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MarketAxess Holdings Inc.’s (MKTX - Free Report) fourth-quarter 2019 earnings per share of $1.32 beat the Zacks Consensus Estimate by 1.5% and grew 9.1% year over year.
Better-than-expected results were driven by increased open trading volumes.
MarketAxess Holdings Inc. Price, Consensus and EPS Surprise
Revenues of $129.8 million beat the Zacks Consensus Estimate by 2.2% and were up 15.9% year over year. Commission revenues increased 15.4% year over year to $117.1 million.
All other revenues, which comprise information services, post-trade services and other revenues, increased 15.5% to $12.7 million.
Total trading volumes increased 14.4% year over year to $489.5 billion.
Total expenses at MarketAxess increased 17.9% from the prior-year quarter to $68.9 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 18.9% in the fourth quarter, up from 18.3% in the year-ago quarter.
Operating income of $60.9 million increased 12.8% year over year.
Financial Update
Total assets were $954.9 million as of Dec 31, 2019, up 37.3% year over year.
Total cash, cash equivalents and investments were $500.6 million, up 2.8% from year-end 2018 level.
During the quarter, the company generated free cash flow of $72.6 million, up 18.3% year over year.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $5.8 million in the fourth quarter.
The company's board of directors declared a quarterly cash dividend of 60 cents per share, which represented an 18% increase. The same will be paid out on Feb 26, 2020 to stockholders of record as of the close of business on Feb 12, 2020.
2020 Guidance
Expenses are expected in the range of $297 million to $314 million and include a full year of LiquidityEdge expenses estimated between $18 million and $22 million. The company anticipates overall effective tax rate between 20% and 22%
The company provided capital expenditure guidance range between $44 million and $49 million.
A few other stocks in the same space due to report earnings are CME Group Inc. (CME - Free Report) , Intercontinental Exchange Inc. (ICE - Free Report) and Nasdaq, Inc. (NDAQ - Free Report) . CME Group, Intercontinental Exchange and Nasdaq surpassed their respective earnings estimates in the trailing four quarters with positive surprise of 2.88%, 4.82% and 2.94%, on average.
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MarketAxess (MKTX) Q4 Earnings & Revenues Beat Estimates
MarketAxess Holdings Inc.’s (MKTX - Free Report) fourth-quarter 2019 earnings per share of $1.32 beat the Zacks Consensus Estimate by 1.5% and grew 9.1% year over year.
Better-than-expected results were driven by increased open 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 $129.8 million beat the Zacks Consensus Estimate by 2.2% and were up 15.9% year over year. Commission revenues increased 15.4% year over year to $117.1 million.
All other revenues, which comprise information services, post-trade services and other revenues, increased 15.5% to $12.7 million.
Total trading volumes increased 14.4% year over year to $489.5 billion.
Total expenses at MarketAxess increased 17.9% from the prior-year quarter to $68.9 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 18.9% in the fourth quarter, up from 18.3% in the year-ago quarter.
Operating income of $60.9 million increased 12.8% year over year.
Financial Update
Total assets were $954.9 million as of Dec 31, 2019, up 37.3% year over year.
Total cash, cash equivalents and investments were $500.6 million, up 2.8% from year-end 2018 level.
During the quarter, the company generated free cash flow of $72.6 million, up 18.3% year over year.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $5.8 million in the fourth quarter.
The company's board of directors declared a quarterly cash dividend of 60 cents per share, which represented an 18% increase. The same will be paid out on Feb 26, 2020 to stockholders of record as of the close of business on Feb 12, 2020.
2020 Guidance
Expenses are expected in the range of $297 million to $314 million and include a full year of LiquidityEdge expenses estimated between $18 million and $22 million. The company anticipates overall effective tax rate between 20% and 22%
The company provided capital expenditure guidance range between $44 million and $49 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.
A few other stocks in the same space due to report earnings are CME Group Inc. (CME - Free Report) , Intercontinental Exchange Inc. (ICE - Free Report) and Nasdaq, Inc. (NDAQ - Free Report) . CME Group, Intercontinental Exchange and Nasdaq surpassed their respective earnings estimates in the trailing four quarters with positive surprise of 2.88%, 4.82% and 2.94%, on average.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>