Tradeweb Markets Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10‑Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by the forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10‑Q and the section titled “Item 1A. Risk Factors” in Part I of the 2023 Form 10-K.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Basis of Presentation,” “Use of Non-GAAP Financial Measures” and our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10‑Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by the forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10‑Q and the section titled “Item 1A. Risk Factors” in Part I of the 2024 Form 10-K.

Previous wording

We are a leader in building and operating electronic marketplaces for our global network of more than 2,800 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 corporate treasury organizations. 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 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. Our expansion into the corporates sector was driven by our acquisition of Institutional Cash Distributors (“ICD”) on August 1, 2024. The addition of ICD to our platform broadens our product suite, further diversifies our client and revenue base and strengthens our position in the corporate treasury space, enabling us to provide a more comprehensive range of liquidity management tools and services.

Current wording

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 corporates client sector through our acquisition of Institutional Cash Distributors (“ICD”) on August 1, 2024 (the “ICD Acquisition”). 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.

Previous wording

From the date of the ICD Acquisition through September 30, 2024, ICD revenues of $17.2 million and an operating loss of $0.3 million, including $7.3 million of depreciation and amortization from acquired assets, were included in our condensed consolidated statements of income for the three and nine months ended September 30, 2024. See Note 4 – Acquisitions to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details of this acquisition.

Current wording

On August 1, 2024, we completed our acquisition of ICD. ICD revenues of $24.7 million and operating income of $0.9 million, including $11.2 million of depreciation and amortization expense, were included in our condensed consolidated statements of income for the three months ended March 31, 2025. See Note 4 – Acquisitions to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details of this acquisition.

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 during the remainder of 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 recent and potential future changes in tariffs, international trade agreements or trade policies and other potential 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 Quarterly Report on Form 10-Q. To the extent inflation, along with other factors, results 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 Quarterly Report on Form 10-Q. 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. 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. The existing legal framework that governs the financial markets is periodically reviewed and amended, typically resulting in enforcement of new laws and regulations that apply to our business. The regulatory environment in the United States and abroad may be subject to future legislative and regulatory changes driven by current U.S. and global issues and priorities. Legislative and regulatory changes may include the promulgation of new or revised laws and regulations, or the adoption of changes in the interpretation of or the repeal of existing laws and regulations, or the abandonment of any pending legislative or regulatory proposals. The impact of any changes in the legal or regulatory landscape on us and our operations generally 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. Currently, we believe that uncertainty and potential delays around the final form of certain new rules and regulations may negatively impact our clients and trading volumes in certain markets in which we transact, although a relaxation of or the amendment of existing rules and requirements could potentially have a positive impact on certain markets.

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.

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, (vi) our

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 three and nine months ended September 30, 2024. The Company is subject to the 15% CAMT, 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, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA established a 15% corporate alternative minimum tax (“CAMT”) effective for taxable years beginning after December 31, 2022, and imposed 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 on the Company’s financial condition, results of operations and cash flows as of and for the three months ended March 31, 2025 or 2024. The Company is subject to the current 15% CAMT, however, it did not have an impact on the Company’s effective tax rate for the three months ended March 31, 2025 or 2024. The IRA also did 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 for the three months ended March 31, 2025 and 2024.

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 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.

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 Two Pillar Plan did not have an impact on the Company’s financial condition, results of operations and cash flows as of and for the three months ended March 31, 2025 or 2024.

Previous 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 either 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.

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

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 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. We expect occupancy expense to increase as our space needs grow in line with our global expansion.

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

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 September 30, 2024, 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 March 31, 2025, 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 three months ended September 30, 2024 and 2023 include $20.5 million and $15.5 million, respectively, of LSEG market data fees (formerly referred to as Refinitiv market data fees).

Current wording

(1)Subscription fees for the three months ended March 31, 2025 and 2024 include $28.9 million and $20.5 million, respectively, of LSEG market data fees.

Previous wording

Our strong results for the third quarter of 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 $120.6 million increase in revenue was related to an $110.0 million increase in transaction fees and commissions to $373.5 million for the three months ended September 30, 2024 from $263.5 million for the three months ended September 30, 2023, primarily due to higher revenues for rate derivatives products, U.S. corporate bonds and U.S. government bonds, as well as the basis point commissions earned on the average daily balance of client money market fund investments made through the ICD Portal for the two months subsequent to the acquisition.

Current wording

Our strong results for the first quarter of 2025 reflected significant organic growth and solid contributions from our recent acquisition of ICD. We remained focused on and grew market share while also benefiting from market volatility around economic and geopolitical uncertainty contributing to broad-based volume growth, which underscored our sustained momentum across asset classes. The primary driver of the $100.9 million increase in revenue was related to an $85.9 million increase in transaction fees and commissions to $421.3 million for the three months ended March 31, 2025 from $335.5 million for the three months ended March 31, 2024, primarily due to higher revenues for rates derivatives products, U.S. government bonds, credit derivative products and European exchange traded funds (“ETFs”), as well as the basis point commissions earned on the average daily balance of client money market fund investments made through the ICD Portal during the three months ended March 31, 2025.

Previous wording

(4)We acquired Yieldbroker, r8fin and ICD on August 31, 2023, January 19, 2024 and August 1, 2024, respectively. Total volume reported includes volumes from each acquired business subsequent to the closing date of the applicable acquisition.

Current wording

(4)We acquired r8fin and ICD on January 19, 2024 and August 1, 2024, respectively. Total volume reported includes volumes from each acquired business subsequent to the closing date of the applicable acquisition. For average daily volume derived from acquisitions, the denominator is the number of trading days within the reporting period that have elapsed from the acquisition date to the end date of the reporting period.

Previous wording

Rates. Revenues from our rates asset class increased by $60.3 million or 34.9% to $233.1 million for the three months ended September 30, 2024 compared to $172.8 million for the three months ended September 30, 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.

Current wording

Rates. Revenues from our rates asset class increased by $51.3 million or 24.0% to $265.4 million for the three months ended March 31, 2025 compared to $214.1 million for the three months ended March 31, 2024 primarily due to higher variable transaction fees and commissions on higher trading volumes for rates derivatives products and U.S. government bonds. The increase in fixed revenue was primarily driven by changes to certain contracts that, among other items, introduced minimum fee floors or subscription fees, resulting in a shift of a portion of revenues from variable to fixed revenue.

Previous wording

Credit. Revenues from our credit asset class increased by $82.3 million or 31.3% to $345.5 million for the nine months ended September 30, 2024 compared to $263.1 million for the nine months ended September 30, 2023 primarily due to higher variable transaction fees and commissions on higher trading volumes for U.S., European and Chinese corporate bonds and municipals, as well as an increase in fixed subscription fees.

Current wording

Credit. Revenues from our credit asset class increased by $8.2 million or 7.0% to $124.0 million for the three months ended March 31, 2025 compared to $115.8 million for the three months ended March 31, 2024 primarily due to higher variable transaction fees and commissions on higher trading volumes for credit derivative products and municipals, as well as an increase in fixed revenues. The increase in fixed revenues was primarily driven by certain market participants switching from fully variable pricing plans to pricing plans that include minimum fee floors or subscription fees, resulting in a shift of a portion of revenues from variable to fixed revenue.

Previous wording

Average variable fees per million for credit decreased primarily due to a shift in the mix and methods of products traded, including increases in the percentage of derivative products, which have a lower variable fee capture compared to overall credit.

Current wording

Average variable fees per million for credit decreased primarily due to a shift in the mix and methods of products traded, including certain market participants opting for pricing plans with more fixed fee components, resulting in a shift from variable to fixed revenue within U.S. corporate bonds and a mix shift towards derivatives products, which have a lower variable fee capture compared to overall credit.

Previous wording

Equities. Revenues from our equities asset class increased by $4.6 million or 22.1% to $25.5 million for the three months ended September 30, 2024 compared to $20.9 million for the three months ended September 30, 2023 primarily due to higher variable transaction fees and commissions on higher trading volumes for European and U.S. ETFs and equity derivative products.

Current wording

Equities. Revenues from our equities asset class increased by $4.4 million or 16.1% to $31.4 million for the three months ended March 31, 2025 compared to $27.1 million for the three months ended March 31, 2024 primarily due to higher variable transaction fees and commissions on higher trading volumes for European ETFs and equity derivative products.

Previous wording

Money Markets. Revenues from our money markets asset class increased by $24.6 million or 52.9% to $71.0 million for the nine months ended September 30, 2024 compared to $46.4 million for the nine months ended September 30, 2023 primarily due to the August 1, 2024 acquisition of ICD and the associated basis point commissions earned on the average daily balance 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.

Current wording

Money Markets. Revenues from our money markets asset class increased by $26.9 million or 160.3% to $43.7 million for the three months ended March 31, 2025 compared to $16.8 million for the three months ended March 31, 2024 primarily due to the August 1, 2024 acquisition of ICD and the associated basis point commissions earned on the average daily balance 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

Average variable fees per million for money markets increased primarily due to a shift in the mix of products traded in this category as a result of the August 1, 2024 acquisition of ICD and the associated basis point commissions earned on the average daily balance of client money market fund investments made through the ICD Portal, which have a higher variable fee capture compared to the historical product mix.

Current wording

Average variable fees per million for money markets increased primarily due to a shift in the mix of products traded in this category as a result of the August 1, 2024 acquisition of ICD and the associated basis point commissions earned on the average daily balance of client money market fund investments made through the ICD Portal, which have a higher variable fee capture compared to the historical product mix, partially offset by a mix shift towards repurchase agreements which have a lower variable fee capture compared to overall money markets.

Previous wording

Market Data. Revenues from our market data asset class increased by $6.8 million or 29.6% to $29.8 million for the three months ended September 30, 2024 compared to $23.0 million for the three months ended September 30, 2023. The increase was derived primarily from increased LSEG market data fees from our market data agreement that was amended effective November 1, 2023 and proprietary third party market data revenue.

Current wording

Market Data. Revenues from our market data asset class increased by $9.7 million or 33.4% to $38.7 million for the three months ended March 31, 2025 compared to $29.0 million for the three months ended March 31, 2024. The increase was primarily due to increased LSEG market data fees, with $8.4 million of the increase derived from the periodic delivery of historical data sets which occurred during the three months ended March 31, 2025, and other increases in proprietary third party market data revenue.

Previous wording

Other. Revenues from our other asset class was relatively flat with an increase of $0.2 million or 4.0% to $6.1 million for the three months ended September 30, 2024 compared to $5.9 million for the three months ended September 30, 2023.

Current wording

Other. Revenues from our other asset class increased by $0.5 million or 7.9% to $6.4 million for the three months ended March 31, 2025 compared to $5.9 million for the three months ended March 31, 2024.

Previous wording

Institutional. Revenues from our institutional client sector increased by $181.8 million or 31.5% to $759.6 million for the nine months ended September 30, 2024 from $577.8 million for the nine months ended September 30, 2023. The increase was derived primarily from higher revenues for rates derivatives products, U.S. corporate bonds and U.S., European and other government bonds.

Current wording

Institutional. Revenues from our institutional client sector increased by $60.7 million or 24.6% to $308.1 million for the three months ended March 31, 2025 from $247.3 million for the three months ended March 31, 2024. The increase was derived primarily from higher revenues for rates derivatives products, credit derivative products, U.S., European and other government bonds, U.S. and European corporate bonds, European ETFs and mortgages.

Previous wording

Wholesale. Revenues from our wholesale client sector increased by $21.5 million or 27.6% to $99.5 million for the three months ended September 30, 2024 from $78.0 million for the three months ended September 30, 2023. The increase was derived primarily from higher revenues for U.S. government bonds, including positive contributions from the r8fin Acquisition, as well as higher revenues for U.S. corporate bonds, repurchase agreements and rates derivative products.

Current wording

Wholesale. Revenues from our wholesale client sector increased by $5.1 million or 5.2% to $102.3 million for the three months ended March 31, 2025 from $97.2 million for the three months ended March 31, 2024. The increase was derived primarily from higher revenues for U.S. government bonds.

Previous wording

Corporates. Revenues from our corporates client sector were $17.2 million for the three months ended September 30, 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 average daily balance of client money market fund investments made through the ICD Portal for the two months subsequent to the acquisition. See “—Trends and Other Factors Impacting Our Performance—Acquisitions,” above for further details about this acquisition.

Current wording

Corporates. Revenues from our corporates client sector were $24.7 million for the three months ended March 31, 2025. 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 average daily balance of client money market fund investments made through the ICD Portal during the three months ended March 31, 2025.

Previous wording

Market Data. Revenues from our market data client sector increased by $6.8 million or 29.6% to $29.8 million for the three months ended September 30, 2024 from $23.0 million for the three months ended September 30, 2023. The increase was derived primarily from increased LSEG market data fees from our market data agreement that was amended effective November 1, 2023 and proprietary third party market data revenue.

Current wording

Market Data. Revenues from our market data client sector increased by $9.7 million or 33.4% to $38.7 million for the three months ended March 31, 2025 from $29.0 million for the three months ended March 31, 2024. The increase was derived primarily from increased LSEG market data fees, with $8.4 million of the increase derived from the periodic delivery of historical data sets which occurred during the three months ended March 31, 2025, and other increases in proprietary third party market data revenue.

Previous wording

U.S. Revenues from U.S. clients increased by $71.9 million or 34.6% to $279.7 million for the three months ended September 30, 2024 from $207.8 million for the three months ended September 30, 2023 primarily due to higher revenues for U.S. corporate bonds, U.S. government bonds, money markets, including the contribution from the ICD Acquisition, rates derivatives products and market data.

Current wording

U.S. Revenues from U.S. clients increased by $43.8 million or 17.2% to $297.9 million for the three months ended March 31, 2025 from $254.1 million for the three months ended March 31, 2024 primarily due to higher revenues for money markets, including the contribution from the ICD Acquisition, rates derivative products, U.S. government bonds, market data, mortgages and municipals.

Previous wording

International. Revenues from International clients increased by $48.7 million or 40.4% to $169.2 million for the three months ended September 30, 2024 from $120.5 million for the three months ended September 30, 2023 primarily due to higher revenues for rates derivatives products, money markets, including the contribution from the ICD Acquisition, European and other government bonds and market data.

Current wording

International. Revenues from International clients increased by $57.2 million or 37.0% to $211.8 million for the three months ended March 31, 2025 from $154.6 million for the three months ended March 31, 2024 primarily due to higher revenues for rates derivatives products, money markets, including the contribution from the ICD Acquisition, market data, credit derivative products and European ETFs.

Previous wording

Employee Compensation and Benefits. Expenses related to employee compensation and benefits increased by $106.1 million or 31.7% to $440.5 million for the nine months ended September 30, 2024 from $334.4 million for the nine months ended September 30, 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, bonus and benefits to support our continued growth.

Current wording

Employee Compensation and Benefits. Expenses related to employee compensation and benefits increased by $33.8 million or 23.6% to $176.9 million for the three months ended March 31, 2025 from $143.1 million for the three months ended March 31, 2024. 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, bonus and benefits associated with our continued growth, including the August 1, 2024 ICD Acquisition. As of March 31, 2025, December 31, 2024 and March 31, 2024, we had 1,435, 1,412 and 1,185 employees globally, respectively.

Previous wording

Depreciation and Amortization. Expenses related to depreciation and amortization increased by $11.3 million or 24.3% to $57.9 million for the three months ended September 30, 2024 from $46.6 million for the three months ended September 30, 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.

Current wording

Depreciation and Amortization. Expenses related to depreciation and amortization increased by $13.4 million or 27.1% to $62.7 million for the three months ended March 31, 2025 from $49.3 million for the three months ended March 31, 2024. The increase was primarily due to increases in amortization of assets acquired in connection with the ICD Acquisition on August 1, 2024.

Previous wording

Technology and Communications. Expenses related to technology and communications increased by $4.6 million or 23.1% to $24.3 million for the three months ended September 30, 2024 from $19.7 million for the three months ended September 30, 2023. The increase was primarily due to increased investment in our data strategy and infrastructure and increased clearance and data fees driven primarily by higher trading volumes period-over-period.

Current wording

Technology and Communications. Expenses related to technology and communications increased by $7.4 million or 34.8% to $28.7 million for the three months ended March 31, 2025 from $21.3 million for the three months ended March 31, 2024. 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 $13.7 million or 204.7% to $20.4 million for the three months ended September 30, 2024 from $6.7 million for the three months ended September 30, 2023. The increase was primarily due to an $8.7 million increase in foreign exchange losses during the three months ended September 30, 2024 compared to the prior year period. Realized and unrealized foreign currency losses totaled $4.1 million during the three months ended September 30, 2024 as compared to $4.6 million in gains during three months ended September 30, 2023. The change was primarily driven by changes in fair value of our foreign currency forward contracts used in connection with our foreign currency risk management program. Increases in travel and recruiting costs to support our continued growth also contributed to the overall increase in general and administrative expenses.

Current wording

General and Administrative. Expenses related to general and administrative costs increased by $8.9 million or 81.9% to $19.7 million for the three months ended March 31, 2025 from $10.9 million for the three months ended March 31, 2024. The increase was primarily due to an $8.6 million increase in foreign exchange losses during the three months ended March 31, 2025 compared to the prior year period. Realized and unrealized foreign currency losses totaled $5.4 million during the three months ended March 31, 2025 as compared to $3.2 million in gains during three months ended March 31, 2024. 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 gains on transactions in nonfunctional currencies. Increases in travel and entertainment costs to support our continued growth also contributed to the overall increase in general and administrative expenses.

Previous wording

Professional Fees. Expenses related to professional fees increased by $11.0 million or 104.5% to $21.4 million for the three months ended September 30, 2024 from $10.5 million for the three months ended September 30, 2023, primarily due to an increase in professional fees related to acquisitions.

Current wording

Professional Fees. Expenses related to professional fees increased by $0.7 million or 5.6% to $12.5 million for the three months ended March 31, 2025 from $11.8 million for the three months ended March 31, 2024, primarily due to higher technology consulting expenses.

Previous wording

Occupancy. Expenses related to occupancy costs increased by $1.3 million or 31.1% to $5.4 million for the three months ended September 30, 2024 from $4.1 million for the three months ended September 30, 2023. The increase was primarily due to higher data center and office rent expense associated with our global expansion.

Current wording

Occupancy. Expenses related to occupancy costs increased by $0.4 million or 8.6% to $5.1 million for the three months ended March 31, 2025 from $4.7 million for the three months ended March 31, 2024. The increase was primarily due to higher data center and office rent expense associated with our global expansion.

Previous wording

Interest income decreased by $1.3 million to $16.7 million for the three months ended September 30, 2024 from $17.9 million for the three months ended September 30, 2023 primarily due to a decrease in interest income earned as a result of a decrease in our average invested cash balance as a result of the cash paid in connection with the ICD Acquisition.

Current wording

Interest income decreased by $7.2 million to $13.8 million for the three months ended March 31, 2025 from $21.1 million for the three months ended March 31, 2024 primarily due to a decrease in the average interest rates earned period-over-period and a decrease in our average invested cash balance as a result of the cash paid in connection with the August 1, 2024 ICD Acquisition.

Previous wording

Income tax expense increased by $14.8 million to $43.5 million for the three months ended September 30, 2024 from $28.7 million for the three months ended September 30, 2023. The provision for income taxes includes U.S. federal, state, local and foreign taxes. The effective tax rate for the three months ended September 30, 2024 was approximately 25.0%, compared with 20.4% for the three months ended September 30, 2023. The effective tax rate for the three months ended September 30, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign taxes and the disallowance of compensation expense tax deductions, partially offset by the effect of non-controlling interests and the Foreign-Derived Intangible Income (“FDII”) deduction. The effective tax rate for the three months ended September 30, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to the return-to-provision adjustment and the effect of non-controlling interests, partially offset by the effect of state, local and foreign taxes.

Current wording

Income tax expense increased by $9.6 million to $53.3 million for the three months ended March 31, 2025 from $43.6 million for the three months ended March 31, 2024. The provision for income taxes includes U.S. federal, state, local and foreign taxes. The effective tax rate for the three months ended March 31, 2025 was approximately 24.0%, compared with 23.3% for the three months ended March 31, 2024. The effective tax rate for the three months ended March 31, 2025 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign taxes and the disallowance of compensation expense tax deductions, partially offset by the effect of non-controlling interests and the Foreign-Derived Intangible Income (“FDII”) deduction. The effective tax rate for the three months ended March 31, 2024 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign taxes and the disallowance of compensation expense tax deductions, partially offset by the effect of non-controlling interests.