MarketAxess has reported strong results for Q3 including revenues of USD74.2 million – an increase of 15.5 per cent on the same period in 2014.
“Our third quarter results reflect strong market share gains across all of our core products. In spite of less favourable credit market conditions during the quarter, we reached record estimated market share levels in both US high-grade and high-yield bonds,” says Richard M McVey, Chairman and CEO of MarketAxess. “Adoption of our Open Trading solutions is growing and we saw new records during the quarter for Open Trading volume and trade count. We continue to increase our investment in all-to-all technology solutions to address liquidity challenges in the market. Our European business shows strong growth and MIFID II is likely to create additional opportunities for e-trading, post-trade regulatory reporting, and data products.”
Pre-tax income in the period was USD35.4 million, compared to USD28.3 million for the third quarter of 2014, an increase of 25.1 per cent. Pre-tax margin was meanwhile was 47.7 per cent, compared to 44.0 per cent for the third quarter of 2014. and net income totalled USD22.7 million, or USD0.60 per share on a diluted basis, compared to USD17.5 million, or USD0.46 per share, for the third quarter of 2014.
Commission revenue for the third quarter of 2015 increased 19.7 per cent to USD65.2 million, compared to USD54.5 million for the third quarter of 2014. ariable transaction fees increased 26.3 per cent to USD48.0 million on total trading volume of USD239.7 billion for the third quarter of 2015, compared to variable transaction fees of USD38.0 million on total trading volume of USD182.1 billion for the third quarter of 2014. US high-grade trading volume as a percentage of FINRA’s high-grade TRACE trading volume increased to an estimated 17.3 per cent on an adjusted basis, compared to an estimated 14.6 per cent on an adjusted basis for the third quarter of 2014. For important additional information on FINRA TRACE volumes and US high-grade market share, see Non-GAAP Financial Measures and Other Items below.
All other revenue, which consists of information and post-trade services, technology products and services, investment income and other revenue, decreased to USD9.0 million for the third quarter of 2015, compared to USD9.8 million for the third quarter of 2014. Lower technology-related professional consulting services fees and the unfavourable impact of the strengthening US dollar accounted for the decline in all other revenue.
Total expenses for the third quarter of 2015 increased 8.0 per cent to USD38.8 million, compared to USD36.0 million for the third quarter of 2014. The increase in total expenses was principally due to higher employee compensation and benefits costs of USD2.4 million resulting from an increase in incentive and stock-based compensation costs and employee headcount.
The effective tax rate for the third quarter of 2015 was 35.7 per cent, compared to 38.1 per cent for the third quarter of 2014. The lower effective tax rate was principally due to a shift in income to lower tax jurisdictions and a reduction in statutory foreign and state tax rates.
