MarketAxess(MKTX) - 2025 Q3 - Quarterly Results

Financial Performance - Total revenues for Q3 2025 were $208.8 million, a 1% increase year-over-year, including approximately $3.5 million from RFQ-hub and a $1.3 million increase from foreign currency fluctuations[10]. - Net income for Q3 2025 was $68 million, a 4% decrease from the previous quarter and a 4% decrease year-over-year[7]. - Diluted earnings per share (EPS) for Q3 2025 was $1.84, down 3% compared to Q3 2024[8]. - Record services revenue reached $28.7 million, a 9% increase year-over-year[15]. - Total revenues for Q3 2025 reached $208.82 million, a slight increase of 1% compared to $206.71 million in Q3 2024[30]. - Commission revenue for Q3 2025 was $180.17 million, showing a marginal decrease of less than 1% from $180.39 million in Q3 2024[31]. - Operating income for Q3 2025 was $85.58 million, a decrease of 2% from $87.06 million in Q3 2024[30]. - Net income available for common stockholders in Q3 2025 was $68.18 million, down 5% from $71.49 million in Q3 2024[30]. - EBITDA for Q3 2025 was $107,622 thousand, compared to $105,018 thousand in Q3 2024, reflecting a slight increase[36]. Expenses and Costs - Total expenses for Q3 2025 were $123.2 million, a 3% increase from the prior year, including $2.9 million in RFQ-hub expenses[19]. - Total credit commission revenue decreased by $3.5 million, or 2%, compared to the prior year, driven by a 7% decrease in U.S. credit commission revenue[12]. - Employee compensation and benefits expenses increased by 3% to $59.98 million in Q3 2025, compared to $58.43 million in Q3 2024[30]. - The company reported a provision for income taxes of $25.37 million in Q3 2025, an increase of 18% from $21.41 million in Q3 2024[30]. - The effective tax rate increased to 27.1% from 23.0% in the prior year, primarily due to increased accruals for uncertain tax positions[22]. Trading and Volume - U.S. credit portfolio trading average daily volume (ADV) increased 43% year-to-date compared to full-year 2024, with market share rising approximately 210 basis points[5]. - Block trading ADV in U.S. credit is 19% above full-year 2024 levels, with a 10% growth in the client-initiated channel[5]. - Total trading volume for Q3 2025 was $2,488,457 million, a decrease of 4% compared to Q3 2024's $2,595,888 million[32]. - Total credit trading volume increased by 3% in Q3 2025 to $932,426 million from $905,290 million in Q3 2024[32]. - U.S. government bonds trading volume decreased by 9% in Q3 2025 to $1,480,317 million compared to $1,619,337 million in Q3 2024[32]. - High-yield credit trading volume increased by 5% in Q3 2025 to $86,228 million from $81,761 million in Q3 2024[32]. Shareholder Actions - The company repurchased 239,026 shares at a cost of $45.3 million during Q3 2025, with a total of $105 million remaining under the share repurchase authorization[22]. - Cash dividends declared per common share increased to $0.76 in Q3 2025, up from $0.74 in Q3 2024[30]. Assets and Liabilities - Total assets as of September 30, 2025, were $2,013,908 thousand, an increase from $1,789,216 thousand as of December 31, 2024[34]. - Total liabilities increased to $623,725 thousand as of September 30, 2025, from $400,556 thousand as of December 31, 2024[34]. - Total stockholders' equity as of September 30, 2025, was $1,378,450 thousand, a slight decrease from $1,388,660 thousand as of December 31, 2024[34]. Cash Flow - Net cash provided by operating activities for Q3 2025 was $90,164,000, a decrease from $103,714,000 in Q2 2025 and $95,089,000 in Q3 2024[38]. - Free cash flow for Q3 2025 was $111,776,000, slightly down from $112,985,000 in Q2 2025 but up from $86,285,000 in Q3 2024[38]. - Year-to-date (YTD) free cash flow for 2025 reached $271,828,000, compared to $214,816,000 in YTD 2024, indicating a 26.5% increase[38]. Other Financial Metrics - The average variable transaction fee per million for credit decreased by 6% to $140 in Q3 2025, compared to $149 in Q3 2024[31]. - The net change in trading investments for Q3 2025 was $264,000, contrasting with a negative change of $(66,000) in Q2 2025[38]. - The net change in fail-to deliver/receive from broker-dealers, clearing organizations, and customers was $34,338,000 in Q3 2025, up from $22,053,000 in Q2 2025[38]. - Purchases of furniture, equipment, and leasehold improvements totaled $(1,496,000) in Q3 2025, compared to $(1,206,000) in Q2 2025[38]. - Capitalization of software development costs was $(11,494,000) in Q3 2025, consistent with $(11,510,000) in Q2 2025[38].