Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q2 2021 Earnings Presentation
15 slides from Marketaxess's earnings presentation, Jul 21, 2021
Slide 1: Q2 2021 Conference Call and Webcast
Q2 2021 Conference Call and Webcast July 21, 2021
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: 2Q21 Summary
2Q21 Summary1 FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS • Revenues of $176.3 million, down 5%; 2‐year CAGR of 19% • Estimated U.S. high‐grade market share of 21.1%, down from 21.5% and estimated U.S. high‐yield market share of 14.3%, up from 14.0% • Operating income of $87.2 million, down 16%; 2‐year
Slide 4: Market Conditions
Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH‐GRADE & HIGH‐YIELD TRACE VOLUME AND ESTIMATED MARKET SHARE Q2 YoY Change Benchmark Spread 3 Month Rolling Spread Volatility HG TRACE Volume HY TRACE Volume HG TRACE: ‐20% Combined HG and HY Market Share HY TRACE: ‐14% 310 14% Benchmark S
Slide 5: Open Trading Expansion
Open Trading® Expansion HIGHLIGHTS DEALER INITIATED OPEN TRADING 28% Q2 YoY Growth VOLUME U.S. High‐Grade 24% • Over 29,000 orders and $15 billion notional value available through Emerging Markets 42% Open Trading central marketplace on average per day in 2Q21 U.S. High‐Grade Emerging Markets U.S. H
Slide 6: New Products and Protocols
New Products and Protocols PORTFOLIO TRADING MUNICIPAL BONDS • Enriched portfolio trading solution delivered in late‐May to add new • Record municipal bond volume of $6.1 billion, up 89% from 2Q201 functionality and workflow enhancements • Support for multi‐directional lists and multi‐currency lists
Slide 7: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTO‐X TRADE VOLUME AND COUNT Q2 YoY Growth Trade Volume: 29% • Record of over 218,000 trades completed using automated execution, Trade Volume Trade Count Trade Count: 51% up from 145,000 trades in 2Q20 45 250 Trade Count (in thousands) Trade Volume (
Slide 8: Quarterly Volume Growth
Quarterly Volume Growth Q2 Change Q2 Change TOTAL CREDIT YoY ‐10% U.S. HIGH‐GRADE YoY ‐22% 2YR CAGR 14% U.S. High‐Grade Volume Market Share 2YR CAGR 11% 800 450 24% 700 400 23% Estimated Market Share 350 22% 600 Volume ($ billions) 300 500 21% $ billions 250 400 20% 200 300 19% 150 200 100 18% 100 5
Slide 9: Earnings Performance
Earnings Performance ∆ 2Q21 vs. 2Q21 1Q21 2Q20 2Q20 ($ in thousands, except per share data) Revenues Commissions $ 156,431 $ 175,838 $ 172,092 (9.1%) Information Services 9,844 9,162 8,427 16.8% Post‐trade Services 9,848 10,261 4,054 142.9% Other Income 211 203 222 (5.0%) Total Revenues 176,334 195,
Slide 10: Commission Revenue Detail
Commission Revenue Detail %Δ 2Q21 vs. 2Q21 1Q21 2Q20 2Q20 Commissions ($ in thousands) Transaction Fees U.S. High‐Grade $ 56,413 $ 65,356 $ 75,208 (25.0%) 1 Other Credit 67,074 78,899 66,977 0.1% Total Credit 123,487 144,255 142,185 (13.2%) Rates 2 3,612 4,143 3,846 (6.1%) Total Transaction Fees 127
Slide 11: Expense Detail
Expense Detail %Δ 2Q21 vs. 2Q211 1Q212 2Q20 2Q20 ($ in thousands) Expenses Employee Compensation and Benefits $ 40,732 $ 48,088 $ 41,636 (2.2%) Depreciation and Amortization 13,097 11,779 8,305 57.7% Technology and Communications 10,544 10,036 8,592 22.7% Professional and Consulting 10,704 9,640 8,0
Slide 12: Cash Flow and Capital Management
Cash Flow and Capital Management QUARTERLY OVERVIEW TTM FREE CASH FLOW AND CAPITAL EXPENDITURES 1 14% YoY TTM • Total cash and investments of $440 million FCF Growth TTM Free Cash Flow TTM Capital Expenditures – Excludes $132 million of cash deposits supporting self‐clearing 400 100 TTM Capital Expe
Slide 13: Summary
Summary • Two‐year compound growth rates show revenue and earnings growth consistent with long term averages • Growing international client business is creating a strong global footprint for future growth • Emerging markets estimated market share reaching new highs • New products and new trading pro
Slide 14: Now you're in the market
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Slide 15: Disclosures
Disclosures ©2021 MarketAxess Holding Inc. (the "Company"). MarketAxess Corporation and LiquidityEdge LLC are members of FINRA and SIPC. MarketAxess Canada Company is a member of IIROC. MarketAxess Europe Limited (04017160), MarketAxess Capital Limited (09777893), and Xtrakter Limited (01917944) are