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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. Over 1,700 institutional investor and broker-dealer firms are active users of the company patent trading technology. The company also provides real-time the ability to view indicative prices from its broker-dealer clients' inventory available on its platform, access to real-time pricing information and analytical tools available through its Corporate BondTicker service. Majority of its revenue accounts in United States. The company was incorporated in the year 2000.

Operations

Nearly 90% of the company's revenue comes from commissions for transactions executed on its platform between institutional investor and broker-dealer clients. About 5% of its revenue comes from its information products and services. Less than 5% of its revenue comes from its post-trade services from its Trax division, which provides trade matching, regulatory transaction reporting, and market and reference data across a range of fixed income products. MarketAxess had a staff of more than 525 employees, with about 325 of them based in the US and the others mostly in the UK.

Geographic Reach

New York based, MarketAxess generates nearly 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, Netherlands, Hong Kong and Singapore.

Sales and Marketing

To boost awareness of its brand and electronic trading platform, MarketAxess uses advertising, direct marketing, digital and social media, 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 200 active institutional investors and over 90 broker-dealers used MarketAxess' platform, including all of the top 20 broker-dealers as ranked by 2019 US corporate bond new-issue underwriting volume. The company's broker-dealer clients made up of more than 95% of all underwriting activity for newly-issued corporate bonds.

Overall, the firm spent about $11,500 on advertising in 2019, from more than $12,100 million spent in 2018.

Financial Performance

MarketAxess' revenues and profits have risen at a healthy clip over the past five 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. It posted growth of 69% over that period.

The firm's revenue rose by 17% to $511.4 million in 2019, mostly thanks to commission income growth and revenue from Information services segments.

Net income for 2019 was $204.9 million, higher by $32 million than in 2018. The increase in income was mainly due to increase in total revenues.

Cash and cash equivalents at the end of the period were $274.3 million. Net cash provided by operating activities was $265.9 million, while cash used in investing and financing activities were $122.1 million and $118.1 million. Main cash uses were for purchases of investments, acquisitions of businesses, and cash dividends on common stock.

Strategy

MarketAxess objective is to provide the leading global electronic trading platforms 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 key elements of its strategy are:

Broadening its client base in its existing markets and increase penetration with existing clients by increasing its international presence by increasing the number of firms located outside the US that access its platforms through its venues in Europe, Asia and Latin America, increasing the number of local currencies available for trading on its platforms; and, subject to regulatory requirements, increasing the number of countries in which it can offer its platforms;   

Enhance the liquidity of securities traded on its platforms by leveraging its client network and open trading protocols and by deploying innovative technology solutions designed to increase the number of potential trading counterparties on its platforms and to address different trade sizes, bond liquidity characteristics and trading preferences;

Continue to develop innovative next-generation technologies that will allow its clients to further automate and improve the performance of their trading desks by launching a number of innovative technologies that rely on machine-learning, automation and algorithms that are designed to improve the trading decisions and workflows of its clients, while reducing trading inefficiencies and human errors;

Expand and strengthen its trade-related service, data and analytical offerings throughout the trading cycle so that MarketAxess is more fully integrated into the workflow of its broker-dealer and institutional investor clients; and

Pursue select acquisitions and strategic alliances that will enable it to enter new markets, provide new products or services, or otherwise enhance the value of its platform and existing trade-related services to its clients.

Mergers and Acquisitions

In 2020, MarketAxess has completed its previously announced acquisition of Regulatory Reporting Hub, the regulatory reporting business of Deutsche Börse Group. MarketAxess acquired the business through Trax NL B.V., its wholly owned subsidiary in the Netherlands. The Regulatory Reporting Hub is a pan-European reporting and compliance platform that enables buy- and sell-side clients to meet their regulatory obligations and transparency requirements across multiple regulations, such as MiFID II and EMIR. Services include transaction and trade reporting, best execution reporting and SI services, as well as APA and ARM services. Terms were not disclosed.

In 2019, MarketAxess has completed its previously announced acquisition of LiquidityEdge, a leading provider of an electronic U.S. Treasuries marketplace. The acquisition was completed on November 1, 2019 following approval from the necessary regulatory authorities. The purchase price is approximately $150 million, including $100 million in cash and 146,450 shares of MarketAxess common stock, subject to customary purchase price adjustments.

Marketaxess Holdings Inc.

55 Hudson Yards FL 15
New York, NY 10001-2163
Phone: 1 (212) 813-6000

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: MKTX
Stock Exchange: , NASDAQ
CFO: Antonio L. DeLise
Chairman, President, and CEO: Richard M. McVey
CIO: Nicholas Themelis
Employees (This Location): 41
Employees (All Locations): 527

Major Office Locations

New York, NY

Other Locations

New York, NY