MarketAxess (MKTX) Q2 2024 earnings summary

Executive summary

• Revenue grew 10% year-over-year to $197.7 million, with diluted EPS of $1.72 and net income up 8% to $64.9 million, driven by higher trading volumes, strong international and emerging markets performance, and Pragma acquisition contributions.

• Record portfolio trading volume ($55.0 billion, up 143%), Eurobonds ADV, and municipal bond market share achieved, with automation and technology initiatives supporting growth.

• Board approved a new $200 million share repurchase program, increasing total authorization to $250 million, with $50 million repurchased year-to-date.

• Strong commission revenue growth in emerging markets (up 22%), Eurobonds (up 11%), and municipal bonds (record 7.4% market share).

• Continued disciplined expense management, with operating expenses up 12% year-over-year, including Pragma.

Financial highlights

• Total revenues: $197.7 million (+10% year-over-year), including $7.9 million from Pragma; net income: $64.9 million (+8%); diluted EPS: $1.72.

• Operating income: $81.3 million (+7%); EBITDA: $98.9 million (+9%), EBITDA margin: 50.0%.

• Free cash flow for the quarter was $97.6 million, with trailing 12 months at $298 million.

• Total expenses: $116.3 million (+12%), mainly from Pragma and higher compensation.

• Cash, cash equivalents, and investments totaled $559 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 expenses expected to be slightly below the low end of the $480–$500 million range.

• Positive macro backdrop with increased trading velocity, potential rate cuts, and higher volatility expected to support growth.

• Continued investment in technology, global rollout of X-Pro, and next phase of high-touch strategy, including AI dealer select.

• Management expects continued growth opportunities from low electronic trading penetration and new product offerings.

• Acquisition of an additional 49% of RFQ-hub Holdings LLC expected to close in H2 2024.