On October 25, 2023, MarketAxess Holdings Inc (MKTX, Financial), a leading operator of an electronic trading platform for fixed-income securities, announced its financial results for the third quarter ended September 30, 2023. Despite the impact of low credit spread volatility, the company maintained steady revenues, reflecting its strong geographic and product diversification.
Financial Performance
The company reported total revenues of $172.3 million, mirroring the figures from the previous year. The total expenses increased by 10.0%, primarily driven by investments aimed at capturing long-term revenue opportunities in the global fixed-income markets. This resulted in an operating income of $66.9 million. The diluted EPS stood at $1.46 on a net income of $54.9 million.
Operational Highlights
MarketAxess saw a record information services revenue of $11.8 million, up by 21.5%, reflecting the increasing adoption of Composite+. The company also reported a strong geographic and product diversification with an 11.3% increase in average daily volume (ADV) from international products and a 7.4% growth in municipal bonds ADV. Automated trading volume, trade count, and active client firms all hit record levels, surpassing full-year 2022 levels as of October 4, 2023.
CEO Commentary
In the third quarter, we continued to make strong headway in executing our strategy despite lower levels of credit spread volatility. Our international businesses and our municipal bond offering registered solid ADV growth, reflecting the benefits of our geographic and product diversification. We believe that the progress we have made in enhancing the franchise over the past few years has set the foundation for a return to stronger levels of growth in the coming quarters. - Chris Concannon, CEO of MarketAxess
Financial Tables
The financial tables provided in the report show a detailed breakdown of revenues, operating income, net income, diluted EPS, net income margin, EBITDA, and EBITDA margin for 3Q23 and 3Q22, as well as year-to-date figures for 2023 and 2022. The tables also provide a comprehensive overview of trading volume and estimated market share for 3Q23.
Outlook
Despite the challenges posed by low credit spread volatility, MarketAxess remains optimistic about its future growth. The company's strategic investments and strong geographic and product diversification have set a solid foundation for future growth.
