MarketAxess third-quarter profit falls to $54.0 million as expenses rise 10%

MarketAxess Holdings Inc. (MKTX) reported third-quarter net income of $54.0 million on Friday, down 21% from a year earlier, as expenses rose 10% and revenue edged up 1%.

The company said in a regulatory filing that the results cover the quarter ended September 30, 2026. The results were released in a press release attached to the filing.

Here's how the company did:

• Diluted earnings per share: $1.53 vs. $1.84 a year earlier; $1.86 excluding notable items.
• Revenue: $210.4 million vs. $208.8 million a year earlier.
• Net income: $54.0 million vs. $68.3 million a year earlier.

Total trading average daily volume rose 13%, with growth across both credit and rates products. Market share also rose in high-yield and municipal bonds.

Commissions revenue was flat at $179.9 million. Credit commission revenue fell 2% to $161.2 million, as the company cited lower variable transaction fees per million in U.S. credit, partly offset by higher market volumes and fixed distribution fees.

Rates commission revenue rose 34% to $8.9 million, primarily on higher U.S. Treasury volumes and improved fees per million.

Services revenue, which combines information, post-trade and technology services, rose 6% to $30.5 million. Information services revenue increased 10% to $15.2 million, principally on net new contract revenue.

Post-trade services revenue rose 1% to $11.4 million, and technology services revenue rose 8% to $3.9 million.

Total expenses were $136.0 million, up 10%. Excluding notable items, expenses were $122.9 million, flat from a year earlier.

Notable items in the quarter included $13.1 million of merger-related expenses tied to the pending Intercontinental Exchange transaction. Professional and consulting fees rose 99% to $14.7 million.

Operating margin was 35.4%, down 560 basis points from 41.0% a year earlier. Excluding notable items, the operating margin was 41.6%, up 60 basis points.

EBITDA, or earnings before interest, taxes, depreciation and amortization, was $90.7 million, down from $107.6 million. The EBITDA margin was 43.1%, against 51.5% a year earlier.

Other income was $0.4 million, down from $8.1 million. The company cited a tax credit received in the prior year, lower interest income on lower average cash balances, higher interest expense on borrowings used to fund an accelerated stock repurchase agreement that settled in the first quarter of 2026, and higher foreign currency transaction losses.

The effective tax rate was 27.8%, compared with 27.1% a year earlier. Excluding notable items, it was 25.4%.

Employee headcount was 858 at September 30, down from 896 a year earlier and up from 863 at June 30.

For the first nine months, revenue was $662.2 million, up 4%, and net income was $200.5 million, up 30%.

Intercontinental Exchange merger

On July 29, 2026, MarketAxess agreed to merge with Intercontinental Exchange, Inc. (ICE). Under the Agreement and Plan of Merger, MarketAxess will become a wholly owned subsidiary of ICE, and each outstanding share will be converted into the right to receive $167.00 in cash, without interest.

On October 21, the Department of Justice and the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Completion still requires MarketAxess stockholder approval, required regulatory approvals and other closing conditions.

CEO Chris Concannon said: “Overall, we continue to make great progress across our strategic priorities and remain committed to delivering innovative solutions that enhance the trading experience for our clients.”

Guidance and earnings call suspended

In light of the merger, the company has suspended its practice of hosting earnings conference calls and of issuing guidance. It has withdrawn its previously announced 2026 annual guidance and its medium-term financial targets.

The company has also suspended its monthly volumes press releases.

Cash, borrowings and dividend

The company had $539.6 million in cash, cash equivalents, corporate bond investments and U.S. Treasury investments at September 30, down from $678.9 million at December 31, 2025. It had $92.0 million in borrowings under its credit facility, compared with $220.0 million at year-end.

The board declared a quarterly cash dividend of $0.78 per share, up from $0.76 a year earlier. The dividend is payable November 25, 2026, to stockholders of record at the close of business on November 11, 2026.