MarketAxess Reports YoY Growth in Total Revenue for Q1 2024, Despite Decline in ADV

MarketAxess Holdings Inc. (MarketAxess), the operator of a leading electronic trading platform for fixed-income securities, released its financial results for the first quarter ended March 31, 2024 (Q1 2024), witnessing a total revenue of $210.3 million, a modest increase of 4% compared to $203.2 million in the year-ago quarter. However, the average daily volume (ADV) for the period decreased by 15% from $38.20 billion to $32.63 billion on a yearly basis.

In the credit market, total credit commission revenue was $174.8 million for the quarter, slightly lower than $175.7 million in the same period of last year. Total credit ADV for this first quarter reached a record $14.98 billion, up 9% compared to $13.72 billion in the prior year's Q1. U.S. high-grade ADV rose 18% to a record $7.48 billion. However, the U.S. high-yield ADV dropped 29% to $1.40 billion compared to Q1 2023. Emerging market ADV rose 17% to a record 3.63 billion. Eurobonds ADV rose 11% to $2.05 billion, while Municipal bond ADV decreased by 6% to $419 million. Total portfolio trading volume hit a record high of $44.2 billion, up 41% year over year.

In the rates market, total rates commission revenue amounted to $5.2 million for the quarter, 17% lower than $6.3 million in Q1 2023. Total rates ADV for the period was $17.65 billion, a 28% decrease compared to $24.48 billion in the year-ago quarter. Among them, US Government Bonds ADV dropped 29% from $24.05 billion to $17.14 billion on a yearly basis.

Furthermore, information services revenue increased by 7.9% to $11.9 million during the period, while post-trade services revenue grew by 7.5% to $10.7 million. Technology services revenue for the quarter was $2.8 million, up from $0.2 million in the prior year.

During the quarter, operating income was $93 million, down 3% compared to $95 million in Q1 2023. Net income was $73 million, dropping 1% from $74 million in last year's Q1, with a net income margin of 34.5%, 170 bps lower than the same quarter in 2023.

EBITDA for the three months came in at $109 million, a slight decrease of 1% compared to $111 million in the same period last year. The EBITDA margin stood at 51.9%, 560 bps lower than 54.4% in Q1 2023.

As of March 31, 2024, the company had $512.5 million in cash, cash equivalents, and investments. There were no outstanding borrowings under the company's credit facility.

Additionally, the company repurchased a total of 46,844 shares in the quarter at a cost of $10.1 million. As of the end of the period, a total of $89.9 million remains under the current authorization by the company's Board of Directors.