MARKETAXESS HOLDINGS INC false 0001278021 0001278021 2025-02-06 2025-02-06

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 6, 2025

 

 

MarketAxess Holdings Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   001-34091   52-2230784

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

55 Hudson Yards

New York, New York 10001

(Address of principal executive offices, including zip code)

(212) 813-6000

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading

Symbol(s)

  

Name of each exchange

on which registered

Common Stock, par value $0.003 per share   MKTX   NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02

Results of Operations and Financial Condition

On February 6, 2025, MarketAxess Holdings Inc. (the “Company”) issued a press release announcing the Company’s financial results for its fourth quarter and full year ended December 31, 2024. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) that is furnished pursuant to this Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, the information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) that is furnished pursuant to this Item 2.02 shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.

 

Item 8.01

Other Events

On February 6, 2025, the Company also announced that its Board of Directors has declared a regular quarterly dividend to be paid to the holders of the outstanding shares of capital stock. A cash dividend of $0.76 per share of common stock outstanding will be paid on March 5, 2025 to stockholders of record as of the close of business on February 19, 2025.

 

Item 9.01

Financial Statements and Exhibits

(d) Exhibits:

 

99.1    Press Release issued by MarketAxess Holdings Inc. on February 6, 2025.
104    Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    MARKETAXESS HOLDINGS INC.
Date: February 6, 2025     By:  

/s/ Ilene Fiszel Bieler

    Name:   Ilene Fiszel Bieler
    Title:   Chief Financial Officer

Exhibit 99.1

 

LOGO

MarketAxess Reports Fourth Quarter and Full Year 2024 Financial Results

Record Full Year Revenue of $817 Million, Up 9%

Strong Full Year Commission Revenue Growth Across Most Product Areas

NEW YORK | February 6, 2025 - MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, today announced financial results for the fourth quarter and full year ended December 31, 2024.

 

4Q24 select financial and operational highlights*

 

•  Total revenues of $202.4 million, including an increase of approximately $1.0 million from the impact of foreign currency fluctuations.

 

•  15% growth in emerging markets and Eurobonds commission revenue, reflecting strong geographic diversification.

 

•  Record rates commission revenue, up 53%.

 

•  Total expenses of $122.4 million, up 2%, including an increase of approximately $0.9 million from the impact of foreign currency fluctuations.

 

•  Diluted earnings per share (“EPS”) of $1.73 on net income of $65.1 million.

 

Full Year 2024 select financial and operational highlights**

 

•  9% increase in total revenues to a record $817.1 million, including Pragma revenue of $31.7 million and an increase of approximately $3.0 million from the impact of foreign currency fluctuations.

 

•  9% growth in U.S. high-grade commission revenue, helped offset a 17% decline in U.S. high-yield commission revenue, driven by low levels of credit spread volatility.

 

•  Record commission revenue across emerging markets, Eurobonds and municipal bonds, up a combined 15%.

 

•  Record rates commission revenue, up 21%.

 

•  Record services revenue (combined information, post-trade and technology services revenue) of $105.4 million, up 18%, including the benefit from Pragma.

 

•  9% increase in total expenses to $476.2 million, including Pragma operating expenses of $32.0 million and an increase of approximately $2.4 million from the impact of foreign currency fluctuations.

 

•  6% increase in EPS to $7.28 on net income of $274.2 million.

 

*   All comparisons versus 4Q23.

**   All comparisons versus full year 2023.

  

Chris Concannon, CEO of

MarketAxess, commented:

 

“In 2024, we made significant strides in enhancing our client franchise, increasing client engagement with X-Pro, delivering progress with our high touch strategy, and achieving record levels of revenue and ADV across most product areas and regions.

 

We expect to build on this momentum in 2025 by focusing on key initiatives within three market channels. First, in the client-initiated channel, where we hold a clear leadership position, we launched our block trading solution in Eurobonds and emerging markets. We have seen early positive signs of success with a 22% increase in emerging markets block trading. Next, in the portfolio trading channel, in 2024, we gained over 200 basis points of U.S. high-grade market share and launched benchmark pricing for U.S. Credit and Eurobonds. Last, in the dealer-initiated channel, we expect to complete the integration of Dealer RFQ on X-Pro and the migration of Mid-X to Pragma technology in the second half of 2025.

 

We have clear visibility into the completion of these key initiatives and believe that executing our strategy across these three channels will drive market share growth throughout 2025 and long-term value for our shareholders.”

LOGO

 

Table 1: 4Q24 select financial results

 

$ in millions, except per

share data (unaudited)

    Revenues     Operating Income     Net Income     Diluted EPS     Net Income
Margin (%)		     EBITDA1     EBITDA
Margin (%)1		  

4Q24

    $ 202     $ 80     $ 65     $ 1.73       32.2 %    $ 97       47.8 % 

3Q24

    $ 207     $ 87     $ 71     $ 1.90       34.6 %    $ 105       50.8 % 

4Q23

    $ 197     $ 77     $ 70     $ 1.84       35.3 %    $ 99       50.0 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

YoY % Change

      3 %      4 %      (6 %)      (6 %)      (310) bps       (2 %)      (220) bps  

QoQ % Change

      (2 %)      (8 %)      (9 %)      (9 %)      (240) bps       (8 %)      (300) bps  

FY 2024

    $ 817     $ 341     $ 274     $ 7.28       33.6 %    $ 410       50.2 % 

FY 2023

    $ 753     $ 315     $ 258     $ 6.85       34.3 %    $ 383       50.9 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

% Change

      9 %      8 %      6 %      6 %      (70) bps       7 %      (70) bps  

Table 1A: 4Q24 trading volume (ADV)

 

     CREDIT     RATES  

$ in millions

(unaudited)

    US/UK Trading
Days2		      Total
ADV		     Total
Credit		     High-Grade     High-Yield     Emerging
Markets		     Eurobonds     Municipal
Bonds		     Total
Rates		     US
Govt.
Bonds		     Agcy./Other
Govt. Bonds		  

4Q24

      62/64      $ 41,030     $ 13,883     $ 6,454     $ 1,345     $ 3,459     $ 2,001     $ 620     $ 27,147     $ 25,952     $ 1,195  

3Q24

      64/65      $ 40,516     $ 14,116     $ 7,027     $ 1,278     $ 3,333     $ 1,891     $ 577     $ 26,400     $ 25,302     $ 1,098  

4Q23

      62/63      $ 29,641     $ 13,108     $ 6,215     $ 1,653     $ 2,927     $ 1,767     $ 539     $ 16,533     $ 16,106     $ 427  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

YoY % Change

         38 %      6 %      4 %      (19 %)      18 %      13 %      15 %      64 %      61 %      180 % 

QoQ % Change

         1 %      (2 %)      (8 %)      5 %      4 %      6 %      7 %      3 %      3 %      9 % 

Table 1B: 4Q24 estimated market share

 

    

CREDIT

   

RATES

(unaudited)

   

High-Grade

   

High-Yield

   

High-Grade/High-Yield

Combined

   

Municipals3

   

US Govt.

Bonds3

4Q24

    18.4%    13.4%    17.3%    7.1%    2.8%

3Q24

   

19.5%

    13.0%    18.1%    8.7%    2.6%

4Q23

    20.9%    17.2%    20.0%    5.6%    2.0%
  

 

   

 

   

 

   

 

   

 

YoY Bps Change

    (250) bps    (380) bps    (270) bps    +150 bps    +80 bps

QoQ Bps Change

    (110) bps    +40 bps    (80) bps    (160) bps    +20 bps

4Q24 overview of results

Commission revenue and trading volume

Credit

Credit Commission Revenue

 

  •  

Total credit commission revenue of $162.2 million (including $32.8 million in fixed-distribution fees) increased $0.3 million, or 0.2%, compared to $161.9 million (including $34.6 million in fixed-distribution fees) in the prior year. Strong growth in our international product areas,

 

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including 18% growth in emerging markets and 10% growth in Eurobonds, was mostly offset by lower estimated market share in U.S. high grade, and historically low levels of credit spread volatility in U.S. high-yield, resulting in lower estimated market share. Variable transaction fees per million (“FPM”) were $150, compared to $156 in the prior year and $149 in 3Q24. The decline in FPM compared to the prior year was mainly due to product mix-shift, principally lower levels of U.S. high-yield activity. The decrease in fixed-distribution fees was principally driven by migrations to variable fee plans.

Credit Trading Volumes

U.S. Credit5

 

  •  

U.S. high-grade ADV of $6.5 billion increased 4% compared to the prior year, but decreased 8% compared to 3Q24. Estimated market ADV increased 18% compared to the prior year, but decreased 3% compared to 3Q24. Estimated market share was 18.4%, down from 20.9% in the prior year, and down from 19.5% in 3Q24. Including the impact of single-dealer portfolio trades, estimated market share was 18.8%, down from 21.0% in the prior year, and down from 20.0% in 3Q24.

 

  •  

U.S. high-yield ADV of $1.3 billion decreased 19% compared to the prior year, but increased 5% compared to 3Q24. Estimated market ADV increased 5% compared to the prior year, and increased 2% compared to 3Q24. Estimated market share was 13.4%, down from 17.2% in the prior year, but up from 13.0% in 3Q24. Including the impact of single-dealer portfolio trades, estimated market share was 13.7%, down from 17.3% in the prior year, but up from 13.4% in 3Q24.

Other Credit

 

  •  

Emerging markets ADV of $3.5 billion increased 18% compared to the prior year, and increased 4% compared to 3Q24. The year-over-year increase was driven by a 26% increase in hard currency ADV, and a 7% increase in local currency ADV.

 

  •  

Eurobonds ADV of $2.0 billion increased 13% compared to the prior year, and increased 6% compared to 3Q24.

 

  •  

Record municipal bond ADV of $620 million increased 15% compared to the prior year, and increased 7% compared to 3Q24. Estimated market ADV decreased 9% compared to the prior year, but increased 32% compared to 3Q24. Estimated market share was 7.1%, up from 5.6% in the prior year, but down from a record 8.7% in 3Q24.3

Strategic Priority Related Protocols & Workflow Tools

 

  •  

$1.1 billion in total portfolio trading ADV increased 57% compared to the prior year, but decreased 8% compared to 3Q24. A record 71% of portfolio trading volume was executed over X-Pro.

 

  •  

Estimated U.S. high-grade and U.S. high-yield TRACE portfolio trading market ADV was flat compared to 3Q24.

 

  •  

Our estimated market share of U.S. high-grade and U.S. high-yield TRACE portfolio trading was 16.2%, down from 20.0% in 3Q24.

 

  •  

Portfolio trading represented approximately 11% of U.S. high-grade and U.S. high-yield TRACE in 4Q24, in line with 3Q24.

 

 

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  •  

Open Trading ADV of $4.1 billion increased 2% compared to the prior year, and was in line with 3Q24. Open Trading share4 of total credit trading volume was 35%, down from 36% in the prior year, but in line with 3Q24 levels.

 

  •  

Dealer RFQ ADV of $1.2 billion across all credit products increased 8% compared to the prior year, and increased 5% compared to 3Q24.

 

  •  

AxessIQ, the order and execution workflow solution designed for wealth management and private banking clients, achieved record ADV of $147 million, up 6% compared to the prior year, and up 14% compared to 3Q24.

Rates

 

  •  

Record total rates commission revenue of $7.3 million increased $2.5 million, or 53%. Record total rates ADV of $27.1 billion increased 64% compared to the prior year, and increased 3% compared to 3Q24. U.S. Treasury ADV on the platform in November 2023 was negatively impacted by an outage at ICBC, the third-party the Company was then using for U.S. Treasury settlement services.

Other

 

  •  

Total other commission revenue was $5.2 million, which consists of Pragma commission revenue.

Services revenue

Information services

 

  •  

Information services revenue of $13.2 million increased $1.2 million, or 10% compared to the prior year. The increase in revenue was principally driven by net new data contract revenue and an increase of $0.3 million from the impact of foreign currency fluctuations.

Post-trade services

 

  •  

Post-trade services revenue of $11.0 million was flat compared to the prior year mainly due to an increase of $0.2 million from the impact of foreign currency fluctuations, offset by lower end-of-year resubmissions revenue.

Technology services

 

  •  

Total technology services revenue of $3.5 million, up from $2.5 million in the prior year. The increase was driven by higher Pragma-related license fees.

Expenses

 

  •  

Total expenses of $122.4 million increased 2% from the prior year, including an increase of $0.9 million from the impact of foreign currency fluctuations.

Non-operating

 

  •  

Other income (expense): Other income was $4.6 million, down from $6.8 million in the prior year. The current year includes an unrealized loss on U.S. Treasury investments of $1.9 million compared to an unrealized gain in the prior year of $0.9 million.

 

 

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  •  

Tax rate: The effective tax rate was 23.0%, up from 16.9% in the prior year. The increase in the effective tax rate was primarily due to lower one-time tax benefits recognized in 4Q24 compared to 4Q23.

Capital

 

  •  

The Company had $698.6 million in cash, cash equivalents, corporate bond investments and U.S. Treasury investments as of December 31, 2024, up from $602.5 million as of September 30, 2024 and $575.7 million as of December 31, 2023. There were no outstanding borrowings under the Company’s credit facility.

 

  •  

For the full year 2024, a total of 341,477 shares were repurchased at a cost of $75.0 million, including 63,873 shares repurchased during the fourth quarter at a cost of $16.4 million. As of January 31, 2025, a total of $220.0 million remained under the aggregate authorizations by the Company’s Board of Directors.

 

  •  

The Board declared a quarterly cash dividend of $0.76 per share, payable on March 5, 2025 to stockholders of record as of the close of business on February 19, 2025.

Other

 

  •  

Employee headcount was 891 as of December 31, 2024, up from 881 as of December 31, 2023, and up from 881 as of September 30, 2024.

Guidance

For the full year 2025, the Company is providing the following guidance which is based on foreign exchange rates as of December 31, 2024:

 

  •  

Services revenue (combined Information Services, Post-Trade Services and Technology Services) is expected to grow in the mid-single digits (percent).

 

  •  

Expenses are expected to be in the range of $505.0 million to $525.0 million. Based on the midpoint of the stated guidance range, total expenses are expected to increase by approximately 8%.

 

  •  

The effective tax rate is expected to be between 23.5% and 24.5%, assuming no material changes in applicable tax laws.

 

  •  

Capital expenditures to support new protocols, products and trading platform enhancements are expected to be in the range of $65.0 million to $70.0 million.

 

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 U.S. trading days is based on the SIFMA holiday recommendation calendar and the number of U.K. trading days is based primarily on the U.K. bank holiday schedule.

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

The Company is currently highlighting the impact of single-dealer portfolio trading volume on U.S. high-grade and U.S. high-yield trading volume and estimated market share, but will continue to exclude single-dealer portfolio trading activity from each product’s aggregated trading volume and estimated market share and the total credit FPM calculation.

 

 

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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 Thursday, February 6, 2025 at 10:30 a.m. ET. To access the conference call, please dial 646-307-1963 (U.S./International) and use the ID 1832176. The Company will also host a live audio Webcast of the conference call on the Investor Relations section of the Company’s website at http://investor.marketaxess.com. The Webcast will be archived on http://investor.marketaxess.com for 90 days following the announcement.

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 U.S. Government Bonds. For Municipal Bonds, the Company previously used estimates, derived from data issued by the Municipal Securities Rule Making Board (“MSRB”), including estimates for new issuance, commercial paper and variable-rate trading activity, and excluded these volumes from the estimated market volume data. While the Company still uses estimates, the new methodology for identifying and excluding these volumes from the market volume data is now based on MSRB “flags” to identify new issuance, commercial paper, and variable-rate volumes. For U.S. Government Bonds, the previous data source for estimated market volumes was the Federal Reserve Bank’s Reported Primary Dealer U.S. Treasury Bond Trading Volumes, which was reported on a one-week lag. The new source for U.S. Government Bond trading volumes is FINRA’s U.S. Treasury TRACE data. The Company believes that the refined methodology used for Municipal Bonds, and the new data source for U.S. Government Bonds, provides more accurate measures of estimated market volumes and estimated market share. Prior comparable periods have been recast retrospectively for both Municipal and U.S. Government Bonds to conform to the updated presentation of the data. The new estimated market volume data is also available on the Company’s website at investor.marketaxess.com/volume.

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

 

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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 U.K. and European Union legal and regulatory requirements following the U.K.’s exit from the European Union; our exposure to costs and penalties related to our extensive regulation; our risks of litigation and securities laws liability; adverse effects as a result of climate change or other ESG risks that could affect our reputation; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; our exposure to financial institutions by holding cash in excess of federally insured limits; and other factors. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess’ business and prospects is contained in MarketAxess’ periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

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.

# # #

 

 

 

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Contacts   
INVESTOR RELATIONS    MEDIA RELATIONS
Stephen Davidson    Marisha Mistry
MarketAxess Holdings Inc.    MarketAxess Holdings Inc.
+1 212 813 6313    +1 917 267 1232
sdavidson2@marketaxess.com    mmistry@marketaxess.com

 

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Table 2: Consolidated Statements of Operations

 

 

     Three Months Ended
December 31,		     Year Ended
December 31,		  

In thousands, except per share data (unaudited)

    2024     2023     %
Change		     2024     2023     %
Change		  

Revenues

             

Commissions

    $ 174,766     $ 171,891       2 %    $ 711,710     $ 662,964       7 % 

Information services

      13,155       11,917       10       50,540       46,383       9  

Post-trade services

      10,975       10,950       —        42,487       40,178       6  

Technology services

      3,508       2,490       41       12,360       3,022       NM  
  

 

 

    

 

 

      

 

 

    

 

 

    

Total revenues

      202,404       197,248       3       817,097       752,547       9  
  

 

 

    

 

 

      

 

 

    

 

 

    

Expenses

             

Employee compensation and benefits

      59,395       57,356       4       235,880       206,926       14  

Depreciation and amortization

      18,540       19,530       (5 )      73,824       70,557       5  

Technology and communications

      18,791       17,228       9       72,166       62,801       15  

Professional and consulting fees

      6,329       7,604       (17 )      27,382       31,935       (14 ) 

Occupancy

      3,716       3,903       (5 )      14,690       14,216       3  

Marketing and advertising

      3,972       2,646       50       11,713       11,049       6  

Clearing costs

      4,443       4,610       (4 )      17,863       17,002       5  

General and administrative

      7,242       7,344       (1 )      22,709       23,042       (1 ) 
  

 

 

    

 

 

      

 

 

    

 

 

    

Total expenses

      122,428       120,221       2       476,227       437,528       9  
  

 

 

    

 

 

      

 

 

    

 

 

    

Operating income

      79,976       77,027       4       340,870       315,019       8  

Other income (expense)

             

Interest income

      6,719       6,274       7       26,046       22,425       16  

Interest expense

      (318 )      (1,636 )      (81 )      (1,601 )      (1,983 )      (19 ) 

Equity in earnings of unconsolidated affiliate

      331       156       112       1,395       735       90  

Other, net

      (2,113 )      1,991       NM       (6,164 )      (3,496 )      76  
  

 

 

    

 

 

      

 

 

    

 

 

    

Total other income (expense)

      4,619       6,785       (32 )      19,676       17,681       11  
  

 

 

    

 

 

      

 

 

    

 

 

    

Income before income taxes

      84,595       83,812       1       360,546       332,700       8  

Provision for income taxes

      19,456       14,185       37       86,365       74,645       16  
  

 

 

    

 

 

      

 

 

    

 

 

    

Net income

    $ 65,139     $ 69,627       (6 )    $ 274,181     $ 258,055       6  
  

 

 

    

 

 

      

 

 

    

 

 

    

Per Share Data:

             

Net income per common share

             

Basic

    $ 1.74     $ 1.85       $ 7.29     $ 6.87    

Diluted

    $ 1.73     $ 1.84       $ 7.28     $ 6.85    

Cash dividends declared per common share

    $ 0.74     $ 0.72       $ 2.96     $ 2.88    

Weighted-average common shares:

             

Basic

      37,479       37,730         37,600       37,546    

Diluted

      37,601       37,809         37,672       37,654    

NM - not meaningful

 

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Table 3: Commission Revenue Detail

 

 

In thousands, except fee per million data    Three Months Ended December 31,     Year Ended December 31,  

(unaudited)

    2024      2023      % Change     2024      2023      % Change  

Variable transaction fees

                 

Credit

    $ 129,351      $ 127,283        2 %    $ 533,363      $ 496,028        8 % 

Rates

      7,262        4,735        53       25,165        20,749        21  

Other

      5,235        4,979        5       20,016        4,979        NM  
  

 

 

     

 

 

       

 

 

     

 

 

     

Total variable transaction fees

      141,848        136,997        4       578,544        521,756        11  
  

 

 

     

 

 

       

 

 

     

 

 

     

Fixed distribution fees

                 

Credit

      32,849        34,581        (5 )      132,898        140,700        (6 ) 

Rates

      69        57        21       268        252        6  

Other

      —         256        NM       —         256        NM  
  

 

 

     

 

 

       

 

 

     

 

 

     

Total fixed distribution fees

      32,918        34,894        (6 )      133,166        141,208        (6 ) 
  

 

 

     

 

 

       

 

 

     

 

 

     

Total commission revenue

    $ 174,766      $ 171,891        2     $ 711,710      $ 662,964        7  
  

 

 

     

 

 

       

 

 

     

 

 

     

Average variable transaction fee per million

                 

Credit

    $ 149.59      $ 156.28        (4 )%    $ 150.26      $ 158.61        (5 )% 

Rates

      4.31        4.62        (7 )      4.39        4.46        (2 ) 

Table 4: Trading Volume Detail*

 

     Three Months Ended December 31,  

In millions (unaudited)

    2024      2023      % Change  
   Volume      ADV      Volume      ADV      Volume     ADV  

Credit

                 

High-grade

    $ 400,129      $ 6,454      $ 385,301      $ 6,215        4 %      4 % 

High-yield

      83,373        1,345        102,501        1,653        (19 )      (19 ) 

Emerging markets

      214,439        3,459        181,445        2,927        18       18  

Eurobonds

      128,064        2,001        111,330        1,767        15       13  

Other credit

      38,698        624        33,854        546        14       14  
  

 

 

     

 

 

     

 

 

     

 

 

       

Total credit trading

      864,703        13,883        814,431        13,108        6       6  
  

 

 

     

 

 

     

 

 

     

 

 

       

Rates

                 

U.S. government bonds

      1,608,995        25,952        998,542        16,106        61       61  

Agency and other government bonds

      76,221        1,195        26,684        427        186       180  
  

 

 

     

 

 

     

 

 

     

 

 

       

Total rates trading

      1,685,216        27,147        1,025,226        16,533        64       64  
  

 

 

     

 

 

     

 

 

     

 

 

       

Total trading

    $ 2,549,919      $ 41,030      $ 1,839,657      $ 29,641        39       38  
  

 

 

     

 

 

     

 

 

     

 

 

       

Number of U.S. Trading Days1

         62           62       

Number of U.K. Trading Days2

         64           63       

 

     Year Ended December 31,  

In millions (unaudited)

    2024      2023      % Change  
   Volume      ADV      Volume      ADV      Volume     ADV  

Credit

                 

High-grade

    $ 1,711,275      $ 6,845      $ 1,457,559      $ 5,854        17 %      17 % 

High-yield

      334,761        1,339        398,275        1,599        (16 )      (16 ) 

Emerging markets

      859,412        3,438        717,877        2,883        20       19  

Eurobonds

      508,093        2,008        441,171        1,758        15       14  

Other credit

      135,975        543        112,451        451        21       20  
  

 

 

     

 

 

     

 

 

     

 

 

       

Total credit trading

      3,549,516        14,173        3,127,333        12,545        13       13  
  

 

 

     

 

 

     

 

 

     

 

 

       

Rates

                 

U.S. government bonds

      5,511,045        22,044        4,545,850        18,256        21       21  

Agency and other government bonds

      227,614        902        106,933        427        113       111  
  

 

 

     

 

 

     

 

 

     

 

 

       

Total rates trading

      5,738,659        22,946        4,652,783        18,683        23       23  
  

 

 

     

 

 

     

 

 

     

 

 

       

Total trading

    $ 9,288,175      $ 37,119      $ 7,780,116      $ 31,228        19       19  
  

 

 

     

 

 

     

 

 

     

 

 

       

Number of U.S. Trading Days1

         250           249       

Number of U.K. Trading Days2

         253           251       

 

1 

The number of U.S. trading days is based on the SIFMA holiday recommendation calendar.

2

The number of U.K. trading days is based on the U.K. Bank holiday schedule.

*

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, U.S. government bond trades are single-counted.

NM - not meaningful

 

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Table 5: Consolidated Condensed Balance Sheet Data

 

     As of  

In thousands (unaudited)

    December 31, 2024     December 31, 2023  

Assets

     

Cash and cash equivalents

    $ 544,478     $ 451,280  

Cash segregated under federal regulations

      47,107       45,122  

Investments, at fair value

      165,260       134,861  

Accounts receivable, net

      91,845       89,839  

Receivables from broker-dealers, clearing organizations and customers

      357,728       687,936  

Goodwill

      236,706       236,706  

Intangible assets, net of accumulated amortization

      98,078       119,108  

Furniture, equipment, leasehold improvements and capitalized software, net

      107,298       102,671  

Operating lease right-of-use assets

      58,132       63,045  

Prepaid expenses and other assets

      82,584       84,499  
  

 

 

    

 

 

  

Total assets

    $ 1,789,216     $ 2,015,067  
  

 

 

    

 

 

  

Liabilities and stockholders’ equity

     

Liabilities

     

Accrued employee compensation

    $ 68,054     $ 60,124  

Payables to broker-dealers, clearing organizations and customers

      218,845       537,398  

Income and other tax liabilities

      3,683       7,892  

Accounts payable, accrued expenses and other liabilities

      37,320       37,013  

Operating lease liabilities

      72,654       79,677  
  

 

 

    

 

 

  

Total liabilities

      400,556       722,104  
  

 

 

    

 

 

  

Stockholders’ equity

     

Common stock

      123       123  

Additional paid-in capital

      350,701       333,292  

Treasury stock

      (333,369 )      (260,298 ) 

Retained earnings

      1,405,904       1,244,216  

Accumulated other comprehensive loss

      (34,699 )      (24,370 ) 
  

 

 

    

 

 

  

Total stockholders’ equity

      1,388,660       1,292,963  
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 1,789,216     $ 2,015,067  
  

 

 

    

 

 

  

 

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Table 6: Reconciliation of Net Income to EBITDA and Net Income Margin to EBITDA Margin

 

     Three Months Ended
December 31,		     Year Ended
December 31,		  

In thousands (unaudited)

    2024     2023     2024     2023  

Net income

    $ 65,139     $ 69,627     $ 274,181     $ 258,055  

Add back:

         

Interest income

      (6,719 )      (6,274 )      (26,046 )      (22,425 ) 

Interest expense

      318       1,636       1,601       1,983  

Provision for income taxes

      19,456       14,185       86,365       74,645  

Depreciation and amortization

      18,540       19,530       73,824       70,557  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

    $ 96,734     $ 98,704     $ 409,925     $ 382,815  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income margin1

      32.2 %      35.3 %      33.6 %      34.3 % 

Add back:

         

Interest income

      (3.3 )      (3.2 )      (3.2 )      (3.0 ) 

Interest expense

      0.2       0.8       0.2       0.3  

Provision for income taxes

      9.5       7.2       10.6       9.9  

Depreciation and amortization

      9.2       9.9       9.0       9.4  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA margin2

      47.8 %      50.0 %      50.2 %      50.9 % 
  

 

 

    

 

 

    

 

 

    

 

 

  

Table 7: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

 

     Three Months Ended
December 31,		     Year Ended
December 31,		  

In thousands (unaudited)

    2024     2023     2024     2023  

Net cash (used in)/provided by operating activities

    $ 176,248     $ 141,685     $ 385,237     $ 333,767  

Exclude: Net change in trading investments

      —        948       629       25,248  

Exclude: Net change in fail-to-deliver/receive from broker-dealers, clearing organizations and customers

      (51,833 )      (34,354 )      (1,118 )      (46,696 ) 

Less: Purchases of furniture, equipment and leasehold improvements

      (215 )      (2,071 )      (9,942 )      (9,326 ) 

Less: Capitalization of software development costs

      (10,833 )      (11,320 )      (46,623 )      (43,122 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Free cash flow

    $ 113,367     $ 94,888     $ 328,183     $ 259,871  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

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.

 

Page 12

v3.25.0.1
Document and Entity Information
Feb. 06, 2025
Cover [Abstract]  
Entity Registrant Name MARKETAXESS HOLDINGS INC
Amendment Flag false
Entity Central Index Key 0001278021
Document Type 8-K
Document Period End Date Feb. 06, 2025
Entity Incorporation State Country Code DE
Entity File Number 001-34091
Entity Tax Identification Number 52-2230784
Entity Address, Address Line One 55 Hudson Yards
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10001
City Area Code (212)
Local Phone Number 813-6000
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, par value $0.003 per share
Trading Symbol MKTX
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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