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MarketAxess Reports Second Quarter 2012 Revenues Of $48.8 Million, Pre-Tax Income Of $21.2 Million And Diluted EPS Of $0.34

MarketAxess maintains its headquarters in New York and has offices in London, Chicago, Salt Lake City, Hong Kong, Singapore and São Paulo. For more information, please visit  www.marketaxess.com.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for Company 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. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: 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; the rapidly evolving nature of the electronic financial services industry; the level of trading volume transacted on the MarketAxess platform; the absolute level and direction of interest rates and the corresponding volatility in the corporate fixed-income market; our ability to develop new products and offerings and the market’s acceptance of those products; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matching back-to-back trades; our dependence on our broker-dealer clients; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our future capital needs and our ability to obtain capital when needed; and other factors. The Company’s actual results and financial condition may differ, perhaps materially, from the anticipated results and financial condition in any such forward-looking statements. 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.

                             

MarketAxess Holdings Inc.

Consolidated Statements of Operations

 

                   
Three Months Ended Six Months Ended
June 30, June 30,
       
2012 2011 2012 2011
(In thousands, except per share data)
 
(unaudited)
Revenues
Commissions $ 42,690 $ 39,076 $ 87,592 $ 76,861
Technology products and services 3,220 3,984 6,128 7,092
Information and user access fees 1,790 1,719 3,661 3,408
Investment income 268 310 571 609
Other   857   702   1,608   1,430
Total revenues   48,825   45,791   99,560   89,400
 
Expenses
Employee compensation and benefits 15,305 15,104 31,146 31,372
Depreciation and amortization 1,961 1,627 3,815 3,189
Technology and communications 3,015 2,724 5,970 5,224
Professional and consulting fees 2,837 2,665 5,861 5,537
Occupancy 757 708 1,516 1,474
Marketing and advertising 1,732 1,248 3,179 2,222
General and administrative   2,018   1,810   4,125   2,811
Total expenses   27,625   25,886   55,612   51,829
 
Income before taxes 21,200 19,905 43,948 37,571
Provision for income taxes   8,571   7,968   17,826   14,854
Net income $ 12,629 $ 11,937 $ 26,122 $ 22,717
 
Per Share Data:
Earnings per share:
Basic $ 0.35 $ 0.32 $ 0.72 $ 0.62
Diluted $ 0.34 $ 0.30 $ 0.69 $ 0.58
 
Cash dividends declared per common share $ 0.11 $ 0.09 $ 0.22 $ 0.18
 
Weighted-average common shares:
Basic 36,128 36,762 36,531 36,635
Diluted 37,440 39,490 38,067 39,396
 
               

MarketAxess Holdings Inc.

Consolidated Condensed Balance Sheet Data

 
   
June 30, 2012 December 31, 2011
 
(In thousands)
 
(unaudited)
Assets
Cash and cash equivalents $ 129,595 $ 169,620
Securities available-for-sale 58,592 78,110
Accounts receivable, net 33,209 36,170
All other assets   68,332   65,558
Total assets $ 289,728 $ 349,458
 
Liabilities and Stockholders' Equity
Total liabilities $ 27,993 $ 37,019
Total stockholders' equity   261,735   312,439
Total liabilities and stockholders' equity $ 289,728 $ 349,458
 
                             

MarketAxess Holdings Inc.

Reconciliation of Non-GAAP Financial Measures

 
                   
Three Months Ended Six Months Ended
June 30, June 30,
       
2012 2011 2012 2011
(In thousands)
 
(unaudited)
 
Net income $ 12,629 $ 11,937 $ 26,122 $ 22,717
 
Add back:
Interest expense 63 15 74 32
 
Provision for income taxes 8,571 7,968 17,826 14,854
 
Depreciation and amortization   1,961   1,627   3,815   3,189
 
Earnings before interest, taxes, depreciation
and amortization (EBITDA) $ 23,224 $ 21,547 $ 47,837 $ 40,792
 
       

MarketAxess Holdings Inc.

Volume Statistics

 
             
Total Trading Volume
           
Three Months Ended Six Months Ended
June 30, June 30,
       
2012 2011 2012 2011
 
($ in millions)
 
(unaudited)
 
U.S. high-grade - multi dealer 1
fixed-rate $ 87,686 $ 77,077 $ 182,683 $ 159,344
floating-rate 2,984 3,825 6,309 6,763
Eurobond 7,793 9,998 20,527 21,311
Other 1,2   46,313   42,061   93,247   80,722
Total $ 144,776 $ 132,961 $ 302,766 $ 268,140
 
             
Average Daily Volume
           
Three Months Ended Six Months Ended
June 30, June 30,
       
2012 2011 2012 2011
 
($ in millions)
 
(unaudited)
 
U.S. high-grade 1 $ 1,439 $ 1,284 $ 1,512 $ 1,329
Eurobond 130 167 166 173
Other 1,2   735   668   746   646
Total $ 2,304 $ 2,119 $ 2,424 $ 2,148
 
Number of U.S. Trading Days 3 63 63 125 125
Number of U.K. Trading Days 4 60 60 124 123
 
1 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 riskless principal basis between two counterparties.
2 Effective January 2012, the Company no longer reports credit default swaps trading volumes.
Credit default swap volumes previously reported in "Other" trading volume have not been removed.
3 The number of U.S. trading days is based on the SIFMA holiday recommendation calendar.
4 The number of U.K. trading days is based on the U.K. Bank holiday schedule.
 




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