Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q4 2021 Earnings Presentation
18 slides from Marketaxess's earnings presentation, Jan 26, 2022
Slide 1: Q4 2021 Conference Call and Webcast
Q4 2021 Conference Call and Webcast January 26, 2022
Slide 2: Strategic Update
Strategic Update Rick McVey, Chairman and CEO 2
Slide 3: Executing on the MarketAxess Growth Strategy in 2021
Executing on the MarketAxess Growth Strategy in 20211 INCREASED PENETRATION IN CORE PRODUCTS • Maintained substantial leadership position in the institutional client e-trading space for U.S. Credit. Clear #1 in high-grade, record estimated high-yield market share and record active clients; approxima
Slide 4: Full Year 2021 Results Reflect Continued Long-Term Growth
Full Year 2021 Results Reflect Continued Long-Term Growth ANNUAL REVENUE AND CAGRS COMMENTARY 2-YR 5-YR 10-YR OPERATING INCOME • Record emerging markets trading volume of $649 billion, up 16%; Revenue 17% 14% 15% Revenue Operating Income Operating Income 16% 12% 15% record emerging markets local cur
Slide 5: Market Conditions and U.S. Credit
Market Conditions and U.S. Credit LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & U.S HIGH-YIELD TRACE VOLUME Q4 YoY Change Benchmark Spreads 3 Month Rolling Volatility U.S. High-Grade U.S. High-Yield HG TRACE: -6% 3 Month Rolling Volatility (% log scale) 210 HY TRACE: -5% 12.8 3,000 190 Benchm
Slide 6: Investing to Capture the Long-Term E-Trading Opportunity
Investing to Capture the Long-Term E-Trading Opportunity TOTAL ADDRESSABLE MARKET – 2021 ESTIMATES MarketAxess ADV Total Addressable Market ADV $5.0B $22.6B U.S. High-Grade $1.5B $9.8B CORE PRODUCTS U.S. High-Yield $1.8B $20.0B EM Hard Currency $800M $30.0B EM Local Currency $1.3B $11.0B Eurobonds $
Slide 7: Update on Growth Initiatives
Update on Growth Initiatives Chris Concannon, President and COO 7
Slide 8: Open Trading Permeates All Products and Protocols
Open Trading® Permeates All Products and Protocols OPEN TRADING HIGHLIGHTS UNIQUE OPEN TRADING FIRMS • Over 29,000 orders and $15 billion notional value available through Open Trading central marketplace on average per day in 1,800 4Q21 1,600 • Estimated system-wide cost savings of $78 million for l
Slide 9: Powerful Diversification Across Markets, Protocols & Services
Powerful Diversification Across Markets, Protocols & Services Core Products New Products U.S High U.S. High Emerging Eurobonds Municipal Rates Leveraged China Grade Yield Markets Bonds Loans Credit Open Trading Trading Automation Client RFQ Trading Protocols Dealer RFQ Portfolio Trading Live Markets
Slide 10: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTO-X TRADE VOLUME AND COUNT Q4 YoY Growth Trade Volume: 39% • Over 242,000 trades completed using automated execution, up from Trade Volume Trade Count Trade Count: 48% 164,000 trades in 4Q20 50,000 300 Trade Count (in thousands) Trade Volume ($ mill
Slide 11: Financial Review
Financial Review Chris Gerosa, CFO 11
Slide 12: Earnings Performance
Earnings Performance ∆ 4Q21 vs. 4Q21 3Q21 4Q20 4Q20 ($ in thousands, except per share data) Revenues Commissions $ 145,913 $ 142,826 $ 155,813 (6.4%) Information Services 9,561 9,608 8,771 9.0% Post-trade Services 9,369 9,444 6,564 42.7% Other Income 217 215 198 9.6% Total Revenues 165,060 162,093 1
Slide 13: Commission Revenue Detail
Commission Revenue Detail %Δ 4Q21 vs. 4Q21 3Q21 4Q20 4Q20 Commissions ($ in thousands) Transaction Fees U.S. High-Grade $ 46,173 $ 45,848 $ 59,645 (22.6%) Other Credit1 62,767 62,475 65,045 (3.5%) Total Credit 108,940 108,323 124,690 (12.6%) 2 Rates 4,992 3,825 3,267 52.8% Total Transaction Fees 113
Slide 14: Expense Detail
Expense Detail %Δ 4Q21 vs. 4Q21 3Q21 4Q20 4Q20 ($ in thousands) Expenses Employee Compensation and Benefits $ 41,218 $ 40,878 $ 36,472 13.0% Depreciation and Amortization 14,607 13,964 10,592 37.9% Technology and Communications 11,229 10,665 8,922 25.9% Professional and Consulting 10,734 10,847 10,2
Slide 15: Cash Flow and Capital Management
Cash Flow and Capital Management QUARTERLY OVERVIEW TTM FREE CASH FLOW 1 AND CAPITAL Q4 TTM FCF YoY Growth2 EXPENDITURES 2YR CAGR 14% • Total cash and investments of $543 million TTM Free Cash Flow TTM Capital Expenditures TTM Capital Expenditures ($ millions) – Excludes $69 million of cash deposits
Slide 16: 2022 Guidance
2022 Guidance EXPENSES 2022 OPERATING EXPENSE GROWTH BREAKDOWN • Expected range of $385.0 million to $415.0 million Other 15% Investment – Based on the midpoint of the stated guidance range, operating expenses are Intangible expected to increase by approximately 11% in 2022 Amortization 8% – Approxi
Slide 17: Key Takeaways
Key Takeaways • Strong execution of our growth strategy in 2021 • Significant strides in enhancing our core and expanding our cylinders for growth • Strong competitive positioning to capture the electronification of fixed income markets • Deploying capital in a disciplined way to drive long-term val
Slide 18: Now you're in the market
\Y, NX Now you're in the market™