MarketAxess Reports Third Quarter 2024 Financial Results
MarketAxess Holdings (Nasdaq: MKTX) reported strong Q3 2024 financial results with total revenues increasing 20% to $206.7 million. The company achieved a 30% increase in diluted EPS to $1.90 on net income of $71.5 million. Key highlights include 24% growth in U.S. high-grade commission revenue, 20% growth in emerging markets, and record portfolio trading ADV of $1.1 billion. Total expenses rose 14% to $119.7 million. The company maintained strong liquidity with $602.5 million in cash and investments, while declaring a quarterly dividend of $0.74 per share.
MarketAxess Holdings (Nasdaq: MKTX) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un aumento del fatturato totale del 20% a 206,7 milioni di dollari. L'azienda ha raggiunto un aumento del 30% dell'utile per azione diluito a 1,90 dollari, con un reddito netto di 71,5 milioni di dollari. I punti salienti includono una crescita dell'24% dei ricavi da commissioni su bond di alta qualità negli Stati Uniti, una crescita del 20% nei mercati emergenti, e un ADV record nel trading di portafogli di 1,1 miliardi di dollari. Le spese totali sono aumentate del 14% a 119,7 milioni di dollari. L'azienda ha mantenuto una solida liquidità, con 602,5 milioni di dollari in cassa e investimenti, dichiarando un dividendo trimestrale di 0,74 dollari per azione.
MarketAxess Holdings (Nasdaq: MKTX) reportó unos resultados financieros sólidos para el tercer trimestre de 2024, con un aumento del 20% en los ingresos totales hasta los 206,7 millones de dólares. La compañía logró un aumento del 30% en las ganancias por acción diluidas hasta 1,90 dólares, con un ingreso neto de 71,5 millones de dólares. Los puntos destacados incluyen un crecimiento del 24% en los ingresos por comisiones de bonos de alta calidad en EE. UU., un crecimiento del 20% en mercados emergentes, y un ADV récord en trading de carteras de 1,1 mil millones de dólares. Los gastos totales aumentaron un 14% hasta 119,7 millones de dólares. La empresa mantuvo una sólida liquidez con 602,5 millones de dólares en efectivo e inversiones, mientras declaraba un dividendo trimestral de 0,74 dólares por acción.
MarketAxess Holdings (Nasdaq: MKTX)는 2024년 3분기 재무 결과가 강력하다고 보고하며, 총 수익이 20% 증가하여 2억 6천 7백만 달러에 이르렀습니다. 이 회사는 순이익 7천 1백 5십만 달러에 대해 희석 주당 순이익이 30% 증가하여 1.90달러에 도달했습니다. 주요 하이라이트로는 미국 고급 채권 수수료 수익 24% 성장, 신흥 시장에서 20% 성장, 및 포트폴리오 거래 ADV의 기록인 11억 달러가 있습니다. 총 비용은 14% 증가하여 1억 1천 9백 7십만 달러에 도달했습니다. 이 회사는 6억 2천 5백만 달러의 현금 및 투자를 보유하며 강력한 유동성을 유지하고, 주당 0.74달러의 분기 배당금을 선언했습니다.
MarketAxess Holdings (Nasdaq: MKTX) a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec une augmentation de 20% du chiffre d'affaires total, atteignant 206,7 millions de dollars. L'entreprise a réalisé une augmentation de 30% du BPA dilué, atteignant 1,90 dollar, avec un bénéfice net de 71,5 millions de dollars. Les points saillants comprennent une croissance de 24% des revenus de commissions sur les obligations de haute qualité aux États-Unis, une croissance de 20% sur les marchés émergents, et un volume de trading en portefeuille record de 1,1 milliard de dollars. Les dépenses totales ont augmenté de 14% pour atteindre 119,7 millions de dollars. L'entreprise a maintenu une liquidité solide avec 602,5 millions de dollars en espèces et investissements, tout en déclarant un dividende trimestriel de 0,74 dollar par action.
MarketAxess Holdings (Nasdaq: MKTX) hat für das dritte Quartal 2024 starke Finanzergebnisse gemeldet, mit einem Umsatzanstieg von 20% auf 206,7 Millionen Dollar. Das Unternehmen erreichte einen Anstieg des verwässerten EPS um 30% auf 1,90 Dollar bei einem Nettogewinn von 71,5 Millionen Dollar. Zu den wichtigsten Höhepunkten gehören ein 24%iges Wachstum der Provisionseinnahmen aus US-Anleihen mit hoher Bonität, ein 20%iges Wachstum in den Schwellenländern und ein Rekord-Portfolio-Handels-ADV von 1,1 Milliarden Dollar. Die Gesamtausgaben stiegen um 14% auf 119,7 Millionen Dollar. Das Unternehmen wies eine starke Liquidität mit 602,5 Millionen Dollar in Bar und Investitionen auf und erklärte eine quartalsweise Dividende von 0,74 Dollar pro Aktie.
- Revenue growth of 20% to $206.7 million
- 30% increase in diluted EPS to $1.90
- 24% growth in U.S. high-grade commission revenue
- Record portfolio trading ADV of $1.1 billion
- 35% increase in rates commission revenue
- Record municipal bonds ADV, up 49%
- Total expenses increased 14% to $119.7 million
- U.S. high-yield market share declined to 13.0% from 16.1% year-over-year
- U.S. high-grade market share decreased to 19.5% from 20.0% year-over-year
Insights
The Q3 2024 results demonstrate strong operational performance with
- Record portfolio trading ADV of
$1.1 billion showing significant market share gains - U.S. high-grade commission revenue grew
24% on robust market volumes - Operating income increased
30% to$87 million - Diluted EPS rose
30% to$1.90
The company's strategic initiatives, including X-Pro rollout and enhanced dealer liquidity solutions, are gaining traction. Strong market conditions, characterized by high trading volumes and robust new issue calendar, position MarketAxess well for continued growth.
Market share dynamics reveal interesting trends: While U.S. high-grade market share slightly declined YoY to
Revenue Growth of
Record Portfolio Trading ADV; Record Municipal Bonds ADV and Estimated Market Share
3Q24 select financial and operational highlights*
-
20% increase in total revenues to , including Pragma revenue of$206.7 million and an increase of approximately$7.7 million from the impact of foreign currency fluctuations.$0.9 million -
24% growth inU.S. high-grade commission revenue on strong growth in market volumes. -
20% growth in emerging markets and Eurobonds commission revenue reflecting strong geographic diversification. -
Record portfolio trading ADV of
.$1.1 billion -
Record rates commission revenue, up
35% . -
21% increase in services revenue (combined information, post-trade and technology services revenue) to , including Pragma revenue of$26.3 million .$2.8 million
-
-
Total expenses of
, up$119.7 million 14% , including Pragma operating expenses of and an increase of approximately$8.2 million from the impact of foreign currency fluctuations.$0.7 million -
30% increase in diluted earnings per share (“EPS”) to on net income of$1.90 million.$71.5 -
Record 2,125 (+
2% ) active client firms and 1,079 (+2% ) international active client firms on the platform. -
Record automation suite trading volume (+
28% ), trade count (+37% ) and active client firms (+49% ); dealer algorithmic responses up24% .
*All comparisons versus 3Q23.
Chris Concannon, CEO of MarketAxess, commented:
“We delivered significantly improved financial results in the third quarter, as we continued to make progress in executing our strategy.
The initial roll-out of X-Pro to our international client base is underway. In the third quarter, we delivered several hundred basis points in market share gains in
In summary, we exited the quarter in September with a constructive market backdrop, characterized by strong market volumes, a robust new issue calendar and an increase in the velocity of trading in
Table 1: 3Q24 select financial results
$ in millions, except per share data (unaudited) |
Revenues | Operating Income | Net Income | Diluted EPS | Net Income Margin (%) |
EBITDA1 | EBITDA Margin (%)1 |
3Q24 |
|
|
|
|
|
|
|
2Q24 |
|
|
|
|
|
|
|
3Q23 |
|
|
|
|
|
|
|
YoY % Change |
|
|
|
|
+270 bps |
|
+270 bps |
QoQ % Change |
|
|
|
|
+170 bps |
|
+80 bps |
|
|
|
|
|
|
|
|
YTD 2024 |
|
|
|
|
|
|
|
YTD 2023 |
|
|
|
|
|
|
|
% Change |
|
|
|
|
+10 bps |
|
(20) bps |
Table 1A: 3Q24 trading volume (ADV)
CREDIT | RATES |
||||||||||
$ in millions (unaudited) |
US/ |
Total
|
Total
|
High-Grade |
High-Yield |
Emerging
|
Eurobonds |
Municipal Bonds |
Total
|
US Govt.
|
Agcy./Other
|
3Q24 |
64/65 |
|
|
|
|
|
|
|
|
|
|
2Q24 |
63/61 |
|
|
|
|
|
|
|
|
|
|
3Q23 |
63/64 |
|
|
|
|
|
|
|
|
|
|
YoY % Change |
|
|
|
|
( |
|
|
|
|
|
|
QoQ % Change |
|
|
|
|
( |
– |
( |
|
|
|
|
Table 1B: 3Q24 estimated market share
CREDIT | RATES | ||||
(unaudited) |
High-Grade | High-Yield | High-Grade/High-Yield Combined | Municipals3 | US Govt. Bonds3 |
3Q24 |
|
|
|
|
|
2Q24 |
|
|
|
|
|
3Q23 |
|
|
|
|
|
YoY Bps Change |
(50) bps |
(310) bps |
(100) bps |
+320 bps |
+10 bps |
QoQ Bps Change |
+80 bps |
(50) bps |
+50 bps |
+130 bps |
+30 bps |
3Q24 overview of results
Commission revenue and trading volume
Credit
Credit Commission Revenue
-
Total credit commission revenue of
million (including$168.4 million in fixed-distribution fees) increased$33.6 million, or$23.2 16% , compared to million (including$145.2 million in fixed-distribution fees) in the prior year. The increase in total credit commission revenue was driven principally by$36.2 24% growth inU.S. high-grade commission revenue on a39% increase inU.S. high-grade TRACE market ADV. The decline in variable transaction fees per million (“FPM”) to from$148.97 in the prior year was mainly due to product and protocol mix-shift, principally lower levels of$154.85 U.S. high-yield activity and increased portfolio trading, partially offset by the higher duration of bonds traded inU.S. high-grade, principally driven by an increase in the weighted average years to maturity. The decrease in fixed-distribution fees was principally driven by the consolidation of two global dealers and migrations to variable fee plans, partially offset by the addition of new dealer fixed fee plans.
Credit Trading Volumes
-
Total credit ADV of
increased$14.1 billion 27% compared to the prior year, and increased3% compared to 2Q24 levels. -
Record
in total portfolio trading ADV, up$1.1 billion 163% compared to the prior year, and up31% compared to 2Q24. -
35% Open Trading share4 of total credit trading volume, up from34% in each of the prior year and 2Q24. The Company delivered estimated price improvement5 for clients via Open Trading of approximately in the quarter.$119 million
-
U.S. high-grade ADV of billion increased$7.0 36% compared to the prior year, and increased9% compared to 2Q24. Estimated market ADV increased39% compared to the prior year, and increased5% compared to 2Q24. Estimated market share was19.5% , down from20.0% in the prior year, but up from18.7% in 2Q24. Including the impact of single-dealer portfolio trades, estimated market share was20.0% , in line with20.1% in the prior year, but up from19.2% in 2Q24. -
U.S. high-yield ADV of decreased$1.3 billion 1% compared to the prior year, and decreased4% compared to 2Q24. Estimated market ADV increased23% compared to the prior year, but was in line with 2Q24. Estimated market share was13.0% (13.4% including single-dealer portfolio trades), down from16.1% in the prior year, and down from13.5% (13.8% including single-dealer portfolio trades) in 2Q24.
Other Credit
-
Emerging markets ADV of
increased$3.3 billion 19% compared to the prior year, but was in line with 2Q24. The year-over-year increase was driven by a20% increase in hard currency ADV, and an18% increase in local currency ADV. -
Eurobonds ADV of
billion increased$1.9 27% compared to the prior year, but decreased10% compared to 2Q24. -
Record Municipal bond ADV of
increased$577 million 49% compared to the prior year, and increased11% compared to 2Q24. Estimated market ADV was down5% compared to the prior year, and down6% compared to 2Q24. Record estimated market share of8.7% , up from5.5% in the prior year, and up from7.4% in 2Q24.3
Strategic Priority Related Protocols & Workflow Tools
-
Our estimated market share of
U.S. high grade andU.S. high-yield TRACE portfolio trading was20.0% in 3Q24. Portfolio trading represented an estimated10.7% ofU.S. high-grade andU.S. high-yield TRACE in 3Q24. -
A record
59% of our portfolio trading volume was executed on X-Pro in 3Q24. -
Dealer RFQ ADV of
across all credit products increased$1.2 billion 26% compared to the prior year, and was in line with 2Q24 levels. -
AxessIQ, the order and execution workflow solution designed for wealth management and private banking clients, achieved ADV of
, up$131 million 32% compared to the prior year, but down3% compared to 2Q24.
Rates
-
Record total rates commission revenue of
increased$7.1 million , or$1.8 million 35% . Record total rates ADV of increased$26.4 billion 46% compared to the prior year, and increased29% compared to 2Q24.
Other
-
Total other commission revenue was
million, which consists of Pragma commission revenue.$4.9
Services revenue
Information services
-
Information services revenue of
million increased$13.0 million, or$1.2 10% , compared to the prior year. The increase in revenue was principally driven by net new data contract revenue and an increase of from the impact of foreign currency fluctuations.$0.3 million
Post-trade services
-
Post-trade services revenue of
million increased$10.4 , or$0.5 million 6% , compared to the prior year mainly due to net new contract revenue and an increase of from the impact of foreign currency fluctuations.$0.2 million
Technology services
-
Total technology services revenue of
million, up from$3.0 in the prior year. The current quarter includes$0.2 million of Pragma revenue.$2.8 million
Expenses
-
Total expenses of
, up$119.7 million 14% , including Pragma operating expenses of and an increase of$8.2 million from the impact of foreign currency fluctuations.$0.7 million
Non-operating
-
Other income (expense): Other income was
million, up from$5.8 million in the prior year. The current quarter included a$4.8 unrealized gain on$0.8 million U.S. Treasury investments compared to a unrealized loss in the prior year.$0.2 million -
Tax rate: The effective tax rate was
23.0% , down slightly from23.4% in the prior year.
Capital
-
The Company had
million in cash, cash equivalents, corporate bond investments and$602.5 U.S. Treasury investments as of September 30, 2024, up from as of June 30, 2024. There were no outstanding borrowings under the Company’s credit facility.$558.8 million -
Year-to-date through October 2024, a total of 296,505 shares were repurchased at a cost of
, including 66,349 shares repurchased during the third quarter at a cost of$63.9 million . As of October 31, 2024, a total of$15.0 million remained under the aggregate authorizations by the Company’s Board of Directors.$236.1 million -
The Board declared a quarterly cash dividend of
per share, payable on December 4, 2024 to stockholders of record as of the close of business on November 20, 2024.$0.74
Other
- Employee headcount was 881 as of September 30, 2024, in line with 881 as of December 31, 2023, but up from 853 as of September 30, 2023.
1 |
EBITDA and EBITDA margin are non-GAAP financial measures. Refer to “Non-GAAP financial measures and other items” for a discussion of these non-GAAP financial measures. |
2 |
The number of |
3 |
See “General Notes Regarding the Data Presented” below. |
4 |
Open Trading share of total credit trading volume is derived by taking total Open Trading volume across all credit products where Open Trading is offered and dividing by total credit trading volume across all credit products where Open Trading is offered. |
5 |
Estimated price improvement consists of estimated liquidity taker price improvement (defined as the difference between the winning price and the best disclosed dealer cover price) and estimated liquidity provider price improvement (defined as the difference between the winning price and then current Composite+ bid or offer level, offer if the provider is buying, bid if provider is selling) at the time of the inquiry. |
6 |
The Company is highlighting the impact of single-dealer portfolio trading volume on |
Non-GAAP financial measures and other items
To supplement the Company’s unaudited financial statements presented in accordance with generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP measures of financial performance, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margin and free cash flow. We define EBITDA margin as EBITDA divided by revenues. We define free cash flow as net cash provided by/(used in) operating activities excluding the net change in trading investments and net change in securities failed-to-deliver and securities failed-to-receive from broker-dealers, clearing organizations and customers, less expenditures for furniture, equipment and leasehold improvements and capitalized software development costs. The Company believes that these non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, provide additional information regarding the Company’s operating results because they assist both investors and management in analyzing and evaluating the performance of our business. See the attached schedule for a reconciliation of GAAP net income to EBITDA, GAAP net income margin to EBITDA margin and GAAP net cash provided by/(used in) operating activities to free cash flow.
Please refer to Tables 6 & 7 for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
Webcast and conference call information
Chris Concannon, Chief Executive Officer, Richard Schiffman, Global Head of Trading Solutions, and Ilene Fiszel Bieler, Chief Financial Officer will host a conference call to discuss the Company’s financial results and outlook on Wednesday, November 6, 2024 at 10:00 a.m. ET. To access the conference call, please dial 646-307-1963 (
General Notes Regarding the Data Presented
Reported MarketAxess volume in all product categories includes only fully electronic trading volume. MarketAxess trading volumes and the Financial Industry Regulatory Authority (“FINRA”) Trade Reporting and Compliance Engine (“TRACE”) reported volumes are available on the Company’s website at investor.marketaxess.com/volume.
For periods beginning with January 2024, the Company has made changes to the market volume data used to calculate estimated market share for Municipal and
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements, including statements about the outlook and prospects for the Company, product/protocol availability and ability to increase estimated market share, market conditions and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess’ current expectations. The Company’s actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: global economic, political and market factors; the level of trading volume transacted on the MarketAxess platform; the rapidly evolving nature of the electronic financial services industry; the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; the variability of our growth rate; our ability to introduce new fee plans and our clients’ response; our ability to attract clients or adapt our technology and marketing strategy to new markets; risks related to our growing international operations; our dependence on our broker-dealer clients; the loss of any of our significant institutional investor clients; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matched principal trades; risks related to self-clearing; risks related to sanctions levied against states or individuals that could expose us to operational or regulatory risks; the effect of rapid market or technological changes on us and the users of our technology; our dependence on third-party suppliers for key products and services; our ability to successfully maintain the integrity of our trading platform and our response to system failures, capacity constraints and business interruptions; the occurrence of design defects, errors, failures or delays with our platforms, products or services; our vulnerability to malicious cyber-attacks and attempted cybersecurity breaches; our actual or perceived failure to comply with privacy and data protection laws; our ability to protect our intellectual property rights or technology and defend against intellectual property infringement or other claims; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our dependence on our management team and our ability to attract and retain talent; limitations on our flexibility because we operate in a highly regulated industry; the increasing government regulation of us and our clients; risks related to the divergence of
About MarketAxess
MarketAxess (Nasdaq: MKTX) operates a leading electronic trading platform that delivers greater trading efficiency, a diversified pool of liquidity and significant cost savings to institutional investors and broker-dealers across the global fixed-income markets. Over 2,000 firms leverage MarketAxess’ patented technology to efficiently trade fixed-income securities. Our automated and algorithmic trading solutions, combined with our integrated and actionable data offerings, help our clients make faster, better-informed decisions on when and how to trade on our platform. MarketAxess’ award-winning Open Trading® marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets. Founded in 2000, MarketAxess connects a robust network of market participants through an advanced full trading lifecycle solution that includes automated trading solutions, intelligent data and index products and a range of post-trade services. Learn more at www.marketaxess.com and on X @MarketAxess.
Table 2: Consolidated Statements of Operations |
|
|
||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||||||||||
|
|
September 30, |
|
|
|
September 30, |
|
|
||||||||||||||||||
In thousands, except per share data (unaudited) |
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions |
|
$ |
180,392 |
|
|
$ |
150,496 |
|
|
|
20 |
|
% |
|
$ |
536,944 |
|
|
$ |
491,073 |
|
|
|
9 |
|
% |
Information services |
|
|
12,960 |
|
|
|
11,801 |
|
|
|
10 |
|
|
|
|
37,385 |
|
|
|
34,466 |
|
|
|
8 |
|
|
Post-trade services |
|
|
10,382 |
|
|
|
9,833 |
|
|
|
6 |
|
|
|
|
31,512 |
|
|
|
29,228 |
|
|
|
8 |
|
|
Technology services |
|
|
2,981 |
|
|
|
154 |
|
|
NM |
|
|
|
|
8,852 |
|
|
|
532 |
|
|
NM |
|
|
||
Total revenues |
|
|
206,715 |
|
|
|
172,284 |
|
|
|
20 |
|
|
|
|
614,693 |
|
|
|
555,299 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
58,431 |
|
|
|
48,872 |
|
|
|
20 |
|
|
|
|
176,485 |
|
|
|
149,570 |
|
|
|
18 |
|
|
Depreciation and amortization |
|
|
18,728 |
|
|
|
17,561 |
|
|
|
7 |
|
|
|
|
55,284 |
|
|
|
51,027 |
|
|
|
8 |
|
|
Technology and communications |
|
|
18,553 |
|
|
|
15,339 |
|
|
|
21 |
|
|
|
|
53,375 |
|
|
|
45,573 |
|
|
|
17 |
|
|
Professional and consulting fees |
|
|
6,989 |
|
|
|
9,181 |
|
|
|
(24 |
) |
|
|
|
21,053 |
|
|
|
24,331 |
|
|
|
(13 |
) |
|
Occupancy |
|
|
3,835 |
|
|
|
3,503 |
|
|
|
9 |
|
|
|
|
10,974 |
|
|
|
10,313 |
|
|
|
6 |
|
|
Marketing and advertising |
|
|
2,898 |
|
|
|
2,100 |
|
|
|
38 |
|
|
|
|
7,741 |
|
|
|
8,403 |
|
|
|
(8 |
) |
|
Clearing costs |
|
|
4,387 |
|
|
|
3,665 |
|
|
|
20 |
|
|
|
|
13,420 |
|
|
|
12,392 |
|
|
|
8 |
|
|
General and administrative |
|
|
5,839 |
|
|
|
5,154 |
|
|
|
13 |
|
|
|
|
15,467 |
|
|
|
15,698 |
|
|
|
(1 |
) |
|
Total expenses |
|
|
119,660 |
|
|
|
105,375 |
|
|
|
14 |
|
|
|
|
353,799 |
|
|
|
317,307 |
|
|
|
12 |
|
|
Operating income |
|
|
87,055 |
|
|
|
66,909 |
|
|
|
30 |
|
|
|
|
260,894 |
|
|
|
237,992 |
|
|
|
10 |
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
6,953 |
|
|
|
6,590 |
|
|
|
6 |
|
|
|
|
19,327 |
|
|
|
16,151 |
|
|
|
20 |
|
|
Interest expense |
|
|
(346 |
) |
|
|
(164 |
) |
|
|
111 |
|
|
|
|
(1,283 |
) |
|
|
(347 |
) |
|
|
270 |
|
|
Equity in earnings of unconsolidated affiliate |
|
|
340 |
|
|
|
125 |
|
|
|
172 |
|
|
|
|
1,064 |
|
|
|
579 |
|
|
|
84 |
|
|
Other, net |
|
|
(1,105 |
) |
|
|
(1,717 |
) |
|
|
(36 |
) |
|
|
|
(4,051 |
) |
|
|
(5,487 |
) |
|
|
(26 |
) |
|
Total other income (expense) |
|
|
5,842 |
|
|
|
4,834 |
|
|
|
21 |
|
|
|
|
15,057 |
|
|
|
10,896 |
|
|
|
38 |
|
|
Income before income taxes |
|
|
92,897 |
|
|
|
71,743 |
|
|
|
29 |
|
|
|
|
275,951 |
|
|
|
248,888 |
|
|
|
11 |
|
|
Provision for income taxes |
|
|
21,408 |
|
|
|
16,802 |
|
|
|
27 |
|
|
|
|
66,909 |
|
|
|
60,460 |
|
|
|
11 |
|
|
Net income |
|
$ |
71,489 |
|
|
$ |
54,941 |
|
|
|
30 |
|
|
|
$ |
209,042 |
|
|
$ |
188,428 |
|
|
|
11 |
|
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.90 |
|
|
$ |
1.47 |
|
|
|
|
|
|
|
$ |
5.55 |
|
|
$ |
5.03 |
|
|
|
|
|
|
Diluted |
|
$ |
1.90 |
|
|
$ |
1.46 |
|
|
|
|
|
|
|
$ |
5.55 |
|
|
$ |
5.01 |
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
0.74 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
$ |
2.22 |
|
|
$ |
2.16 |
|
|
|
|
|
|
Weighted-average common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
37,527 |
|
|
|
37,491 |
|
|
|
|
|
|
|
|
37,641 |
|
|
|
37,485 |
|
|
|
|
|
|
Diluted |
|
|
37,608 |
|
|
|
37,574 |
|
|
|
|
|
|
|
|
37,696 |
|
|
|
37,603 |
|
|
|
|
|
|
NM - not meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3: Commission Revenue Detail |
|||||||||||||||||||||||||||
In thousands, except fee per million data |
|
|
Three Months Ended September 30, |
|
|
|
Nine Months Ended September 30, |
|
|
||||||||||||||||||
(unaudited) |
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||
Variable transaction fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit |
|
|
$ |
134,863 |
|
|
$ |
109,065 |
|
|
|
24 |
|
% |
|
$ |
404,012 |
|
|
$ |
368,745 |
|
|
|
10 |
|
% |
Rates |
|
|
|
7,018 |
|
|
|
5,209 |
|
|
|
35 |
|
|
|
|
17,903 |
|
|
|
16,014 |
|
|
|
12 |
|
|
Other |
|
|
|
4,856 |
|
|
|
— |
|
|
NM |
|
|
|
|
14,781 |
|
|
|
— |
|
|
NM |
|
|
||
Total variable transaction fees |
|
|
|
146,737 |
|
|
|
114,274 |
|
|
|
28 |
|
|
|
|
436,696 |
|
|
|
384,759 |
|
|
|
13 |
|
|
Fixed distribution fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit |
|
|
|
33,584 |
|
|
|
36,167 |
|
|
|
(7 |
) |
|
|
|
100,049 |
|
|
|
106,119 |
|
|
|
(6 |
) |
|
Rates |
|
|
|
71 |
|
|
|
55 |
|
|
|
29 |
|
|
|
|
199 |
|
|
|
195 |
|
|
|
2 |
|
|
Total fixed distribution fees |
|
|
|
33,655 |
|
|
|
36,222 |
|
|
|
(7 |
) |
|
|
|
100,248 |
|
|
|
106,314 |
|
|
|
(6 |
) |
|
Total commission revenue |
|
|
$ |
180,392 |
|
|
$ |
150,496 |
|
|
|
20 |
|
|
|
$ |
536,944 |
|
|
$ |
491,073 |
|
|
|
9 |
|
|
Average variable transaction fee per million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit |
|
|
$ |
148.97 |
|
|
$ |
154.85 |
|
|
|
(4 |
) |
% |
|
$ |
150.48 |
|
|
$ |
159.43 |
|
|
|
(6 |
) |
% |
Rates |
|
|
|
4.15 |
|
|
|
4.56 |
|
|
|
(9 |
) |
|
|
|
4.42 |
|
|
|
4.41 |
|
|
|
— |
|
|
Table 4: Trading Volume Detail* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
||||||||||||||||||||||
In millions (unaudited) |
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||||||||||||
|
|
|
Volume |
|
|
ADV |
|
|
Volume |
|
|
|
ADV |
|
|
Volume |
|
|
ADV |
|
|
||||||
Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-grade |
|
|
$ |
449,708 |
|
|
$ |
7,027 |
|
|
$ |
326,304 |
|
|
|
$ |
5,179 |
|
|
|
38 |
|
% |
|
36 |
|
% |
High-yield |
|
|
|
81,761 |
|
|
|
1,278 |
|
|
|
81,511 |
|
|
|
|
1,294 |
|
|
|
— |
|
|
|
(1 |
) |
|
Emerging markets |
|
|
|
213,341 |
|
|
|
3,333 |
|
|
|
176,334 |
|
|
|
|
2,799 |
|
|
|
21 |
|
|
|
19 |
|
|
Eurobonds |
|
|
|
122,914 |
|
|
|
1,891 |
|
|
|
94,980 |
|
|
|
|
1,484 |
|
|
|
29 |
|
|
|
27 |
|
|
Other credit |
|
|
|
37,566 |
|
|
|
587 |
|
|
|
25,185 |
|
|
|
|
400 |
|
|
|
49 |
|
|
|
47 |
|
|
Total credit trading |
|
|
|
905,290 |
|
|
|
14,116 |
|
|
|
704,314 |
|
|
|
|
11,156 |
|
|
|
29 |
|
|
|
27 |
|
|
Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,619,337 |
|
|
|
25,302 |
|
|
|
1,115,889 |
|
|
|
|
17,713 |
|
|
|
45 |
|
|
|
43 |
|
|
Agency and other government bonds |
|
|
|
71,261 |
|
|
|
1,098 |
|
|
|
26,467 |
|
|
|
|
416 |
|
|
|
169 |
|
|
|
164 |
|
|
Total rates trading |
|
|
|
1,690,598 |
|
|
|
26,400 |
|
|
|
1,142,356 |
|
|
|
|
18,129 |
|
|
|
48 |
|
|
|
46 |
|
|
Total trading |
|
|
$ |
2,595,888 |
|
|
$ |
40,516 |
|
|
$ |
1,846,670 |
|
|
|
$ |
29,285 |
|
|
|
41 |
|
|
|
38 |
|
|
Number of |
|
|
|
|
|
|
64 |
|
|
|
|
|
|
|
63 |
|
|
|
|
|
|
|
|
|
|
||
Number of |
|
|
|
|
|
|
65 |
|
|
|
|
|
|
|
64 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Nine Months Ended September 30, |
|
|
||||||||||||||||||||||
In millions (unaudited) |
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||||||||||||
|
|
|
Volume |
|
|
ADV |
|
|
Volume |
|
|
|
ADV |
|
|
Volume |
|
|
ADV |
|
|
||||||
Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-grade |
|
|
$ |
1,311,146 |
|
|
$ |
6,974 |
|
|
$ |
1,072,258 |
|
|
|
$ |
5,734 |
|
|
|
22 |
|
% |
|
22 |
|
% |
High-yield |
|
|
|
251,388 |
|
|
|
1,337 |
|
|
|
295,774 |
|
|
|
|
1,582 |
|
|
|
(15 |
) |
|
|
(15 |
) |
|
Emerging markets |
|
|
|
644,973 |
|
|
|
3,431 |
|
|
|
536,432 |
|
|
|
|
2,869 |
|
|
|
20 |
|
|
|
20 |
|
|
Eurobonds |
|
|
|
380,029 |
|
|
|
2,011 |
|
|
|
329,841 |
|
|
|
|
1,754 |
|
|
|
15 |
|
|
|
15 |
|
|
Other credit |
|
|
|
97,271 |
|
|
|
517 |
|
|
|
78,597 |
|
|
|
|
420 |
|
|
|
24 |
|
|
|
23 |
|
|
Total credit trading |
|
|
|
2,684,807 |
|
|
|
14,270 |
|
|
|
2,312,902 |
|
|
|
|
12,359 |
|
|
|
16 |
|
|
|
15 |
|
|
Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,902,050 |
|
|
|
20,756 |
|
|
|
3,547,308 |
|
|
|
|
18,970 |
|
|
|
10 |
|
|
|
9 |
|
|
Agency and other government bonds |
|
|
|
151,393 |
|
|
|
801 |
|
|
|
80,249 |
|
|
|
|
428 |
|
|
|
89 |
|
|
|
87 |
|
|
Total rates trading |
|
|
|
4,053,443 |
|
|
|
21,557 |
|
|
|
3,627,557 |
|
|
|
|
19,398 |
|
|
|
12 |
|
|
|
11 |
|
|
Total trading |
|
|
$ |
6,738,250 |
|
|
$ |
35,827 |
|
|
$ |
5,940,459 |
|
|
|
$ |
31,757 |
|
|
|
13 |
|
|
|
13 |
|
|
Number of |
|
|
|
|
|
|
188 |
|
|
|
|
|
|
|
187 |
|
|
|
|
|
|
|
|
|
|
||
Number of |
|
|
|
|
|
|
189 |
|
|
|
|
|
|
|
188 |
|
|
|
|
|
|
|
|
|
|
||
1 The number of |
|||||||||||||||||||||||||||
2 The number of |
|||||||||||||||||||||||||||
*Consistent with FINRA TRACE reporting standards, both sides of trades are included in the Company's reported volumes when the Company executes trades on a matched principal basis between two counterparties. Consistent with industry standards, |
|||||||||||||||||||||||||||
NM - not meaningful |
|
|
|
|
|
|
|
|
|
|
Table 5: Consolidated Condensed Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|||||
In thousands (unaudited) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
|
||
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
446,347 |
|
|
$ |
451,280 |
|
|
Cash segregated under federal regulations |
|
|
46,657 |
|
|
|
45,122 |
|
|
Investments, at fair value |
|
|
167,213 |
|
|
|
134,861 |
|
|
Accounts receivable, net |
|
|
102,760 |
|
|
|
89,839 |
|
|
Receivables from broker-dealers, clearing organizations and customers |
|
|
474,989 |
|
|
|
687,936 |
|
|
Goodwill |
|
|
236,706 |
|
|
|
236,706 |
|
|
Intangible assets, net of accumulated amortization |
|
|
104,331 |
|
|
|
119,108 |
|
|
Furniture, equipment, leasehold improvements and capitalized software, net |
|
|
109,482 |
|
|
|
102,671 |
|
|
Operating lease right-of-use assets |
|
|
59,998 |
|
|
|
63,045 |
|
|
Prepaid expenses and other assets |
|
|
84,566 |
|
|
|
84,499 |
|
|
Total assets |
|
$ |
1,833,049 |
|
|
$ |
2,015,067 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accrued employee compensation |
|
$ |
52,816 |
|
|
$ |
60,124 |
|
|
Payables to broker-dealers, clearing organizations and customers |
|
|
283,314 |
|
|
|
537,398 |
|
|
Income and other tax liabilities |
|
|
2,151 |
|
|
|
7,892 |
|
|
Accounts payable, accrued expenses and other liabilities |
|
|
33,437 |
|
|
|
37,013 |
|
|
Operating lease liabilities |
|
|
75,077 |
|
|
|
79,677 |
|
|
Total liabilities |
|
|
446,795 |
|
|
|
722,104 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
123 |
|
|
|
123 |
|
|
Additional paid-in capital |
|
|
344,138 |
|
|
|
333,292 |
|
|
Treasury stock |
|
|
(316,524 |
) |
|
|
(260,298 |
) |
|
Retained earnings |
|
|
1,368,661 |
|
|
|
1,244,216 |
|
|
Accumulated other comprehensive loss |
|
|
(10,144 |
) |
|
|
(24,370 |
) |
|
Total stockholders' equity |
|
|
1,386,254 |
|
|
|
1,292,963 |
|
|
Total liabilities and stockholders' equity |
|
$ |
1,833,049 |
|
|
$ |
2,015,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Table 6: Reconciliation of Net Income to EBITDA and Net Income Margin to EBITDA Margin |
|
|
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||
In thousands (unaudited) |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
71,489 |
|
|
$ |
54,941 |
|
|
|
$ |
209,042 |
|
|
$ |
188,428 |
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(6,953 |
) |
|
|
(6,590 |
) |
|
|
|
(19,327 |
) |
|
|
(16,151 |
) |
|
Interest expense |
|
|
346 |
|
|
|
164 |
|
|
|
|
1,283 |
|
|
|
347 |
|
|
Provision for income taxes |
|
|
21,408 |
|
|
|
16,802 |
|
|
|
|
66,909 |
|
|
|
60,460 |
|
|
Depreciation and amortization |
|
|
18,728 |
|
|
|
17,561 |
|
|
|
|
55,284 |
|
|
|
51,027 |
|
|
EBITDA |
|
$ |
105,018 |
|
|
$ |
82,878 |
|
|
|
$ |
313,191 |
|
|
$ |
284,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income margin1 |
|
|
34.6 |
% |
|
|
31.9 |
% |
|
|
|
34.0 |
% |
|
|
33.9 |
% |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(3.4 |
) |
|
|
(3.8 |
) |
|
|
|
(3.1 |
) |
|
|
(2.9 |
) |
|
Interest expense |
|
|
0.2 |
|
|
|
0.1 |
|
|
|
|
0.2 |
|
|
|
0.1 |
|
|
Provision for income taxes |
|
|
10.3 |
|
|
|
9.7 |
|
|
|
|
10.9 |
|
|
|
10.9 |
|
|
Depreciation and amortization |
|
|
9.1 |
|
|
|
10.2 |
|
|
|
|
9.0 |
|
|
|
9.2 |
|
|
EBITDA margin2 |
|
|
50.8 |
% |
|
|
48.1 |
% |
|
|
|
51.0 |
% |
|
|
51.2 |
% |
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 7: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
|
|
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||
In thousands (unaudited) |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)/provided by operating activities |
|
$ |
95,089 |
|
|
$ |
79,161 |
|
|
|
$ |
208,989 |
|
|
$ |
192,082 |
|
|
Exclude: Net change in trading investments |
|
|
784 |
|
|
|
24,771 |
|
|
|
|
629 |
|
|
|
24,300 |
|
|
Exclude: Net change in fail-to-deliver/receive from broker-dealers, clearing organizations and customers |
|
|
2,578 |
|
|
|
(13,099 |
) |
|
|
|
50,715 |
|
|
|
(12,342 |
) |
|
Less: Purchases of furniture, equipment and leasehold improvements |
|
|
(835 |
) |
|
|
(5,983 |
) |
|
|
|
(9,727 |
) |
|
|
(7,255 |
) |
|
Less: Capitalization of software development costs |
|
|
(11,331 |
) |
|
|
(10,087 |
) |
|
|
|
(35,790 |
) |
|
|
(31,802 |
) |
|
Free cash flow |
|
$ |
86,285 |
|
|
$ |
74,763 |
|
|
|
$ |
214,816 |
|
|
$ |
164,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Net income margin is derived by dividing net income by total revenues for the applicable period. |
|
|
||||||||||||||||
2 EBITDA margin is derived by dividing EBITDA by total revenues for the applicable period. |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105557526/en/
INVESTOR RELATIONS
Stephen Davidson
MarketAxess Holdings Inc.
+1 212 813 6313
sdavidson2@marketaxess.com
MEDIA RELATIONS
Marisha Mistry
MarketAxess Holdings Inc.
+1 917 267 1232
mmistry@marketaxess.com
Source: MarketAxess Holdings Inc.
FAQ
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