Tradeweb Markets (TW -1.09%), a leading operator of electronic marketplaces for fixed income, derivatives, and equities, reported earnings on July 30, 2025. The main news from the release: the company delivered strong profit growth and a marked increase in trading activity, with EPS of $0.87 beating the $0.86 consensus, and GAAP revenue of $512.971 million, up 26.7% year over year, though a slight miss versus the $514.34 million GAAP analyst estimate. Overall, the quarter was notable for continued momentum across core asset classes, margin expansion, and a 20% year-over-year increase in the quarterly dividend to $0.12 per share.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.87 | $0.86 | $0.70 | 24.3% |
| Revenue (GAAP) | $513.0 million | $514.34 million | $404.951 million | 26.7% |
| Adjusted EBITDA (Non-GAAP) | $277.9 million | $216.5 million | 28.3% | |
| Adjusted EBITDA Margin (Non-GAAP) | 54.2% | 53.5% | 0.7 pp | |
| Adjusted Expenses (Non-GAAP) | $252.6 million | $203.6 million | 24.1% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
Tradeweb Markets operates global electronic marketplaces, providing platforms where institutions such as asset managers, central banks, and hedge funds can buy and sell bonds, derivatives, and equities. Its technology is designed to make trading faster, more transparent, and cost-effective, with a client network of over 3,000 institutions.
The company’s recent goals focus on expanding its client network, investing in advanced trading technology, and keeping up with market trends toward electronic trading. Deep liquidity pools, regulatory compliance, and innovative automation such as its AiEX tool, which automates trading workflows, are central to Tradeweb's ongoing success. Acquisitions of companies like ICD have broadened its reach, while ongoing product innovation supports its growth.
Quarter Highlights: Growth, Margins, and Segment Trends
The quarter featured growth across all major business segments. Rates trading, which covers products like U.S. government bonds and interest rate swaps, remains the largest contributor. Revenue in this segment reached $274.5 million, up 26.2% year over year, while average daily volume (ADV) in U.S. government bonds grew 23.7%. Activity in mortgages and European government bonds also improved, supporting the overall increase in trading volumes. Management noted that high volatility, driven by events like U.S. tariff announcements and policy changes, encouraged client engagement and electronic trading adoption.
The Credit segment delivered $124.3 million in GAAP revenue, up 11.7%. Average daily trading volume in credit products rose 27.0%, buoyed by strong growth in high-yield bonds. However, Tradeweb’s share of fully electronic U.S. high-grade credit trading dropped 100 basis points to 17.9%. In contrast, its share in U.S. high-yield credit rose to 8.2%. Management continues to emphasize portfolio trading protocols, request-for-quote (RFQ) systems, and AiEX automation in its bid to hold market share and boost revenue stability through a mix of subscription and variable pricing models.
The Equities business generated $34.3 million in GAAP revenue, a 49.8% boost. Average daily trading volume jumped 29.6%, led by record activity in European exchange-traded funds (ETFs) and increased uptake of automated tools like AiEX. Expansion into equity derivatives, which are financial contracts whose value is linked to equity market performance, has further diversified Tradeweb’s offering.
Money Markets were a standout, reporting $41.6 million in GAAP revenue, up 130.7% from a year ago. This growth stems from the full integration of ICD, which specializes in institutional cash management, as reflected in the results, and surging activity in global repurchase agreements (repos). Repo trading, a short-term funding tool widely used by financial institutions, benefited from macro factors such as the U.S. Federal Reserve’s balance sheet moves and increased government bond issuance in Europe.
Other income included $30.4 million in market data revenue and $7.9 million labeled as "Other," with the latter benefiting from digital asset initiatives like the Canton Network (GAAP). Tradeweb earned tokens (Canton Coins) for its work as a network validator, further showcasing its moves into digital finance infrastructure.
Profit margins continued to expand. Adjusted EBITDA rose 28.3% to $277.9 million, while the adjusted EBITDA margin increased 0.7 percentage points to 54.2%. Net income (GAAP) rose 28.7% to $175.5 million. Expenses also climbed--operating expenses (GAAP) increased 29.1% to $313.1 million, and Adjusted expenses grew 24.1%. Key cost drivers were higher employee compensation, investments in technology, and the absorption of ICD. Despite these increases, net income margin (GAAP) still improved to 34.2%. Liquidity remains sound, with $1.6 billion in cash at period end. No shares were repurchased, leaving $179.9 million authorized for future buybacks.
The quarterly dividend rose to $0.12 per share, up 20% from the prior year. Free cash flow (non-GAAP) over the trailing twelve months reached $951.7 million, up 31.9%, signaling continued strong cash generation.
Product and Technology Developments
Tradeweb made several notable product enhancements and investments. It launched direct U.S. Treasury bill trading for corporate treasurers, connecting its ICD Portal with institutional trading functions. Portfolio trading--a protocol allowing clients to trade baskets of bonds in a single transaction--expanded from credit into European government bonds, supporting cross-market adoption of new trading workflows. Management emphasized that product innovation remains central, with significant technology spending on cloud platforms, automation, and integration with client systems.
The company also deepened its push into workflow automation and data analytics. Appointment of a new Head of Artificial Intelligence, Sherry Marcus, underlines its commitment to embedding AI within its trading tools. Partnerships included a new mortgage risk management venture with Novaprime and continued investment in the Canton Network, a digital asset and blockchain infrastructure effort. These initiatives are designed to boost efficiency, strengthen client network effects, and help Tradeweb capture a larger share of the trading ecosystem.
There were no regulatory issues reported for the period. However, management noted that potential relaxation of U.S. bank capital rules, specifically Supplementary Leverage Ratio (SLR) requirements, would be an advantage, as it would allow for increased trading volumes in U.S. Treasuries and potentially drive revenue higher. The overall tone in recent calls emphasized ongoing investments in scalability, security, and partnerships aimed at future growth.
Looking Ahead
For the full year fiscal 2025, Tradeweb maintained its key expense and investment outlook, though it noted that adjusted expenses (non-GAAP) are trending towards the midpoint of its $1.00–1.05 billion range, reflecting ongoing investments in technology and growth initiatives. Capital expenditures, including capitalized software, are forecast between $99 and $109 million, and the effective tax rate (non-GAAP) is expected to stay within 24.5–25.5%. Guidance for revenue from LSEG market data contracts remains unchanged at approximately $90 million. The company did not provide detailed revenue or EPS guidance for the coming quarters.
Management suggested continued priority on innovation and market expansion, but with a careful focus on operating costs. Investors will want to track whether expenses outpace revenue growth in future periods, as well as monitor market share in core categories like U.S. high-grade credit. The company’s growth in Money Markets, while impressive, reflects unusual drivers and may be difficult to repeat at the same rate. The quarterly dividend was raised 20% to $0.12 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
