MarketAxess Holdings Inc. MKTX reported first-quarter 2025 earnings per share of $1.87, which outpaced the Zacks Consensus Estimate by 2.8%. However, the bottom line decreased 2.6% year over year from $1.92 per share. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Total revenues declined 0.8% year over year to $208.6 million. The top line also missed the consensus mark by 1%.

The better-than-expected first-quarter earnings benefited from higher trading volumes due to heightened market volatility, partially offset by an elevated expense level and a decline in credit variable commission revenues.

MarketAxess Holdings Inc. Price, Consensus and EPS SurpriseMarketAxess Holdings Inc. Price, Consensus and EPS Surprise

MarketAxess Holdings Inc. price-consensus-eps-surprise-chart | MarketAxess Holdings Inc. Quote

MarketAxess’ Quarterly Operational Update

Commission revenues of $181.3 million declined 2% year over year, which also fell short of the Zacks Consensus Estimate of $185.4 million and our estimate of $188.5 million. The metric was affected by the decline in credit variable transaction fees, partially offset by an increase in commission revenues in Eurobonds, emerging markets and rates product lines.

Information services revenues were $12.9 million, which improved 9% year over year due to net new data contract revenues. However, the figure missed the consensus mark of $13 million.

Post-trade services revenues increased 3% year over year to $11.1 million due to net new contract revenues, partly offset by a decline due to foreign currency fluctuations. However, the metric fell short of the consensus mark by 0.4%.

Total expenses increased 2% year over year to $120.2 million due to higher employee compensation and benefits, technology and communication, and marketing and advertising expenses. However, the metric was lower than our estimate of $128.1 million.

MarketAxess’ operating income of $88.4 million declined 4% year over year but beat our estimate of $87 million. EBITDA fell 1.7% year over year to $107.4 million, while the EBITDA margin deteriorated 40 basis points year over year to 51.5%.

MarketAxess’ Trading Volumes in Detail

The high-grade trading volume of MarketAxess was $461.3 billion in the first quarter, which rose 1% year over year and also surpassed the Zacks Consensus Estimate of $460.7 billion. The ADV of the same product category increased 1% year over year to $7.6 billion, which is higher than the consensus mark by 0.1% and our estimate of $7.5 billion.

High-yield trading volume increased 5% year over year to $90 billion, while ADV also rose 5% year over year to $1.5 billion.

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Other credit trading volume of $36.5 billion rose 39% year over year, whereas ADV for the same product category grew 38% year over year to $598 million.

Trading volume and ADV of emerging markets rose 9% each on a year-over-year basis to $240.3 billion and $3.9 billion, respectively. The Eurobonds’ trading volume and ADV improved 15% each on a year-over-year basis.

The total credit trading volume of $976 billion grew 6% year over year. Total credit ADV rose 6% to $15.9 billion but missed the consensus mark of $16 billion and our estimate of $16.2 billion.

Total rates’ trading volume and ADV of this product category soared 53% each on a year-over-year basis.

MarketAxess’ Balance Sheet (As of March 31, 2025)

MarketAxess exited the first quarter with cash and cash equivalents of $486.2 million, which decreased from $544.5 million at 2024-end. Total assets of $1.9 billion increased from $1.8 billion at 2024-end.

The company had no outstanding borrowings under its credit facility at the first-quarter end. Total stockholders’ equity of $1.3 billion declined from $1.4 billion as of Dec. 31, 2024.

MarketAxess’ Cash Flows

MarketAxess generated $29.6 million of net cash from operations in the first quarter, which improved from the prior-year figure of $5 million of net cash used in operations. Free cash flow advanced 52.2% year over year to $47.1 million.

MarketAxess’ Capital Deployment Update

MarketAxess bought back shares worth $38.1 million in the quarter under review, and till April 2025, it bought back a total of shares worth $51.7 million from year-end.

A leftover capacity of $173.4 million remained under the company’s authorized repurchase program as of April 30, 2025.

The company declared a quarterly cash dividend of 76 cents per share, which will be paid out on June 4, 2025, to shareholders of record as of May 21.

MarketAxess’ 2025 Outlook

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

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

Capital expenditure was earlier projected between $65 million and $70 million, while the effective tax rate is now expected to lie between 26% and 27%.

MKTX’s Zacks Rank & Key Picks

MKTX currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Finance space are Root Inc. ROOT, Atlanticus Holdings Corp ATLC and Heritage Insurance Holdings Inc. HRTG, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Root’s current-year earnings of 18 cents per share has witnessed one upward revision in the past month against none in the opposite direction. Root beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 26.1%. The consensus estimate for current-year revenues is pegged at $1.3 billion, implying 9.2% year-over-year growth.

The Zacks Consensus Estimate for Atlanticus Holdings’ current-year earnings is pegged at $6.17 per share. It has remained stable over the past week. The consensus estimate for Atlanticus Holdings’ current-year revenues is pegged at $1.5 billion, suggesting 10.8% year-over-year growth.

The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $2.43 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in each of the trailing four quarters, with the average surprise being 363.2%. The consensus estimate for current-year revenues is pegged at $870.2 million, calling for 6.5% year-over-year growth.

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