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MarketAxess Holdings Inc.’s (MKTX - Free Report) third-quarter 2019 earnings per share of $1.42 beat the Zacks Consensus Estimate by 5.2% and grew 39% year over year.
Better-than-expected results were driven by increased trading volumes.
MarketAxess Holdings Inc. Price, Consensus and EPS Surprise
Revenues of $131.6 million beat the Zacks Consensus Estimate by 2.8% and were up 30% year over year. Commission revenues increased 32.4% year over year to $119.9 million.
All other revenues, which comprise information services, post-trade services and other revenues, increased 7.3% to $11.7 million.
Total trading volumes increased 37% year over year to $528.7 billion.
Total expenses at MarketAxess increased 19.3% from the prior-year quarter to $65.6 million. This rise was due to higher employee compensation and benefit cost, headcount, technology and communication costs, professional and consulting fees, general and administrative costs, and clearing costs.
The effective tax rate was 19.8% in the third quarter, marginally up from 19.3% in the year-ago quarter.
Operating income of $66 million increased 42% year over year.
Financial Update
Total assets were $855 million as of Sep 30, 2019, up 23% from year-end 2018 level.
Total cash, cash equivalents and investments were $556 million, up 14.4% from year-end 2018 level.
During the quarter, the company generated free cash flow of $67.7 million, up 42% year over year.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $2.8 million in the third quarter. The company's board of directors declared a quarterly cash dividend of 51 cents per share. The same will be paid out on Nov 20, 2019 to stockholders of record as of the close of business on Nov 6, 2019.
2019 Guidance
MarketAxess reaffirmed its 2019 expense guidance range at $244.0 million to $256.0 million. The expense guidance range excludes any post-acquisition impact of the LiquidityEdge transaction. The company is reconfirming its 2019 overall effective tax rate at 20.5% to 22.5%
The company updated its 2019 capital expenditure guidance range at $31.0 million to $33.0 million from $25.0 million to $30.0 million.
Some better-ranked stocks in the same sector are CME Group Inc. (CME - Free Report) , Intercontinental Exchange Inc. (ICE - Free Report) and Cboe Global Markets , Inc. (CBOE - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy) and has surpassed estimates in each of the four reported quarters by 1.27%, 3.49% and 9.19%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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MarketAxess (MKTX) Beats Q3 Earnings & Revenue Estimates
MarketAxess Holdings Inc.’s (MKTX - Free Report) third-quarter 2019 earnings per share of $1.42 beat the Zacks Consensus Estimate by 5.2% and grew 39% year over year.
Better-than-expected results were driven by increased trading volumes.
MarketAxess Holdings Inc. Price, Consensus and EPS Surprise
MarketAxess Holdings Inc. price-consensus-eps-surprise-chart | MarketAxess Holdings Inc. Quote
Operational Update
Revenues of $131.6 million beat the Zacks Consensus Estimate by 2.8% and were up 30% year over year. Commission revenues increased 32.4% year over year to $119.9 million.
All other revenues, which comprise information services, post-trade services and other revenues, increased 7.3% to $11.7 million.
Total trading volumes increased 37% year over year to $528.7 billion.
Total expenses at MarketAxess increased 19.3% from the prior-year quarter to $65.6 million. This rise was due to higher employee compensation and benefit cost, headcount, technology and communication costs, professional and consulting fees, general and administrative costs, and clearing costs.
The effective tax rate was 19.8% in the third quarter, marginally up from 19.3% in the year-ago quarter.
Operating income of $66 million increased 42% year over year.
Financial Update
Total assets were $855 million as of Sep 30, 2019, up 23% from year-end 2018 level.
Total cash, cash equivalents and investments were $556 million, up 14.4% from year-end 2018 level.
During the quarter, the company generated free cash flow of $67.7 million, up 42% year over year.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $2.8 million in the third quarter.
The company's board of directors declared a quarterly cash dividend of 51 cents per share. The same will be paid out on Nov 20, 2019 to stockholders of record as of the close of business on Nov 6, 2019.
2019 Guidance
MarketAxess reaffirmed its 2019 expense guidance range at $244.0 million to $256.0 million. The expense guidance range excludes any post-acquisition impact of the LiquidityEdge transaction. The company is reconfirming its 2019 overall effective tax rate at 20.5% to 22.5%
The company updated its 2019 capital expenditure guidance range at $31.0 million to $33.0 million from $25.0 million to $30.0 million.
Zacks Rank & Other Releases
MarketAxess carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same sector are CME Group Inc. (CME - Free Report) , Intercontinental Exchange Inc. (ICE - Free Report) and Cboe Global Markets , Inc. (CBOE - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy) and has surpassed estimates in each of the four reported quarters by 1.27%, 3.49% and 9.19%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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