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MarketAxess Holdings Inc.’s (MKTX - Free Report) second-quarter 2020 earnings per share of $2.20 beat the Zacks Consensus Estimate by 3.29% and also soared 73% year over year.
Better-than-expected results came on the back of high corporate bond trading volumes, driven by a record corporate bond new issuance and an elevated credit spread volatility.
MarketAxess Holdings Inc. Price, Consensus and EPS Surprise
Revenues of $184.8 million came in line with the Zacks Consensus Estimate and also surged 48% year over year. Commission revenues jumped 51% year over year to $172 million.
All other revenues, comprising information services, post-trade services and other revenues improved 12% to $12.7 million.
Total trading volumes expanded 44.4% year over year to $741.8 billion.
Total expenses at MarketAxess were up 25% from the prior-year quarter to $80.7 million. This rise was due to escalated employee compensation and benefit cost, headcount, technology and communication costs, and clearing costs.
Operating income of $104 million ascended 71% year over year owing to strength in revenues, partly offset by elevated costs. Operating margin of 56.4% grew 790 basis points year over year.
Financial Update
Total assets were $1.04 billion as of Jun 30, 2020, up 8.8% from the level as of Dec 31, 2019.
Total cash, cash equivalents and investments as of Jun 30, 2020 were $404.8 million, up 49.6% from the level at 2019 end.
During the quarter, the company generated free cash flow of $86.78 million, up 51.4% year over year.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $5.9 million in the second quarter. The company's board of directors declared a quarterly cash dividend of 60 cents per share, to be paid out on Aug 19, 2020 to its stockholders of record as of Aug 5.
Price Performance
Year to date, the stock has rallied 40.7% compared with its industry’s mere growth of 0.6%.
This price performance looks stellar against some other stock movements in the same space like CME Group Inc. (CME - Free Report) and Cboe Global Markets Inc. (CBOE - Free Report) , both of which have declined 22.4% and 16.2%, respectively. However, Intercontinental Exchange Inc. (ICE - Free Report) has inched up 2.8% over the same time frame.
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year. These 7 were selected because of their superior potential for immediate breakout..
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MarketAxess (MKTX) Q2 Earnings Beat Estimates, Revenues Meet (revised)
MarketAxess Holdings Inc.’s (MKTX - Free Report) second-quarter 2020 earnings per share of $2.20 beat the Zacks Consensus Estimate by 3.29% and also soared 73% year over year.
Better-than-expected results came on the back of high corporate bond trading volumes, driven by a record corporate bond new issuance and an elevated credit spread volatility.
MarketAxess Holdings Inc. Price, Consensus and EPS Surprise
MarketAxess Holdings Inc. price-consensus-eps-surprise-chart | MarketAxess Holdings Inc. Quote
Operational Update
Revenues of $184.8 million came in line with the Zacks Consensus Estimate and also surged 48% year over year. Commission revenues jumped 51% year over year to $172 million.
All other revenues, comprising information services, post-trade services and other revenues improved 12% to $12.7 million.
Total trading volumes expanded 44.4% year over year to $741.8 billion.
Total expenses at MarketAxess were up 25% from the prior-year quarter to $80.7 million. This rise was due to escalated employee compensation and benefit cost, headcount, technology and communication costs, and clearing costs.
Operating income of $104 million ascended 71% year over year owing to strength in revenues, partly offset by elevated costs.
Operating margin of 56.4% grew 790 basis points year over year.
Financial Update
Total assets were $1.04 billion as of Jun 30, 2020, up 8.8% from the level as of Dec 31, 2019.
Total cash, cash equivalents and investments as of Jun 30, 2020 were $404.8 million, up 49.6% from the level at 2019 end.
During the quarter, the company generated free cash flow of $86.78 million, up 51.4% year over year.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $5.9 million in the second quarter.
The company's board of directors declared a quarterly cash dividend of 60 cents per share, to be paid out on Aug 19, 2020 to its stockholders of record as of Aug 5.
Price Performance
Year to date, the stock has rallied 40.7% compared with its industry’s mere growth of 0.6%.
This price performance looks stellar against some other stock movements in the same space like CME Group Inc. (CME - Free Report) and Cboe Global Markets Inc. (CBOE - Free Report) , both of which have declined 22.4% and 16.2%, respectively. However, Intercontinental Exchange Inc. (ICE - Free Report) has inched up 2.8% over the same time frame.
The stock sports a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
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