All right, everybody. All right, welcome back to the 2025 Piper Sandler Global Exchange and Trading Conference. My name is Patrick Moley, Senior Research Analyst covering the exchanges, brokers, and trading companies. Last fireside of the morning, we have Tradeweb CEO Billy Hult. Tradeweb is a leading fixed income derivatives ETF and electronic trading platform. Company IPO'd in 2019. Billy's been CEO for a little over three years now. Thanks so much for joining us. Thanks for having me. Awesome. Appreciate it. We'll start off with one on the environment. It's been an interesting start to the year for fixed income volumes with all the tariff-driven rate volatility. How are you feeling about the business environment overall? I know you released your May metrics this morning, so maybe you can speak to that and maybe give an outlook for the rest of the year. Absolutely. I feel like this is like the Rich Repetto Conference. I know. It's like in my brain. It is. I'm used to seeing, obviously, Mr. Lutnick and Mr. Sifu here, and I kind of miss them. I know. I don't miss Chris Concannon, by the way. Yeah. I mean, I miss him just from a friendship perspective. I think they have an offsite. They have a board offsite. Okay. So. I tried. I was extremely oriented, obviously, around those two-week trading, two weeks of trading in April around Liberation Day. I was not surprised at how well Tradeweb performed in that environment. Very, very close focus on, and I tried to talk about this on the earnings call, very, very close focus on market function, particularly in the government bond market. The volatility there around the basis trade was significant. It was, I think, a strong indicator that the ultimate, the function of the market really held in very well. Maybe not surprisingly, as we've transitioned, kind of knock on wood, hopefully, into a different kind of environment today versus the stress and duress in the market in those two weeks, business has maintained itself, and we've had a very, very strong May, which is great news. There continues to be, obviously, headline risk in the marketplace. Credit volumes have rebounded well. From my perspective, when I take kind of like this half step back, I kind of say a couple of things just in general about the environment, which is like there still is this concept of debt markets continuing to grow. The central banks continue to play a lesser role in the markets that Tradeweb tends to be a leader in, and private sector intermediation is here. Those tend to be very good environments for our business. My general inclination, even though sometimes more challenging on our nervous system, that's the state of play. When I kind of take a half a step back, what I try to think about is the reality that the markets are more connected than ever. I think we've learned that sentiment is also connected in an interesting way, but the markets are more connected than ever. Technology continues to push that in that direction. As sort of an electronic marketplace that has the kind of scale and is in the market, the types of markets that we're in, I feel like in a straightforward way and truthfully in a humble way, I feel like we're in a little bit of a catbird seat around where these markets and this business is going. I'm feeling pretty good about it. Really, since you've gone public, you've done a great job growing the business, expanding market share across different asset classes. I think a lot of that has had to do with the fact that you're a multi-asset platform. As we sit here today, what do you view as the largest competitive advantages for Tradeweb? How do you really maintain these going forward as you continue to grow the business? Yeah. I mean, I'll answer that just again, like super genuinely. I feel like everybody knows Tradeweb as a technology company. And that's what we are first and foremost. I do believe that we are a technology company that really tries to live and breathe in the financial marketplace as partners in the markets. We are not, say this the right way, we are pragmatic. We're not delusional. We don't think that we have a more important relationship with BlackRock than JP Morgan does. I think we've been very good stewards in general of the reality that we sit in the middle between the largest banks in the world and their most important clients. We approach marketplaces in that light as a balanced approach. Deep down, my general instinct is with all the protocols and all the leverage and all the scale and the way that we have been able to kind of build out an institutional platform across all these businesses globally and then try to mirror it the right way around a wholesale marketplace. I think the strategic rationale about getting into the retail space, all of that stuff makes sense and it is really important. Ultimately, the secret sauce is really in understanding that balance. My general instinct is when other companies have gotten off balance in that approach, we have generally been able to accelerate into that opportunity. That is the lens that we try to bring into building these marketplaces as a real partner. I think you have to be, you try to be as external and as straightforward as you can be as you're doing that. I think with your business, people tend to focus on credit a lot, but rates is the foundational piece of the business, over 50% of your revenues today. Can you talk about your position in rates and touch on some of the things that you're doing to push the market forward electronically, specifically in swaps, which you continuously highlight as a big opportunity? It's only 35% electronic today. What are you doing to kind of push that forward? Yeah, it's a combination of probably really two things. It is continuing to bring into market what we think about as micro trading protocols that ultimately mimic real risk orientation trades. In 2025, there are still a couple of reasons why my biggest competitor, and I made the joke about Chris, but we're friends. Chris's biggest competitor and Bloomberg's biggest competitor is the phone. There's a reason why. That's because there are types of trades that fit the eye of an end user picking up the phone and doing a trade that way. Now that you know that, what are you doing about it, really? What we try to do is kind of launch these micro protocols. An example of that from our perspective would be a request for market protocol that we launched into global swaps that continues to do really well. We have to continue to market that out to our clients. That's the concept of one end user being able to go to one bank, ask that bank for a two-sided market without revealing the direction of the trade, getting back a level inside of a bid-ask, and then the expectation is the client will do a trade. Sounds all like interesting stuff. That's how a lot of phone business gets done or Bloomberg messaging gets done. We try to electronically replicate that flow as much as possible and then market the heck out of it. It's done very well for us. The second thing is the AIEX story, the concept of how bigger and more sophisticated clients are continuing now to engage with liquidity algorithmically in the market where very large trades get broken down into smaller trades. That is a one-way kind of momentum piece of where we're at. It is still the concept of fine-tuning and working with your clients around the parameters of how they engage with liquidity and also continuing to market the heck out of AIEX across the board to our clients. Those are going to be two big engines, the concept of micro protocols plus the concept of algorithmic engagement with liquidity. From my perspective, you're off to a good start when you're kind of leading it that way. That is a big focus for us. We've seen more, I guess, on the credit side here more recently, but some of the larger alternative liquidity providers getting into the space. We're going to talk to Jim Esposito from Citadel Securities later. They are trying to get into credit more and kind of take some of that mid-tier bank liquidity. I would assume it would eventually be placed on electronic rails. How do you think about those participants coming to the market and what it could mean for your business? I like Jim. I think it's good. I mean, I really think it's good. We've seen sort of the impact of a firm like Jane Street in credit. That's a well-known story for a company like that to arrive by no means out of nowhere, but maybe by, in a certain way, out of nowhere inside of the fixed income landscape not that long ago and be able to sort of make an impact the way that they have is pretty extraordinary. I think Citadel's going about it a slightly different way, but their impact is also going to be significant. If you think about it, they arrived, obviously, in global swaps and global governments. Now they're looking at credit. My instinct is they're going to keep kind of moving in marketplaces that are robust and interesting to them. We have a kind of case study kind of developing of a best-in-class market maker with all of the skills around kind of anonymous market making in equities or equity options at a moment in time where, obviously, machine learning is at its kind of highest. The odds of them not being able to apply all of the things that they've done exceptionally well in that domain into this new domain, I mean, I think I wouldn't short their ability to succeed. I think that's all cool. My general inclination is that they do something else, which is as they've arrived in this kind of maybe I would describe it this way. I don't know if Jim would, but I would describe it this way is as they've kind of arrived in this kind of tier almost directly below either the four or five biggest kind of traditional market makers, they've put everyone on notice. If you have been playing kind of stall ball or four-corner offense in basketball, or you've been like, "I hope this electronic thing kind of goes away a little bit, and it's okay for a little part of my business, but not the other part," if you've been a little cutesy on the kind of evolution of all of this, it's one thing to be cutesy when there are firms that are not as formidable as you are behind you. It's another thing to be cutesy when you have a leading firm like that that is extremely reliant on best-in-class technology with those kinds of ambitions coming up behind you. That's no longer such a great kind of play. I think from my perspective, and I say this a little bit pragmatically, it's made some of those conversations, some of the innovations, some of the pushing that we've had to do around a little bit of the historical resistance a little bit easier. That's an interesting kind of knock-on effect of having firms like Jane Street or Citadel. There are going to be more, by the way, but having firms like Jane Street and Citadel aggressively out there and making ambitious moves into the core domain of the historical four or five banks. One of the areas that those types of market participants I think have found useful is, or protocols is portfolio trading. I think that's driven a lot of your, or maybe I shouldn't say a lot, but it's driven decent growth and aided your growth in growing the credit market share. How are you feeling about your position in portfolio trading today, the advantages that you have, and do you expect it to continue to kind of help you drive growth there? Yeah. Most interesting when you asked the question about that sort of like, "What's the competitive moat thing?" I answered it very genuinely around understanding the balance. I think portfolio trading fits that almost perfectly. The motivation behind kind of portfolio trading from my perspective was really almost twofold. Firstly, we understood very well, I think, that the biggest, most important buy-side clients ultimately wanted liquidity. The concept of them facing off with their competitor, Fidelity facing off with Vanguard or Wellington facing off with BlackRock, was a reality of a lack of liquidity in the marketplace. It wasn't like, "That has to happen." Once we decided that, or once we understood that, the question was, "How do you build a protocol therefore that helps these clients achieve the kind of liquidity that they need?" If these bid-lists and offer-lists are only getting 40% responses and this whole thing is a pain in the neck, how do you figure out a protocol that actually gives them an all-in level and now they have liquidity on their big giant bid-list or offer-list? That is a kind of practical way of thinking about it. We also really wanted to bring the banks back, really wanted to bring the banks back. That was like a real motivation for us, which was like understanding that kind of all-to-all trading, or Chris would say open trading, kind of created truthfully the worst-case environment if you are one of the leading banks, which is like it's not about markets getting more transparent. It's actually about kind of like me getting disintermediated from my biggest clients. That's the true sort of big challenge. Once we again kind of realized that's the big challenge, now how do you reset that? Portfolio trading became in a very simple and straightforward way the way that we brought back Citi and J.P. Morgan and Morgan Stanley and Goldman Sachs into the electronic mix in credit going forward. I do think, and I say this hopefully the right way, I do think the credibility that we have around having done that pays off big time down the road. Continue to maintain a strong leadership position in portfolio trading. I think there's going to be, again, I think everyone's eyes are open about how important it is. The way portfolio trading held up during that duress in the market around those couple of weeks in April that I described, I think is a very strong story. We expect more competition, but we do feel very strongly that this special sauce thing that we bring to the table around really the connectivity, not just with the buy-side, but with the banks is a powerful combo. Speaking of the banks, you recently began introducing subscription fees and increasing minimum floors for some of the dealer clients. How should investors think about this and where are you at in terms of the overall evolution of this pricing model? Yeah. I think maybe let me see if I can describe it without confusing everyone. Sometimes I confuse myself on this one, but I'll try. A bunch of years ago when we were kind of getting into the credit business, I remember spending time with a couple of the really important Boston asset managers on the credit side and getting very, very ultimately very, very good advice, which was, "Hey, Billy, if you try to do exactly what your competitor does in this space and charge us less, you're going to be back in like two years being confused as to why that didn't work." Because you got to do something kind of different and you got to do something better and you have to create a real efficiency for me to really pay attention to you in credit. I heard that and I sort of listened to that, luckily. It was also assigned to me that a price war or just going to the lowest kind of fee is ultimately not a great strategy because the client base does want you investing on solving real problems for them. What I have been kind of oriented to is making sure that Tradeweb, with all of its complexity, sort of makes sure that we protect what I think about as the real pot of gold in the credit space, which is the client-dealer side, and then really the ability to extract revenue from the buy-side as we continue to enhance their workflows in good ways. We are not kind of touching that piece of our business model, which I think is probably the most important kind of comment I can make. With the dealers, understand this, it's two things. One, we have a very strong leadership position on the wholesale side where the banks face off with each other and offset risk. We will do things in that space given the leadership role we have to manage fees. We're kind of smart about doing that and pragmatic because we want them arriving. I said they are partners. They are partners, but you still have to do the right thing. We want them in the institutional side really arriving leading edge for us. We want to be able to put in some kind of baked fees with them in ways that kind of always work for us. I think without sort of getting overly exact, I think the overall kind of fee-per-million story in credit from my perspective will continue to improve. I think we've made some changes in ways that work for us, and I think you're going to see some good outcomes from there. In terms of the evolution, you think you're, are we still early on? Are we kind of through the discussions with the dealers in terms of? Yeah. We're through them, and I think we're going to wind up—I think we've wound up in a good place. Okay. That would be my comment. Moving on to digital assets, we're just up here with Don Wilson. He was talking about tokenization a lot. He founded Digital Asset. They have the Canton Network. You've announced initiatives with the Canton Network. What are your overall thoughts on tokenization, I guess, Canton specifically, and what role do you think Tradeweb plays in the tokenization story? A couple of things on that one. It's interesting. I'll start by saying it kind of this way, first of all. I would say as we were watching the sort of landscape develop over the past kind of maybe just start with the last 12 months, the initial approach we took, and this probably wouldn't surprise anyone in the room, was like, "Let's stay open and let's play a little kind of like Switzerland on the guardrail thing. Who's going to be the winner? We're not really sure who are going to be the winners. Let's make sure we're talking to everyone. Let's code up. Let's not be short a change that happens in the marketplace, and let's be kind of smart about this." I think that's ultimately like a pretty sensible approach. We wound up, I think, in a really interesting way, maybe like six months ago, taking a little bit more of an aggressive and proactive approach around really thinking to ourselves, "Who actually is going to be the winner? Who do we think actually is going to be the winner? And how do we actually not just kind of play along from making sure that we've covered all bases, but how do we actually partner with the winner?" I've known Don for a while. Everyone knows, including Don, how smart he is. He's a super smart guy. My instinct is not to say that we overly bet on the jockey versus the horse, but my very strong instinct is he's the right kind of person to partner with in the space. We're pretty well partnered with canton. Don, I think we do a good job of really being able to bring in maybe some, as you think about the scale that you need to make these networks really work, I think we are in pockets of the marketplace, a good company to go in and talk about the benefits and help him on some level build out that network. I'll kind of say it to you this way because as everybody knows, government bonds was the first marketplace that Tradeweb was in way, way back when, and we are the leaders in that space. We want DRW's business. It's like, "Let's do stuff together. Let's partner. Let's work on this outcome. I'm not afraid to try to, even at my age as a CEO, I'm not afraid to kind of take out the tin cup and ask for some business a little bit. Sure. Sure. Sure. Let's end on one on capital allocation. You've been relatively active in the last few years from an M&A perspective. How do you think about capital allocation and your appetite for M&A here as you think about opportunities across the business? A few things on that, I would say. I would say feeling extremely confident about our organic business and our organic growth. Sometimes people can kind of go down the M&A road as a substitute for the business kind of growing. That is not where we are, and that is not my mindset at all. That being said, I would say strong business momentum gives you the credibility to think about things bigger around M&A. I think doing a couple to kind of three deals in a couple-year period of time, doing them well, hopefully having the strategic rationale work, being able to show the integration around that, I think that also gives you kind of credibility. It is like business momentum. There is the sort of a little bit of the DNA now of a company like Tradeweb, which has largely arrived here organically, starting to do more deals, smaller deals, but more deals that work for us, a pattern, a little bit of pattern recognition. I think we're in an interesting spot to look at something bigger. It has to fit. When I say it has to fit, it has to bring something really interesting to the equation for us, which generally is about a network that we would have a harder time kind of accessing. I say this again very strongly because people kind of are starting to get to know me a little bit. The culture piece of that is a big part to me, finding that cultural fit that winds up working. So many deals, I think, go badly on cultural mismatches. Those are not kind of like just words out of my mouth. That is a very strong feeling that I have in terms of making sure that you are kind of checking the right boxes around that. We are going to be looking at things, I think, bigger with a lot of ambition, but also obviously very, very selectively in a way that has to work. All right. I think that's a good place to end. Billy, thank you so much for joining us. This concludes the morning sessions. We're going to be over in the ballroom across the hall for lunch, where we'll hear from our keynote speaker, Acting Chairman of the CFTC, Caroline Pham. Thank you.