Tradeweb (TW) Q2 2025: International Revenue Jumps 41% as Electronification Broadens
Tradeweb’s global expansion and product innovation fueled record quarterly revenue, with international markets and swaps leading the charge. Underlying the headline growth, the firm is accelerating investments in digital assets, infrastructure, and emerging markets, while managing margin expansion and navigating shifting market structure in core U.S. Treasuries. With double-digit volume gains across asset classes and a robust M&A and technology agenda, Tradeweb’s runway for electronification remains long, but execution in U.S. rates and cross-sell in ICD will be critical watchpoints for the second half.
Summary
- International Momentum Broadens: Overseas revenues and client engagement outpaced U.S. growth, deepening Tradeweb’s global footprint.
- Margin Expansion Amid Heavy Investment: Operating leverage improved despite increased spend on tech, digital assets, and headcount.
- Strategic Focus on Electronification: Management is doubling down on swaps, credit, and digital innovation to drive future market share gains.
Performance Analysis
Tradeweb delivered a record quarter, with revenues up 26.7% year-over-year, propelled by robust activity across rates, credit, equities, and money markets. International business was a standout, growing 41% and now representing 42% of total revenue, signaling successful expansion in Europe and APAC. Swaps, a core driver, posted 45% revenue growth, aided by a favorable mix shift and increased client demand for risk trading.
Margins expanded by 83 basis points, with adjusted EBITDA margin reaching 54.2%, despite a 24% rise in adjusted expenses as the company invested in technology, digital assets, and headcount (up 20%, with over half from ICD, institutional cash management business). Fee-per-million dynamics varied: swaps benefited from less low-fee compression activity, while credit and rates saw some drag from product mix and client migration to fixed plans. Cash flow remained robust, supporting a 20% dividend increase and ongoing capital flexibility.
- Swaps Outperformance: Global swaps revenue surged, with EM and APAC leading, and market share gains in higher-margin protocols.
- Credit Innovation: Double-digit revenue growth in credit, led by automation and product expansion, despite retail headwinds.
- ICD Integration: Money markets growth was tempered by episodic client cash drawdowns, but cross-sell and international expansion remain in early innings.
Equities and data products contributed incremental upside, with ETFs and equity derivatives both hitting record levels. The diversity of growth across asset classes and geographies underpins a resilient model, but U.S. Treasuries market share slipped due to a mix shift back to voice trading amid volatility—a key area for future execution risk.
Executive Commentary
"We set a new high watermark for quarterly revenues once again, surpassing the record we set in the first quarter of 2025. This strong momentum propelled revenues to exceed $1 billion in the first half of the year, and we expect 2025 to shape up to produce another year of double-digit revenue growth."
Billy Hult, Chief Executive Officer
"The scalability and variable nature of our expense base allows us to continue to invest for growth and grow margins. We have maintained a consistent philosophy here. Adjusted expenses for the second quarter increased 24%... Given the strong environment to invest for long-term growth, during the second quarter, we continued investments in digital assets, consulting, and client relationship development."
Sarah Ferber, Chief Financial Officer
Strategic Positioning
1. Global Expansion and Diversification
Tradeweb’s international strategy is delivering, with Europe and APAC both posting over 35% revenue growth, and engagement from North American and Asian clients trading international products up 15%. Product breadth is expanding, with swaps, ETFs, and repo driving growth across regions, and the ICD business extending its reach into new geographies.
2. Electronification and Product Innovation
Electronification—the migration of trading from voice to electronic platforms—remains the core growth engine. Swaps, credit, and ETF protocols like AIX, RFQ (request for quote), and portfolio trading all saw record adoption, with automation driving higher average daily trades and block market penetration. Innovation in micro-protocols and cross-asset workflows, especially in complex trades, is a strategic priority to recapture U.S. Treasury share and deepen client stickiness.
3. Technology and Digital Asset Investment
Management is accelerating investment in digital assets, including partnerships in tokenization, stablecoins, and distributed ledger infrastructure. The Canton network, Securitize, and other strategic ventures position Tradeweb at the forefront of the digital fixed income ecosystem, aiming to be the go-to venue for secondary trading in digital assets.
4. Capital Allocation and M&A Discipline
With $1.6 billion in cash, Tradeweb remains positioned for opportunistic M&A, targeting deals that expand the total addressable market and reinforce network effects. Management emphasized disciplined integration and operational scaling, with recent acquisitions (Yieldbroker, RateFin, ICD) now fully absorbed.
5. Margin Management Amid Growth Investment
Operating leverage is evident, as margin expansion continues even as headcount and technology spend rise. Management expects modest further margin gains in 2025, balancing near-term investment with long-term profitability.
Key Considerations
Tradeweb’s quarter highlights both the breadth of its growth and the complexity of its execution environment. The company is simultaneously scaling new products, expanding globally, and investing in digital transformation, all while navigating shifting market structure in core franchises.
Key Considerations:
- Global Revenue Mix Shifting: International revenues now comprise 42% of total, reducing U.S. concentration risk and opening new cross-sell opportunities.
- Swaps and Credit as Growth Engines: Both asset classes are benefiting from increased automation and broader protocol adoption, with swaps in particular showing outsized EM and APAC momentum.
- ICD Integration Still Evolving: Money market volatility impacted balances, but retention remains high and cross-sell efforts are underway; full synergies are not yet realized.
- Margin Expansion Despite Spend: Investments in tech, data, and digital assets are being absorbed without eroding profitability, reflecting scalable cost structure.
- Market Structure Shifts in U.S. Treasuries: Share loss due to a temporary shift back to voice trading highlights the need for continued innovation in complex and risk trades.
Risks
Tradeweb faces execution risk in recapturing U.S. Treasuries market share as volatility drives clients to voice trading for complex and risk trades. Fee-per-million pressure from product mix shifts, dealer migration to fixed plans, and episodic client behavior in ICD could weigh on near-term revenue. Heavy investment in digital assets and technology carries integration and ROI risk, while regulatory changes and macro volatility may impact trading volumes and client engagement.
Forward Outlook
For Q3 2025, Tradeweb guided to:
- Accelerated investment in technology and digital assets, with a $5 million increase in non-comp expense run rate beginning in Q3
- Second-half occupancy expenses to rise 40% YoY due to NYC headquarters move
For full-year 2025, management raised adjusted expense guidance to $1.0–1.05 billion and expects:
- Adjusted EBITDA margin to exceed 2024 levels, though expansion will be more modest
- Master data agreement revenue with LSEG to reach $90 million, up 10% YoY
Management cited double-digit volume growth trends across swaps, mortgages, European government bonds, and global credit as tailwinds for the rest of the year, with July average daily revenue tracking 20% above prior-year levels.
Takeaways
Tradeweb’s Q2 performance underscores its position as a global leader in electronic fixed income trading, with broad-based growth, margin expansion, and strategic investment in future platforms.
- International and swaps growth are powering revenue diversification, reducing reliance on U.S. rates and opening new market opportunities.
- Execution in core U.S. Treasuries and ICD cross-sell remains a key watchpoint, as market structure and client behavior shift with volatility.
- Investors should monitor the pace of digital asset adoption, integration of recent acquisitions, and the ability to sustain margin gains amid heavier investment in technology and headcount.
Conclusion
Tradeweb’s record quarter was driven by global expansion, swaps innovation, and ongoing investment in digital assets and infrastructure. While execution risk remains in key U.S. franchises and integration of new businesses, the company’s broad-based growth and strategic discipline position it for continued leadership as fixed income markets digitize.
Industry Read-Through
Tradeweb’s results highlight the accelerating global electronification of fixed income markets, with international venues and protocols gaining traction as clients seek liquidity and automation amid volatility. Swaps, credit, and digital asset infrastructure are becoming critical battlegrounds, with data, workflow, and API integration differentiating winners. Competitors in electronic trading, market data, and post-trade settlement should expect continued fee pressure, margin expansion, and technology arms race as the buy side and dealers demand more seamless, multi-asset solutions. Voice trading’s persistence in complex and risk trades signals ongoing opportunity for innovation, but also highlights the limits of electronification in certain market regimes.