MarketAxess Holdings Inc. reported significant financial performance improvements for the third quarter and the first nine months of 2024, driven by increased trading volumes and the recent acquisition of Pragma LLC. For the three months ended September 30, 2024, total revenues reached $206.7 million, a 20.0% increase from $172.3 million in the same period of 2023. This growth was primarily fueled by a 19.9% rise in commission revenues, which amounted to $180.4 million, up from $150.5 million year-over-year. The acquisition of Pragma contributed $7.7 million to revenues during the quarter.
Operating income for Q3 2024 was $87.1 million, reflecting a 30.1% increase from $66.9 million in Q3 2023. Net income also rose significantly to $71.5 million, compared to $54.9 million in the prior year, resulting in diluted earnings per share of $1.90, up from $1.46. For the nine months ended September 30, 2024, total revenues increased to $614.7 million, a 10.7% rise from $555.3 million in 2023, with net income growing to $209.0 million from $188.4 million.
The company’s total expenses for Q3 2024 were $119.7 million, up from $105.4 million in Q3 2023, largely due to increased employee compensation and benefits, which rose by $9.6 million, driven by higher salaries and a larger workforce following the Pragma acquisition. Technology and communications expenses also increased by $3.2 million, reflecting higher software and connectivity costs.
MarketAxess's total assets decreased to $1.8 billion as of September 30, 2024, from $2.0 billion at the end of 2023, while total liabilities fell to $446.8 million from $722.1 million. Stockholders' equity increased to $1.4 billion, up from $1.3 billion, supported by rising retained earnings.
The company continues to face competitive pressures in the electronic trading space, particularly from direct bond trading between broker-dealers and institutional investors. However, it has seen increased activity in its Auto-X automated trading protocol, with trading volumes reaching $96.1 billion in Q3 2024, a 27.6% increase from the previous year.
In terms of strategic developments, MarketAxess has authorized a new share repurchase program of up to $200 million in August 2024, following a previous program initiated in January 2022. As of September 30, 2024, the company had $241.4 million remaining under its repurchase programs. The company also plans to acquire an additional 49% interest in RFQ-hub Holdings LLC for approximately $37.9 million, aiming for a 92% controlling stake.
About MARKETAXESS HOLDINGS INC
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