MarketAxess Reports Third Quarter 2012 Revenues of $48.3 Million, Pre-Tax Income of $21.2 Million and Record Diluted EPS of

  MarketAxess Reports Third Quarter 2012 Revenues of $48.3 Million, Pre-Tax
  Income of $21.2 Million and Record Diluted EPS of $0.36

Third Quarter Financial Highlights^*

  *Revenues of $48.3 million, up 3.6%
  *Expenses of $27.0 million, up 11.5%
  *Record diluted EPS of $0.36, up from $0.34
  *Record estimated U.S. high grade market share of 12.5%, up from 11.6%

^*All comparisons versus third quarter 2011.

Business Wire

NEW YORK -- November 02, 2012

MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic
trading platform for U.S. and European corporate bonds, emerging markets bonds
and other types of fixed-income securities, today announced results for the
third quarter ended September 30, 2012.

“We are pleased with our solid market share gains in U.S. high-grade this
quarter and the continued strong growth in high-yield and emerging markets
trading volume. U.S. high-grade TRACE volume also rebounded significantly in
the past two months, following softer volumes in August,” said Richard M.
McVey, chairman and chief executive officer of MarketAxess. “As announced
earlier this morning, MarketAxess has agreed to buy Xtrakter Limited, a
provider of regulatory transaction reporting, trade matching services and data
services to the European securities market. We believe this acquisition will
provide MarketAxess European clients with an expanded set of technology
solutions ahead of incoming regulatory mandates from MiFID II in Europe.”

Third Quarter Results

Total revenues for the third quarter of 2012 increased 3.6% to $48.3 million,
compared to $46.6 million for the third quarter of 2011. Pre-tax income was
$21.2 million, compared to $22.3 million for the third quarter of 2011, a
decrease of 4.9%. Net income totaled $13.5 million, or a record $0.36 per
share on a diluted basis, compared to $13.4 million, or $0.34 per share on a
diluted basis, for the third quarter of 2011.

Commission revenue for the third quarter of 2012 totaled $42.4 million on
total trading volume of $137.8 billion, compared to $39.8 million in
commission revenue on total trading volume of $131.7 billion for the third
quarter of 2011. U.S. high-grade trading volume as a percentage of FINRA’s
U.S. high-grade TRACE trading volume increased to a record estimated 12.5%,
compared to an estimated 11.6% for the third quarter of 2011.

All other revenue, which consists of technology products and services,
information and user access fees, investment income and other revenue, was
$5.9 million, down 12.8% from $6.7 million for the third quarter of 2011. The
decline was primarily due to lower technology professional service fees.

Total expenses for the third quarter of 2012 increased 11.5% to $27.0 million,
compared to $24.3 million for the third quarter of 2011. This increase was
primarily due to higher professional and consulting costs and employee
compensation and benefits costs. Professional and consulting fees in the third
quarter of 2012 include $0.5 million of Xtrakter acquisition-related costs.
Employee compensation and benefits costs for the prior year period reflected a
downward adjustment to the year-to-date cash incentive bonus accrual.

The effective tax rate for the third quarter of 2012 was 36.4%, compared to
39.7% for the third quarter of 2011. The decline in the effective tax rate was
due principally to a refinement in certain state tax apportionment methodology
resulting in a decrease in the 2012 projected tax rate.

Employee headcount as of September 30, 2012 was 235, compared to 234 as of
September 30, 2011.

Dividend

The Company’s board of directors declared a quarterly cash dividend of $0.11
per share of common stock outstanding, to be paid on November 26, 2012 to
stockholders of record as of the close of business on November 12, 2012.

Balance Sheet Data

As of September 30, 2012, total assets were $304.9 million and included $204.3
million, or $5.44 per diluted share, in cash, cash equivalents and securities
available-for-sale. Total stockholders’ equity as of September 30, 2012 was
$271.9 million.

Guidance for 2012

The Company expects that its full year 2012 expenses and capital spending will
be at the high end of the guidance ranges of $107.0 million to $112.0 million
and $8.0 million to $11.0 million, respectively. The Company also anticipates
that the overall effective tax rate for 2012 will be between 39% and 41%.

Non-GAAP Financial Measure

EBITDA is a non-GAAP financial measure. The Company believes that this
non-GAAP financial measure, when taken into consideration with the
corresponding GAAP financial measure, is important in understanding the
Company's operating results. See the attached schedule for a full
reconciliation of GAAP net income to EBITDA.

Webcast and Conference Call Information

Richard M. McVey, chairman and chief executive officer, and Antonio L. DeLise,
chief financial officer, will host a conference call to discuss the Company’s
financial results and outlook on November 2, 2012, at 9:00 a.m. Eastern time.
To access the conference call, please dial 877-299-4454 (U.S.) or
+1-617-597-5447 (international). The passcode for all callers is 42452936. The
Company will also host a live audio Webcast of the conference call on the
Investor Relations section of the Company's website at
http://www.marketaxess.com. A replay of the call will be made available by
dialing 888-286-8010 (U.S.) or +1-617-801-6888 (international) for one week
after the announcement. The passcode for replay callers is 41146492. The
Webcast will also be archived on http://www.marketaxess.com for 90 days
following the announcement.

About MarketAxess

MarketAxess operates a leading electronic trading platform that enables
fixed-income market participants to efficiently trade corporate bonds and
other types of fixed-income instruments using MarketAxess’ patented trading
technology. Over 1,000 investor and broker-dealer firms are active users of
the MarketAxess trading platform, accessing global liquidity in U.S.
high-grade corporate bonds, European bonds, high yield and emerging markets
bonds, agency bonds, asset-backed and preferred securities and credit default
swaps. MarketAxess also offers a number of trading-related products and
services, including: market data to assist clients with trading decisions;
connectivity solutions that facilitate straight-through processing; technology
services to optimize trading environments; and execution services for
exchange-traded fund managers and other clients.

MarketAxess maintains its headquarters in New York and has offices in London,
Chicago, Salt Lake City, Hong Kong, Singapore and São Paulo. For more
information, please visitwww.marketaxess.com.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including
statements about the outlook and prospects for Company and industry growth, as
well as statements about the Company’s future financial and operating
performance. These and other statements that relate to future results and
events are based on MarketAxess’ current expectations. Actual results in
future periods may differ materially from those currently expected or desired
because of a number of risks and uncertainties, including: the level and
intensity of competition in the fixed-income electronic trading industry and
the pricing pressures that may result; the variability of our growth rate; the
rapidly evolving nature of the electronic financial services industry; the
level of trading volume transacted on the MarketAxess platform; the absolute
level and direction of interest rates and the corresponding volatility in the
corporate fixed-income market; our ability to develop new products and
offerings and the market’s acceptance of those products; our exposure to risks
resulting from non-performance by counterparties to transactions executed
between our clients in which we act as an intermediary in matching
back-to-back trades; our dependence on our broker-dealer clients; our ability
to enter into strategic alliances and to acquire other businesses and
successfully integrate them with our business; our future capital needs and
our ability to obtain capital when needed; and other factors. The Company’s
actual results and financial condition may differ, perhaps materially, from
the anticipated results and financial condition in any such forward-looking
statements. The Company undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise. More information about these and other factors affecting
MarketAxess’ business and prospects is contained in MarketAxess’ periodic
filings with the Securities and Exchange Commission and can be accessed at
www.marketaxess.com.


MarketAxess Holdings Inc.

Consolidated Statements of Operations
                                                       
                         Three Months Ended            Nine Months Ended
                         September 30,                 September 30,
                                                              
                         2012           2011           2012            2011
                         (In thousands, except per share data)
                                                                       
                         (unaudited)
Revenues
Commissions              $ 42,379       $ 39,822       $ 129,971       $ 116,683
Technology
products and               2,979          3,779          9,107           10,871
services
Information and            1,896          1,831          5,557           5,239
user access fees
Investment                 251            303            822             912
income
Other                     752           829           2,360          2,259
Total revenues            48,257        46,564        147,817        135,964
                                                                       
Expenses
Employee
compensation and           14,636         13,707         45,782          45,079
benefits
Depreciation and           2,081          1,799          5,896           4,988
amortization
Technology and             3,262          2,772          9,232           7,996
communications
Professional and           3,202          2,247          9,063           7,784
consulting fees
Occupancy                  732            721            2,248           2,195
Marketing and              1,067          1,280          4,246           3,502
advertising
General and               2,068         1,742         6,193          4,553
administrative
Total expenses            27,048        24,268        82,660         76,097
                                                                       
Income before              21,209         22,296         65,157          59,867
taxes
Provision for             7,727         8,852         25,553         23,706
income taxes
Net income               $ 13,482       $ 13,444       $ 39,604        $ 36,161
                                                                       
Per Share Data:
Earnings per
share:
Basic                    $ 0.37         $ 0.36         $ 1.08          $ 0.98
Diluted                  $ 0.36         $ 0.34         $ 1.05          $ 0.91
                                                                       
Cash dividends
declared per             $ 0.11         $ 0.09         $ 0.33          $ 0.27
common share
                                                                       
Weighted-average
common shares:
Basic                      36,500         37,126         36,521          36,798
Diluted                    37,541         39,828         37,892          39,539



MarketAxess Holdings Inc.

Consolidated Condensed Balance Sheet Data
                                                     
                                         September 30,       December 31, 2011
                                         2012
                                                             
                                         (In thousands)
                                                             
                                         (unaudited)
Assets
Cash and cash equivalents                $   150,101         $     169,620
Securities available-for-sale                54,181                78,110
Accounts receivable, net                     33,414                36,170
All other assets                            67,232               65,558
Total assets                             $   304,928         $     349,458
                                                             
Liabilities and Stockholders'
Equity
Total liabilities                        $   32,994          $     37,019
Total stockholders' equity                  271,934              312,439
Total liabilities and                    $   304,928         $     349,458
stockholders' equity



MarketAxess Holdings Inc.

Reconciliation of Non-GAAP Financial Measures
                                               
                         Three Months Ended            Nine Months Ended
                         September 30,                 September 30,
                                                             
                         2012           2011           2012           2011
                         (In thousands)
                                                                      
                         (unaudited)
                                                                      
Net income               $ 13,482       $ 13,444       $ 39,604       $ 36,161
                                                                      
Add back:
Interest expense           55             14             128            46
                                                                      
Provision for              7,727          8,852          25,553         23,706
income taxes
                                                                      
Depreciation and          2,081         1,799         5,896         4,988
amortization
                                                                      
Earnings before
interest, taxes,
depreciation
and amortization         $ 23,345       $ 24,109       $ 71,181       $ 64,901
(EBITDA)





MarketAxess Holdings Inc.

Volume and Fee Per Million Statistics
                                              
                      Three Months Ended              Nine Months Ended
                      September 30,                   September 30,
                                                             
                      2012            2011            2012            2011
                                                          
                      Total Trading Volume
                                                                      
                      ($ in millions)
                      (unaudited)
                                                                      
U.S.
high-grade -
multi dealer
^1
fixed-rate            $ 83,193        $ 79,233        $ 265,876       $ 238,577
floating-rate           2,795           2,761           9,104           9,524
Eurobond                6,016           7,580           26,543          28,891
Other ^1,2             45,748         42,092         138,995        122,814
Total                 $ 137,752       $ 131,666       $ 440,518       $ 399,806
                                                          
                      Average Daily Volume
                                                                      
                      ($ in millions)
                      (unaudited)
                                                                      
U.S.                  $ 1,365         $ 1,281         $ 1,463         $ 1,313
high-grade ^1
Eurobond                94              117             141             154
Other ^1,2             726            658            739            650
Total                 $ 2,185         $ 2,056         $ 2,344         $ 2,116
                                                                      
Number of
U.S. Trading            63              64              188             189
Days ^ 3
Number of
U.K. Trading            64              65              188             188
Days ^ 4
                                                          
                      Average Variable Transaction Fee Per Millon
                                                                      
U.S.
high-grade -
multi dealer
fixed-rate            $ 209           $ 195           $ 203           $ 188
floating-rate          37             24             30             21
Total U.S.              203             189             198             182
high-grade
Eurobond                79              108             71              101
Other                  216            175            208            177
Total                 $ 202           $ 180           $ 193           $ 174



1 Consistent with FINRA TRACE reporting standards, both sides of trades are
included in the Company's
reported volumes when the Company executes trades on a riskless principal
basis between two counterparties.

2 Effective January 2012, the Company no longer reports credit default swaps
trading volumes.
Credit default swap volumes previously reported in "Other" trading volume have
not been removed.

3 The number of U.S. trading days is based on the SIFMA holiday recommendation
calendar.

4 The number of U.K. trading days is based on the U.K. Bank holiday schedule.


Contact:

Media and Investor Relations:
MarketAxess Holdings Inc.
Tony DeLise, +1-212-813-6017
or
Florencia Panizza, +1-212-813-6029
or
William McBride & Associates
William McBride, +1-917-239-6726
 
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