Marketaxess Holdings, Inc. · NASDAQ:MKTX

Marketaxess — Q1 2019 Earnings Presentation

14 slides from Marketaxess's earnings presentation, Apr 24, 2019

  1. Slide 1: Q1 2019 Conference Call and Webcast

    Q1 2019 Conference Call and Webcast April 24, 2019

  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: 1Q19 Summary

    1Q19 Summary1 FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS • Record revenues of $124 million, up 9% • Record total trading volume of $526 billion, up 13% • Expenses of $61 million, up 12% • Record U.S. high-grade, U.S. high-yield, emerging markets and Eurobonds volume • Record operating income of $63 mi

  4. Slide 4: Market Conditions

    Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & HIGH-YIELD TRACE Q1 YoY Growth HG TRACE: 13% Benchmark Spread 3 Month Rolling Spread Volatility HG TRACE HY TRACE HY TRACE: 5% 180 2.7% 2,250 Benchmark Spread (bps) Rolling Spread Volatility 160 2,000 2.2% 140 1,750 1.7% $ billio

  5. Slide 5: Open Trading

    Open Trading™ HIGHLIGHTS Q1 YoY Growth OPEN TRADING ESTIMATED Liquidity Taker: 59% TRANSACTION COST SAVINGS 1 • $2.2 billion average daily volume, up 65% from 1Q18 Liquidity Provider: 48% Liquidity Taker Cost Savings Liquidity Provider Cost Savings • Over 344,000 total Open Trading transactions comp

  6. Slide 6: International Progress

    International Progress Q1 YoY Growth of 23% EUROPEAN CLIENT VOLUMES INTERNATIONAL PROGRESS U.S. Credit 20% Eurobonds Emerging Markets U.S. Credit Emerging Markets Eurobond 13% 32% • European client volume of $141 billion, up 23% 150 • Emerging market volume of $116 billion, up 10% 125 $26 100 $22 •

  7. Slide 7: Automation Driving Increase in Trading Activity

    Automation Driving Increase in Trading Activity HIGHLIGHTS AUTO EXECUTED TRADE VOLUME AND COUNT • Approximately 2.2 million algo responses in 1Q19, up 126% Trade Volume Trade Count from 1Q181 14,000 100 Trade Count (in thousands) 12,000 Trade Volume ($ millions) • 17 firms providing algo responses i

  8. Slide 8: Quarterly Volume Growth

    Quarterly Volume Growth GLOBAL 13% U.S. HIGH-GRADE 11% Q1 YoY Growth U.S. High-Grade Volume Market Share Q1 YoY Growth 550 300 20% 500 450 250 18% 400 Volume ($ billions) 350 200 Market Share 16% $ billions 300 150 250 200 14% 100 150 100 50 12% 50 -- -- 10% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1

  9. Slide 9: Earnings Performance

    Earnings Performance (In thousands, except per share data) %Δ 1Q19 vs. 1Q19 4Q18 1Q18 1Q18 Revenues Commissions $ 112,760 $ 101,436 $ 102,772 10% Information Services 7,366 7,057 7,066 4% Post-trade Services 4,100 3,675 4,576 (10%) Other Income 265 276 300 (12%) Total Revenues 124,491 112,444 114,71

  10. Slide 10: Commission Revenue Detail

    Commission Revenue Detail %Δ ($ in thousands) 1Q19 vs. 1Q19 4Q18 1Q18 1Q18 Commissions Transaction Fees U.S. High-Grade $ 42,501 $ 37,089 $ 38,767 10% 1 Other Credit 46,034 38,868 40,427 14% 2 Liquid Products 557 593 583 (4%) Total Transaction Fees 89,092 76,550 79,777 12% Distribution Fees U.S. Hig

  11. Slide 11: Expense Detail

    Expense Detail ($ in thousands) %Δ 1Q19 vs. 1Q19 4Q18 1Q18 1Q18 Expenses Employee Compensation and Benefits $ 32,658 $ 27,802 $ 28,834 13% Depreciation and Amortization 6,082 5,848 5,269 15% Technology and Communications 5,782 6,415 5,779 0% Professional and Consulting 5,831 5,353 5,057 15% 1 Occupa

  12. Slide 12: Balance Sheet Data

    Balance Sheet Data ($ in thousands) TTM FREE CASH FLOW AND CAPITAL 3/31/2019 12/31/2018 EXPENDITURES Assets TTM Free Cash Flow TTM Capital Expenditures 50 TTM Capital Expenditure ($ millions) Cash and Cash Equivalents $ 260,953 $ 246,322 180 Free Cash Flow ($ millions) 40 Investments 222,458 240,105

  13. Slide 13: Summary

    Summary • Strong volume growth evident across all core products in spite of spread narrowing environment • International client contribution reaches new highs led by Europe • Open Trading driving growth in transaction cost savings • Trading automation accelerating in global credit markets • New init

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

    \Y, aN Now you're in the market”

MarketAxess Holdings — Q1 2019 Earnings Presentation on 6ix