Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q1 2018 Earnings Presentation
13 slides from Marketaxess's earnings presentation, Apr 25, 2018
Slide 1: Q1 2018 Conference Call and Webcast
Q1 2018 Conference Call and Webcast April 25, 2018
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: 1Q18 Summary
1Q18 Summary¹ EARNINGS BUSINESS HIGHLIGHTS • Record revenues of $114.7 million, up 11.4%. • Record total trading volume of $465.0 billion, up 17.9%. • Expenses of $54.5 million up 14.1%, includes $1.7 million of • Record trading volume in each of our four core products: duplicate occupancy expense U
Slide 4: Market Conditions
Market Conditions U.S. HIGH-GRADE & HIGH-YIELD TRACE Q1 YoY GROWTH LIQUID U.S. CORPORATE INDEX (LUCI) HG TRACE: 1% HG TRACE HY TRACE HY TRACE: -4% Benchmark Spread 3 Month Rolling Spread Volatility 180 2.7% 2,000 Benchmark Spread (bps) Rolling Spread Volatility 1,750 160 2.2% 1,500 140 120 1.7% 1,25
Slide 5: Open Trading
Open Trading™ 38% HIGHLIGHTS OPEN TRADING GROWTH Q1 YoY Volume Growth • $1.3 billion average daily volume, up 40% from 1Q17 Trade Volume OT Percentage of Total Volume 100 21% • Approximately 204,000 total Open Trading transactions OT % of Total Trade Volume 19% Total Volume ($ billions) 80 completed
Slide 6: MiFID II and International Progress
MiFID II and International Progress Q1 YoY Growth of 29% EUROPEAN CLIENT VOLUMES Emerging Markets 52% EMERGING MARKET VOLUME BY PRODUCT Eurobond 22% U.S. Credit Eurobonds Emerging Markets U.S. Credit 10% External Markets Local Markets 125 120 100 100 $47 $31 80 $ billions $ billions 75 $31 $22 $24 $
Slide 7: Quarterly Volume
Quarterly Volume 14% GLOBAL 18% U.S. HIGH-GRADE Q1 YoY Growth Q1 YoY Growth U.S. High-Grade Volume Market Share 500 300 18% 450 250 400 17% Volume ($ billions) 350 200 Market Share 300 $ billions 250 150 16% 200 150 100 15% 100 50 50 0 0 14% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q16 2Q16 3Q1
Slide 8: Earnings Performance
Earnings Performance (In thousands, except per share data) ∆ 1Q18 vs. 1Q18 4Q17 1Q17 1Q17 Revenues Commissions $ 102,772 $ 87,975 $ 94,022 9.3% Information Services 7,066 6,793 6,185 14.2% Post-trade Services 4,576 3,467 2,456 86.3% Other Income 1 300 325 301 (0.3%) Total Revenues 114,714 98,560 102
Slide 9: Commission Revenue Detail
Commission Revenue Detail %Δ 1Q18 vs. ($ in thousands) 1Q18 4Q17 1Q17 1Q17 Commissions Transaction Fees U.S. High-Grade $ 38,767 $ 34,623 $ 35,523 9.1% Other Credit1 40,427 30,271 41,695 (3.0%) 2 Liquid Products 583 531 630 (7.5%) Total Transaction Fees 79,777 65,425 77,848 2.5% Distribution Fees U.
Slide 10: Expense Detail
Expense Detail ($ in thousands) %∆ 1Q18 vs. 1Q18 4Q17 1Q17 1Q17 Expenses Employee Comp. and Benefits $ 28,834 $ 24,225 $ 27,284 5.7% Depreciation and Amortization 5,269 5,208 4,693 12.3% Technology and Communications 5,779 5,606 4,585 26.0% Professional and Consulting 5,057 5,455 4,279 18.2% Occupan
Slide 11: Balance Sheet Data
Balance Sheet Data % Δ vs. ($ in thousands) 3/31/2018 12/31/2017 12/31/2017 Assets Cash and Cash Equivalents $ 156,169 $ 167,014 (6.5%) Investments 244,271 239,521 2.0% Accounts Receivable, net 67,529 52,636 28.3% All Other Assets 121,304 122,061 (0.6%) Total Assets $ 589,273 $ 581,232 1.4% Liabilit
Slide 12: Summary
Summary • Modest improvement in secondary trading conditions led to record trading volume • MiFID II implementation drives increase in European client activity • International business diversification continues to improve • Record Open Trading volume and transaction cost savings 12
Slide 13: Now you're in the market
\V, aN Now you're in the market”