Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q2 2024 Earnings Presentation
24 slides from Marketaxess's earnings presentation, Aug 6, 2024
Slide 1: 2Q24 Earnings Conference Call
2Q24 Earnings Conference Call August 6, 2024
Slide 2: Strategic Update
Strategic Update ❖ Chris Concannon, CEO 2
Slide 3: 2Q24 Highlights
2Q24 Highlights1 • 10% growth in revenue2 • 8% growth in commission revenue2 Financial – 22% growth in emerging markets and 11% growth in Eurobonds Performance • 22% growth in services revenue2,3 • $1.72 in diluted earnings per share • $298 million in TTM free cash flow4 generation • Strong internat
Slide 4: Key Components of Our Strategy to Grow Market Share
Strategic Priorities to Drive Market Share Growth Key Milestones / Execution Timing Completed Near-Term1 Key Components of Our Strategy to Grow Market Share ✓ Phased in roll-out of X-Pro to our largest • Roll-out of X-Pro to international clients X-Pro clients with emphasis on high ticket across Eur
Slide 5: Driving Growth: Diversification Through Our Global Network
Driving Growth: Diversification Through Our Global Network Regional / North Volume Product View America EMEA APAC LATAM Growth1 High-Grade +15% High-Yield (21)% Emerging +20% Markets Eurobonds +9% Municipals - - +13% Volume +10% +11% +23% +11% +11% Growth1 = Double-Digit Increase = Single-Digit Incr
Slide 6: International Momentum: Growth in Our EM Franchise
International Momentum: Growth in Our EM Franchise 2Q24 COMMENTARY 1 EMERGING MARKETS TRADE VOLUME BY REGION • Emerging markets commission revenue up 22% North America EMEA APAC LATAM • Record 1,507 emerging markets active client firms, up 5%. 250 Q2 YoY Growth: 25% • Record LATAM and APAC emerging
Slide 7: Strategic Priorities: Driving Our Future Success
Strategic Priorities: Driving Our Future Success 1 Grow Core Fixed Income Trading Revenue 2 Enhance Client Network Experience 3 Deliver Innovative Technology & Data Solutions 4 Drive a High-Performing Team / Culture 7
Slide 8: Update on Our Markets
Update on Our Markets ❖ Rich Schiffman, Global Head of Trading Solutions 8
Slide 9: Strong Geographic and Product / Protocol Expansion
Strong Geographic and Product / Protocol Expansion INTERNATIONAL1 CLIENT TRADE VOLUME AND TRADE COUNT HEDGE FUND, DEALER INITIATED, AND PRIVATE BANK TRADE VOLUME International Trade Volume International Trade Count Hedge Fund Dealer Initiated Private Bank 350 Q2 YoY Growth 3-Year CAGR 700 300 Trade
Slide 10: Leveraging Open Trading as a Liquidity Destination
Leveraging Open Trading as a Liquidity Destination 2Q24 COMMENTARY 1 TOTAL CREDIT OPEN TRADING TRADE VOLUME AND TOTAL CREDIT OPEN TRADING TRADE COUNT • Open Trading ADV of ~$4 billion, up 8%. Open Trading Total Credit Volume Open Trading Total Credit Trade Count 300 900 Trade Volume (in $ billions)
Slide 11: Integrating Our Full Ecosystem Through Automation
Integrating Our Full Ecosystem Through Automation 2Q24 COMMENTARY 1 RECORD AUTO-X ACTIVE CLIENT FIRMS • Record 248 automation active client firms, up 70%. 250 Q2 YoY Growth: 70% • ~$88 billion automation volume, up 21%; record ~580 200 3-Year CAGR: 37% # Active Client Firms thousand trade count, up
Slide 12: Financial Review
Financial Review ❖ Ilene Fiszel Bieler, CFO 12
Slide 13: 2Q24 Financial Summary
2Q24 Financial Summary (in $ thousands, except EPS data) COMMENTARY3 • Commission revenue benefited from strong ADV across emerging 2Q24 vs. Financial Results 2Q24 1Q24 2Q23 markets, U.S. high-grade and Eurobonds, and the acquisition of 2Q23 Pragma ($5.1 million); mostly offset by the impact of lowe
Slide 14: 2Q24 Commission Revenue Detail
2Q24 Commission Revenue Detail (in $ thousands, except transaction fees per million data) 2Q24 vs. COMMENTARY2 Commissions 2Q24 1Q24 2Q23 2Q23 Credit Variable Transaction Fees • 12% increase in total credit ADV, partially offset by Credit $ 127,645 $ 141,504 $ 118,710 8% a 6% decrease in total credi
Slide 15: 2Q24 Expense Detail
2Q24 Expense Detail (in $ thousands) 2Q24 vs. COMMENTARY1 Expense Summary 2Q24 1Q24 2Q23 2Q23 • Total expenses of $116.3 million, including $7.8 Employee Compensation and Benefits $ 56,790 $ 61,264 $ 48,383 17 % million impact from Pragma. Depreciation and Amortization 18,356 18,200 17,005 8% – Prag
Slide 16: Capital Management and Cash Flow
Capital Management and Cash Flow TTM QUARTERLY DIVIDENDS CAPITAL MANAGEMENT 115 • Board of Directors approved new share repurchase authorization of $200 million; total aggregate TTM Quarterly Dividends (in $ millions) 100 outstanding authorization of $250 million. 85 • Total of 242,890 shares repurc
Slide 17: Key Takeaways
Key Takeaways • Solid financial performance • Key indicators pointing to improved macro backdrop for MarketAxess • Roll-out of X-Pro is continuing; expanding to global client base • Executing plan to grow market share in U.S. credit • Client franchise continues to expand • Well positioned to deliver
Slide 18: Appendix
>« Market Axess: Appendix
Slide 19: Continued Strong Expansion of the Client Network
Continued Strong Expansion of the Client Network RECORD ACTIVE CLIENT FIRMS; ACTIVE U.S. CREDIT AND CLIENT PERCENT CONTRIBUTION FROM HEDGE FUND AND PRIVATE FIRMS TRADING 3 OR MORE PRODUCTS BANK CLIENTS TO TOTAL CREDIT TRADE VOLUME Active Clients Trading 3 or More Products Active U.S. Credit Clients
Slide 20: Reconciliation of Net Income to EBITDA and Net Income Margin to EBITDA Margin
Reconciliation of Net Income to EBITDA and Net Income Margin to EBITDA Margin Reconciliation of Net Income to EBITDA and Net YTD YTD 2Q24 1Q24 2Q23 Income Margin to EBITDA Margin 2024 2023 Net income $ 64,938 $ 72,615 $ 59,859 $ 137,553 $ 133,487 Add back: Interest income (6,401) (5,973) (5,312) (12
Slide 21: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Reconciliation of Net Cash Provided by YTD YTD 2Q24 1Q24 2Q23 Operating Activities to Free Cash Flow 2024 2023 Net cash provided by operating activities $ 118,849 $ (4,949) $ 105,394 $ 113,900 $ 112,921 Exclude: Net change
Slide 22: Definitions
Definitions AI-driven dealer selection tool Trading work-flow tool that helps clients access liquidity on the platform for larger sized trades leveraging tradability data (see below) and artificial intelligence (“AI”) to determine the counterparties that have historically traded the bond. Dealer sol
Slide 23: Disclosures
Disclosures ©2024 MarketAxess Holding Inc. (the "Company"). MarketAxess Corporation and Pragma LLC are members of FINRA and SIPC. MarketAxess Canada Company is a member of the New SRO. MarketAxess Europe Limited (04017160), MarketAxess Capital Limited (09777893), and MarketAxess Post-Trade Limited (
Slide 24: Now you're in the market
\Y, oN Now you're in the market”