PART I — Financial Information [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q2 2025 financials show total assets at **$1.97 billion**, revenue up **11.0%** to **$219.5 million**, and net income up **9.6%** to **$71.1 million** [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets increased to **$1.97 billion** as of June 30, 2025, driven by receivables and goodwill, while liabilities also rose | Account | June 30, 2025 (In thousands) | December 31, 2024 (In thousands) | | :--- | :--- | :--- | | **Total Assets** | **$1,974,938** | **$1,789,216** | | Cash and cash equivalents | $462,837 | $544,478 | | Receivables from broker-dealers, etc. | $559,120 | $357,728 | | Goodwill | $286,020 | $236,706 | | **Total Liabilities** | **$574,038** | **$400,556** | | Payables to broker-dealers, etc. | $329,785 | $218,845 | | Income and other tax liabilities | $95,197 | $3,683 | | **Total Stockholders' Equity** | **$1,386,185** | **$1,388,660** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenues grew **11.0%** to **$219.5 million** and net income rose **9.6%** to **$71.1 million**, while H1 net income fell **37.3%** due to higher taxes | Metric | Q2 2025 (In thousands) | Q2 2024 (In thousands) | YoY Change | H1 2025 (In thousands) | H1 2024 (In thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$219,462** | **$197,660** | **+11.0%** | **$428,038** | **$407,978** | **+4.9%** | | Commissions | $191,770 | $171,679 | +11.7% | $373,113 | $356,552 | +4.6% | | **Total Expenses** | **$127,598** | **$116,321** | **+9.7%** | **$247,792** | **$234,139** | **+5.8%** | | **Operating Income** | **$91,864** | **$81,339** | **+12.9%** | **$180,246** | **$173,839** | **+3.7%** | | Provision for Income Taxes | $26,236 | $21,399 | +22.6% | $107,325 | $45,501 | +135.9% | | **Net Income** | **$71,180** | **$64,938** | **+9.6%** | **$86,245** | **$137,553** | **-37.3%** | | **Diluted EPS** | **$1.91** | **$1.72** | **+11.0%** | **$2.31** | **$3.64** | **-36.5%** | - Cash dividends declared per common share increased to **$0.76** in Q2 2025 from **$0.74** in Q2 2024[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow increased to **$133.3 million**, but cash and equivalents decreased by **$50.0 million** due to acquisitions and share repurchases | Activity | Six Months Ended June 30, 2025 (In thousands) | Six Months Ended June 30, 2024 (In thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $133,343 | $113,900 | | Net cash (used in) investing activities | $(68,177) | $(33,753) | | Net cash (used in) financing activities | $(142,315) | $(114,015) | | **Net decrease in cash** | **$(50,005)** | **$(37,542)** | - The acquisition of RFQ-hub resulted in a net cash outflow of **$36.5 million**[23](index=23&type=chunk) - Cash used for repurchases of common stock increased to **$74.8 million** in H1 2025 from **$43.6 million** in H1 2024[23](index=23&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail revenue recognition, the RFQ-hub acquisition, goodwill, a significant tax provision, and share repurchase activities Commission Revenue by Fee Type (Q2 2025 vs Q2 2024) | Fee Type | Q2 2025 (In thousands) | Q2 2024 (In thousands) | | :--- | :--- | :--- | | Variable transaction fees | $158,073 | $138,440 | | Distribution fees and unused minimum fees | $33,697 | $33,239 | | **Total commissions** | **$191,770** | **$171,679** | - In May 2025, the Company acquired a **90.3%** controlling stake in RFQ-hub for cash consideration of **$38.1 million**, recognizing **$49.3 million** in goodwill and **$30.3 million** in intangible assets[78](index=78&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - The effective tax rate for H1 2025 was **55.4%**, up from **24.9%** in H1 2024, primarily due to a **$58.8 million** provision for unrecognized tax benefits[91](index=91&type=chunk) - During H1 2025, the Company repurchased **355,688** shares for **$74.8 million**, with **$150.3 million** remaining under the 2024 Repurchase Program[116](index=116&type=chunk) Geographic Revenue Breakdown (H1 2025 vs H1 2024) | Region | H1 2025 (In thousands) | H1 2024 (In thousands) | | :--- | :--- | :--- | | United States | $291,288 | $282,666 | | United Kingdom | $87,299 | $79,111 | | Other | $49,451 | $46,201 | | **Total** | **$428,038** | **$407,978** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue growth driven by trading volumes, increased expenses, a higher H1 tax rate, and strong liquidity [Critical Factors Affecting Our Industry and Our Company](index=35&type=section&id=Critical%20Factors%20Affecting%20Our%20Industry%20and%20Our%20Company) Market conditions, competition, and evolving regulations, including DORA, significantly impact the company's industry and operations - In H1 2025, U.S. high-grade and high-yield market average daily volumes increased by **12.3%** and **23.9%**, respectively[130](index=130&type=chunk) - Increased client demand for portfolio trading has intensified competition, potentially impacting market share due to competing platforms[136](index=136&type=chunk) - The E.U.'s Digital Operational Resilience Act (DORA) became applicable in January 2025, introducing significant ICT governance and risk management requirements[140](index=140&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Q2 2025 revenues rose **11.0%** due to higher trading volumes, while H1 net income dropped **37.3%** primarily from a substantial tax provision Q2 2025 vs Q2 2024 Trading Volume (in millions) | Product | Q2 2025 (in millions) | Q2 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Total Credit | $1,035,916 | $861,535 | +20.2% | | Total Rates | $1,994,517 | $1,285,423 | +55.2% | | **Total Trading Volume** | **$3,030,433** | **$2,146,958** | **+41.2%** | Q2 2025 vs Q2 2024 Average Variable Fee Per Million | Product | Q2 2025 ($) | Q2 2024 ($) | % Change | | :--- | :--- | :--- | :--- | | Credit | $138.02 | $148.16 | -6.8% | | Rates | $4.03 | $4.45 | -9.4% | - Employee compensation and benefits for Q2 2025 increased by **$8.4 million** YoY, primarily due to **$4.0 million** in severance costs[185](index=185&type=chunk) - The effective tax rate for H1 2025 increased to **55.4%** from **24.9%** in H1 2024, due to a reserve for unrecognized tax benefits[205](index=205&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$620.9 million** in cash and investments, and **$749.9 million** available under its credit facility - As of June 30, 2025, the company had **$749.9 million** in available borrowing capacity under its Credit Agreement[208](index=208&type=chunk) - Regulated subsidiaries held aggregate net capital **$603.8 million** in excess of the required **$42.4 million**[216](index=216&type=chunk) - The 2022 Share Repurchase Program was exhausted in Q1 2025, with **$150.3 million** remaining under the 2024 program[222](index=222&type=chunk) [Non-GAAP Financial Measures](index=57&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like EBITDA and free cash flow, with Q2 2025 EBITDA at **$110.8 million** and an **EBITDA margin of 50.5%** Reconciliation of GAAP to Non-GAAP Diluted EPS (H1 2025) | Metric | H1 2025 ($) | | :--- | :--- | | Diluted EPS, GAAP-basis | $2.31 | | Notable items impact | $1.56 | | **Diluted EPS, excluding notable items** | **$3.87** | EBITDA and EBITDA Margin | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | EBITDA | $110,820 | $98,913 | $218,254 | $208,173 | | EBITDA Margin | 50.5% | 50.0% | 51.0% | 51.0% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market, interest rate, foreign currency, and credit risks, with specific impacts quantified for interest rate and FX changes - A hypothetical **100 basis point** change in interest rates would impact annual interest income by approximately **$6.5 million**[232](index=232&type=chunk) - A hypothetical **10.0%** change in the U.S. dollar against other currencies would impact annual revenue by approximately **$13.8 million** and operating expenses by **$13.4 million**[236](index=236&type=chunk) - The company is exposed to credit risk as a matched principal trading counterparty, particularly with the growth of Open Trading[238](index=238&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[242](index=242&type=chunk) PART II — Other Information [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal matters, with outcomes not expected to materially impact its financial position - The outcome of outstanding legal matters is not expected to have a material adverse impact on the Company's financial position[246](index=246&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for FY2024 [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **169,195** shares for **$218.65** average per share, with **$150.3 million** remaining for repurchase Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | April 2025 | 63,593 | $216.14 | | May 2025 | 56,032 | $219.31 | | June 2025 | 49,570 | $221.12 | | **Total** | **169,195** | **$218.65** | - As of June 30, 2025, the company had **$150.3 million** of remaining capacity under the 2024 Repurchase Program[250](index=250&type=chunk) [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) The Chief Information Officer adopted a Rule 10b5-1 trading plan in May 2025 for the potential sale of up to **600** shares - On May 15, 2025, the Chief Information Officer adopted a Rule 10b5-1(c) trading arrangement for the sale of up to **600** shares of the Company's common stock, expiring May 29, 2026[253](index=253&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO and various agreements

Group 1 - MarketAxess Holdings Inc. held its Q2 2025 Earnings Conference Call on August 6, 2025, with key participants including CEO Christopher Concannon and CFO Ilene Fiszel Bieler [1][2][3] - The call was structured to provide updates on the company's strategy and trading businesses, with a financial results review by the CFO [3] Group 2 - The conference call was recorded and included instructions for participants, indicating a formal setting for discussing the company's performance [2] - Forward-looking statements were mentioned, highlighting the uncertainty of future events and the potential for actual results to differ from expectations [4]

Advanced technology and analytics continued to play an increasing role. Services revenue, which includes information, post-trade, and technology services, reached a record $27.7 million, up 7%. The X-Pro platform, which streamlines client workflows and provides advanced analytics, processed over 92% of portfolio trades in Q2 2025. The recent acquisition of RFQ-Hub, a Europe-based electronic trading platform, contributed approximately $1.8 million to commission revenues and boosted technology services growth ...

Core Insights - MarketAxess Holdings Inc. (MKTX) reported Q2 2025 earnings per share of $2, exceeding the Zacks Consensus Estimate by 3.1%, and up from $1.72 a year ago [1][10] - Total revenues increased by 11% year over year to $219.5 million, also surpassing the consensus mark by 0.6% [1][10] - The strong performance was driven by record-high trading volumes amid heightened market volatility, although elevated expenses partially offset this growth [2][10] Financial Performance - Commission revenues rose 12% year over year to $191.8 million, beating the Zacks Consensus Estimate by 1.3% [4] - Information services revenues were $13.1 million, a 4% year-over-year increase, but missed the consensus mark by 2% [4] - Total expenses increased by 10% year over year to $127.6 million, primarily due to higher employee compensation, technology, and G&A costs [5][10] - Net income grew 10% year over year to $71.2 million, exceeding estimates, while the net income margin decreased by 50 basis points to 32.4% [5] Trading Volumes - High-grade trading volume reached $481.1 billion, a 19% year-over-year increase, surpassing the consensus estimate by 3.8% [6] - High-yield trading volume increased by 25% year over year to $104.9 billion, with an average daily volume (ADV) rise of 27% to $1.7 billion [7] - Total credit trading volume grew 20% year over year to $1.04 trillion, with total credit ADV rising 22% to $16.8 billion [8] Balance Sheet and Cash Flow - As of June 30, 2025, cash and cash equivalents were $462.8 million, down from $544.5 million at the end of 2024 [9] - Total assets increased to $1.97 billion from $1.79 billion at the end of 2024 [9] - Net cash from operations was $103.7 million, down from $118.8 million a year ago, while free cash flow increased to $113 million from $97.6 million [12] Capital Deployment - MarketAxess repurchased shares worth $36.7 million in the quarter, totaling $80 million year-to-date, with $145 million remaining under the repurchase program [13] - A quarterly cash dividend of 76 cents per share was declared [13] Strategic Outlook - The company aims to execute its long-term growth strategy through product innovation and strategic talent acquisition, focusing on expanding block trading solutions and enhancing portfolio trading capabilities [14]

Financial Data and Key Metrics Changes - The company reported an 11% revenue growth to a record $219 million, including a $2 million benefit from foreign currency fluctuations, with a 10% growth excluding FX [23][24] - Diluted earnings per share increased by 11% to $1.91, or $2 per share excluding notable items, representing a 16% increase [23] - Commission revenue rose 12% to a record $192 million, driven by strong market volumes and increased volatility [24][27] Business Line Data and Key Metrics Changes - The client-initiated channel saw a 38% growth in block trading average daily dollar volume (ADD) across U.S. Credit, emerging markets, and Eurobonds [8][14] - Portfolio trading channel generated a 69% increase in total portfolio trading ADV [9] - Dealer-initiated channel experienced a 40% increase in dealer-initiated ADV [9] Market Data and Key Metrics Changes - U.S. High grade market share dropped to 10% in July from 12% in June, attributed to large trades moving to phone and chat [11] - The company reported a record 12.5% share of blocks in U.S. High grade, representing an increase of almost 200 basis points year-over-year [15] - Emerging markets and Eurobonds saw significant growth, with block trading volume up 27% in Q2 [56][100] Company Strategy and Development Direction - The company is focusing on becoming more protocol agnostic and expanding its addressable market through multiple trading protocols [5] - Strategic hires have been made to enhance product delivery and drive growth, including key personnel in product management and analytics [34][78] - The launch of the new Midex solution is expected to enhance dealer-to-dealer trading capabilities [18][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, particularly in U.S. Credit, driven by new initiatives and a favorable macro environment [21][31] - The company acknowledged disappointing market share numbers in July but remains confident in its strategies to electronify the market [22][44] - Management highlighted the importance of adapting to market dynamics, particularly in the context of low volatility environments [42][72] Other Important Information - The company generated $360 million in free cash flow over the trailing twelve months, with $145 million remaining on the share repurchase authorization [29] - Operating expenses increased by 6% year-over-year, driven by higher employee compensation and technology costs [28] - The effective tax rate rose to 26.9%, reflecting increased accrual for uncertain tax positions [26] Q&A Session Summary Question: Can you provide details on the progress of new initiatives and market share? - Management reported significant growth in key areas, with investment grade portfolio trading up 47% year-to-date and market share in portfolio trading up 340 basis points [38][39] Question: What are the drivers behind the decline in fee per million? - The decline was attributed to protocol mix and increased portfolio trading volumes, although there was a slight recovery in July due to changes in high-grade duration [50][51] Question: Can you elaborate on the block trading initiative? - Management noted that block trading volume year-to-date is up over 20%, with significant growth in both Eurobonds and emerging markets [54][56] Question: What is the outlook for the municipal business? - The municipal business has seen a year-over-year growth of 23%, with a focus on enhancing electronic trading capabilities [85][89] Question: How does the company view M&A opportunities? - The company remains focused on organic growth but is also open to bolt-on acquisitions, leveraging a strong balance sheet for potential M&A activities [92][95]

Financial Data and Key Metrics Changes - The company reported an 11% revenue growth to a record $219 million, including a $2 million benefit from foreign currency fluctuations, with a 10% growth excluding FX [21][22] - Diluted earnings per share increased by 11% to $1.91, or $2 per share excluding notable items, representing a 16% increase [21] - Commission revenue increased by 12% to a record $192 million, driven by strong market volumes and increased volatility [22][25] Business Line Data and Key Metrics Changes - Block trading in the client-initiated channel saw a 38% growth in average daily volume (ADV) across U.S. Credit, emerging markets, and Eurobonds [6][12] - Portfolio trading channel generated a 69% increase in total portfolio trading ADV [7] - Dealer-initiated channel experienced a 40% increase in dealer-initiated ADV [7] Market Data and Key Metrics Changes - U.S. High grade market share dropped to 10% in July from 12% in June, attributed to large trades moving to phone and chat [9] - The share of lock trades equal to or larger than $5 million increased to 47% in July, up from 42% in June [9] - U.S. High grade portfolio trading market share was over 19%, up 370 basis points year-over-year [14] Company Strategy and Development Direction - The company is focusing on becoming more protocol agnostic and expanding its addressable market through multiple trading protocols and automation tools [4] - A high-touch strategy was launched in U.S. Credit to target the phone and chat market, which has seen significant block trading activity [10] - The company is preparing to launch a new Midex solution in September for U.S. Credit, aimed at enhancing dealer-to-dealer trading [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the supportive market backdrop and strong growth across new initiatives, despite disappointing U.S. High grade share numbers in July [19][20] - The company anticipates continued growth in U.S. Credit through progress in client-initiated, portfolio trading, and dealer-initiated channels [30][31] - Management highlighted the importance of strategic hires in driving future growth and enhancing product offerings [33][79] Other Important Information - The company generated $360 million in free cash flow over the trailing twelve months, with $145 million remaining on the share repurchase authorization as of July 31, 2025 [28] - Operating expenses increased by 6% year-over-year, driven by higher employee compensation and technology costs [26] Q&A Session Summary Question: Progress on new initiatives and July volumes - Management reported significant growth in key areas, with investment grade portfolio trading up 47% year-to-date and block activity up over 20% [37][39] - July market dynamics favored large portfolio trades, impacting market share [42][44] Question: Drivers of fee per million decline - The decline was attributed to new protocols and increased portfolio trading volumes, though July saw a slight recovery due to high-grade duration changes [49][50] Question: Update on block trading initiatives - Block trading volume in Eurobonds was up 54% in July, with expectations for continued growth as dealer content increases [56][62] Question: Performance in the muni business - The muni market saw a 23% increase in overall volume, with tax-exempt business growing by 34% [85][88] Question: Capital return priorities and M&A - The company remains focused on organic growth opportunities while being opportunistic with share repurchases and considering bolt-on acquisitions [92][95]

Financial Performance - Revenue increased by 11% to a record $219 million, with 10% growth excluding FX[3] - Commissions revenue increased by 12% to a record $192 million[3] - Earnings per share (EPS) increased by 11% to $1.91, or $2.00 per share excluding notable items, a 16% increase[3] - The company generated $360 million in TTM free cash flow[3] Trading Volume Growth - Total trading ADV increased by 43% to a record $49.0 billion[3] - Total credit ADV increased by 22% to a record $16.8 billion[3] - Combined emerging markets ADV and eurobonds ADV increased by 23% to a record level[3] - Total portfolio trading ADV increased by 69% to a record $1.5 billion[3] Strategic Channel Performance - Client-Initiated Channel: Block trading ADV increased by 37%, emerging markets increased by 27%, and eurobonds increased by 100%[3] - Dealer-Initiated Channel: Dealer-initiated ADV increased by 40% to $1.8 billion, including record eurobonds ADV[3] Expense Management - Expenses grew by 10%, but only 5% excluding notable items and FX[3] Capital Management - Total cash, cash equivalents, corporate bond and U S Treasury investments amounted to $621 million as of June 30, 2025[5] - The company repurchased 380K shares for $80 million year-to-date through July 2025, including 168K shares repurchased in 2Q25 for $37 million[5]

MarketAxess, which belongs to the Zacks Financial - Investment Bank industry, posted revenues of $219.46 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.59%. This compares to year-ago revenues of $197.66 million. The company has topped consensus revenue estimates two times over the last four quarters. MarketAxess (MKTX) came out with quarterly earnings of $2 per share, beating the Zacks Consensus Estimate of $1.94 per share. This compares to earnings of $1.72 per share ...

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) MarketAxess's Q2 2025 performance saw record revenue and EPS growth, driven by strong trading channel expansion [Q2 2025 Financial and Operational Performance](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Performance) MarketAxess achieved record Q2 2025 revenue of $219.5 million and strong EPS growth, fueled by significant increases in portfolio, block, and dealer-initiated trading Q2 2025 Select Financial Results ($ in millions, except per share data) | | 2Q 2025 | 2Q 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | **GAAP-basis** | | | | | Revenues | $219 | $198 | 11% | | Expenses | $128 | $116 | 10% | | Net Income | $71 | $65 | 10% | | Diluted EPS | $1.91 | $1.72 | 11% | | **Non-GAAP (ex-notable items)** | | | | | Expenses | $124 | $116 | 6% | | Net Income | $74 | $65 | 15% | | Diluted EPS | $2.00 | $1.72 | 16% | | **Other Non-GAAP** | | | | | EBITDA | $111 | $99 | 12% | | EBITDA Margin | 50.5% | 50.0% | +50 bps | - Total revenues increased **11%** to a record **$219.5 million**, driven by a **12%** rise in total commission revenue and a **7%** increase in services revenue[8](index=8&type=chunk) - The company achieved strong growth across its strategic channels: - **Client-Initiated:** Record ADV in U.S. credit block trading (**+37%**) - **Portfolio Trading:** **69% increase** in total portfolio trading ADV to a record **$1.5 billion** - **Dealer-Initiated:** ADV increased **40%** to **$1.8 billion**[8](index=8&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO emphasized progress in client engagement and X-Pro platform adoption, outlining future growth strategies including targeted block trading and the new Mid-X solution - In Q2, the company made significant strides in enhancing its client franchise, increasing client engagement with X-Pro, and delivering on new initiatives across client-initiated, portfolio trading, and dealer-initiated channels[4](index=4&type=chunk) - Future strategic focus for the latter half of 2025 includes growing the targeted block trading solution, enhancing the portfolio trading solution, and launching the new Mid-X solution for the dealer-initiated channel[5](index=5&type=chunk) - Recent strategic hires in key roles are expected to enhance the company's ability to drive growth in 2025 and beyond[5](index=5&type=chunk)[6](index=6&type=chunk) [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) Revenue growth was driven by increased commission and services revenue, while expenses rose due to operational costs and notable items [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Total revenue growth stemmed from a 12% increase in commission revenue and a 7% rise in services revenue, with strong trading volumes offsetting lower fees per million [Commission Revenue](index=2&type=section&id=Commission%20Revenue) Record total commission revenue of $191.8 million was driven by increased credit and rates ADV, despite declines in fees per million, with RFQ-Hub contributing to other commissions Q2 2025 Average Variable Transaction Fee Per Million (FPM) | Category | 2Q25 FPM | 2Q24 FPM | % Change YoY | | :--- | :--- | :--- | :--- | | Total Credit | $138 | $148 | (7)% | | Total Rates | $4.03 | $4.45 | (9)% | - Record total credit commission revenue of **$176.6 million** was up **10%**, driven by a **22% increase** in total credit ADV, which was partially offset by a **7% decrease** in total credit FPM due to protocol mix[12](index=12&type=chunk) - Record total rates commission revenue of **$8.1 million** increased **40%**, driven by a **58% increase** in total rates ADV, partially offset by a **9% decrease** in FPM due to product mix[13](index=13&type=chunk) - Other commission revenue increased **39%** to a record **$7.1 million**, primarily due to the inclusion of approximately **$1.8 million** from the newly acquired RFQ-Hub[14](index=14&type=chunk) [Services Revenue](index=3&type=section&id=Services%20Revenue) Services revenue grew 7% to a record $27.7 million, with increases across information, post-trade, and technology services, the latter boosted by the RFQ-hub acquisition - Information services revenue increased **4%** to **$13.1 million**, driven by foreign currency fluctuations and net new data contract revenue[16](index=16&type=chunk) - Post-trade services revenue grew **7%** to **$11.1 million**, mainly due to foreign currency fluctuations and new contract revenue[17](index=17&type=chunk) - Technology services revenue rose **16%** to **$3.5 million**, driven by higher license and connectivity fees from the recently acquired RFQ-hub[18](index=18&type=chunk) [Expense Analysis](index=2&type=section&id=Expense%20Analysis) Total expenses increased 10% to $127.6 million, with a 6% rise excluding notable items like repositioning and acquisition-related charges - Total expenses increased **10%** to **$127.6 million**. Excluding notable items, expenses were **$123.6 million**, an increase of **6%**[19](index=19&type=chunk) - Notable items in Q2 2025 totaled **$4.6 million** pre-tax, consisting of **$4.0 million** in repositioning charges (mainly severance) and a **$0.6 million** acquisition-related charge[9](index=9&type=chunk)[10](index=10&type=chunk) [Non-Operating Items and Tax Rate](index=3&type=section&id=Non-Operating%20Items%20and%20Tax%20Rate) Other income increased to $5.6 million due to foreign exchange gains, while the effective tax rate rose to 26.9% reflecting an uncertain tax position reserve - Other income increased to **$5.6 million** from **$5.0 million** in the prior year, driven by foreign exchange gains[21](index=21&type=chunk) - The effective tax rate rose to **26.9%** from **24.8%** in the prior year, due to an increase in accruals for the uncertain tax position reserve established in Q1 2025[21](index=21&type=chunk) [Capital Management and Other Information](index=3&type=section&id=Capital%20Management%20and%20Other%20Information) The company maintains a strong capital position with $620.9 million in cash and investments, no debt, and continued shareholder returns through buybacks and dividends [Capital Position and Shareholder Returns](index=3&type=section&id=Capital%20Position%20and%20Shareholder%20Returns) The company reported $620.9 million in cash and investments with no debt, repurchased $80.0 million in shares, and declared a $0.76 per share quarterly dividend - The company held **$620.9 million** in cash, cash equivalents, and investments as of June 30, 2025, with no outstanding borrowings under its credit facility[21](index=21&type=chunk) - Year-to-date through July 2025, the company repurchased **379,667 shares** for **$80.0 million**. **$145.0 million** remains under the share repurchase authorization[21](index=21&type=chunk) - A quarterly cash dividend of **$0.76 per share** was declared, payable on September 3, 2025[21](index=21&type=chunk) [Other Corporate Information](index=3&type=section&id=Other%20Corporate%20Information) Employee headcount increased to 881 as of June 30, 2025, reflecting a slight rise from the prior year - Employee headcount was **881** as of June 30, 2025, up from **864** as of June 30, 2024[21](index=21&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's core financial statements, including detailed income statements, commission revenue, trading volumes, and balance sheet data [Consolidated Statements of Operations (Table 2)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20%28Table%202%29) This table presents the company's detailed income statement for the three and six months ended June 30, 2025, compared to the same periods in 2024, breaking down revenues, expenses, and net income Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total revenues** | **$219,462** | **$197,660** | **11%** | | Commissions | $191,770 | $171,679 | 12% | | Information services | $13,087 | $12,544 | 4% | | Post-trade services | $11,076 | $10,400 | 7% | | Technology services | $3,529 | $3,037 | 16% | | **Total expenses** | **$127,598** | **$116,321** | **10%** | | **Operating income** | **$91,864** | **$81,339** | **13%** | | Income before income taxes | $97,416 | $86,337 | 13% | | Provision for income taxes | $26,236 | $21,399 | 23% | | **Net income** | **$71,180** | **$64,938** | **10%** | | **Diluted EPS** | **$1.91** | **$1.72** | | [Commission Revenue Detail (Table 3)](index=7&type=section&id=Commission%20Revenue%20Detail%20%28Table%203%29) This table provides a detailed breakdown of commission revenue into variable transaction fees and fixed distribution fees for credit and rates products, including average variable transaction fee per million (FPM) Commission Revenue Detail (Three Months Ended June 30, in thousands) | | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total variable transaction fees** | **$158,073** | **$138,440** | **14%** | | Credit | $142,977 | $127,645 | 12% | | Rates | $8,035 | $5,719 | 40% | | **Total fixed distribution fees** | **$33,697** | **$33,239** | **1%** | | **Total commission revenue** | **$191,770** | **$171,679** | **12%** | [Trading Volume Detail (Table 4)](index=7&type=section&id=Trading%20Volume%20Detail%20%28Table%204%29) This table details trading volumes and average daily volume (ADV) across various credit and rates products for the three months ended June 30, 2025, with year-over-year comparisons Trading Volume (ADV, in millions for Three Months Ended June 30) | | 2025 ADV | 2024 ADV | % Change | | :--- | :--- | :--- | :--- | | **Total credit trading** | **$16,795** | **$13,743** | **22%** | | High-grade | $7,760 | $6,436 | 21% | | High-yield | $1,692 | $1,337 | 27% | | Emerging markets | $4,018 | $3,337 | 20% | | Eurobonds | $2,681 | $2,103 | 27% | | **Total rates trading** | **$32,214** | **$20,426** | **58%** | | U.S. government bonds | $30,756 | $19,634 | 57% | | **Total trading** | **$49,009** | **$34,169** | **43%** | [Consolidated Condensed Balance Sheet (Table 5)](index=8&type=section&id=Consolidated%20Condensed%20Balance%20Sheet%20%28Table%205%29) This table shows the company's financial position as of June 30, 2025, compared to December 31, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Condensed Balance Sheet Data (in thousands) | | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $462,837 | $544,478 | | Investments, at fair value | $169,349 | $165,260 | | Total assets | $1,974,938 | $1,789,216 | | **Liabilities and Stockholders' Equity** | | | | Total liabilities | $574,038 | $400,556 | | Total stockholders' equity | $1,386,185 | $1,388,660 | | Total liabilities and stockholders' equity | $1,974,938 | $1,789,216 | [Non-GAAP Financial Measures and Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures like EBITDA, EBITDA margin, and free cash flow to supplement GAAP financials, offering additional insights into operating performance - The company utilizes non-GAAP financial measures, including EBITDA, EBITDA margin, free cash flow, and results excluding notable items, to provide additional information to investors and management for analyzing and evaluating business performance[22](index=22&type=chunk) [Reconciliation of Notable Items (Table 6)](index=9&type=section&id=Reconciliation%20of%20Notable%20Items%20%28Table%206%29) This table reconciles GAAP to non-GAAP figures for total expenses, other income, net income, and diluted EPS by excluding notable items such as repositioning and acquisition-related charges Reconciliation of GAAP to Non-GAAP Results (Q2 2025, in thousands) | | GAAP-basis | Notable Items | Non-GAAP basis | | :--- | :--- | :--- | :--- | | Total Expenses | $127,598 | $(3,970) | $123,628 | | Other income (expense) | $5,552 | $557 | $6,109 | | Net income | $71,180 | $3,309 | $74,489 | | Diluted EPS | $1.91 | $0.09 | $2.00 | [Reconciliation of Net Income to EBITDA (Table 7)](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20%28Table%207%29) This table reconciles GAAP Net Income to the non-GAAP measure of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and calculates the corresponding margins Reconciliation to EBITDA (Q2 2025 vs Q2 2024, in thousands) | | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Net income | $71,180 | $64,938 | | Interest income | $(5,930) | $(6,401) | | Interest expense | $139 | $621 | | Provision for income taxes | $26,236 | $21,399 | | Depreciation and amortization | $19,195 | $18,356 | | **EBITDA** | **$110,820** | **$98,913** | | **EBITDA Margin** | **50.5%** | **50.0%** | [Reconciliation to Free Cash Flow (Table 8)](index=10&type=section&id=Reconciliation%20to%20Free%20Cash%20Flow%20%28Table%208%29) This table reconciles Net Cash Provided by Operating Activities (a GAAP measure) to the non-GAAP measure of Free Cash Flow by adjusting for changes in trading investments, fails, and capital expenditures Reconciliation to Free Cash Flow (Q2 2025 vs Q2 2024, in thousands) | | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $103,714 | $118,849 | | Adjustments for trading & fails | $21,987 | $(3,051) | | Less: CapEx & Capitalized Software | $(12,716) | $(18,191) | | **Free cash flow** | **$112,985** | **$97,607** |

Core Viewpoint - MarketAxess Holdings Inc. (MKTX) is expected to report second-quarter 2025 results on August 6, with earnings estimated at $1.94 per share, reflecting a 12.8% increase year-over-year [1] Earnings Estimates - The Zacks Consensus Estimate for revenues is $218 million, indicating a 10.1% growth from the previous year [2] - The second-quarter earnings estimate has seen four upward revisions and three downward movements in the last 30 days [2] Earnings Surprise History - MarketAxess has consistently beaten earnings estimates in the last four quarters, with an average surprise of 2.67% [3] - The company has a positive Earnings ESP of +0.95%, with the Most Accurate Estimate at $1.96 per share [4] Factors Influencing Q2 Results - Increased trading volumes and market share gains in credit products are expected to boost credit commission revenues to $138.4 million, an 8.4% year-over-year increase [5][6] - Solid trading volumes in international markets and new product areas are anticipated to contribute to overall commission growth, with a consensus estimate of $189 million, reflecting a 9.9% increase from the prior year [8] Trading Volume and Revenue Projections - The consensus estimate for total trading volume is 2.9 million, representing a 33.3% growth year-over-year [9] - Information services revenues are projected at $13.4 million, indicating a 6.5% rise from the previous year [10] Expense Outlook - Total expenses are expected to reach $125.7 million, marking an 8.1% increase year-over-year due to ongoing investments in trading and data capabilities [11]