MarketAxess Holdings Inc. MKTX reported fourth-quarter 2024 earnings per share of $1.73, which outpaced the Zacks Consensus Estimate by 1.8%. The bottom line decreased 6% year over year.

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Total revenues advanced 3% year over year to $202 million. However, the top line missed the consensus mark by 0.5%.

MarketAxess benefited from increased commission revenues, strong growth in information services revenues, higher total credit trading volume and surging rates trading volume. However, the upside was partly offset by an elevated expense level.

MKTX’s Quarterly Operational Update

Commission revenues of $174.8 million grew 2% year over year, which fell short of the Zacks Consensus Estimate of $176.7 and our estimate of $179.9 million. The metric benefited from an increase in commission revenues in Eurobonds, emerging markets and rates product lines. 

Information services revenues were $13.2 million, which improved 10% year over year on the back of net new data contract revenues. The figure beat the consensus mark of $13.1 million but missed our estimate of $13.3 million. 

Post-trade services revenues remained almost flat at $10.98 million due to the effect of foreign currency fluctuations, partly offset by a decline in end-of-year resubmission revenues.  The metric fell short of the consensus mark of $10.99 million and $11.6 million. 

Total expenses increased 2% year over year to $122.4 million due to higher employee compensation and benefits, technology and communication, and marketing and advertising expenses. However, the metric lagged our estimate of $125.8 million.

MKTX’s operating income of $80 million advanced 4% year over year but missed our estimate of $82 million. EBITDA fell 2% year over year to $97 million while EBITDA margin deteriorated 220 basis points year over year to 47.8%.

MKTX’s Trading Volumes in Detail

The high-grade trading volume of MarketAxess was $400.1 billion in the fourth quarter, which rose 4% year over year but fell short of the Zacks Consensus Estimate of $441.8 billion. The ADV of the same product category increased 4% year over year to $6.5 billion, lower than the consensus mark of $6.8 billion and our estimate of $7 billion.

However, high-yield trading volume tumbled 19% year over year, while ADV also fell 19% due to a reduced level of credit spread volatility.

Other credit trading volume of $38.7 billion rose 14% year over year, whereas ADV for the same product category grew 14% year over year to $624 million.

Trading volume and ADV of emerging markets rose 18% each on a year-over-year basis. The Eurobonds’ trading volume and ADV improved 15% and 13%, respectively.

Total credit trading volume of $864.7 billion grew 6% year over year. Total credit ADV rose 6% to $13.9 billion but missed the consensus mark of $14.2 billion and our estimate of $14.7 billion.

Total rates’ trading volume and ADV of this product category soared 64% each on a year-over-year basis.

MarketAxess’ Balance Sheet (As of Dec. 31, 2024)

MarketAxess exited the fourth quarter with cash and cash equivalents of $544.5 million, which advanced 20.7% from the 2023-end level. Total assets of $1.8 billion decreased 11.2% from the figure at 2023-end.

The company had no outstanding borrowing under its credit facility at the fourth-quarter end. Total stockholders’ equity of $1.4 billion improved 7.4% from the 2023-end level.

MKTX’s Cash Flows

MKTX generated $176.2 million of net cash from operations in the fourth quarter, which grew 24.4% year over year. Free cash flow advanced 19.5% year over year to $113.4 million.

MarketAxess’ Capital Deployment Update

MarketAxess bought back shares worth $16.4 million in the quarter under review. A leftover capacity of $220 million remained under the company’s authorized repurchase program as of Jan. 31, 2025.

Management approved a 2.7% hike in the quarterly cash dividend. The increased dividend amounted to 76 cents per share, which will be paid out on March 5, 2024, to shareholders of record as of Feb. 19.

MKTX’s Full Year Update

MarketAxess’ revenues of $817.1 million improved 9% from the 2023 figure. Earnings per share rose 6.3% year over year to $7.28. Operating income of $340.9 million grew 8% from a year ago.

MarketAxess’ 2025 Outlook

Services revenues, which comprise Information Services, Post-Trade Services and Technology Services, are anticipated to witness mid-single-digit growth. 

Total expenses are estimated between $505 million and $525 million for 2025.

Capital expenditure is projected between $65 million and $70 million, while the effective tax rate is expected to lie between 23.5% and 24.5%.

MKTX’s Zacks Rank

MarketAxess currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Sector Players

Here are some other Finance sector players that have reported fourth-quarter results so far. The bottom-line results of Nasdaq, Inc. NDAQ, Synchrony Financial SYF and American Express Company AXP beat the respective Zacks Consensus Estimate.

Nasdaq reported fourth-quarter 2024 adjusted earnings per share of 76 cents, which beat the Zacks Consensus Estimate by 1.3%. The bottom line improved 5% year over year. Nasdaq’s net revenues of $1.2 billion increased 10% year over year. The top line missed the Zacks Consensus Estimate by 0.1%. Annualized Recurring Revenue (ARR) increased 7% year over year. Annualized SaaS revenues increased 14% and represented 37% of ARR. Organic growth was 7%.

Market Services net revenues were $268 million, up 8%. Revenues at the Solutions business increased 10% year over year to $949 million.  The company’s operating margin of 55% remained flat year over year. The Nasdaq stock market welcomed 162 new company listings in the fourth quarter of 2024, including 66 initial public offerings. The number of listed companies was 4,075 at the end of the quarter.

$Synchrony Financial(SYF-B)$ reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.91, which beat the Zacks Consensus Estimate of $1.90. The bottom line also increased from $1.03 per share a year ago. Net interest income improved 2.7% year over year to $4.6 billion . Retailer share arrangements of Synchrony increased 4.7% year over year to $919 million. Total loan receivables of SYF grew 2% year over year to $104.7 billion. 

Total deposits were $82.1 billion, which rose 1.1% year over year. Provision for credit losses decreased 13.5% year over year to $1.6 billion due to a reserve release. The purchase volume of Synchrony declined 3% year over year to $48 billion in the fourth quarter. Interest and fees on loans of $5.5 billion improved 2.9% year over year. Net interest margin deteriorated nine basis points (bps) year over year to 15.01%.  New accounts of 5 million slipped 19% year over year. 

American Express reported fourth-quarter 2024 EPS of $3.04, which beat the Zacks Consensus Estimate by a whisker. The bottom line climbed 16% year over year. Total revenues net of interest expense amounted to $17.2 billion, which also beat the Zacks Consensus Estimate by a whisker. The top line improved 8.7% year over year . Network volumes of $464 billion rose 7% year over year. Total interest income of $6.1 billion increased 9% year over year. Provision for credit losses declined 10% year over year to $1.3 billion. 

The U.S. Consumer Services segment’s pre-tax income of $1.5 billion improved 5% year over year. Total revenues net of interest expense climbed 12% year over year to $8.3 billion. The Commercial Services segment recorded a pre-tax income of $814 million, which rose 22% year over year. Total revenues net of interest expense amounted to $4.1 billion, which grew 8% year over year.  The International Card Services segment reported a pre-tax income of $34 million, which plunged 76% year over year.

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