---
title: MarketAxess Third Quarter Revenues Decrease 1.2%
description: Combined data and post-trade revenue reached a record.
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 10.21.2021

 By Shanny Basar

 Bonds

# MarketAxess Third Quarter Revenues Decrease 1.2%

 10.21.2021 By Shanny Basar

![MarketAxess Third Quarter Revenues Decrease 1.2%](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_198471984_xl-2015-May-12-2022-09-24-47-70-AM.jpg)

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***Third Quarter Highlights******\****

- Revenues of $162.1 million, down 1%
- Operating income of $74.0 million, down 16%
- Operating margin of 45.7%
- Diluted EPS of $1.52, down 15% from $1.78
- Estimated U.S. high-grade market share of 21.4%
- Record active total client firms of 1,848 and international client firms of 934

\*All comparisons versus third quarter 2020 unless otherwise stated.

MarketAxess Holdings, the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, tannounced results for the quarter ended September 30, 2021.

https://twitter.com/MarketAxess/status/1450772494726598660

"Growth in our global client network and adoption of automated solutions continued in the third quarter in spite of generally weak secondary trading conditions in global credit trading. Credit spreads and credit spread volatility have remained at historically low levels throughout the year," said Rick McVey, chairman and CEO of MarketAxess. "Investments in our international client business are paying off with record estimated market share in Eurobonds and strong trends in global Emerging Markets bond trading. Combined data and post-trade revenue also reached a new record this quarter, providing an important source of diversification."

***Third Quarter Results***

Total revenues for the third quarter of 2021 decreased 1.2% to $162.1 million, compared to $164.0 million for the third quarter of 2020. Operating income was $74.0 million, compared to $87.8 million for the third quarter of 2020, a decrease of 15.7%. Operating margin was 45.7%, compared to 53.5% for the third quarter of 2020. Net income totaled $58.0 million, or $1.52 per share on a diluted basis, compared to $67.8 million, or $1.78 per share, for the third quarter of 2020.

Commission revenue for the third quarter of 2021 decreased 5.2% to $142.8 million, compared to $150.6 million for the third quarter of 2020. Variable transaction fees decreased 9.0% to $112.1 million for the third quarter of 2021, compared to variable transaction fees of $123.2 million for the third quarter of 2020. Commission revenue includes $1.2 million generated by MuniBrokers, which was acquired in April 2021. U.S. high-grade trading volume as a percentage of FINRA’s high-grade TRACE trading volume was an estimated 21.4% for the third quarter of 2021, compared to an estimated 22.2% for the third quarter of 2020.

All other revenue, which consists of information services, post-trade services and other revenue, increased to $19.3 million, compared to $13.4 million for the third quarter of 2020. The increase in all other revenue was principally due to $3.4 million of regulatory trade reporting revenue generated by Regulatory Reporting Hub, which was acquired from Deutsche Börse Group in November 2020, net new post-trade services contract revenue of $1.1 million, net new data sales of $0.9 million and $0.5 million of revenue due to the weaker U.S. dollar to U.K. pound sterling exchange rate.

Total expenses for the third quarter of 2021 increased 15.6% to $88.1 million, compared to $76.2 million for the third quarter of 2020. The increase in total expenses was largely due to higher depreciation and amortization of $4.9 million, which includes acquired intangibles expense of $3.2 million; higher professional and consulting fees of $2.6 million, mainly attributable to non-recurring integration costs associated with the Regulatory Reporting Hub transaction of $1.1 million and IT consulting fees of $0.9 million; and higher technology and communication costs of $2.2 million which was partially offset by a decrease in clearing costs of $1.6 million. Expenses in the third quarter of 2021 reflect operating expenses and costs associated with the MuniBrokers and Regulatory Reporting Hub businesses totaling $5.5 million. Excluding the MuniBrokers and Regulatory Reporting Hub expenses, total expenses for the quarter were up 8.4%.

The effective tax rate for the third quarter of 2021 was 22.2%, compared to 23.0% for the third quarter of 2020. The income tax provision for the third quarter of 2021 and 2020 reflected $1.7 million and $5.9 million, respectively, of excess tax benefits related to share-based compensation awards.

Employee headcount was 671 as of September 30, 2021 compared to 599 as of September 30, 2020. The increase in headcount was due to the continued investment in the Company’s growth initiatives, including geographic expansion, trading automation, new trading protocols and the transition to self-clearing.

***Dividend***

The Company’s board of directors declared a quarterly cash dividend to $0.66 per share of common stock outstanding, to be paid on November 17, 2021 to stockholders of record as of the close of business on November 3, 2021.

***Share Repurchases***

A total of 9,189 shares were repurchased in the third quarter of 2021 at a cost of $4.2 million.

***Balance Sheet Data***

As of September 30, 2021, total assets were $1.6 billion and included $468.5 million in cash, cash equivalents and investments.   Total stockholders’ equity as of September 30, 2021 was $1.1 billion.

***Updated Expense Guidance for 2021***

The Company is updating its full year 2021 expense guidance range to $360.0 million to $365.0 million, down from a range of $370.0 million to $386.0 million.  The updated expense guidance range reflects, among other items, lower incentive compensation and variable clearing costs.

Source: MarketAxess

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