MarketAxess (MKTX -9.85%), the electronic bond-trading platform leader, posted its financial results on August 6, 2025. The big headline: record revenue of $219.5 million (11% year-over-year growth) (GAAP) and Non-GAAP earnings per share (EPS) of $2.00, both edging past analyst expectations ($219.17 million GAAP revenue estimate, $1.96 non-GAAP EPS estimate). This quarter highlighted rapid expansion in trading volumes and solid adoption of new protocols. However, it also revealed continued margin pressure as fee-per-million declined and costs rose. Overall, the period showed strong execution on growth initiatives, but with profit growth trailing revenue gains due to shifting trading mix and expenses.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $2.00 | $1.96 | $1.72 | 16% |
| Revenue (GAAP) | $219.5 million | $219.17 million | $198.0 million | 11% |
| EBITDA (Non-GAAP) | $110.8 million | N/A | 12% | |
| Net Income (GAAP) | $71.2 million | $64.9 million | 10% | |
| Free Cash Flow (Non-GAAP) | N/A | $97.6 million | N/A |
Source: Analyst estimates for the quarter provided by FactSet.
Inside the MarketAxess Platform and Its Key Success Factors
MarketAxess runs an electronic trading platform that connects bond investors and market makers to trade fixed-income securities like corporate bonds, government bonds, and emerging market debt. Its business model depends on processing growing volumes of trades, generating commissions, and leveraging technology to make bond trading more efficient than traditional phone-based systems.
The company’s recent focus includes building out trading protocols, such as “portfolio trading” (trading baskets of bonds in a single transaction), “block trading” (large individual transactions), and “Open Trading” (its all-to-all system that allows broad anonymous access to liquidity). Technology upgrades, international expansion, and stronger data analytics are also key to its strategy. Growth hinges on accelerating adoption of electronic trading in bond markets, expanding platform features, and managing the margin as new protocols gain share.
Quarter Highlights: Trading, Technology, Margins, and Global Push
This quarter saw trading activity hit new records. Overall trading volume soared to $3.03 trillion, a 41% increase. Average daily volume (ADV) climbed to $49.0 billion, up 43% year-over-year. In the high-grade U.S. credit segment, ADV rose 21%, while high-yield increased 27%. Emerging markets and eurobonds posted 20% and 27% growth in ADV, respectively, year-over-year. Notably, U.S. government bond ADV grew 57% year-over-year. Product and region diversification continued, helping offset margin pressure from protocol mix changes.
Product and protocol innovation drove much of the platform’s expansion. MarketAxess rolled out new features in its “portfolio trading” and “block trading” protocols for clients to trade large groups of bonds efficiently. Portfolio trading ADV jumped 69% to a record $1.5 billion. Block trading saw booming adoption, with record activity in the U.S, eurobonds, and emerging markets (U.S. credit block ADV up 37%, Eurobonds up 100%). The Open Trading system maintained its role as a differentiator, supporting liquidity and attracting alternative market makers and ETF participants. Management reports that client feedback on these new protocols has been very positive.
Advanced technology and analytics continued to play an increasing role. Services revenue, which includes information, post-trade, and technology services, reached a record $27.7 million, up 7%. The X-Pro platform, which streamlines client workflows and provides advanced analytics, processed over 92% of portfolio trades in Q2 2025. The recent acquisition of RFQ-Hub, a Europe-based electronic trading platform, contributed approximately $1.8 million to commission revenues and boosted technology services growth by supplying new connectivity fees. This underlines the company’s effort to blend data tools, upgraded workflows, and cross-region capabilities.
International expansion delivered double-digit growth in emerging market (+16%) and eurobonds (+22%) activity. Commission revenue from emerging markets increased 16%, and eurobonds commission revenue rose 22% year-over-year. The rollout of X-Pro is planned for Europe next, with expansion into additional markets.
Margin Pressure, Expenses, Tax, and Capital Management
Despite the surge in volumes, fee-per-million (FPM), a key measure of the average commission collected per million dollars traded, declined sharply: credit FPM dropped 7% to $138, rates fell 9% to $4.03. The company cites protocol mix as the main factor. As portfolio and block trading -- which come with lower fees but higher volumes -- become a larger part of activity, this metric (average variable transaction fee per million, or FPM) fell to $138 even as total revenue climbed. Management emphasized that these new trading protocols are high-margin but warned that declining FPM may persist as protocol-agnostic strategies continue, as evidenced by the decrease in total credit variable transaction fee per million (FPM) to $138. The focus remains on total revenue and share gains rather than fee capture alone.
Expenses (GAAP) grew 10% to $127.6 million. Excluding notable items, expenses were up 6%. Major drivers included a higher headcount, technology investments (partly for integrating RFQ-Hub), and impacts from currency movements.
Tax and regulatory complexities increased. The effective tax rate (GAAP) rose to 26.9%, up from 24.8% in Q2 2024. This increase was due to additional provisions for uncertain tax reserves, following a New York state tax court decision. Notable items included $4.0 million in restructuring costs (linked to management changes) and $0.6 million in acquisition costs. These non-recurring charges affected reported net income.
On capital management, cash, equivalents, and investments stood at $620.9 million, down from $698.6 million as of December 31, 2024, due to share repurchases and compensation outflows. Year to date, 379,667 shares were bought back for $80.0 million. The board declared a quarterly dividend of $0.76 per share, consistent with past quarters. No new share repurchase authorization or dividend increase was announced.
Looking Forward: Guidance, Risk Areas, and Trends to Watch
Management did not offer formal quantitative guidance for the remainder of fiscal 2025 in the earnings release. Past calls have suggested full-year expenses at the low end of the $505–$525 million range, including RFQ-Hub impacts.
Looking ahead, investors should watch expense discipline, margin trends, and the adoption rate of new protocols. The ongoing shift toward lower-fee, higher-volume protocols is likely to keep pressure on profit margins, even as revenue grows. Fee compression could accelerate if portfolio and dealer-initiated trading expands further as a share of volume. Management sees further opportunity in product and international market rollouts (such as X-Pro in Europe). The company does not currently pay a dividend increase this quarter, continuing its prior $0.76 per-share payout.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
