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MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for U.S. and European corporate bonds, emerging markets bonds and other types of fixed-income securities, today announced results for the fourth quarter and full year ended December 31, 2012.
“We are very pleased to announce record revenues, operating income and EBITDA for the full year 2012,” said Richard M. McVey, chairman and chief executive officer of MarketAxess. “In the fourth quarter we also achieved record market share in U.S. high-grade, and quarterly volume records for high yield and emerging markets demonstrating our ongoing strong growth in these products. Our open trading initiatives continue to gain traction and we are excited to be at the center of market structure changes that are driving increased electronic trading in credit.”
Fourth Quarter Results
Total revenues for the fourth quarter of 2012 increased 11.6% to $50.4 million, compared to $45.1 million for the fourth quarter of 2011. Pre-tax income was $21.5 million, compared to $18.9 million for the fourth quarter of 2011, an increase of 14.1%. Pre-tax margin was 42.7%, compared to 41.8% for the fourth quarter of 2011. Net income totaled $20.5 million, or $0.54 per share on a diluted basis, compared to $11.5 million, or $0.29 per share on a diluted basis, for the fourth quarter of 2011. The fourth quarter 2012 results include a favorable income tax adjustment of $6.7 million, or $0.18 per share, relating to certain previously unrecognized tax benefits. The Company received new information from a taxing authority in the fourth quarter of 2012 and updated the recognition of certain acquired net operating loss carryforwards. Excluding this income tax adjustment, net income totaled $13.7 million, or $0.36 per share on a diluted basis.
Commission revenue for the fourth quarter of 2012 totaled $44.2 million on total trading volume of $149.1 billion, compared to $38.8 million in commission revenue on total trading volume of $125.2 billion for the fourth quarter of 2011. U.S. high-grade trading volume as a percentage of FINRA’s high-grade TRACE trading volume increased to an estimated 13.6%, compared to an estimated 12.2% for the fourth quarter of 2011.