Marketaxess Holdings, Inc. · NASDAQ:MKTX

Marketaxess — Q2 2018 Earnings Presentation

14 slides from Marketaxess's earnings presentation, Jul 25, 2018

  1. Slide 1: Q2 2018 Conference Call and Webcast

    Q2 2018 Conference Call and Webcast July 25, 2018

  2. 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

  3. Slide 3: 2Q18 Summary

    2Q18 Summary1 EARNINGS BUSINESS HIGHLIGHTS • Revenues of $107.0 million, up 11.1%. • Total trading volume of $421 billion, up 16.4%. • Expenses of $54.9 million up 16.1%, includes $1.8 million of • Estimated U.S. high-grade market share of 17.4%, up from duplicate occupancy expense. 17.0%. • Operati

  4. Slide 4: Market Conditions

    Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & HIGH-YIELD TRACE Q2 YoY GROWTH HG TRACE: 11% Benchmark Spread 3 Month Rolling Spread Volatility HG TRACE HY TRACE HY TRACE: 0% 180 2.7% 2,000 Rolling Spread Volatility Benchmark Spread (bps) 160 1,750 2.2% 140 1,500 120 1.7% 1,25

  5. Slide 5: Open Trading

    Open Trading™ 57% HIGHLIGHTS OPEN TRADING GROWTH Q2 YoY Volume Growth • $1.4 billion average daily volume, up 54.5% from 2Q17. Trade Volume OT Percentage of Total Volume 100 25% • Over 256,000 total Open Trading transactions completed in OT % of Total Trade Volume Total Volume ($ billions) 80 2Q18,

  6. Slide 6: Automation Driving Increase in Trading Activity

    Automation Driving Increase in Trading Activity TOTAL INQUIRY AND TRADE COUNT 18% TOTAL RESPONSES AND AVG. RESPONSE PER Q2 YoY Trade INQUIRY Inquiry Count Trade Count Growth Response Count Avg. Responses per Inquiry Total Responses (in thousands) 1,400 900 6,000 6.0 Average Response per Inquiry Inqu

  7. Slide 7: International Progress

    International Progress Q2 YoY Growth of 27% Q2 YoY Growth of 27% EUROPEAN CLIENT VOLUMES EMERGING MARKET VOLUME Emerging Markets 35% External Markets 22% Eurobond 34% BY PRODUCT Local Markets 40% U.S. Credit Eurobonds Emerging Markets U.S. Credit 4% External Markets Local Markets 125 120 100 100 $47

  8. Slide 8: Quarterly Volume and Client Firm Growth

    Quarterly Volume and Client Firm Growth GLOBAL VOLUME 16% U.S. HIGH-GRADE VOLUME 13% Q2 YoY Growth U.S. High-Grade Volume Market Share Q2 YoY Growth 500 300 18% 450 250 Trade Volume ($ billions) 400 17% 350 200 Market Share 300 $ billions 250 150 16% 200 150 100 15% 100 50 50 -- -- 14% 2Q16 3Q16 4Q1

  9. Slide 9: Earnings Performance

    Earnings Performance ∆ (In thousands, except per share data) 2Q18 vs. 2Q18 1Q18 2Q17 2Q17 Revenues Commissions $ 96,113 $ 102,772 $ 87,015 10.5% Information Services 6,930 7,066 6,497 6.7% Post-trade Services 3,620 4,576 2,489 45.4% Other Income 301 300 313 (3.8%) Total Revenues 106,964 114,714 96,3

  10. Slide 10: Commission Revenue Detail

    Commission Revenue Detail %Δ 2Q18 vs. ($ in thousands) 2Q18 1Q18 2Q17 2Q17 Commissions Transaction Fees U.S. High-Grade $ 36,401 $ 38,767 $ 32,868 10.7% 1 Other Credit 34,765 40,427 37,145 (6.4%) 2 Liquid Products 488 583 570 (14.4%) Total Transaction Fees 71,654 79,777 70,583 1.5% Distribution Fees

  11. Slide 11: Expense Detail

    Expense Detail ($ in thousands) %∆ 2Q18 vs. 2Q18 1Q18 2Q17 2Q17 Expenses Employee Comp. and Benefits $ 26,199 $ 28,834 $ 25,319 3.5% Depreciation and Amortization 5,790 5,269 4,790 20.9% Technology and Communications 5,793 5,779 4,822 20.1% Professional and Consulting 5,426 5,057 4,086 32.8% Occupan

  12. Slide 12: Balance Sheet Data

    Balance Sheet Data ($ in thousands) TTM FREE CASH FLOW AND CAPITAL 6/30/2018 12/31/2017 EXPENDITURES Assets TTM Free Cash Flow TTM Capital Expenditures 200 40 TTM Capital Expenditure ($ million) Cash and Cash Equivalents $ 170,686 $ 167,014 Free Cash Flow ($ million) Investments 249,591 239,521 30 1

  13. Slide 13: Summary

    Summary • Strong second quarter results driven by increased trading volumes across all four of our core products. • Record Open Trading volume and transaction cost savings. • Rapid growth in trading automation driving improved efficiency. • International client breadth and trading activity continues

  14. Slide 14: Now you're in the market

    \Y, aN Now you're in the market”

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