Revenue

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Revenue Recognition

The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly.

The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met.

The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recognized and recorded on a trade-date basis. Commission revenue is collected by the Company when the trade settles or is billed monthly.

The Company earns fees from Refinitiv relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis, and historical data sets which are recognized when the historical data set is provided to Refinitiv. Significant judgements used in accounting for this contract include:

•The provision of real-time market data feeds and annual historical data sets are distinct performance obligations.

•The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term.

•Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies.

Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the three and nine months ended September 30, 2020 and 2019 is as follows:

	Three Months Ended				Three Months Ended
	September 30, 2020				September 30, 2019
	(in thousands)				(in thousands)
	Variable		Fixed		Variable		Fixed
Revenues
Transaction fees	$	94,122	$	26,460	$	87,574	$	25,172
Subscription Fees including Refinitiv market data fees	400		50,090		440		48,198
Commissions	29,497		10,096		27,840		9,750
Other	117		2,088		87		1,920
Gross revenue	$	124,136	$	88,734	$	115,941	$	85,040

	Nine Months Ended				Nine Months Ended
	September 30, 2020				September 30, 2019
	(in thousands)				(in thousands)
	Variable		Fixed		Variable		Fixed
Revenues
Transaction fees	$	305,848	$	77,704	$	246,066	$	73,272
Subscription Fees including Refinitiv market data fees	1,280		147,892		1,330		143,320
Commissions	90,079		30,122		78,785		29,415
Other	464		6,194		692		5,378
Gross revenue	$	397,671	$	261,912	$	326,873	$	251,385

Deferred Revenue

The Company records deferred revenue when cash payments are received or due in advance of services to be performed. The recognized revenue and remaining balance is shown below (in thousands):

	Amount
Deferred revenue balance - December 31, 2019	$	23,990
New billings	87,153
Revenue recognized	(81,286)
Deferred revenue balance - September 30, 2020	$	29,857