MarketAxess Q4 Earnings Beat on Strong Emerging Markets Volumes

Core Viewpoint - MarketAxess Holdings Inc. reported mixed financial results for the fourth quarter of 2024, with earnings per share exceeding estimates but total revenues falling short of expectations [1][2]. Financial Performance - Earnings per share for Q4 2024 were $1.73, surpassing the Zacks Consensus Estimate by 1.8%, although this represented a 6% decline year over year [1]. - Total revenues increased by 3% year over year to $202 million, but missed the consensus mark by 0.5% [2]. - Commission revenues reached $174.8 million, a 2% year-over-year growth, but fell short of the Zacks Consensus Estimate of $176.7 million [3]. - Information services revenues improved by 10% year over year to $13.2 million, exceeding the consensus mark of $13.1 million [4]. - Total expenses rose by 2% year over year to $122.4 million, primarily due to increased employee compensation and technology costs, but were below the estimate of $125.8 million [5]. - Operating income increased by 4% year over year to $80 million, although it missed the estimate of $82 million [5]. - EBITDA decreased by 2% year over year to $97 million, with the EBITDA margin declining by 220 basis points to 47.8% [5]. Trading Volumes - High-grade trading volume was $400.1 billion, a 4% increase year over year, but below the consensus estimate of $441.8 billion [6]. - High-yield trading volume fell by 19% year over year, reflecting reduced credit spread volatility [6]. - Other credit trading volume rose by 14% year over year to $38.7 billion, with total credit trading volume growing by 6% to $864.7 billion [7]. Balance Sheet and Cash Flow - As of December 31, 2024, cash and cash equivalents were $544.5 million, a 20.7% increase from the end of 2023 [10]. - Total assets decreased by 11.2% to $1.8 billion, while total stockholders' equity improved by 7.4% to $1.4 billion [10]. - Net cash from operations for Q4 was $176.2 million, a 24.4% year-over-year increase, with free cash flow advancing by 19.5% to $113.4 million [11]. Capital Deployment - MarketAxess repurchased shares worth $16.4 million during the quarter, with a remaining capacity of $220 million under its repurchase program [12]. - The quarterly cash dividend was increased by 2.7% to 76 cents per share, payable on March 5, 2024 [12]. Full Year Update - For the full year 2024, revenues totaled $817.1 million, a 9% increase from 2023, with earnings per share rising by 6.3% to $7.28 [13]. 2025 Outlook - Services revenues are expected to grow in the mid-single digits, with total expenses projected between $505 million and $525 million [14].