Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q3 2021 Earnings Presentation
14 slides from Marketaxess's earnings presentation, Oct 20, 2021
Slide 1: Q3 2021 Conference Call and Webcast
Q3 2021 Conference Call and Webcast October 20, 2021
Slide 2: 3Q21 Summary
3Q21 Summary1 FINANCIAL HIGHLIGHTS BUSINESS UPDATE • Revenues of $162.1 million, down 1% • Estimated U.S. high‐grade market share of 21.4%, down from 22.2% and estimated U.S. high‐yield market share of 15.3%, down from 16.0% • Operating income of $74.0 million, down 16% • U.S. corporate credit sprea
Slide 3: Market Conditions
Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH‐GRADE & U.S HIGH‐YIELD TRACE VOLUME Q3 YoY Change HG TRACE: ‐6% 3 Month Rolling Volatility (% log scale) Benchmark Spreads 3 Month Rolling Volatility U.S. High‐Grade U.S. High‐Yield 210 HY TRACE: ‐3% 12.8 3,000 190 Benchmark Spreads (bps
Slide 4: International Growth
International Growth HIGHLIGHTS TOTAL ACTIVE INTERNATIONAL CLIENT FIRMS & INTERNATIONAL CLIENT VOLUMES 1 • Emerging markets hard currency markets volume of $108.9 billion up International Client Volume International Clients 17%; local markets volume of $45.5 billion, up 25% 250 1,000 Active Internat
Slide 5: Open Trading and Product Expansion
Open Trading® and Product Expansion OPEN TRADING HIGHLIGHTS U.S. TREASURIES • Over 25,000 orders and $13 billion notional value available through • U.S. Treasury volume of $910.4 billion, up 22% from 3Q20 Open Trading central marketplace on average per day in 3Q21 • Enhanced the click‐to‐trade proto
Slide 6: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTO‐X TRADE VOLUME AND COUNT Q3 YoY Growth Trade Volume: 39% • Record of over 224,000 trades completed using automated execution, Trade Volume Trade Count Trade Count: 42% up from 159,000 trades in 3Q20 45 250 Trade Count (in thousands) Trade Volume (
Slide 7: Business and Protocol Diversification
Business and Protocol Diversification POST‐TRADE SERVICES PORTFOLIO TRADING • Post‐trade revenue of $9.4 million, up 101%; Regulatory Reporting • 54 unique investor firms and 13 dealers traded since May 2021 Hub contributed $3.4 million of revenue in 3Q21 • Estimated total portfolio trading volume c
Slide 8: Earnings Performance
Earnings Performance ∆ 3Q21 vs. 3Q21 2Q21 3Q20 3Q20 ($ in thousands, except per share data) Revenues Commissions $ 142,826 $ 156,431 $ 150,586 (5.2%) Information Services 9,608 9,844 8,501 13.0% Post‐trade Services 9,444 9,848 4,689 101.4% Other Income 215 211 230 (6.5%) Total Revenues 162,093 176,3
Slide 9: Commission Revenue Detail
Commission Revenue Detail %Δ 3Q21 vs. 3Q21 2Q21 3Q20 3Q20 Commissions ($ in thousands) Transaction Fees U.S. High‐Grade $ 45,848 $ 56,413 $ 60,861 (24.7%) Other Credit1 62,475 67,074 59,131 5.7% Total Credit 108,323 123,487 119,992 (9.7%) Rates2 3,825 3,612 3,191 19.9% Total Transaction Fees 112,148
Slide 10: Expense Detail
Expense Detail %Δ 3Q21 vs. 3Q21 2Q21 3Q20 3Q20 ($ in thousands) Expenses Employee Compensation and Benefits $ 40,878 $ 40,732 $ 37,583 8.8% Depreciation and Amortization 13,964 13,097 9,032 54.6% Technology and Communications 10,665 10,544 8,417 26.7% Professional and Consulting 10,847 10,704 8,269
Slide 11: Cash Flow and Capital Management
Cash Flow and Capital Management QUARTERLY OVERVIEW TTM FREE CASH FLOW 1 AND CAPITAL EXPENDITURES 2 • Total cash and investments of $458 million TTM Free Cash Flow TTM Capital Expenditures – Excludes $131 million of cash deposits supporting self‐clearing TTM Capital Expenditures ($ millions) 350 100
Slide 12: Summary
Summary • Market conditions remain unfavorable but positive signs emerging • International footprint growing; record clients, new markets, and increasing share • Data and post‐trade revenue growing and providing diversification • Trading automation adoption accelerating • New protocols gaining momen
Slide 13: Now you're in the market
\Y, aN Now you're in the market”
Slide 14: Disclosures
Disclosures ©2021 MarketAxess Holdings 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 MarketAxess Post‐Trade Limited