Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q1 2020 Earnings Presentation
13 slides from Marketaxess's earnings presentation, Apr 29, 2020
Slide 1: Q1 2020 Conference Call and Webcast
Q1 2020 Conference Call and Webcast April 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: 1Q20 Summary
1Q20 Summary1 FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS • Record revenues of $169 million, up 36% • Record total credit trading volume of $660 billion, up 29% • Record operating income of $91 million, up 44% • Record U.S. high-grade, U.S. high-yield, emerging markets, Eurobonds, munis and U.S treasur
Slide 4: Market Conditions
Market Conditions HIGH GRADE LUCI SPREADS AND VOLATILTY PRE-CRISIS VS. CRISIS ACTIVITY LEVELS Benchmark Spread 3 Month Rolling Spread Volatility 1/2 – 2/21 2/24 – 3/31 % Change 400 14% U.S High Grade 350 12% TRACE ADV $23.8 bil $30.2 bil 27% Benchmark Spread (bps) Rolling Spread Volatility 300 10% M
Slide 5: Open Trading
Open Trading™ HIGHLIGHTS OPEN TRADING VOLUME & UNIQUE TRADING 55% • Open Trading volume grew to 31% of total volume, up from 26% in FIRMS Q1 YoY Trade 1Q19 Trade Volume Unique Open Trading Firms Volume Growth 220 1,500 • $3.4 billion average daily volume, up 53% from 1Q19 Total Volume ($ billions) 1
Slide 6: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTOMATED TRADE VOLUME AND COUNT Q1 YoY Growth Trade Volume: 152% • Over 149,000 trades completed using automated Trade Volume Trade Count Trade Count: 81% execution, up from 83,000 trades in 1Q19 35,000 160 Trade Count (in thousands) Trade Volume ($ m
Slide 7: Quarterly Volume Growth
Quarterly Volume Growth TOTAL CREDIT 29% U.S. HIGH-GRADE 19% Q1 YoY Growth U.S. High-Grade Volume Market Share Q1 YoY Growth 700 350 21% 650 600 300 20% Estimated Market Share Volume ($ billions) 550 500 250 19% $ billions 450 400 200 18% 350 300 150 17% 250 200 100 16% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Slide 8: COVID-19 Response
COVID-19 Response MONTHLY ACTIVE FIRMS AND USERS Active Firms Active Users 1,400 5,400 • Seamlessly transitioned global workforce to full work-from- Monthly Active Users Monthly Active Firms 1,300 home in mid-March 4,900 1,200 • Trading platforms scaled and maintained quality of service 1,100 4,400
Slide 9: Earnings Performance
Earnings Performance %Δ 1Q20 vs. 1Q20 4Q19 1Q19 1Q19 ($ in thousands, except per share data) Revenues Commissions $ 155,954 $ 117,103 $ 112,760 38.3% Information Services 8,642 8,515 7,366 17.3% Post-trade Services 4,153 3,923 4,100 1.3% Other Income 229 233 265 (13.6%) Total Revenues 168,978 129,77
Slide 10: Commission Revenue Detail
Commission Revenue Detail %Δ 1Q20 vs. 1Q20 4Q19 1Q19 1Q19 Commissions ($ in thousands) Transaction Fees U.S. High-Grade $ 57,970 $ 43,120 $ 42,501 36.4% Other Credit1 65,610 45,238 46,034 42.5% Total Credit 123,580 88,358 88,535 39.6% Rates2 5,586 2,983 557 902.9% Total Transaction Fees 129,166 91,3
Slide 11: Expense Detail
Expense Detail %Δ 1Q201 vs. 1 1 1Q20 4Q19 1Q19 1Q19 ($ in thousands) Expenses Employee Compensation and Benefits $ 41,194 $ 33,117 $ 32,658 26.1% Depreciation and Amortization 8,067 7,730 6,082 32.6% Technology and Communications 8,161 7,155 5,782 41.1% Professional and Consulting 5,675 6,389 5,831
Slide 12: Balance Sheet Data
Balance Sheet Data TTM FREE CASH FLOW AND CAPITAL ($ in thousands) 3/31/2020 12/31/2019 EXPENDITURES 1 37% YoY TTM Assets FCF Growth TTM Free Cash Flow TTM Capital Expenditures 250 40 Cash, Cash Equivalents and Investments $ 499,428 $ 500,601 TTM Capital Expenditures ($ millions) TTM Free Cash Flow
Slide 13: Summary
Summary • Record quarter for trading volume, revenue and earnings • Record number of client firms and individual traders transacting on the platform • Credit market overall volumes and MKTX market share both rose in March • Open Trading percentage of trading volume spiked throughout the peak weeks o