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Dec 31, 2023
MarketAxess Q4 2023 Earnings Report
MarketAxess reported solid growth in ADV across new product areas and regions, enhanced its client franchise, and increased client engagement with MarketAxess X-Pro.
Key Takeaways
MarketAxess reported a 10.9% increase in total revenues, reaching $197.2 million, driven by strong growth in information services and post-trade revenue. Diluted EPS increased by 16.5% to $1.84. The company saw record automated and algorithmic trading volume and expanded its client base.
Total revenues increased by 10.9% to $197.2 million, including Pragma revenues of $7.6 million.
Diluted EPS increased by 16.5% to $1.84, driven by a net income of $69.6 million.
Record information services revenue of $11.9 million, up 14.6%, and record post-trade revenue of $11.0 million, up 24.1%.
Record automated and algorithmic trading volume (+40.3%), trade count (+41.3%) and active client firms (+36.0%).
Revenue by Segment
Forward Guidance
MarketAxess provided guidance for the full year 2024, based on foreign exchange rates as of December 31, 2023.
Positive Outlook
- Revenue from Pragma is expected to grow in the mid-single digits (percent).
- Expenses are expected to be in the range of $480.0 million to $500.0 million and includes a full year of Pragma expenses estimated to range between $33.0 million to $35.0 million.
- Pragma expenses are expected to include amortization expense on acquired intangible assets of $4.8 million.
- Based on the midpoint of the stated guidance range, total expenses are expected to increase by approximately 12%, 6% excluding the impact of Pragma expenses.
- Capital expenditures to support new protocols, products and trading platform enhancements are expected to be in the range of $60.0 million to $65.0 million.
Challenges Ahead
- The effective tax rate is expected to be between 24.0% and 25.0%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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