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Exhibit 99.1
MARKETAXESS REPORTS SECOND QUARTER 2019 RECORD REVENUES
OF $125.5 MILLION, OPERATING INCOME OF $60.9 MILLION AND
DILUTED EPS OF $1.27
Second Quarter Financial Highlights*
| Record revenues of $125.5 million, up 17.3% |
| Operating income of $60.9 million, up 17.0% |
| Diluted EPS of $1.27, up 18.7% from $1.07 |
| Record trading volume of $527.0 billion, up 25.3% |
| Record trading volume in U.S. high-yield, Eurobonds and emerging market bonds |
| Open TradingTM volume of $130.7 billion, up 46.0% |
* | All comparisons versus second quarter 2018. |
NEW YORK, July 24, 2019 MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced results for the quarter ended June 30, 2019.
Trading volumes remained strong across all product categories and regions as dealer and investor adoption of electronic trading continues to accelerate, said Rick McVey, Chairman and CEO of MarketAxess. We set new quarterly records for trading volumes in U.S. High Yield, Emerging Markets and Eurobonds, three product areas that are benefiting from growth in Open Trading. We are especially encouraged by the strong demand we are seeing for new trading automation tools in credit markets by both our dealer and investor clients.
Second Quarter Results
Total revenues for the second quarter of 2019 increased 17.3% to $125.5 million, compared to $107.0 million for the second quarter of 2018. Operating income was $60.9 million, compared to $52.0 million for the second quarter of 2018, an increase of 17.0%. Operating margin was 48.5%, compared to 48.6% for the second quarter of 2018. Net income totaled $48.1 million, or $1.27 per share on a diluted basis, compared to $40.5 million, or $1.07 per share, for the second quarter of 2018.
Commission revenue for the second quarter of 2019 increased 18.7% to $114.1 million, compared to $96.1 million for the second quarter of 2018. Variable transaction fees increased 26.7% to $90.8 million on total trading volume of $527.0 billion for the second quarter of 2019, compared to variable transaction fees of $71.7 million on total trading volume of $420.8 billion for the second quarter of 2018. U.S. high-grade trading volume as a percentage of FINRAs high-grade TRACE trading volume increased to an estimated 18.7% for the second quarter of 2019, compared to an estimated 17.4% for the second quarter of 2018.
All other revenue, which consists of information services, post-trade services and other revenue, increased to $11.4 million, compared to $10.9 million for the second quarter of 2018. The increase in all other revenue was principally due to higher revenue from data sales and post-trade services, partially offset by the unfavorable impact of the stronger U.S. dollar of $0.4 million.
Total expenses for the second quarter of 2019 increased 17.6% to $64.6 million, compared to $54.9 million for the second quarter of 2018. The increase in total expenses was largely due to higher employee compensation and benefit costs, mainly due to an increase in headcount, of $6.4 million, general and administrative costs of $1.1 million, professional and consulting fees of $0.9 million and technology and communications expense of $0.7 million.
1
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Marketaxess Holdings Inc's Definitive Proxy Statement (Form DEF 14A) filed after their 2019 10-K Annual Report includes:
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29 Expenses Our expenses for the three months ended June 30, 2019 and 2018, and the resulting dollar and percentage changes, were as follows: Employee compensation and benefits increased by $6.4 million, primarily due to a $2.8 million increase in salaries, taxes and benefits on higher employee headcount, an increase of $2.2 million in stock-based compensation and higher employee incentive compensation of $1.4 million which is tied to operating performance.
33 Expenses Our expenses for the six months ended June 30, 2019 and 2018, and the resulting dollar and percentage changes, were as follows: Employee compensation and benefits increased by $10.2 million, primarily due to a $4.9 million increase in salaries, taxes and benefits on higher employee headcount, an increase of $3.5 million in stock-based compensation and higher employee incentive compensation of $1.9 million which is tied to operating performance.
In general, we compete on the basis of a number of key factors, including, among others, the liquidity provided on our platform, the magnitude and frequency of price improvement enabled by our platform, total transaction costs and the quality and speed of execution.
Because a significant percentage of our revenue is tied directly to the volume of securities traded on our platform, it is likely that a general decline in trading volumes, regardless of the cause of such decline, would reduce our revenues and have a significant negative impact on profitability.
Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized over their estimated useful lives, ranging from three to 15 years.
Factors that could cause or...Read more
We believe the majority of...Read more
Free Cash Flow is defined...Read more
Other, net consists of unrealized...Read more
General and administrative expenses increased...Read more
General and administrative expenses increased...Read more
In September 2017, our Board...Read more
In January 2019, the Board...Read more
Clients can use our auto-execution...Read more
We amortize leasehold improvements on...Read more
Occupancy costs for the three...Read more
Occupancy costs for the six...Read more
Historically, market conditions are typically...Read more
Various rules promulgated since the...Read more
However, based on past experience,...Read more
A decrease in cash flows...Read more
Our estimated market share of...Read more
Our estimated market share of...Read more
28 Our trading volumes for...Read more
32 Our trading volumes for...Read more
The $18.7 million decrease in...Read more
The global fixed-income securities industry...Read more
Our commission revenues for the...Read more
The 15.1% increase in our...Read more
The 12.7% increase in our...Read more
Expenses may grow in the...Read more
This expense also includes costs...Read more
In July 2019, our Board...Read more
Our cash flows were as...Read more
Open Trading volume increased by...Read more
Estimated U.S. high-grade TRACE volume...Read more
Open Trading volume increased by...Read more
Estimated U.S. high-grade TRACE volume...Read more
Our commission revenues for the...Read more
Similar to our U.S. high-grade...Read more
Information services revenue increased $0.2...Read more
Information services revenue increased $0.5...Read more
30 Provision for Income Taxes...Read more
34 Provision for Income Taxes...Read more
Occupancy costs consist primarily of...Read more
As of June 30, 2019,...Read more
While we generally believe the...Read more
Post-trade services revenue increased $0.3...Read more
We believe that our ability...Read more
Other credit average variable transaction...Read more
Other credit average variable transaction...Read more
Financial Statements, Disclosures and Schedules
Inside this 10-Q Quarterly Report
Material Contracts, Statements, Certifications & more
Marketaxess Holdings Inc provided additional information to their SEC Filing as exhibits
Ticker: MKTX
CIK: 1278021
Form Type: 10-Q Quarterly Report
Accession Number: 0001564590-19-026136
Submitted to the SEC: Thu Jul 25 2019 12:28:38 PM EST
Accepted by the SEC: Thu Jul 25 2019
Period: Sunday, June 30, 2019
Industry: Security Brokers Dealers And Flotation Companies