Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q2 2020 Earnings Presentation
12 slides from Marketaxess's earnings presentation, Jul 22, 2020
Slide 1: Q2 2020 Conference Call and Webcast
Q2 2020 Conference Call and Webcast July 22, 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: 2Q20 Summary
2Q20 Summary1 FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS • Record revenues of $185 million, up 47% • Record total credit trading volume of $742 billion, up 44% • Record operating income of $104 million, up 71% • Record estimated U.S. high-grade market share of 21.5%, up from 18.7% • Record operating m
Slide 4: Market Conditions
Market Conditions PRE-CRISIS VS. CRISIS ACTIVITY LEVELS NEW ISSUANCE & CORPORATE DEBT OUTSTANDING 1/2 – 2/21 2/24 – 6/30 % Change HY New Issuance HG New Issuance Corporate Debt Outstanding (HG+HY) U.S High Grade 880 10.0 Corporate Debt ($ trillions) TRACE ADV $23.8 bil $30.4 bil 28% 800 New Issuance
Slide 5: Open Trading
Open Trading™ HIGHLIGHTS OPEN TRADING CREDIT VOLUME & UNIQUE 87% • Open Trading credit volume grew to 32% of total volume, up from 25% TRADING FIRMS Q2 YoY Trade in 2Q19 Trade Volume Unique Open Trading Firms Volume Growth • $3.8 billion average daily volume, up 87% from 2Q19 270 1,600 Total Volume
Slide 6: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTO-X TRADE VOLUME AND COUNT Q2 YoY Growth Trade Volume: 66% • Over 144,000 trades completed using automated Trade Volume Trade Count Trade Count: 38% execution, up from 105,000 trades in 2Q19 35,000 160 Trade Count (in thousands) Trade Volume ($ mill
Slide 7: Quarterly Volume Growth
Quarterly Volume Growth TOTAL CREDIT 44% U.S. HIGH-GRADE 56% Q2 YoY Growth U.S. High-Grade Volume Market Share Q2 YoY Growth 800 450 22% 400 700 21% Estimated Market Share Volume ($ billions) 350 600 20% $ billions 300 500 19% 250 400 18% 200 300 150 17% 200 100 16% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q1
Slide 8: Earnings Performance
Earnings Performance %Δ 2Q20 vs. 2Q20 1Q20 2Q19 2Q19 ($ in thousands, except per share data) Revenues Commissions $ 172,092 $ 155,954 $ 114,124 50.8% Information Services 8,427 8,642 7,156 17.8% Post-trade Services 4,054 4,153 3,956 2.5% Other Income 222 229 254 (12.6%) Total Revenues 184,795 168,97
Slide 9: Commission Revenue Detail
Commission Revenue Detail %Δ 2Q20 vs. 2Q20 1Q20 2Q19 2Q19 Commissions ($ in thousands) Transaction Fees U.S. High-Grade $ 75,208 $ 57,970 $ 42,914 75.3% 1 Other Credit 66,977 65,610 47,233 41.8% Total Credit 142,185 123,580 90,147 57.7% Rates 2 3,846 5,586 615 525.4% Total Transaction Fees 146,031 1
Slide 10: Expense Detail
Expense Detail %Δ 2Q20 vs. 2Q201 1Q201 2Q19 2Q19 ($ in thousands) Expenses Employee Compensation and Benefits $ 41,636 $ 41,194 $ 32,623 27.6% Depreciation and Amortization 8,305 8,067 6,345 30.9% Technology and Communications 8,592 8,161 6,474 32.7% Professional and Consulting 8,065 5,675 6,296 28.
Slide 11: Balance Sheet Data
Balance Sheet Data 6/30/2020 12/31/2019 TTM FREE CASH FLOW AND CAPITAL ($ in thousands) EXPENDITURES 1 43% YoY TTM Assets FCF Growth TTM Free Cash Flow TTM Capital Expenditures Cash, Cash Equivalents and Investments $ 535,520 $ 500,601 300 40 TTM Capital Expenditures ($ millions) TTM Free Cash Flow
Slide 12: Summary
Summary • Record quarter for trading volume, revenue and earnings • Record estimated U.S high-grade and U.S. high-yield market share • Market share gains across all credit products and geographic regions • Record estimated Open Trading transaction cost savings, exceeding company revenue for second q