All right. Good morning. We will go ahead and get started. For those of you who do not know me, I'm Patrick O'Shaughnessy, the capital markets technology analyst here at Raymond James. Thanks everybody for joining us this morning on day two. Up next, we have Tradeweb Markets, and on their behalf, we have CEO Billy Hult. Format of this is gonna be just a Q&A fireside chat. Billy, welcome.
Thanks very much for having me, as always. Appreciate it.
Obviously, as you could probably guess, the big topic of the past month and at this conference so far has been AI risk. I almost feel embarrassed to ask you this question, but do you see any theoretical competitive disruption risk to Tradeweb from AI?
Yeah. Great question. It's amazing like how fast kind of, you know, time goes 'cause we've gone from kind of like, you know, Tradeweb the origins of Tradeweb was really kind of almost like in like the Liar's Poker world. You know, we're a technology company, but I say this all the time, we're a technology company that like, lives and breathes like in the financial services. We're a pretty big part of the, of the, you know, really of the fabric of the financial markets. The roots are deep around obviously, you know, government bonds, mortgage-backed securities, interest rate swaps, credit, ETFs. How do you connect the biggest, most important asset managers, hedge funds in the world to their counterparties? That's the business model, you know, of Tradeweb.
We've gone from, you know, the Liar's Poker, you know, pizza at 9:00 A.M., you know, to how do you get people to log onto a platform and start beginning to trade electronically. Now here we are, you know, in March of 2026 kind of talking about AI, which is kind of amazing, how quickly things change. If you want to think about, you know, really the concept of, you know, if not like AI proof, but the real way to be, you know, on the right side of this evolution around AI, I would say, you know, proprietary data is probably first and foremost the most important thing to think about. Then secondly, I would say like leading market share, you know.
I feel like, you know, with what Tradeweb does day in and day out, the bread and butter of how we go about continuing to move markets forward into transparency, you know, we're really kinda living and breathing on the right side of this movement around AI. You know, we have amazing data in part because we live not just on the institutional side of the business where, you know, the PIMCOs of the world connect with the Goldmans of the world, but on the wholesale side of the world where banks offset risk with each other and also on the retail side of the world. We are able to offer really, I think, best in class data. We've been able to build up these kinda leading market shares all these years, which gives us some pretty good room around AI.
Then on the other side of the coin, how are you guys internally deploying AI to generate market share gains?
Yeah.
You know, extend your competitive advantages, et cetera?
Yeah. I'll keep going with the Liar's Poker analogy. In the whole Liar's Poker analogy thing, it was all like about like, you know, telephone to terminal. You know, telephone to terminal, maybe terminal mouse. You know, without question, this next leg of what's happening around technology and how technology is being applied, you know, into these markets is really about now how we think about algorithms, smart searching, finding liquidity in the markets that we are in with the least amount of footprint possible, and almost ways that we think about smart searches.
We've been, I think, in a good way, you know, front-footed around something that we call AiEX trading, which is really a kind of data-oriented algorithmic smart search in the market where many of our bigger and more sophisticated clients are, you know, no longer on the phone, they're no longer on the mouse, they're no longer on the terminal, but they're aggregating liquidity. We're building models with them, you know. Instead of guessing where the liquidity is in the market, they have a lot of data that reinforces where the liquidity is. My instinct is, as the market continues to evolve, that's a really strong, you know, a push around that.
I think if I were gonna describe it to you this way, Patrick, I would say, as you know well, you know, the origins around Tradeweb is, you know, we grew up as a company really competing against, you know, Bloomberg, you know, day one. Very formidable company as everyone in this room knows well. Big, big presence around desktops, et cetera. We always had to We always felt like we had to be ultimately, you know, living and breathing in the markets better, but ultimately also I would say innovative around change.
I think as we think about and talk about where we're going around these smart searches and AiEX activity, I would say as great of a company as Bloomberg is, and they're a great company as everyone knows, they're a little bit more defensive around this next wave of technology. My instinct is obviously that's because their first and foremost inclination is towards the terminal, and that's given us an edge.
On the topic of competition more broadly, you guys often speak about how Tradeweb's strong relationships with dealers is really critical to your success. As I kinda think more broadly, the history of the exchange and trading venue space is you see new launches, dealer support, new launches. They get warrants, they get ownership rights. How do you ensure that Tradeweb maintains those strong dealer relationships given those dynamics?
Yeah, it's true. It's like, not to say that like, you know, markets have short memories, but they sometimes have short memories. You're right, and I think the inclination on us is to always reinforce something that we've done essentially from day one, which is understand that, you know, this is, this is part of the living and the breathing in the marketplace.
Understand that there's a balance and, you know, there are moments in time, and I'll say this the right way, where, you know, we've walked out of BlackRock with an idea that BlackRock has had, and by the time the elevator has reached the lobby, we've realized that, like, there's a pretty decent chance that even though that's a great idea, most likely it's not gonna wind up working for the Goldmans or the JP Morgans or the Morgan Stanleys in the world. You have to have a very fine-tuned sense around market structure and the nuances of ultimately trading relationships that exist, you know, in the universe.
We had some interesting benefit around this because as you guys know, I think well around the stories of it all, kind of post-crisis, our direct competitor in credit really ran, I think, intelligently ran, how we think about a all-to-all strategy. They call it Open Trading, it's a strategy that, you know, ultimately connected sort of the buy side with other buy side participants in terms of liquidity provision. There were a lot of things, you know, particularly around that moment in time that made sense. The reality is that's a kind of evolutionary protocol.
Actually, it's a, it's a revolutionary protocol that actually disrupts, you know, the normal engagement of trading, and it opened up a door for us as a company to really bring the banks back in and to restore the banks as primary market makers to their clients. Those kinds of stories, that kind of track record, I think, goes a long way for us to continue to build out marketplaces with the banks. From our perspective, just the combination of having, you know, the banks having gone through the sort of the teeth of regulation, they have a little bit of, like, their swag back, you know, in the marketplaces that we live in. We view that as a good thing. There's the reality of the, of the non-bank liquidity providers, the Citadel of the world arriving full speed in our marketplace.
That keeps everyone on their toes in a really good way, you know, short memories and all.
You guys had an interesting graphic in your quarterly slides where you said, you know, you're up to 10% market share in risk trades in the interest rate swaps market. I think there's a lot of noise in the data, interest rate swaps, there's compression trades, there's risk trades. Is it right or kind of appropriate to think of your strategy as kinda enter that space with compression trades? Yes, it's lower fee, but you get your foot in the door, you get those relationships, and then you move up to the risk trades from there?
Yeah, it is. I mean, our. You talk a lot about credit. We talk a lot about government bonds. Those are the two markets that everyone kinda goes to quickly. Our global swaps business has been just an absolute, you know, killer market for us. We've done exceptionally well. That was the ultimate kinda back-alley market that's gone to, you know, an electronic market, very transparent. Now the volumes are really strong. We've gone, you know, from, you know, as you know very well, my first year as CEO, we were up kinda 12% growth. Swaps was a big engine on that. We had 29% growth in 2024. A very strong year in 2025. I feel like this year's setup is great for our business. It's a crazy world, obviously.
We had a very strong January, up over 15%. Excuse me, very strong February, up over 15% year-over-year growth. A lot of that was fueled by continued very, very strong activity in our global swaps business, particularly, maybe not surprisingly, coming out of Europe. The way that we think about compression has always been, let's get into the most sophisticated clients' workflows, show that we know what we're doing around solving for problems, and then ultimately the risk of it all follows. Sometimes, not with you, sometimes I'll spend time with, you know, a smart analyst, not as smart as you, and they'll be like, "When is that kinda compression thing gonna go away?" Because it's harder to understand where the fee per million goes.
From our perspective, we kinda hope it never goes away because it's a gateway to ultimately getting after the real risk trades of the most sophisticated clients out there in the ecosystem. That's kinda what we do, hopefully, you know, best in class. That's what we try to do.
On the topic of cash versus Treasuries, the market structure there, you know, is changing, and we're gonna have, at some point, centralized clearing-
Yeah
...just Treasuries, even though it's been delayed. How do you see that playing out and impacting Tradeweb?
Yeah, it is changing, and you're right. You know, not that long ago, I made the kinda Liar's Poker story in the beginning. If you had told, you know, government bond dealers not that long ago, you know, that non-bank liquidity providers would be the engine of market making in the wholesale side of the market, the most sophisticated machine learning, technology-oriented side of the market, I think a lot of people would've been surprised. It shows you how quickly, you know, evolution occurs, which is one of the reasons why from our perspective, from a strategic perspective, we have always wanted to make sure that we're on kinda both sides of market structure, like the wholesale side plus the client side.
I would say as we think about, you know, clearing, you know, one of the things that I think we would, we would be pretty clear about is that, no pun intended, would be, you know, that there will be ultimately with central clearing the potential, which I think is the strong word, for more clients to trade picks and spots anonymously on order books, which we think is a good thing for the business. It's one of the reasons why you wanna have that kind of full cycle of market structure at your disposal.
On the U.S. credit side of things, your market share has been largely range-bound since the second quarter 2024, as has your larger competitors who you mentioned earlier. There's some good stuff happening under the hood as well, particularly with RFQ. Why are you confident that you still have strong momentum in the business?
You know, I've learned, like, all these years, and you know this well, Patrick, from the first time we met, like, you know, be directionally on the right side of where market share is going, do the right thing for your clients. There's always gonna be kind of like fits and starts around market share. It doesn't just come in waves. It was not that long ago, you know, that Tradeweb was a rates company and had essentially no presence in credit. Now we're pound for pound kinda in there as the one or the one A in credit. I think the recipe is gonna be the company that can navigate for sure keeping the banks on side. I think the banks are gonna continue to play meaningful roles in credit market making, period. We say that very loudly.
At the same time, embrace protocols to have the Jane Street and the Citadel in the world, you know, playing on your side, you know, aggressively. I think multi-asset class matters in credit. We've been able to make a lot of inroads by being the leading treasury platform. I think that helps us in credit because it obviously credit trades on spread. I would say, you know, in a lot of ways, the most important thing, and this will probably combine some things I just said, is, you know, companies like Tradeweb, companies like MarketAxess, companies like Bloomberg, they make their living essentially with, you know, the buy side being proactive in the market and the banks reacting to flow.
That makes a lot of sense to me, but I would say it sort of encapsulates part of the flows that exist on a trading day. The other type of flow that exists, which I think this room knows really well, are kind of banks in moments being proactive in the market, either around inventory or around their trading axes. Those tend to be the more profitable pieces of the business. They're sensitive pieces of the business. I think it goes back to, you know, making sure that you've navigated those relationships the right way and you've built technology the right way. The next leg of growth I think most likely will incorporate, you know, banks being the proactive participants in the market in terms of either inventory or trading axes.
A big plus on this one, the ability to ultimately navigate for block trades and complexity. I don't think you can navigate for block trades, i.e. risk trades, without keeping the banks on side. I don't think that, you know, for better or for worse, Wellington connecting out there in the universe with Fidelity will occur around block.
Makes sense. We've talked about interest rate swaps and U.S. Treasuries and U.S. Credit. What are some of the other products at Tradeweb that you think are underappreciated long-term growth drivers for the company?
First one that comes to mind, it's like, you know, it's again, it's a little bit, it's an interesting story. Like we, you know, the TBA mortgage market, like way back when, was the, you know, sort of like the second market that the company was in, but it was the first market that took off. When I say it took off, it immediately had kind of the biggest players, you know, playing electronically, which can be unusual. A lot of times as markets kind of evolve electronically, it doesn't take place on the fringes, but it takes place with the types of companies that have the most to gain from transparency, which isn't always like the big, you know, the big guys.
The mortgage market for a bunch of different reasons took on a very different kind of character around it all. That market goes from being sort of one of the leading marketplaces. The current coupon mortgage market can be one of the two or three most important financial instruments in the world to sleepy, you know, depending on where we are in the rates kind of cycle of it all. We have, you know, very strong market share at Tradeweb in mortgages, combination of the institutional piece and the wholesale piece. I think we have a pretty strong instinct that, you know, quite a strong February in, you know, in mortgages. I think we have a pretty strong instinct that if we go lower in rates from here, the potential of that market really picking up from a volume standpoint is there.
I obviously use the word potential, but I think it's there. Then I think, you know, what we've been very, very focused as a company, you know, we're U.S.-based, we have a big New York presence, you know, for better or worse, we're born and raised in Manhattan, we have a big global business. We've done. I mentioned European swaps. We've done exceptionally well in European swaps. I think, like, what we've been able to do as a public company really building out our presence in EM is a little bit of an underappreciated story. We started off in the kinda interest rate side of the EM marketplaces. We have our sights set on credit, which we think is a big market where there is room for competition there.
We are a New York-based company that does not have any version of a satellite office in London. It's a leadership area of the company. I think our best and brightest kind of are in and out of that office all of the time. I think the lens that we approach to global businesses, I think is one of the more important, not to say underappreciated, but I would say I think one of the more important things that we've done over the years.
Remind me, I think it's 40% of your revenue comes from outside of the U.S. right now?
40%, you know, combination of Sameer, Sara, and Ashley, all much smarter than I do, have the exact, like, percentage of growth. It's a very big percentage of growth that comes out of our world internationally. You know, it's the kind of world there where, you know, the practitioners in that space can understand how clients engage in liquidity, build out what I would describe to everyone as micro-protocols information, if the bid- ask on the market is within a certain parameter, the client will engage on one side or the other. Then all of a sudden, big versions of risk get traded.
I tell that story with a lot of pride for the international business because they figured out, you know, how to do that. That was phone-based business or kind of Bloomberg message-based business before someone figured out how to do that. That's a good sign around innovation. It's a practical sign around innovation, I think.
Beyond AI, another big topic of late has been tokenization. What do you think is the role for tokenization to play within Tradeweb?
I think, you know, I think there are markets that we are in that will have, you know, from our perspective, significant benefits on the kinda collateral management settlement side of the world. I had mentioned the TBA mortgage market kinda going from, you know, at one point in time, one of the biggest markets in the world or one of the most active markets in the world to sleepy. One of the things about that market that's unusual is much, much fewer participants in that market. You don't really have, you know, the non-bank liquidity providers living in the space like they live in government bonds or swaps or credit. You don't really have systematic trading in that world like you have in the mirror pools of liquidity in the macro world.
One of the reasons why that is because, you know, for obvious reasons around origination, the settlement cycle is funky. You know, you have 30-day settlement cycles. You have mortgage bankers selling out 90 days from now. I think that market in particular will benefit massively from a shift around collateral management and efficiency around how pools are ultimately transferred back and forth. Really interesting possibilities around with that. That's just, like, one example, but I would say, like, you know, the collateral management of it all, more efficiency there is ultimately good for velocity and something that we are for.
What's your current think in terms of the timing of implementation of solutions like that, where, you know, new settlement structures emerge and are real and tangible? Maybe how does that play together with your investment in work with the Canton Network?
It's a good question, and it's tricky because I would say things tend to evolve at different rates than we think. You know, and we're moving a big kinda ocean liner, you know, around all of this. We've had a very long-standing relationship with Don Wilson, who's the founder of DRW. We think he's, like, you know, top of the list in terms of, you know, smart people, practitioners in the space. He's very passionate about it. He'll say very, you know, very clearly from his perspective, ultimately, all financial transactions will wind up on-c hain within the next five years. Then he'll say, like, "I've always been kinda, like, a little wrong on timing." He might be wrong on timing to some extent, I think directionally speaking, he's onto something big.
You know, the challenge is not to say always around the kind of like the herding of the cats of it all. It's just getting everyone online and ultimately making the kinds of investments needed to move this forward. I think one of the reasons why we've connected with him really well is because of the, you know, of the reach that we have to the network.
He likes us, and that's certainly part of it, but more importantly, it's because we're able to go into BlackRock in probably a different way than a, you know, a Canton Network would on their own and really strike the right chords with firms like that and ultimately, you know, hopefully make that light bulb go off around the efficiencies that the market would have, you know, through a better, you know, better settlement cycles and things like that.
Your largest shareholder, LSE Group, has been in the news recently due to an activist shareholder. In addition to their governance role, they're also a partner in some trading solutions with Tradeweb and a key distribution avenue for your market data. Does LSE's ownership of Tradeweb make Tradeweb a better company?
You know, I think, you know, first of all, I would say this, like, I think, I think the relationship with LSEG is really good. You know, part of my job as CEO is to do a couple of things. One is to make sure from our perspective, we coordinate, collaborate, and communicate. That's like three Cs, coordinate, collaborate, and communicate with them, like, really, really well. I think we do that. The other thing, you know, to make an obvious point is to make sure that every single day we are a separately managed company. I am not surprisingly, like, really, really strong about that. You know, we are a trading business. We are a markets business.
From our perspective, having a partner like LSEG that can be a distributor of our data, we feel like is a great thing. You know, I think we can kind of close our eyes and, you know, maybe wonder where the world goes and think about what our strategy could be, like in a region like China, and then ask ourselves a question, you know, could we take a real advantage from kind of a London-based company in China as we look to move things forward there? I think that's like a pretty intuitive kind of place to go.
My other instinct is, you know, with my Tradeweb CEO hat on all the time, I feel like we're, you know, we're a really good company, and we're gonna be a really good company in low rates, high rates, you know, volatile markets, less volatile markets, ultimately with whatever the partnership structure that we wind up in. Feel really excited about kinda where our business is headed, you know, the progress that we've made as a company from my perspective, good stories, it's like in the past. The future, you know, just in terms of technology continuing to be applied to the markets that we are in, is quite bright. I'm feeling like, you know, directionally pretty amped and excited, you know, about where we're going.
Got it. Maybe time left for one or two more questions. Prediction markets are obviously a hot topic right now.
Yeah.
What's the opportunity to bring the prediction markets to the institutional world? 'Cause right now it's largely a retail product.
Yeah. It's interesting. I mean, you know, I think I'd mentioned this to you last night. I was at a dinner in November with Jeff Sprecher, right as they had done, ICE had done the Polymarket's deal. I was not to say like picking his brain 'cause I don't think you pick his brain like very easily, but I was, you know, intrigued by that. I kept thinking to myself a little bit from Tradeweb's perspective, living and breathing in kinda macro outcomes, there feels like there's some natural inclination for us, you know, around these marketplaces.
We were able to hook up with Kalshi and I think begin what I would say is the early steps around, you know, a partnership with them that I think will start to make an obvious point around data. I think, you know, the concept of our clients getting more sophisticated as they price risk is a one-way train. As they get more sophisticated pricing risk, are they going to look to incorporate the right kinds of prediction markets into their pricing algorithm? I would say so. You know, to make an obvious point from our perspective at Tradeweb, like all prediction markets are not, you know, created equally. There are some prediction markets that we are not the least bit interested in, there are some that we would be, you know, exceptionally interested as they have a financial construct to them.
I think you can talk about the pricing of risk. I think you can talk about the ultimately how data informs portfolio management. I think there's a natural kinda connectivity around that. Then to your point, does it ultimately evolve to a place where there's actual institutional liquidity in a variety of these marketplaces? I would say hard to know. I think a lot of smart people think that we might get there. You know, from our perspective, being willing to always place forward bets, I think in a smart way, we wanna make sure we have that forward manned. It's interesting.
When we made that press release, a couple of weeks ago, we got more inbound calls from some of our biggest clients asking for seminars, asking for opportunities to learn more about it. I think we placed the right flag in the right way, if this makes sense, with the right kinda company around this, we'll take it from there. The world evolves like very quickly on these things, and we wanna make sure that we're being obviously as thoughtful as possible on it.
Perfect. Think that's a great place to wrap up. Appreciate everybody for coming this morning, and thank you very much, Billy.
Thank you very much. Thanks a lot. Thank you.