I'm Patrick Moley. I'm a senior research analyst covering the exchanges, online brokers, and trading companies. Our next guest is Tradeweb CEO Billy Hult. Tradeweb is a leading fixed income derivatives and ETF electronic trading platform. The company IPO'd in 2019. Billy is in his second year as CEO, but's been in a variety of roles, I think, since 2000, so. Yeah. Thanks for joining us. Thanks for having me. We've been talking about the macro a lot with people this year. You know, your business has been firing on all cylinders. Revenues, on average, I think in the last two quarters are up around 25% on average year- over- year. Can you talk about what you're seeing across asset classes, across your client channels, and, you know, what's driving this growth? And then maybe also, you know, what are your expectations heading into the back half of the year? Sure. Thanks for having me. I feel like I'm cheating on Rich Repetto. Yeah. He's somewhere back there. Very, very awkward. I kinda like you better. I don't know. Yeah. I hope Rich heard me say that. A lot of people say that. Yeah. It's true. Let me be the first of many to agree. Yeah. Thanks for the question. You know, we are, I think we are kinda hitting on all cylinders, so I appreciate the, the frame on that. As you know really well, we went public five years ago, a little bit more than five years ago. We've doubled our revenues in the last five years, 50% of that growth coming from non-rates products, right? Tradeweb has transformed itself from being, you know, a company I think that everybody knew of as a really strong rates platform to a global marketplace. And that's kinda the journey, you know, that we're on. We are continuing to kind of push all the buttons, I think, to continue to define ourselves as a global marketplace. For sure, we think the environment, you know, has been kinda quite good for us. As you know really well, you know, when you're running a company, and when you're a senior person at the company, you tend to focus first and foremost on the things that you can control. We're, you know, hyper-focused on our clients. How do we solve for, you know, our clients, you know, time and money are the things that matter the most to our clients. We lead with that sort of external orientation around our client base. We think at the end of the day, I think in a sort of interesting way, multi-asset class trading is the right, is the right lens to define a marketplace by. When I think about the environment, what I would say to you, with a sort of tense, nervous system election coming up, you know, global debts are rising. I think the Fed is playing, you know, a lesser role in the marketplaces that this company kinda operates in. Private sector intermediation is back in vogue in a big way. I think as I describe all of that, those are very good outcomes, you know, for our business. You know, to start with, from us, what you get is a relentless execution, and we never kinda rest on our laurels. We are very excited about the second half of the year and obviously the future going forward. Maybe building off that and talking about some of the competitive advantages you have with the multi-asset class model, can you talk about those competitive advantages, how sustainable those are, and how you can kinda. Yeah. Leverage those over time? Yeah. No, you earn those competitive advantages. The way I kinda think about it is we do not have a patent like on anything, right? It is, you know, we are a technology company that lives and breathes and operates in the financial service business. When I say that, what I mean is we understand, I think, the balance around all of these businesses that we are in, the very unique balance that has to kind of exist in the businesses. I have made this point before. There have been many times, you know, over the years where, you know, I have been, for example, at PIMCO in Newport, California, waiting in the lobby for like three hours and then going up the stairs, going up the elevator to meet them. You sometimes wind up with a great idea at the end of that meeting. By the time the elevator hits the lobby, you realize that idea does not work because there is no way that the Goldmans, the JP Morgans, and the Morgan Stanleys are gonna go for that idea, right? The balance around all of this is exceptionally important. I think as a company, we have understood that for a very long time. I would honestly say amongst almost everything, that has probably been our single most important kind of competitive advantage, really understanding the ecosystem of the markets that we live in. These are big, important, real players. As good of a relationship that I might think I have with PIMCO, I can guarantee you Goldman Sachs and JPMorgan and Morgan Stanley have a much bigger, more important relationship with that company than I do. Understand where you are in the totem pole. Sure. Let's dig into some, the specific asset classes. You mentioned rates. It's kinda the foundational business. Still about 50% of your revenues. Yeah. Can you maybe touch, you know, just on how much the macro environment has meant for that business recently? We've seen, you know, really strong volumes there, especially in swaps. Yeah. and then maybe also, can you just touch on the things that you're doing to kinda push forward electronification in those markets? Sure. Macro environment's, you know, been good. Hasn't been perfect, perfect, but it's been good. It's certainly been a very good environment to be, you know, in the global government bond business. It's certainly been a global, a good environment, you know, to be, in the global interest rate swap business. I would say 50% of the growth that we've had in swaps has come from what I would describe to you as like our organic initiatives, right? Like how we've built micro trading protocols that have fit our customers' eyes. Again, that's that concept of, you know, focusing on what you can control. That it hasn't been perfect, right? Other businesses that we're in, like TBA Mortgages, I think are gonna have, you know, better days for us. It's a great franchise and a great business for us. I think that kind of business will have better days for us as we get into a little bit more of a lower rate environment when we get there. Maybe just real quick before we switch over to credit, the SEC's, you know, rules on central clearing, the central clearing mandate. Can you talk about, you know, the impact you expect that to have on your business? I know there's this notion that it could, you know, force a lot more volumes to the futures market. Maybe you could talk about the ways in which you're sort of approaching that in your strategy. I mean, you know, generally speaking, I think we've done as a company, you know, I say this like humbly, I think we've done a good job sort of navigating regulation for a long time, whether or not we're talking about, you know, the entire derivatives market and the SEFs that were created. We are viewing central clearing as a positive thing for our business. The proof is always in the pudding. I understand kinda eyes wide open your question. I do think that as it winds up becoming a part of the day in and day out business, you know, the very important market participants who are, you know, what we describe as the PTF firms, the market makers in the wholesale world, need to be incentivized the right way to continue playing a large role. We think that's gonna happen. Love the concept ultimately over time of certain types of buy-side clients, not only accessing liquidity in a disclosed way. Hi, I'm Brevan Howard. Please offer me $25 million five-year notes. We think that there's a model going forward where that client wants to access liquidity in spots in an anonymous way because of the fact that Tradeweb is in obviously the institutional space, but also the wholesale space. We feel like from a market structure perspective, we're kind of set up very well to take advantage of, you know, of where this is going from a regulation perspective. Okay. Moving on to credit. You've had a lot of success there, especially in IG. You saw a record share in the first quarter. You've highlighted that you have more work to do in high yield. Can you speak to the impact, or, sorry, what do you think drives overall credit market share from here? Yeah. Thank you. I think we have done well in credit. Sure. Right? You know, there were moments in time where I was on this stage a few years ago where we were not really in the credit business yet. I think, you know, as everybody knows from the stats, I think there are aspects of where we are in credit where, you know, we are defining ourselves, you know, not just as a competitive force, but in certain ways, you know, as a leader. I think that is a pretty big deal. From our perspective, it was always, what can we do better? What can we do differently? How do we bring in this concept of multi-asset trading into the credit market? That was, you know, obviously starting with the concept of bringing in the government bond market with net spotting and net hedging. Portfolio trading, from our perspective, speaks to that kind of balance that I was talking about. How do you bring the banks back into the equation in a way that, and I heard Rich talking about it before, in a way that, you know, open trading on some level disintermediated the banks from their biggest clients. We think it's important to bring the banks back into the equation. That's real balance. I think, you know, that's been a big part of our success there. I've said this before. My very strong instinct is that, you know, what Tradeweb focuses on, what MarketAxess focuses on, what Bloomberg focuses on is always about, you know, the buy-side being proactive and the banks being reactive. I think this next wave of growth, specifically in credit, if you think about what's happening to your point about regulation, you know, with Basel, for example, I think the next leg of growth is really gonna be about, how do the dealers get much smarter and more efficient about balance sheet axes? How do they get their most important types of transactions to their most important clients in a streamlined, efficient way? How do you do more with less? My instinct is that's a big, wave of where the next growth is headed. I think because we've been able to kind of like achieve that balance thing, we're pretty well positioned to be that kind of partner on the next leg. You know, we're gonna have to work hard for it. Sure. I wanna touch on portfolio trading. We talked about it a lot with Rich. You're the dominant player in portfolio trading. How comfortable are you with your ability to kinda defend that position as the premier portfolio trading platform in the years to come? Not, not to be sort of like linguistic, but what I would say is, I guess, I think like very genuinely, like in a really good way, not comfortable at all. Because I think comfort is probably like the worst thing you could ever feel in markets that are constantly changing and constantly dynamic and where there are kinda stronger competitors coming forward every day. We feel really good about where we are, and we know exactly what we need to do in terms of the sort of communication needed with our strongest clients, how we're building, the ins and outs from a technology perspective of our portfolio trading and the things that we build really well. I'm confident but totally uncomfortable because I think the minute that you get comfortable, you drop your guard, and you don't become kind of as good as you need to be. Sure. Switching gears, emerging markets is one of those asset classes that still has very low levels of electronification. You have highlighted it as kind of the next asset class that you are focused on. Can you elaborate on that opportunity, your strategy, and any early signs of success that you have seen? Sure. You know, there's definitely, Patrick, there are kinda similarities in a broad way in terms of our perspective around EM versus where we were kind of, you know, with credit a while ago. From our perspective, that is it starts with the basic rationale that the market wants competition. You know, we grew up, I think as this room knows really well, we grew up sort of competing with Bloomberg basically day one in government bonds, mortgages, interest rate swaps, et cetera. We felt like the market wanted competition in credit. We had to show that we could compete. We feel like the market wants competition in the EM region, and we have to show how we're gonna compete. From our perspective, that's lead with strength. We've built out like a very formidable interest rate swap business in the EM region, and now we're kind of approaching credit in the exact way that you would expect us to, which is like, what are we really good at? That's gonna be a combination of, you know, portfolio trading and how we bring in, you know, efficiencies on net spotting, and things like that. We're putting kind of, you know, boots on the ground, where we think it's needed. Opened up an office in Dubai, spending time covering clients in Miami in the Florida region because we think that's important. I think EM, you know, sometimes you get asked the question, like, what's the biggest kind of priority over the next bunch of years and all that? It can be tough to answer. It's hard not to think that EM is a massive, massive opportunity, you know, for us because it's got so much of, I think, the things that remind us of credit. From my perspective, if we focus, if we execute, I think we're gonna make a ton of progress in EM. What do you think the ramp looks like there? It almost always ramps slightly differently than you kind of expect. Sure. I think the ramp is gonna be all around, I saw Rich, Rich Repetto in the background 'cause he always makes fun of the fact when I say like the light bulb, it's like the ramp is so correlated to the concept of that light bulb going off with the most important clients. I would be very surprised if it was not about another big leg of growth around portfolio trading, by the way, both in credit but also in EM. All right. Rapid fire here. We're gonna move to equities. You have a very interesting ETF franchise. Could you talk about the ETF business and how it fits in with the rest of the fixed income business? Sure. You know, great business for us. We're talking about sort of context here, I think, in a good way. You know, from our perspective, you know, Tradeweb was a rates business that wound up, you know, sort of going from government bonds to mortgages to, by the way, interest rate swaps, right? That's pretty, pretty obvious. MarketAxess in a great way was a credit business that wound up becoming first mover, into EM. That was a great move for them, and they did a great job there. ETFs was sort of like out there kinda in the middle a little bit. I do say with a little bit of pride, I think that speaks to, you know, the way that we connect with our external clients. This concept of us being a company that understands balance because we were the first mover in ETFs when we did not have a natural kind of inclination to go into that zone. Great business for us. Interestingly, from a kind of scale perspective, we basically use the same technology in ETFs that we used in government bonds like way back when. I think it is really, really important business for us to continue to thrive in because obviously the ETF market continues to grow in importance, but maybe in some ways, more importantly, the major ETF participants are so fundamentally important now in credit that we think it has given us an edge in credit as we become a very strong player in the ETF market. Great story for us, very, very focused to continue to grow revenue in ETFs. I think the concept of multi-asset class trading, but the concept of staying close to our ETF clients as they become more and more fundamentally important in fixed income is a big deal. Sure. All right. Switching gears, market data, I think this is kind of an underappreciated part of your business. You've guided to almost a 50% increase in those revenues between 2023 and 2025. A lot of that's been driven by the LSEG partnership. Maybe setting that aside, could you talk about the rest of the data offering, you know, what's exciting to you? What are the opportunities there? Yeah. It's like, it's, you know, you framed the question perfectly. I think we've been doing really good deals that work for both Tradeweb and LSEG around kinda straightforward monetization of market data, and we're really comfortable, you know, with that. I think that's gone really well for us. On the more sort of maybe, maybe more complex, sophisticated side, we wanna make sure that we continue to monetize that on our own, and we're doing that really well. I think we're putting a lot of investment into that because we think there's a ton of upside to continue to do that. Most important thing, though, besides those first two statements, is probably the point around, you know, data is going to continue to drive more sophisticated execution going forward. We are gonna be absolutely relentless in terms of how we apply data into trade execution. You asked the question a little bit about kind of our competitive moat before. I think the way we think about the space in terms of how data gets integrated into, sort of the search for liquidity is a big, big deal. We are focused on monetization in a straightforward way of data. I say this in a very kind of, you know, blunt way. I think we understand our day job, though. Our day job is to run a global marketplace, right? We wanna integrate data the right way that where it really becomes the facilitator of execution that we wouldn't have had before. We wanna make sure as we're doing that, we maintain this balance thing that I was describing, and we set the rules of engagement in a way that works for the participants. The worst thing you can do about data is to implement it into a marketplace in a way that loses the trust of the participants. It's happened before. It will happen again, and it will never happen with us because we do bring that lens, I think, of, you know, sophistication in terms of how data needs to be applied into the market. Great. I think we have time for maybe one or two more. I wanna talk about M&A. Yeah. You know, you've leveraged the balance sheet and you're growing free cash flow. You acquired Yieldbroker, r8fin last year. You recently announced your intention to acquire Institutional Cash Distributors. What's next on the inorganic growth? Yeah, it's a totally fair question. We, you know, Sara and I, as sort of the end of 2023 occurred and into 2024, we really kinda said, "Look, we wanna get like a, a, a really good deal done." If you think about it, we've done basically, you know, three deals to your point in, you know, 16 months. Getting those deals integrated the right way, and executing on those deals is like a high-level, you know, priority for us. Last earnings call, Ashley, who we all love at Tradeweb, had sort of given me a little bit of like a note where he said, you know, on M&A, our hands are kinda full for the moment. I kinda scribbled it out because I just I don't think that's exactly where we are, right? Yes, we're gonna execute on kinda deal integration. We're used to having our hands full. We're a busy, busy company that sees a tremendous amount of opportunity in the space. Part of that opportunity going forward is gonna be M&A with the right rigor, with the right lens, you know, with the cooperation, obviously, of our controlling shareholder, of our majority shareholder, LSEG. We see some pretty interesting opportunity, you know, over the next 12 months. Momentum builds momentum. The better we're doing organically, we feel like to your very first point that we are kind of clicking on all cylinders. We wanna supplement that with the right kind of M&A, and we're gonna approach it that way. Are there any specific areas that you're maybe focusing on? Love the concept. One of the things that we loved about ICD was, you're tempting me to say something, but loving, you know, loving the concept of sort of expanding our network, getting into that kinda, kinda corporate treasury network, we think is a big deal. That's been an underserved network in terms of capital markets technology. We think there's more to do with that network. I'll kinda just leave it at that for now. All right. We got a couple more minutes. One of the things I've been getting more questions on recently is the Aladdin integration. Can you talk about, you know, how that's been going, once it's live, you know, what do you expect in terms of your customers now that are transacting with you? How much, how many, how much of that will be moved to Aladdin? Aladdin integration's going really well. It's a really important integration both for Tradeweb and at the top of the house for BlackRock. It's an interesting thing for us 'cause we can't control all aspects of the integration. It's like a, you know, it's a JV. It is going really, really well. We talk about, you know, you mentioned the, you know, the sort of expression that we can do better in high yield, which we can. Part of that is gonna be the further integration around Aladdin. We wanna continue to add more responders to our open to our all-to-all trading network, both in IG and high yield. I think the Aladdin integration gives us that sort of momentum to get there with that. That's a big priority for us, to continue to sort of integrate that, in an efficient way. We like doing nice things with BlackRock. Sure. I mean, to make an obvious point. We think that kinda works for us. We try to like make sure we stay on sides with them in terms of the development. You know, they've been a they've been an enormously important client of ours, you know, for a long time. Sometimes things kinda boil down to very basic stuff. Very good. I think we're out of time, but Billy, thanks so much for joining us. Thank you for having me. Yeah. Appreciate it very much. Thanks.