Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q3 2018 Earnings Presentation
13 slides from Marketaxess's earnings presentation, Oct 24, 2018
Slide 1: Q3 2018 Conference Call and Webcast
Q3 2018 Conference Call and Webcast October 24, 2018
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: 3Q18 Summary
3Q18 Summary1 EARNINGS BUSINESS HIGHLIGHTS • Revenues of $101.4 million, up 6.1%. • Total trading volume of $385.5 billion, up 11.2%. • Expenses of $55.0 million, up 12.4%; excluding $1.9 million • Estimated U.S. high-grade market share of 17.5%, up from of duplicate occupancy expense, up 8.6%. 17.2
Slide 4: Market Conditions
Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & HIGH-YIELD TRACE Q3 YoY GROWTH HG TRACE: 0% Benchmark Spread 3 Month Rolling Spread Volatility HG TRACE HY TRACE HY TRACE: -5% 180 2.7% 2,000 Benchmark Spread (bps) Rolling Spread Volatility 160 1,750 2.2% 140 1,500 120 1.7% 1,25
Slide 5: Open Trading
Open Trading™ 58% HIGHLIGHTS OPEN TRADING GROWTH Q3 YoY Volume Growth • $1.4 billion average daily volume, up 58.2% from 3Q17. Total Volume OT Percentage of Total Volume 100 24% • Over 282,000 total Open Trading transactions completed in OT % of Total Trade Volume 90 22% Total Volume ($ millions) 3Q
Slide 6: Product and Geographic Diversification
Product and Geographic Diversification 27% Q3 YoY Growth of 22% U.S. HIGH-YIELD Q3 YoY Volume EMERGING MARKET VOLUME External Markets 15% Growth BY PRODUCT Local Markets 42% U.S. High-Yield Volume Market Share 50 10% External Markets Local Markets 110 45 9% 100 90 $31 40 8% $29 Market Share 80 $26 $
Slide 7: Quarterly Volume
Quarterly Volume GLOBAL 11% U.S. HIGH-GRADE 3% Q3 YoY Growth U.S. High-Grade Volume Market Share Q3 YoY Growth 500 260 18.0% 240 450 17.5% 220 Volume ($ billions) 400 17.0% Market Share 200 $ billions 350 180 16.5% 160 300 16.0% 140 250 15.5% 120 200 100 15.0% 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
Slide 8: Earnings Performance
Earnings Performance ∆ (In thousands, except per share data) 3Q18 vs. 3Q18 2Q18 3Q17 3Q17 Revenues Commissions $ 90,513 $ 96,113 $ 86,270 4.9% Information Services 7,174 6,930 6,331 13.3% Post-trade Services 3,475 3,620 2,678 29.8% Other Income 281 301 305 (7.9%) Total Revenues 101,443 106,964 95,58
Slide 9: Commission Revenue Detail
Commission Revenue Detail %Δ 3Q18 vs. ($ in thousands) 3Q18 2Q18 3Q17 3Q17 Commissions Transaction Fees U.S. High-Grade $ 32,385 $ 36,401 $ 34,020 (4.8%) 1 Other Credit 33,088 34,765 31,381 5.4% 2 Liquid Products 482 488 546 (11.7%) Total Transaction Fees 65,955 71,654 65,947 0.0% Distribution Fees
Slide 10: Expense Detail
Expense Detail ($ in thousands) %∆ 3Q18 vs. 3Q18 2Q18 3Q17 3Q17 Expenses Employee Comp. and Benefits $ 26,282 $ 26,199 $ 25,485 3.1% Depreciation and Amortization 6,173 5,790 4,583 34.7% Technology and Communications 5,879 5,793 5,035 16.8% Professional and Consulting 5,685 5,426 5,547 2.5% Occupanc
Slide 11: Balance Sheet Data
Balance Sheet Data ($ in thousands) TTM FREE CASH FLOW AND CAPITAL 9/30/2018 12/31/2017 EXPENDITURES Assets TTM Free Cash Flow TTM Capital Expenditures 190 45 TTM Capital Expenditure ($ million) Cash and Cash Equivalents $ 210,085 $ 167,014 Free Cash Flow ($ million) 170 Investments 236,101 239,521
Slide 12: Summary
Summary • Strong third quarter results driven by increased market share across all of our core products. • High yield market share showing significant momentum. • Accelerated adoption of Open Trading by dealer and investor clients. • Fourth quarter market trading conditions improving. MarketAxess.co
Slide 13: Now you're in the market
\Y, aN Now you're in the market”