Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 22, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MKTX | |
Entity Registrant Name | MARKETAXESS HOLDINGS INC | |
Entity Central Index Key | 0001278021 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 37,697,485 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 260,953 | $ 246,322 |
Investments, at fair value | 222,458 | 240,105 |
Accounts receivable, net of allowance of $114 and $80 as of March 31, 2019 and December 31, 2018, respectively | 70,946 | 57,535 |
Goodwill and intangible assets, net of accumulated amortization | 62,579 | 62,675 |
Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization | 61,047 | 63,010 |
Operating lease right-of-use assets | 78,190 | |
Prepaid expenses and other assets | 17,219 | 22,468 |
Deferred tax assets, net | 1,417 | 3,424 |
Total assets | 774,809 | 695,539 |
Liabilities | ||
Accrued employee compensation | 16,699 | 39,053 |
Income and other tax liabilities | 18,857 | 16,432 |
Deferred revenue | 3,545 | 2,810 |
Accounts payable, accrued expenses and other liabilities | 13,717 | 29,366 |
Operating lease liabilities | 90,845 | |
Total liabilities | 143,663 | 87,661 |
Commitments and Contingencies (Note 11) | ||
Stockholders' equity | ||
Additional paid-in capital | 335,425 | 341,860 |
Treasury stock - Common stock voting, at cost, 2,921,902 and 2,900,432 shares as of March 31, 2019 and December 31, 2018, respectively | (190,146) | (184,962) |
Retained earnings | 496,562 | 463,252 |
Accumulated other comprehensive loss | (10,817) | (12,394) |
Total stockholders' equity | 631,146 | 607,878 |
Total liabilities and stockholders' equity | 774,809 | 695,539 |
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 | $ 122 | $ 122 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Allowance for accounts receivable | $ 114 | $ 80 |
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 | 40,622,066 | 40,540,349 |
Common stock, shares outstanding | 37,700,164 | 37,639,917 |
Treasury stock, shares | 2,921,902 | 2,900,432 |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Revenues | $ 124,491 | $ 114,714 |
Expenses | ||
Employee compensation and benefits | 32,658 | 28,834 |
Depreciation and amortization | 6,082 | 5,269 |
Technology and communications | 5,782 | 5,779 |
Professional and consulting fees | 5,831 | 5,057 |
Occupancy | 2,949 | 3,337 |
Marketing and advertising | 2,299 | 2,065 |
Clearing costs | 2,577 | 1,725 |
General and administrative | 3,124 | 2,475 |
Total expenses | 61,302 | 54,541 |
Operating income | 63,189 | 60,173 |
Other income (expense) | ||
Investment income | 1,989 | 1,168 |
Other, net | 42 | (328) |
Total other income | 2,031 | 840 |
Income before income taxes | 65,220 | 61,013 |
Provision for income taxes | 12,698 | 13,073 |
Net income | $ 52,522 | $ 47,940 |
Net income per common share | ||
Basic | $ 1.42 | $ 1.30 |
Diluted | 1.39 | 1.27 |
Cash dividends declared per common share | $ 0.51 | $ 0.42 |
Weighted average shares outstanding | ||
Basic | 37,043 | 36,954 |
Diluted | 37,832 | 37,886 |
Commissions [Member] | ||
Revenues | ||
Revenues | $ 112,760 | $ 102,772 |
Information Services [Member] | ||
Revenues | ||
Revenues | 7,366 | 7,066 |
Post-trade Services [Member] | ||
Revenues | ||
Revenues | 4,100 | 4,576 |
Other [Member] | ||
Revenues | ||
Revenues | $ 265 | $ 300 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 52,522 | $ 47,940 |
Net cumulative translation adjustment and foreign currency exchange hedge, net of tax of $(452) and $(823), respectively | 1,118 | 268 |
Net unrealized gain (loss) on securities available-for-sale, net of tax of $143 and $(107), respectively | 459 | (334) |
Comprehensive income | $ 54,099 | $ 47,874 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Foreign currency exchange hedge, tax expense (benefit) | $ (452) | $ (823) |
Securities available-for-sale, tax expense (benefit) | $ 143 | $ (107) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - 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, 2017 | $ 514,768 | $ 121 | $ 331,081 | $ (159,791) | $ 353,583 | $ (10,226) |
Net income | 47,940 | 47,940 | ||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | 268 | 268 | ||||
Unrealized net gain (loss) on securities available-for-sale, net of tax | (334) | (334) | ||||
Stock-based compensation | 3,951 | 3,951 | ||||
Exercise of stock options | 258 | 258 | ||||
Withholding tax payments on restricted stock vesting and stock option exercises | (7,621) | (7,621) | ||||
Repurchases of common stock | (6,268) | (6,268) | ||||
Cash dividend on common stock | (15,798) | (15,798) | ||||
Ending Balance at Mar. 31, 2018 | 537,164 | 121 | 327,669 | (166,059) | 385,725 | (10,292) |
Beginning Balance at Dec. 31, 2018 | 607,878 | 122 | 341,860 | (184,962) | 463,252 | (12,394) |
Net income | 52,522 | 52,522 | ||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | 1,118 | 1,118 | ||||
Unrealized net gain (loss) on securities available-for-sale, net of tax | 459 | 459 | ||||
Stock-based compensation | 5,196 | 5,196 | ||||
Exercise of stock options | 172 | 172 | ||||
Withholding tax payments on restricted stock vesting and stock option exercises | (11,803) | (11,803) | ||||
Repurchases of common stock | (5,184) | (5,184) | ||||
Cash dividend on common stock | (19,212) | (19,212) | ||||
Ending Balance at Mar. 31, 2019 | $ 631,146 | $ 122 | $ 335,425 | $ (190,146) | $ 496,562 | $ (10,817) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 52,522 | $ 47,940 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 6,082 | 5,269 |
Amortization of operating lease right-of-use assets | 1,291 | |
Stock-based compensation expense | 5,196 | 3,951 |
Deferred taxes | 2,022 | 2,061 |
Other | (587) | (186) |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | (13,453) | (14,955) |
Decrease in prepaid expenses and other assets | 5,264 | 852 |
Decrease (Increase) in trading securities | 6,015 | 3,054 |
(Decrease) in accrued employee compensation | (22,354) | (20,891) |
Increase in income and other tax liabilities | 2,267 | 4,304 |
Increase in deferred revenue | 735 | 894 |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (3,764) | 307 |
(Decrease) in operating lease liabilities | (321) | |
Net cash provided by operating activities | 39,369 | 31,439 |
Cash flows from investing activities | ||
Proceeds from maturities and sales, available-for-sale investments | 67,603 | 51,002 |
Purchases, available-for-sale investments | (53,193) | (57,839) |
Purchases of furniture, equipment and leasehold improvements | (649) | (2,278) |
Capitalization of software development costs | (3,184) | (3,590) |
Other | (15) | (24) |
Net cash provided by (used in) investing activities | 10,562 | (12,729) |
Cash flows from financing activities | ||
Cash dividend on common stock | (19,412) | (15,814) |
Exercise of stock options | 172 | 258 |
Withholding tax payments on restricted stock vesting and stock option exercises | (11,803) | (7,621) |
Repurchases of common stock | (5,184) | (6,268) |
Net cash (used in) financing activities | (36,227) | (29,445) |
Effect of exchange rate changes on cash and cash equivalents | 943 | (110) |
Cash and cash equivalents including restricted cash | ||
Net increase (decrease) for the period | 14,647 | (10,845) |
Beginning of period | 247,458 | 168,150 |
End of period | 262,105 | 157,305 |
Mutual Funds Held In Rabbi Trust [Member] | ||
Changes in operating assets and liabilities: | ||
Decrease (Increase) in trading securities | $ (1,546) | $ (1,161) |
Organization and Principal Busi
Organization and Principal Business Activity | 3 Months Ended |
Mar. 31, 2019 | |
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 | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018. The consolidated financial information as of December 31, 2018 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. Accounting Pronouncements, Recently Adopted In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”) requiring lessees to recognize lease assets and lease liabilities on the balance sheet for those leases previously classified as operating leases with lease terms greater than 12 months. The Company adopted ASU 2016-02 effective January 1, 2019 using a modified retrospective transition approach and will not restate comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard which allowed it to carry forward the historical lease classification. Accounting Pronouncements, Not Yet Adopted as of March 31, 2019 In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other” (“ASU 2017-04”). ASU 2017-04 simplifies the testing for goodwill impairment. The guidance will be effective for the Company beginning January 1, 2020 and early adoption is permitted and should be applied prospectively. The adoption of this guidance is not expected to have a material effect on the Company’s Consolidated Financial Statements. 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 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 include investment grade corporate debt securities and U.S. Treasuries and are carried at fair value, with realized and 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 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 three months ended March 31, 2019 and 2018. 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 Company’s 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 other, net 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 Company’s classification of revenues in the Consolidated Statements of Operations represents revenues from contracts with customers disaggregated by type of revenue. The Company has four revenue streams as described below. Commission Revenue – The Company charges its broker-dealer clients variable transaction fees for trades executed on its platform and, under certain plans, distribution fees or monthly minimum fees to use the platform for a particular product area. Variable transaction fees 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 disclosed trading 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. Variable transaction fees, distribution fees and unused monthly fee commitments are invoiced and recorded on a monthly basis. 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 its commission through the difference in price between the two trades. The commission is collected upon settlement of the trade, which typically occurs within one to two trading days after the trade date. The following table presents commission revenue by fee type for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Commission revenue by fee type Variable transaction fees Disclosed trading $ 66,056 $ 66,253 Open Trading - matched principal trading 23,036 13,524 Total variable transaction fees 89,092 79,777 Distribution fees and unused minimum fees 23,668 22,995 Total commissions $ 112,760 $ 102,772 Information services – Information services includes data licensed to the Company’s broker-dealer clients, institutional investor clients and data-only subscribers; professional and consulting services; technology software licenses; and maintenance and support services. The nature and timing of each performance obligation may vary as these contracts are either subscription based services transferred over time or one-time services that are transferred at a point in time. Revenues for services transferred over time are recognized ratably over the contract period as the Company’s performance obligation is met whereas revenues for services transferred at a point in time are recognized in the period the services are provided. Customers are generally billed monthly, quarterly, or annually; revenues billed in advance are deferred and recognized ratably over the contract period. The following table presents information services revenue by timing of recognition for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Information services revenue by timing of recognition Services transferred over time $ 7,219 $ 6,842 Services transferred at a point in time 147 224 Total information services revenues $ 7,366 $ 7,066 Post-trade services – Post-trade services revenue is generated from regulatory transaction reporting, trade publication and trade matching services. Customers are generally billed monthly in arrears and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period. The Company also generates one-time implementation fees for onboarding clients which are invoiced and recognized in the period the implementation is completed. The following table presents post-trade services revenue by timing of recognition for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Post-trade services revenue by timing of recognition Services transferred over time $ 4,087 $ 4,287 Services transferred at a point in time 13 289 Total post-trade services revenues $ 4,100 $ 4,576 Other revenues – Other revenues primarily includes revenue from telecommunications line charges to broker-dealer clients. Contract liabilities consist of deferred revenues that the Company records when cash payments are received or due in advance of services to be performed. The revenue recognized from contract liabilities and the remaining balance is shown below: December 31, 2018 Payments received in advance of services to be performed Revenue recognized for services performed during the period Foreign Currency Translation March 31, 2019 (In thousands) Information services $ 1,959 $ 1,957 $ (1,799 ) $ — $ 2,117 Post-trade services 851 3,709 (3,152 ) 20 1,428 Total deferred revenue $ 2,810 $ 5,666 $ (4,951 ) $ 20 $ 3,545 The majority of the Company’s contracts are short-term in nature with durations of less than one-year. For contracts extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $10.4 million as of March 31, 2019. The Company expects to recognize revenue associated with the remaining performance obligations over the next 21 months. 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. Forfeitures are recognized as they occur. 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. Effective upon the Company’s adoption of ASU 2016-09, all tax effects related to share-based payments are recorded through tax expense in the periods during which the awards are exercised or vest. 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. |
Net Capital Requirements
Net Capital Requirements | 3 Months Ended |
Mar. 31, 2019 | |
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 (“CFTC”). 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 other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of March 31, 2019, 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 March 31, 2019, the Company’s subsidiaries maintained aggregate net capital and financial resources that was $172.5 million in excess of the required levels of $12.7 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 | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
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) March 31, 2019 Money market funds $ 155,570 $ — $ — $ 155,570 Securities available-for-sale Corporate debt — 133,051 — 133,051 Trading securities Corporate debt — 56,465 — 56,465 U.S. Treasuries — 27,296 — 27,296 Mutual funds held in rabbi trust — 5,646 — 5,646 Foreign currency forward position — 1,096 — 1,096 Total $ 155,570 $ 223,554 $ — $ 379,124 December 31, 2018 Money market funds $ 112,529 $ — $ — $ 112,529 Securities available-for-sale Corporate debt — 146,966 — 146,966 Trading securities Corporate debt — 71,861 — 71,861 U.S. Treasuries — 17,178 — 17,178 Mutual funds held in rabbi trust — 4,100 — 4,100 Foreign currency forward position — (1,021 ) — (1,021 ) Total $ 112,529 $ 239,084 $ — $ 351,613 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). There were no financial assets classified within Level 3 during the three months ended March 31, 2019 and 2018. 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 March 31, 2019 December 31, 2018 (In thousands) Notional value $ 123,263 $ 106,306 Fair value of notional 122,167 107,327 Fair value of the asset (liability) $ 1,096 $ (1,021 ) The following is a summary of the Company’s investments: Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value (In thousands) As of March 31, 2019 Securities available-for-sale Corporate debt $ 133,039 $ 238 $ (226 ) $ 133,051 Trading securities Corporate debt 56,626 2 (163 ) 56,465 U.S. Treasuries 26,949 347 — 27,296 Mutual funds held in rabbi trust 5,281 365 — 5,646 Total trading securities 88,856 714 (163 ) 89,407 Total investments $ 221,895 $ 952 $ (389 ) $ 222,458 December 31, 2018 Securities available-for-sale Corporate debt $ 147,556 $ 27 $ (617 ) $ 146,966 Trading securities Corporate debt 72,274 8 (421 ) 71,861 U.S. Treasuries 16,953 225 — 17,178 Mutual funds held in rabbi trust 4,347 — (247 ) 4,100 Total trading securities 93,574 233 (668 ) 93,139 Total investments $ 241,130 $ 260 $ (1,285 ) $ 240,105 The following table summarizes the fair value of the investments based upon the contractual maturities: As of March 31, 2019 December 31, 2018 (In thousands) Less than one year $ 129,435 $ 134,255 Due in 1 - 5 years 93,023 105,850 Total $ 222,458 $ 240,105 Proceeds from the sales and maturities of investments during the three months ended March 31, 2019 and 2018 were $100.1 million and $67.4 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 March 31, 2019 and December 31, 2018: Less than Twelve Months Twelve Months or More Total Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses (In thousands) As of March 31, 2019 Corporate debt $ 27,031 $ (18 ) $ 82,528 $ (371 ) $ 109,559 $ (389 ) As of December 31, 2018 Corporate debt $ 80,282 $ (256 ) $ 87,028 $ (782 ) $ 167,310 $ (1,038 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following: March 31, 2019 December 31, 2018 Cost Accumulated amortization Net carrying amount Cost Accumulated amortization Net carrying amount (In thousands) Technology $ 5,770 $ (5,770 ) $ — $ 5,770 $ (5,770 ) $ — Customer relationships 5,639 (2,773 ) 2,866 5,634 (2,672 ) 2,962 Non-competition agreements 380 (380 ) — 380 (380 ) — Tradenames 370 (370 ) — 370 (370 ) — Total $ 12,159 $ (9,293 ) $ 2,866 $ 12,154 $ (9,192 ) $ 2,962 Amortization expense associated with identifiable intangible assets was $0.1 million for each of the three months ended March 31, 2019 and 2018, respectively. Estimated total amortization expense is $0.4 million for each year from 2019 through 2022 and $0.3 million for 2023. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The provision for income taxes consists of the following: Three Months Ended March 31, 2019 2018 Current: (In thousands) Federal $ 6,524 $ 7,970 State and local 1,393 1,919 Foreign 2,771 1,114 Total current provision 10,688 11,003 Deferred: Federal 1,602 846 State and local 249 130 Foreign 159 1,094 Total deferred provision 2,010 2,070 Provision for income taxes $ 12,698 $ 13,073 T he Company recognized excess tax benefits on share-based payments of $ million and $ million through the provision for income taxes, for the three months ended March 31, 2019 and 2018, respectively. 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 the Company’s New York State income tax returns for 2010 through 2017 is currently underway. The Company cannot estimate when the examination will conclude or the impact such examination will have on the Company’s Consolidated Financial Statements, if any. All previously undistributed foreign earnings have now been subject to U.S. tax. Notwithstanding the U.S. taxation of these amounts, the Company considers its undistributed foreign earnings to be indefinitely reinvested outside of the U.S. and does not expect to incur any significant additional taxes related to such amounts. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Plans | 7. Stock-Based Compensation Plans Total stock-based compensation expense Three Months Ended March 31, 2019 2018 (In thousands) Employees $ 4,916 $ 3,692 Non-employee directors 280 259 Total stock-based compensation $ 5,196 $ 3,951 The Company records stock-based compensation expense 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 three months ended March 31, 2019, the Company granted to employees a total of 82,423 shares of restricted stock or restricted stock units, 82,474 options to purchase shares of common stock and performance-based shares with an expected pay-out at target of 13,225 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 $213.62 and $208.84, respectively. Based on the Black-Scholes option pricing model, the weighted-average fair value for each option granted was $38.83 per share. In addition to the grants above, 76,868 stock options and 18,914 performance shares were granted to the Company’s President and Chief Operating Officer in January 2019 with an aggregate grant date fair value of $5.8 million as determined by an independent third party using a Monte Carlo simulation model. The exercise price is $272.88 for 35,678 of the stock options and $294.71 for the remaining 41,189 stock options, which is equal to 125% and 135%, respectively, of the fair market value of the Company’s common stock on the grant date. The performance share award provides that the number of shares earned will be based on the Company’s achievement of certain share price levels during the five-year performance period. The performance level is $272.88 for 8,969 of the performance shares and $294.71 for the remaining 9,945 performance shares, which is equal to 125% and 135%, respectively, of the fair market value of the Company’s common stock on the grant date. Subject to the terms of the award agreements, the performance shares will vest and options will vest and become exercisable only upon the grantee’s continued employment with the Company through January 24, 2024. The options expire on July 22, 2024. Key assumptions used for the Monte Carlo model included a risk free interest rate of 2.6%, a dividend yield of 0.8%, volatility of 25.8% for the stock options and volatility of 25.9% for the performance shares. As of March 31, 2019, the total unrecognized compensation cost related to all non-vested awards was $52.2 million. That cost is expected to be recognized over a weighted-average period of 2.5 years. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. Earnings Per Share The following table sets forth basic and diluted weighted average shares outstanding used to compute earnings per share: Three Months Ended March 31, 2019 2018 (In thousands) Basic weighted average shares outstanding 37,043 36,954 Dilutive effect of stock options and restricted stock 789 932 Diluted weighted average shares outstanding 37,832 37,886 Stock options and restricted stock totaling 346,327 shares and 77,732 shares for the three months ended March 31, 2019 and 2018, 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 | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit Agreement | 9. Credit Agreement In October 2015, the Company entered into a two-year amended and restated credit agreement (the “Credit Agreement”) that provided for revolving loans and letters of credit up to an aggregate of $100.0 million. The Company amended the Credit Agreement in October 2017 and extended the maturity date to October 2018. The amended Credit Agreement also provided for two additional one-year extension options and modified certain borrowing terms and covenants. In October 2018, the Company exercised its first option to extend the maturity date to October 2019. 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. As of March 31, 2019, the Company had $1.7 million in letters of credit outstanding and $98.3 million in available borrowing capacity under the Credit Agreement. Borrowings under the Credit Agreement will bear interest at a rate per annum equal to the base rate or adjusted LIBOR plus an applicable margin that varies with the Company’s consolidated total leverage ratio. The Credit Agreement requires that the Company satisfies certain covenants, which includes leverage ratios and minimum earnings before interest, tax, depreciation and amortization (“EBITDA”) requirements. The Company was in compliance with all applicable covenants at March 31, 2019 and December 31, 2018. 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). 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. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 10. Leases The Company has operating leases for corporate offices with initial lease terms ranging from one-year to 15 years. The following table presents the components of occupancy expense for the three months ended March 31, 2019: Lease cost: Classification (In thousands) Operating lease cost Occupany $ 2,745 Operating lease cost for subleased/assigned properties Other, net 573 Variable lease costs Occupany 124 Sublease income subleased/assigned properties Other, net (573 ) Net lease cost $ 2,869 The Company determines whether an arrangement The following table presents the maturity of lease liabilities as of March 31, 2019 (In thousands) Remainder of 2019 $ 3,768 2020 11,185 2021 10,125 2022 9,092 2023 8,762 2024 and thereafter 96,287 Total lease payments 139,219 Less: interest 48,374 Present value of lease liabilities $ 90,845 Minimum lease commitments as of December 31, 2018 that had an initial term or remaining lease term in excess of one-year are as follows: (In thousands) 2019 $ 9,764 2020 10,919 2021 10,114 2022 9,067 2023 8,738 2024 and thereafter 95,467 $ 144,069 The Company has entered into agreements that assign the Company’s lease obligations on two properties to third parties and is contingently liable should the third parties default on future lease obligations through the lease termination dates of November 2020 and February 2022. The aggregate amount of the future lease obligations under these arrangements is $5.4 million as of March 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Legal 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 will establish an accrual for the loss. Once established, the accrual will 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 two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded. Under securities clearing agreements with third party clearing brokers, the Company maintains collateral deposits with each clearing broker in the form of cash. The amount of the collateral deposits, which are disclosed in the Consolidated Statements of Cash Flows as restricted cash, and included in prepaid expenses and other assets in the Consolidated Statements of Financial Condition was $1.2 million as of both March 31, 2019 and 2018. In the normal course of business, the Company enters into contracts that contain a variety of representations, warranties and indemnification provisions. 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. |
Share Repurchase Program
Share Repurchase Program | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Share Repurchase Program | 12. Share Repurchase Program In September 2017, the Board of Directors authorized a fifteen-month share repurchase program for up to $100.0 million that commenced in October 2017. The expiration date of this program was subsequently extended to March 31, 2019. In January 2019, the Board of Directors authorized a new two-year share repurchase program for up to $100.0 million that commenced in April 2019. For the three months ended March 31, 2019, the Company repurchased 23,365 shares of common stock at a cost of $5.2 million. Shares repurchased under each program will be held in treasury for future use. |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 13. Segment and Geographic Information The Company operates an electronic 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, the financial markets in which the Company competes and 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 months ended March 31, 2019 and 2018, 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 months ended March 31, 2019 and 2018 and long-lived assets as of March 31, 2019 and December 31, 2018 was as follows: Three Months Ended March 31, 2019 2018 (In thousands) Revenues United States $ 103,615 $ 96,451 United Kingdom 20,267 17,751 Other 609 512 Total $ 124,491 $ 114,714 As of March 31, 2019 December 31, 2018 (In thousands) Long-lived assets, as defined United States $ 53,518 $ 55,200 United Kingdom 7,508 7,787 Other 21 23 Total $ 61,047 $ 63,010 |
Retirement and Deferred Compens
Retirement and Deferred Compensation Plans | 3 Months Ended |
Mar. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement and Deferred Compensation Plans | 14. Retirement and Deferred Compensation Plans The Company offers a non-qualified deferred cash incentive plan to 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. As of March 31, 2019 and 2018, the fair value of the mutual fund investments and deferred compensation obligations were $5.6 million and $4.3 million, respectively. Changes in the fair value of securities held in the rabbi trust and offsetting increases or decreases in the deferred compensation obligation are recognized in other, net in the Company’s Consolidated Statements of Operations. For the three months ended March 31, 2019 and 2018, the trading (losses) gains and changes in deferred compensation liability and expense |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018. The consolidated financial information as of December 31, 2018 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. |
Accounting Pronouncements, Recently Adopted | Accounting Pronouncements, Recently Adopted In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”) requiring lessees to recognize lease assets and lease liabilities on the balance sheet for those leases previously classified as operating leases with lease terms greater than 12 months. The Company adopted ASU 2016-02 effective January 1, 2019 using a modified retrospective transition approach and will not restate comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard which allowed it to carry forward the historical lease classification. |
Accounting Pronouncements, Not Yet Adopted as of March 31, 2019 | Accounting Pronouncements, Not Yet Adopted as of March 31, 2019 In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other” (“ASU 2017-04”). ASU 2017-04 simplifies the testing for goodwill impairment. The guidance will be effective for the Company beginning January 1, 2020 and early adoption is permitted and should be applied prospectively. The adoption of this guidance is not expected to have a material effect on the Company’s Consolidated Financial Statements. |
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 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 include investment grade corporate debt securities and U.S. Treasuries and are carried at fair value, with realized and 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 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 three months ended March 31, 2019 and 2018. |
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 Company’s 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 other, net 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 Company’s classification of revenues in the Consolidated Statements of Operations represents revenues from contracts with customers disaggregated by type of revenue. The Company has four revenue streams as described below. Commission Revenue – The Company charges its broker-dealer clients variable transaction fees for trades executed on its platform and, under certain plans, distribution fees or monthly minimum fees to use the platform for a particular product area. Variable transaction fees 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 disclosed trading 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. Variable transaction fees, distribution fees and unused monthly fee commitments are invoiced and recorded on a monthly basis. 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 its commission through the difference in price between the two trades. The commission is collected upon settlement of the trade, which typically occurs within one to two trading days after the trade date. The following table presents commission revenue by fee type for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Commission revenue by fee type Variable transaction fees Disclosed trading $ 66,056 $ 66,253 Open Trading - matched principal trading 23,036 13,524 Total variable transaction fees 89,092 79,777 Distribution fees and unused minimum fees 23,668 22,995 Total commissions $ 112,760 $ 102,772 Information services – Information services includes data licensed to the Company’s broker-dealer clients, institutional investor clients and data-only subscribers; professional and consulting services; technology software licenses; and maintenance and support services. The nature and timing of each performance obligation may vary as these contracts are either subscription based services transferred over time or one-time services that are transferred at a point in time. Revenues for services transferred over time are recognized ratably over the contract period as the Company’s performance obligation is met whereas revenues for services transferred at a point in time are recognized in the period the services are provided. Customers are generally billed monthly, quarterly, or annually; revenues billed in advance are deferred and recognized ratably over the contract period. The following table presents information services revenue by timing of recognition for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Information services revenue by timing of recognition Services transferred over time $ 7,219 $ 6,842 Services transferred at a point in time 147 224 Total information services revenues $ 7,366 $ 7,066 Post-trade services – Post-trade services revenue is generated from regulatory transaction reporting, trade publication and trade matching services. Customers are generally billed monthly in arrears and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period. The Company also generates one-time implementation fees for onboarding clients which are invoiced and recognized in the period the implementation is completed. The following table presents post-trade services revenue by timing of recognition for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Post-trade services revenue by timing of recognition Services transferred over time $ 4,087 $ 4,287 Services transferred at a point in time 13 289 Total post-trade services revenues $ 4,100 $ 4,576 Other revenues – Other revenues primarily includes revenue from telecommunications line charges to broker-dealer clients. Contract liabilities consist of deferred revenues that the Company records when cash payments are received or due in advance of services to be performed. The revenue recognized from contract liabilities and the remaining balance is shown below: December 31, 2018 Payments received in advance of services to be performed Revenue recognized for services performed during the period Foreign Currency Translation March 31, 2019 (In thousands) Information services $ 1,959 $ 1,957 $ (1,799 ) $ — $ 2,117 Post-trade services 851 3,709 (3,152 ) 20 1,428 Total deferred revenue $ 2,810 $ 5,666 $ (4,951 ) $ 20 $ 3,545 The majority of the Company’s contracts are short-term in nature with durations of less than one-year. For contracts extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $10.4 million as of March 31, 2019. The Company expects to recognize revenue associated with the remaining performance obligations over the next 21 months. |
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. Forfeitures are recognized as they occur. |
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. Effective upon the Company’s adoption of ASU 2016-09, all tax effects related to share-based payments are recorded through tax expense in the periods during which the awards are exercised or vest. |
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. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Commission Revenue by Fee Type | The following table presents commission revenue by fee type for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Commission revenue by fee type Variable transaction fees Disclosed trading $ 66,056 $ 66,253 Open Trading - matched principal trading 23,036 13,524 Total variable transaction fees 89,092 79,777 Distribution fees and unused minimum fees 23,668 22,995 Total commissions $ 112,760 $ 102,772 |
Summary of Information Services Revenue by Timing of Recognition | The following table presents information services revenue by timing of recognition for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Information services revenue by timing of recognition Services transferred over time $ 7,219 $ 6,842 Services transferred at a point in time 147 224 Total information services revenues $ 7,366 $ 7,066 |
Summary of Post-Trade Services Revenue by Timing of Recognition | The following table presents post-trade services revenue by timing of recognition for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 2018 (In thousands) Post-trade services revenue by timing of recognition Services transferred over time $ 4,087 $ 4,287 Services transferred at a point in time 13 289 Total post-trade services revenues $ 4,100 $ 4,576 |
Summary of Revenue Recognized from Contract Liabilities and Remaining Balance | The revenue recognized from contract liabilities and the remaining balance is shown below: December 31, 2018 Payments received in advance of services to be performed Revenue recognized for services performed during the period Foreign Currency Translation March 31, 2019 (In thousands) Information services $ 1,959 $ 1,957 $ (1,799 ) $ — $ 2,117 Post-trade services 851 3,709 (3,152 ) 20 1,428 Total deferred revenue $ 2,810 $ 5,666 $ (4,951 ) $ 20 $ 3,545 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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) March 31, 2019 Money market funds $ 155,570 $ — $ — $ 155,570 Securities available-for-sale Corporate debt — 133,051 — 133,051 Trading securities Corporate debt — 56,465 — 56,465 U.S. Treasuries — 27,296 — 27,296 Mutual funds held in rabbi trust — 5,646 — 5,646 Foreign currency forward position — 1,096 — 1,096 Total $ 155,570 $ 223,554 $ — $ 379,124 December 31, 2018 Money market funds $ 112,529 $ — $ — $ 112,529 Securities available-for-sale Corporate debt — 146,966 — 146,966 Trading securities Corporate debt — 71,861 — 71,861 U.S. Treasuries — 17,178 — 17,178 Mutual funds held in rabbi trust — 4,100 — 4,100 Foreign currency forward position — (1,021 ) — (1,021 ) Total $ 112,529 $ 239,084 $ — $ 351,613 |
Summary of Foreign Currency Forward Contracts | A summary of the Company’s foreign currency forward position is as follows: As of March 31, 2019 December 31, 2018 (In thousands) Notional value $ 123,263 $ 106,306 Fair value of notional 122,167 107,327 Fair value of the asset (liability) $ 1,096 $ (1,021 ) |
Summary of Company's Investments | The following is a summary of the Company’s investments: Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value (In thousands) As of March 31, 2019 Securities available-for-sale Corporate debt $ 133,039 $ 238 $ (226 ) $ 133,051 Trading securities Corporate debt 56,626 2 (163 ) 56,465 U.S. Treasuries 26,949 347 — 27,296 Mutual funds held in rabbi trust 5,281 365 — 5,646 Total trading securities 88,856 714 (163 ) 89,407 Total investments $ 221,895 $ 952 $ (389 ) $ 222,458 December 31, 2018 Securities available-for-sale Corporate debt $ 147,556 $ 27 $ (617 ) $ 146,966 Trading securities Corporate debt 72,274 8 (421 ) 71,861 U.S. Treasuries 16,953 225 — 17,178 Mutual funds held in rabbi trust 4,347 — (247 ) 4,100 Total trading securities 93,574 233 (668 ) 93,139 Total investments $ 241,130 $ 260 $ (1,285 ) $ 240,105 |
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 March 31, 2019 December 31, 2018 (In thousands) Less than one year $ 129,435 $ 134,255 Due in 1 - 5 years 93,023 105,850 Total $ 222,458 $ 240,105 |
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 March 31, 2019 and December 31, 2018: Less than Twelve Months Twelve Months or More Total Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses Estimated fair value Gross unrealized losses (In thousands) As of March 31, 2019 Corporate debt $ 27,031 $ (18 ) $ 82,528 $ (371 ) $ 109,559 $ (389 ) As of December 31, 2018 Corporate debt $ 80,282 $ (256 ) $ 87,028 $ (782 ) $ 167,310 $ (1,038 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following: March 31, 2019 December 31, 2018 Cost Accumulated amortization Net carrying amount Cost Accumulated amortization Net carrying amount (In thousands) Technology $ 5,770 $ (5,770 ) $ — $ 5,770 $ (5,770 ) $ — Customer relationships 5,639 (2,773 ) 2,866 5,634 (2,672 ) 2,962 Non-competition agreements 380 (380 ) — 380 (380 ) — Tradenames 370 (370 ) — 370 (370 ) — Total $ 12,159 $ (9,293 ) $ 2,866 $ 12,154 $ (9,192 ) $ 2,962 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following: Three Months Ended March 31, 2019 2018 Current: (In thousands) Federal $ 6,524 $ 7,970 State and local 1,393 1,919 Foreign 2,771 1,114 Total current provision 10,688 11,003 Deferred: Federal 1,602 846 State and local 249 130 Foreign 159 1,094 Total deferred provision 2,010 2,070 Provision for income taxes $ 12,698 $ 13,073 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expense | Total stock-based compensation expense Three Months Ended March 31, 2019 2018 (In thousands) Employees $ 4,916 $ 3,692 Non-employee directors 280 259 Total stock-based compensation $ 5,196 $ 3,951 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Weighted Average Shares Outstanding Used to Compute Earnings Per Share | The following table sets forth basic and diluted weighted average shares outstanding used to compute earnings per share: Three Months Ended March 31, 2019 2018 (In thousands) Basic weighted average shares outstanding 37,043 36,954 Dilutive effect of stock options and restricted stock 789 932 Diluted weighted average shares outstanding 37,832 37,886 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Components of Occupancy Expense | The following table presents the components of occupancy expense for the three months ended March 31, 2019: Lease cost: Classification (In thousands) Operating lease cost Occupany $ 2,745 Operating lease cost for subleased/assigned properties Other, net 573 Variable lease costs Occupany 124 Sublease income subleased/assigned properties Other, net (573 ) Net lease cost $ 2,869 |
Schedule of Maturity of Lease Liabilities | The following table presents the maturity of lease liabilities as of March 31, 2019 (In thousands) Remainder of 2019 $ 3,768 2020 11,185 2021 10,125 2022 9,092 2023 8,762 2024 and thereafter 96,287 Total lease payments 139,219 Less: interest 48,374 Present value of lease liabilities $ 90,845 |
Summary of Minimum Lease Commitments | Minimum lease commitments as of December 31, 2018 that had an initial term or remaining lease term in excess of one-year are as follows: (In thousands) 2019 $ 9,764 2020 10,919 2021 10,114 2022 9,067 2023 8,738 2024 and thereafter 95,467 $ 144,069 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Revenue and Long-lived Assets | Information regarding revenue for the three months ended March 31, 2019 and 2018 and long-lived assets as of March 31, 2019 and December 31, 2018 was as follows: Three Months Ended March 31, 2019 2018 (In thousands) Revenues United States $ 103,615 $ 96,451 United Kingdom 20,267 17,751 Other 609 512 Total $ 124,491 $ 114,714 As of March 31, 2019 December 31, 2018 (In thousands) Long-lived assets, as defined United States $ 53,518 $ 55,200 United Kingdom 7,508 7,787 Other 21 23 Total $ 61,047 $ 63,010 |
Organization and Principal Bu_2
Organization and Principal Business Activity - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2019Institutional_Investor_and_Broker-dealer_Firm | |
Accounting Policies [Line Items] | |
Date of incorporation | Apr. 11, 2000 |
Minimum [Member] | |
Accounting Policies [Line Items] | |
Number of institutional investor and broker-dealer firms | 1,500 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2019USD ($)Revenue | Mar. 31, 2018USD ($) | |
Significant Accounting Policies [Line Items] | ||
Operating lease liabilities | $ 90,845,000 | |
Operating lease right-of-use assets | $ 78,190,000 | |
Maximum maturity period for classification of investments as cash equivalents | 3 months | |
Investments other-than-temporary losses | $ 0 | $ 0 |
Number of revenue streams | Revenue | 4 | |
Description of commission revenue | 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 its commission through the difference in price between the two trades. | |
Settlement days of bond transaction | Within one to two trading days | |
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 | |
ASU 2016-02 | ||
Significant Accounting Policies [Line Items] | ||
Operating lease liabilities | $ 91,200,000 | |
Operating lease right-of-use assets | 79,500,000 | |
Deferred rent liability | $ 11,700,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Commission Revenue by Fee Type (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Commission revenue by fee type | ||
Revenues | $ 124,491 | $ 114,714 |
Commissions [Member] | ||
Commission revenue by fee type | ||
Disclosed trading | 66,056 | 66,253 |
Open Trading - matched principal trading | 23,036 | 13,524 |
Total variable transaction fees | 89,092 | 79,777 |
Distribution fees and unused minimum fees | 23,668 | 22,995 |
Revenues | $ 112,760 | $ 102,772 |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Information Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Significant Accounting Policies [Line Items] | ||
Revenues | $ 124,491 | $ 114,714 |
Information Services [Member] | ||
Significant Accounting Policies [Line Items] | ||
Revenues | 7,366 | 7,066 |
Information Services [Member] | Transferred over Time [Member] | ||
Significant Accounting Policies [Line Items] | ||
Revenues | 7,219 | 6,842 |
Information Services [Member] | Transferred at a Point in Time [Member] | ||
Significant Accounting Policies [Line Items] | ||
Revenues | $ 147 | $ 224 |
Significant Accounting Polici_7
Significant Accounting Policies - Summary of Post-Trade Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Significant Accounting Policies [Line Items] | ||
Revenues | $ 124,491 | $ 114,714 |
Post-trade Services [Member] | ||
Significant Accounting Policies [Line Items] | ||
Revenues | 4,100 | 4,576 |
Post-trade Services [Member] | Transferred over Time [Member] | ||
Significant Accounting Policies [Line Items] | ||
Revenues | 4,087 | 4,287 |
Post-trade Services [Member] | Transferred at a Point in Time [Member] | ||
Significant Accounting Policies [Line Items] | ||
Revenues | $ 13 | $ 289 |
Significant Accounting Polici_8
Significant Accounting Policies - Summary of Revenue Recognized from Contract Liabilities and Remaining Balance (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |
Deferred revenues, beginning balance | $ 2,810 |
Payments received in advance of services to be performed | 5,666 |
Revenue recognized for services performed during the period | (4,951) |
Foreign Currency Translation | 20 |
Deferred revenues, ending balance | 3,545 |
Information Services [Member] | |
Significant Accounting Policies [Line Items] | |
Deferred revenues, beginning balance | 1,959 |
Payments received in advance of services to be performed | 1,957 |
Revenue recognized for services performed during the period | (1,799) |
Deferred revenues, ending balance | 2,117 |
Post-trade Services [Member] | |
Significant Accounting Policies [Line Items] | |
Deferred revenues, beginning balance | 851 |
Payments received in advance of services to be performed | 3,709 |
Revenue recognized for services performed during the period | (3,152) |
Foreign Currency Translation | 20 |
Deferred revenues, ending balance | $ 1,428 |
Significant Accounting Polici_9
Significant Accounting Policies - Additional Information (Detail 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-04-01 $ in Millions | Mar. 31, 2019USD ($) |
Significant Accounting Policies [Line Items] | |
Aggregate amount of transaction price allocated to remaining performance obligations | $ 10.4 |
Expected time to recognize revenue for remaining performance obligation | 21 months |
Net Capital Requirements - Addi
Net Capital Requirements - Additional Information (Detail) $ in Millions | Mar. 31, 2019USD ($) |
Brokers And Dealers [Abstract] | |
Aggregate net capital and financial resources in excess of required level | $ 172.5 |
Aggregate net capital and financial resources, minimum capital requirement | $ 12.7 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation of Company's Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | $ 155,570 | $ 112,529 |
Trading securities | 89,407 | 93,139 |
Assets Fair Value Total | 379,124 | 351,613 |
Corporate Debt [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 133,051 | 146,966 |
Trading securities | 56,465 | 71,861 |
U.S. Treasuries [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 27,296 | 17,178 |
Mutual Funds Held In Rabbi Trust [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 5,646 | 4,100 |
Foreign Currency Forward Position [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Foreign currency forward position | 1,096 | (1,021) |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | 155,570 | 112,529 |
Assets Fair Value Total | 155,570 | 112,529 |
Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets Fair Value Total | 223,554 | 239,084 |
Level 2 [Member] | Corporate Debt [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 133,051 | 146,966 |
Trading securities | 56,465 | 71,861 |
Level 2 [Member] | U.S. Treasuries [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 27,296 | 17,178 |
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 | 5,646 | 4,100 |
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 | $ 1,096 | $ (1,021) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Hedge derivative expiration period | 1 month | |
Proceeds from the sales and maturities of securities available-for-sale | $ 100.1 | $ 67.4 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Foreign Currency Forward Contracts (Detail) - Foreign Currency Forward Position [Member] - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Derivatives Fair Value [Line Items] | ||
Notional value | $ 123,263 | $ 106,306 |
Fair value of notional | 122,167 | 107,327 |
Fair value of the asset (liability) | $ 1,096 | $ (1,021) |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Company's Investments (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule Of Available For Sale Securities [Line Items] | ||
Trading securities, Amortized cost | $ 88,856 | $ 93,574 |
Trading securities, Gross unrealized gains | 714 | 233 |
Trading securities, Gross unrealized losses | (163) | (668) |
Trading securities, Estimated fair value | 89,407 | 93,139 |
Investments, Amortized cost | 221,895 | 241,130 |
Investments, Gross unrealized gains | 952 | 260 |
Investments, Gross unrealized losses | (389) | (1,285) |
Investments, Estimated fair value | 222,458 | 240,105 |
Corporate Debt [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Securities available-for-sale, Amortized cost | 133,039 | 147,556 |
Securities available-for-sale, Gross unrealized gains | 238 | 27 |
Securities available-for-sale, Gross unrealized losses | (226) | (617) |
Securities available-for-sale, Estimated fair value | 133,051 | 146,966 |
Trading securities, Amortized cost | 56,626 | 72,274 |
Trading securities, Gross unrealized gains | 2 | 8 |
Trading securities, Gross unrealized losses | (163) | (421) |
Trading securities, Estimated fair value | 56,465 | 71,861 |
U.S. Treasuries [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Trading securities, Amortized cost | 26,949 | 16,953 |
Trading securities, Gross unrealized gains | 347 | 225 |
Trading securities, Estimated fair value | 27,296 | 17,178 |
Mutual Funds Held In Rabbi Trust [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Trading securities, Amortized cost | 5,281 | 4,347 |
Trading securities, Gross unrealized gains | 365 | |
Trading securities, Gross unrealized losses | (247) | |
Trading securities, Estimated fair value | $ 5,646 | $ 4,100 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Fair Value of Investments Based upon Contractual Maturities (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Less than one year | $ 129,435 | $ 134,255 |
Due in 1 - 5 years | 93,023 | 105,850 |
Total | $ 222,458 | $ 240,105 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Values and Unrealized Losses on Investments (Detail) - Corporate Debt [Member] - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule Of Available For Sale Securities [Line Items] | ||
Less than Twelve Months, Estimated fair value | $ 27,031 | $ 80,282 |
Less than Twelve Months, Gross unrealized losses | (18) | (256) |
Twelve Months or More, Estimated fair value | 82,528 | 87,028 |
Twelve Months or More, Gross unrealized losses | (371) | (782) |
Estimated fair value, Total | 109,559 | 167,310 |
Gross unrealized losses, Total | $ (389) | $ (1,038) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Goodwill [Line Items] | |||
Goodwill and intangible assets with indefinite lives | $ 62,579 | $ 62,675 | |
Amortization expense associated with identifiable intangible assets | 100 | $ 100 | |
Estimated total amortization expense 2019 | 400 | ||
Estimated total amortization expense 2020 | 400 | ||
Estimated total amortization expense 2021 | 400 | ||
Estimated total amortization expense 2022 | 400 | ||
Estimated total amortization expense 2023 | 300 | ||
Indefinite-lived Intangible Assets [Member] | |||
Goodwill [Line Items] | |||
Goodwill and intangible assets with indefinite lives | $ 59,700 | $ 59,700 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 12,159 | $ 12,154 |
Accumulated amortization | (9,293) | (9,192) |
Net carrying amount | 2,866 | 2,962 |
Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 5,770 | 5,770 |
Accumulated amortization | (5,770) | (5,770) |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 5,639 | 5,634 |
Accumulated amortization | (2,773) | (2,672) |
Net carrying amount | 2,866 | 2,962 |
Non-Competition Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 380 | 380 |
Accumulated amortization | (380) | (380) |
Tradenames - Finite Life [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 370 | 370 |
Accumulated amortization | $ (370) | $ (370) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Current: | ||
Federal | $ 6,524 | $ 7,970 |
State and local | 1,393 | 1,919 |
Foreign | 2,771 | 1,114 |
Total current provision | 10,688 | 11,003 |
Deferred: | ||
Federal | 1,602 | 846 |
State and local | 249 | 130 |
Foreign | 159 | 1,094 |
Total deferred provision | 2,010 | 2,070 |
Provision for income taxes | $ 12,698 | $ 13,073 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule Of Pre Tax Income [Line Items] | ||
Excess tax benefits on share based payments | $ 3 | $ 1.8 |
New York State [Member] | Earliest Tax Year [Member] | ||
Schedule Of Pre Tax Income [Line Items] | ||
Income tax year under examination | 2010 | |
New York State [Member] | Latest Tax Year [Member] | ||
Schedule Of Pre Tax Income [Line Items] | ||
Income tax year under examination | 2017 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 5,196 | $ 3,951 |
Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 4,916 | 3,692 |
Non-Employee Directors [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 280 | $ 259 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended |
Jan. 31, 2019 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs related to non-vested | $ 52.2 | |
Weighted-average period over which cost is expected to be recognized | 2 years 6 months | |
Employees [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 | 82,423 | |
Weighted-average grant date fair value per share | $ 213.62 | |
Employees [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 | 13,225 | |
Number of stock option equity instruments granted during the period | 82,474 | |
Weighted-average fair value each option granted | $ 38.83 | |
Weighted-average grant date fair value per share | $ 208.84 | |
President and Chief Operating Officer [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 | 18,914 | |
Grant date fair value | $ 5.8 | |
Share-based compensation arrangement by share-based payment award award vesting date | Jan. 24, 2024 | |
Fair value assumptions, Risk free interest rate | 2.60% | |
Fair value assumptions, Dividend yield rate | 25.90% | |
Fair value assumptions, Volatility rate | 0.80% | |
Performance period | 5 years | |
President and Chief Operating Officer [Member] | Performance Based Share [Member] | Range One [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of non-option equity instruments granted during the period | 8,969 | |
Weighted-average grant date fair value per share | $ 272.88 | |
Percentage of fair market value of the common stock on the grant date | 125.00% | |
President and Chief Operating Officer [Member] | Performance Based Share [Member] | Range Two [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of non-option equity instruments granted during the period | 9,945 | |
Weighted-average grant date fair value per share | $ 294.71 | |
Percentage of fair market value of the common stock on the grant date | 135.00% | |
President and Chief Operating Officer [Member] | Incentive Stock Options [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of stock option equity instruments granted during the period | 76,868 | |
Grant date fair value | $ 5.8 | |
Share-based compensation arrangement by share-based payment award award vesting date | Jan. 24, 2024 | |
Fair value assumptions, Risk free interest rate | 2.60% | |
Fair value assumptions, Dividend yield rate | 0.80% | |
Fair value assumptions, Volatility rate | 25.80% | |
Share-based compensation arrangement by share-based payment award, options expiry date | Jul. 22, 2024 | |
President and Chief Operating Officer [Member] | Incentive Stock Options [Member] | Range One [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of stock option equity instruments granted during the period | 35,678 | |
Weighted-average fair value each option granted | $ 272.88 | |
Percentage of fair market value of the common stock on the grant date | 125.00% | |
President and Chief Operating Officer [Member] | Incentive Stock Options [Member] | Range Two [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of stock option equity instruments granted during the period | 41,189 | |
Weighted-average fair value each option granted | $ 294.71 | |
Percentage of fair market value of the common stock on the grant date | 135.00% |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Weighted Average Shares Outstanding Used to Compute Earnings Per Share (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share Basic And Diluted [Abstract] | ||
Basic weighted average shares outstanding | 37,043 | 36,954 |
Dilutive effect of stock options and restricted stock | 789 | 932 |
Diluted weighted average shares outstanding | 37,832 | 37,886 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
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 | 346,327 | 77,732 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2015 | Mar. 31, 2019 | |
Line Of Credit Facility [Line Items] | ||||
Revolving loans and letters of credit | $ 100,000,000 | |||
Letter of credit outstanding | $ 1,700,000 | |||
Additional Credit Agreement | $ 50,000,000 | |||
Amount available under credit agreement | $ 98,300,000 | |||
Period of credit agreement | 2 years | |||
Equity interest | 65.00% | |||
Minimum [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Excess judgments against the company | $ 10,000,000 | |||
Credit Agreement [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Expiration period of credit agreement | Oct. 31, 2019 | Oct. 31, 2018 | ||
Period of credit agreement | 1 year |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)Agreement | |
Lessee Lease Description [Line Items] | |
Operating lease, option to extend | Certain leases contain options to extend the initial term at the Company’s discretion |
Operating lease, existence of option to extend [true false] | true |
Weighted average remaining lease term | 14 years 2 months 12 days |
Weighted average discount rate | 6.00% |
Number of lease agreements assigned to third parties | Agreement | 2 |
Future lease obligation under sublease arrangements | $ | $ 5.4 |
Property One [Member] | |
Lessee Lease Description [Line Items] | |
Lease termination dates | 2020-11 |
Property Two [Member] | |
Lessee Lease Description [Line Items] | |
Lease termination dates | 2022-02 |
Minimum [Member] | |
Lessee Lease Description [Line Items] | |
Term of lease contract | 1 year |
Maximum [Member] | |
Lessee Lease Description [Line Items] | |
Term of lease contract | 15 years |
Leases - Schedule of Components
Leases - Schedule of Components of Occupancy Expense (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease Cost [Line Items] | |
Net lease cost | $ 2,869 |
Other, net [Member] | |
Lease Cost [Line Items] | |
Operating lease cost for subleased/assigned properties | 573 |
Sublease income subleased/assigned properties | (573) |
Occupancy [Member] | |
Lease Cost [Line Items] | |
Operating lease cost | 2,745 |
Variable lease costs | $ 124 |
Leases - Schedule of Maturity o
Leases - Schedule of Maturity of Lease Liabilities (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 3,768 |
2020 | 11,185 |
2021 | 10,125 |
2022 | 9,092 |
2023 | 8,762 |
2024 and thereafter | 96,287 |
Total lease payments | 139,219 |
Less: interest | 48,374 |
Present value of lease liabilities | $ 90,845 |
Leases - Summary of Minimum Lea
Leases - Summary of Minimum Lease Commitments (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
2019 | $ 9,764 |
2020 | 10,919 |
2021 | 10,114 |
2022 | 9,067 |
2023 | 8,738 |
2024 and thereafter | 95,467 |
Operating Leases | $ 144,069 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)Subsidiary | Mar. 31, 2018USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | ||
Number of subsidiaries | Subsidiary | 2 | |
Settlement days of bond transaction | Within one to two trading days | |
Collateral deposits | $ | $ 1.2 | $ 1.2 |
Share Repurchase Program - Addi
Share Repurchase Program - Additional Information (Detail) - Share Repurchase Program [Member] - USD ($) | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2019 | Sep. 30, 2017 | Mar. 31, 2019 | |
Equity Class Of Treasury Stock [Line Items] | |||
Shares repurchase program period | 2 years | 15 months | |
Shares repurchase program authorized | $ 100,000,000 | $ 100,000,000 | |
Commencement date | 2019-04 | 2017-10 | |
Total shares repurchased | 23,365 | ||
Cost of common stock shares repurchased | $ 5,200,000 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Detail) - Segment | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Number of operating segment | 1 | |
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% |
Segment and Geographic Inform_4
Segment and Geographic Information - Summary of Revenue and Long-lived Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 124,491 | $ 114,714 | |
Long-lived assets | 61,047 | $ 63,010 | |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 103,615 | 96,451 | |
Long-lived assets | 53,518 | 55,200 | |
United Kingdom [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 20,267 | 17,751 | |
Long-lived assets | 7,508 | 7,787 | |
Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 609 | $ 512 | |
Long-lived assets | $ 21 | $ 23 |
Retirement and Deferred Compe_2
Retirement and Deferred Compensation Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | ||
Non-qualified deferred cash incentive plan maximum eligibility percentage of employees | 100.00% | |
Mutual fund investments and deferred compensation obligation, at fair value | $ 5.6 | $ 4.3 |