About Marketaxess Holdings Inc.

A little creative spelling never got in the way of a good bond trade. MarketAxess offers an electronic multi-dealer platform for institutional traders buying and selling US corporate, high-yield, and emerging market bonds, as well as Eurobonds. Participating broker-dealers include some of the world's largest, such as BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs, and Merrill Lynch. In all, MarketAxess serves more than 1,000 investment firms, mutual funds, insurance companies, pension funds, and other institutional investors. The company also provides real-time corporate bond price information through its Corporate BondTicker service.

Operations

Nearly 85% of the company's revenue comes from monthly distribution fees and commissions for transactions executed on its platform between institutional investor and broker-dealer clients. About 10% of its revenue comes from its information and post-trade services from its Trax division (the trading name under Xtrakter Ltd.), which provides trade matching, regulatory transaction reporting, and market and reference data across a range of fixed income products. Less than 5% of its revenue comes from its technology products and services. MarketAxess had a staff of 303 employees at the end of 2014, with 187 of them based in teh US and the others mostly in the UK.

Geographic Reach

MarketAxess generates 85% of its revenue from the US, while nearly all of the remainder comes from the UK. The company has office locations in the US, UK, Brazil, and Singapore.

Sales and Marketing

To boost awareness of its brand and electronic trading platform, MarketAxess uses advertising, direct marketing, promotional mailings, and participates in industry conferences and media engagement. As an example, it worked with The Wall Street Journal to make its Corporate BondTicker service the source of WSJ's information for its daily corporate bond and high-yield tables.

In the US high-grade corporate bond market, more than 600 active institutional investors and 68 broker-dealers used MarketAxess' platform in 2014, including all of the top 20 broker-dealers as ranked by 2014 US corporate bond new-issue underwriting volume. The company's broker-dealer clients made up 96% of all underwriting activity for newly-issued corporate bonds in 2014.

Overall, the firm spent $5.8 million on advertising in 2014, up 25% from $4.6 million spent in 2013.

Financial Performance

MarketAxess' revenues and profits have risen at a healthy clip over the past several years largely as the bond market has become more attractive to investors, which has led to growth in both MarketAxess' commission income and information and post-trade services income.

The firm's revenue rose by 10% to $262.8 million in 2014 mostly thanks to commission income growth as trading activity in the bond market remained strong. Its revenue from its information and post-trade services also grew thanks to its 2013 acquisition of Xtrackter, while favorable foreign currency exchange rates also added to the company's top-line growth.

Despite generating higher revenue in 2014, MarketAxess' net income dipped by 2% to $74.8 million for the year, mostly because in 2013 it had enjoyed a $7.6 million (non-recurring) gain from its since-discontinued Greenline subsidiary. MarketAxess' operating cash levels jumped 21% to nearly $110 million in 2014 mostly as it generated higher cash earnings compared to the prior year.

Strategy

MarketAxess focuses on technology investments to expand its connectivity offerings for electronic transactions. Its main objective, reiterated in 2015, is to "provide the leading global electronic trading platform for fixed-income securities, connecting broker-dealers and institutional investors more easily and efficiently, while offering a broad array of information, trading and technology services to market participants across the trading cycle."

The strategy's key elements include: innovating and introducing new product offerings to the MarketAxess platform; leverage its existing client network to increase the number of potential counterparties and boost liquidity; continue to build on its existing service offerings to ensure that its platform is more full integrated into the workflow of its client base; and add new content and analytical capabilities to its Corporate BondTicker service.

The firm also fosters growth by entering strategic alliances or acquiring smaller marketplace firms to expand its service capabilities, extend its market reach, or bolsters its existing service expertise.

Mergers and Acquisitions

In February 2013, MarketAxess expanded its capacity when it acquired Xtrakter Limited, a leading provider of regulatory transaction reporting, financial market data, and trade matching services to the European securities markets. The acquired company became MarketAxess' Trax division.

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Marketaxess Holdings Inc.

299 Park Ave Fl 10
New York, NY 10171-3804
Phone: 1 (212) 813-6000
Fax: 1 (212) 813-6390

Stats

  • Employer Type: Public
  • Stock Symbol: MKTX
  • Stock Exchange: NASDAQ
  • Chairman, President, and CEO: Richard M. McVey
  • Chairman, President, and CEO: Richard M. McVey
  • CIO: Nicholas Themelis
  • 2017 Employees: 429

Major Office Locations

  • New York, NY