MarketAxess : Q4 2020 Earnings slides

Q4 2020 Conference Call and Webcast

January 27, 2021

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 future results and events are based on MarketAxess' current expectations. The Company's actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: risks relating to the COVID-19 pandemic, including the possible effects of the economic conditions worldwide resulting from the COVID-19 pandemic; global economic, political and market factors; the volatility of financial services markets generally; the level of trading volume transacted on the MarketAxess platform; the absolute level and direction of interest rates and the corresponding volatility in the corporate fixed-income market; the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; the variability of our growth rate; the rapidly evolving nature of the electronic financial services industry; our ability to introduce new fee plans and our clients' response; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matched principal trades; risks related to self-clearing; our dependence on our broker-dealer clients; the loss of any of our significant institutional investor clients; our ability to develop new products and offerings and the market's acceptance of those products; the effect of rapid market or technological changes on us and the users of our technology; our ability to successfully maintain the integrity of our trading platform and our response to system failures, capacity constraints and business interruptions; our vulnerability to cyber security risks; our ability to protect our intellectual property rights or technology and defend against intellectual property infringement or other claims; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our ability to comply with new and existing laws, rules and regulations both domestically and internationally; our ability to maintain effective compliance and risk management methods; the strain of growth initiatives on management and other resources; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; and other factors. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess' business and prospects is contained in MarketAxess' periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

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4Q20 Summary1

FINANCIAL HIGHLIGHTS

BUSINESS HIGHLIGHTS

• Revenues of $171.3 million, up 32%

• Total credit trading volume of $640 billion, up 31%

• 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 market share of 17.1%, up

• Operating margin of 53.5%, up from 46.9%

from 10.6%

• Open Trading™ credit volume of $218 billion, up 63%, and estimated

• EBITDA of $101.0 million, up 45%

total system-wide cost savings of $225 million2

• Diluted EPS of $1.91, up 45%

• Board of Directors approved an increase to the regular quarterly

dividend to $0.66 per share, up from $0.60 per share

• Acquisition of Deutsche Börse's Regulatory Reporting Hub closed

November 30, 2020

TRAILING TWELVE MONTHS EPS

45%

TRAILING TWELVE MONTHS REVENUE

35%

Q4 TTM YoY

Q4 TTM YoY

Growth

Growth

$8.50

750

$8.00

700

$7.50

650

$7.00

600

$6.50

550

$6.00

$5.50

500

Pershare $5.00

$millions 450

$4.50

400

$4.00

350

$3.50

300

$3.00

$2.50

250

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q20

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q20

1. All period comparisons versus 4Q19 unless otherwise stated.
2. Estimated total system-wide cost savings represents the combination of liquidity taker and liquidity provider estimated cost savings. Please see footnote 1 on

slide 6 for the definition of liquidity taker cost savings and liquidity provider cost savings.

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Full Year 2020 Results Reflect Accelerated Growth

ANNUAL REVENUE AND EPS										CAGRS
																					5-YR10-YR
									Revenue				EPS				Revenue 18%	18%
															EPS	25%	25%
RevenueAnnual($ millions)	$800																				$10.00
$100																							Earningsper Share
	$700																				$8.00
	$600
	$500																				$6.00
	$400																				$4.00
	$300
	$200																				$2.00
	--																				--
	2016	2017			2018	2019		2020
TOTAL GLOBAL CREDIT TRADING VOLUME			5-YR CAGRS:
			U.S. High-Grade			Emerging Markets			Total Credit	24%
							U.S. High Grade	19%
			U.S High-Yield			Eurobonds
										Emerging Markets	31%
	3,000														U.S. High-Yield	28%
														Eurobond	32%
	2,500																		$300
	2,000																	$385
billions$				$140						$247	$562
											$489
	1,500										$167	$229
					$134	$127			$178
	1,000							$378
			$148			$307
	500		$224									$1,058	$1,368
		$731	$825			$928
	--
		2016	2017			2018	2019	2020

COMMENTARY

• 12th consecutive year of record full year trading volume, revenue and operating income
• Record estimated U.S. high-grade, U.S. high-yield, emerging markets and Eurobond market share
• Record estimated transaction cost savings of $1.1 billion delivered through Open Trading solutions
• Increase in active clients across all geographies and products
• Record total credit trade volume and trade count, up 29% and 24%, respectively

ACTIVE CLIENT FIRMS

Active International Clients		Clients Trading 3 or more products
Total Active Clients

	2,100
					1721	1823
					1538
	1,600
clients	1238	1375
1,100					978	899 996
# of				850
718	794	744	830
		563
	600	477
	100
	2016	2017		2018	2019	2020

1. International firms include all firms outside of the United States and Canada

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