Tradeweb Markets has played a key role in bringing Wall Street fully into the electronic age. The company's strategic selection of markets to serve has driven immense growth, while its balanced capital allocation strategy treats shareholders right.
For institutional investors making billion-dollar trades, taking maximum advantage of the latest technology to facilitate trades is crucial. Tradeweb Markets has captured that market admirably, according to the first article in the series on Tradeweb here.
Tradeweb gets paid in various ways. About three-quarters of its revenue is variable, relying on trade volume and negotiated fees. Most money comes from institutional clients, who value access to interest rate and credit markets.
A quarter of revenue comes from fixed arrangements, including some trading deals and market data services that provide recurring revenue. The company's roughly 60/40 split between U.S. and international sales adds geographical diversity.
Increased market penetration and rising trading volume have fueled considerable growth over the past decade. Between 2016 and 2024, revenue rose at an average annual rate exceeding 16%. Gains accelerated in 2025, with 21% year-over-year growth through the first nine months.
Average daily volume has gone from $324 billion to $2.56 trillion over that stretch. Net income jumped almost sixfold to $695 million between 2016 and 2024. EBITDA grew at an average 21% annual rate.
Adjusted EBITDA margin improvements have taken the figure from 38.7% ten years ago to 54.2% for the first nine months of 2025. The business has generated about $1 billion in free cash flow over the past 12 months.
Tradeweb maintains a strong balance sheet with $1.9 billion in cash and cash equivalents. Ample free cash flow allows the company to pursue a balanced capital allocation strategy.
Some capital goes into acquisitions to grow the business, while some gets invested internally for organic growth. Money is also returned to shareholders through modest stock repurchases every year since 2021.
The company's dividend yield is 0.5%. With $180 million available in its current stock buyback program, Tradeweb foresees chances to send more money back to shareholders as opportunities arise.
Despite financial success, shareholders have been disappointed with recent stock performance. Shares are down almost 20% in the past year. Tradeweb's future growth plans aim to reverse that trend.
The third and final Voyager Portfolio article in this series will look more closely at growth prospects. Before buying stock in Tradeweb Markets, consider that The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now, and Tradeweb Markets wasn't one of them.
The 10 stocks that made the cut could produce monster returns in coming years. Stock Advisor's total average return is 955% compared to 196% for the S&P 500.