunctional currencies.
Current wording
General and Administrative. Expenses related to general and administrative costs increased by $4.8 million or 9.4% to $56.3 million for the year ended December 31, 2024 from $51.5 million for the year ended December 31, 2023. The increase was primarily due to increases in travel, marketing and recruiting costs to support our continued growth. These increases were offset by an $11.3 million increase in foreign exchange gains during the year ended December 31, 2024 compared to the year ended December 31, 2023. Realized and unrealized foreign currency gains totaled $10.4 million during the year ended December 31, 2024 as compared to $0.8 million in losses during the year ended December 31, 2023. The change was primarily driven by the change in fair value of our foreign currency forward contracts used in connection with our foreign currency risk management program, partially offset by an increase in foreign currency re-measurement losses on transactions in nonfunctional currencies.
Previous wording
Professional Fees. Expenses related to professional fees increased by $4.6 million or 12.2% to $42.4 million for the year ended December 31, 2023 from $37.8 million for the year ended December 31, 2022. The increase was primarily due to increased legal and other costs related to acquisitions.
Current wording
Professional Fees. Expenses related to professional fees increased by $17.8 million or 41.9% to $60.1 million for the year ended December 31, 2024 from $42.4 million for the year ended December 31, 2023. The increase was primarily due to an increase in professional fees related to acquisitions.
Previous wording
Occupancy. Expenses related to occupancy costs increased by $1.2 million or 8.2% to $15.9 million for the year ended December 31, 2023 as compared to $14.7 million for the year ended December 31, 2022. The increase was primarily due to higher data center rent expense primarily driven by the completion of the NFI Acquisition technology integration during the three months ended March 31, 2023 and the relocation of data centers to locations providing enhanced infrastructure and improved performance.
Current wording
Occupancy. Expenses related to occupancy costs increased by $4.3 million or 26.9% to $20.2 million for the year ended December 31, 2024 as compared to $15.9 million for the year ended December 31, 2023. The increase was primarily due to higher data center and office rent expense associated with our global expansion.
Previous wording
The tax receivable agreement liability adjustment decreased by $23.2 million or 169.7% to $9.5 million of expense for the year ended December 31, 2023 from $13.7 million of income for the year ended December 31, 2022, due to changes in the tax receivable agreement liability recorded in our consolidated statements of financial condition as a result of changes in the mix of earnings, tax legislation and tax rates in various jurisdictions, which impacted our estimated future tax savings.
Current wording
The tax receivable agreement liability adjustment was $7.7 million of income for the year ended December 31, 2024 compared to $9.5 million of expense for the year ended December 31, 2023, due to changes in the tax receivable agreement liability recorded in our consolidated statements of financial condition primarily as a result of changes to tax legislation and tax rates in various jurisdictions, which impacted our estimated future tax savings.
Previous wording
Net interest income increased by $53.4 million or 448.8% to $65.4 million of net interest income for the year ended December 31, 2023 from $11.9 million of net interest expense for the year ended December 31, 2022, primarily due to an increase in interest income earned relating to an increase in our average invested cash balance and an increase in interest rates period over period.
Current wording
Interest income increased by $6.6 million to $74.0 million for the year ended December 31, 2024 from $67.4 million for the year ended December 31, 2023 primarily due to increases in interest rates and our average invested cash balance period over period.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Interest income consists primarily of interest earned from our cash deposited with large commercial banks and money market funds, as well as interest earned from our investments in available-for-sale debt securities.
Current report — wording carried from elsewhere
The valuation of the Customer Relationships and the developed technology primarily included significant unobservable inputs (Level 3), creating a significant level of estimation uncertainty. Customer Relationships were valued using the income approach, specifically a multi-period excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then examines the excess return that is attributable to the intangible asset being valued. The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the Customer Relationships relative to the overall business. In developing a discount rate for the Customer Relationships, the Company estimated a weighted-average cost of capital for the overall business and employed an intangible asset risk premium to this rate when discounting the excess earnings related to Customer Relationships. The resulting discounted cash flows were then tax-affected at the applicable statutory rate.
Current report — wording carried from elsewhere
The stock-based payments received by the employees of the Company are accounted for as equity awards. The Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We earn commission revenue from our electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. For TBA-MBS, U.S. Treasury and repurchase agreement transactions executed by our wholesale clients, we also generate revenue from fixed commissions that are generally invoiced monthly.