Good morning and welcome to Tradeweb’s Third Quarter 2020 Earnings Conference Call. As a reminder, today’s call is being recorded and will be available for playback. To begin the call, I’ll turn the call over to Head of US Corporate Development and Investor Relationship, Ashley Serrao. Please go ahead.

Thank you and good morning. Joining me today for the call are our CEO, Lee Olesky, who will review the highlights for the quarter and provide a business update; our President, Billy Hult, who’ll dive a little deeper into some growth initiatives; and Bob Warshaw, our CFO, who will review our financial results. Our third quarter earnings release, prepared remarks, and accompanying presentation are available on the Investor Relations portion of our website. I’d like to remind you that certain statements in this presentation and during 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, including full-year 2020 guidance, and the COVID-19 pandemic, the potential impacts of which are inherently uncertain, 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 and periodic reports filed with the SEC. In addition, on today’s call, we will reference certain non-GAAP measures. Information regarding these non-GAAP measures, including reconciliations to GAAP measures, are in our posted earnings release and presentation. Lastly, we provide certain market and industry data which is based on management’s estimates and various industry sources. See our posted earnings presentation for more details. To recap, this morning we reported GAAP earnings per diluted share of $0.19. Excluding certain non-cash stock-based compensation expense, acquisition and Refinitiv-related D&A and certain FX items, and assuming an effective tax rate of 22%, we reported adjusted net income per diluted share of $0.30. Please see the earnings release and the Form 10-Q to be filed with the SEC for additional information regarding the presentation of our historical results. Now, let me turn the call over to Lee.

Thanks, Ashley. Good morning, everyone, and thank you for joining our third quarter earnings call. The world remains an uncertain place amidst numerous political, climate, health, and social challenges. At Tradeweb, cyclical macro headwinds from subdued rate volatility and lower yields continue to partially mask encouraging secular and organic growth across our rates credit money market asset classes. Our team remains focused on the future, operating purposely to execute on our growth roadmap by managing what's within our control which is relentlessly engaging clients, innovating with technology and improving trading workflows to gain share. And as we continue to focus on revenue growth we believe we are increasing our earnings power, positioning Tradeweb to eventually benefit when volatility resurfaces and secondarily when interest rates head higher. Our message to our investors is unchanged. We remain laser focused on capitalizing on the secular tailwinds underpinning our business to drive revenue growth and margin expansion for the remainder of 2020 and 2021 and beyond To drive revenue growth and margin expansion for the remainder of 2020 -- in 2021 and beyond as both our existing and pending investment scale globally. Turning to slide 4, we reported the strongest third quarter in our history -- hitting new market share and volume records across numerous products -- specifically gross revenues of $213 million during third quarter 2020, were up 5.9% year-on-year on a reported basis and by 4.7% on a constant currency basis. The revenue growth and the resulting scale translated into improved profitability year-over-year as our third quarter adjusted EBITDA margin expanded by 91 basis points to 47.4% . On the investment front we continue to innovate by rolling out several early stage initiatives we launched our enhanced specified pool platform after collaborating for a year with leading mortgage originators to design a…

Thanks Lee. Turning to slide 7, for a closer look at swaps. Swaps remain a critical component of the trade web story and one with considerable room for growth and innovation. We continue to operate with a growth mentality investing for the future. The broader industry backdrop in the third quarter for interest rate swaps remained cyclically challenging given low interest rate volatility. Industry volumes as measured by Claris were down 38% year-over-year during the quarter driven primarily by a 56% decline in lower fee per million overnight index swaps OIS, which were pressured by reduced speculation on the front end of the curve. The higher fee per million core IRS market fared relatively better. Industry volumes here declined 29% year-over-year. But as Lee indicated our volumes outperformed the overall market as our targeted investments continue to pay off. Specifically, our market share increased to a record 10.2% from 9.8% last year, driven primarily by gains within core IRS, our main market of focus, where shares rose -- where share rose to a record 17.5%. We were also pleased to be recognized by global capital as the OTC trading venue of the year for our consistent ability to pioneer the next generation of tools to access liquidity and inform trading decisions. We are continuing to innovate by responding to structural changes in the swaps market be it the growth of emerging market swaps clearing or the transition to alternative reference rates. We are launching new protocols like RFM adding new products like electronic FRAs and package swaps and expanding regionally in APAC. Specifically during the third quarter, we posted our highest single revenue day for EM swaps as large asset managers that are fully integrated into trade web for major currencies leverage the same infrastructure to trade EM currencies. Clients…

Thanks, Billy and good morning. As I go through the numbers all comparisons will be to the prior year period unless otherwise noted. Let me begin with an overview of volumes on slide 9. We reported quarterly total average daily volumes of $780 billion, down 4.5% but up 5.4% when you exclude short tenure swaps. Areas of notable growth include mortgages, US corporate credit, global CDS, Chinese bonds, equity derivatives and bilateral repo. Slide 10 provides summary of our quarterly earnings performance. Despite the lower volumes which were mainly driven by short tenure swaps third quarter volumes translated into gross revenues increasing by 5.9% on an reported basis and 4.7% on a constant currency basis. We derived approximately 36% of our revenues from international customers. Recall that approximately 30% of our revenue base is denominated in currencies other than dollars, predominantly in euros. Our variable revenues increased by 7.1% and our total treaty review increased by 5.5%. Total fixed revenues related to our four major asset classes continue to grow as expected up 3% year-over-year and 1% on a constant currency basis. Credit fixed revenue growth was primarily driven by the addition of new dealers in US credit and additional clients in Chinese bonds. Rates fixed revenue growth was driven by the addition of new dealers and swaps and the impact of FX. Market data increased by 10% year-over-year led by Refinitiv, APA and proprietary data products. Adjusted EBITDA margin came in at 47.4% and expanded by 91 basis points relative to third quarter 2019 as we continue to benefit from scale. All in, we reported adjusted net income per diluted share of $0.30. Moving on to fees per million on slide 11. The trends I'm about to describe are driven by a mix of the various projects within our…

Thanks Bob. In sum despite macro challenges market share gains and volume increases continue to drive growth today continue to drive growth today. And we believe it increase our future earnings potential. The secular trends powering electronic application and automation remain intact. We continue to operate with a growth mindset and we're focused on collaborating with our clients to capitalize on the various opportunities ahead of us across asset classes. The regional products and asset class diversity of our revenues was on display with another strong quarter for credit with rates, equities and money markets having multiple growth levers, despite the noted macro challenges. In addition to organic growth we continue to spend a lot of time evaluating potential M&A opportunities that we believe would further augment our growth as cash builds on our balance sheet. With a couple of important month end trading days left in October, firm wide volumes are up double digits relative to October 2019. We are happy to provide more detail during the Q&A. I'd like to conclude my remarks by thanking our clients for their business and partnership in the quarter. And I want to especially thank my colleagues for their efforts that contributed to our strongest third quarter in our history. With that, I'll turn it back to Ashley for your questions.

Thanks, Lee. 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 10:00 AM Eastern Time. Operator, you can now take our first question.

Our first question comes from Ari Ghosh with Credit Suisse. Your line is open.

Hi. Thank you. Good morning, everyone. So Lee, the rates business right now has an obvious macro challenges, plus they also seem to be like several pockets of opportunity as we look at the overall business. So can you talk about maybe the structural deal wins and new initiatives that perhaps a less impacted by the low quality backdrop as you look out over the next 12 months.

Thanks Ari, good morning. Yeah that's a, it's an important question and I do think it merits spending a little bit of time on, on this one. One of the one of the aspects of our race rates business that we believe is still underappreciated by the market is our, our products that is not as mature despite we've been doing this for over 20 years. So behavior is still changing. Our products are still electrifying which is why our volumes are able to outperform the more mature rate sectors like futures and cash rate venues. Our biggest competitor [indiscernible] always stated when we started off and I think it's still largely the case. Our biggest competitor is actually the phone and the cultural change to get people to go electronic. The other point I'd make is that you know our rates business it isn't one product or one client sector, right, we have treasuries we have European government bonds we have mortgages we have interest rate swaps. And the diversity is important because lower volatility in rates hit these products differently, right. So you know some you might have more issuance or prescriptive monetary policy messaging which creates both tailwinds and headwinds for our product set. But you can't lose sight of the fact that we are primarily an institutional marketplace between the buy side and sell side which is a bit different from futures markets or the inner dealer markets which we're also in. But are not as large a part of our business. So it's this combination of being levered to institutional growth the diversity of our product set and our organic investments that drive behavior change that really allows processing the growth so to be more specific right. With respect to government bonds where we're hitting…

Thank you. Our next question comes from Rich Repetto with Piper Sandler. Your line is open.

I'm sorry to stay on the rates question, but it does drive so much of your revenue. So this is the first quarter that you had single-digit year-over-year percentage revenue growth -- you know because of the rates? And I guess I sort of want to get the benefit of your experience here -- clearly you've been through cycles before. So could you talk about -- any time in history you know where the growth has slow and you had growth opportunities which you outlined dramatically on the call -- is the growth opportunity bigger -- is this slowdown more or -- and that's one part of the question. And you also mentioned that fintech in the prepared remarks -- you know they just put in some new proposal for our rules on Treasury trading platforms tend to regulate them as ATS and et cetera and whether that will have an impact on the different platforms you have in great Treasury.

Right. So let me take a crack at this. I think the first part was have we seen slowdowns like this before historically and I don't know if this is just a reflection of my years of doing this. Of course, we have been doing this over 20 years. And there are periods when we have a slowdown. I mean, we haven't seen this exact set of circumstances obviously with the coronavirus and the zero interest rate environment. But this is over time, while this is an extreme situation for everybody on so many different levels. It's not unprecedented to see this sort of activity. And I think what we would stress here is look at the diversity of our business. We had the credit business grew 27% in the last quarter, which I would say is a leader across the board in terms of growth percentage wise, so now a $50 million business in the last quarter alone. So certain markets are going to be more active than other markets and we think this is one of the reasons. There's many reasons for being diverse, but this is one of the reasons to be diverse. You have different situations. The rates market, we've seen a surge of government bond activity of issuance and focus even though we have a very low rate environment. But derivatives have slowed because of the volatility in the way derivatives are often traded. So I don't think that we should be overly concerned with a few weeks or a quarter or even up a slightly longer period of time. The most critical thing has been really this secular trend of moving markets electronically even of the slightly longer period of time, the most critical thing has been really the secular trend of moving markets…

Thank you. Our next question comes from Mike Carrier with Bank of America. Your line is open.

Hey guys this is Dean Stephan on for Mike Carrier. My question is for Billy, given attractive volume growth in 3Q, can you update us on the outlook for both portfolio trading and net spotting. Have you guys seen any significant shifts in either client behavior or utilization? And then finally what are your thoughts on the competitive landscape given new launches and collaborations from several competitors? Thanks.

Yeah. Sure. That's a great question. Thanks. Thank you for that. Lee, described really well this kind of this big thing that happened around work from home. And I think in a certain way, if we could design a perfect product around the work from home environment it might be something around portfolio trading, where it kind of solves these issues around you know execution leakage, around information leakage. It solves these issues or uncertainty of execution. It's almost like a perfectly designed product for this moment in time. And we're seeing very clearly the results kind of following that. We've talked a lot on these calls around net spotting and net hedging in the way that we've kind of created this lightbulb moment for clients. And we feel really good about the efficiencies and the dollar savings that we've provided for our clients. So as we've made this growth in credit that Lee has described, I would say for sure net spotting and hedging and portfolio trading, and then on some level we feel also equally excited about this rematch that we described, which is again we've always felt like from a market structure perspective create optionality, get into the wholesale business, get into the retail business because the market structures tend to change quickly. And we never want to be kind of left out in the cold as these changes happen. So we're going to be in front of all of this stuff. And so these are the kind of thought processes and innovations I think that have helped us kind of grow the way we have in credit. So we feel ultimately to your question, we feel really good about where we stand around that. Listen around the competitive landscape and specifically maybe for a second in credit we've said very consistently that the market you know we feel like the market wants competition in this space and over -- the past you know period of time obviously we have built a significant business and we are clearly a competitive threat and a force in credit. And I think I think there’s some version of kind of acknowledgment around that as we will see more entities getting into the credit space because it is as lucrative as it is -- it's as big as it is and I think we're going to see more entrants coming in. But we're going to focus always on what we do best which is problem solve -- with clients -- fill deficiencies for clients and get in businesses the right way. And thanks for the question.

Thank you. Our next question comes from Jeremy Campbell with Barclays. Your line is open.

Hey, thanks Lee -- I know you spent some time on rates already at a high level in response to Ari's question earlier but I just wanted to dig in a little bit on MBS since low rates puts MBS prepays into focus. Can you remind us first -- how overall refie originations and MBM prepayments correlate with the total MBA trading volume on the trading platform? And then maybe second -- we spent some time spec tools with their low prepay characteristics and they're currently in demand -- I know you mentioned that that market was less than 5% electronic and you recently enhanced your electronic platform -- just wondering if you could provide some color around the client and demand for that enhanced platform and any you know goals and how quickly that platform could get some traction to meaningfully move that needle up from 5% electronic in that subsector?

Hey, thanks, Jeremy. You know what since Billy builds our mortgage business -- I’m going to let him take -- take this one and just chime in. But I -- you know I think we've got sort of the foremost expert on I think we’ve got sort of the four most expert on that space, on the call with us my partner Billy [indiscernible] can tackle that.

Yeah, I mean sure, sure, the question is a really good one, you described it really well. And what we are we have this really strong TBA mortgage trading franchise. We are very hooked into the originator community, the more refi the better. And this is a moment in time that kind of plays to that business very well. As we kind of move forward in mortgages around specified pools, what's interesting in some ways is that you know clearly our TBA focus and our TBA franchise is going to help us dramatically because we have the clients we have the end users, we’re connected we have the brand we have the credibility. But what I would also say is in an obvious way specified pools trade on spread in a very similar way that corporate bonds trade on spread. And so the domain understanding of how these securities trade is very, very helpful to us as we kind of build out this specified pool platform going forward. We have all the kind of pieces of the puzzle and we're putting them together. And so are feeling or very confident as we kind of move forward with our specified pool platform.

Our next question comes from Alex Kramm with UBS. Your line is open.

Hey good morning everyone. Lee, I guess you mentioned or gave a, gave a quick look about October I think double digits overall was the comment you made since nobody else has ask I would be interested what additional color you can give us by, by asset class and cash versus derivatives. So we have a better idea how things are trending so forth in the fourth quarter? Thank you.

Oh, thanks Alex, always a tricky one right. So let me just say we still have a couple of very important month and trading days for October at a particularly interesting time for everybody. But the one comment I'd make is October is trending close to double digits in terms of revenue growth just rather than getting into the detail of volumes, which are can be confusing. I'm not going to get specifically into volumes we’ll release that next week. We believe we continue to gain share across many of our products. Rates have seen a continuation of the themes that characterize the third quarter. Swaps are better but remain challenged. Mortgages and government bonds continue to grow. The credit space with IG and high yield those markets are running higher than September 2020 at really record levels for us. The acceleration was all network and other things. Money markets is particularly strong month growth in Repo. Client focus on that. Equities is a good month for the ETF and derivative space. Overall our team our client onboarding and sales team has really been very busy engaging clients and our technology team of 300 plus are it is rolled out another software release recently and are continuing to crank out new features new functionality. And are working hard on the next set of innovations and enhancements so we're feeling pretty good about October, but we have two more days to go here. And but things have been as I said sort of in this trending towards a close to double digit revenue growth.

Thank you. Our next question comes from Ken Worthington with JP Morgan. Your line is open.

Hi, It’s Ken Worthington. Thank you for taking my question here. I wanted to ask maybe on the transition from LIBOR to other benchmarks like SONIA and [indiscernible]. To what extent is that having an impact on trading activity, are these transitions having any bearing on either usage or adoption of your trading, you're trading tools and products? Thank you.

I'll take that Ken. One of the challenges of solving in different locations is…

We can't look at each other…

…look at each other. Say, you’re going to -- and I’m going to take that one. So I'll start off and leave room for anyone to chime in on our team. So it's we've been the first in so many things. And I think we've clearly been preparing for this for some time as the market has. We just executed one of the first trades in SONIA. There was a link trade. It's moving along. I think that you know we are -- we're ready, we're ready for this transition. The market is starting to make the changes over. And it's interesting because there's just so many other things happening in this market. It's probably not getting the attention it would in another scenario between the markets and the politics and everything else, but we are -- you know we are confident this is I don’t see this as a fundamental change for our business, it’s a pretty big change in general for sure, but we are well prepared for it. I think the clients are by and large prepared for it, you know it’s like a lot of things that the larger firms are all over this and as you get to a smaller organizations they’re ready or getting ready, but there are some of them are a little bit further behind the firms that have a lot more to invest in -- in attention on these kinds of issues. But I don't see this as a material issue for Tradeweb and I think ultimately for the markets too. But I don't know if anyone wants to add anything from our team. We’re running out of time.

Okay. Thank you very much. I appreciate the response.

Thank you. And our next question comes from Ken Hill with Loop Capital. Your line is open.

Yeah. Thanks for taking the question. Lee, I just wanted to follow up at the end of your prepared remarks you mentioned you're spending a lot of time evaluating potential M&A opportunities. That’s hoping you kind of flushed that out a little bit maybe talk about what capabilities or opportunities you see in the market right now that might look more attractive given the cash build you guys have on your balance sheet. Thanks.

Sure. Well, look I mean the bottom line is we do spend a fair amount of time on this. We have a whole team that is focused on -- on M&A and you know the nonorganic side of things and we continue to look at a number of things where we're kind of given some direction on what we focus on. We're obviously going to be focused on what we think is strategically sensible, what fits our business. You know we have as you mentioned we were very well aware of you know the cash building and the excess cash we’re sitting on. We believe the space is going to continue to consolidate. There will be a number of opportunities, we're always looking and this is a bit of a repeat from what I've said on, on areas where we can expand our network of customers. You know in the past week that's how we got into retail and the wholesale side. We’re very focused on adjacent markets and expanding into adjacent markets new geographies and you know adding spec capability which as everyone is well aware you know there's a huge premium on tech talent across the board. So you know M&A is a way of getting a little bit more tech talent in the door so work we’re focused on that as well. Rob I don't know if you want to add anything in terms of M&A side?

Sure. Yeah sure I think one of things to that and you mentioned that it was we are building cash. We have we have a lot of credits, there’s $500 million that we haven’t drawn down. We certainly think we could go as 3.5 times maybe four times EBITDA and then in a net debt basis. All of that is to say that we think it’s really important at this moment given all the change to marketplace, we talk about consolidation and some other things over time that we in effect be ready for when we, when we want to pull the trigger that we have the right assets and capabilities to do that. And it's part of what we're doing and we talked internally a lot about this is let's make sure that it meets what we describe as the things we're trying to grow but also meets all of the performance criteria that we need to meet in terms of understanding how we make an acquisition accretive as well. And so it's a bit of -- a lot of we're sort of ready and armed and spending a lot of time understanding what the opportunities might be.

Got it. Thanks for all the detail there, Bob and Lee.

Thank you. Our next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Thanks for squeezing my question here. And I was hoping you guys could comment on the new approval you received with respect to your bank line business in China. You know maybe speak to what extent this improves the addressable market for you -- ultimately kind of the framework of thinking how that could translate into better revenue growth and the impact on the kind of profitability of that business? Thanks. : Sure and thanks for that question. Yeah well -- look -- let me just set the stage where we're still in the early stages of evolution of the market. Such as -- you know more foreign institutions are connecting to bond-connect via a Tradeweb -- remember we start -- we were the first ones right. So we were over there many years ago, but really was 2017 that we opened up this channel for our customer base and we now have -- I don't know close to 400 institutions and over 1,700 funds. The newest initiative you know the access to the CIBM the China interbank bond market -- you know that -- that's a relatively new channel northbound channel -- which gives all of our clients the electronic access for price discovery -- transparency efficiency and for prices coverage addition that’s going well. We think the opportunity is very exciting. China is the third largest bond market in the world, $13 trillion of debt and yet is less than 3% in foreign hands and when you compare that to the US, which is like 30%. So we've invested with boots on the ground. We've got our office opened in Shanghai to capitalize on this first mover advantage. We got streaming prices we’re really kind of getting our feet underneath us with respect to China and we see it as a really big considerable opportunity, it's about innovating. So it's not just that we were the first in 2017. But now we've got a messaging tool that's integrated as the index inclusion grows. We see Chinese bonds becoming increasingly more part of the global benchmark. We've got Putsy Russell in. So I think this is a huge opportunity. But as I've said before it's a little challenging to forecast timelines. A lot of it will be down to liberalization and from the Government in China. And the market's acceptance of this huge amount of debt. But we can -- we continue to invest there. We continue to see it grow and think it's a very significant opportunity for us.

Thank you. And our last question comes from Kyle Voigt with KBW. Your line is open.

Hi thanks for taking my question. Maybe just a question on credit trading. I think one of your private competitors is seeing significant success in new issue trading and you’re the largest public competitors also launching a CLOB like offering to address that more liquid part of the corporate bond market. So just wondering if we can, can update on the strategy for attacking that more liquid part of the market and also wondering if you're seeing any institutional client demand for a CLOB or CLOB like trading for US credit.

Hey it's Billy, so, so listen you know I'll make the joke that we're not going to give away too many kind of company secrets exactly in this form. But we’re, we're watching all, all of the developments around new issuance in the way that you would expect us to. And it's certainly a business that we've that we've looked at and that we're sizing up and that that we are very well aware of. In terms of your question which is a good one around sort of you know the central limit order book pricing in credit that's a little bit kind of if you think about it that's a little bit out of our rates playbook. And it's a type of business that we know extremely well. So again kind of eyes wide open we are very well aware of how things are developing in that space. We are going to kind of continue to do what we sort of are focused on in credit and some of those things I would describe around kind of continued innovation around portfolio trading. We love the concept of access and inventory and credit and we are going to have kind of eyes wide opened around potential kind of changes in the market structure around credit. And we are certainly aware of everything that's happening around from pricing.

Thank you. And at this time I would like to hand the call back over to Mr. Lee Olesky for any further comments.

So I would just, I thank you guys all for just joining us this morning and for your thoughtful questions and we look forward to talking to you after our fourth quarter and we are through some really interesting period of time here, especially in the US and also in Europe. So stay well and thanks for joining us this morning. Take care.

Ladies and gentlemen this concludes today's conference call. Thank you for your participation. You may now disconnect everyone have a wonderful day.