Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 21, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
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 | 37,971,735 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, $0.003 par value | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-34091 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 52-2230784 | |
Entity Address, Address Line One | 55 Hudson Yards | |
Entity Address, Address Line Two | 15th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10001 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
City Area Code | 212 | |
Local Phone Number | 813-6000 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 404,148 | $ 270,124 |
Investments, at fair value | 131,372 | 230,477 |
Accounts receivable, net of allowance of $200 and $57 as of June 30, 2020 and December 31, 2019, respectively | 99,222 | 62,017 |
Goodwill | 147,394 | 146,861 |
Intangible assets, net of accumulated amortization | 59,552 | 60,986 |
Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization | 78,461 | 71,795 |
Operating lease right-of-use assets | 77,933 | 81,399 |
Prepaid expenses and other assets | 41,102 | 30,770 |
Deferred tax assets, net | 33 | 501 |
Total assets | 1,039,217 | 954,930 |
Liabilities | ||
Accrued employee compensation | 39,434 | 47,365 |
Income and other tax liabilities | 24,906 | 16,690 |
Deferred revenue | 4,068 | 3,499 |
Accounts payable, accrued expenses and other liabilities | 22,624 | 19,294 |
Operating lease liabilities | 94,701 | 97,991 |
Total liabilities | 185,733 | 184,839 |
Commitments and Contingencies (Note 12) | ||
Stockholders' equity | ||
Preferred stock | ||
Common stock | 122 | 122 |
Additional paid-in capital | 327,970 | 342,541 |
Treasury stock - Common stock voting, at cost, 2,837,164 and 2,810,609 shares as of June 30, 2020 and December 31, 2019, respectively | (164,676) | (153,388) |
Retained earnings | 704,219 | 591,086 |
Accumulated other comprehensive loss | (14,151) | (10,270) |
Total stockholders' equity | 853,484 | 770,091 |
Total liabilities and stockholders' equity | 1,039,217 | 954,930 |
Series A Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for accounts receivable | $ 200 | $ 57 |
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 | 40,775,124 | 40,746,593 |
Common stock, shares outstanding | 37,937,960 | 37,935,984 |
Treasury stock, shares | 2,837,164 | 2,810,609 |
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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | ||||
Revenues | $ 184,795 | $ 125,490 | $ 353,773 | $ 249,981 |
Expenses | ||||
Employee compensation and benefits | 41,636 | 32,623 | 82,830 | 65,281 |
Depreciation and amortization | 8,305 | 6,345 | 16,372 | 12,427 |
Technology and communications | 8,592 | 6,474 | 16,753 | 12,256 |
Professional and consulting fees | 8,065 | 6,296 | 13,740 | 12,127 |
Occupancy | 3,286 | 2,798 | 6,760 | 5,747 |
Marketing and advertising | 1,810 | 3,667 | 4,485 | 5,966 |
Clearing costs | 5,713 | 2,610 | 11,223 | 5,187 |
General and administrative | 3,253 | 3,800 | 6,386 | 6,924 |
Total expenses | 80,660 | 64,613 | 158,549 | 125,915 |
Operating income | 104,135 | 60,877 | 195,224 | 124,066 |
Other income (expense) | ||||
Investment income | 714 | 2,096 | 1,983 | 4,085 |
Other, net | (446) | (64) | (1,102) | (22) |
Total other income | 268 | 2,032 | 881 | 4,063 |
Income before income taxes | 104,403 | 62,909 | 196,105 | 128,129 |
Provision for income taxes | 20,549 | 14,804 | 37,435 | 27,502 |
Net income | $ 83,854 | $ 48,105 | $ 158,670 | $ 100,627 |
Net income per common share | ||||
Basic | $ 2.25 | $ 1.30 | $ 4.25 | $ 2.72 |
Diluted | 2.20 | 1.27 | 4.16 | 2.66 |
Cash dividends declared per common share | $ 0.60 | $ 0.51 | $ 1.20 | $ 1.02 |
Weighted average shares outstanding | ||||
Basic | 37,340 | 37,049 | 37,322 | 37,046 |
Diluted | 38,153 | 37,910 | 38,115 | 37,871 |
Commissions [Member] | ||||
Revenues | ||||
Revenues | $ 172,092 | $ 114,124 | $ 328,046 | $ 226,884 |
Information Services [Member] | ||||
Revenues | ||||
Revenues | 8,427 | 7,156 | 17,069 | 14,522 |
Post-trade Services [Member] | ||||
Revenues | ||||
Revenues | 4,054 | 3,956 | 8,207 | 8,056 |
Other [Member] | ||||
Revenues | ||||
Revenues | $ 222 | $ 254 | $ 451 | $ 519 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 83,854 | $ 48,105 | $ 158,670 | $ 100,627 |
Net cumulative translation adjustment and foreign currency exchange hedge, net of tax of $121, $721, $2,562, and $269, respectively | (351) | (1,100) | (4,210) | 18 |
Net unrealized gain on securities available-for-sale, net of tax of $259, $144, $104, and $287, respectively | 820 | 459 | 329 | 918 |
Comprehensive income | $ 84,323 | $ 47,464 | $ 154,789 | $ 101,563 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Foreign currency exchange hedge, tax expense (benefit) | $ 121 | $ 721 | $ 2,562 | $ 269 |
Securities available-for-sale, tax expense (benefit) | $ 259 | $ 144 | $ 104 | $ 287 |
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, 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 (loss) gain 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 ($0.60 per share) | (19,212) | (19,212) | ||||
Ending Balance at Mar. 31, 2019 | 631,146 | 122 | 335,425 | (190,146) | 496,562 | (10,817) |
Beginning Balance at Dec. 31, 2018 | 607,878 | 122 | 341,860 | (184,962) | 463,252 | (12,394) |
Net income | 100,627 | |||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | 18 | |||||
Ending Balance at Jun. 30, 2019 | 661,908 | 122 | 341,446 | (193,632) | 525,430 | (11,458) |
Beginning Balance at Mar. 31, 2019 | 631,146 | 122 | 335,425 | (190,146) | 496,562 | (10,817) |
Net income | 48,105 | 48,105 | ||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | (1,100) | (1,100) | ||||
Unrealized net (loss) gain on securities available-for-sale, net of tax | 459 | 459 | ||||
Stock-based compensation | 5,929 | 5,929 | ||||
Exercise of stock options | 350 | 350 | ||||
Withholding tax payments on restricted stock vesting and stock option exercises | (258) | (258) | ||||
Repurchases of common stock | (3,486) | (3,486) | ||||
Cash dividend on common stock ($0.60 per share) | (19,237) | (19,237) | ||||
Ending Balance at Jun. 30, 2019 | 661,908 | 122 | 341,446 | (193,632) | 525,430 | (11,458) |
Beginning Balance at Dec. 31, 2019 | 770,091 | 122 | 342,541 | (153,388) | 591,086 | (10,270) |
Net income | 74,816 | 74,816 | ||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | (3,859) | (3,859) | ||||
Unrealized net (loss) gain on securities available-for-sale, net of tax | (491) | (491) | ||||
Stock-based compensation | 6,677 | 6,677 | ||||
Exercise of stock options | 80 | 80 | ||||
Withholding tax payments on restricted stock vesting and stock option exercises | (21,243) | (21,243) | ||||
Repurchases of common stock | (5,415) | (5,415) | ||||
Cash dividend on common stock ($0.60 per share) | (22,773) | (22,773) | ||||
Ending Balance at Mar. 31, 2020 | 797,883 | 122 | 328,055 | (158,803) | 643,129 | (14,620) |
Beginning Balance at Dec. 31, 2019 | 770,091 | 122 | 342,541 | (153,388) | 591,086 | (10,270) |
Net income | 158,670 | |||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | (4,210) | |||||
Ending Balance at Jun. 30, 2020 | 853,484 | 122 | 327,970 | (164,676) | 704,219 | (14,151) |
Beginning Balance at Mar. 31, 2020 | 797,883 | 122 | 328,055 | (158,803) | 643,129 | (14,620) |
Net income | 83,854 | 83,854 | ||||
Cumulative translation adjustment and foreign currency exchange hedge, net of tax | (351) | (351) | ||||
Unrealized net (loss) gain on securities available-for-sale, net of tax | 820 | 820 | ||||
Stock-based compensation | 5,791 | 5,791 | ||||
Exercise of stock options | 659 | 659 | ||||
Withholding tax payments on restricted stock vesting and stock option exercises | (6,535) | (6,535) | ||||
Repurchases of common stock | (5,873) | (5,873) | ||||
Cash dividend on common stock ($0.60 per share) | (22,764) | (22,764) | ||||
Ending Balance at Jun. 30, 2020 | $ 853,484 | $ 122 | $ 327,970 | $ (164,676) | $ 704,219 | $ (14,151) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Stockholders Equity [Abstract] | ||||||
Cash dividends declared per common share | $ 0.60 | $ 0.60 | $ 0.51 | $ 0.51 | $ 1.20 | $ 1.02 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 158,670 | $ 100,627 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 16,372 | 12,427 |
Amortization of operating lease right-of-use assets | 3,325 | 2,835 |
Stock-based compensation expense | 12,468 | 11,125 |
Deferred taxes | 4,741 | 1,631 |
Other | 2,199 | (296) |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | (37,457) | (8,883) |
Decrease (increase) in prepaid expenses and other assets | 6,124 | (131) |
Decrease in trading investments | 63,274 | 8,854 |
(Decrease) in accrued employee compensation | (7,931) | (12,384) |
Increase (decrease) in income and other tax liabilities | 3,839 | (3,661) |
Increase in deferred revenue | 569 | 1,000 |
Increase (decrease) in accounts payable, accrued expenses and other liabilities | 3,460 | (877) |
(Decrease) in operating lease liabilities | (3,072) | (1,422) |
Net cash provided by operating activities | 225,222 | 109,102 |
Cash flows from investing activities | ||
Acquisition of business, net of cash and cash equivalents acquired | (533) | |
Proceeds from maturities and sales, available-for-sale investments | 68,596 | 130,875 |
Purchases, available-for-sale investments | (32,865) | (128,189) |
Purchases of furniture, equipment and leasehold improvements | (9,264) | (6,114) |
Capitalization of software development costs | (13,003) | (7,310) |
Other | 2 | |
Net cash provided by (used in) investing activities | 12,931 | (10,736) |
Cash flows from financing activities | ||
Cash dividend on common stock | (45,668) | (38,323) |
Exercise of stock options | 739 | 522 |
Withholding tax payments on restricted stock vesting and stock option exercises | (27,778) | (12,061) |
Repurchases of common stock | (11,288) | (8,670) |
Net cash (used in) financing activities | (83,995) | (58,532) |
Effect of exchange rate changes on cash and cash equivalents | (3,678) | 21 |
Cash and cash equivalents including restricted cash | ||
Net increase for the period | 150,480 | 39,855 |
Beginning of period | 274,253 | 247,458 |
End of period | 424,733 | 287,313 |
Non-cash activity | ||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 688 | |
Mutual Funds Held In Rabbi Trust [Member] | ||
Changes in operating assets and liabilities: | ||
Decrease in trading investments | $ (1,359) | $ (1,743) |
Organization and Principal Busi
Organization and Principal Business Activity | 6 Months Ended |
Jun. 30, 2020 | |
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 | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019. The consolidated financial information as of December 31, 2019 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 August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). The standard requires the capitalization of implementation costs incurred in a cloud computing arrangement to be aligned with the requirements for capitalizing costs incurred to develop or obtain internal-use software. The updated guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2018-15 effective July 1, 2019 on a prospective basis. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. 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, which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Instead, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing impairment by which the carrying amount exceeds the reporting unit’s fair value. The Company adopted ASU 2017-04 effective January 1, 2020 on a prospective basis. Adoption of this guidance did not have a material impact 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, net 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 to other, net income in the Consolidated Statements of Operations. The remainder is recognized in accumulated other comprehensive loss if the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery. No charges for other-than-temporary losses were recorded during the three and six months ended June 30, 2020 and 2019, respectively. 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. Cloud Computing Costs The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, employee compensation and related benefits and third party consulting costs that are part of the application development stage. These costs are setup as a pre-paid asset on the balance sheet and are amortized over the period of the hosting service contract. 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 platforms and, under certain plans, distribution fees or monthly minimum fees to use the platforms for a particular product area. Variable transaction fees are generally calculated as a percentage of the notional dollar volume of bonds traded on the platforms 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 Open Trading 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. For U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly basis. The following table presents commission revenue by fee type: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Commission revenue by fee type Variable transaction fees Disclosed trading $ 95,634 $ 67,308 $ 179,879 $ 133,364 Open Trading - matched principal trading 47,373 23,454 87,731 46,490 U.S. Treasuries - matched principal trading 3,024 — 7,587 — Total variable transaction fees 146,031 90,762 275,197 179,854 Distribution fees and unused minimum fees 26,061 23,362 52,849 47,030 Total commissions $ 172,092 $ 114,124 $ 328,046 $ 226,884 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, and may be net of volume-based discounts, 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: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Information services revenue by timing of recognition Services transferred over time $ 7,819 $ 7,050 $ 15,625 $ 14,269 Services transferred at a point in time 608 106 1,444 253 Total information services revenues $ 8,427 $ 7,156 $ 17,069 $ 14,522 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: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Post-trade services revenue by timing of recognition Services transferred over time $ 3,948 $ 3,949 $ 8,098 $ 8,036 Services transferred at a point in time 106 7 109 20 Total post-trade services revenues $ 4,054 $ 3,956 $ 8,207 $ 8,056 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, 2019 Payments received in advance of services to be performed Revenue recognized for services performed during the period Foreign Currency Translation June 30, 2020 (In thousands) Information services $ 2,138 $ 4,314 $ (3,844 ) $ — $ 2,608 Post-trade services 1,361 7,395 (7,203 ) (93 ) 1,460 Total deferred revenue $ 3,499 $ 11,709 $ (11,047 ) $ (93 ) $ 4,068 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 $33.4 million as of June 30, 2020. The Company expects to recognize revenue associated with the remaining performance obligations over the next 25 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 other, net in the Consolidated Statements of Operations. 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 requires judgment 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 over their estimated useful lives which range from one to 15 years using either a straight-line or accelerated amortization method based on the pattern of economic benefit the Company expects to realize from such assets. 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 | 6 Months Ended |
Jun. 30, 2020 | |
Brokers And Dealers [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 (“SEF”) 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 that 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 (“FCA”) 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 June 30, 2020, 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 June 30, 2020, the Company’s subsidiaries maintained aggregate net capital and financial resources that was $287.5 million in excess of the required levels of $19.6 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 | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2. Level 1 Level 2 Level 3 Total (In thousands) As of June 30, 2020 Money market funds $ 153,750 $ — $ — $ 153,750 Securities available-for-sale Corporate debt — 102,151 — 102,151 Trading securities Corporate debt — 21,645 — 21,645 Mutual funds held in rabbi trust — 7,576 — 7,576 Foreign currency forward position — 1,396 — 1,396 Total $ 153,750 $ 132,768 $ — $ 286,518 As of December 31, 2019 Money market funds $ 99,755 $ — $ — $ 99,755 Securities available-for-sale Corporate debt — 137,835 — 137,835 Trading securities Corporate debt — 31,120 — 31,120 U.S. Treasuries — 55,305 — 55,305 Mutual funds held in rabbi trust — 6,217 — 6,217 Foreign currency forward position — (2,772 ) — (2,772 ) Total $ 99,755 $ 227,705 $ — $ 327,460 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 Company’s deferred cash incentive plan. There were no financial assets classified within Level 3 during the six months ended June 30, 2020 and 2019. 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 As of June 30, 2020 December 31, 2019 (In thousands) Notional value $ 179,109 $ 155,885 Fair value of notional 177,713 158,657 Fair value of the asset (liability) $ 1,396 $ (2,772 ) 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 June 30, 2020 Securities available-for-sale Corporate debt $ 101,001 $ 1,167 $ (17 ) $ 102,151 Trading securities Corporate debt 21,556 90 (1 ) 21,645 Mutual funds held in rabbi trust 7,680 54 (158 ) 7,576 Total trading securities 29,236 144 (159 ) 29,221 Total investments $ 130,237 $ 1,311 $ (176 ) $ 131,372 As of December 31, 2019 Securities available-for-sale Corporate debt $ 137,119 $ 721 $ (5 ) $ 137,835 Trading securities Corporate debt 31,120 14 (14 ) 31,120 U.S. Treasuries 54,738 567 — 55,305 Mutual funds held in rabbi trust 5,173 1,044 — 6,217 Total trading securities 91,031 1,625 (14 ) 92,642 Total investments $ 228,150 $ 2,346 $ (19 ) $ 230,477 The following table summarizes the fair value of the investments based upon the contractual maturities: As of June 30, 2020 December 31, 2019 (In thousands) Less than one year $ 77,068 $ 120,850 Due in 1 - 5 years 54,304 109,627 Total $ 131,372 $ 230,477 Proceeds from the sales and maturities of investments during the six months ended June 30, 2020 and 2019 were $144.4 million and $175.7 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 June 30, 2020 and December 31, 2019: 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 June 30, 2020 Corporate debt $ 11,578 $ (18 ) $ — $ — $ 11,578 $ (18 ) As of December 31, 2019 Corporate debt $ 27,999 $ (18 ) $ 4,406 $ (1 ) $ 32,405 $ (19 ) |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisition | 5. Acquisition On November 1, 2019, the Company and one of its subsidiaries completed their acquisition (the “Acquisition”) of all of the outstanding equity interests of LiquidityEdge LLC (“LiquidityEdge”) pursuant to the terms and conditions of a Unit Purchase Agreement entered into among the Company, LiquidityEdge, the holders of all the outstanding equity interests in LiquidityEdge and certain other persons named therein on August 12, 2019 (as amended, the “Agreement”). The aggregate consideration for the Acquisition was $152.7 million, comprised of approximately $103.9 million in cash and 146,450 shares of common stock of the Company (valued at approximately $48.8 million as of the closing date of the Acquisition, as described below). The aggregate consideration was increased by $0.5 million in the first quarter of 2020 to adjust for cash on hand, outstanding debt, transaction expenses and working capital as set forth in the Agreement. A portion of the stock consideration, amounting to 43,937 shares of common stock, was placed in escrow for up to 18 months to secure the sellers’ indemnification obligations under the Agreement. In addition, under the Agreement, the sellers were generally prohibited from transferring any of the Company common stock received in the Acquisition for a period of six months following the November 1, 2019 closing date. The value ascribed to the shares by the Company was discounted from the market value on the date of closing to reflect the non-marketability of such shares during the restriction period. LiquidityEdge is a limited liability company organized in the state of Delaware and is a broker-dealer registered with the SEC and the Financial Industry Regulatory Authority (“FINRA”). LiquidityEdge offers an electronic trading platform for U.S. Treasuries. The Company has completed a preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed at the date of acquisition. The Company utilized an independent third-party to determine the fair value of the acquired intangible assets. It is possible that the purchase price allocation will be adjusted upon finalization of the accounting for the acquired assets. The purchase price allocation as of June 30, 2020 is as follows (in thousands): Purchase price $ 153,210 Less: acquired cash (2,935 ) Purchase price, net of acquired cash 150,275 Accounts receivable (1,811 ) Intangible assets (58,780 ) Prepaid expenses and other assets (4,168 ) Accounts payable, accrued expenses and other liabilities 2,165 Goodwill $ 87,681 The acquired intangible assets are as follows (in thousands, except for useful lives): Costs Useful Lives Customer relationships $ 58,690 15 years Tradename - finite life 90 1 year Total $ 58,780 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives was $147.4 million and $146.9 million as of June 30, 2020 and December 31, 2019, respectively. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following: June 30, 2020 December 31, 2019 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 64,316 (4,793 ) 59,523 64,332 (3,451 ) 60,881 Non-competition agreements 380 (380 ) — 380 (380 ) — Tradenames 400 (371 ) 29 490 (385 ) 105 Total $ 70,866 $ (11,314 ) 59,552 $ 70,972 $ (9,986 ) $ 60,986 Amortization expense associated with identifiable intangible assets was $1.3 million and $0.2 million for the six months ended June 30, 2020 and 2019, respectively. Estimated total amortization expense is $3.2 million, $5.7 million, $6.9 million, $7.9 million and $6.7 million, respectively, for each year from 2020 through 2024. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The provision for income taxes consists of the following: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Current: (In thousands) Federal $ 10,887 $ 9,948 $ 18,653 $ 16,472 State and local 3,917 1,957 6,827 3,350 Foreign 3,741 3,273 7,188 6,044 Total current provision 18,545 15,178 32,668 25,866 Deferred: Federal 1,475 (176 ) 3,380 1,426 State and local 266 (31 ) 618 218 Foreign 263 (167 ) 769 (8 ) Total deferred provision 2,004 (374 ) 4,767 1,636 Provision for income taxes $ 20,549 $ 14,804 $ 37,435 $ 27,502 Effective tax rate 19.7 % 23.5 % 19.1 % 21.5 % T he Company recognized excess tax benefits on share-based payments of $ million and $ The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. The Company is currently under a New York State income tax examination for the tax years 2010 through 2017 and a New York City income tax examination for the tax years 2016 through 2018. At this time, the Company cannot estimate when the examinations will conclude or the impact such examinations will have on the Company’s Consolidated Financial Statements, if any. Generally, other than New York State, the Company is no longer subject to tax examinations by tax authorities for years prior to 2016. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Plans | 8. Stock-Based Compensation Plans Total stock-based compensation expense was as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Employees $ 5,512 $ 5,645 $ 11,911 $ 10,561 Non-employee directors 279 284 557 564 Total stock-based compensation $ 5,791 $ 5,929 $ 12,468 $ 11,125 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 six months ended June 30, 2020, the Company granted to employees a total of 39,174 shares of restricted stock or restricted stock units, 13,900 options to purchase shares of common stock and performance-based shares with an expected pay-out at target of 13,295 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 $376.51 and $360.90, respectively. Based on the Black-Scholes option pricing model, the weighted-average fair value for each option granted was $91.43 per share. As of June 30, 2020, the total unrecognized compensation cost related to all non-vested awards was $44.5 million. That cost is expected to be recognized over a weighted-average period of 2.1 years. On June 8, 2020, the Company’s stockholders approved the Company’s 2020 Equity Incentive Plan, which replaces the Company’s 2012 Incentive Plan. An additional 2,500,000 shares will be available under the 2020 Equity Incentive Plan for the grant of stock options, stock appreciation rights, restricted stock, performance shares, performance units, or other stock-based awards as incentives and rewards to encourage employees, consultants and non-employee directors to participate in the long-term success of the Company. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. Earnings Per Share The following table sets forth basic and diluted weighted average shares outstanding used to compute earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Basic weighted average shares outstanding 37,340 37,049 37,322 37,046 Dilutive effect of stock options and restricted stock 813 861 793 825 Diluted weighted average shares outstanding 38,153 37,910 38,115 37,871 Stock options and restricted stock totaling 19,101 shares and 232,043 shares for the three months ended June 30, 2020 and 2019, respectively, and 41,033 and 289,185 shares for the six months ended June 30, 2020, and 2019, 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 | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Credit Agreement | 10. Credit Agreement The Company is party to an amended and restated credit agreement (the “Credit Agreement”) that provides for revolving loans and letters of credit up to an aggregate of $100.0 million. The Credit Agreement matures in October 2020 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 satisfy certain covenants, which include leverage ratios and minimum earnings before interest, tax, depreciation and amortization (“EBITDA”) requirements. The Company was in compliance with all applicable covenants at June 30, 2020 and December 31, 2019. 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 | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | 11. Leases The Company has operating leases for corporate offices with initial lease terms ranging from one year to 15 years. Certain leases contain options to extend the initial term at the Company’s discretion. The Company accounts for the option to extend when it is reasonably certain of being exercised. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants. The following table presents the components of lease expense: Three Months Ended June 30, Six Months Ended June 30, Lease cost: Classification 2020 2019 2020 2019 (In thousands) Operating lease cost Occupancy $ 3,357 $ 2,656 $ 6,806 $ 5,401 Operating lease cost for subleased/assigned properties Other, net 635 583 1,171 1,156 Variable lease costs Occupancy 7 31 23 155 Sublease income subleased/assigned properties Other, net (635 ) (583 ) (1,171 ) (1,156 ) Net lease cost $ 3,364 $ 2,687 $ 6,829 $ 5,556 The Company determines whether an arrangement is, or includes, a lease at contract inception. Operating lease right-of-use assets and liabilities are recognized at commencement date and are initially measured based on the present value of lease payments over the defined lease term. As the Company's leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments. The weighted average remaining lease term (in years) and weighted average discount rate are as follows: As of Lease Term and Discount Rate June 30, 2020 December 31, 2019 Weighted average remaining lease term (in years) 12.9 13.3 Weighted average discount rate 5.9 % 5.9 % The following table presents the maturity of lease liabilities as of June 30, 2020: (In thousands) Remainder of 2020 $ 5,308 2021 11,893 2022 10,227 2023 9,982 2024 10,648 2025 and thereafter 89,326 Total lease payments 137,384 Less: interest 42,683 Operating lease liabilities $ 94,701 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 $2.8 million as of June 30, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. 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 certain of its 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 | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Share Repurchase Program | 13. Share Repurchase Program In January 2019, the Board of Directors authorized a two-year |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 14. 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 For the six months ended June 30, 2020 and 2019, the U.K. was the only individual foreign country in which the Company had a subsidiary that accounted for 10% or more of the total revenues or total long-lived assets of the Company. Revenues and long-lived assets are attributed to a geographic area based on the location of the particular subsidiary. Long-lived assets are defined as furniture, equipment, leasehold improvements and capitalized software. Information regarding revenue for the three and six months ended June 30, 2020 and 2019 and long-lived assets as of June 30, 2020 and December 31, 2019 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Revenues United States $ 157,727 $ 104,141 $ 299,337 $ 207,756 United Kingdom 22,086 20,706 44,505 40,973 Other 4,982 643 9,931 1,252 Total $ 184,795 $ 125,490 $ 353,773 $ 249,981 As of June 30, 2020 December 31, 2019 (In thousands) Long-lived assets, as defined United States $ 63,915 $ 62,356 United Kingdom 14,527 9,410 Other 19 29 Total $ 78,461 $ 71,795 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019. The consolidated financial information as of December 31, 2019 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 August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). The standard requires the capitalization of implementation costs incurred in a cloud computing arrangement to be aligned with the requirements for capitalizing costs incurred to develop or obtain internal-use software. The updated guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2018-15 effective July 1, 2019 on a prospective basis. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. 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, which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Instead, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing impairment by which the carrying amount exceeds the reporting unit’s fair value. The Company adopted ASU 2017-04 effective January 1, 2020 on a prospective basis. Adoption of this guidance did not have a material impact 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, net 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 to other, net income in the Consolidated Statements of Operations. The remainder is recognized in accumulated other comprehensive loss if the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery. No charges for other-than-temporary losses were recorded during the three and six months ended June 30, 2020 and 2019, respectively. |
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. |
Cloud Computing Costs | Cloud Computing Costs The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, employee compensation and related benefits and third party consulting costs that are part of the application development stage. These costs are setup as a pre-paid asset on the balance sheet and are amortized over the period of the hosting service contract. 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 platforms and, under certain plans, distribution fees or monthly minimum fees to use the platforms for a particular product area. Variable transaction fees are generally calculated as a percentage of the notional dollar volume of bonds traded on the platforms 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 Open Trading 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. For U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly basis. The following table presents commission revenue by fee type: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Commission revenue by fee type Variable transaction fees Disclosed trading $ 95,634 $ 67,308 $ 179,879 $ 133,364 Open Trading - matched principal trading 47,373 23,454 87,731 46,490 U.S. Treasuries - matched principal trading 3,024 — 7,587 — Total variable transaction fees 146,031 90,762 275,197 179,854 Distribution fees and unused minimum fees 26,061 23,362 52,849 47,030 Total commissions $ 172,092 $ 114,124 $ 328,046 $ 226,884 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, and may be net of volume-based discounts, 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: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Information services revenue by timing of recognition Services transferred over time $ 7,819 $ 7,050 $ 15,625 $ 14,269 Services transferred at a point in time 608 106 1,444 253 Total information services revenues $ 8,427 $ 7,156 $ 17,069 $ 14,522 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: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Post-trade services revenue by timing of recognition Services transferred over time $ 3,948 $ 3,949 $ 8,098 $ 8,036 Services transferred at a point in time 106 7 109 20 Total post-trade services revenues $ 4,054 $ 3,956 $ 8,207 $ 8,056 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, 2019 Payments received in advance of services to be performed Revenue recognized for services performed during the period Foreign Currency Translation June 30, 2020 (In thousands) Information services $ 2,138 $ 4,314 $ (3,844 ) $ — $ 2,608 Post-trade services 1,361 7,395 (7,203 ) (93 ) 1,460 Total deferred revenue $ 3,499 $ 11,709 $ (11,047 ) $ (93 ) $ 4,068 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 $33.4 million as of June 30, 2020. The Company expects to recognize revenue associated with the remaining performance obligations over the next 25 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 other, net in the Consolidated Statements of Operations. 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 requires judgment 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 over their estimated useful lives which range from one to 15 years using either a straight-line or accelerated amortization method based on the pattern of economic benefit the Company expects to realize from such assets. 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) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Commission Revenue by Fee Type | The following table presents commission revenue by fee type: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Commission revenue by fee type Variable transaction fees Disclosed trading $ 95,634 $ 67,308 $ 179,879 $ 133,364 Open Trading - matched principal trading 47,373 23,454 87,731 46,490 U.S. Treasuries - matched principal trading 3,024 — 7,587 — Total variable transaction fees 146,031 90,762 275,197 179,854 Distribution fees and unused minimum fees 26,061 23,362 52,849 47,030 Total commissions $ 172,092 $ 114,124 $ 328,046 $ 226,884 |
Summary of Information Services Revenue by Timing of Recognition | The following table presents information services revenue by timing of recognition: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Information services revenue by timing of recognition Services transferred over time $ 7,819 $ 7,050 $ 15,625 $ 14,269 Services transferred at a point in time 608 106 1,444 253 Total information services revenues $ 8,427 $ 7,156 $ 17,069 $ 14,522 |
Summary of Post-Trade Services Revenue by Timing of Recognition | The following table presents post-trade services revenue by timing of recognition: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Post-trade services revenue by timing of recognition Services transferred over time $ 3,948 $ 3,949 $ 8,098 $ 8,036 Services transferred at a point in time 106 7 109 20 Total post-trade services revenues $ 4,054 $ 3,956 $ 8,207 $ 8,056 |
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, 2019 Payments received in advance of services to be performed Revenue recognized for services performed during the period Foreign Currency Translation June 30, 2020 (In thousands) Information services $ 2,138 $ 4,314 $ (3,844 ) $ — $ 2,608 Post-trade services 1,361 7,395 (7,203 ) (93 ) 1,460 Total deferred revenue $ 3,499 $ 11,709 $ (11,047 ) $ (93 ) $ 4,068 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Valuation of Company's Assets and Liabilities Measured at Fair Value | The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2. Level 1 Level 2 Level 3 Total (In thousands) As of June 30, 2020 Money market funds $ 153,750 $ — $ — $ 153,750 Securities available-for-sale Corporate debt — 102,151 — 102,151 Trading securities Corporate debt — 21,645 — 21,645 Mutual funds held in rabbi trust — 7,576 — 7,576 Foreign currency forward position — 1,396 — 1,396 Total $ 153,750 $ 132,768 $ — $ 286,518 As of December 31, 2019 Money market funds $ 99,755 $ — $ — $ 99,755 Securities available-for-sale Corporate debt — 137,835 — 137,835 Trading securities Corporate debt — 31,120 — 31,120 U.S. Treasuries — 55,305 — 55,305 Mutual funds held in rabbi trust — 6,217 — 6,217 Foreign currency forward position — (2,772 ) — (2,772 ) Total $ 99,755 $ 227,705 $ — $ 327,460 |
Summary of Foreign Currency Forward Contracts | A summary of the Company’s foreign currency forward position is as follows: As of June 30, 2020 December 31, 2019 (In thousands) Notional value $ 179,109 $ 155,885 Fair value of notional 177,713 158,657 Fair value of the asset (liability) $ 1,396 $ (2,772 ) |
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 June 30, 2020 Securities available-for-sale Corporate debt $ 101,001 $ 1,167 $ (17 ) $ 102,151 Trading securities Corporate debt 21,556 90 (1 ) 21,645 Mutual funds held in rabbi trust 7,680 54 (158 ) 7,576 Total trading securities 29,236 144 (159 ) 29,221 Total investments $ 130,237 $ 1,311 $ (176 ) $ 131,372 As of December 31, 2019 Securities available-for-sale Corporate debt $ 137,119 $ 721 $ (5 ) $ 137,835 Trading securities Corporate debt 31,120 14 (14 ) 31,120 U.S. Treasuries 54,738 567 — 55,305 Mutual funds held in rabbi trust 5,173 1,044 — 6,217 Total trading securities 91,031 1,625 (14 ) 92,642 Total investments $ 228,150 $ 2,346 $ (19 ) $ 230,477 |
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 June 30, 2020 December 31, 2019 (In thousands) Less than one year $ 77,068 $ 120,850 Due in 1 - 5 years 54,304 109,627 Total $ 131,372 $ 230,477 |
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 June 30, 2020 and December 31, 2019: 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 June 30, 2020 Corporate debt $ 11,578 $ (18 ) $ — $ — $ 11,578 $ (18 ) As of December 31, 2019 Corporate debt $ 27,999 $ (18 ) $ 4,406 $ (1 ) $ 32,405 $ (19 ) |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | The Company has completed a preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed at the date of acquisition. The Company utilized an independent third-party to determine the fair value of the acquired intangible assets. It is possible that the purchase price allocation will be adjusted upon finalization of the accounting for the acquired assets. The purchase price allocation as of June 30, 2020 is as follows (in thousands): Purchase price $ 153,210 Less: acquired cash (2,935 ) Purchase price, net of acquired cash 150,275 Accounts receivable (1,811 ) Intangible assets (58,780 ) Prepaid expenses and other assets (4,168 ) Accounts payable, accrued expenses and other liabilities 2,165 Goodwill $ 87,681 |
Summary of Acquired Intangible Assets | The acquired intangible assets are as follows (in thousands, except for useful lives): Costs Useful Lives Customer relationships $ 58,690 15 years Tradename - finite life 90 1 year Total $ 58,780 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Company's Intangible Assets | Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following: June 30, 2020 December 31, 2019 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 64,316 (4,793 ) 59,523 64,332 (3,451 ) 60,881 Non-competition agreements 380 (380 ) — 380 (380 ) — Tradenames 400 (371 ) 29 490 (385 ) 105 Total $ 70,866 $ (11,314 ) 59,552 $ 70,972 $ (9,986 ) $ 60,986 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Current: (In thousands) Federal $ 10,887 $ 9,948 $ 18,653 $ 16,472 State and local 3,917 1,957 6,827 3,350 Foreign 3,741 3,273 7,188 6,044 Total current provision 18,545 15,178 32,668 25,866 Deferred: Federal 1,475 (176 ) 3,380 1,426 State and local 266 (31 ) 618 218 Foreign 263 (167 ) 769 (8 ) Total deferred provision 2,004 (374 ) 4,767 1,636 Provision for income taxes $ 20,549 $ 14,804 $ 37,435 $ 27,502 Effective tax rate 19.7 % 23.5 % 19.1 % 21.5 % |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expense | Total stock-based compensation expense was as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Employees $ 5,512 $ 5,645 $ 11,911 $ 10,561 Non-employee directors 279 284 557 564 Total stock-based compensation $ 5,791 $ 5,929 $ 12,468 $ 11,125 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Basic weighted average shares outstanding 37,340 37,049 37,322 37,046 Dilutive effect of stock options and restricted stock 813 861 793 825 Diluted weighted average shares outstanding 38,153 37,910 38,115 37,871 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The following table presents the components of lease expense: Three Months Ended June 30, Six Months Ended June 30, Lease cost: Classification 2020 2019 2020 2019 (In thousands) Operating lease cost Occupancy $ 3,357 $ 2,656 $ 6,806 $ 5,401 Operating lease cost for subleased/assigned properties Other, net 635 583 1,171 1,156 Variable lease costs Occupancy 7 31 23 155 Sublease income subleased/assigned properties Other, net (635 ) (583 ) (1,171 ) (1,156 ) Net lease cost $ 3,364 $ 2,687 $ 6,829 $ 5,556 |
Summary of Weighted Average Remaining Lease Term and Discount Rate | The weighted average remaining lease term (in years) and weighted average discount rate are as follows: As of Lease Term and Discount Rate June 30, 2020 December 31, 2019 Weighted average remaining lease term (in years) 12.9 13.3 Weighted average discount rate 5.9 % 5.9 % |
Schedule of Maturity of Lease Liabilities | The following table presents the maturity of lease liabilities as of June 30, 2020: (In thousands) Remainder of 2020 $ 5,308 2021 11,893 2022 10,227 2023 9,982 2024 10,648 2025 and thereafter 89,326 Total lease payments 137,384 Less: interest 42,683 Operating lease liabilities $ 94,701 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Revenue and Long-lived Assets | Information regarding revenue for the three and six months ended June 30, 2020 and 2019 and long-lived assets as of June 30, 2020 and December 31, 2019 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (In thousands) Revenues United States $ 157,727 $ 104,141 $ 299,337 $ 207,756 United Kingdom 22,086 20,706 44,505 40,973 Other 4,982 643 9,931 1,252 Total $ 184,795 $ 125,490 $ 353,773 $ 249,981 As of June 30, 2020 December 31, 2019 (In thousands) Long-lived assets, as defined United States $ 63,915 $ 62,356 United Kingdom 14,527 9,410 Other 19 29 Total $ 78,461 $ 71,795 |
Organization and Principal Bu_2
Organization and Principal Business Activity - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2020Institutional_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 | 1,700 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Revenue | Jun. 30, 2019USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Maximum maturity period for classification of investments as cash equivalents | 3 months | |||
Investments other-than-temporary losses | $ | $ 0 | $ 0 | $ 0 | $ 0 |
Number of revenue streams | Revenue | 4 | |||
Description of commission revenue | For Open Trading 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 | 1 year | |||
Minimum [Member] | Internally Developed Software [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated life of intangible assets | 3 years | |||
ASU 2018-15 [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jul. 1, 2019 | Jul. 1, 2019 | ||
Change in Accounting Principle, Accounting Standards Update, Early Adoption [true false] | true | true | ||
Change in Accounting Principle, Accounting Standards Update, Retrospective Application Impracticable [true false] | false | false | ||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | true | ||
ASU 2017-04 [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2020 | Jan. 1, 2020 | ||
Change in Accounting Principle, Accounting Standards Update, Retrospective Application Impracticable [true false] | false | false | ||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | true | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | true |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Commission Revenue by Fee Type (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Commission revenue by fee type | ||||
Revenues | $ 184,795 | $ 125,490 | $ 353,773 | $ 249,981 |
Commissions [Member] | ||||
Commission revenue by fee type | ||||
Disclosed trading | 95,634 | 67,308 | 179,879 | 133,364 |
Matched principal trading | 47,373 | 23,454 | 87,731 | 46,490 |
Total variable transaction fees | 146,031 | 90,762 | 275,197 | 179,854 |
Distribution fees and unused minimum fees | 26,061 | 23,362 | 52,849 | 47,030 |
Revenues | 172,092 | $ 114,124 | 328,046 | $ 226,884 |
Commissions [Member] | U.S. Treasuries [Member] | ||||
Commission revenue by fee type | ||||
Matched principal trading | $ 3,024 | $ 7,587 |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Information Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Significant Accounting Policies [Line Items] | ||||
Revenues | $ 184,795 | $ 125,490 | $ 353,773 | $ 249,981 |
Information Services [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Revenues | 8,427 | 7,156 | 17,069 | 14,522 |
Information Services [Member] | Transferred over Time [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Revenues | 7,819 | 7,050 | 15,625 | 14,269 |
Information Services [Member] | Transferred at a Point in Time [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Revenues | $ 608 | $ 106 | $ 1,444 | $ 253 |
Significant Accounting Polici_7
Significant Accounting Policies - Summary of Post-Trade Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Significant Accounting Policies [Line Items] | ||||
Revenues | $ 184,795 | $ 125,490 | $ 353,773 | $ 249,981 |
Post-trade Services [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Revenues | 4,054 | 3,956 | 8,207 | 8,056 |
Post-trade Services [Member] | Transferred over Time [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Revenues | 3,948 | 3,949 | 8,098 | 8,036 |
Post-trade Services [Member] | Transferred at a Point in Time [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Revenues | $ 106 | $ 7 | $ 109 | $ 20 |
Significant Accounting Polici_8
Significant Accounting Policies - Summary of Revenue Recognized from Contract Liabilities and Remaining Balance (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Significant Accounting Policies [Line Items] | |
Deferred revenues, beginning balance | $ 3,499 |
Payments received in advance of services to be performed | 11,709 |
Revenue recognized for services performed during the period | (11,047) |
Foreign Currency Translation | (93) |
Deferred revenues, ending balance | 4,068 |
Information Services [Member] | |
Significant Accounting Policies [Line Items] | |
Deferred revenues, beginning balance | 2,138 |
Payments received in advance of services to be performed | 4,314 |
Revenue recognized for services performed during the period | (3,844) |
Deferred revenues, ending balance | 2,608 |
Post-trade Services [Member] | |
Significant Accounting Policies [Line Items] | |
Deferred revenues, beginning balance | 1,361 |
Payments received in advance of services to be performed | 7,395 |
Revenue recognized for services performed during the period | (7,203) |
Foreign Currency Translation | (93) |
Deferred revenues, ending balance | $ 1,460 |
Significant Accounting Polici_9
Significant Accounting Policies - Additional Information (Detail 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01 $ in Millions | Jun. 30, 2020USD ($) |
Significant Accounting Policies [Line Items] | |
Aggregate amount of transaction price allocated to remaining performance obligations | $ 33.4 |
Expected time to recognize revenue for remaining performance obligation | 25 months |
Net Capital Requirements - Addi
Net Capital Requirements - Additional Information (Detail) $ in Millions | Jun. 30, 2020USD ($) |
Brokers And Dealers [Abstract] | |
Aggregate net capital and financial resources in excess of required level | $ 287.5 |
Aggregate net capital and financial resources, minimum capital requirement | $ 19.6 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation of Company's Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | $ 153,750 | $ 99,755 |
Trading securities | 29,221 | 92,642 |
Foreign currency forward position | 1,396 | (2,772) |
Assets Fair Value Total | 286,518 | 327,460 |
Corporate Debt [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 102,151 | 137,835 |
Trading securities | 21,645 | 31,120 |
U.S. Treasuries [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 55,305 | |
Mutual Funds Held In Rabbi Trust [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 7,576 | 6,217 |
Foreign Currency Forward Position [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Foreign currency forward position | 1,396 | (2,772) |
Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | 153,750 | 99,755 |
Assets Fair Value Total | 153,750 | 99,755 |
Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets Fair Value Total | 132,768 | 227,705 |
Level 2 [Member] | Corporate Debt [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 102,151 | 137,835 |
Trading securities | 21,645 | 31,120 |
Level 2 [Member] | U.S. Treasuries [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Trading securities | 55,305 | |
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 | 7,576 | 6,217 |
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 | $ 1,396 | $ (2,772) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | ||
Hedge derivative expiration period | 1 month | |
Proceeds from the sales and maturities of securities available-for-sale | $ 144.4 | $ 175.7 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Foreign Currency Forward Contracts (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivatives Fair Value [Line Items] | ||
Fair value of the asset (liability) | $ 1,396 | $ (2,772) |
Foreign Currency Forward Position [Member] | ||
Derivatives Fair Value [Line Items] | ||
Notional value | 179,109 | 155,885 |
Fair value of notional | 177,713 | 158,657 |
Fair value of the asset (liability) | $ 1,396 | $ (2,772) |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Company's Investments (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Trading securities, Amortized cost | $ 29,236 | $ 91,031 |
Trading securities, Gross unrealized gains | 144 | 1,625 |
Trading securities, Gross unrealized losses | (159) | (14) |
Trading securities, Estimated fair value | 29,221 | 92,642 |
Investments, Amortized cost | 130,237 | 228,150 |
Investments, Gross unrealized gains | 1,311 | 2,346 |
Investments, Gross unrealized losses | (176) | (19) |
Investments, Estimated fair value | 131,372 | 230,477 |
Corporate Debt [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Securities available-for-sale, Amortized cost | 101,001 | 137,119 |
Securities available-for-sale, Gross unrealized gains | 1,167 | 721 |
Securities available-for-sale, Gross unrealized losses | (17) | (5) |
Securities available-for-sale, Estimated fair value | 102,151 | 137,835 |
Trading securities, Amortized cost | 21,556 | 31,120 |
Trading securities, Gross unrealized gains | 90 | 14 |
Trading securities, Gross unrealized losses | (1) | (14) |
Trading securities, Estimated fair value | 21,645 | 31,120 |
U.S. Treasuries [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Trading securities, Amortized cost | 54,738 | |
Trading securities, Gross unrealized gains | 567 | |
Trading securities, Estimated fair value | 55,305 | |
Mutual Funds Held In Rabbi Trust [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Trading securities, Amortized cost | 7,680 | 5,173 |
Trading securities, Gross unrealized gains | 54 | 1,044 |
Trading securities, Gross unrealized losses | (158) | |
Trading securities, Estimated fair value | $ 7,576 | $ 6,217 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Fair Value of Investments Based upon Contractual Maturities (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Less than one year | $ 77,068 | $ 120,850 |
Due in 1 - 5 years | 54,304 | 109,627 |
Total | $ 131,372 | $ 230,477 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Values and Unrealized Losses on Investments (Detail) - Corporate Debt [Member] - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Less than Twelve Months, Estimated fair value | $ 11,578 | $ 27,999 |
Less than Twelve Months, Gross unrealized losses | (18) | (18) |
Twelve Months or More, Estimated fair value | 4,406 | |
Twelve Months or More, Gross unrealized losses | (1) | |
Estimated fair value, Total | 11,578 | 32,405 |
Gross unrealized losses, Total | $ (18) | $ (19) |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - LiquidityEdge LLC [Member] - USD ($) $ in Thousands | Nov. 01, 2019 | Mar. 31, 2020 | Jun. 30, 2020 |
Business Acquisition [Line Items] | |||
Aggregate consideration | $ 152,700 | $ 153,210 | |
Cash consideration | $ 103,900 | ||
Business combination, shares of common stock | 146,450 | ||
Business combination, common stock value | $ 48,800 | ||
Increase in aggregate consideration | $ 500 | ||
Business combination, period for shares of common stock placed in escrow | 18 months | ||
Business combination, shares of common stock received period | 6 months | ||
Escrow [Member] | |||
Business Acquisition [Line Items] | |||
Business combination, shares of common stock | 43,937 |
Acquisition - Summary of Purcha
Acquisition - Summary of Purchase Price Allocation (Detail) - USD ($) $ in Thousands | Nov. 01, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 147,394 | $ 146,861 | |
LiquidityEdge LLC [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 152,700 | 153,210 | |
Less: acquired cash | (2,935) | ||
Purchase price, net of acquired cash | 150,275 | ||
Accounts receivable | (1,811) | ||
Intangible assets | (58,780) | ||
Prepaid expenses and other assets | (4,168) | ||
Accounts payable, accrued expenses and other liabilities | 2,165 | ||
Goodwill | $ 87,681 |
Acquisition - Summary of Acquir
Acquisition - Summary of Acquired Intangible Assets (Detail) - LiquidityEdge LLC [Member] $ in Thousands | Nov. 01, 2019USD ($) |
Acquired Finite Lived Intangible Assets [Line Items] | |
Costs | $ 58,780 |
Customer Relationships [Member] | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Costs | $ 58,690 |
Useful Lives | 15 years |
Tradename - Finite Life [Member] | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Costs | $ 90 |
Useful Lives | 1 year |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Goodwill [Line Items] | |||
Amortization expense associated with identifiable intangible assets | $ 1.3 | $ 0.2 | |
Estimated total amortization expense 2020 | 3.2 | ||
Estimated total amortization expense 2021 | 5.7 | ||
Estimated total amortization expense 2022 | 6.9 | ||
Estimated total amortization expense 2023 | 7.9 | ||
Estimated total amortization expense 2024 | 6.7 | ||
Indefinite-lived Intangible Assets [Member] | |||
Goodwill [Line Items] | |||
Goodwill and intangible assets with indefinite lives | $ 147.4 | $ 146.9 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 70,866 | $ 70,972 |
Accumulated amortization | (11,314) | (9,986) |
Net carrying amount | 59,552 | 60,986 |
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 | 64,316 | 64,332 |
Accumulated amortization | (4,793) | (3,451) |
Net carrying amount | 59,523 | 60,881 |
Non-Competition Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 380 | 380 |
Accumulated amortization | (380) | (380) |
Tradenames [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 400 | 490 |
Accumulated amortization | (371) | (385) |
Net carrying amount | $ 29 | $ 105 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Current: | ||||
Federal | $ 10,887 | $ 9,948 | $ 18,653 | $ 16,472 |
State and local | 3,917 | 1,957 | 6,827 | 3,350 |
Foreign | 3,741 | 3,273 | 7,188 | 6,044 |
Total current provision | 18,545 | 15,178 | 32,668 | 25,866 |
Deferred: | ||||
Federal | 1,475 | (176) | 3,380 | 1,426 |
State and local | 266 | (31) | 618 | 218 |
Foreign | 263 | (167) | 769 | (8) |
Total deferred provision | 2,004 | (374) | 4,767 | 1,636 |
Provision for income taxes | $ 20,549 | $ 14,804 | $ 37,435 | $ 27,502 |
Effective tax rate | 19.70% | 23.50% | 19.10% | 21.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule Of Pre Tax Income [Line Items] | ||||
Excess tax benefits on share based payments | $ 5.7 | $ 0.4 | $ 12 | $ 3.5 |
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 | |||
New York City [Member] | Earliest Tax Year [Member] | ||||
Schedule Of Pre Tax Income [Line Items] | ||||
Income tax year under examination | 2016 | |||
New York City [Member] | Latest Tax Year [Member] | ||||
Schedule Of Pre Tax Income [Line Items] | ||||
Income tax year under examination | 2018 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 5,791 | $ 5,929 | $ 12,468 | $ 11,125 |
Employees [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | 5,512 | 5,645 | 11,911 | 10,561 |
Non-Employee Directors [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 279 | $ 284 | $ 557 | $ 564 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jun. 08, 2020 | Jun. 30, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation costs related to non-vested | $ 44.5 | |
Weighted-average period over which cost is expected to be recognized | 2 years 1 month 6 days | |
2020 Equity Incentive Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Additional shares available for grant under plan | 2,500,000 | |
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 | 39,174 | |
Weighted-average grant date fair value per share | $ 376.51 | |
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 | 13,295 | |
Number of stock option equity instruments granted during the period | 13,900 | |
Weighted-average fair value each option granted | $ 91.43 | |
Weighted-average grant date fair value per share | $ 360.90 |
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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share Basic And Diluted [Abstract] | ||||
Basic weighted average shares outstanding | 37,340 | 37,049 | 37,322 | 37,046 |
Dilutive effect of stock options and restricted stock | 813 | 861 | 793 | 825 |
Diluted weighted average shares outstanding | 38,153 | 37,910 | 38,115 | 37,871 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
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 | 19,101 | 232,043 | 41,033 | 289,185 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Line Of Credit Facility [Line Items] | |
Revolving loans and letters of credit | $ 100,000,000 |
Letter of credit outstanding | 1,000,000 |
Additional Credit Agreement | 50,000,000 |
Amount available under credit agreement | $ 99,000,000 |
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, 2020 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($)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 |
Number of lease agreements assigned to third parties | Agreement | 2 |
Future lease obligation under sublease arrangements | $ | $ 2.8 |
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 Lease Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease Cost [Line Items] | ||||
Net lease cost | $ 3,364 | $ 2,687 | $ 6,829 | $ 5,556 |
Other, net [Member] | ||||
Lease Cost [Line Items] | ||||
Operating lease cost for subleased/assigned properties | 635 | 583 | 1,171 | 1,156 |
Sublease income subleased/assigned properties | (635) | (583) | (1,171) | (1,156) |
Occupancy [Member] | ||||
Lease Cost [Line Items] | ||||
Operating lease cost | 3,357 | 2,656 | 6,806 | 5,401 |
Variable lease costs | $ 7 | $ 31 | $ 23 | $ 155 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Term and Discount Rate (Details) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 12 years 10 months 24 days | 13 years 3 months 18 days |
Weighted average discount rate | 5.90% | 5.90% |
Leases - Schedule of Maturity o
Leases - Schedule of Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Remainder of 2020 | $ 5,308 | |
2021 | 11,893 | |
2022 | 10,227 | |
2023 | 9,982 | |
2024 | 10,648 | |
2025 and thereafter | 89,326 | |
Total lease payments | 137,384 | |
Less: interest | 42,683 | |
Operating lease liabilities | $ 94,701 | $ 97,991 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Settlement days of bond transaction | within one to two trading days | |
Collateral deposits | $ 20.6 | $ 4.1 |
Share Repurchase Program - Addi
Share Repurchase Program - Additional Information (Detail) - Share Repurchase Program [Member] - USD ($) | 1 Months Ended | 6 Months Ended |
Jan. 31, 2019 | Jun. 30, 2020 | |
Equity Class Of Treasury Stock [Line Items] | ||
Total shares repurchased | 28,564 | |
Cost of common stock shares repurchased | $ 11,300,000 | |
Shares repurchase program period | 2 years | |
Shares repurchase program authorized | $ 100,000,000 | |
Commencement date | 2019-04 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Detail) - Segment | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
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 | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 184,795 | $ 125,490 | $ 353,773 | $ 249,981 | |
Long-lived assets | 78,461 | 78,461 | $ 71,795 | ||
United States [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 157,727 | 104,141 | 299,337 | 207,756 | |
Long-lived assets | 63,915 | 63,915 | 62,356 | ||
United Kingdom [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 22,086 | 20,706 | 44,505 | 40,973 | |
Long-lived assets | 14,527 | 14,527 | 9,410 | ||
Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 4,982 | $ 643 | 9,931 | $ 1,252 | |
Long-lived assets | $ 19 | $ 19 | $ 29 |