Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 27, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MKTX | |
Entity Registrant Name | MARKETAXESS HOLDINGS INC | |
Entity Central Index Key | 1,278,021 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,579,648 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 161,444 | $ 199,728 |
Investments, at fair value | 170,655 | 84,706 |
Accounts receivable, net of allowance of $194 and $109 as of September 30, 2016 and December 31, 2015, respectively | 56,583 | 40,459 |
Goodwill and intangible assets, net of accumulated amortization | 63,539 | 64,142 |
Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization | 30,773 | 30,897 |
Prepaid expenses and other assets | 11,758 | 9,880 |
Deferred tax assets, net | 7,399 | 9,229 |
Total assets | 502,151 | 439,041 |
Liabilities | ||
Accrued employee compensation | 28,546 | 29,296 |
Income and other tax liabilities | 3,634 | 4,463 |
Deferred revenue | 3,006 | 2,312 |
Accounts payable, accrued expenses and other liabilities | 15,265 | 12,257 |
Total liabilities | 50,451 | 48,328 |
Commitments and Contingencies (Note 10) | ||
Stockholders’ equity | ||
Additional paid-in capital | 337,261 | 321,215 |
Treasury stock - Common stock voting, at cost, 2,499,785 and 2,412,245 shares as of September 30, 2016 and December 31, 2015, respectively | (107,279) | (93,405) |
Retained earnings | 231,743 | 168,011 |
Accumulated other comprehensive loss | (10,145) | (5,229) |
Total stockholders’ equity | 451,700 | 390,713 |
Total liabilities and stockholders’ equity | 502,151 | 439,041 |
Undefined Preferred Stock [Member] | ||
Stockholders’ equity | ||
Preferred stock | ||
Series A Preferred Stock [Member] | ||
Stockholders’ equity | ||
Preferred stock | ||
Voting Common Stock [Member] | ||
Stockholders’ equity | ||
Common stock | $ 120 | $ 121 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Allowance for accounts receivable | $ 194 | $ 109 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 4,855,000 | 4,855,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.003 | $ 0.003 |
Common stock, shares authorized | 110,000,000 | 110,000,000 |
Common stock, shares issued | 40,093,981 | 39,821,519 |
Common stock, shares outstanding | 37,594,196 | 37,409,274 |
Treasury stock, shares | 2,499,785 | 2,412,245 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 110,000 | 110,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock Non-Voting [Member] | ||
Common stock, par value | $ 0.003 | $ 0.003 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | ||||
Commissions | $ 81,456 | $ 65,178 | $ 246,788 | $ 198,608 |
Information and post-trade services | 7,322 | 7,671 | 23,687 | 22,982 |
Investment income | 534 | 248 | 1,469 | 621 |
Other | 959 | 1,095 | 3,539 | 4,243 |
Total revenues | 90,271 | 74,192 | 275,483 | 226,454 |
Expenses | ||||
Employee compensation and benefits | 23,914 | 21,002 | 74,256 | 62,769 |
Depreciation and amortization | 4,325 | 4,642 | 13,546 | 13,857 |
Technology and communications | 4,245 | 3,891 | 12,826 | 12,196 |
Professional and consulting fees | 4,342 | 3,210 | 12,449 | 9,503 |
Occupancy | 1,220 | 1,246 | 3,606 | 3,470 |
Marketing and advertising | 2,140 | 1,304 | 5,742 | 4,260 |
General and administrative | 3,731 | 3,544 | 11,783 | 9,485 |
Total expenses | 43,917 | 38,839 | 134,208 | 115,540 |
Income before income taxes | 46,354 | 35,353 | 141,275 | 110,914 |
Provision for income taxes | 15,436 | 12,638 | 48,268 | 39,368 |
Net income | $ 30,918 | $ 22,715 | $ 93,007 | $ 71,546 |
Net income per common share | ||||
Basic | $ 0.84 | $ 0.62 | $ 2.52 | $ 1.95 |
Diluted | 0.82 | 0.60 | 2.46 | 1.90 |
Cash dividends declared per common share | $ 0.26 | $ 0.20 | $ 0.78 | $ 0.60 |
Weighted average shares outstanding | ||||
Basic | 36,889 | 36,681 | 36,847 | 36,695 |
Diluted | 37,792 | 37,643 | 37,738 | 37,636 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 30,918 | $ 22,715 | $ 93,007 | $ 71,546 |
Net cumulative translation adjustment and foreign currency exchange hedge, net of tax of $346, $(69), $4,448 and $(229), respectively | (1,052) | (105) | (5,093) | (420) |
Net unrealized gain (loss) on securities available-for-sale, net of tax of $(27), $(4), $109 and $(7), respectively | (44) | (6) | 177 | (12) |
Comprehensive Income | $ 29,822 | $ 22,604 | $ 88,091 | $ 71,114 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Foreign currency exchange hedge, tax benefit | $ 346 | $ (69) | $ 4,448 | $ (229) |
Securities available-for-sale, tax expense (benefit) | $ (27) | $ (4) | $ 109 | $ (7) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock Voting [Member] | Additional Paid-in Capital [Member] | Treasury Stock - Common Stock Voting [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning Balance at Dec. 31, 2015 | $ 390,713 | $ 121 | $ 321,215 | $ (93,405) | $ 168,011 | $ (5,229) |
Net income | 93,007 | 93,007 | ||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | (5,093) | (5,093) | ||||
Unrealized gain on securities available-for-sale, net of tax | 177 | 177 | ||||
Stock-based compensation | 10,636 | 10,636 | ||||
Exercise of stock options | 2,172 | 2,172 | ||||
Withholding tax payments on restricted stock vesting and stock option exercises | (5,929) | (1) | (5,928) | |||
Excess tax benefits from stock-based compensation | 9,166 | 9,166 | ||||
Repurchases of common stock | (13,874) | (13,874) | ||||
Cash dividend on common stock | (29,275) | (29,275) | ||||
Ending Balance at Sep. 30, 2016 | $ 451,700 | $ 120 | $ 337,261 | $ (107,279) | $ 231,743 | $ (10,145) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net income | $ 93,007 | $ 71,546 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,546 | 13,857 |
Stock-based compensation expense | 10,636 | 9,276 |
Deferred taxes | (1,387) | (1,250) |
Other | 878 | 1,638 |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | (16,439) | (15,595) |
(Increase) in prepaid expenses and other assets | (2,151) | (347) |
(Decrease) in accrued employee compensation | (750) | (2,472) |
(Decrease) in income and other tax liabilities | (843) | (1,309) |
Increase (decrease) in deferred revenue | 694 | (250) |
Increase in accounts payable, accrued expenses and other liabilities | 2,646 | 1,244 |
Net cash provided by operating activities | 23,974 | 76,338 |
Available-for-sale investments: | ||
Proceeds from maturities and sales | 32,025 | 25,048 |
Purchases | (42,495) | (57,175) |
Purchases of furniture, equipment and leasehold improvements | (4,754) | (3,730) |
Capitalization of software development costs | (9,058) | (7,517) |
Other | 383 | (141) |
Net cash (used in) investing activities | (23,899) | (43,515) |
Cash flows from financing activities | ||
Cash dividend on common stock | (28,914) | (22,201) |
Exercise of stock options | 2,172 | 1,530 |
Withholding tax payments on restricted stock vesting and stock option exercises | (5,929) | (4,450) |
Excess tax benefits from stock-based compensation | 9,166 | 4,202 |
Repurchases of common stock | (13,874) | (20,025) |
Net cash (used in) financing activities | (37,379) | (40,944) |
Effect of exchange rate changes on cash and cash equivalents | (980) | (427) |
Cash and cash equivalents | ||
Net (decrease) for the period | (38,284) | (8,548) |
Beginning of period | 199,728 | 168,924 |
End of period | 161,444 | $ 160,376 |
Corporate Debt [Member] | ||
Changes in operating assets and liabilities: | ||
(Increase) in trading securities | (74,535) | |
Mutual Funds Held In Rabbi Trust [Member] | ||
Changes in operating assets and liabilities: | ||
(Increase) in trading securities | $ (1,328) |
Organization and Principal Busi
Organization and Principal Business Activity | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Principal Business Activity | 1. Organization and Principal Business Activity MarketAxess Holdings Inc. (the “Company” or “MarketAxess”) was incorporated in the State of Delaware on April 11, 2000. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. These consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The consolidated financial information as of December 31, 2015 has been derived from audited financial statements not included herein. These unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to Form 10-Q and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the interim periods presented. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. Interim period operating results may not be indicative of the operating results for a full year. Cash and Cash Equivalents Cash and cash equivalents includes cash and money market instruments that are primarily maintained at one major global bank. Given this concentration, the Company is exposed to certain credit risk in relation to its deposits at this bank. The Company defines cash equivalents as short-term interest-bearing investments with maturities at the time of purchase of three months or less. Investments The Company determines the appropriate classification of securities at the time of purchase which are recorded in the Consolidated Statements of Financial Condition on the trade date. Securities are classified as available-for-sale or trading. The Company’s available-for-sale investments are comprised of municipal bonds and investment grade corporate debt securities. Available-for-sale investments are carried at fair value with the unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Trading investments primarily include investment grade corporate debt securities and are carried at fair value, with unrealized gains or losses included in other income in the Consolidated Statements of Operations. The Company assesses whether an other-than-temporary impairment loss on the available-for-sale investments has occurred due to declines in fair value or other market conditions. The portion of an other-than-temporary impairment related to credit loss is recorded as a charge in other income in the Consolidated Statements of Operations. The remainder is recognized in accumulated other comprehensive loss if the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery. No charges for other-than-temporary losses were recorded during the nine months ended September 30, 2016 and 2015. Fair Value Financial Instruments Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” A three-tiered hierarchy for determining fair value has been established that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as Level 1 (unadjusted quoted prices for identical assets or liabilities in active markets), Level 2 (inputs that are observable in the marketplace other than those inputs classified in Level 1) and Level 3 (inputs that are unobservable in the marketplace). The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of its money market funds, securities available-for-sale, trading securities and foreign currency forward contracts. All other financial instruments are short-term in nature and the carrying amount is reported on the Consolidated Statements of Financial Condition at approximate fair value. Allowance for Doubtful Accounts All accounts receivable have contractual maturities of less than one year and are derived from trading-related fees and commissions and revenues from products and services. The Company continually monitors collections and payments from its customers and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expense in the Consolidated Statements of Operations. Depreciation and Amortization Fixed assets are carried at cost less accumulated depreciation. The Company uses the straight-line method of depreciation over three to seven years. The Company amortizes leasehold improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease. Software Development Costs The Company capitalizes certain costs associated with the development of internal use software, including among other items, employee compensation and related benefits and third party consulting costs at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed. Once the product is ready for its intended use, such costs are amortized on a straight-line basis over three years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Cash Provided as Collateral Cash is provided as collateral for broker-dealer clearing accounts. Cash provided as collateral is included in prepaid expenses and other assets in the Consolidated Statements of Financial Condition. Foreign Currency Translation and Forward Contracts Assets and liabilities denominated in foreign currencies are translated using exchange rates at the end of the period; revenues and expenses are translated at average monthly rates. Gains and losses on foreign currency translation are a component of accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Transaction gains and losses are recorded in general and administrative expense in the Consolidated Statements of Operations. The Company enters into foreign currency forward contracts to hedge its net investment in its U.K. subsidiaries. Gains and losses on these transactions are included in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Revenue Recognition The majority of the Company’s revenues are derived from commissions for trades executed on its platform and distribution fees that are billed to its broker-dealer clients on a monthly basis. The Company also derives revenues from information and post-trade services, investment income and other income. Commission revenue. Commissions are generally calculated as a percentage of the notional dollar volume of bonds traded on the platform and vary based on the type, size, yield and maturity of the bond traded. Under the Company’s transaction fee plans, bonds that are more actively traded or that have shorter maturities are generally charged lower commissions, while bonds that are less actively traded or that have longer maturities generally command higher commissions. For trades that the Company executes between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller, the Company earns the commission through the difference in price between the two matched principal trades. Fee programs for certain products include distribution fees which are recognized monthly. Information and post-trade services. The Company generates revenue from information services provided to our broker-dealer clients, institutional investor clients and data-only subscribers. Information services are invoiced monthly, quarterly or annually. When billed in advance, revenues are deferred and recognized monthly on a straight-line basis. The Company also generates revenue from regulatory transaction reporting and trade matching services. Revenue is recognized in the period the services are provided. Technology products and services. The Company generates revenues from professional consulting services, technology software licenses and maintenance and support services. Revenue is generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collection is considered probable. Technology products and services revenue is reported in other income in the Consolidated Statements of Operations. Initial set-up fees. The Company enters into agreements with its broker-dealer clients pursuant to which the Company provides access to its platform through a non-exclusive and non-transferable license. Broker-dealer clients may pay an initial set-up fee, which is typically due and payable upon execution of a dealer agreement. The initial set-up fee, if any, varies by agreement. Revenue is recognized over the initial term of the agreement, which is generally two years. Initial set-up fees are reported in other income in the Consolidated Statements of Operations. Stock-Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards based on their estimated fair values measured as of the grant date. These costs are recognized as an expense in the Consolidated Statements of Operations over the requisite service period, which is typically the vesting period, with an offsetting increase to additional paid-in capital. Income Taxes Income taxes are accounted for using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized against deferred tax assets if it is more likely than not that such assets will not be realized in future years. The Company recognizes interest and penalties related to unrecognized tax benefits in general and administrative expenses in the Consolidated Statements of Operations. Business Combinations, Goodwill and Intangible Assets Business combinations are accounted for under the purchase method of accounting. The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of certain assets acquired and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates and asset lives. The Company operates as a single reporting unit. Subsequent to an acquisition, goodwill no longer retains its identification with a particular acquisition, but instead becomes identifiable with the entire reporting unit. As a result, all of the fair value of the Company is available to support the value of goodwill. An impairment review of goodwill is performed on an annual basis, at year-end, or more frequently if circumstances change. Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized on a straight-line basis over their estimated useful lives, ranging from three to 15 years. Intangible assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment. Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue common stock were converted into or exercised for common stock. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Out-of-Period Adjustments During the first quarter of 2016, the Company determined that it had incorrectly recorded deferred taxes for the cumulative translation adjustment (“CTA”) that arises from converting the local currency financial statements into U.S. dollars. Upon making a permanent reinvestment assertion on unremitted earnings from foreign subsidiaries effective January 1, 2013, the Company should have eliminated any deferred tax balances derived from the CTA balance. The Company also determined that gains and losses on the foreign currency forward contracts used to hedge the net investment in certain foreign subsidiaries were not appropriately considered as taxable income or expense in the consolidated tax returns. The Company assessed these errors and determined that they were not material to previous reporting periods. Therefore, the Company recorded these items as out-of-period adjustments in the three months ended March 31, 2016 by decreasing deferred tax assets by $3.1 million, decreasing other comprehensive income by $2.1 million and increasing prepaid expenses and other assets by $1.0 million in the Consolidated Statements of Financial Condition. Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230)” (“ASU 2016-15”). ASU 2016-15 is intended to provide clarification on the treatment of certain cash receipts and payments. The ASU will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company is in the process of determining the method of adoption and assessing the impact of ASU 2016-15 on the Company’s Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326)” (“ASU 2016-13”). ASU 2016-13 is intended to require timelier recording of credit losses with respect to loans and other financial instruments. The ASU will be effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company is in the process of determining the method of adoption and assessing the impact of ASU 2016-13 on the Company’s Consolidated Financial Statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) and has subsequently issued a series of modifying ASUs that will not change the core principle of the guidance stated in ASU 2014-09. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The modifying ASUs include: (i) ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. ASU 2016-09 will be effective for the Company beginning January 1, 2017 and early adoption is permitted. The Company is currently in the process of determining the method of adoption and assessing the impact of ASU 2016-09 on the Company's Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The guidance affects the accounting for leases and provides for a lessee model that brings substantially all leases onto the balance sheet |
Net Capital Requirements
Net Capital Requirements | 9 Months Ended |
Sep. 30, 2016 | |
Net Capital [Abstract] | |
Net Capital Requirements | 3. Net Capital Requirements Certain U.S. subsidiaries of the Company are registered as a broker-dealer or swap execution facility and therefore are subject to the applicable rules and regulations of the SEC and the Commodity Futures Trading Commission. These rules contain minimum net capital requirements, as defined in the applicable regulations, and also may require a significant part of the registrants’ assets be kept in relatively liquid form. Certain of the Company’s foreign subsidiaries are regulated by the Financial Conduct Authority in the U.K. or Ontario Securities Commission in Canada and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of September 30, 2016, each of the Company’s subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of September 30, 2016, the Company’s subsidiaries maintained aggregate net capital and financial resources that was $107.3 million in excess of the required levels of $10.4 million. Each of the Company’s U.S. and foreign regulated subsidiaries are subject to local regulations which generally prohibit repayment of borrowings from the Company or affiliates, paying cash dividends, making loans to the Company or affiliates or otherwise entering into transactions that result in a significant reduction in regulatory net capital or financial resources without prior notification to or approval from such regulated entity’s principal regulator. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2. Level 1 Level 2 Level 3 Total (In thousands) As of September 30, 2016 Money market funds $ 37,609 $ — $ — $ 37,609 Securities available-for-sale Corporate debt — 94,781 — 94,781 Trading securities Corporate debt — 74,546 — 74,546 Mutual funds held in rabbi trust — 1,328 — 1,328 Foreign currency forward position — 318 — 318 Total $ 37,609 $ 170,973 $ — $ 208,582 As of December 31, 2015 Money market funds $ 61,913 $ — $ — $ 61,913 Securities available-for-sale Corporate debt — 82,671 — 82,671 Municipal securities — 2,035 — 2,035 Foreign currency forward position — 354 — 354 Total $ 61,913 $ 85,060 $ — $ 146,973 Securities classified within Level 2 were valued using a market approach utilizing prices and other relevant information generated by market transactions involving comparable assets. The foreign currency forward contracts are classified within Level 2 as the valuation inputs are based on quoted market prices. The mutual funds held in a rabbi trust represent investments associated with the deferred cash incentive plan. See Note 14 to these Consolidated Financial Statements for further discussion of the deferred cash incentive plan. There were no financial assets classified within Level 3 during the nine months ended September 30, 2016 and 2015. The Company enters into foreign currency forward contracts to hedge the net investment in the Company’s U.K. subsidiaries. The Company designates each foreign currency forward contract as a hedge and assesses the risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure and how effectiveness is to be assessed prospectively and retrospectively. These hedges are for a one-month period and are used to limit exposure to foreign currency exchange rate fluctuations. The fair value of the asset is included in prepaid expenses and other assets and the fair value of the liability is included in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. Gains or losses on foreign currency forward contracts designated as hedges are included in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. A summary of the Company’s foreign currency forward position is as follows: As of September 30, 2016 December 31, 2015 (In thousands) Notional value $ 59,962 $ 45,716 Fair value of notional 59,644 45,362 Fair value of the asset $ 318 $ 354 The following is a summary of the Company’s investments: Gross Gross Estimated Amortized unrealized unrealized fair cost gains losses value (In thousands) As of September 30, 2016 Securities available-for-sale Corporate debt $ 94,760 $ 59 $ (38 ) $ 94,781 Total securities available-for-sale 94,760 59 (38 ) 94,781 Trading securities Corporate debt 74,370 188 (12 ) 74,546 Mutual funds held in rabbi trust 1,167 161 — 1,328 Total trading securities 75,537 349 (12 ) 75,874 Total investments $ 170,297 $ 408 (50 ) $ 170,655 As of December 31, 2015 Securities available-for-sale Corporate debt $ 82,937 $ 4 $ (270 ) $ 82,671 Municipal securities 2,035 — — 2,035 Total securities available-for-sale $ 84,972 $ 4 $ (270 ) $ 84,706 The following table summarizes the fair value of the investments based upon the contractual maturities: As of September 30, 2016 December 31, 2015 (In thousands) Less than one year $ 99,264 $ 37,694 Due in 1 - 5 years 71,391 47,012 Total $ 170,655 $ 84,706 Proceeds from the sales and maturities of investments during the nine months ended September 30, 2016 and 2015 were $48.1 million and $25.0 million, respectively. The following table provides fair values and unrealized losses on investments and by the aging of the securities’ continuous unrealized loss position as of September 30, 2016 and December 31, 2015: Less than Twelve Months Twelve Months or More Total Estimated Gross Estimated Gross Estimated Gross fair unrealized fair unrealized fair unrealized value losses value losses value losses (In thousands) As of September 30, 2016 Corporate debt $ 49,177 $ (41 ) $ 2,000 $ (9 ) $ 51,177 $ (50 ) As of December 31, 2015 Corporate debt $ 70,651 $ (270 ) $ — $ — $ 70,651 $ (270 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives was $59.7 million as of both September 30, 2016 and December 31, 2015. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following: September 30, 2016 December 31, 2015 Cost Accumulated Amortization Net Carrying Amount Cost Accumulated Amortization Net Carrying Amount (In thousands) Technology $ 5,770 $ (5,770 ) $ — $ 5,770 $ (5,492 ) $ 278 Customer relationships 5,638 (1,812 ) 3,826 5,668 (1,553 ) 4,115 Non-competition agreements 380 (380 ) — 380 (359 ) 21 Tradenames 370 (370 ) — 370 (353 ) 17 Total $ 12,158 $ (8,332 ) $ 3,826 $ 12,188 $ (7,757 ) $ 4,431 Amortization expense associated with identifiable intangible assets was $0.6 million and $1.7 million for the nine months ended September 30, 2016 and 2015, respectively. Estimated total amortization expense is $0.7 million for 2016, and $0.4 million for each of 2017, 2018, 2019 and 2020. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The provision for income taxes consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands) Current: Federal $ 13,273 $ 11,041 $ 30,898 $ 28,131 State and local 1,895 2,036 5,055 5,234 Foreign 1,714 1,234 4,599 3,189 Total current provision 16,882 14,311 40,552 36,554 Deferred: Federal (918 ) (1,246 ) 6,895 2,658 State and local (154 ) (209 ) 964 420 Foreign (374 ) (218 ) (143 ) (264 ) Total deferred provision (1,446 ) (1,673 ) 7,716 2,814 Provision for income taxes $ 15,436 $ 12,638 $ 48,268 $ 39,368 The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. Income tax returns for U.S. Federal (through 2013), New York City (through 2003) and state (through 2009) and Connecticut state (through 2003) have been audited. An examination of New York State tax returns for 2010 through 2012 is currently underway. The Company cannot estimate when the examinations will conclude or the impact such examinations will have on the Company’s Consolidated Financial Statements, if any. The Company has determined that unremitted earnings of the Company’s foreign subsidiaries are considered indefinitely reinvested outside of the United States. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Plans | 7. Stock-Based Compensation Plans Stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands) Employees $ 3,387 $ 2,958 $ 9,963 $ 8,596 Non-employee directors 312 294 673 680 Total stock-based compensation $ 3,699 $ 3,252 $ 10,636 $ 9,276 The Company records stock-based compensation for employees in employee compensation and benefits and for non-employee directors in general and administrative expenses in the Consolidated Statements of Operations. During the nine months ended September 30, 2016, the Company granted to employees and directors a total of 101,215 shares of restricted stock or restricted stock units, performance-based shares with an expected pay-out at target of 48,899 shares of common stock and 112,988 options to purchase shares of common stock. The fair value of the restricted stock and performance-based share awards was based on a weighted-average fair value per share at the grant date of $106.25 and $102.54, respectively. Based on the Black-Scholes option pricing model, the weighted-average fair value for each option granted was $31.80 per share. As of September 30, 2016, the total unrecognized compensation cost related to all non-vested awards was $25.8 million. That cost is expected to be recognized over a weighted-average period of 2.5 years. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per common share: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands, except per share amounts) Net income $ 30,918 $ 22,715 $ 93,007 $ 71,546 Basic weighted average shares outstanding 36,889 36,681 36,847 36,695 Dilutive effect of stock options and restricted stock 903 962 891 941 Diluted weighted average shares outstanding 37,792 37,643 37,738 37,636 Basic earnings per share $ 0.84 $ 0.62 $ 2.52 $ 1.95 Diluted earnings per share $ 0.82 $ 0.60 $ 2.46 $ 1.90 Stock options and restricted stock totaling 6,480 shares and 130,112 shares for the three months ended September 30, 2016 and 2015, respectively, and 112,004 shares and 170,429 shares for the nine months ended September 30, 2016 and 2015, respectively, were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. The computation of diluted shares can vary among periods due, in part, to the change in the average price of the Company’s common stock. |
Credit Agreement
Credit Agreement | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Credit Agreement | 9. Credit Agreement In January 2013, the Company entered into a three-year credit agreement that provided for revolving loans and letters of credit up to an aggregate of $50.0 million. In October 2015, the Company entered into an amended and restated credit agreement (the “Credit Agreement”) that increased the borrowing capacity to an aggregate of $100.0 million, including a $5.0 million sub-limit for standby letters of credit. The Credit Agreement will mature in October 2017. As of September 30, 2016, the Company had $0.9 million in letters of credit outstanding leaving $99.1 million available to borrow under the Credit Agreement. Subject to satisfaction of certain specified conditions, the Company is permitted to upsize the borrowing capacity under the Credit Agreement by an additional $50.0 million. Borrowings under the Credit Agreement will bear interest at a rate per annum equal to either of the following, as designated by the Company for each borrowing: (A) the sum of (i) the greatest of (a) the prime rate, as defined, (b) the federal funds effective rate plus 0.50% and (c) one month adjusted LIBOR plus 1.00% plus (ii) 0.50% or (B) the sum of (i) adjusted LIBOR plus (ii) 1.50%. Default interest is 2.00% per annum in excess of the rate otherwise applicable in the case of any overdue principal or any other overdue amount. The Company is also required to pay a commitment fee to the lenders under the Credit Agreement in respect of unutilized revolving loan commitments at a rate of 0.40% per annum. The Company’s existing and future domestic subsidiaries (other than any regulated subsidiary) have guaranteed the Company’s obligations under the Credit Agreement. Subject to customary exceptions and exclusions, the Company’s borrowings under the Credit Agreement are collateralized by first priority pledges (subject to permitted liens) of substantially all of the Company’s personal property assets and the personal property assets of the Company’s domestic subsidiaries that have guaranteed the Credit Agreement, including the equity interests of the Company’s domestic subsidiaries and the equity interests of certain of the Company’s foreign subsidiaries (limited, in the case of the voting equity interests of the foreign subsidiaries, to a pledge of 65% of those equity interests). The Credit Agreement requires that the Company’s consolidated total leverage ratio tested on the last day of each fiscal quarter not exceed 2.5 to 1.0 and a consolidated interest coverage ratio tested on the last day of each fiscal quarter not be less than 3.5 to 1.0. The Credit Agreement also requires that the Company’s trailing twelve month adjusted EBITDA tested on the last day of each fiscal quarter not be less than $80 million. The Company was in compliance with all applicable covenants at September 30, 2016 and December 31, 2015. If an event of default occurs, including failure to pay principal or interest due on the loan balance, a voluntary or involuntary proceeding seeking liquidation, change in control of the Company, or one or more material judgments against the Company in excess of $10.0 million, the lenders would be entitled to accelerate the borrowings under the Credit Agreement and take various other actions, including all actions permitted to be taken by a secured creditor. If certain bankruptcy events of default occur, the borrowings under the Credit Agreement will automatically accelerate. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Lease Commitments The Company leases office space under non-cancelable lease agreements expiring at various dates through 2033. Office space leases are subject to escalation based on certain costs incurred by the landlord. Minimum rental commitments as of September 30, 2016 under such operating leases were as follows (in thousands): Remainder of 2016 $ 821 2017 4,497 2018 4,348 2019 9,256 2020 10,542 2021 and thereafter 118,179 $ 147,643 Rental expense was $3.1 million and $3.0 million for the nine months ended September 30, 2016 and 2015, respectively, and is included in occupancy expense in the Consolidated Statements of Operations. Rental expense has been recorded based on the total minimum lease payments after giving effect to rent abatement and concessions, which are being amortized on a straight-line basis over the life of the lease. The Company is contingently obligated for standby letters of credit amounting to $0.9 million that were issued to landlords for office space. During the three months ended September 30, 2016, the Company entered into non-cancelable lease agreements for approximately 108,000 square feet of office space that commence on or after December 1, 2016 and expire through December 31, 2033. The aggregate minimum rental commitment under such leases is $127.4 million. The Company has assigned a lease agreement on a leased property to a third party and is contingently liable should the assignee default on future lease obligations through the November 2020 lease termination date. The aggregate amount of the future lease obligation under this arrangement is $1.1 million as of September 30, 2016. Legal Matters In the normal course of business, the Company and its subsidiaries included in the consolidated financial statements may be involved in various lawsuits, proceedings and regulatory examinations. The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings, if any, utilizing the latest information available. For matters where it is probable that the Company will incur a material loss and the amount can be reasonably estimated, the Company would establish an accrual for the loss. Once established, the accrual would be adjusted to reflect any relevant developments. When a loss contingency is not both probable and estimable, the Company does not establish an accrual. Based on currently available information, the outcome of the Company’s outstanding matters is not expected to have a material adverse impact on the Company’s financial position. It is not presently possible to determine the ultimate exposure to these matters and there is no assurance that the resolution of the outstanding matters will not significantly exceed any reserves accrued by the Company. Other The Company, through two regulated subsidiaries, executes certain bond transactions between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades which settle through third-party clearing brokers. Settlement typically occurs within one to three trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded. For the nine months ended September 30, 2016 and 2015, revenues from matched principal trading were approximately $26.6 million and $11.6 million, respectively. Under securities clearing agreements with third-party clearing brokers, the Company maintains collateral deposits with each clearing broker in the form of cash. As of September 30, 2016, the amount of the collateral deposits included in prepaid expenses and other assets in the Consolidated Statements of Financial Condition was $1.1 million compared to $1.5 million at December 31, 2015. For the nine months ended September 30, 2016 and 2015, clearing expenses associated with matched principal transactions were $4.8 million and $2.3 million, respectively, and are classified under general and administrative expense on the Consolidated Statements of Operations. The Company is exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is a miscommunication or other error in executing a matched principal transaction. Pursuant to the terms of the securities clearing agreements, the clearing broker has the right to charge the Company for losses resulting from a counterparty credit failure. The losses are not capped at a maximum amount and apply to all trades executed through the clearing broker. The Company did not record any liabilities or losses with regard to this right for the nine months ended September 30, 2016 and 2015. In the normal course of business, the Company enters into contracts that contain a variety of representations, warranties and general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of loss to be remote. |
Customer Concentration
Customer Concentration | 9 Months Ended |
Sep. 30, 2016 | |
Risks And Uncertainties [Abstract] | |
Customer Concentration | 11. Customer Concentration During both the nine months ended September 30, 2016 and 2015, no single client accounted for more than 10% of total revenue. One institutional investor client accounted for 14.6% and 15.5% of trading volumes during the nine months ended September 30, 2016 and 2015, respectively. |
Share Repurchase Program
Share Repurchase Program | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Share Repurchase Program | 12. Share Repurchase Program In January 2014, the Board of Directors of the Company authorized a two-year share repurchase program for up to $35.0 million of the Company’s common stock. In July 2014, the Board of Directors approved a $65.0 million increase in the size of the share repurchase program. In January 2016, the Board of Directors authorized a new two-year share repurchase program for up to $25.0 million of the Company’s common stock. For the nine months ended September 30, 2015, the Company repurchased 238,201 shares of common stock at a cost of $20.0 million. For the nine months ended September 30, 2016, the Company repurchased 93,516 shares of common stock at a cost of $13.9 million. In October 2016, the Board of Directors approved a $50.0 million increase in the size of the current share repurchase program. Shares repurchased under each program will be held in treasury for future use. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 13. Segment and Geographic Information The Company operates an electronic multi-party platform for the trading of fixed-income securities and provides related data, analytics, compliance tools and post-trade services. The Company considers its operations to constitute a single business segment because of the highly integrated nature of these product and services, of the financial markets in which the Company competes and of the Company’s worldwide business activities. The Company believes that results by geographic region or client sector are not necessarily meaningful in understanding its business. For the three and nine months ended September 30, 2016 and 2015, the U.K. was the only individual foreign country in which the Company had a subsidiary that accounted for 10% or more of the total revenues or total long-lived assets of the Company. Revenues and long-lived assets are attributed to a geographic area based on the location of the particular subsidiary. Long-lived assets are defined as furniture, equipment, leasehold improvements and capitalized software. Information regarding revenue for the three and nine months ended September 30, 2016 and 2015 and long-lived assets as of September 30, 2016 and December 31, 2015 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands) Revenues United States $ 77,571 $ 64,098 $ 235,078 $ 196,488 United Kingdom 12,433 9,830 39,165 29,094 Other 267 264 1,240 872 Total $ 90,271 $ 74,192 $ 275,483 $ 226,454 As of September 30, 2016 December 31, 2015 (In thousands) Long-lived assets, as defined United States $ 22,674 $ 21,968 United Kingdom 8,077 8,910 Other 22 19 Total $ 30,773 $ 30,897 |
Deferred Compensation Plans
Deferred Compensation Plans | 9 Months Ended |
Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Deferred Compensation Plans | 14. Deferred Compensation Plans In 2015, the Company adopted a non-qualified deferred cash incentive plan for certain officers and other employees. Under the plan, eligible employees may defer up to 100% of their annual cash incentive pay. The Company has elected to fund its deferred compensation obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of insolvency but such assets are not available for general corporate purposes. Assets held in the rabbi trust are invested in mutual funds, as selected by the participants, which are designated as trading securities and carried at fair value. The initial deferrals of $1.2 million occurred in January 2016 and as of September 30, 2016; the fair value of the mutual fund investments was $1.3 million. Changes in the fair value of securities held in the rabbi trust will be recognized as trading gains and losses and included in other revenues and offsetting increases or decreases in the deferred compensation obligation will be recorded in employee compensation and benefits. For the nine months ended September 30, 2016, the trading gains and compensation expense were each $0.2 million. |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. These consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The consolidated financial information as of December 31, 2015 has been derived from audited financial statements not included herein. These unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to Form 10-Q and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the interim periods presented. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. Interim period operating results may not be indicative of the operating results for a full year. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes cash and money market instruments that are primarily maintained at one major global bank. Given this concentration, the Company is exposed to certain credit risk in relation to its deposits at this bank. The Company defines cash equivalents as short-term interest-bearing investments with maturities at the time of purchase of three months or less. |
Investments | Investments The Company determines the appropriate classification of securities at the time of purchase which are recorded in the Consolidated Statements of Financial Condition on the trade date. Securities are classified as available-for-sale or trading. The Company’s available-for-sale investments are comprised of municipal bonds and investment grade corporate debt securities. Available-for-sale investments are carried at fair value with the unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Trading investments primarily include investment grade corporate debt securities and are carried at fair value, with unrealized gains or losses included in other income in the Consolidated Statements of Operations. The Company assesses whether an other-than-temporary impairment loss on the available-for-sale investments has occurred due to declines in fair value or other market conditions. The portion of an other-than-temporary impairment related to credit loss is recorded as a charge in other income in the Consolidated Statements of Operations. The remainder is recognized in accumulated other comprehensive loss if the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery. No charges for other-than-temporary losses were recorded during the nine months ended September 30, 2016 and 2015. |
Fair Value Financial Instruments | Fair Value Financial Instruments Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” A three-tiered hierarchy for determining fair value has been established that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as Level 1 (unadjusted quoted prices for identical assets or liabilities in active markets), Level 2 (inputs that are observable in the marketplace other than those inputs classified in Level 1) and Level 3 (inputs that are unobservable in the marketplace). The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of its money market funds, securities available-for-sale, trading securities and foreign currency forward contracts. All other financial instruments are short-term in nature and the carrying amount is reported on the Consolidated Statements of Financial Condition at approximate fair value. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts All accounts receivable have contractual maturities of less than one year and are derived from trading-related fees and commissions and revenues from products and services. The Company continually monitors collections and payments from its customers and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expense in the Consolidated Statements of Operations. |
Depreciation and Amortization | Depreciation and Amortization Fixed assets are carried at cost less accumulated depreciation. The Company uses the straight-line method of depreciation over three to seven years. The Company amortizes leasehold improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease. |
Software Development Costs | Software Development Costs The Company capitalizes certain costs associated with the development of internal use software, including among other items, employee compensation and related benefits and third party consulting costs at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed. Once the product is ready for its intended use, such costs are amortized on a straight-line basis over three years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. |
Cash Provided as Collateral | Cash Provided as Collateral Cash is provided as collateral for broker-dealer clearing accounts. Cash provided as collateral is included in prepaid expenses and other assets in the Consolidated Statements of Financial Condition. |
Foreign Currency Translation and Forward Contracts | Foreign Currency Translation and Forward Contracts Assets and liabilities denominated in foreign currencies are translated using exchange rates at the end of the period; revenues and expenses are translated at average monthly rates. Gains and losses on foreign currency translation are a component of accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Transaction gains and losses are recorded in general and administrative expense in the Consolidated Statements of Operations. The Company enters into foreign currency forward contracts to hedge its net investment in its U.K. subsidiaries. Gains and losses on these transactions are included in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. |
Revenue Recognition | Revenue Recognition The majority of the Company’s revenues are derived from commissions for trades executed on its platform and distribution fees that are billed to its broker-dealer clients on a monthly basis. The Company also derives revenues from information and post-trade services, investment income and other income. Commission revenue. Commissions are generally calculated as a percentage of the notional dollar volume of bonds traded on the platform and vary based on the type, size, yield and maturity of the bond traded. Under the Company’s transaction fee plans, bonds that are more actively traded or that have shorter maturities are generally charged lower commissions, while bonds that are less actively traded or that have longer maturities generally command higher commissions. For trades that the Company executes between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller, the Company earns the commission through the difference in price between the two matched principal trades. Fee programs for certain products include distribution fees which are recognized monthly. Information and post-trade services. The Company generates revenue from information services provided to our broker-dealer clients, institutional investor clients and data-only subscribers. Information services are invoiced monthly, quarterly or annually. When billed in advance, revenues are deferred and recognized monthly on a straight-line basis. The Company also generates revenue from regulatory transaction reporting and trade matching services. Revenue is recognized in the period the services are provided. Technology products and services. The Company generates revenues from professional consulting services, technology software licenses and maintenance and support services. Revenue is generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collection is considered probable. Technology products and services revenue is reported in other income in the Consolidated Statements of Operations. Initial set-up fees. The Company enters into agreements with its broker-dealer clients pursuant to which the Company provides access to its platform through a non-exclusive and non-transferable license. Broker-dealer clients may pay an initial set-up fee, which is typically due and payable upon execution of a dealer agreement. The initial set-up fee, if any, varies by agreement. Revenue is recognized over the initial term of the agreement, which is generally two years. Initial set-up fees are reported in other income in the Consolidated Statements of Operations. |
Stock-Based Compensation | Stock-Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards based on their estimated fair values measured as of the grant date. These costs are recognized as an expense in the Consolidated Statements of Operations over the requisite service period, which is typically the vesting period, with an offsetting increase to additional paid-in capital. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized against deferred tax assets if it is more likely than not that such assets will not be realized in future years. The Company recognizes interest and penalties related to unrecognized tax benefits in general and administrative expenses in the Consolidated Statements of Operations. |
Business Combinations, Goodwill and Intangible Assets | Business Combinations, Goodwill and Intangible Assets Business combinations are accounted for under the purchase method of accounting. The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of certain assets acquired and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates and asset lives. The Company operates as a single reporting unit. Subsequent to an acquisition, goodwill no longer retains its identification with a particular acquisition, but instead becomes identifiable with the entire reporting unit. As a result, all of the fair value of the Company is available to support the value of goodwill. An impairment review of goodwill is performed on an annual basis, at year-end, or more frequently if circumstances change. Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized on a straight-line basis over their estimated useful lives, ranging from three to 15 years. Intangible assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue common stock were converted into or exercised for common stock. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Out-of-Period Adjustments | Out-of-Period Adjustments During the first quarter of 2016, the Company determined that it had incorrectly recorded deferred taxes for the cumulative translation adjustment (“CTA”) that arises from converting the local currency financial statements into U.S. dollars. Upon making a permanent reinvestment assertion on unremitted earnings from foreign subsidiaries effective January 1, 2013, the Company should have eliminated any deferred tax balances derived from the CTA balance. The Company also determined that gains and losses on the foreign currency forward contracts used to hedge the net investment in certain foreign subsidiaries were not appropriately considered as taxable income or expense in the consolidated tax returns. The Company assessed these errors and determined that they were not material to previous reporting periods. Therefore, the Company recorded these items as out-of-period adjustments in the three months ended March 31, 2016 by decreasing deferred tax assets by $3.1 million, decreasing other comprehensive income by $2.1 million and increasing prepaid expenses and other assets by $1.0 million in the Consolidated Statements of Financial Condition. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230)” (“ASU 2016-15”). ASU 2016-15 is intended to provide clarification on the treatment of certain cash receipts and payments. The ASU will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company is in the process of determining the method of adoption and assessing the impact of ASU 2016-15 on the Company’s Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326)” (“ASU 2016-13”). ASU 2016-13 is intended to require timelier recording of credit losses with respect to loans and other financial instruments. The ASU will be effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company is in the process of determining the method of adoption and assessing the impact of ASU 2016-13 on the Company’s Consolidated Financial Statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) and has subsequently issued a series of modifying ASUs that will not change the core principle of the guidance stated in ASU 2014-09. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The modifying ASUs include: (i) ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. ASU 2016-09 will be effective for the Company beginning January 1, 2017 and early adoption is permitted. The Company is currently in the process of determining the method of adoption and assessing the impact of ASU 2016-09 on the Company's Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The guidance affects the accounting for leases and provides for a lessee model that brings substantially all leases onto the balance sheet |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Valuation of Company's Assets and Liabilities Measured at Fair Value | The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2. Level 1 Level 2 Level 3 Total (In thousands) As of September 30, 2016 Money market funds $ 37,609 $ — $ — $ 37,609 Securities available-for-sale Corporate debt — 94,781 — 94,781 Trading securities Corporate debt — 74,546 — 74,546 Mutual funds held in rabbi trust — 1,328 — 1,328 Foreign currency forward position — 318 — 318 Total $ 37,609 $ 170,973 $ — $ 208,582 As of December 31, 2015 Money market funds $ 61,913 $ — $ — $ 61,913 Securities available-for-sale Corporate debt — 82,671 — 82,671 Municipal securities — 2,035 — 2,035 Foreign currency forward position — 354 — 354 Total $ 61,913 $ 85,060 $ — $ 146,973 |
Summary of Foreign Currency Forward Contracts | A summary of the Company’s foreign currency forward position is as follows: As of September 30, 2016 December 31, 2015 (In thousands) Notional value $ 59,962 $ 45,716 Fair value of notional 59,644 45,362 Fair value of the asset $ 318 $ 354 |
Summary of Company's Investments | The following is a summary of the Company’s investments: Gross Gross Estimated Amortized unrealized unrealized fair cost gains losses value (In thousands) As of September 30, 2016 Securities available-for-sale Corporate debt $ 94,760 $ 59 $ (38 ) $ 94,781 Total securities available-for-sale 94,760 59 (38 ) 94,781 Trading securities Corporate debt 74,370 188 (12 ) 74,546 Mutual funds held in rabbi trust 1,167 161 — 1,328 Total trading securities 75,537 349 (12 ) 75,874 Total investments $ 170,297 $ 408 (50 ) $ 170,655 As of December 31, 2015 Securities available-for-sale Corporate debt $ 82,937 $ 4 $ (270 ) $ 82,671 Municipal securities 2,035 — — 2,035 Total securities available-for-sale $ 84,972 $ 4 $ (270 ) $ 84,706 |
Summary of Fair Value of Investments Based upon Contractual Maturities | The following table summarizes the fair value of the investments based upon the contractual maturities: As of September 30, 2016 December 31, 2015 (In thousands) Less than one year $ 99,264 $ 37,694 Due in 1 - 5 years 71,391 47,012 Total $ 170,655 $ 84,706 |
Fair Values and Unrealized Losses on Investments | The following table provides fair values and unrealized losses on investments and by the aging of the securities’ continuous unrealized loss position as of September 30, 2016 and December 31, 2015 Less than Twelve Months Twelve Months or More Total Estimated Gross Estimated Gross Estimated Gross fair unrealized fair unrealized fair unrealized value losses value losses value losses (In thousands) As of September 30, 2016 Corporate debt $ 49,177 $ (41 ) $ 2,000 $ (9 ) $ 51,177 $ (50 ) As of December 31, 2015 Corporate debt $ 70,651 $ (270 ) $ — $ — $ 70,651 $ (270 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Company's Intangible Assets | Goodwill and intangible assets with indefinite lives was $59.7 million as of both September 30, 2016 and December 31, 2015. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following: September 30, 2016 December 31, 2015 Cost Accumulated Amortization Net Carrying Amount Cost Accumulated Amortization Net Carrying Amount (In thousands) Technology $ 5,770 $ (5,770 ) $ — $ 5,770 $ (5,492 ) $ 278 Customer relationships 5,638 (1,812 ) 3,826 5,668 (1,553 ) 4,115 Non-competition agreements 380 (380 ) — 380 (359 ) 21 Tradenames 370 (370 ) — 370 (353 ) 17 Total $ 12,158 $ (8,332 ) $ 3,826 $ 12,188 $ (7,757 ) $ 4,431 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands) Current: Federal $ 13,273 $ 11,041 $ 30,898 $ 28,131 State and local 1,895 2,036 5,055 5,234 Foreign 1,714 1,234 4,599 3,189 Total current provision 16,882 14,311 40,552 36,554 Deferred: Federal (918 ) (1,246 ) 6,895 2,658 State and local (154 ) (209 ) 964 420 Foreign (374 ) (218 ) (143 ) (264 ) Total deferred provision (1,446 ) (1,673 ) 7,716 2,814 Provision for income taxes $ 15,436 $ 12,638 $ 48,268 $ 39,368 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands) Employees $ 3,387 $ 2,958 $ 9,963 $ 8,596 Non-employee directors 312 294 673 680 Total stock-based compensation $ 3,699 $ 3,252 $ 10,636 $ 9,276 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands, except per share amounts) Net income $ 30,918 $ 22,715 $ 93,007 $ 71,546 Basic weighted average shares outstanding 36,889 36,681 36,847 36,695 Dilutive effect of stock options and restricted stock 903 962 891 941 Diluted weighted average shares outstanding 37,792 37,643 37,738 37,636 Basic earnings per share $ 0.84 $ 0.62 $ 2.52 $ 1.95 Diluted earnings per share $ 0.82 $ 0.60 $ 2.46 $ 1.90 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Minimum Rental Commitments under Operating Leases | Minimum rental commitments as of September 30, 2016 under such operating leases were as follows (in thousands): Remainder of 2016 $ 821 2017 4,497 2018 4,348 2019 9,256 2020 10,542 2021 and thereafter 118,179 $ 147,643 |
Segment and Geographic Inform30
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Summary of Revenue and Long-lived Assets | Information regarding revenue for the three and nine months ended September 30, 2016 and 2015 and long-lived assets as of September 30, 2016 and December 31, 2015 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands) Revenues United States $ 77,571 $ 64,098 $ 235,078 $ 196,488 United Kingdom 12,433 9,830 39,165 29,094 Other 267 264 1,240 872 Total $ 90,271 $ 74,192 $ 275,483 $ 226,454 As of September 30, 2016 December 31, 2015 (In thousands) Long-lived assets, as defined United States $ 22,674 $ 21,968 United Kingdom 8,077 8,910 Other 22 19 Total $ 30,773 $ 30,897 |
Organization and Principal Bu31
Organization and Principal Business Activity - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Date of incorporation | Apr. 11, 2000 |
Significant Accounting Polici32
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | |
Significant Accounting Policies [Line Items] | ||||
Maximum maturity period for classification of investments as cash equivalents | 3 months | |||
Investments other-than-temporary losses | $ 0 | $ 0 | ||
Term of agreement for revenue recognition | 2 years | |||
Other comprehensive income | $ (10,145,000) | $ (5,229,000) | ||
Deferred tax assets, net | 7,399,000 | 9,229,000 | ||
Prepaid expenses and other assets | $ 11,758,000 | $ 9,880,000 | ||
Restatement Adjustment [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Other comprehensive income | $ 2,100,000 | |||
Deferred tax assets, net | 3,100,000 | |||
Prepaid expenses and other assets | $ 1,000,000 | |||
Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Contractual maturities accounts receivable | 1 year | |||
Estimated useful life of fixed assets | 7 years | |||
Maximum [Member] | Business Combinations [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated life of intangible assets | 15 years | |||
Minimum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful life of fixed assets | 3 years | |||
Minimum [Member] | Business Combinations [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated life of intangible assets | 3 years | |||
Minimum [Member] | Internally Developed Software [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated life of intangible assets | 3 years |
Net Capital Requirements - Addi
Net Capital Requirements - Additional Information (Detail) $ in Millions | Sep. 30, 2016USD ($) |
Brokers And Dealers [Abstract] | |
Aggregate net capital and financial resources in excess of required level | $ 107.3 |
Aggregate net capital and financial resources, minimum capital requirement | $ 10.4 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation of Company's Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | $ 37,609 | $ 61,913 |
Securities available-for-sale | 94,781 | 84,706 |
Trading securities | 75,874 | |
Assets Fair Value Total | 208,582 | 146,973 |
Corporate Debt [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 94,781 | 82,671 |
Trading securities | 74,546 | |
Mutual Funds Held In Rabbi Trust [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 1,328 | |
Municipal Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 2,035 | |
Foreign Currency Forward Position [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Foreign currency forward position | 318 | 354 |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | 37,609 | 61,913 |
Assets Fair Value Total | 37,609 | 61,913 |
Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets Fair Value Total | 170,973 | 85,060 |
Level 2 [Member] | Corporate Debt [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 94,781 | 82,671 |
Trading securities | 74,546 | |
Level 2 [Member] | Mutual Funds Held In Rabbi Trust [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 1,328 | |
Level 2 [Member] | Municipal Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 2,035 | |
Level 2 [Member] | Foreign Currency Forward Position [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Foreign currency forward position | $ 318 | $ 354 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | ||
Hedge derivative expiration period | 1 month | |
Proceeds from the sales and maturities of securities available-for-sale | $ 48.1 | $ 25 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Foreign Currency Forward Contract (Detail) - Foreign Currency Forward Position [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Derivatives Fair Value [Line Items] | ||
Notional value | $ 59,962 | $ 45,716 |
Fair value of notional | 59,644 | 45,362 |
Fair value of the asset | 318 | 354 |
Other Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Fair value of the asset | $ 318 | $ 354 |
Fair Value Measurements - Sum37
Fair Value Measurements - Summary of Company's Investments (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule Of Available For Sale Securities [Line Items] | ||
Securities available-for-sale, Amortized cost | $ 94,760 | $ 84,972 |
Securities available-for-sale, Gross unrealized gains | 59 | 4 |
Securities available-for-sale, Gross unrealized losses | (38) | (270) |
Securities available-for-sale, Estimated fair value | 94,781 | 84,706 |
Trading securities, Amortized cost | 75,537 | |
Trading securities, Gross unrealized gains | 349 | |
Trading securities, Gross unrealized losses | (12) | |
Trading securities, Estimated fair value | 75,874 | |
Investments, Amortized cost | 170,297 | |
Investments, Gross unrealized gains | 408 | |
Investments, Gross unrealized losses | (50) | |
Investments, Estimated fair value | 170,655 | 84,706 |
Corporate Debt [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Securities available-for-sale, Amortized cost | 94,760 | 82,937 |
Securities available-for-sale, Gross unrealized gains | 59 | 4 |
Securities available-for-sale, Gross unrealized losses | (38) | (270) |
Securities available-for-sale, Estimated fair value | 94,781 | 82,671 |
Trading securities, Amortized cost | 74,370 | |
Trading securities, Gross unrealized gains | 188 | |
Trading securities, Gross unrealized losses | (12) | |
Trading securities, Estimated fair value | 74,546 | |
Municipal Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Securities available-for-sale, Amortized cost | 2,035 | |
Securities available-for-sale, Estimated fair value | $ 2,035 | |
Mutual Funds Held In Rabbi Trust [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Trading securities, Amortized cost | 1,167 | |
Trading securities, Gross unrealized gains | 161 | |
Trading securities, Estimated fair value | $ 1,328 |
Fair Value Measurements - Sum38
Fair Value Measurements - Summary of Fair Value of Investments Based upon Contractual Maturities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Less than one year | $ 99,264 | $ 37,694 |
Due in 1 - 5 years | 71,391 | 47,012 |
Total | $ 170,655 | $ 84,706 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Values and Unrealized Losses on Investments (Detail) - Corporate Debt [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule Of Available For Sale Securities [Line Items] | ||
Less than Twelve Months, Estimated fair value | $ 49,177 | $ 70,651 |
Less than Twelve Months, Gross unrealized losses | (41) | (270) |
Twelve Months or More, Estimated fair value | 2,000 | |
Twelve Months or More, Gross unrealized losses | (9) | |
Estimated fair value, Total | 51,177 | 70,651 |
Gross unrealized losses, Total | $ (50) | $ (270) |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||
Goodwill and intangible assets with indefinite lives | $ 63,539 | $ 64,142 | |
Amortization expense associated with identifiable intangible assets | 600 | $ 1,700 | |
Estimated total amortization expense 2016 | 700 | ||
Estimated total amortization expense 2017 | 400 | ||
Estimated total amortization expense 2018 | 400 | ||
Estimated total amortization expense 2019 | 400 | ||
Estimated total amortization expense 2020 | 400 | ||
Indefinite-lived Intangible Assets [Member] | |||
Goodwill [Line Items] | |||
Goodwill and intangible assets with indefinite lives | $ 59,700 | $ 59,700 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 12,158 | $ 12,188 |
Accumulated Amortization | (8,332) | (7,757) |
Net Carrying Amount | 3,826 | 4,431 |
Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 5,770 | 5,770 |
Accumulated Amortization | (5,770) | (5,492) |
Net Carrying Amount | 278 | |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 5,638 | 5,668 |
Accumulated Amortization | (1,812) | (1,553) |
Net Carrying Amount | 3,826 | 4,115 |
Non-Competition Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 380 | 380 |
Accumulated Amortization | (380) | (359) |
Net Carrying Amount | 21 | |
Tradenames - Finite Life [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 370 | 370 |
Accumulated Amortization | $ (370) | (353) |
Net Carrying Amount | $ 17 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Current: | ||||
Federal | $ 13,273 | $ 11,041 | $ 30,898 | $ 28,131 |
State and local | 1,895 | 2,036 | 5,055 | 5,234 |
Foreign | 1,714 | 1,234 | 4,599 | 3,189 |
Total current provision | 16,882 | 14,311 | 40,552 | 36,554 |
Deferred: | ||||
Federal | (918) | (1,246) | 6,895 | 2,658 |
State and local | (154) | (209) | 964 | 420 |
Foreign | (374) | (218) | (143) | (264) |
Total deferred provision | (1,446) | (1,673) | 7,716 | 2,814 |
Provision for income taxes | $ 15,436 | $ 12,638 | $ 48,268 | $ 39,368 |
Stock-Based Compensation Plan43
Stock-Based Compensation Plans - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 3,699 | $ 3,252 | $ 10,636 | $ 9,276 |
Employees [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | 3,387 | 2,958 | 9,963 | 8,596 |
Non-Employee Directors [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 312 | $ 294 | $ 673 | $ 680 |
Stock-Based Compensation Plan44
Stock-Based Compensation Plans - Additional Information (Detail) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation costs related to non-vested | $ | $ 25.8 |
Weighted-average period over which cost is expected to be recognized | 2 years 6 months |
Employees and Directors [Member] | Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of non-option equity instruments granted during the period | shares | 101,215 |
Weighted-average grant date fair value per share | $ / shares | $ 106.25 |
Employees and Directors [Member] | Performance Based Share [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of non-option equity instruments granted during the period | shares | 48,899 |
Number of options to purchase shares of common stock | shares | 112,988 |
Weighted-average fair value each option granted | $ / shares | $ 31.80 |
Weighted-average grant date fair value per share | $ / shares | $ 102.54 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share Basic And Diluted [Abstract] | ||||
Net income | $ 30,918 | $ 22,715 | $ 93,007 | $ 71,546 |
Basic weighted average shares outstanding | 36,889 | 36,681 | 36,847 | 36,695 |
Dilutive effect of stock options and restricted stock | 903 | 962 | 891 | 941 |
Diluted weighted average shares outstanding | 37,792 | 37,643 | 37,738 | 37,636 |
Basic earnings per share | $ 0.84 | $ 0.62 | $ 2.52 | $ 1.95 |
Diluted earnings per share | $ 0.82 | $ 0.60 | $ 2.46 | $ 1.90 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock Options and Restricted Stock [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Stock options and restricted stock excluded from the computation of diluted earnings per share | 6,480 | 130,112 | 112,004 | 170,429 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jan. 31, 2013 | Sep. 30, 2016 | Oct. 31, 2015 | |
Line Of Credit Facility [Line Items] | |||
Revolving loans and letters of credit | $ 50,000,000 | $ 100,000,000 | |
Letter of credit outstanding | $ 900,000 | ||
Additional Credit Agreement | $ 50,000,000 | ||
Amount available under credit agreement | $ 99,100,000 | ||
Period of credit agreement | 3 years | ||
LIBOR rate description | (A) the sum of (i) the greatest of (a) the prime rate, as defined, (b) the federal funds effective rate plus 0.50% and (c) one month adjusted LIBOR plus 1.00% plus (ii) 0.50% or (B) the sum of (i) adjusted LIBOR plus (ii) 1.50% | ||
Federal funds effective rate | 0.50% | ||
One month adjusted LIBOR | 1.00% | ||
LIBOR Rate | 0.50% | ||
Adjusted LIBOR rate | 1.50% | ||
Interest per annum | 2.00% | ||
Revolving loan commitment rate | 0.40% | ||
Equity interest | 65.00% | ||
Maximum [Member] | |||
Line Of Credit Facility [Line Items] | |||
Total leverage ratio | 250.00% | ||
Minimum [Member] | |||
Line Of Credit Facility [Line Items] | |||
Interest coverage ratio | 350.00% | ||
Adjusted EBITDA | $ 80,000,000 | ||
Excess judgments against the company | $ 10,000,000 | ||
Standby Letters of Credit [Member] | |||
Line Of Credit Facility [Line Items] | |||
Revolving loans and letters of credit | $ 5,000,000 | ||
Credit Agreement [Member] | |||
Line Of Credit Facility [Line Items] | |||
Expiration period of credit agreement | Oct. 31, 2017 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016USD ($)ft²AgreementSubsidiary | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | |||
Non-cancelable leases expiration date | Dec. 31, 2033 | ||
Rental expense | $ 3,100 | $ 3,000 | |
Aggregate minimum rental commitment under non-cancelable leases | $ 147,643 | ||
Number of lease agreements assigned to third parties | Agreement | 1 | ||
Lease termination dates | 2020-11 | ||
Future lease obligation under sublease arrangements | $ 1,100 | ||
Number of subsidiaries | Subsidiary | 2 | ||
Settlement days of bond transaction | Within one to three trading days | ||
Revenues from riskless principal transactions | $ 26,600 | 11,600 | |
Collateral deposits | 1,100 | $ 1,500 | |
General and Administrative Expense [Member] | |||
Loss Contingencies [Line Items] | |||
Clearing expenses | $ 4,800 | $ 2,300 | |
Non-Cancelable Leases Commence on or after December 1, 2016 [Member] | |||
Loss Contingencies [Line Items] | |||
Non-cancelable leases expiration date | Dec. 31, 2033 | ||
Non-cancelable leases commencement date | Dec. 1, 2016 | ||
Aggregate minimum rental commitment under non-cancelable leases | $ 127,400 | ||
Area of office space under non-cancelable leases | ft² | 108,000 | ||
Standby Letters of Credit [Member] | |||
Loss Contingencies [Line Items] | |||
Contingent obligation for standby letter of credit issued to Landlord | $ 900 |
Commitments and Contingencies49
Commitments and Contingencies - Summary of Minimum Rental Commitments under Operating Leases (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
Remainder of 2016 | $ 821 |
2,017 | 4,497 |
2,018 | 4,348 |
2,019 | 9,256 |
2,020 | 10,542 |
2021 and thereafter | 118,179 |
Operating Leases | $ 147,643 |
Customer Concentration - Additi
Customer Concentration - Additional Information (Detail) - Customer | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Concentration Risk [Line Items] | ||
Number of client accounted for more than 10% of total revenue | 0 | 0 |
Customer Concentration Risk [Member] | Trading Volume [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of trading volumes by single client | 14.60% | 15.50% |
Share Repurchase Program - Addi
Share Repurchase Program - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Jan. 31, 2016 | Jan. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Oct. 28, 2016 | Jul. 31, 2014 | |
Equity Class Of Treasury Stock [Line Items] | ||||||
Shares repurchase program authorized | $ 25,000,000 | $ 35,000,000 | $ 65,000,000 | |||
Common stock shares repurchased | 93,516 | 238,201 | ||||
Cost of common stock shares repurchased | $ 13,900,000 | $ 20,000,000 | ||||
Share Repurchase Program [Member] | ||||||
Equity Class Of Treasury Stock [Line Items] | ||||||
Shares repurchase program period | 2 years | |||||
New Share Repurchase Program [Member] | ||||||
Equity Class Of Treasury Stock [Line Items] | ||||||
Shares repurchase program period | 2 years | |||||
Subsequent Event [Member] | New Share Repurchase Program [Member] | ||||||
Equity Class Of Treasury Stock [Line Items] | ||||||
Shares repurchase program additional authorized amount | $ 50,000,000 |
Segment and Geographic Inform52
Segment and Geographic Information - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Geographic Concentration Risk [Member] | Total Revenue and Long-lived Assets [Member] | United Kingdom [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Segment and Geographic Inform53
Segment and Geographic Information - Summary of Revenue and Long-lived Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 90,271 | $ 74,192 | $ 275,483 | $ 226,454 | |
Long-lived assets | 30,773 | 30,773 | $ 30,897 | ||
United States [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 77,571 | 64,098 | 235,078 | 196,488 | |
Long-lived assets | 22,674 | 22,674 | 21,968 | ||
United Kingdom [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 12,433 | 9,830 | 39,165 | 29,094 | |
Long-lived assets | 8,077 | 8,077 | 8,910 | ||
Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 267 | $ 264 | 1,240 | $ 872 | |
Long-lived assets | $ 22 | $ 22 | $ 19 |
Deferred Compensation Plans - A
Deferred Compensation Plans - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Jan. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||
Initial deferrals occurred | $ 1.2 | ||
Non-qualified deferred cash incentive plan maximum eligibility percentage of employees | 100.00% | ||
Mutual fund investments, at fair value | $ 1.3 | ||
Trading gain and compensation expense | $ 0.2 |