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Tradeweb Markets (TW -0.91%)
Q1 2024 Earnings Call
Apr 25, 2024, 9:30 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning, and welcome to Tradeweb's first quarter 2024 earnings conference call. As a reminder, today's call is being recorded and will be available for playback. To begin, I'll turn the call over to Head of Treasury, FP&A, and Investor Relations Ashley Serrao. Please go ahead.
Ashley Serrao -- Head of Treasury, FP&A, and Investor Relations
Thank you, and good morning. Joining me today for the call are our CEO, Billy Hult, who will review the highlights for the quarter and provide a brief business update; our president, Tom Pluta, who will dive a little deeper into some growth initiatives; and our CFO, Sara Furber, who will review our financial results. We intend to use the website as a means of disclosing material, non-public information, and complying with our disclosure obligations under Regulation FD. I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Statements related to, among other things, our guidance are forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release, presentation, and periodic reports filed with the SEC. In addition, on today's call, we will reference certain non-GAAP measures, as well as certain market and industry data.
Information regarding these non-GAAP measures, including reconciliations to GAAP measures, is in our earnings release and presentation. Information regarding market and industry data, including sources, is in our earnings presentation. Now let me turn the call over to Billy.
Billy Hult -- Chief Executive Officer
Thanks, Ashley. Good morning, everyone, and thank you for joining our first quarter earnings call. This was another record quarter as our strategy and focus on building deeper relationships with our clients through our one-stop shop offering continues to pay off. I believe it's a great time to be in the fixed-income trading business, macro debate is flourishing and electronification continues to take hold leaving me optimistic about our future.
Even as there is consensus around rate cuts in the U.S., questions remain on the number of cuts this year, ultimate level of rates, and shape of the yield curve. In fact, Jamie Dimon, in his most recent annual letter, highlighted the potential for U.S. rates to range from as low as 2% to as high as 8%. Traders can make a lot of money with that sort of spread.
While capitalizing on the array of organic growth opportunities in front of us remains our focus, we also continue to selectively use M&A to complement our offerings with the goal to create better outcomes for our clients. This year, we have deepened our penetration into the U.S. Treasury market and added new futures and algorithmic functionality with r8fin, and are adding corporates as a fourth client channel with our pending ICD acquisition. Diving into the first quarter, the momentum we saw in January persisted into February and March as we eclipsed $400 million in quarterly revenues for the first time.
Specifically, strong client activity, share gains, and improved risk-appetite drove 24.1% year-over-year revenue growth on a reported basis. We continue to balance investing for growth and profitability as adjusted EBITDA margins expanded by 141 basis points relative to the first quarter of 2023. Turning to Slide 5. Rates and credit led the way, accounting for 55% and 34% of our revenue growth, respectively.
Record revenues across rates were primarily driven by organic growth across global government bonds and swaps and were also supplemented by the addition of r8fin and Yieldbroker. Similarly, record revenues across credit were led by strong U.S. and European corporate credit, with record quarterly market share in electronic U.S. investment grade being a highlight.
Money markets also hit a record fueled by continued growth in institutional repos. Equities also hit a record despite challenging industry volumes in our core ETF business. Finally, market data revenues were driven by growth in our LSEG market data contract and proprietary data products. Turning to Slide 6.
I will provide a brief update on two of our focus areas, U.S. Treasuries and ETFs, and then turn it over to Tom who will dig deeper into U.S. credit and global interest rate swaps. Starting with U.S.
Treasuries, record first quarter revenues increased by 22% year over year led by records across our institutional and wholesale businesses. Our institutional business saw growing adoption of our streaming and RFQ+ offering. The leading indicators of the institutional business remains strong. We gained share and achieved record quarterly market share of U.S.
Treasuries versus Bloomberg. Client engagement was healthy with institutional average daily trades up 40% year over year. Automation continues to be an important theme with institutional U.S. Treasury AiEX average daily trades increasing by more than 80% year over year and over 50% of our institutional tickets utilizing our AiEX functionality.
Our wholesale business featured record volumes across our streaming and session protocols. Our recent acquisition of r8fin is off to a strong start, contributing approximately 1.5% to our overall U.S. Treasury market share complementing our CLOB and streaming protocols. While the central limit order book continued to face tougher market conditions, the team remains focused on onboarding more liquidity providers over the coming quarters as they deliver on a holistic strategy across our wholesale protocols.
Within equities, our ETF business saw its second-highest quarterly revenues which were up 1% year over year despite challenging industry volumes. Other initiatives to expand our equity brand beyond our flagship ETF franchise continue to bear fruit. First quarter equity derivatives revenues were up 10% year over year, driven by strong equity futures growth. Looking ahead, the client pipeline remains strong as the benefits of our electronic solutions continue to resonate.
We believe we are well-positioned to capitalize on the long-term secular ETF growth story, not just in equities, but across our fixed-income business. With that, I will turn it over to Tom.
Tom Pluta -- President
Thanks Billy. Turning to Slide 7 for a closer look at another record-breaking quarter for credit. Strong double-digit revenue growth was driven by 37% and 46% year-over-year revenue growth across U.S. and European Credit, respectively.
Munis produced mid-single-digit growth, while credit derivatives revenues were more muted given softer industry volumes. Automation continued to surge with global credit AiEX average daily trades increasing by about 70% year over year. We set another fully electronic quarterly market share record in U.S. IG helped by record IG block market share.
Our institutional business continues to scale to new highs as clients engage with our diverse set of protocols to optimize execution across a variety of market environments. Our primary focus on growing institutional RFQ continues to pay off with ADV growing 29% year over year, with strong double-digit growth across both IG and high yield. Moreover, Portfolio trading ADV rose over 70% year over year with IG portfolio trading reaching record levels. Our clients continue to get more sophisticated in their usage of PT, with 65% of our PT volume done in-comp.
These in-comp volumes grew 85% year over year. Retail credit revenues were up almost 40% year over year as financial advisors have started to turn their focus toward credit in recent months to complement their buying of U.S. Treasuries. AllTrade produced a record quarter with over $200 billion in volume.
Specifically, our all-to-all volumes grew over 15% year over year and our dealer-RFQ offering grew almost 40% year over year. The team continues to be focused on broadening out our network and increasing the number of responses on the AllTrade platform. In the first quarter, the average number of responses per all-to-all inquiry rose by over 45% year over year. We also continue to increase our engagement and wallet share with ETF market makers.
Finally, our sessions ADV grew over 65% year over year and saw another record revenue quarter. Looking ahead, U.S. credit remains our biggest focus area and we like the way we are positioned across our three client channels. We believe we have a long runway for growth with ample opportunity to innovate alongside our clients.
Our strategy is focused on expanding our network, increasing our wallet share, enhancing our pre and post-trade analytics, and continuously improving our protocols and client experience. In the first quarter, we continued to strategically expand our sales force to broaden our coverage and attract clients we have historically not had a presence with. With respect to high yield, we continue to chip away and believe we should be able to replicate the success we have seen in IG as we leverage our Aladdin collaboration to grow our all-to-all network later this year, enhance functionality, and increase our presence with ETF market makers. Beyond U.S.
credit, our EM expansion efforts continue to progress with the opening of new offices in Miami and Dubai and a steady increase in engagement with local clients. On the product side, we are focused on enhancing our integration with FXall and continuing to build out functionality for multi-asset package trading. Moving to Slide 8, global swaps produced record revenues, driven by a combination of strong client engagement in response to the macro environment and continued market share gains. Strength here was partially offset by an 8% reduction in duration and elevated quarterly compression activity.
All in, global swaps revenues grew 35% year over year and market share rose to 22% with record share across other G-11 and EM-denominated currencies. Finally, we continue to make progress across emerging markets swaps and our rapidly growing RFM protocol. Our first quarter EM swaps revenues more than doubled year over year and we believe there is still significant room to grow given the low levels of electronification. Our RFM protocol saw average daily volume rise over 130% year over year with adoption picking up, especially across our European swaps business.
Looking ahead, we believe the long-term swaps revenue growth potential is meaningful. With the market still about 30% electronified, we believe there remains a lot we can do to help digitize our clients' manual workflows while the global fixed-income markets and broader swaps market grow. And with that, let me turn it over to Sara to discuss our financials in more detail.
Sara Furber -- Chief Financial Officer
Thanks, Tom, and good morning. As I go through the numbers, all comparisons will be to the prior-year period, unless otherwise noted. Slide 9 provides a summary of our quarterly earnings performance. As Billy recapped earlier, this quarter we saw record revenues of $409 million that were up 24.1% year over year on a reported basis and 23.8% on a constant-currency basis.
Stepping back, looking at revenue this quarter, we generated similar average daily revenue growth with March being the strongest across all three months. We derived approximately 38% of our first quarter revenues from international customers, and recall that approximately 30% of our revenue base is denominated in currencies other than dollars, predominantly in euros. Our variable revenues increased by 30% and total trading revenues increased by 24%. Total fixed revenues related to our four major asset classes were up 7.3% on a reported and 6.9% on a constant-currency basis.
The fixed subscription fee increase was primarily driven by the addition of new dealers and customers to the rates platform, as well as pricing increases on some of our rates subscription services. Credit fixed revenue growth was driven by the previously disclosed dealer fee increases, which we instituted at the start of the third quarter of 2023. And other trading revenues were down 5%. As a reminder, this line fluctuates as it reflects revenues tied to periodic technology enhancements performed for our retail clients.
This quarter's adjusted EBITDA margin of 53.7% increased by 128 basis points on a reported basis when compared to the 2023 full-year margins. Moving on to fees per million on Slide 10 and a highlight of the key trends for the quarter. You can see Slide 16 of the earnings presentation for additional detail regarding our fee per million performance this quarter. For cash rates products, fees per million were up 1%, primarily due to an increase in the European government bond fees per million.
For long-tenor swaps, fees per million were down 18%, primarily due to an increase in compression, as well as an 8% decline in duration. For cash credit, average fees per million decreased 4% due to a mix shift away from high yield and munis. For cash equities, average fees per million decreased by 15% due to a reduction in U.S. ETF fee per million given an increase in notional per share traded.
Recall in the U.S., we charge per share and not for notional value traded. Finally, within money markets, average fees per million decreased 6%, driven by a mix shift away from higher fee per million U.S. CDs and toward our growing institutional repo business. Slide 11 details our adjusted expenses.
At a high level, the scalability and variable nature of our expense base allows us to continue to invest for growth and grow margins. We have maintained a consistent philosophy here. Adjusted expenses for the first quarter increased 19.5% on a reported basis and 18.3% on a constant-currency basis. Compensation costs increased 24.7% due to increases in performance-related compensation and headcount.
Technology and communication costs increased 21.3%, primarily due to our previously communicated investments in data strategy and infrastructure. Professional fees decreased 17.6% mainly due to a decrease in periodic regulatory and compliance requests relative to the first quarter of 2023. We expect professional fees to rebound over the course of the year and grow over time as we spend more on technology consulting to support our organic growth. General and administrative costs increased due to a pickup in marketing and well as a decline in FX gains year-on-year.
Movements in FX resulted in a $900,000 gain in the first quarter of 2024 versus a $1.3 million gain in first quarter of 2023. Slide 12 details capital management and our guidance. On our cash position and capital return policy. We ended the first quarter in a strong position with $1.54 billion in cash and cash equivalents and free cash flow reached approximately $651 million for the trailing 12 months.
Recall we recently entered into a definitive agreement to acquire ICD for $785 million, subject to customary adjustments, pending customary closing conditions and regulatory reviews. Our net interest income of $19.3 million increased due to a combination of higher cash balances and interest yields. This was primarily driven by the higher interest rate environment and more efficient management of our cash. With this quarter's earnings, the board declared a quarterly dividend of $0.10 per Class A and Class B shares.
Turning to guidance for 2024. Given the strong start to the year, we now expect adjusted expenses to trend close to the top end of our previously communicated $755 million to $805 million range for 2024. We continue to believe we can drive margin expansion compared to 2023, although it will be more modest compared to last year since we expect to capitalize on the anticipated healthy revenue environment by accelerating investments to support our current and future organic growth. We expect our capex spend to increase as the year progresses into our previously communicated range.
Now I'll turn it back to Billy for concluding remarks.
Billy Hult -- Chief Executive Officer
Thanks, Sara. We have always recognized that we occupy a very important piece of desktop real estate connecting liquidity providers to their most important clients. The markets we live and breathe in remain dynamic, and we continue to work very hard alongside our clients to innovate and push the boundaries of what can be traded electronically. Our sales and tech teams remain busy, and strategically, I feel good about the road ahead and durability of our one-stop-shop value proposition.
With a couple of important month-end trading days left in April, which tend to be our strongest revenue days, overall revenue growth is trending in excess of 40% relative to April 2023, driven, in part, by a favorable year-over-year comparison due to a temporary risk-off environment fueled by the regional banking crisis in the prior-year period. Revenue growth this month is also being helped by a few more trading days. Focusing on average daily revenue, we are trending close to the first quarter as momentum in the business continues. The diversity of our growth remains a theme.
We are seeing strong volume growth across global government bonds, mortgages, interest rate swaps, corporate credit and repos. Our IG and high yield share are both higher than March levels with IG currently at record levels. As we focus on our future, we recently expanded our executive leadership team, adding Ashley Serrao who you all know well; and Michael Cohen, our global head of marketing and communications. Both these leaders have made a significant impact on our company, and we look forward to their future contributions.
I would also like to welcome Lisa Opoku to our board of directors, who joined our board as of March 7th. Lisa brings nearly 30 years of finance and legal experience to the board while also increasing our board's independence and diversity. We look forward to benefiting from her valuable insight and industry experience. Finally, I would like to conclude my remarks by thanking our clients for their business and partnership in the quarter, and I want to thank my colleagues for their efforts that contributed to our record quarterly revenues at Tradeweb.
With that, I will turn it back to Ashley for your questions.
Ashley Serrao -- Head of Treasury, FP&A, and Investor Relations
Thanks, Billy. As a reminder, please limit yourself to one question only. Feel free to hop back in the queue and ask additional questions at the end. Q&A will end at 10:30 a.m.
Eastern Time. Operator, you can now take our first question.
Questions & Answers:
Operator
Thank you. One moment for our first question, please. Our first question comes from the line of Alexander Blostein with Goldman Sachs. Your line is now open.
Alex Blostein -- Goldman Sachs -- Analyst
Hey, good morning, Billy. Good morning, everybody. Great to see diversity in the business and the growth, but I wanted to zone in on the interest rate swap business, which continues to be obviously quite active here. And I guess the growth is not all sort of coming from compression trading, as maybe we've seen over the last couple of quarters.
So help us maybe unpack a little bit the key drivers of recent growth and how you're thinking about this business for the rest of the year from here.
Billy Hult -- Chief Executive Officer
Sure. Alex, how are you? Happy spring, and thanks for the question. Alex, if we were going to – I like to always start with a little bit of a half a step back as, you know. If we were going to sort of paint a picture on from our perspective, not just on how to really build a business, but really grow it and become the leader in a business.
From our perspective, I really feel like the swap business would paint a pretty good picture for us. It would be plant the flag early in a large, opaque, non-transparent market. When regulation starts moving in that direction, don't be a bystander, really work with the regulators and shape that regulation in a way that works for the most important clients and then leverage the network. And I kind of say that very strongly leverage the network.
And so the advantage for us, as you know, in swaps has always been this giant network of mortgage customers who are huge consumers of swaps that we have, very strong network of U.S. government and European government clients, particularly on the hedge fund side. We're very active in the swaps market. So leverage that network and then continue to invest and innovate.
Invest in regions. So a lot of the investments that we have put into place around EM has paid off for us, Alex. And then work with clients and innovate on what we describe as micro-trading protocols. So from our perspective, the protocol request for market has been a market share driver and a big driver of revenue.
So those two factors alone are responsible for 50% of our revenue growth over the past two years. We've gone from basically making $220 million in our global swaps business in 2021 to $300 million in 2023, and feeling really good where the trajectory of that business is going in 2024. So a lot of enthusiasm for us, we see a lot of potential. We quote the big stat that 70% of the swaps business is still done via voice markets.
We see that as large-size trades, we see that as partly the wholesale market where we still have a big area of focus there and we're still early in the penetration of electronic solutions across EM, I think inflation swaps, swaptions and then how we describe multi-asset packages. So we're going to keep our focus. It's been a big business for us over the past few years and it's a story that we're going to continue to tell very strongly because I think it paints a very strong picture about how we've arrived in a leadership position in that space. And thanks for the question, Alex.
Operator
Thank you. Our next question comes from the line of Patrick Moley with Piper Sandler. Your line is now open.
Patrick Moley -- Piper Sandler -- Analyst
Good morning. Thanks for taking the question. So you've made a number of value-add bolt-on acquisitions in recent years. ICD may be a little larger than the others, but we're just hoping to get your updated thoughts on how we should think about the M&A strategy going forward.
And then if I could just add a second piece to that, ICD obviously adds an entirely new client segment in corporates. So could you just talk about how that might impact your approach to evaluating potential targets in the future? Thanks.
Billy Hult -- Chief Executive Officer
Sure. Hey, Patrick, how are you? Thanks for the question. I don't want to say we have our hands full right now. It's maybe not quite the perfect way to describe it, but we're focused with a capital F focused really on two things.
It's maximizing our organic growth potential, first and foremost, and then the value of our recent acquisitions. And I think you framed it really well, we announced three deals in the past year. The good news from our perspective is our growth is really kind of firing on all cylinders. And both r8fin and Yieldbroker are from our perspective, progressing very, very well.
And I say this in a strong way very much looking forward to ICD being part of the Tradeweb family, feeling very, very good about the strategy there and our ability to integrate going forward. Longer-term view, it's always important for the company to continue to place these bets on the table, improving the client experience, increasing our earnings power. These are kind of blueprints for us. And so with respect to future deals, we're going to continue to evaluate expansion areas for growth across geographies, clients, and products.
And that's become our playbook. I'm going to kick it to Sara for some important details. And we lead always with the concept of how important it is for the culture to fit us. And that is one of the reasons why we feel good about the acquisitions over the past year, and particularly around our recent one.
We feel there's a very, very strong cultural fit there, which matters to us a lot.
Sara Furber -- Chief Financial Officer
Great. I mean, I think you covered it really well. I would say just emphasizing what Billy said, the framework doesn't change, obviously, looking at strategic fit and discipline, financial fit discipline, and then also going to be measured in terms of operationally making sure that we have the bandwidth and are digesting. That said, ICD, once it closes, does open a new client channel for us.
And obviously, we're focused on that integration. But we think we're going to use all our tools in the toolkit to ultimately grow our overall platform, and that will be organic and inorganic. And we do think overall corporate treasurer is an underserved market. So we like the long-term ability to layer on different pieces of the puzzle there.
I would say just one other thing, we've talked a lot about acquisitions. I would say when we think about inorganic, we do think about the range of tools in the toolkit. And so we do look at partnerships, we do look at smaller investments. And one area that doesn't actually conflict in terms of integration and operational bandwidth, we are spending more time just researching emerging technologies, much smaller financial commitments in that space that we want to look at to make sure that we're building out a platform across the full suite of things in terms of where the market goes.
So thanks for the question and good to hear from you.
Operator
Thank you. One moment for our next question, please. Our next question comes from the line of Andrew Bond with Rosenblatt Securities. Your line is now open.
Andrew Bond -- Rosenblatt Securities -- Analyst
Hey, thanks. Good morning. So on the last call, you talked a bit about the pace of margin expansion moderating from here. Sara, you talked a little bit about that in your prepared remarks today.
So can you frame what kind of margin expansion opportunity you still see for the company over time, given your current growth rates? And maybe what do you see as Tradeweb's steady state for EBITDA margin?
Sara Furber -- Chief Financial Officer
Great. Hi, Andrew. Nice to hear from you. Obviously like -- and I've talked about this, we feel like our business is still growing and our platform is still growing, and we are confident we can grow margins from here.
Given that many of our businesses are still scaling where we are on that spectrum, I think it's too early to really quote or determine what the steady-state margin opportunity is. Our focus right now, particularly in the environment that we're in, is around entering new markets, expanding the platform, and investing in new opportunities. And I think the great news is we see a lot of interesting opportunities to accelerate our investment, which we talked about and really drive durable, profitable revenue growth over the long term. So, you've seen us and we've talked about investing in areas like EM more on credit sales as we have momentum there.
Automation and algo there is a lot of organic opportunities, but you've also seen us deploy capital for acquisitions, and we're going to continue to put investment dollars behind those, whether it be Yieldbroker, ultimately ICD or r8fin which we think we can leverage that technology in other markets. So I think, I know everybody wants like a very specific number, but I just think it's – the good news is it's too early. I think our business really is on that growth horizon for several years to come. What I can be clear about and I think you've seen us do have a good track record here is while we're focused on all these areas of investment, we care about profitability.
And so you should expect us to grow our margins slowly and steadily and have them trend higher, particularly as we look around making decisions. These are decisions that we all think add to the margin expectation over time. And then lastly, I've talked about this. Even in environments that can be more volatile, we have a lot of control over our expense base and so a fair bit of discretion and variable expenses.
So that allows us to kind of have that extra bit of confidence around delivering for our shareholders.
Operator
Thank you. One moment for our next question. Our next question comes from the line of Chris Allen with Citi. Your line is now open.
Chris Allen -- Citi -- Analyst
Hey, good morning, everyone, and thanks for taking my question. I wanted to circle back on interest rate swaps and compression activity specifically. Maybe if you could just provide some color on what kind of customers are coming in for compression trading, customers that are just coming in for compression trading. Are you making any progress in broadening out the wallet of those customers to capture risk trades? And kind of where are you with that progress?
Tom Pluta -- President
Hi, Chris. Good morning. Good to hear from you. It's Tom.
So, yes, compression trading ebbs and flows during the normal course of business, clients put risk on and then they manage out old risk through compressions. And both clients and dealers find it a very efficient tool to reduce derivative notional balances. The biggest players are the macro hedge funds and they can drive large amounts of the volume, so they continue to be big drivers. We have been broadening out and increasing the number of participants in the compression protocols, so it's all been a very positive story.
Now to your question about how that relates to risk trading, what we've learned is that our most active compression clients become very sticky to the platform and they've also been significantly growing their volumes of risk traits with us, which are, as you know, more profitable. Last quarter, we did have some charts in the investor presentation that highlighted this powerful correlation as well. And the key takeaways from that are in the charts last time, our top five to 10 compression clients have not only had very significant growth in compression volumes but also very large growth in their risk trading volumes as well. So those clients moved up very significantly in the rankings with us in risk trading.
So we think that compression continues to be a very useful tool and very complementary and additive protocol to our overall swaps business. Thanks for the question.
Operator
Thank you. One moment for our next question. Our next question comes from the line of Kyle Voigt with KBW. Your line is now open.
Kyle Voigt -- Keefe, Bruyette and Woods -- Analyst
Hi. Good morning. So you called out adoption of RFQ trading as being a key driver of credit volume growth in the quarter and in March specifically. And I think in the prepared remarks, you noted success on both the institutional RFQ and dealer RFQ side.
Just more broadly speaking, just wondering if you could talk about why you're having success with that RFQ protocol right now. What is resonating with these end clients across both the institutional and dealer segments? Is it price, capabilities or something else driving the outsized growth on the platform?
Billy Hult -- Chief Executive Officer
Yes. Hey, Kyle. It's Billy. It's a good question because as you know really well, it sometimes feels like when you talk about credit, it's like the world gets divided between portfolio trading and alt to all trading, and those kind of pick up the kind of big headlines, but those are kind of headlines sometimes.
And we feel like RFQ trading is really in a pretty straightforward way our biggest tangible opportunity in credit right now. It's a foundational protocol that you have to get really right to be in the flow of things. So that's like a huge, huge area of focus for us. And so when we think about that RFQ world, we think about first and foremost the institutional side, where we've been kind of growing our volumes there really now for years as our network expands and our efforts to kind of cross-sell pay off.
I say this in a pretty simple way. We're building deeper and stronger relationships with our clients. And part of that has been, from our perspective, getting things right, adding value around portfolio trading, adding value around the alt to all network. And then sometimes what happens in a very straightforward way is then you wind up getting that RFQ volume.
It's like you've kind of earned that type of business. And that's been a big kind of area of growth for us. Dealer RFQ, which is a sort of change in market structure, is a more recent initiative for us. So still in early stages of building that protocol, but we feel given the relationships we have with the dealers, with the banks that the momentum there is quite promising.
So answer your questions for a second on some numbers. RFQ activity increased almost 30% for us, dealer RFQ almost 40% in the first quarter. So we're getting really into some big numbers. And a little bit technically on the RFQ side, we continue to sort of make the investments and the enhancements that you would expect us to make some of those quite bespoke for specific clients.
It continues to kind of resonate with the broader market. It's a big area of investment for us, huge growth potential. And I kind of emphasize this point to you. You start to get some of that after you've added some of these efficiencies that we've talked a lot about in terms of portfolio trading and rounding out our liquidity and alt to all trading.
Then all of a sudden you start to get some real kind of momentum in terms of the client activity. So thanks very much, Kyle, for your question. Appreciate it.
Operator
Thank you. Our next question comes from the line of Benjamin Budish with Barclays. Your line is now open.
Ben Budish -- Barclays -- Analyst
Hi. Good morning, and thanks for taking the question. Maybe, I think, circling back, I think it was Patrick's question on M&A, just can you maybe give an update on r8fin? You've owned the asset for about a quarter now. Any updated thoughts on what Tradeweb can do to sort of accelerate that business? What's sort of the potential upside from now having access to that futures trading workflow, having had a little bit more time owning the asset? Thank you.
Tom Pluta -- President
Hi, Ben. Good morning. Yes, so as Billy and Sara mentioned, we remain very excited about this asset and the opportunity for growth, which nicely complements our existing businesses. As mentioned in the prepared remarks, the acquisition is off to a very strong start and already contributing about 1.5 percentage points to our U.S.
treasury market share. So that's very significant volumes starting day one. Over the last quarter, we spent a lot of time engaging with the r8fin client base, working on full integration into the Tradeweb infrastructure. And our focus ahead will be on onboarding more Tradeweb clients to r8fin, which will add to an already very rapid pace of client growth that existed before we got involved.
So there's a lot of momentum on the client side and the feedback that we're getting from existing clients and prospective clients is extremely positive. We now have a market-leading technology offering that's allowing us to capitalize on growing demand for intelligent execution of multi-legged orders across cash treasuries and treasury futures. This access to U.S. bond futures is a nice compliment to the rest of our rate products.
I think you heard us talking about finding ways to get involved in that space. And now we are. As far as what's ahead to your question there, looking forward, there is a lot of excitement outside of the U.S. on this acquisition as well, and our plans include expanding into new markets with European cash and futures and potentially swaps likely next on the agenda.
So we see growth in the U.S. with the existing products and international expansion coming in the relatively near future. Thanks for the question.
Operator
Thank you. Our next question comes from the line of Michael Cyprys with Morgan Stanley. Your line is now open.
Michael Cyprys -- Morgan Stanley -- Analyst
Hey, good morning. Thanks for taking the question. Just wanted to circle back on the Aladdin integration for the credit business. I was hoping you can update us on the progress there.
Maybe just remind us what exactly is going to be changing in terms of what customers will have access to, that they didn't have access to previously. And how do you think about the opportunity set? And if there's any sort of lessons learned from the integration on the rate side that occurred years ago if I'm not mistaken.
Billy Hult -- Chief Executive Officer
Sure, I'll take that one as well. So the Aladdin partnership remains an important component of our growth strategy and credit and a significant part of our plan of expanding our network, particularly in high yield. We've made great progress and have been working through the three phases of this integration. So in Phase 1, we completed that in the second half of last year, and that was focused on getting dealer access and inventory data into Aladdin.
Phase 2, we recently completed, and that allows Aladdin clients to respond to auto inquiries right from their Aladdin dashboard. And in Phase 3, clients will be able to initiate an RFQ on Tradeweb from within Aladdin and then also use our automation tools. So we expect, we're progressing – we expect all phase of this to be completed over the next 12 months. And as far as the results for us on volumes, revenue, and market share, we expect this to be a steady progression as we move forward with more clients within Aladdin using Tradeweb functionality.
So your question on lessons learned, yes, we integrated with Aladdin in rates a number of years ago. And the main lesson there is really that Aladdin is a very important tool for many asset managers and being partnered with them and providing easier access for those clients to Tradeweb is beneficial to us and growing our volumes. We learned that in rates. That's what we're expecting and learning and seeing in credit as well.
Thanks for the question.
Operator
Thank you. Our next question comes from the line of Dan Fannon with Jefferies. Your line is now open.
Dan Fannon -- Jefferies -- Analyst
Thanks. Good morning. I guess sticking with you, Tom, you had mentioned in your prepared remarks about looking to replicate the success and invest in high grade and high yield. And I think Aladdin to your previous response as part of that, but maybe you can elaborate on what you expect on other things you're doing and really kind of a time period you think to gauge the success of the potential share gains?
Tom Pluta -- President
Sure. So in high yield, the goal is to continue to build out the client network, and we have been doing that. Billy mentioned we're hiring salespeople to help build out that client footprint and we have been making notable progress. We're also building out the dealer network, and you can see in the stats on the increase in the number of responses, clients will come on the system, but ultimately, they want liquidity, and they want a lot of responses and they're getting that.
As Aladdin functionality rolls out, as I mentioned, over the course of the year, this will continue to boost high-yield volume. So there's no time frame as far as when we're there and when we're done, but it's more a continuum, and we do expect to continue to grow our share over time. And this is a very sustained effort. It's blocking and tackling.
It's getting clients to come over to Tradeweb for the first time and we are getting there. So that's what we're going to continue to do. Thanks for the question.
Operator
Thank you. One moment for our next question. And our next question comes from the line of Craig Siegenthaler with Bank of America. Your line is now open.
Craig Siegenthaler -- Bank of America Merrill Lynch -- Analyst
Good morning, everyone. Our question is on pricing and credit. So as competition here in credit continues to intensify, how are you thinking about pricing over the long term? And in your discussions with buy-side clients, is this becoming a more relevant topic? Thank you.
Billy Hult -- Chief Executive Officer
Hey, Craig. It's Billy. Thanks very much. We'd be crazy to say that pricing isn't part of the conversation with our clients.
And if I didn't say that the right way, it would be when this call was over, right. It's a big part of the reality. That being said, we say this in a very kind of blunt way. It's not the main focus, right? Clients are focused on being able to do their job more efficiently and more intelligently.
And it's important for us to always appreciate that when clients think about value, that we provide, it goes just a lot past that sort of execution fee. It starts with liquidity and functionality, but it stretches to pre-trade analytics, and really how we describe this like flow of information and Tom was talking about Aladdin but this flow of information to OMSs. And so the convenience of trading multiple products from a single platform, that's a big deal, that one-stop shop sort of emphasis that we continue to kind of make. I say this again in my – in sort of a little bit of my own language.
If pricing was the main focus, our largest competitor in institutional rates market would have all that business. And if it was the main focus, we'd be the full leader in the credit market, right? So these are kind of complex dynamics, sometimes with a complex dynamic, you simplify, right? Simple strategy, continue to provide our clients with more innovation or bang for the buck, and pricing conversations always take care of themselves. And I don't say that flippantly. I say that with a lot of rigor in terms of the analysis.
So we're going to continue to innovate with protocols, connecting our markets. We believe we provide a lot of value to our clients, and we have that loyalty and support, and we feel quite good about where our pricing model is today. It's a good question, Craig, thank you.
Operator
Thank you. Our next question comes from the line of Ken Worthington with J.P. Morgan. Your line is now open.
Ken Worthington -- JPMorgan Chase and Company -- Analyst
Hi. Good morning, everybody. Congrats, Ashley. On high yield, connection with ETF managers seems like a no-brainer to me for Tradeweb and high yield.
How big a part of the high-yield trading ecosystem are ETFs? How is rebalancing and high-yield ETFs done currently? And what needs to happen for Tradeweb to win more business in that part of the market?
Tom Pluta -- President
Hey, Ken, good morning. Yes, high yields, I should say, ETF market makers and ETF volumes coming into the cash markets continue to be a significant part of what we're seeing and a significant part of our growth strategy. We've also seen ETF market makers using portfolio trading to replicate some of those baskets. So I think us having the full range of protocols, a thorough ETF market offering, strengthen portfolio trading, RFQ, and the cash bonds, all complement one another.
So as far as what has to continue to happen, we continue to work on all of these protocols, building out the network, building out the responses, building out the volume and what we've seen increasingly is these players interacting across the various protocols, and we're working on ways to try to make it easier for clients to access those protocols within Tradeweb in terms of doing more than one trade or doing a package of trades at one time. So we're focused on all those things. The results have been quite promising, and it's a big part of the focus going forward. Thanks for the question.
Operator
Thank you. One moment for our next question, please. Our next question will come from the line of Brian Bedell with Deutsche Bank. Your line is now open.
Brian Bedell -- Deutsche Bank -- Analyst
Great. Thanks. Good morning. Thanks for taking my question.
Most have been asked and answered, but maybe just one on your views on the potential clearing of treasuries, new regulations coming around and I realize it's still potentially a couple of years out, but how do you see that changing the landscape for Tradeweb in any major way and are there opportunities for you to expand your business with that new paradigm.
Tom Pluta -- President
Sure, Brian. So just to recap, the SEC did announce the final clearing rules in December and set the deadlines for the end of 2025 for cash treasuries and mid-2026 for treasury repo. In cash treasury, essentially the rule will scope in more dealers, essentially the PTFs to clear their trades. But this rule fell short of scoping an even wider variety of market participants that some had expected.
So it's not as dramatic in cash treasuries. In treasury repo that is the bigger change. So substantially all of the market will be required to clear repo going forward or essentially clear repo going forward. There's a few exclusions out there, but it is most of the market.
I guess what I would highlight is that there's still a number of open questions that the industry is wrestling with such as, will there be other clearing houses other than FICC entering the space as competitors and one or more have suggested that they will enter. And then what are the specifics of the protocols that are introduced by clearing houses with respect to cross margining and netting and things that. And then is there enough capacity for bank dealers who are sponsoring a large number of clients into the clearing houses and how those margin costs we shared? So these are the types of things that are being discussed in the market, being discussed in the panels. And then how might that impact liquidity? So these details are still being worked out.
But ultimately, your question is what's the impact to Tradeweb? Generally speaking, more central clearing is positive for our business. It does go hand-in-hand with electronification. And as we are a large player in critical infrastructure provider in the treasury and repo markets, we're already fully connected to FICC. We already manage clear treasury business today through Dealerweb.
We're very familiar with how all that works. And as these deadlines approach, we're going to work closely with our clients and help them navigate the rule changes as we've done in interest rate swaps. So mild positive, not a dramatic change, but this direction of travel in the regulation continues to be supportive for Tradeweb.
Billy Hult -- Chief Executive Officer
And our ability to have a voice around how this regulation ultimately gets implemented in the market. From my perspective, there's some pretty good feelings about that because it mimics a little bit the way that we were able to kind of get in there around, as you guys all know very well, the derivatives regulation and how SEFs reform and very important decisions that were made around really how clearing would work and the market structure of that market that gives us now, again, a bunch of years later, confidence, but also the credibility to be in there with the right people and really shape how that regulation winds up really affecting the markets that we live and breathe in. So that's a big part of this and Tom answered that perfectly.
Operator
Thank you. One moment for our next question. Our next question comes from the line of Alex Kramm with UBS. Your line is now open.
Alex Kramm -- UBS -- Analyst
Hey, hello, everyone. Just wanted to come back on the discussion we had earlier about RFQ. Sounds like you're being successful there. But I know there's limited disclosures.
But when I look at some of the foundational RFQ numbers that you give every quarter, I think over the last 10 quarters, you're kind of stuck in the low to high 4% market share of trade. Now that's combined high yield in IG. So I don't know if that's a fair way to look at it. But doesn't seem like you've been really able to break out, and I think 1Q was actually down a little bit over the – from the last few quarters.
So just wondering if we're looking at this right, is there's still a lot to do, and what there is to do because it seems like you've been stuck a little bit. So just maybe rectify that a little bit. Thanks.
Billy Hult -- Chief Executive Officer
Yes. How are you? I made the sort of analogy about the painting to the first question that Alex from Goldman asked me, I'm not saying you're going to like smudge our Picasso, but I kind of hear where you're coming from. I think at the end of the day, as we talk about sort of where we're headed with RFQ trading and the real significant progress that we've made around that and the emphasis around that. At the end of the day, the success around that has been, I think, higher around kind of IG.
And we're pretty blunt here. I think we do a lot of things very, very well. We still have more work to do on high yield. And some of that work is around the penetration of RFQ trading into high yield.
But from our perspective, also it's about the adoption of portfolio trading into the less liquid areas of the market. And it's also about, and Tom described, this work that we're doing with Aladdin in terms of increasing the responder network in high yield, that's going to be a big piece of it as well. So if you felt like just everything we do in RFQ trading would perfectly apply from IG to high yield, not so fast. It's again, the collaborative effect of really impacting the clients' workflow.
And the focus in high yield have to be three-pronged. It has to be around, yes, RFQ, but also the continued confidence around portfolio trading plus rounding up this network of responders through integrations like Aladdin. So it's always a sort of pure focus that we have. It's a good question.
Thanks a lot.
Operator
Thank you. One moment for the next question. Our next question comes from Craig Siegenthaler with Bank of America. Your line is now open.
Elias Abboud -- Bank of America Merrill Lynch -- Analyst
Hi, good morning. It's Elias Abboud from Craig's team. Thanks for taking the question. You mentioned earlier that you've completed Phase 2 of the Aladdin integration, which was for all-to-all trading.
I was wondering if you could quantify the inflection you've seen in institutional all-to-all volume since that integration was completed. So maybe we can get a peek into what the results from Phase 3 could look like down the road. Thanks.
Tom Pluta -- President
Yes. So we've definitely made significant progress there. We don't actually break out and disclose that, but I think it's safe to say that we are making progress. We see more.
It's a little bit too soon, I'd say, to see the full effect because these are still coming online. And I think we'll see more of the impact later this year and into next year, but it has been a steady growth and what's been contributing to the overall market share gains that you have – that we have been experiencing over the last year or a year and a half. Thanks for the question.
Operator
Thank you. And this concludes our Q&A portion. I'll now turn the call back over to Mr. Billy Hult for closing remarks.
Billy Hult -- Chief Executive Officer
Thank you all very much for joining us this morning. Any follow-up questions, obviously, always feel free to reach out to Ashley and the team. We also want to end with a little congratulations to one of our teammates, Sameer, who had a baby boy who we know is listening at home. Congratulations to Sameer.
And, everyone, have a great day. Thank you.
Sara Furber -- Chief Financial Officer
Thank you.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Ashley Serrao -- Head of Treasury, FP&A, and Investor Relations
Billy Hult -- Chief Executive Officer
Tom Pluta -- President
Sara Furber -- Chief Financial Officer
Alex Blostein -- Goldman Sachs -- Analyst
Patrick Moley -- Piper Sandler -- Analyst
Andrew Bond -- Rosenblatt Securities -- Analyst
Chris Allen -- Citi -- Analyst
Kyle Voigt -- Keefe, Bruyette and Woods -- Analyst
Ben Budish -- Barclays -- Analyst
Michael Cyprys -- Morgan Stanley -- Analyst
Dan Fannon -- Jefferies -- Analyst
Craig Siegenthaler -- Bank of America Merrill Lynch -- Analyst
Ken Worthington -- JPMorgan Chase and Company -- Analyst
Brian Bedell -- Deutsche Bank -- Analyst
Alex Kramm -- UBS -- Analyst
Elias Abboud -- Bank of America Merrill Lynch -- Analyst
