Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q4 2019 Earnings Presentation
16 slides from Marketaxess's earnings presentation, Jan 29, 2020
Slide 1: Q4 2019 Conference Call and Webcast
Q4 2019 Conference Call and Webcast January, 29 2020
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: 4Q19 Summary
4Q19 Summary1 FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS • Revenues of $130 million, up 15% • Total credit trading volume of $490 billion, up 14% • Operating income of $61 million, up 13% • Estimated U.S. high-grade market share of 19.9% • EBITDA of $70 million, up 13% • Open Trading™ volume of $136 b
Slide 4: Full Year 2019 Results Reflect Continued Strong Growth
Full Year 2019 Results Reflect Continued Strong Growth ANNUAL REVENUE AND EPS 5-Year CAGR COMMENTARY Revenue EPS 14% 22% • 11th consecutive year of record full year trading volume, Revenue EPS revenue and operating income $600 $6.00 • Record estimated U.S. high-grade and U.S. high-yield Annual Reven
Slide 5: Market Conditions
Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & HIGH-YIELD TRACE VOLUME Q4 YoY AND 6 MONTH ROLLING EST. MARKET SHARE Growth Benchmark Spread 3 Month Rolling Spread Volatility HG TRACE Volume HY TRACE Volume HG TRACE: 2% Combined HG and HY Market Share HY TRACE: 10% 160 1.8% 2,
Slide 6: Breadth of Global Network
Breadth of Global Network TOTAL ACTIVE CLIENT FIRMS BY PRODUCT HIGHLIGHTS 1,721 • European client volume of $563 billion, up 38% 2014 2019 • Emerging market volume of $489 billion, up 29%; EM local 1,221 1,191 1,114 markets trading volume up 44% 885 675 583 596 603 • Over 1,700 active firms globally
Slide 7: Open Trading
Open Trading™ HIGHLIGHTS OPEN TRADING VOLUME & UNIQUE TRADING 16% • Open Trading volume grew to 27.2% of total volume, up from 26.6% in FIRMS Q4 YoY Trade 4Q18 Trade Volume Unique Open Trading Firms Volume Growth 160 1,500 • $2.1 billion average daily volume, up 14% from 4Q18 Total Volume ($ billion
Slide 8: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTOMATED TRADE VOLUME AND COUNT Q4 YoY Growth Trade Volume: 164% • Over 127,000 trades used automated execution Trade Volume Trade Count Trade Count: 93% functionality, up from 66,000 trades in 4Q18 30,000 140 Trade Count (in thousands) Trade Volume (
Slide 9: Quarterly Volume Growth
Quarterly Volume Growth TOTAL CREDIT 14% U.S. HIGH-GRADE 5% Q4 YoY Growth U.S. High-Grade Volume Market Share Q4 YoY Growth 550 300 21% 500 20% Estimated Market Share 250 450 19% Volume ($ billions) 400 18% $ billions 200 350 17% 300 150 16% 250 15% 200 100 14% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q1
Slide 10: Earnings Performance
Earnings Performance %Δ 4Q19 vs. 4Q19 3Q19 4Q18 4Q18 ($ in thousands, except per share data) Revenues Commissions $ 117,103 $ 119,869 $ 101,436 15.4% Information Services 8,515 7,693 7,057 20.7% Post-trade Services 3,923 3,784 3,675 6.7% Other Income 233 251 276 (15.6%) Total Revenues 129,774 131,59
Slide 11: Commission Revenue Detail
Commission Revenue Detail %Δ 4Q19 vs. 4Q19 3Q19 4Q18 4Q18 Commissions ($ in thousands) Transaction Fees U.S. High-Grade $ 43,120 $ 45,409 $ 37,089 16.3% 1 Other Credit 45,238 50,009 38,868 16.4% Total Credit 88,358 95,418 75,957 16.3% 2 Rates 2,983 567 593 403.0% Total Transaction Fees 91,341 95,985
Slide 12: Expense Detail
Expense Detail %Δ 4Q19 vs. 4Q19 3Q19 4Q18 4Q18 ($ in thousands) Expenses Employee Compensation and Benefits $ 33,117 $ 32,681 $ 27,802 19.1% Depreciation and Amortization 7,730 6,700 5,848 32.2% Technology and Communications 7,155 7,381 6,415 11.5% Professional and Consulting 6,389 7,018 5,353 19.4%
Slide 13: Balance Sheet Data
Balance Sheet Data TTM FREE CASH FLOW AND CAPITAL ($ in thousands) EXPENDITURES 2 12/31/2019 12/31/2018 TTM Free Cash Flow TTM Capital Expenditures Assets 240 40 TTM Capital Expenditures ($ millions) TTM Free Cash Flow ($ millions) 220 Cash and Cash Equivalents $ 270,124 $ 246,322 200 30 Investments
Slide 14: 2020 Guidance
2020 Guidance EXPENSES • Expected range of $297.0 million to $314.0 million – Reflects a full year of LiquidityEdge expenses, inclusive of amortization expense on acquired intangible assets, of approximately $18.0 to $22.0 million. – Excluding LiquidityEdge expenses, the midpoint in the guidance ran
Slide 15: Summary
Summary • Eleventh consecutive year of record trading volume, revenue and earnings • All product areas showing strong momentum • Client breadth continues to grow across products and regions • Trading automation is fueling growth in electronic credit trading • New opportunities emerging in new produc
Slide 16: Now you're in the market
\Y, aN Now you're in the market”