Tradeweb Markets Inc.TWNASDAQ
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Operator: Good morning, and welcome to Tradeweb's Third Quarter 2025 Earnings Conference Call. As a reminder, today's call is being recorded and will be available for playback. To begin, I'll turn the call over to Head of Treasury, FP&A and Investor Relations, Ashley Serrao. Please go ahead.
Ashley Serrao: Thank you, and good morning. Joining me today for the call are our CEO, Billy Hult, who will review our business results and key growth initiatives and our CFO, Sara Furber, who will review our financial results. We intend to use the website as a means of disclosing material, nonpublic information and complying with our disclosure obligations under Regulation FD. I'd like to remind you that certain statements in this presentation and during the 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 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, earnings presentation and periodic reports filed with the SEC. In addition, on today's call, we will reference certain non-GAAP measures as well as certain market and industry data. Information regarding these non-GAAP measures, including reconciliations to GAAP measures is in our earnings release and earnings presentation. Information regarding market and industry data, including sources, is in our earnings presentation. References to year-to-date results on today's call mean results for the 9 months ended September 30, 2025. Now let me turn the call over to Billy.
William Hult: Thanks, Ashley. Good morning, everyone, and thank you for joining our third quarter earnings call. We delivered another strong quarter, surpassing $500 million in quarterly revenues for the third consecutive quarter. Year-to-date revenues as of the third quarter are up 21% or 17% organically, putting us on track for another year of double-digit revenue growth. We believe change is constant. The current macro environment is defined by historically low interest rate volatility, tight credit spreads and muted equity volatility. At the same time, geopolitical uncertainty and the rapid rise of artificial intelligence continue to reshape how we work and live. We've consistently thrived amid change, and we believe we're well positioned to keep doing so. From the emergence of decentralized finance to shifting regulatory frameworks, we believe our global fixed income platform and network put us in the catbird seat, helping our clients solve their real-world intangible challenges. While the pendulum may be swinging away from globalization, fixed income and ETF markets are becoming increasingly interconnected. Clients and major dealers are thinking globally and nonbank liquidity providers are expanding their global presence, bringing new technology and data capabilities to the ecosystem. As clients seek more time and cost-efficient ways to interact across markets, we remain focused on delivering innovative collaborative solutions that enhance liquidity and efficiency across the global fixed income ecosystem. Diving into the third quarter, despite muted volatility, strong client activity drove 13% year-over-year revenue growth on a reported basis. We produced strong third quarter revenue growth despite facing increasingly tougher year-over-year comparisons, especially in August, which last year defied the typical seasonal slowdown and was exceptionally active as macro growth fears grip the market and the yen carry trade collapsed. Our international revenues continue to scale higher delivering 25% year-over-year growth as our strategic initiatives in EM and APAC continue to pay off. We continue to balance investing for growth and profitability as adjusted EBITDA margins expanded by 54 basis points relative to the third quarter of 2024. Turning to Slide 5. Rates produced its second highest revenue quarter driven by continued organic growth across swaps and global government bonds, while mortgages produced record revenues. Credit growth was led by strength across munis, European credit and emerging market credit. Money markets revenue growth was led by the addition of ICD and aided by record quarterly revenues across global repos. ICD continues to build back balances post the April volatility that led to some large clients drawing down their money market fund balances to tactically buy back shares in the market and increase spending ahead of potential tariffs. ICD revenues were up 7% relative to the second quarter of 2025. Equities posted another strong growth quarter with revenues up 17% year-over-year, led by growth in global ETFs and equity derivatives. Other revenues grew over 50% as we see growing contributions from our emerging digital asset initiatives. Finally, market data revenues were driven by growth in our proprietary data products. We have reached an agreement in principle to renew the LSEG market data agreement, which is up for renewal at the end of October, for an additional 3 years striking the right balance between maintaining the integrity of our platform and commercializing our rich data sets. We expect this agreement will not only generate significant more revenue for Tradeweb, which Sara will touch on later, but it also maintains flexibility to grow our proprietary data business. We also see additional upside as we build more products to enhance the trading experience of our clients. Turning to Slide 6. This quarter saw a significant drop in intraday volatility from the off-the-chart levels seen in prior periods, specifically it was down 19% year-over-year and 30% quarter-over-quarter. All in, U.S. treasury revenues decreased slightly by 2% year-over-year as positive revenue growth across our institutional channel was more than offset by weaker wholesale trends, a business that tends to thrive when there is heightened volatility. One of the trends that has attracted a lot of attention this year is the rise of voice activity in tandem with, and not at the expense of, electronic trading. Year-to-date, electronic industry average daily volume saw a 10% increase year-over-year. We also saw a 26% increase in industry voice average daily volume. This distinction is very important. Electronic trading remains robust and should continue to rise, but we are operating with a continued paradigm of extreme market conditions, this time marked by unusually low volatility. This is driving more complex voice-centric package trades in the market, a mix shift that weighed on our U.S. treasury market share, which stood at 22% in the third quarter. However, our share is rebounding. It increased quarter-over-quarter with September reaching the highest levels since March of this year. In addition, this week, we did our first package trade with a bespoke swap versus the U.S. Treasury. This is an entry point into a world of more complex package trades across the deep liquidity we have in U.S. treasuries and swaps. Our competitive position remains strong on a relative basis, we exceeded 50% for the sixth consecutive quarter in institutional U.S. treasuries versus our main electronic competitor. During the quarter, we expanded our dealer algorithmic execution capabilities. We expect additional global dealer algos to be onboarded in the coming months, further enhancing our unified multi-dealer and multi-asset platform. Finally, attacking voice packaged trades remains a main focus for the team, and we believe we have all the solutions in-house, especially with our r8fin asset. Turning to wholesale U.S. treasuries. Revenues were down 6%, mainly driven by lower volumes across our central limit order book, partially offset by growth across our wholesale streaming protocol. Wholesale continues to be a strategic priority as we focus on expanding our network of liquidity providers and strengthening our liquidity pools in alignment with our multi-protocol platform strategy. In equities, ETFs posted strong double-digit revenue growth as we continue to deepen integration with our clients. A key differentiator with our ETF clients has been our AiEX automation solution with average daily trades increasing over 90% year-over-year. While AiEX is deeply penetrated across European ETFs, we are now seeing strong adoption across U.S. ETFs with AiEX average daily trades up 70% quarter-over-quarter. Our efforts to broaden our equity presence beyond our flagship ETF franchise continued to pay off with institutional equity derivative revenues up 16% year-over-year. Looking ahead, the pipeline remains strong as the benefits of our electronic solutions continue to resonate with our clients. Turning to Slide 7. Global Rates continue to deliver diversified revenue growth across an expanding range of products and geographies. Rates have been a core growth engine for us with year-to-date revenues up 23% year-over-year and averaging 16% annual growth since 2019 with international being a highlight. Even with our scale, the majority of Global Rates products still trade over the phone or chat. That's a significant opportunity. We are leaning into it by building more innovative electronic solutions that make markets more efficient, transparent and connected across swaps, government bonds and mortgages. We are pushing into new voice-centric markets like bilateral and multi-asset package swaps, specified pool trading and mortgages and packaged trading across global government bonds. Altogether, we estimate these initiatives to open up a revenue TAM of nearly $500 million annually. By capturing share from traditional voice trading and continuing to innovate with clients, we continue to strengthen our competitive position in Global Rates. Moving to Slide 8. We have spent years building our strong global interest rate swaps foundation, and it's paying off. Clients continue to shift more of their workflow from voice to electronic and we're right at the center of that change. What started as a regulatory push has evolved into a structural movement. Clients and dealers have never been so invested in building out more efficient workflow options for their voice flow. From 2019 through 2024, swaps revenues have grown at more than 20% on average. And year-to-date, we have accelerated to 40% year-over-year. Just like our broader rate franchise, the growth has been diverse, over 30% year-to-date revenue growth in European and dollar swaps, over 70% across APAC and our emerging market initiatives alone added over 500 basis points to our total swaps year-to-date revenue growth. We are seeing a client base that's deeply engaged, active, cross-currency and increasingly electronic. And while compression can sometimes mask the strength of the business, the underlying trend is clear. We continue to grow our overall risk market share. Even with all of that progress, the majority of swaps trading is still voice-driven, which means there's plenty of room ahead for continued electronification. Our team continues to innovate around that opportunity. We're expanding our presence in emerging market swaps, building multi-asset package swaps capabilities across our clear developed market currencies and making early headway in the bilateral swap space. Each of these initiatives opens new ways for clients to connect, trade and unlock efficiency on Tradeweb. Focusing on the third quarter, global swaps delivered record revenues driven by a combination of strong client engagement, a dynamic macro backdrop, a favorable mix shift towards risk trading and a 7% year-over-year increase in weighted average duration. Altogether, global swaps revenues grew over 30% year-over-year. Core risk market share, which excludes compression trading had a record, rising over 130 basis points year-over-year. Total market share declined from 22.4% in third quarter '24 to 21.2% in third quarter 2025, largely due to a significant reduction in European client-related compression volumes, which carry much lower fee rates. The third quarter highlighted the continued global expansion of our swaps franchise. We achieved record revenues across EM and institutional dollar swaps revenues, while European swaps revenues rose nearly 30% year-over-year. Our strong performance was supported by an 8% year-over-year increase in global active users. We continue to make progress across emerging market swaps and our rapidly growing request for market protocol. Our third quarter EM swaps revenues produced another strong quarter, while our RFM protocol also saw average daily volume more than double year-over-year with adoption picking up. You can see Slide 17 of the earnings presentation for our usual global swaps disclosure. Looking ahead, we continue to believe the long-term growth potential for swaps remains significant with just 30% of the cleared swaps market currently electronified, there is substantial runway to digitize workflows alongside our clients. Our clients have stayed very engaged given the fluid global macroeconomic backdrop, and we continue to partner with them to create better workflow solutions across a growing part of the cleared markets and make inroads into the uncleared swaps market. This month, we launched the first fully electronic swaption package trading protocol in the market, a major step forward in bringing transparency efficiency and 2-way pricing to a product that has historically traded almost entirely by voice. Shifting to Global Credit on Slide 9, low single-digit revenue growth for Global Credit was driven by strong double-digit revenue growth in both European credit and municipal bonds, which more than offset weakness in U.S. credit, where revenues fell year-over-year, mainly due to retail corporate credit revenues that were down nearly 30% year-over-year, primarily reflecting the better relative yields our clients were getting across money markets and munis. Automation continues to resonate with Global Credit AiEX average daily trades, increasing 5% year-over-year. U.S. credit remains a key growth initiative. We are focused on maintaining our leadership position in our pioneering portfolio and session trading protocols and increasing our block market share, perhaps most importantly, continuing to increase our RFQ share which we expect to be the #1 driver of revenue growth in U.S. credit going forward. Our deepening liquidity pool and continuously improving client experience is resonating as we attract more clients and experienced talent across the board. We achieved record block share for the quarter in fully electronic U.S. investment grade at 10%. Our volume growth was driven by continued adoption of our Portfolio Trading, RFQ and sessions protocols. Institutional RFQ average daily volume grew 13% year-over-year with double-digit growth in both IG and high yield. Our efforts to expand into RFQ are seeing continued signs of success with our IG RFQ share of overall TRACE up over 60 basis points year-over-year. Portfolio Trading average daily volume also increased over 10% year-over-year, with over 30% growth across international Portfolio Trading. During the quarter, we saw our largest line item portfolio trade at over 4,000 lines. Additionally, we saw our largest ever international portfolio trade at nearly $1.4 billion. We saw double-digit active user growth across the U.S. and international PT, and we continue to expect adoption of the Portfolio Trading solution to expand. AllTrade had a strong quarter with over $200 billion in volume with average daily volume up almost 10% year-over-year. Our all-to-all average daily volume grew over 35% year-over-year while sessions average daily volume rose by nearly 10% year-over-year. The team remains focused on expanding our network and increasing the number of responders on the AllTrade platform. We saw record responder rates across IG and we also saw strong ETF market maker participation across institutional credit with volume showing strong year-over-year gains. Moving to Slide 10. One aspect of the Tradeweb story that often doesn't get enough attention is how far we've come internationally. Over the past few years, we've built tremendous momentum outside the U.S. with international revenues growing at a 19% compound annual growth rate from 2019 through 2024. And so far this year, they're up more than 30% year-over-year. Today, over half of our overall revenue growth is coming from outside the United States and about 1/5 of that is from regions beyond Europe and the U.K., mainly Asia. Regions that were once viewed as future opportunities have now become meaningful contributors to our business. This success stems from the strength of our global presence and the deep relationships we've built with our international clients. Importantly, these clients aren't just engaging with Tradeweb for international fixed income products, they're increasingly turning to the platform for our home court U.S. products as well, underscoring the global reach and versatility of our offering. Building on the success of our international expansion, we've also seen strong early results from our emerging markets initiative, much like our broader international strategy. We've been leveraging our established developed market presence to drive growth in these regions, and we believe it is working. Traders in emerging markets are deeply engaged with Tradeweb and increasingly drawn to our multi-asset class model trading an average of more than 5 products on our platform. We're now pacing at over $100 million in annual revenue from emerging markets, nearly triple what we achieved in 2023. Yet even with this progress, we're only beginning to tap into a total addressable market exceeding $1.5 billion. Across emerging market swaps in particular, long-standing challenges such as geographic dispersion, pricing opacity and operational inefficiencies have traditionally made voice trading the default. That dynamic is changing. Tradeweb is helping to lead the shift towards electronification by providing clients with more discrete, transparent and efficient execution, innovations like our RFM protocol and AiEX are playing a key role in that evolution. Beyond swaps, we're also seeing encouraging momentum in emerging markets cash credit, where revenues are up more than 40% year-over-year. Last week, we announced the successful launch of the first electronic bond alternative trading system in Saudi Arabia, a foundational moment for a fixed income market structure in the Kingdom and a testament to our growing geographic footprint. The opportunity ahead remains significant, not only within global fixed income and ETF markets, but also as we continue to build brand recognition and expand our footprint across more countries. And with that, let me turn it over to Sara to discuss our financials in more detail.
Sara Furber: Thanks, Billy, and good morning. As I go through the numbers, all comparisons will be to the prior year period, unless otherwise noted. Slide 11 provides a summary of our quarterly earnings performance. As Billy recapped earlier, this quarter, we saw revenues of $509 million that were up 13% year-over-year on a reported basis and 11% on a constant currency basis given the weakening dollar. We derived approximately 42% of our third quarter revenues from international clients and recall that approximately 30% of our revenue base is denominated in currencies other than dollars, predominantly in euros. Our variable revenues increased by 11% and total trading revenues increased by 13%. Total fixed revenues related to our 4 major asset classes were up 28% on a reported basis and 26% on a constant currency basis. Rates fixed revenue growth was primarily driven by an increase in minimum fee floors for certain dealers and by the addition of dealers to our mortgage and U.S. government bond platforms. Credit fixed revenue growth was primarily driven by the previously disclosed introduction of minimum fee floors and the migration of certain dealers to subscription fees. Other revenues increased 52%, primarily driven by our digital initiatives. Specifically, we earned $2.3 million from our work with the Canton Network, where we are compensated in Canton Coins. This item will be variable quarter-to-quarter, reflecting fluctuations in the number of Canton Coins earned, Canton Coin prices and periodic tech enhancements for retail clients. Year-to-date adjusted EBITDA margin of 54.2% increased by 90 basis points on a reported basis when compared to our 2024 full year margins. Lastly, this quarter's GAAP results include a $15 million realized gain from the sale of Canton Coins. For the first 9 months of 2025, we also recorded unrealized gains of $50.6 million. As a reminder, realized and unrealized gains are included in GAAP EPS and excluded from non-GAAP adjusted diluted EPS. As of the end of the third quarter, we held approximately 1.7 billion Canton Coins with a fair value of approximately $56 million, which is recorded on our balance sheet under other assets. Moving on to fees per million on Slide 12, and I'll highlight of the key trends for the quarter. You can see Slide 19 of the earnings presentation for additional detail regarding our fee per million performance this quarter. For cash rates products, average fees per million were down 7%, primarily due to a mix shift away from U.S. government bonds, which carry a comparatively higher fee per million and a shift towards mortgages, which carry a lower fee per million. For long-tenor swaps, average fees per million were up 21%, primarily due to a decline in compression activity. For cash credit, average fees per million decreased 15% due to the migration of certain dealers from fully variable plans to fix plans across institutional and wholesale U.S. credit and a mix shift away from retail within the U.S. credit which carries a higher fee per million. For cash equities, average fees per million increased 1% due to higher fee per million in EU ETFs. And finally, within money markets, average fees per million decreased 4%, primarily due to a mix shift away from retail CDs, which carry a comparatively higher fee per million. Slide 13 details our adjusted expenses. At a high level, the scalability and variable nature of our expense base allow us to continue to invest for growth and grow margins. We have maintained a consistent philosophy here. Adjusted expenses for the third quarter increased 12% on a reported basis and 11% on a constant currency basis. During the third quarter, we continued investments in tech and communications, digital assets, consulting and client relationship development. Adjusted compensation costs grew 6%, driven by a 12% year-over-year increase in headcount and higher salaries, partially offset by lower accruals for performance-related variable compensation. Technology and communication costs increased 39%, primarily due to our continued investments in data strategy and infrastructure. Adjusted professional fees grew 6%, mainly due to an increase in tech consultants as we augment our offshore technology operations and build incremental scalability. This was partially offset by lower legal fees. Occupancy expenses increased 23%, primarily from increased rent due to the move of our new New York City headquarters, including duplicate rent of $241,000 in the quarter. Excluding duplicate rent, occupancy expense grew 18%. Adjusted general and administrative costs increased 30%, primarily due to a pickup in travel and entertainment and unfavorable movements in FX. Unfavorable movements in FX resulted in a $1 million loss in the third quarter of '25 versus approximately a $400,000 gain in the third quarter of '24. Excluding FX, adjusted general and administrative costs grew 19%. Slide 14 details capital management and our guidance. On our cash position and capital return policy, we ended the third quarter in a strong position with $1.9 billion in cash and cash equivalents, and free cash flow reached approximately $987 million for the trailing 12 months. Our net interest income of $19.8 million increased due to higher cash balances despite lower interest yields and included a onetime payment of $2.4 million related to interest income from a tax refund. With this quarter's earnings, the Board declared a quarterly dividend of $0.12 per Class A and Class B shares, up 20% year-over-year. Turning to guidance for 2025. We are tightening our adjusted expense guidance to $1 billion to $1.025 billion. In the fourth quarter, we expect a similar sequential dollar increase in technology and communication expenses as we are seeing this quarter driven by continued investment in platform infrastructure, AI and data. We expect to see continued double-digit growth in technology and communications through 2026 based off the fourth quarter run rate. We expect fourth quarter professional fees to see a seasonal pickup similar to the fourth quarter of 2024. We expect adjusted G&A to rise sequentially, primarily due to an expected $4 million in FX losses based on where current FX rates are coupled with the usual seasonal rise in T&E, marketing and charity. Lastly, we estimate fourth quarter occupancy expenses to increase by $1.5 million over the third quarter, primarily due to the move to our New York City headquarters in September, along with higher data center costs. All in, with these investments in FX-related impacts, we continue to expect our 2025 adjusted EBITDA margin to exceed 2024 levels although expansion will be more modest than last year as we support our current and future organic growth. As Billy mentioned, we reached an agreement in principle to renew our market data contract with LSEG for a duration of 3 years that will see the contract increase in value by 9% annually, effective as of November 1. We are still in the process of formalizing the contract and finalizing the cadence of revenue recognition, and we'll provide an update on our fourth quarter earnings call. In the interim, for modeling purposes, you can use $22 million in revenue from the LSEG market data agreement for the fourth quarter, which is derived using the current monthly implied rate for the third quarter for October and growing that by 9% for November and December. Now I'll turn it back to Billy for concluding remarks.
William Hult: Thanks, Sara. 2025 is shaping up to be another banner year for Tradeweb even as the markets present their share of challenges. We have a data-driven Fed that reacts to each new data point and that, in turn, is influencing how our clients think about risk and express it through our platform. Across our client base, a clear theme is emerging, what I'd like to call, mechanized flow. Put simply, our clients are becoming increasingly systematic and data-driven in how they trade and that evolution aligns perfectly with how our global platform is built. That said, we're in a period where the market feels somewhat on autopilot with the lack of fresh data that makes it difficult for our clients to war game and position effectively. Low volatility and limited data or near-term headwinds, not just for us, but for the broader market. Still, we believe the setup heading into 2026 is constructive. Volatility will normalize, data will return. And when it does, our clients will once again need to hedge and reposition their global books of risk. And importantly, the firm is not standing still. We are focused on what we can control, building innovative solutions across our clients' execution workflows to win market share from the voice markets. I remain incredibly proud of what we've achieved this year and confident in the opportunities ahead as we continue to partner with our clients to help redefine how the world trades fixed income. Overall, revenue growth is trending approximately 9% higher relative to October 2024, which was exceptionally strong given the election volatility. While overall revenue growth is lower than we expected, this growth is happening in an environment of low volatility, fewer data points and without the benefit of an election year. Our international business continued its strong revenue performance with October growth of nearly 20% year-over-year. The diversity of our growth remains a theme as we are seeing double-digit volume growth across global swaps, European government bonds, U.S. high yield, European credit, munis, China bonds, global ETFs and global repo. Our IG share is tracking below September levels, while our high-yield share is tracking above September levels. Finally, I would like to thank our clients for their business and partnership in the quarter and recognize my colleagues for their efforts that contributed to the strong quarterly revenues and volumes at Tradeweb. With that, I will turn it back to Ashley for your questions.
Ashley Serrao: Thanks, Billy. [Operator Instructions] Q&A will end at 10:30 a.m. Eastern Time. Operator, you can now take our first question.
Operator: [Operator Instructions] Our first question comes from the line of Chris Allen with Citi.
Christopher Allen: I wanted to get a little bit more on rate environment. Billy, as you noted, volatility in activity levels have been low. It sounds like clients are sitting on their hands to an extent. Just wondering, from your perspective, what potential catalysts are ahead that could spark volatility and improve activity. Also, you noted the lack of data impacting activity. Is there any way to gauge the impact of the government shutdown and the lack of releases on activity levels?
William Hult: Yes. Chris, how are you? Thanks for the question. Speaking of volatility, I want to congratulate you on surviving your golf round with Sameer. October, I think, was like the lowest rate volatility since 2021. So your question is kind of interesting and I think timely. And Chris, obviously, when we kind of think about it to make an obvious point, our clients rely on data to make forward decisions starting with where to deploy capital, how do you position risk? When are you kind of leaning in? When are you risk on? And when are you kind of risk off. So your question is a good one. And I said this in my closing remarks a little bit, so let me get to it. Like I think for sure, from our perspective, part of the muted activity -- and I think mute is the right word. Part of the muted activity, I think we've seen recently is tied to the lack of data points. That's obviously directly correlated to the government shutdown. Many of our clients, as you know, now are kind of more systematic and they rely on this kind of like they rely on as a war game and shape the forward strategy like real precise data, market makers and hedge funds have become very important to the financial ecosystem. And I do think we've done a really good job of being like very front-footed on that trend. And so data is their fuel and there's no other way for me to describe that. So I think without overdoing it, I think they have been a little bit in this kind of like wait and -- wait and see mode as they traffic through the U.S. markets. I think the Fed, in an interesting way is maybe -- I don't want to say flying blind, but maybe a little bit -- I think there was a perception that they were a little bit on kind of autopilot. I think something around that in an interesting way kind of naturally maybe sets up for surprises. And I think yesterday is a really good kind of indication around how kind of surprises kind of seep into the marketplace. So I think the rate cut announcement yesterday was accompanied by some new perspective, some new data. I think that interestingly, did kind of spark our markets. We saw a very big selloff on the short end of the curve yesterday. The Fed announced that it will end QT, which we believe pretty strongly is a positive for our business. And I think they surprisingly raised questions about the pace of future cuts, which leads to this kind of activity around repositioning. So new data always sparks volatility. And I would say, looking ahead, we have growing, I think, descent within the Fed, so rate expectations and yield curve keeps changing. Reminder, as we look to the forward, midterms, believe it or not, time is going so fast, midterms are looming. I'll make this point very specifically. We know that this is a regime that, by no means, kind of flies below the radar and the geopolitical landscape continues to remain very uncertain. And so these are, from our perspective, all potential catalysts for volatility and activity. And so as I say all that, what I would say also, as you know very well, we operate a global business and its business, I would say, as usual, for our international clients, they are not being weighed down by data drought at all. So as we kind of reflect a little bit on the third quarter, even with volatility, roughly, I think it's roughly 20% below long-term averages. From my perspective, we still delivered positive revenue growth in institutional treasuries, double-digit growth across mortgages. I think that's an important comment. European governments, global swaps have done well. Big picture, trends of higher global debt push for greater efficiency, leveraging electronic trading continue. That's a really important kind of comment from me. And I think the recent move lower in rates has, without question, reinvigorated our leading mortgage business where we have significant market share and has been a flagship franchise for us for a long time. It delivered record revenues. Looking ahead, and I say this like very kind of clearly, I think it's a great time to be in the macro markets, global backdrop, you have moderate growth, using inflation, but also this kind of thing I said before, Chris, which is continued uncertainty and some structural challenges, tariffs on, tariffs off. We think we've been through move a little bit. I always say this very loud and clear, control what you can control. You know that we are not a company that remotely stand still. So the focus is always going to be on expanding the electronic pie, building new solutions, continuing to compete with the voice markets, grow our overall revenue wallet. Very proud that we launched. We had our first electronic swaption trade this month for U.S. multi-asset package trade continuing to innovate and be front-footed. So good questions, Chris, and appreciate it always.
Operator: Our next question comes from the line of Jeff Schmitt with William Blair.
Jeffrey Schmitt: Electronic market share for treasuries has been down in recent months, I think, under 60% or even 55% of industry volumes. What's driving that greater mix of voice trades? I think you've pointed out package trades in the past. Is that still the case? And do you see this as a structural issue? Or could it be more temporary?
William Hult: Yes, it's a really good question. And I don't see it structural, but let me get into it. I think your frame is a good one, and we say this all the time, and I've been really clear about this, like our biggest competition is the phone. It's the 1996 way of still doing business, not the 2026 way that the market will do business. And so when I think about sort of the holy grail of it all, it continues to be going after these kind of larger complex trades that continue to be transacted on the phone. Voice trading has always been a part of the U.S. treasury market, and there are certain strategies within the treasury market like basis trades and you mentioned it before, asset swaps, swap spreads that I would say have kind of historically lent themselves to more kind of 1996 kind of voice execution. They're often kind of more complex, multi-leg trades, larger notionals, and it's made it more kind of better suited for that type of activity. Interestingly also, and let me kind of comment again with a bit of bluntness on this because it sort of does tie together with lower volatility and that little bit of -- a little conviction on rate direction, I think the instinct that we have is clients tend to focus on sort of more arbitrage opportunities within treasuries or between something like treasuries and futures and swaps. And so I think the instinct is these tend to be large notional package trades that remain predominantly voice-driven for now. And I think we make a very strong point about saying for now because that's where a lot of the focus of that rates business is. And so yes, to your point, that has led to sort of parts of that market where voice volumes have been growing at a faster pace than the kind of straightforward kind of electronic flow that we live and breathe in. I think what I would say is from a good news perspective, and again, this kind of speaks a little bit to the focus that we have, I think the share around what you described kind of bottomed in kind of April and May. And I would say that we've been seeing, I think, a real kind of reacceleration of our share through September and into October. And I would say we expect that to continue. And then I kind of always kind of say like what's the big picture here. So kind of stepping back, I think the very strong instinct is always the advent of investment and new technology. It's a trend that has been unfolding for years. And it's -- like I would say, it's like hard to call kind of top around this continued expansion of electronification. We see it much as this kind of one-way train with a lot of room to run. We're going to continue to apply kind of AI around the AiEX pricing. We think the move into the kind of how we think about the Defi ecosystem with stable coin and tokenization are very good trends for us. And across fixed income, electronic trading continues to grow because electronic trading continues to grow because it delivers this efficiency, competition, transparency, all of the processing and to make an obvious point, and it's really important that you hear me say this, these benefits are hard, if not impossible to replicate in the voice market, which gives us that kind of optimism as we continue to fine-tune and go after more of the complexity in the market. And so I say this all the time, like I can get like a bit intense, but broad adoption does take time. It requires a thing that we know about really well, which is behavior change. behavior change from clients. But I think from our perspective, at Tradeweb, and Sara and I talk about this all the time, we're not complacent, but we're confident, I think, that the direction of travel around the ongoing electronification is pretty clear. So thanks very much for the question. Good to hear your voice.
Sara Furber: Maybe just like amplifying one of the points that you made earlier in the earlier part of this call, when we talk about the percent of electronification in U.S. treasuries and Billy said this, it sometimes gets lost. The actual electronic ADV in this treasury market is up double digits year-to-date, right? So Billy is talking about this episodic increased voice flow that we have an opportunity to help electronify around packaged traits. But not to lose sight of the underlying business, the underlying industry trend is actually up 10% year-over-year. So both things are healthy opportunities.
William Hult: Yes. Very good point, Sara.
Operator: Our next question comes from the line of Dan Fannon.
Daniel Fannon: Sorry about the background noise here. But there's a general narrative around lower rates and what that means -- is that for trading volumes for -- and so I was curious about how the outlook for rates, given where the Fed funds curve is say, what you think about the outlook for the next year.
William Hult: Yes. Good question. And maybe I'll take a little bit of this, and sir, you come in with me on this as well. And good morning to whoever said that I don't know on the call as well. So you and I know each other, Dan. So I've been at the company now it's amazing, I think it's like 25-plus years, getting older by the day. we've grown revenues every year, I say this very proudly because it has nothing to do with me. But every year, kind of irrespective of the rate environment. This is now -- I'm going to say this like pretty clearly 9 straight -- 9 straight quarters of double-digit revenue growth that we've kind of managed to do that, as you know, very well through a bunch of different kind of market environments because the focus is obviously always on building more innovative solutions to attack this thing I was saying before around more parts of the voice market. So I want to make sure I'm really clear about that because that ethos has not changed over the past 25 years. And so maybe for a second, just like specifically around your question. Your question is not oversimplified, but I think in some ways, the view around that, as you know, I think, is a little bit oversimplified. This environment, from our perspective, I think, is constructive for us, right? So we think about real yields of 2% to 3% on the short end, which we think makes fixed income quite an attractive income-generating tool. We think about the concept of kind of sustained upward sloping yield curve, which we think incentivized is something very, very important, which is duration extension. We think benefiting our higher duration products. I think that's like a really important thing for you to hear from me. Continued issuance would support and should support velocity and future secondary supply. And so with respect to rates, we think it's very, very important to draw what I would say is a very clear and sharp distinction between lower rates and 0 rates. These are very different environments. I think history shows that trading volumes kind of ebb and flow in ways that you know very well, Dan, with volatility and policy expectations. It's not just absolute level of rates. And so as rates trend lower, we expect private intermediation, which is something I've talked about a lot, it's back in vogue. The banks are capitalized and stronger than ever. Client-driven activity is going to continue to remain active. And we think -- and we're starting to hear this, that obviously, the central banks will remain a smaller part of the market than they were a few years ago. And so we think that's a very good environment for us. And Sara, if you want to add?
Sara Furber: I think in addition to what Billy is talking about around what's really driving business volumes, I think it's also important to remember that lower interest rates actually impacts in a positive way, 2 of our biggest businesses around swaps and cash credit fee per million. So if you think about it, and I know we've talked a little bit about this before, but if you were just to take rates and drop them by 100 basis points across the curve, swap fee per million would increase by 4% or 5%, cash credit fee per million by 2%. And as a reminder, it's because both of those businesses and fee structures operate on PV-01 or DV-01, so on the risk notional that's being traded. And then I know earlier, we talked about the shape of the curve, that also has a positive impact in terms of duration being extended in our products. And so as you think about the impact of that on fee per million, a 1-year increase in duration. So if you take it 10 years going to 11 years in a business like swaps, fee per million can go up 7% to 8% and credit a little bit less, but around 2%. So obviously, like when we think about our business, the way the business mix changes is the biggest driver of revenue. But structurally, when rates go down, there is this positive impact on fee per million holding all else constant, which I think is something sometimes people forget.
William Hult: It's amazing, sir. If you look back at that kind of last period, Dan, of 0 rates, which is obviously a very different and kind of more challenging environment than what Sara was describing as kind of lower rates. So we're really kind of talking about that sort of like 2019 to 2021 time period where the Fed was kind of a large buyer. And you've heard me talk about that when the Fed was a large buyer in the market. I think U.S. treasury industry volumes were flat, but at that time, our revenue -- our revenues grew 14%, which is what you're describing, Sara. And swaps -- interest rate swaps volumes were down 14%, but our revenues were up 23% that year, which I think speaks a lot to how we are commercial in more challenging environments. And I think it's a good question, Dan. So we appreciate you always.
Operator: Our next question comes from the line of Alex Blostein with Goldman Sachs.
Alexander Blostein: So I wanted to spend a minute on the topic of tokenized assets, obviously, quite an evolving landscape there. What are the opportunities, I guess, in risk that you see for Tradeweb on both of those fronts.
Sara Furber: Great. Nice to hear from you, Alex. Maybe I'll start and Billy, feel free to chime in. I think -- look, it's a great question, and we are definitely spending a lot of time on tokenization and digital assets more broadly. So maybe let me cover a little bit about what we mean when we're talking about digital assets because I think everybody talks about different components about it. For Tradeweb, when we're talking about tokenization, stablecoins in digital assets, we're really talking about further modernizing the way financial assets trade. And so if you think about that, it's a natural extension of what we've done and what Billy and the team have done for 25 years in terms of electronifying voice markets, it's what we feel we do best. It's more efficiently enabling the transfer of risk. And so our goal, just like when we talk about electronifying markets is, we want to be a market leader. We want to allow our clients to trade tokenized assets on blockchains. It's programmable, it's interoperable. It provides huge client benefits from our standpoint, faster settlement, things like 24/7 trading, data synchronization, I would love less reconciliation personally and capital efficiency, which is probably one of the biggest drivers. So from our seat, there's a lot of opportunity here when there's so much opportunities for our clients, and we have a right to win, which is sort of the first part of what I was getting at. And we've been at it for a while. We've been at it for over 3 years, given the regulatory tailwinds that appear to be lining up. We think this is a real significant opportunity for us. And I think I say this with some appropriate humility, I think we feel we're well ahead of our peers in being able to provide both traditional and digital rails side by side for our clients at scale. So all of those components, I think, matter as we think about the forwards. We've made a number of targeted investments. I think, Alex, you've seen us do that in an effort to provide this end-to-end service, like connecting issuance, trading and settlement, being able to handle the cash leg and the asset leg as you think about tokenized assets. And so I don't need to read the laundry list, but digital asset holdings, finality, securitize and of course, our work with Canton Network. The thing that's exciting, I think, especially from my seat as a CFO is we're really generating revenue. This is having a real impact. And so obviously, early innings, but this year, we've already generated $5 million year-to-date from our work as a validator and super validator on the Canton Network. That's in addition to having 1.7 billion coins on our balance sheet, which are worth approximately $55 million. So I think there's real financial benefits. The digital business for us is something that we continue to invest in. We intend to expand our work with the Canton Network and obviously want to be part of growing that and building trading applications on it. So we think this is the beginning of our digital business. And I think it's really important to recognize that because we've been in this for a long time. It's not just financial investments, it's inorganic and organic like people at Tradeweb embedding these technologies and mortgages in repo in all of our traditional businesses. I think, obviously, you can tell we're excited about it, always trying to be balanced. When we talk about the risks. I think complacency is probably the biggest risk that Billy and I spend a lot of time talking about. We don't take our position in the ecosystem lightly. We don't ever expect to be the only solution or only platform out there. But we do think, given how long we've been at it and some of the things that we can do uniquely and maybe more importantly -- and Billy like I know you feel strongly about this, who we've partnered with very strategically. We think we're in a good position to evolve with the market that going to keep changing.
William Hult: It's always like a good question we still like, Alex. It's always a good question from Alex. I think it's impossible to look at kind of 2025 and not say that in exactly the way that you described it really, really well, Sara, that crypto exposure to gold and the [indiscernible] stocks have not become kind of macro products in our world. And so when we kind of -- when I say that, Alex, about kind of crypto, I mean, I think it's fair to say that ultimately, we see institutional grade crypto as part of the kind of broader macro toolkit and we plan to play a role there. And part of the kind of partnerships, Sara, that you were alluding to, and I think very specifically around kind of the Canton Network partnership that we have is very, very important to us because we see kind of best-in-class there, and we see real potential partners with us in the kind of go-forward evolution potentially around that marketplace becoming more institutional. And so as everybody here knows, the routes around that market are always, by definition, going to be kind of 24/7 stuff. And so as this kind of ties in, the general feeling is as fixed income products kind of follow that route around tokenization and 24/7 liquidity, we're going to play a leadership role with the potential, Alex, ability to pivot as a leader around institutional crypto trading. So this is all kind of very, very important and interesting stuff that I think is going to define really the next couple of years of electronic marketplaces.
Operator: Our next question comes from the line of Simon Clinch -- I'm sorry -- yes, Simon Clinch with Rothschild & Company.
Simon Alistair Clinch: I was wondering if you could talk -- maybe give us a sense of how to think about the next stages of electronification in the U.S. credit in particular? And how Tradeweb is positioned to both drive and benefit from this trend, specifically in terms of like the technologies you have in the pipeline to accelerate this opportunity, how value trading fits into the frame, particularly in the case of blocks? And ultimately, how we should think about the revenue benefits that accrue from this opportunity?
William Hult: Sure. I said before about kind of to be kind of super focused, but also with an understanding that human behavior change takes a little bit of time. So I'll make the most obvious point on this entire earnings call. Electronification and credit has never been and will never be kind of straight line stop. And so what we've seen is periods of gradual progress -- gradual progression followed from our perspective by kind of sharp accelerations when what we would say very key ingredients come together: better technology, improved data, shifts in trading behavior and more efficient post-trade process. These are the kind of pieces of the ingredients that need to come together. And I'll say it this way for a second. At the same time, I think it's important to recognize and understand something that's embedded in your question, which is the credit market is structurally different from other asset classes. And I'll say it this way. I think from our perspective, I think liquidity in that marketplace can be a little bit fragile. It's a fragmented markets with thousands of individual bonds, sometimes limited depth that can change very quickly when conditions move. And so the market itself, I would say this, like in my entire career, it's a challenge. And I say that optimistically because I think challenges plays to kind of Tradeweb strengths. So in a complex market, I think there's a real difference between just what we would say is like adding technology for technology sake and building balanced real solutions and collaborations with our partners. I mean I think that is front and center, a fundamental ethos to how we partner with the buy side and with the dealers. We still feel exceptionally strong that we are right sided on Portfolio Trading. We think bringing the dealers back into the equation as market makers is a fundamentally important part of the marketplace. I would say there needs to be very strong and continued work on ultimately delivering the dealers' balance sheets and inventories to the most sophisticated, most important clients. I think that's an important endeavor that we are working on. And ultimately, as you know well, this piece of the market is going to be defined as innovations that ultimately land, again, this concept of the holy grail around risk trades. And so we have our best and brightest in the credit business, working on this all the time. I feel very, very strong and proud around how we've landed in credit, and the company is extremely focused into 2026 and continuing to make progress there. So appreciate it, Simon.
Operator: Our next question comes from the line of Craig Siegenthaler with Bank of America.
Elias Abboud: This is Elias Abboud on for Craig. You launched treasury trading on ICD last quarter. Can you update us on what adoption has looked like? Do you have any plans to launch more products in ICD? And then bigger picture, you're still sitting on a lot of cash. Is there more opportunities for M&A in the corporate channel going forward?
Sara Furber: It's Sara. I'll take that. I think we are really excited. We've seen early interest from our Tivo launch on ICD, which we did at the end of the second quarter, and we've already had a few clients execute their first trades this month. So good momentum and progress there. What's been encouraging even beyond that is some of the largest potential clients we have in our pipeline, those who previously passed on ICD are now more focused on reengaging because of this added ability to bring Tradeweb products onto the platform, the ICD portal. So I think holistically, we continue to see momentum around that strategy. Obviously, it takes time in their long sales cycles. Beyond that, we're very focused on making the whole experience when we brought Tradeweb and ICD together to be more seamless. So there's work that we're doing to integrate straight through processing between our organizations and platforms and obviously, a couple of aspects on the custody relationship. So more to come on that, but I think good progress. And beyond ICD, the second part of your question, just in terms of bigger picture sitting on cash and M&A. Look, I think Billy has been really clear. We are an ambitious company, and we continue to consistently evaluate buy versus build, investments, outright M&A. Just because we have the cash does not mean that we're going to be lacking in discipline. So the bar is high, and we have a number of strategic and financial objectives that anything that we deploy capital against has to meet, but I think you've heard us talk about some of the areas that we're most excited about on this call, whether it be digital, an area that we're evaluating continued investments, both inorganically and organically. Billy's talked about institutional crypto. As that world evolves, I think there are things that we can do to accelerate our technology build there and areas that are adjacent to some of our markets like private credit. So in particular, we're focused on where the biggest opportunities are the growth in the marketplace that are adjacent to what we do, where we think we have a right to win. And so I think the inorganic question is much more than just M&A from our seat. It's a combination of partnerships investments as well as looking at acquisitions. So I hope that helps.
Operator: Our next question comes from the line of Ken Worthington with JPMorgan.
Kenneth Worthington: Maybe following up here. Sara, you highlighted in that '25 would be an investment year, remain open to evaluating M&A opportunities, like if and where appropriate, when you're looking at the product suite as it stands today, are there particular protocols, technologies, geographies that you think could better amplify Tradeweb's value proposition? And to Alex's question earlier, you spent a lot of time on digital and the Canton Network. Are there pieces particularly on the digital side, that would be helpful to fill in here.
Sara Furber: Yes, obviously. Billy, feel free to jump in. I think -- I'd say I'd characterize, we don't see any major gaps across our asset classes, protocol, geography set. We think we're highly global, really diversified across client channels as well as asset classes. But we do consistently evaluate where can we amplify or accelerate. And so the areas I probably just highlighted are areas that we would call more frontier markets on the adjacent standpoint that I think are our biggest opportunity is to add potential asset classes, like when Billy talks about institutional crypto, we think of that as an adjacent asset class and in some ways, an extension of clients, right, more crypto-native firms. So that would be an area that I'd highlight. It's interesting when you take a different lens around digital, and you asked a little bit about life cycle, I think that's like a really good adding dimension to look at. Sometimes, people think Tradeweb is only focused on what I would call the match, like the execution. The reality is our offering goes from pre-trade analytics to execution to post-trade in a lot of different scenarios. I think what's really interesting about some of the work we're doing in the digital space is it can make our participation across the full trading life cycle even more efficient, both from providing a service from -- to clients, but also from a capital perspective. So I would say, if anything, as the world evolves and we don't think it will be binary, I think our role and opportunity across the trading life cycle, that opportunity kind of grows in multiple dimensions beyond just purely a trade execution.
Operator: Our next question is from the line of Benjamin Budish with Barclays.
Benjamin Budish: Billy, in your prepared remarks, you talked a lot about very low levels of market volatility and what that's doing to electronic share. I'm just curious, I think earlier in the Q&A, you talked about your outlook for [ e-share ]. Maybe just on market volumes in general, both TRACE and U.S. Treasury. What are your thoughts on? Why is that the case it feels like uncertainty remains quite high. The comps are fairly tough, but like what do you think are the reasons that market volumes have been a little bit lower? And how do you think about how that unfolds over the next 6, 12 months?
William Hult: It's a little bit of what I was saying before, and it's a really good question. There's been a little bit of the kind of Fed on autopilot, lack of data. Your question is a really interesting one. And as I'm kind of thinking about it, when you think about '26, you know that factors around kind of timing of rate cuts is going to be very, very important, like continued kind of fiscal developments. There's going to be macro data surprises. We know that credit risk are coming to light. That's a big deal. So we feel kind of like volatility and client activity is big time coming back into the marketplace. You know that we're going to kind of win in the storm, right? We've shown our ability to win in the storm consistently, whether or not that storm was way back when kind of COVID or the regional crisis, that storm that took place or then just very, very recently, obviously around kind of liberation moments within the marketplace. We're going to win in the storm. I feel very strongly that we're also going to win in the comp and we have been winning in the comp. And so that's where we kind of talk about this kind of concept of mechanized flow. And back to the basics around RFQ technology. These environments play very, very well for us in part because of our ability to kind of engage them with clients and to put innovations into the marketplace at periods of calm, I think, plays extremely well to our strengths down the road. So I kind of say this with a little bit of a wink. Nobody knows anything. The very strong instinct is comm markets lead to something very different and we've seen little even pieces of that as of yesterday afternoon when the market just saw something different than I had expected to see an activity kind of surged very quickly in volatility search. As a consequence of that, it's going to be a very interesting, I think, market dynamic into 2026. And I think our general feeling here is, and kind of Sara said it with humbleness, but with a tremendous amount of confidence, I think we sit extremely well positioned to be that partner to the industry. So as always, Ben, a very good question and appreciate it, thank you.
Sara Furber: You know it's interesting, I think, also in what you're saying as you think about our ability to win in the storm and in the comp, the financial model supports that as well, which I think is a really important and unique advantage. So we've had a market environment that was extremely volatile in the beginning half of the year and last year. And as you think about one of the things that we do as an organization, as a management team, we've accelerated a lot of investment to invest through the cycle, in particular, been able to deploy a lot of capital in those environments for things that are new initiatives, which I know Ash and Sameer have highlighted in some of the new slides that we put out, but new initiatives like in spec pools, in bilateral swaps and obviously, in government bonds and being able to do those through the cycle, regardless of if it's like highly volatile or not as volatile, I think, really sets that groundwork for us to perform in all different environments. So that ability to have sustained investment through the cycle, I think is a complement, a different way of looking at kind of why I think Billy's point around we can win in either environment is really backed up.
Operator: Our next question comes from the line of Alex Kramm with UBS.
Alex Kramm: Late here, but look, there's been a lot of questions today, I feel like on electronification of various markets, both longer term. The one that hasn't come up is actually our largest business, which is interest rate swaps. And I think, Billy, you mentioned earlier in your prepared remarks, only 30% of the market is -- of the cleared IRS market is electronic today. So this may be a little bit nitpicky, but I feel like I've heard that number for multiple years, maybe even back to the IPO. So just wondering, is it just a very rounded number? Is there just not good data out there? Or has the market actually not electronified more in the last few years? It's just all been market growth that you've been participating in?
William Hult: You have a good memory, Alex. And it's such a good memory, and it's just a good question and I'm definitely going to have to have Sara answer it, but I'll first by acknowledging. I thought I had a good memory until I got to know you, but it's a very good question.
Sara Furber: Actually, it's a great question because it does give us an opportunity to unpack something, which is true across a bunch of different aspects around our business because it is so nuanced and there's so many layers in it. So swaps, yes, is one of our biggest businesses, most important and growing most quickly, that 30% number, like a lot of things, is this monolithic large pie and can mask a lot of the underlying trends that are really important. So swaps and that 30% number, as an example, include compression, right? And as we've talked about every quarter, compression volumes can be really large, obviously don't come with the same amount of revenue and can distort what's going on. So if I take out compression trades and really focus on what we call risk-based swap share for electronification or some people would call like DV01 based swaps in that market, you can really see that electronification trend much more clearly. So in terms of that piece, that risk base, which really drives revenue in 2020, the total electronification was 10%. And if we compare to where we are now, that number is 19%. So that's 150 basis points per annum over that 5-year period. And I think really gets to what you're saying, which is like, oh, okay, there is some real movement and actually that movement, what moves revenue. So when you know our revenues have moved in excess of double digits, you kind of have that clearer picture. It's not the only way to look at it. I'd say the other big driver we spend a lot of time talking about, but gets buried in that 30% is emerging markets. So emerging markets in 2020 was like 1%. I don't know if you can even measure 1%, but 1% electronic, it really wasn't electronic at all. And now as we fast forward to where the market is in 2025, and we obviously view ourselves as a leader in that market, it's at 18%, so that market is growing 300 basis points year-over-year in terms of electronification. So to your point, sometimes when you're trying to cover a broad universe with a single stat, it cannot do justice to some of the underlying trends that are really important, especially when you think about what drives our revenue opportunity going forward and our investment dollars. So thanks for the question. I don't know if you want to add anything.
William Hult: That's perfect.
Operator: And our last question comes from the line of Kyle Voigt with KBW.
Kyle Voigt: Maybe a question on capital priorities. Just given the pullback in share price, have your capital allocation priorities shifted at all? And I guess, why haven't you stepped up for purchases in light of that pullback in the share price? And then you addressed some of the inorganic investment outlook in a prior question, but also maybe you could address the priorities for organic investments from an asset class or product perspective as we're looking out over the next year.
Sara Furber: Great question. Okay. So there's a near-term view and a long-term view, and I don't want to conflate those. Long term, there's really no change in our capital management philosophy. But I think to the point and sort of the temperature around that question, given where the share price is, we do have a fundamental value on what the company is worth and don't really feel the valuation fully reflects all the opportunities we have in front of us. So we're definitely actively looking at share repurchases and being opportunistic in the market. Obviously, we have to wait till the window opens up again into your point a little bit about why we weren't active in the earlier part of the market. There are times when the window is open and isn't, and we have an active set of M&A targets and pipeline activities that we look at. So I think don't take that as we think this is where the stock should trade, I do think as we think longer term, the waterfall isn't really any different than it's been over the last 5 years, at least since I've been here. First and foremost, organic, then M&A then share repurchases and then dividends, which we like to grow in line with earnings. On the organic front, and I think we've talked a lot about the inorganic front on this call, and Billy feel free to chime in, I think some of the areas where we continue to invest, obviously, EM has been a big focus for us. swaps and credit, really a consistent focus for us. And then increasingly, things like AI, our data infrastructure strategy and digital are areas that we're spending a lot of time all organically, even if they're complemented by inorganic strategies. So those are all things that we see large TAMs for and our ability to leverage what we do well to drive long-term growth.
William Hult: Perfectly said. I would only mess it up by adding something in, but as always a great question, thank you.
Operator: Thank you. And this will conclude our Q&A session. I will pass it back to Billy Hult for his final comments.
William Hult: Thank you all very much for joining us this morning. As always, if you have any follow-up questions, please feel free to reach out to Ashley, Sameer and the team. Have a great day, everybody, and thank you.
Operator: And with that, we conclude our conference. Thank you for participating. You may all disconnect.