Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q1 2023 Earnings Presentation
17 slides from Marketaxess's earnings presentation, Apr 26, 2023
Slide 1: Q1 2023 Conference Call and Webcast
Q1 2023 Conference Call and Webcast April 26, 2023
Slide 2: Business Update
Business Update ❖ Chris Concannon, CEO 2
Slide 3: 1Q23 Results – Executing Our Growth Strategy
1Q23 Results* – Executing Our Growth Strategy (in $ millions, except EPS data) Revenue Operating Expenses Operating Income +9% $203.2 +10% $107.8 +8% $95.4 (+11% ex. FX) (+12% ex. FX) Operating Margin NI1 & EBITDA2 EPS +14% $73.6 46.9% +5% $110.5 +15% $1.96 Key Themes • Record revenues up 9%, (+11%
Slide 4: Open Trading – Our Differentiated Liquidity Pool
Open Trading – Our Differentiated Liquidity Pool Q1 YoY Growth Volume: 28% 1Q23 OPEN TRADING HIGHLIGHTS U.S. HIGH-GRADE OPEN TRADING VOLUME AND Record Share: 34% RECORD SHARE1 (+350 bps) • Record Open Trading ADV of $4.5 billion, up 21%, with Open Trading U.S. High-Grade Volume Open Trading % Share
Slide 5: Our Growth Strategy is Multi-Dimensional
Our Growth Strategy is Multi-Dimensional INCREASING GROWTH IN HEDGE FUND, DEALER INITIATED, MUNICIPAL BONDS TRADING ADV AND RECORD AND PRIVATE BANK TRADING VOLUME ESTIMATED MARKET SHARE1 Hedge Fund Dealer Initiated Private Bank Municipal Bonds Trading ADV Estimated Market Share 250 600 7% $216 Trade
Slide 6: Automation – Driver of Increased Trading Velocity
Automation – Driver of Increased Trading Velocity RECORD DATA REVENUE DRIVEN BY CP+ ADOPTION RECORD AUTO-X TRADE VOLUME AND COUNT Q1 YoY Growth Trade Volume: 39% Trade Count: 42% Trade Volume Trade Count 12 80 450 $11 Q1 YoY Growth: 12% 70 3-Year CAGR 400 Data Revenue (in $ millions) Trade Volume (i
Slide 7: Financial Review
Financial Review ❖ Chris Gerosa, CFO 7
Slide 8: 1Q23 Financial Summary
1Q23 Financial Summary (in $ thousands, except EPS data) COMMENTARY* • Commission revenue benefited from strong estimated market share 1Q23 vs. gains and higher volumes, partially offset by lower average fees per Financial Results 1Q23 4Q22 1Q22 1Q22 million, principally in U.S. high-grade Commissio
Slide 9: 1Q23 Commission Revenue Detail
1Q23 Commission Revenue Detail (in $ thousands, except transaction fees per million data) COMMENTARY* 1Q23 vs. Credit Commissions 1Q23 4Q22 1Q22 1Q22 • Record credit commission revenue due to strong Variable Transaction Fees market share gains and higher volumes, partially Credit $ 140,970 $ 120,887
Slide 10: 1Q23 Expense Detail
1Q23 Expense Detail (in $ thousands) COMMENTARY* • Total expenses of $108 million, up 10% on continued investment, up 12% excluding the impact of foreign 1Q23 vs. currency fluctuations Expense Summary 1Q23 4Q22 1Q22 1Q22 • Year-over-year increase in operating expenses due Employee Compensation and B
Slide 11: Cash Flow and Capital Management
Cash Flow and Capital Management QUARTERLY OVERVIEW TTM FREE CASH FLOW 1 AND CAPITAL Q1 TTM FCF2 EXPENDITURES 5-Year CAGR: 11% • Total cash and investments of $440 million TTM Free Cash Flow TTM Capital Expenditures TTM Capital Expenditures (in $ millions) 350 100 TTM Free Cash Flow (in $ millions)
Slide 12: Market Update
Market Update ❖ Rick McVey, Founder and Executive Chairman 12
Slide 13: Market Conditions and U.S. Credit
Market Conditions and U.S. Credit LIQUID U.S. CORPORATE INDEX (LUCI) INCREASE IN HIGH-GRADE TRADING VELOCITY ON Benchmark Spreads* 3-Month Rolling Volatility HIGHER RATES 1 Turnover LUCI Yield 3 Month Rolling Volatility (% log scale) 550 12.8 110% 9% Annualized High Grade Turnover (%) Benchmark Spre
Slide 14: Expanding Our Addressable Market Opportunity
Expanding Our Addressable Market Opportunity 2018 ESTIMATED CURRENT ESTIMATED REVENUE OPPORTUNITY1 REVENUE OPPORTUNITY Market Volume Growth New Product Expansion $4 $7 Billion Billion Acquisitions New Protocols CORE PRODUCT SET U.S. High Grade EXPANDED REVENUE NEW PROTOCOLS / OPPORTUNITIES WORKFLOWS
Slide 15: Key Takeaways
Key Takeaways • Continued strong execution of our growth strategy • Fourth consecutive quarter of improving financial metrics on higher levels of estimated market share, Open Trading activity and stronger industry volumes • Global diversification continues across products, protocols and regions • St
Slide 16: Disclosures
Disclosures ©2023 MarketAxess Holdings Inc. (the "Company"). MarketAxess Corporation is a member of FINRA and SIPC. MarketAxess Canada Company is a member of IIROC. MarketAxess Europe Limited (04017160), MarketAxess Capital Limited (09777893), and MarketAxess Post-Trade Limited (01917944) are incorp
Slide 17: Now you're in the market
\V, aN Now you're in the market™