MarketAxess Holdings Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>MarketAxess Holdings Inc. filed its Q1 2024 10-Q report, detailing financial positions and disclosures.</b>

AI Summary

MARKETAXESS HOLDINGS INC (MKTX) filed a Quarterly Report (10-Q) with the SEC on May 7, 2024. MarketAxess Holdings Inc. filed a 10-Q report for the period ending March 31, 2024. The filing includes data related to various financial statement line items and disclosures. Key dates mentioned include the filing date of May 7, 2024, and the reporting period of January 1, 2024, to March 31, 2024. The company's principal executive offices are located at 55 Hudson Yards, New York, NY. The filing references various accounting standards and disclosures, including fair value measurements and specific asset/liability categories.

Why It Matters

For investors and stakeholders tracking MARKETAXESS HOLDINGS INC, this filing contains several important signals. This 10-Q filing provides investors with an updated view of MarketAxess's financial health and operational status for the first quarter of 2024. The detailed disclosures within the report are crucial for understanding the company's asset and liability structure, fair value measurements, and compliance with financial reporting standards.

Risk Assessment

Risk Level: low — MARKETAXESS HOLDINGS INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain any immediate red flags or significant negative developments, indicating a low level of immediate risk.

Analyst Insight

Review the detailed financial statements and disclosures in the 10-Q to assess MarketAxess's performance and financial position in Q1 2024.

Key Numbers

• 2024-03-31 — Reporting Period End Date (10-Q filing)
• 2024-05-07 — Filing Date (10-Q filing)
• 2024-01-01 — Reporting Period Start Date (10-Q filing)

Key Players & Entities

• MARKETAXESS HOLDINGS INC (company) — Filer name
• MKTX (company) — Ticker symbol
• 2024-05-07 (date) — Filing date
• 2024-03-31 (date) — Reporting period end date
• 55 HUDSON YARDS, 15TH FLOOR (address) — Business address
• New York (location) — City in business address
• NY (location) — State in business address
• 10001 (postal_code) — ZIP code in business address

FAQ

Industry Context

MarketAxess Holdings Inc. operates in the financial services sector, specifically as an operator of a leading electronic trading platform for U.S. corporate bonds and other fixed-income securities.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to submit regular financial reports to the SEC.

What Investors Should Do

1. Analyze the balance sheet for changes in assets, liabilities, and equity compared to the previous period.
2. Review the income statement for revenue trends, expenses, and profitability metrics.
3. Examine the footnotes and disclosures for any significant accounting policies, contingent liabilities, or other material information.

Key Dates

• 2024-05-07: Filing Date — Submission of the quarterly report (10-Q).
• 2024-03-31: Reporting Period End Date — End of the fiscal quarter for which financial information is reported.
• 2024-01-01: Reporting Period Start Date — Start of the fiscal quarter for which financial information is reported.

Year-Over-Year Comparison

This is the initial 10-Q filing for the fiscal quarter ending March 31, 2024, providing a snapshot of the company's financial status at that time.

Key Financial Figures

• $0.003 — nge on which registered Common Stock, $0.003 par value MKTX NASDAQ Global Select

Filing Documents

• mktx-20240331.htm (10-Q) — 2497KB
• mktx-ex10_5.htm (EX-10.5) — 36KB
• mktx-ex10_6.htm (EX-10.6) — 57KB
• mktx-ex10_7.htm (EX-10.7) — 40KB
• mktx-ex10_8.htm (EX-10.8) — 41KB
• mktx-ex10_9.htm (EX-10.9) — 59KB
• mktx-ex10_10.htm (EX-10.10) — 49KB
• mktx-ex10_11.htm (EX-10.11) — 45KB
• mktx-ex31_1.htm (EX-31.1) — 12KB
• mktx-ex32_1.htm (EX-32.1) — 8KB
• 0000950170-24-054646.txt (&nbsp;) — 12023KB
• mktx-20240331.xsd (EX-101.SCH) — 1554KB
• mktx-20240331_htm.xml (XML) — 2543KB

— Financial Information

PART I — Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Consolidated Statements of Financial Condition as of March 31, 2024 and December 31, 2023 3 Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 202 3 4 Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 5 Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2024 and 2023 6 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 41 Item 4.

Controls and Procedures

Controls and Procedures 43

— Other Information

PART II — Other Information Item 1.

Legal Proceedings

Legal Proceedings 44 Item 1A.

Risk Factors

Risk Factors 44 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 3. Defaults Upon Senior Securities 45 Item 4. Mine Safety Disclosures 45 Item 5. Other Information 45 Item 6. Exhibits 46 2 P ART I — Financial Information It em 1. Financial Statements MARKETAXESS HOLDINGS INC. C ONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) As of March 31, 2024 December 31, 2023 (In thousands, except share and per share amounts) ASSETS Cash and cash equivalents $ 376,679 $ 451,280 Cash segregated under federal regulations 45,629 45,122 Investments, at fair value 135,831 134,861 Accounts receivable, net of allowance of $ 638 and $ 577 as of March 31, 2024 and December 31, 2023, respectively 99,878 89,839 Receivables from broker-dealers, clearing organizations and customers 662,888 687,936 Goodwill 236,706 236,706 Intangible assets, net of accumulated amortization 113,576 119,108 Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization 107,239 102,671 Operating lease right-of-use assets 62,006 63,045 Prepaid expenses and other assets 86,531 84,499 Total assets $ 1,926,963 $ 2,015,067 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accrued employee compensation 28,665 60,124 Payables to broker-dealers, clearing organizations and customers 465,703 537,398 Income and other tax liabilities 2,931 7,892 Accounts payable, accrued expenses and other liabilities 33,361 37,013 Operating lease liabilities 78,070 79,677 Total liabilities $ 608,730 $ 722,104 Commitments and Contingencies (Note 13) Stockholders' equity Preferred stock, $ 0.001 par value, 4,855,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively — — Series A Preferred Stock, $ 0.001 par value

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (Unaudited) Fair Value Financial Instruments Fair value is defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." A three-tiered hierarchy for determining fair value has been established that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as Level 1 (unadjusted quoted prices for identical assets or liabilities in active markets), Level 2 (inputs that are observable in the marketplace other than those inputs classified in Level 1) and Level 3 (inputs that are unobservable in the marketplace). The Company's financial assets and liabilities measured at fair value on a recurring basis consist of its money market funds, trading securities, available-for-sale securities, foreign currency forward contracts and contingent consideration payables associated with acquisitions. All other financial instruments are short-term in nature and the carrying amounts reported on the Consolidated Statements of Financial Condition approximate fair value. Receivables from and Payables to Broker-dealers, Clearing Organizations and Customers Receivables from broker-dealers, clearing organizations and customers include amounts receivable for securities not delivered by the Company to the purchaser by the settlement date ("securities failed-to-deliver") and cash deposits held at clearing organizations and clearing brokers to facilitate the settlement and clearance of matched principal transactions. Payables to broker-dealers, clearing organizations and customers include amounts payable for securities not received by the Company from a seller by the settlement date ("securities failed-to-receive"). Securities failed-to-deliver and securities failed-to-receive for transactions executed on a matched principal basis where the Company serves as a coun

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (Unaudited) Cloud Computing Costs The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, vendor software development costs billed to us that are part of the application development stage. These costs are recorded as a prepaid asset on the Consolidated Statements of Financial Condition and are amortized over the period of the hosting service contract, which ranges from one to five years . The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Foreign Currency Translation and Forward Contracts Assets and liabilities denominated in foreign currencies are translated using exchange rates at the end of the period; revenues and expenses are translated at average monthly rates. Gains and losses on foreign currency translation are a component of accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Transaction gains and losses are recorded in other, net in the Consolidated Statements of Operations. The Company enters into foreign currency forward contracts to economically hedge its foreign currency transaction gains and losses. Realized and unrealized gains and losses on these forward contracts are included in other, net in the Consolidated Statements of Operations. The Company records the fair value of the forward contract asset in prepaid expenses and other assets or the fair value of the forward contract liability in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. Revenue Recognition The Company's classification of revenues in the Consolidated Statements of Operations represents revenues from contracts with customers disaggregated by type of revenue. The Company has four revenue streams as described below. Commission Revenu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (Unaudited) Information services – Information services includes data licensed to the Company's broker-dealer clients, institutional investor clients and data-only subscribers; professional and consulting services; technology software licenses; and maintenance and support services. The nature and timing of each performance obligation may vary as these contracts are either subscription-based services transferred over time, and may be net of volume-based discounts, or one-time services that are transferred at a point in time. Revenues for services transferred over time are recognized ratably over the contract period as the Company's performance obligation is met, whereas revenues for services transferred at a point in time are recognized in the period the services are provided. Customers are generally billed monthly, quarterly, or annually; revenues billed in advance are

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View this 10-Q filing on SEC EDGAR