Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q3 2019 Earnings Presentation
14 slides from Marketaxess's earnings presentation, Oct 23, 2019
Slide 1: Q3 2019 Conference Call and Webcast
Q3 2019 Conference Call and Webcast October 23, 2019
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain forward-looking statements, including statements about the outlook and prospects for Company and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to f
Slide 3: 3Q19 Summary
3Q19 Summary1 FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS • Record revenues of $132 million, up 30% • Record total trading volume of $529 billion, up 37% • Expenses of $66 million, up 19% • Record estimated U.S. high-grade market share of 20.2% • Record operating income of $66 million, up 42% • Record
Slide 4: Market Conditions
Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & HIGH-YIELD TRACE Q3 YoY Growth HG TRACE: 10% Benchmark Spread 3 Month Rolling Spread Volatility HG TRACE HY TRACE HY TRACE: 19% 180 1.8% 2,250 Benchmark Spread (bps) 1.6% Rolling Spread Volatility 160 2,000 140 1.4% 1,750 1.2% $
Slide 5: Open Trading
Open Trading™ HIGHLIGHTS Q3 YoY Growth OPEN TRADING ESTIMATED Liquidity Taker: 72% • Open Trading volume grew to 27% of total volume, up from 23% in TRANSACTION COST SAVINGS 1 Liquidity Provider: 49% 3Q18 Liquidity Taker Cost Savings Liquidity Provider Cost Savings 70 • $2.2 billion average daily vo
Slide 6: New Initiatives
New Initiatives LIVE MARKETS LIQUIDITYEDGE 1 • Launched on October 16th LIQUIDITYEDGE QUARTERLY UST AVERAGE DAILY VOLUMES $20 104% • Live Markets is a two-sided order book designed for Q3 YoY Growth Average Daily Volume ($ in billions) institutional credit space $15 • Targeting the most active and n
Slide 7: Automation Driving Increase in Trading Activity
Automation Driving Increase in Trading Activity HIGHLIGHTS AUTO EXECUTED TRADE VOLUME AND COUNT Q3 YoY Growth Trade Volume: 156% • Approximately 2.3 million algo responses in 3Q19, up 61% Trade Volume Trade Count Trade Count: 96% from 3Q181 25,000 140 Trade Count (in thousands) Trade Volume ($ milli
Slide 8: Quarterly Volume Growth
Quarterly Volume Growth GLOBAL 37% U.S. HIGH-GRADE 27% Q3 YoY Growth U.S. High-Grade Volume Market Share Q3 YoY Growth 550 300 21% 500 250 20% 450 400 19% Volume ($ billions) 350 200 Market Share 18% $ billions 300 150 250 17% 200 100 150 16% 100 50 15% 50 -- -- 14% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q1
Slide 9: Earnings Performance
Earnings Performance ($ in thousands, except per share data) %Δ 3Q19 vs. 3Q19 2Q19 3Q18 3Q18 Revenues Commissions $ 119,869 $ 114,124 $ 90,513 32.4% Information Services 7,693 7,156 7,174 7.2% Post-trade Services 3,784 3,956 3,475 8.9% Other Income 251 254 281 (10.7%) Total Revenues 131,597 125,490
Slide 10: Commission Revenue Detail
Commission Revenue Detail %Δ ($ in thousands) 3Q19 vs. 3Q19 2Q19 3Q18 3Q18 Commissions Transaction Fees U.S. High-Grade $ 45,409 $ 42,914 $ 32,385 40.2% 1 Other Credit 50,009 47,233 33,088 51.1% Liquid Products 2 567 615 482 17.6% Total Transaction Fees 95,985 90,762 65,955 45.5% Distribution Fees U
Slide 11: Expense Detail
Expense Detail ($ in thousands) %Δ 3Q19 vs. 3Q19 2Q19 3Q18 3Q18 Expenses Employee Compensation and Benefits $ 32,681 $ 32,623 $ 26,282 24.3% Depreciation and Amortization 6,700 6,345 6,173 8.5% Technology and Communications 7,381 6,474 5,879 25.5% Professional and Consulting 7,018 6,296 5,685 23.4%
Slide 12: Balance Sheet Data
Balance Sheet Data TTM FREE CASH FLOW AND CAPITAL ($ in thousands) EXPENDITURES 9/30/2019 12/31/2018 TTM Free Cash Flow TTM Capital Expenditures Assets 50 TTM Capital Expenditures ($ millions) 220 TTM Free Cash Flow ($ millions) Cash and Cash Equivalents $ 320,527 $ 246,322 200 40 Investments 235,62
Slide 13: Summary
Summary • Electronic credit trading volumes showing strong growth across all products and regions • New initiatives creating additional long term growth opportunities • LiquidityEdge provides an attractive entry point to the U.S. Treasury bond market • Open Trading expanding trading opportunities Ma
Slide 14: Now you're in the market
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