MarketAxess Reports Third Quarter 2024 Financial Results
Revenue Growth of 20% Driven by Strong Growth in Total Credit ADV on Higher Market Volumes
Record Portfolio Trading ADV; Record Municipal Bonds ADV and Estimated Market Share
3Q24 select financial and operational highlights*
-
20% increase in total revenues to
$206.7 million , includingPragma revenue of$7.7 million and an increase ofapproximately$0.9 million from the impact of foreign currency fluctuations.- 24% growth in
U.S. high-grade commission revenue on strong growth in market volumes. - 20% growth in emerging markets and Eurobonds commission revenue reflecting strong geographic diversification.
- Record portfolio trading ADV of
$1.1 billion . - Record rates commission revenue, up 35%.
- 21% increase in services revenue (combined information, post-trade and technology services revenue) to
$26.3 million ,includingPragma revenue of$2.8 million .
- 24% growth in
-
Total expenses of
$119.7 million ,up 14%,includingPragma operating expenses of$8.2 million and an increase of approximately$0.7 million from the impact of foreign currency fluctuations. -
30% increase in diluted earnings per share (“EPS”) to
$1.90 on net income of$71.5 million. - Record 2,125 (+2%) active client firms and 1,079 (+2%) international active client firms on the platform.
- Record automation suite trading volume (+28%),trade count (+37%) and active client firms (+49%); dealer algorithmic responses up 24%.
*All comparisons versus 3Q23.
“We delivered significantly improved financial results in the third quarter, as we continued to make progress in executing our strategy.
The initial roll-out of X-Pro to our international client base is underway. In the third quarter, we delivered several hundred basis points in market share gains in
In summary, we exited the quarter in September with a constructive market backdrop, characterized by strong market volumes, a robust new issue calendar and an increase in the velocity of trading in
Table 1: 3Q24 select financial results
$ in millions, except per share data (unaudited) |
Revenues | Operating Income | Net Income | Diluted EPS |
Net Income Margin (%) |
EBITDA1 |
EBITDA Margin (%)1 |
3Q24 |
|
|
|
|
34.6% |
|
50.8% |
2Q24 |
|
|
|
|
32.9% |
|
50.0% |
3Q23 |
|
|
|
|
31.9% |
|
48.1% |
YoY % Change |
20% |
30% |
30% |
30% |
+270 bps |
27% |
+270 bps |
QoQ % Change |
5% |
7% |
10% |
10% |
+170 bps |
6% |
+80 bps |
|
|
|
|
|
|
|
|
YTD 2024 |
|
|
|
|
34.0% |
|
51.0% |
YTD 2023 |
|
|
|
|
33.9% |
|
51.2% |
% Change |
11% |
10% |
11% |
11% |
+10 bps |
10% |
(20) bps |
Table 1A: 3Q24 trading volume (ADV)
CREDIT |
RATES |
||||||||||
$ in millions (unaudited) |
US/ |
Total
|
Total
|
High-Grade |
High-Yield |
Emerging
|
Eurobonds |
Municipal Bonds |
Total
|
US Govt.
|
Agcy./Other
|
3Q24 |
64/65 |
|
|
|
|
|
|
|
|
|
|
2Q24 |
63/61 |
|
|
|
|
|
|
|
|
|
|
3Q23 |
63/64 |
|
|
|
|
|
|
|
|
|
|
YoY % Change |
|
38% |
27% |
36% |
(1%) |
19% |
27% |
49% |
46% |
43% |
164% |
QoQ % Change |
|
19% |
3% |
9% |
(4%) |
– |
(10%) |
11% |
29% |
29% |
39% |
Table 1B: 3Q24 estimated market share
CREDIT | RATES | ||||
(unaudited) |
High-Grade | High-Yield | High-Grade/High-Yield Combined | Municipals3 |
US Govt. Bonds3 |
3Q24 |
19.5% |
13.0% |
18.1% |
8.7% |
2.6% |
2Q24 |
18.7% |
13.5% |
17.6% |
7.4% |
2.3% |
3Q23 |
20.0% |
16.1% |
19.1% |
5.5% |
2.5% |
YoY Bps Change |
(50) bps |
(310) bps |
(100) bps |
+320 bps |
+10 bps |
QoQ Bps Change |
+80 bps |
(50) bps |
+50 bps |
+130 bps |
+30 bps |
3Q24 overview of results
Commission revenue and trading volume
Credit
Credit Commission Revenue
-
Total credit commission revenue of
$168.4 million (including$33.6 million in fixed-distribution fees) increased$23.2 million, or 16%, compared to$145.2 million (including$36.2 million in fixed-distribution fees) in the prior year. The increase in total credit commission revenue was driven principally by 24% growth inU.S. high-grade commission revenue on a 39% increase inU.S. high-grade TRACE market ADV. The decline in variable transaction fees per million (“FPM”) to$148.97 from$154.85 in the prior year was mainly due to product and protocol mix-shift, principally lower levels ofU.S. high-yield activity and increased portfolio trading, partially offset by the higher duration of bonds traded inU.S. high-grade, principally driven by an increase in the weighted average years to maturity.The decrease in fixed-distribution fees was principally driven by the consolidation of two global dealers and migrations to variable fee plans, partially offset by the addition of new dealer fixed fee plans.
Credit Trading Volumes
-
Total credit ADVof
$14.1 billion increased 27% compared to the prior year, and increased 3% compared to 2Q24 levels. -
Record
$1.1 billion intotal portfolio trading ADV, up 163% compared to the prior year, and up 31% compared to 2Q24. -
35% Open Trading share4 of total credit trading volume, up from 34% in each of the prior year and 2Q24. The Company delivered estimated price improvement5 for clients via Open Trading of approximately
$119 million in the quarter.
-
U.S. high-grade ADV of$7.0 billion increased 36% compared to the prior year, and increased 9% compared to 2Q24.Estimated market ADV increased 39% compared to the prior year, and increased 5% compared to 2Q24.Estimated market share was 19.5%, down from 20.0% in the prior year, but up from 18.7% in 2Q24. Including the impact of single-dealer portfolio trades, estimated market share was 20.0%, in line with 20.1% in the prior year, but up from 19.2% in 2Q24. -
U.S. high-yield ADV of$1.3 billion decreased 1% compared to the prior year, and decreased 4% compared to 2Q24. Estimated market ADV increased 23% compared to the prior year, but was in line with 2Q24. Estimated market share was 13.0% (13.4% including single-dealer portfolio trades), down from 16.1% in the prior year, and down from 13.5% (13.8% including single-dealer portfolio trades) in 2Q24.
Other Credit
-
Emerging markets ADV of
$3.3 billion increased 19% compared to the prior year, but was in line with 2Q24. The year-over-year increase was driven by a 20% increase in hard currency ADV, and an 18% increase in local currency ADV. -
Eurobonds ADVof
$1.9 billion increased 27% compared to the prior year, but decreased 10% compared to 2Q24. -
Record Municipal bondADV of
$577 million increased 49% compared to the prior year, and increased 11% compared to 2Q24. Estimated market ADV was down 5% compared to the prior year, and down 6% compared to 2Q24. Record estimated market share of 8.7%, up from 5.5% in the prior year, and up from 7.4% in 2Q24.3
Strategic Priority Related Protocols & Workflow Tools
-
Our estimated market share of
U.S. high grade andU.S. high-yield TRACE portfolio trading was 20.0% in 3Q24. Portfolio trading represented an estimated 10.7% ofU.S. high-grade andU.S. high-yield TRACE in 3Q24. - A record 59% of our portfolio trading volume was executed on X-Pro in 3Q24.
-
Dealer RFQ ADV of
$1.2 billion across all credit products increased 26% compared to the prior year, and was in line with 2Q24 levels. -
AxessIQ, the order and execution workflow solution designed for wealth management and private banking clients, achieved ADV of
$131 million , up 32% compared to the prior year, but down 3% compared to 2Q24.
Rates
-
Record total rates commission revenue of
$7.1 million increased$1.8 million , or 35%. Record total rates ADV of$26.4 billion increased 46% compared to the prior year, and increased 29% compared to 2Q24.
Other
-
Total other commission revenue was
$4.9 million, which consists ofPragma commission revenue.
Services revenue
Information services
-
Information services revenue of
$13.0 million increased$1.2 million, or 10%, compared to the prior year. The increase in revenue was principally driven by net new data contract revenue and an increase of$0.3 million from the impact of foreign currency fluctuations.
Post-trade services
-
Post-trade services revenue of
$10.4 million increased$0.5 million , or 6%, compared to the prior year mainly due to net new contract revenue and an increase of$0.2 million from the impact of foreign currency fluctuations.
Technology services
-
Total technology services revenue of
$3.0 million, up from$0.2 million in the prior year.The current quarter includes$2.8 million ofPragma revenue.
Expenses
-
Total expenses of
$119.7 million , up 14%, includingPragma operating expenses of$8.2 million and an increase of$0.7 million from the impact of foreign currency fluctuations.
Non-operating
-
Other income (expense): Other income was
$5.8 million, up from$4.8 million in the prior year. The current quarter included a$0.8 million unrealized gain onU.S. Treasury investments compared to a$0.2 million unrealized loss in the prior year. - Tax rate: The effective tax rate was 23.0%, down slightly from 23.4% in the prior year.
Capital
-
The Company had
$602.5 million in cash, cash equivalents, corporate bond investments andU.S. Treasury investments as ofSeptember 30, 2024 , up from$558.8 million as ofJune 30, 2024 . There were no outstanding borrowings under the Company’s credit facility. -
Year-to-date through
October 2024 , a total of 296,505 shares were repurchased at a cost of$63.9 million , including 66,349 shares repurchased during the third quarter at a cost of$15.0 million . As ofOctober 31, 2024 , a total of$236.1 million remained under the aggregate authorizations by the Company’s Board of Directors. -
The Board declared a quarterly cash dividend of
$0.74 per share, payable onDecember 4 , 2024 to stockholders of record as of the close of business onNovember 20, 2024 .
Other
-
Employee headcount was 881 as of
September 30, 2024 , in line with 881 as ofDecember 31, 2023 , but up from 853 as ofSeptember 30, 2023 .
1 |
EBITDA and EBITDA margin are non-GAAP financial measures. Refer to “Non-GAAP financial measures and other items” for a discussion of these non-GAAP financial measures. |
2 |
The number of |
3 |
See “General Notes Regarding the Data Presented” below. |
4 |
Open Trading share of total credit trading volume is derived by taking total Open Trading volume across all credit products where Open Trading is offered and dividing by total credit trading volume across all credit products where Open Trading is offered. |
5 |
Estimated price improvement consists of estimated liquidity taker price improvement (defined as the difference between the winning price and the best disclosed dealer cover price) and estimated liquidity provider price improvement (defined as the difference between the winning price and then current Composite+ bid or offer level, offer if the provider is buying, bid if provider is selling) at the time of the inquiry. |
6 |
The Company is highlighting the impact of single-dealer portfolio trading volume on |
Non-GAAP financial measures and other items
To supplement the Company’s unaudited financial statements presented in accordance with generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP measures of financial performance, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margin and free cash flow. We define EBITDA margin as EBITDA divided by revenues. We define free cash flow as net cash provided by/(used in) operating activities excluding the net change in trading investments and net change in securities failed-to-deliver and securities failed-to-receive from broker-dealers, clearing organizations and customers, less expenditures for furniture, equipment and leasehold improvements and capitalized software development costs. The Company believes that these non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, provide additional information regarding the Company’s operating results because they assist both investors and management in analyzing and evaluating the performance of our business. See the attached schedule for a reconciliation of GAAP net income to EBITDA, GAAP net income margin to EBITDA margin and GAAP net cash provided by/(used in) operating activities to free cash flow.
Please refer to Tables 6 & 7for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
Webcast and conference call information
General Notes Regarding the Data Presented
Reported
For periods beginning with
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements, including statements about the outlook and prospects for the Company, product/protocol availability and ability to increase estimated market share, market conditions and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess’ current expectations. The Company’s actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: global economic, political and market factors; the level of trading volume transacted on the
About
Table 2: Consolidated Statements of Operations |
|
|
||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||
In thousands, except per share data (unaudited) |
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions |
|
$ |
180,392 |
|
|
$ |
150,496 |
|
|
|
20 |
|
% |
|
$ |
536,944 |
|
|
$ |
491,073 |
|
|
|
9 |
|
% |
Information services |
|
|
12,960 |
|
|
|
11,801 |
|
|
|
10 |
|
|
|
|
37,385 |
|
|
|
34,466 |
|
|
|
8 |
|
|
Post-trade services |
|
|
10,382 |
|
|
|
9,833 |
|
|
|
6 |
|
|
|
|
31,512 |
|
|
|
29,228 |
|
|
|
8 |
|
|
Technology services |
|
|
2,981 |
|
|
|
154 |
|
|
NM |
|
|
|
|
8,852 |
|
|
|
532 |
|
|
NM |
|
|
||
Total revenues |
|
|
206,715 |
|
|
|
172,284 |
|
|
|
20 |
|
|
|
|
614,693 |
|
|
|
555,299 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
58,431 |
|
|
|
48,872 |
|
|
|
20 |
|
|
|
|
176,485 |
|
|
|
149,570 |
|
|
|
18 |
|
|
Depreciation and amortization |
|
|
18,728 |
|
|
|
17,561 |
|
|
|
7 |
|
|
|
|
55,284 |
|
|
|
51,027 |
|
|
|
8 |
|
|
Technology and communications |
|
|
18,553 |
|
|
|
15,339 |
|
|
|
21 |
|
|
|
|
53,375 |
|
|
|
45,573 |
|
|
|
17 |
|
|
Professional and consulting fees |
|
|
6,989 |
|
|
|
9,181 |
|
|
|
(24 |
) |
|
|
|
21,053 |
|
|
|
24,331 |
|
|
|
(13 |
) |
|
Occupancy |
|
|
3,835 |
|
|
|
3,503 |
|
|
|
9 |
|
|
|
|
10,974 |
|
|
|
10,313 |
|
|
|
6 |
|
|
Marketing and advertising |
|
|
2,898 |
|
|
|
2,100 |
|
|
|
38 |
|
|
|
|
7,741 |
|
|
|
8,403 |
|
|
|
(8 |
) |
|
Clearing costs |
|
|
4,387 |
|
|
|
3,665 |
|
|
|
20 |
|
|
|
|
13,420 |
|
|
|
12,392 |
|
|
|
8 |
|
|
General and administrative |
|
|
5,839 |
|
|
|
5,154 |
|
|
|
13 |
|
|
|
|
15,467 |
|
|
|
15,698 |
|
|
|
(1 |
) |
|
Total expenses |
|
|
119,660 |
|
|
|
105,375 |
|
|
|
14 |
|
|
|
|
353,799 |
|
|
|
317,307 |
|
|
|
12 |
|
|
Operating income |
|
|
87,055 |
|
|
|
66,909 |
|
|
|
30 |
|
|
|
|
260,894 |
|
|
|
237,992 |
|
|
|
10 |
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
6,953 |
|
|
|
6,590 |
|
|
|
6 |
|
|
|
|
19,327 |
|
|
|
16,151 |
|
|
|
20 |
|
|
Interest expense |
|
|
(346 |
) |
|
|
(164 |
) |
|
|
111 |
|
|
|
|
(1,283 |
) |
|
|
(347 |
) |
|
|
270 |
|
|
Equity in earnings of unconsolidated affiliate |
|
|
340 |
|
|
|
125 |
|
|
|
172 |
|
|
|
|
1,064 |
|
|
|
579 |
|
|
|
84 |
|
|
Other, net |
|
|
(1,105 |
) |
|
|
(1,717 |
) |
|
|
(36 |
) |
|
|
|
(4,051 |
) |
|
|
(5,487 |
) |
|
|
(26 |
) |
|
Total other income (expense) |
|
|
5,842 |
|
|
|
4,834 |
|
|
|
21 |
|
|
|
|
15,057 |
|
|
|
10,896 |
|
|
|
38 |
|
|
Income before income taxes |
|
|
92,897 |
|
|
|
71,743 |
|
|
|
29 |
|
|
|
|
275,951 |
|
|
|
248,888 |
|
|
|
11 |
|
|
Provision for income taxes |
|
|
21,408 |
|
|
|
16,802 |
|
|
|
27 |
|
|
|
|
66,909 |
|
|
|
60,460 |
|
|
|
11 |
|
|
Net income |
|
$ |
71,489 |
|
|
$ |
54,941 |
|
|
|
30 |
|
|
|
$ |
209,042 |
|
|
$ |
188,428 |
|
|
|
11 |
|
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.90 |
|
|
$ |
1.47 |
|
|
|
|
|
|
|
$ |
5.55 |
|
|
$ |
5.03 |
|
|
|
|
|
|
Diluted |
|
$ |
1.90 |
|
|
$ |
1.46 |
|
|
|
|
|
|
|
$ |
5.55 |
|
|
$ |
5.01 |
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
0.74 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
$ |
2.22 |
|
|
$ |
2.16 |
|
|
|
|
|
|
Weighted-average common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
37,527 |
|
|
|
37,491 |
|
|
|
|
|
|
|
|
37,641 |
|
|
|
37,485 |
|
|
|
|
|
|
Diluted |
|
|
37,608 |
|
|
|
37,574 |
|
|
|
|
|
|
|
|
37,696 |
|
|
|
37,603 |
|
|
|
|
|
|
NM - not meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
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Table 3: Commission Revenue Detail |
|||||||||||||||||||||||||||
In thousands, except fee per million data |
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||||||||||
(unaudited) |
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||
Variable transaction fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit |
|
|
$ |
134,863 |
|
|
$ |
109,065 |
|
|
|
24 |
|
% |
|
$ |
404,012 |
|
|
$ |
368,745 |
|
|
|
10 |
|
% |
Rates |
|
|
|
7,018 |
|
|
|
5,209 |
|
|
|
35 |
|
|
|
|
17,903 |
|
|
|
16,014 |
|
|
|
12 |
|
|
Other |
|
|
|
4,856 |
|
|
|
— |
|
|
NM |
|
|
|
|
14,781 |
|
|
|
— |
|
|
NM |
|
|
||
Total variable transaction fees |
|
|
|
146,737 |
|
|
|
114,274 |
|
|
|
28 |
|
|
|
|
436,696 |
|
|
|
384,759 |
|
|
|
13 |
|
|
Fixed distribution fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit |
|
|
|
33,584 |
|
|
|
36,167 |
|
|
|
(7 |
) |
|
|
|
100,049 |
|
|
|
106,119 |
|
|
|
(6 |
) |
|
Rates |
|
|
|
71 |
|
|
|
55 |
|
|
|
29 |
|
|
|
|
199 |
|
|
|
195 |
|
|
|
2 |
|
|
Total fixed distribution fees |
|
|
|
33,655 |
|
|
|
36,222 |
|
|
|
(7 |
) |
|
|
|
100,248 |
|
|
|
106,314 |
|
|
|
(6 |
) |
|
Total commission revenue |
|
|
$ |
180,392 |
|
|
$ |
150,496 |
|
|
|
20 |
|
|
|
$ |
536,944 |
|
|
$ |
491,073 |
|
|
|
9 |
|
|
Average variable transaction fee per million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit |
|
|
$ |
148.97 |
|
|
$ |
154.85 |
|
|
|
(4 |
) |
% |
|
$ |
150.48 |
|
|
$ |
159.43 |
|
|
|
(6 |
) |
% |
Rates |
|
|
|
4.15 |
|
|
|
4.56 |
|
|
|
(9 |
) |
|
|
|
4.42 |
|
|
|
4.41 |
|
|
|
— |
|
|
Table 4: Trading Volume Detail* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
||||||||||||||||||||||
In millions (unaudited) |
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||||||||||||
|
|
|
Volume |
|
|
ADV |
|
|
Volume |
|
|
|
ADV |
|
|
Volume |
|
|
ADV |
|
|
||||||
Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-grade |
|
|
$ |
449,708 |
|
|
$ |
7,027 |
|
|
$ |
326,304 |
|
|
|
$ |
5,179 |
|
|
|
38 |
|
% |
|
36 |
|
% |
High-yield |
|
|
|
81,761 |
|
|
|
1,278 |
|
|
|
81,511 |
|
|
|
|
1,294 |
|
|
|
— |
|
|
|
(1 |
) |
|
Emerging markets |
|
|
|
213,341 |
|
|
|
3,333 |
|
|
|
176,334 |
|
|
|
|
2,799 |
|
|
|
21 |
|
|
|
19 |
|
|
Eurobonds |
|
|
|
122,914 |
|
|
|
1,891 |
|
|
|
94,980 |
|
|
|
|
1,484 |
|
|
|
29 |
|
|
|
27 |
|
|
Other credit |
|
|
|
37,566 |
|
|
|
587 |
|
|
|
25,185 |
|
|
|
|
400 |
|
|
|
49 |
|
|
|
47 |
|
|
Total credit trading |
|
|
|
905,290 |
|
|
|
14,116 |
|
|
|
704,314 |
|
|
|
|
11,156 |
|
|
|
29 |
|
|
|
27 |
|
|
Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,619,337 |
|
|
|
25,302 |
|
|
|
1,115,889 |
|
|
|
|
17,713 |
|
|
|
45 |
|
|
|
43 |
|
|
Agency and other government bonds |
|
|
|
71,261 |
|
|
|
1,098 |
|
|
|
26,467 |
|
|
|
|
416 |
|
|
|
169 |
|
|
|
164 |
|
|
Total rates trading |
|
|
|
1,690,598 |
|
|
|
26,400 |
|
|
|
1,142,356 |
|
|
|
|
18,129 |
|
|
|
48 |
|
|
|
46 |
|
|
Total trading |
|
|
$ |
2,595,888 |
|
|
$ |
40,516 |
|
|
$ |
1,846,670 |
|
|
|
$ |
29,285 |
|
|
|
41 |
|
|
|
38 |
|
|
Number of |
|
|
|
|
|
|
64 |
|
|
|
|
|
|
|
63 |
|
|
|
|
|
|
|
|
|
|
||
Number of |
|
|
|
|
|
|
65 |
|
|
|
|
|
|
|
64 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Nine Months Ended |
|
|
||||||||||||||||||||||
In millions (unaudited) |
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
||||||||||||||||
|
|
|
Volume |
|
|
ADV |
|
|
Volume |
|
|
|
ADV |
|
|
Volume |
|
|
ADV |
|
|
||||||
Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-grade |
|
|
$ |
1,311,146 |
|
|
$ |
6,974 |
|
|
$ |
1,072,258 |
|
|
|
$ |
5,734 |
|
|
|
22 |
|
% |
|
22 |
|
% |
High-yield |
|
|
|
251,388 |
|
|
|
1,337 |
|
|
|
295,774 |
|
|
|
|
1,582 |
|
|
|
(15 |
) |
|
|
(15 |
) |
|
Emerging markets |
|
|
|
644,973 |
|
|
|
3,431 |
|
|
|
536,432 |
|
|
|
|
2,869 |
|
|
|
20 |
|
|
|
20 |
|
|
Eurobonds |
|
|
|
380,029 |
|
|
|
2,011 |
|
|
|
329,841 |
|
|
|
|
1,754 |
|
|
|
15 |
|
|
|
15 |
|
|
Other credit |
|
|
|
97,271 |
|
|
|
517 |
|
|
|
78,597 |
|
|
|
|
420 |
|
|
|
24 |
|
|
|
23 |
|
|
Total credit trading |
|
|
|
2,684,807 |
|
|
|
14,270 |
|
|
|
2,312,902 |
|
|
|
|
12,359 |
|
|
|
16 |
|
|
|
15 |
|
|
Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,902,050 |
|
|
|
20,756 |
|
|
|
3,547,308 |
|
|
|
|
18,970 |
|
|
|
10 |
|
|
|
9 |
|
|
Agency and other government bonds |
|
|
|
151,393 |
|
|
|
801 |
|
|
|
80,249 |
|
|
|
|
428 |
|
|
|
89 |
|
|
|
87 |
|
|
Total rates trading |
|
|
|
4,053,443 |
|
|
|
21,557 |
|
|
|
3,627,557 |
|
|
|
|
19,398 |
|
|
|
12 |
|
|
|
11 |
|
|
Total trading |
|
|
$ |
6,738,250 |
|
|
$ |
35,827 |
|
|
$ |
5,940,459 |
|
|
|
$ |
31,757 |
|
|
|
13 |
|
|
|
13 |
|
|
Number of |
|
|
|
|
|
|
188 |
|
|
|
|
|
|
|
187 |
|
|
|
|
|
|
|
|
|
|
||
Number of |
|
|
|
|
|
|
189 |
|
|
|
|
|
|
|
188 |
|
|
|
|
|
|
|
|
|
|
||
1 The number of |
|||||||||||||||||||||||||||
2 The number of |
|||||||||||||||||||||||||||
*Consistent with FINRA TRACE reporting standards, both sides of trades are included in the Company's reported volumes when the Company executes trades on a matched principal basis between two counterparties. Consistent with industry standards, |
|||||||||||||||||||||||||||
NM - not meaningful |
|
|
|
|
|
|
|
|
|
|
Table 5: Consolidated Condensed Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|||||
In thousands (unaudited) |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
446,347 |
|
|
$ |
451,280 |
|
|
Cash segregated under federal regulations |
|
|
46,657 |
|
|
|
45,122 |
|
|
Investments, at fair value |
|
|
167,213 |
|
|
|
134,861 |
|
|
Accounts receivable, net |
|
|
102,760 |
|
|
|
89,839 |
|
|
Receivables from broker-dealers, clearing organizations and customers |
|
|
474,989 |
|
|
|
687,936 |
|
|
|
|
|
236,706 |
|
|
|
236,706 |
|
|
Intangible assets, net of accumulated amortization |
|
|
104,331 |
|
|
|
119,108 |
|
|
Furniture, equipment, leasehold improvements and capitalized software, net |
|
|
109,482 |
|
|
|
102,671 |
|
|
Operating lease right-of-use assets |
|
|
59,998 |
|
|
|
63,045 |
|
|
Prepaid expenses and other assets |
|
|
84,566 |
|
|
|
84,499 |
|
|
Total assets |
|
$ |
1,833,049 |
|
|
$ |
2,015,067 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accrued employee compensation |
|
$ |
52,816 |
|
|
$ |
60,124 |
|
|
Payables to broker-dealers, clearing organizations and customers |
|
|
283,314 |
|
|
|
537,398 |
|
|
Income and other tax liabilities |
|
|
2,151 |
|
|
|
7,892 |
|
|
Accounts payable, accrued expenses and other liabilities |
|
|
33,437 |
|
|
|
37,013 |
|
|
Operating lease liabilities |
|
|
75,077 |
|
|
|
79,677 |
|
|
Total liabilities |
|
|
446,795 |
|
|
|
722,104 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
123 |
|
|
|
123 |
|
|
Additional paid-in capital |
|
|
344,138 |
|
|
|
333,292 |
|
|
|
|
|
(316,524 |
) |
|
|
(260,298 |
) |
|
Retained earnings |
|
|
1,368,661 |
|
|
|
1,244,216 |
|
|
Accumulated other comprehensive loss |
|
|
(10,144 |
) |
|
|
(24,370 |
) |
|
Total stockholders' equity |
|
|
1,386,254 |
|
|
|
1,292,963 |
|
|
Total liabilities and stockholders' equity |
|
$ |
1,833,049 |
|
|
$ |
2,015,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Table 6: Reconciliation of Net Income to EBITDA and Net Income Margin to EBITDA Margin |
|
|
||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
In thousands (unaudited) |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
71,489 |
|
|
$ |
54,941 |
|
|
|
$ |
209,042 |
|
|
$ |
188,428 |
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(6,953 |
) |
|
|
(6,590 |
) |
|
|
|
(19,327 |
) |
|
|
(16,151 |
) |
|
Interest expense |
|
|
346 |
|
|
|
164 |
|
|
|
|
1,283 |
|
|
|
347 |
|
|
Provision for income taxes |
|
|
21,408 |
|
|
|
16,802 |
|
|
|
|
66,909 |
|
|
|
60,460 |
|
|
Depreciation and amortization |
|
|
18,728 |
|
|
|
17,561 |
|
|
|
|
55,284 |
|
|
|
51,027 |
|
|
EBITDA |
|
$ |
105,018 |
|
|
$ |
82,878 |
|
|
|
$ |
313,191 |
|
|
$ |
284,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income margin1 |
|
|
34.6 |
% |
|
|
31.9 |
% |
|
|
|
34.0 |
% |
|
|
33.9 |
% |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(3.4 |
) |
|
|
(3.8 |
) |
|
|
|
(3.1 |
) |
|
|
(2.9 |
) |
|
Interest expense |
|
|
0.2 |
|
|
|
0.1 |
|
|
|
|
0.2 |
|
|
|
0.1 |
|
|
Provision for income taxes |
|
|
10.3 |
|
|
|
9.7 |
|
|
|
|
10.9 |
|
|
|
10.9 |
|
|
Depreciation and amortization |
|
|
9.1 |
|
|
|
10.2 |
|
|
|
|
9.0 |
|
|
|
9.2 |
|
|
EBITDA margin2 |
|
|
50.8 |
% |
|
|
48.1 |
% |
|
|
|
51.0 |
% |
|
|
51.2 |
% |
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 7: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
|
|
||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
In thousands (unaudited) |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)/provided by operating activities |
|
$ |
95,089 |
|
|
$ |
79,161 |
|
|
|
$ |
208,989 |
|
|
$ |
192,082 |
|
|
Exclude: Net change in trading investments |
|
|
784 |
|
|
|
24,771 |
|
|
|
|
629 |
|
|
|
24,300 |
|
|
Exclude: Net change in fail-to-deliver/receive from broker-dealers, clearing organizations and customers |
|
|
2,578 |
|
|
|
(13,099 |
) |
|
|
|
50,715 |
|
|
|
(12,342 |
) |
|
Less: Purchases of furniture, equipment and leasehold improvements |
|
|
(835 |
) |
|
|
(5,983 |
) |
|
|
|
(9,727 |
) |
|
|
(7,255 |
) |
|
Less: Capitalization of software development costs |
|
|
(11,331 |
) |
|
|
(10,087 |
) |
|
|
|
(35,790 |
) |
|
|
(31,802 |
) |
|
Free cash flow |
|
$ |
86,285 |
|
|
$ |
74,763 |
|
|
|
$ |
214,816 |
|
|
$ |
164,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Net income margin is derived by dividing net income by total revenues for the applicable period. |
|
|
||||||||||||||||
2 EBITDA margin is derived by dividing EBITDA by total revenues for the applicable period. |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105557526/en/
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