Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q4 2016 Earnings Presentation
14 slides from Marketaxess's earnings presentation, Jan 25, 2017
Slide 1: 4Q16 Conference Call & Webcast
4Q16 CONFERENCE CALL & WEBCAST January 25, 2017
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: 4Q16 Summary
4Q16 Summary1 Earnings Business Highlights Revenues of $94.4 million, up 23.2% Total trading volume up 35.1% Expenses of $44.1 million, up 11.2% Record adjusted estimated U.S. high-grade2 market share of 17.2%, up from 15.1% Pre-tax income of $50.3 million, up 36.1% Record quarter for U.
Slide 4: Full Year 2016 Results Reflect Acceleration of Growth Rates
Full Year 2016 Results Reflect Acceleration of Growth Rates Annual Revenue & Adjusted EPS1 Trend Full Year 2016 Compound Annual Growth Rate 400 Revenue Adjusted EPS $4.00 1-Year 3-Year 5-Year 350 $3.50 Annual Revenue ($ millions) 300 $3.00 Total Revenue 22.0% 15.7% 16.6% Adjusted EPS 250 $2.50 200 $
Slide 5: Annual Volume and Active Clients by Product
Annual Volume and Active Clients by Product U.S. High-Grade Eurobond 800 U.S. High-Grade Volume Active Clients 1,000 160 Eurobond Volume Active Clients 500 # of Client Firms Trading U.S. High-Grade 700 900 140 18% 5-Year Vol. CAGR 34% 5-Year Vol. CAGR # of Client Firms Trading Eurobond 800 400 Trade
Slide 6: Open Trading
Open Trading™ Open Trading Growth Highlights 140,000 Trade Volume Trade Count 60 $831 million average daily volume, up 86% from 4Q15 120,000 50 Approximately 125,000 total Open Trading Trade Volume ($ in billion) Trade Count (# of trades) 100,000 40 transactions completed in 4Q16, up from 58,000
Slide 7: Global Regulatory Landscape
Global Regulatory Landscape MarketAxess is actively engaged with clients and regulators regarding MiFID II implementation, while monitoring Brexit and potential changes in U.S. regulations. Bank capital requirements are not likely to be reduced; however, an incremental rollback of the most controv
Slide 8: Quarterly Volume
Quarterly Volume Global U.S. High-Grade U.S. High-Grade Volume Market Share Market Share1 350 200 18% 35% 29% U.S. High-Grade Volume ($ billions) 300 Q4 YoY 180 Q4 YoY 17% Growth 160 Growth 250 140 16% Market Share ($ billions) 200 120 100 15% 150 80 14% 100 60 40 50 13% 20 0 0 12% 4Q14 1Q15 2Q15 3Q
Slide 9: Earnings Performance
Earnings Performance (In thousands, except per share data) ∆ 4Q16 vs. 4Q16 3Q16 4Q15 4Q15 Revenues Commissions $ 85,519 $ 81,456 $ 67,613 26.5% Information and Post-trade Services 7,538 7,322 7,678 (1.8%) Investment and Other Income 1,379 1,493 1,353 1.9% Total Revenues 94,436 90,271 76,644 23.2% Ex
Slide 10: Commission Revenue Detail
Commission Revenue Detail %Δ ($ in thousands) 4Q16 vs. 4Q16 3Q16 4Q15 4Q15 Commissions Transaction Fees U.S. High-Grade $ 34,191 $ 33,765 $ 24,686 38.5% 1 Other Credit 35,048 30,181 26,002 34.8% 2 Liquid Products 699 798 606 15.3% Total Transaction Fees 69,938 64,744 51,294 36.3% Distribution Fees U
Slide 11: Expense Detail
Expense Detail ($ in thousands) %∆ 4Q16 vs. 4Q16 3Q16 4Q15 4Q15 Expenses Employee Comp. and Benefits $ 22,529 $ 23,914 $ 21,087 6.8% Depreciation and Amortization 4,292 4,325 4,685 (8.4%) Technology and Communications 4,449 4,245 3,720 19.6% Professional and Consulting 4,726 4,342 3,540 33.5% Occupa
Slide 12: Strong Cash Flow Generation With Focus on Investing in Business and Returning Capital to Shareholders
Strong Cash Flow Generation With Focus on Investing in Business and Returning Capital to Shareholders (In thousands) Free Cash Flow and Dividends 12/31/2016 12/31/2015 Free Cash Flow Full Year Dividend 160 $1.20 Assets 140 Free Cash Flow ($ in millions) $1.00 Annual Dividend Per Share Cash and Cash
Slide 13: 2017 Guidance and Other Matters
2017 Guidance and Other Matters Guidance New Standard for Employee Share-Based Accounting Windfall tax benefits or decrements: Expenses Will be recognized through the income tax Total expenses ranging from $192 million to $208 provision million Will be classified within operating cash flows
Slide 14: Summary
Summary Record trading volumes, revenues and EPS in 2016 Acceleration in market share gains across core products Open Trading momentum continues Expanding global credit footprint Regulatory changes likely to be net positives © 2017 MarketAxess Holdings Inc. (the "Company"). Confidential an