Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q4 2015 Earnings Presentation
15 slides from Marketaxess's earnings presentation, Jan 27, 2016
Slide 1: 4Q15 Conference Call & Webcast
4Q15 CONFERENCE CALL & WEBCAST January 27, 2016
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: 4Q15 Summary
4Q15 Summary1 Earnings Business Highlights Revenues of $76.6 million, up 9.2% Record total trading volume up 18.5% Record adjusted estimated U.S. high-grade2 market Expenses of $39.7 million, up 8.1% share of 17.6%, up from 16.1% Pre-tax income of $37.0 million, up 10.4% Record quarter f
Slide 4: Full Year 2015 Results Reflect Continued Strong Growth Rates
Full Year 2015 Results Reflect Continued Strong Growth Rates Annual Revenue & Adjusted EPS1 Trend Full Year 2015 Compound Annual Growth Rate 350 Revenue Adjusted EPS $3.00 1-Year 3-Year 5-Year 10-Year 300 $2.50 250 Total Revenue 15.3% 16.7% 17.4% 14.5% $2.00 200 ($ millions) $1.50 150 Total Expenses
Slide 5: Market Conditions
Market Conditions U.S. High-Grade & High-Yield TRACE1 Liquid U.S. Corporate Index (LUCI) 2015 YOY Growth Benchmark Spread 3 Month Rolling Spread Volatility 1,400 HG TRACE HY TRACE 180 2.4% HG TRACE: 5% LUCI 3 Month Rolling Spread Volatility 1,300 2.2% HY TRACE: 8% 160 Total HG and HY TRACE ($ billio
Slide 6: Expanding Market Opportunity
Expanding Market Opportunity Estimated ADV for Core and Expanded Markets Expanded Markets Opportunity ($ in billions) Local Emerging Markets Local Emerging Trading available in 22 global local currency bond markets Markets Local markets trading volume up 238% in 4Q15 $11 B Municipal Bonds Co
Slide 7: Open Trading
Open Trading™ Open Trading Growth Highlights 70,000 Trade Volume Trade Count 30 $446 million average daily volume, up 100% from 4Q14 and up 60,000 25 25% from 3Q15 Trade Volume ($ in billion) 50,000 Over 57,000 total Open Trading transactions completed in 4Q15, 20 up from 28,000 in 4Q14 ( # of t
Slide 8: Quarterly Volume
Quarterly Volume Global U.S. High Grade U.S. High Grade Volume MarketShare Market Share1 250 18% 160 10% 18% Q4 YOY Q4 YOY U.S. High Grade Volume ($ billions) 140 17% 200 Growth Growth 120 16% Market Share 150 100 15% ($ billions) 80 100 14% 60 13% 40 50 20 12% 0 0 11% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
Slide 9: Earnings Performance
Earnings Performance (In thousands, except per share data) ∆ 4Q15 vs. 4Q15 3Q15 4Q14 4Q14 Revenues Commissions $ 67,613 $ 65,178 $ 60,372 12.0% Information and Post-trade Services 7,678 7,671 7,869 (2.4%) Technology Products & Services 708 683 1,289 (45.1%) Investment and Other Income 645 660 637 1.
Slide 10: Commission Revenue Detail
Commission Revenue Detail %Δ ($ in thousands) 4Q15 vs. 4Q15 3Q15 4Q14 4Q14 Commissions Transaction Fees U.S. High-Grade $ 24,686 $ 23,337 $ 23,146 6.7% 1 Other Credit 26,002 24,091 20,245 28.4% 2 Liquid Products 606 598 725 (16.4%) Total Transaction Fees 51,294 48,026 44,116 16.3% Distribution Fees
Slide 11: Expense Detail
Expense Detail ($ in thousands) %∆ 4Q15 vs. 4Q15 3Q15 4Q14 4Q14 Expenses Employee Comp. and Benefits $ 21,087 $ 21,002 $ 19,376 8.8% Depreciation and Amortization 4,685 4,642 4,425 5.9% Technology and Communications 3,720 3,891 4,385 (15.2%) Professional and Consulting 3,540 3,210 3,463 2.2% Occupan
Slide 12: Balance Sheet Data
Balance Sheet Data ($ in thousands) % Δ vs. 12/31/2015 12/31/2014 12/31/2014 Assets Cash and Cash Equivalents $ 199,728 $ 168,924 18.2% Securities Available-For-Sale 84,706 64,863 30.6% Accounts Receivable, net 40,459 33,836 19.6% All Other Assets 114,148 112,261 1.7% Total Assets $ 439,041 $ 379,88
Slide 13: Capital Management
Capital Management Dividends and Free Cash Flow Capital Expenditures $0.90 Full Year Dividend FCF Payout Ratio 35% $25 Capitalized Software Equipment and Other $0.80 30% $0.70 $20 25% $0.60 (in millions) (per share) 20% $15 $0.50 $0.40 15% $10 $0.30 10% $0.20 $5 5% $0.10 $0.00 0% $0 2010 2011 2012 2
Slide 14: 2016 Guidance
2016 Guidance Expenses Total expenses ranging from $168 million to $176 million Capital Expenditures Total capital expenditures ranging from $18 million to $22 million Income Tax Rate Estimated effective tax rate ranging from 34.0% to 36.0% ©2016 MarketAxess Holdings Inc. MarketAxess and the M
Slide 15: Summary
Summary Record trading volumes, revenues and EPS in 2015 Acceleration in market share gains across core products Open Trading momentum continues Expanding global credit footprint ©2016 MarketAxess Holdings Inc. MarketAxess and the MarketAxess logo are trademarks of the Company. Confidential