Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q4 2020 Earnings Presentation
17 slides from Marketaxess's earnings presentation, Jan 27, 2021
Slide 1: Q4 2020 Conference Call and Webcast
Q4 2020 Conference Call and Webcast January 27, 2021
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: 4Q20 Summary
4Q20 Summary1 FINANCIAL HIGHLIGHTS BUSINESS HIGHLIGHTS • Total credit trading volume of $640 billion, up 31% • Revenues of $171.3 million, up 32% • Record estimated U.S. high-grade market share of 22.8%, up from • Operating income of $91.7 million, up 51% 19.9% and record estimated U.S. high-yield m
Slide 4: Full Year 2020 Results Reflect Accelerated Growth
Full Year 2020 Results Reflect Accelerated Growth ANNUAL REVENUE AND EPS CAGRS COMMENTARY 5-YR 10-YR Revenue 18% 18% • 12th consecutive year of record full year trading volume, revenue and Revenue EPS EPS 25% 25% operating income $800 $10.00 • Record estimated U.S. high-grade, U.S. high-yield, emerg
Slide 5: Market Conditions
Market Conditions LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & HIGH-YIELD TRACE VOLUME Q4 YoY Growth AND ESTIMATED MARKET SHARE HG TRACE: 10% Benchmark Spread 3 Month Rolling Spread Volatility HG TRACE Volume HY TRACE Volume HY TRACE: 8% 310 14.0% Combined HG and HY Market Share Benchmark Sp
Slide 6: Open Trading
Open Trading™ HIGHLIGHTS DEALER VS. CLIENT INITIATED OPEN TRADING 63% Q4 YoY • Over 28,000 orders and $15 billion notional value available through VOLUME Growth Open Trading on average per day in 4Q20 Client Initiated Volume Dealer Initiated Volume Dealer: 70% Unique Open Trading Firms Client: 60% •
Slide 7: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTO-X TRADE VOLUME AND COUNT Q4 YoY Growth Trade Volume: 31% • Over 163,000 trades completed using automated execution, up from Trade Volume Trade Count Trade Count: 29% 127,000 trades in 4Q19 35,000 180 Trade Count (in thousands) Trade Volume ($ mill
Slide 8: Investing in Long Term Growth Through Diversification
Investing in Long Term Growth Through Diversification INFORMATION SERVICES – 2020 Data Services revenue of $34.3 million, up 12% YoY; 5-year CAGR of 11% on a constant currency basis – $6.5 million in net new annualized contract value in 2020, up 14% – Over 16,000 individual users utilize award-winni
Slide 9: Quarterly Volume Growth and Estimated Market Share
Quarterly Volume Growth TOTAL CREDIT 31% U.S. HIGH-GRADE 26% Q4 YoY Growth U.S. High-Grade Volume Market Share Q4 YoY Growth 800 450 24% 700 400 23% Estimated Market Share 350 22% 600 Volume ($ billions) 300 500 21% $ billions 250 400 20% 200 300 19% 150 200 100 18% 100 50 17% -- -- 16% 1Q18 2Q18 3Q
Slide 10: Earnings Performance
Earnings Performance %Δ 4Q20 vs. 4Q20 3Q20 4Q19 4Q19 ($ in thousands, except per share data) Revenues Commissions $ 155,813 $ 150,586 $ 117,103 33.1% Information Services 8,771 8,501 8,515 3.0% Post-trade Services 6,564 4,689 3,923 67.3% Other Income 198 230 233 (15.0%) Total Revenues 171,346 164,00
Slide 11: Commission Revenue Detail
Commission Revenue Detail %Δ 4Q20 vs. 4Q20 3Q20 4Q19 4Q19 Commissions ($ in thousands) Transaction Fees U.S. High-Grade $ 59,645 $ 60,861 $ 43,120 38.3% 1 Other Credit 65,045 59,131 45,238 43.8% Total Credit 124,690 119,992 88,358 41.1% 2 Rates 3,267 3,191 2,983 9.5% Total Transaction Fees 127,957 1
Slide 12: Expense Detail
Expense Detail %Δ 4Q20 vs. 4Q20 3Q20 4Q19 4Q19 ($ in thousands) Expenses Employee Compensation and Benefits $ 36,472 $ 37,583 $ 33,117 10.1% Depreciation and Amortization 10,592 9,032 7,730 37.0% Technology and Communications 8,922 8,417 7,155 24.7% Professional and Consulting 10,295 8,269 6,389 61.
Slide 13: Balance Sheet Data
Balance Sheet Data TTM FREE CASH FLOW AND CAPITAL ($ in thousands) 12/31/2020 12/31/2019 EXPENDITURES 2 50% YoY TTM FCF Growth TTM Free Cash Flow TTM Capital Expenditures Assets 400 100 TTM Capital Expenditures ($ millions) Cash, Cash Equivalents and Investments $ 488,969 $ 500,601 TTM Free Cash Flo
Slide 14: 2021 Guidance
2021 Guidance EXPENSES • Expected range of $362.0 million to $382.0 million – Excluding Regulatory Reporting Hub expenses, the midpoint in the guidance range would represent an approximate 13% year-over-year increase in expenses on a constant currency basis – Reflects Regulatory Reporting Hub expens
Slide 15: Summary
Summary • Accelerating market share gains in core products driving revenue and earnings growth. • Growth opportunities expanding with new products and trading protocols on the network. • Institutional client network growing globally • Long term revenue and earnings growth rates show consistent track
Slide 16: Now you're in the market
\V, aN Now you're in the market”
Slide 17: Disclosures
Disclosures ©2021 MarketAxess Holding Inc. (the "Company"). MarketAxess Corporation and LiquidityEdge LLC are members of FINRA and SIPC. MarketAxess Canada Company is a member of IIROC. MarketAxess Europe Limited (04017160), MarketAxess Capital Limited (09777893), and Xtrakter Limited (01917944) are