MarketAxess Earnings: Lower Trading Volume Drives Trading Revenue and Earnings Lower

Wide-moat MarketAxess reported second-quarter results that were in line with our expectations, as weak trading volume was only partially offset by strong data and fixed-fee growth. Revenue declined 1.3% from last year and 11.5% from a strong first quarter to $180 million. Net income declined 10.6% to $59.9 million, in part due to foreign currency translation losses of $1.3 million versus a gain of $5.5 last year. While these results were not impressive, the decline in revenue was driven by trading volume, which is inherently volatile from quarter to quarter. As we incorporate these results, we do not expect to materially alter our $350 per share fair value estimate for MarketAxess.