10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-34091

MARKETAXESS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	52-2230784
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
55 Hudson Yards, 15th Floor New York, New York	10001
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 813-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.003 par value	MKTX	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 22, 2022, the number of shares of the Registrant’s voting common stock outstanding was 37,640,008.

MARKETAXESS HOLDINGS INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

TABLE OF CONTENTS

		Page
PART I — Financial Information
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Statements of Financial Condition as of June 30, 2022 and December 31, 2021	3
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021	4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
PART II — Other Information
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	44

2

PART I — Financial Information

Item 1. Financial Statements

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	As of
	June 30, 2022			December 31, 2021
	(In thousands, except share  and per share amounts)
ASSETS
Cash and cash equivalents	$	290,544		$	506,735
Cash segregated under federal regulations		50,276			50,159
Investments, at fair value		34,297			36,078
Accounts receivable, net of allowance of $193 and $140 as of June 30, 2022 and December 31, 2021, respectively		87,475			63,881
Receivables from broker-dealers, clearing organizations and customers		617,817			408,346
Goodwill		154,789			154,789
Intangible assets, net of accumulated amortization		105,607			116,377
Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization		93,255			96,061
Operating lease right-of-use assets		68,602			70,960
Prepaid expenses and other assets		65,048			27,066
Total assets	$	1,567,710		$	1,530,452
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accrued employee compensation	$	35,685		$	59,719
Payables to broker-dealers, clearing organizations and customers		375,211			229,325
Income and other tax liabilities		27,660			40,456
Accounts payable, accrued expenses and other liabilities		42,797			71,218
Operating lease liabilities		85,555			88,425
Total liabilities		566,908			489,143
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 June 30, 2022 and December 31, 2021		—			—
Series A Preferred Stock, $0.001 par value, 110,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021		—			—
Common stock voting, $0.003 par value, 110,000,000 shares authorized, 40,910,520 shares and 40,911,506 shares issued and 37,640,008 shares and 37,918,956 shares outstanding as of June 30, 2022 and December 31, 2021, respectively		123			123
Common stock non-voting, $0.003 par value, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021		—			—
Additional paid-in capital		325,047			330,262
Treasury stock – Common stock voting, at cost, 3,270,512 shares and 2,992,550 shares as of June 30, 2022 and December 31, 2021, respectively		(320,252	)		(232,712	)
Retained earnings		1,035,723			956,966
Accumulated other comprehensive loss		(39,839	)		(13,330	)
Total stockholders' equity		1,000,802			1,041,309
Total liabilities and stockholders' equity	$	1,567,710		$	1,530,452
The accompanying notes are an integral part of these consolidated financial statements.

3

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(In thousands, except per share amounts)
Revenues
Commissions	$	163,463		$	156,431		$	329,576		$	332,269
Information services		9,396			9,844			19,205			19,006
Post-trade services		9,144			9,848			19,056			20,109
Other		226			211			449			414
Total revenues		182,229			176,334			368,286			371,798
Expenses
Employee compensation and benefits		45,435			40,732			93,191			88,820
Depreciation and amortization		15,240			13,097			30,414			24,876
Technology and communications		12,490			10,544			24,682			20,580
Professional and consulting fees		8,920			10,704			18,541			20,344
Occupancy		3,700			3,300			7,087			6,617
Marketing and advertising		2,949			3,128			4,738			4,332
Clearing costs		4,263			4,372			8,838			9,066
General and administrative		4,444			3,280			7,903			6,512
Total expenses		97,441			89,157			195,394			181,147
Operating income		84,788			87,177			172,892			190,651
Other income (expense)
Investment income		254			107			313			214
Interest expense		(337	)		(171	)		(510	)		(362	)
Equity in earnings of unconsolidated affiliate		191			—			191			—
Other, net		4,682			(1,060	)		7,111			(2,649	)
Total other income (expense)		4,790			(1,124	)		7,105			(2,797	)
Income before income taxes		89,578			86,053			179,997			187,854
Provision for income taxes		22,656			18,765			48,306			40,109
Net income	$	66,922		$	67,288		$	131,691		$	147,745
Net income per common share
Basic	$	1.78		$	1.79		$	3.52		$	3.94
Diluted	$	1.78		$	1.77		$	3.49		$	3.87
Cash dividends declared per common share	$	0.70		$	0.66		$	1.40		$	1.32
Weighted average shares outstanding
Basic		37,529			37,508			37,456			37,489
Diluted		37,608			38,104			37,716			38,129
The accompanying notes are an integral part of these consolidated financial statements.

4

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2022			2021		2022			2021
	(In thousands)
Net income	$	66,922		$	67,288	$	131,691		$	147,745
Net cumulative translation adjustment and foreign currency exchange hedge, net of tax of $0, $(133), $0, and $(546), respectively		(21,458	)		1,138		(26,509	)		(794	)
Comprehensive income	$	45,464		$	68,426	$	105,182		$	146,951
The accompanying notes are an integral part of these consolidated financial statements.

5

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

	Common Stock Voting		Additional Paid-In Capital			Treasury Stock – Common Stock Voting			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
	(In thousands, except per share amounts)
Balance at January 1, 2022	$	123	$	330,262		$	(232,712	)	$	956,966		$	(13,330	)	$	1,041,309
Net income		—		—			—			64,769			—			64,769
Cumulative translation adjustment		—		—			—			—			(5,051	)		(5,051	)
Stock-based compensation		—		8,099			—			—			—			8,099
Exercise of stock options		—		50			—			—			—			50
Withholding tax payments on restricted stock vesting and stock option exercises		—		(20,292	)		—			—			—			(20,292	)
Repurchases of common stock		—		—			(38,800	)		—			—			(38,800	)
Cash dividend on common stock ($0.70 per share)		—		—			—			(26,543	)		—			(26,543	)
Balance at March 31, 2022		123		318,119			(271,512	)		995,192			(18,381	)		1,023,541
Net income		—		—			—			66,922			—			66,922
Cumulative translation adjustment		—		—			—			—			(21,458	)		(21,458	)
Stock-based compensation		—		6,503			—			—			—			6,503
Exercise of stock options		—		86			—			—			—			86
Withholding tax payments on restricted stock vesting and stock option exercises		—		339			—			—			—			339
Repurchases of common stock		—		—			(48,740	)		—			—			(48,740	)
Cash dividend on common stock ($0.70 per share)		—		—			—			(26,391	)		—			(26,391	)
Balance at June 30, 2022	$	123	$	325,047		$	(320,252	)	$	1,035,723		$	(39,839	)	$	1,000,802
The accompanying notes are an integral part of these consolidated financial statements.

6

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)

(Unaudited)

	Common Stock Voting		Additional Paid-In Capital			Treasury Stock – Common Stock Voting			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
	(In thousands, except per share amounts)
Balance at January 1, 2021	$	123	$	329,742		$	(169,523	)	$	799,369		$	(4,650	)	$	955,061
Net income		—		—			—			80,457			—			80,457
Cumulative translation adjustment and foreign currency exchange hedge, net of tax		—		—			—			—			(1,932	)		(1,932	)
Stock-based compensation		—		7,424			—			—			—			7,424
Exercise of stock options		—		244			—			—			—			244
Withholding tax payments on restricted stock vesting and stock option exercises		—		(27,422	)		—			—			—			(27,422	)
Repurchases of common stock		—		—			(520	)		—			—			(520	)
Cash dividend on common stock ($0.66 per share)		—		—			—			(25,079	)		—			(25,079	)
Balance at March 31, 2021		123		309,988			(170,043	)		854,747			(6,582	)		988,233
Net income		—		—			—			67,288			—			67,288
Cumulative translation adjustment and foreign currency exchange hedge, net of tax		—		—			—			—			1,138			1,138
Stock-based compensation		—		6,134			—			—			—			6,134
Exercise of stock options		—		4,421			—			—			—			4,421
Withholding tax payments on restricted stock vesting and stock option exercises		—		(6,860	)		—			—			—			(6,860	)
Repurchases of common stock		—		—			(13,436	)		—			—			(13,436	)
Cash dividend on common stock ($0.66 per share)		—		—			—			(25,058	)		—			(25,058	)
Balance at June 30, 2021	$	123	$	313,683		$	(183,479	)	$	896,977		$	(5,444	)	$	1,021,860

The accompanying notes are an integral part of these consolidated financial statements.

7

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2022			2021
	(In thousands)
Cash flows from operating activities
Net income	$	131,691		$	147,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		30,414			24,876
Amortization of operating lease right-of-use assets		2,999			3,368
Stock-based compensation expense		14,602			13,558
Deferred taxes		(2,164	)		1,600
Other		(1,068	)		(176	)
Changes in operating assets and liabilities:
(Increase) in accounts receivable		(23,728	)		(7,434	)
(Increase) in receivables from broker-dealers, clearing organizations and customers		(190,074	)		(211,434	)
(Increase) in prepaid expenses and other assets		(3,632	)		(4,624	)
Decrease in trading investments		—			(5,569	)
Decrease (increase) in mutual funds held in rabbi trust		1,336			(1,960	)
(Decrease) in accrued employee compensation		(24,034	)		(23,048	)
Increase in payables to broker-dealers, clearing organizations and customers		145,886			144,977
(Decrease) in income and other tax liabilities		(10,175	)		(3,101	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		1,141			(1,479	)
(Decrease) in operating lease liabilities		(3,287	)		(3,732	)
Net cash provided by operating activities		69,907			73,567
Cash flows from investing activities
Acquisitions, net of cash and cash equivalents acquired		—			(17,078	)
Acquisition of equity method investment		(34,400	)		—
Purchases of furniture, equipment and leasehold improvements		(2,681	)		(9,809	)
Capitalization of software development costs		(18,561	)		(16,459	)
Net cash (used in) investing activities		(55,642	)		(43,346	)
Cash flows from financing activities
Cash dividend on common stock		(53,527	)		(50,238	)
Exercise of stock options		136			4,665
Withholding tax payments on restricted stock vesting and stock option exercises		(19,953	)		(34,282	)
Repurchases of common stock		(87,540	)		(13,956	)
Payment of contingent consideration		(26,164	)		—
Proceeds from short-term borrowings		100,000			70,348
Repayments of short-term borrowings		(100,000	)		(69,302	)
Net cash (used in) financing activities		(187,048	)		(92,765	)
Effect of exchange rate changes on cash and cash equivalents		(23,894	)		(263	)
Cash and cash equivalents including restricted cash
Net decrease for the period		(196,677	)		(62,807	)
Beginning of period		625,567			608,050
End of period	$	428,890		$	545,243
Supplemental cash flow information
Cash paid for income taxes	$	47,991		$	36,798
Cash paid for interest		429			362
Non-cash activity
Contingent consideration payable recognized in connection with acquisitions		—			22,450
Exercise of stock options - cashless		—			2,750
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		1,651			1,208
The accompanying notes are an integral part of these consolidated financial statements.

8

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Principal Business Activity

MarketAxess Holdings Inc. (the “Company” or “MarketAxess”) was incorporated in the State of Delaware on April 11, 2000. Through its subsidiaries, MarketAxess operates leading electronic trading platforms delivering expanded liquidity opportunities, improved execution quality and significant cost savings across global fixed-income markets. Over 1,900 institutional investor and broker-dealer firms are active users of MarketAxess’ patented trading technology, accessing global liquidity on its platforms in U.S. investment-grade bonds, U.S. high-yield bonds, emerging market debt, Eurobonds, municipal bonds, U.S. government bonds and other fixed-income securities. Through its Open Trading® protocols, MarketAxess executes bond trades between and among institutional investor and broker-dealer clients in the leading all-to-all anonymous trading environment for corporate bonds. MarketAxess also offers a number of trading-related products and services, including: Composite+™ pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to optimize trading environments. The Company also provides a range of pre- and post-trade services, including trade matching, trade publication, regulatory transaction reporting and market and reference data across a range of fixed-income and other products.

2. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. These consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The consolidated financial information as of December 31, 2021 has been derived from audited financial statements not included herein. These unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to Form 10-Q and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the interim periods presented. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. Interim period operating results may not be indicative of the operating results for a full year. Certain reclassifications have been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Such reclassifications are immaterial, individually and in the aggregate, to both current and all previously issued financial statements taken as a whole and have no effect on previously reported net income.

Cash and Cash Equivalents

The Company defines cash equivalents as short-term interest-bearing investments with maturities at the time of purchase of three months or less.

9

Investments

The Company determines the appropriate classification of securities at the time of purchase which are recorded in the Consolidated Statements of Financial Condition on the trade date. Securities are classified as available-for-sale or trading. Available-for-sale investments are carried at fair value with the unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Trading investments include U.S. Treasuries and are carried at fair value, with realized and unrealized gains or losses included in other, net in the Consolidated Statements of Operations.

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 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 counterparty to both the buyer and the seller are recorded on a settlement date basis. The Company presents its securities failed-to-deliver and securities failed-to-receive balances on a net-by-counterparty basis within receivables from and payables to broker-dealers, clearing organizations and customers. The difference between the Company’s trade-date receivables and payables for unsettled matched principal transactions reflects commissions earned and is recorded within accounts receivable, net on a trade date basis.

Allowance for Credit Losses

All accounts receivable have contractual maturities of less than one year and are derived from trading-related fees and commissions and revenues from products and services. The Company continually monitors collections and payments from its customers and maintains an allowance for doubtful accounts. The allowance for credit losses is based on an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific collection issues that have been identified. Account balances are grouped for evaluation based on various risk characteristics, including billing type, legal entity, and geographic region. Additions to the allowance for credit losses are charged to bad debt expense, which is included in general and administrative expense in the Company’s Consolidated Statements of Operations. Balances that are determined to be uncollectable are written off against the allowance for credit losses. The allowance for credit losses was immaterial as of June 30, 2022 and December 31, 2021.

Depreciation and Amortization

Fixed assets are carried at cost less accumulated depreciation. The Company uses the straight-line method of depreciation over three to seven years. The Company amortizes leasehold improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease.

Software Development Costs

The Company capitalizes certain costs associated with the development of internal use software, including, among other items, employee compensation and related benefits and third party consulting costs at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed. Once the product is ready for its intended use, such costs are amortized on a straight-line basis over three 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.

10

Cloud Computing Costs

The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, employee compensation and related benefits and third party consulting costs that are part of the application development stage. These costs are recorded as a prepaid asset on the Consolidated Statement 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 previously entered into foreign currency forward contracts to hedge its net investment in its U.K. subsidiaries. Gains and losses on these transactions are included in accumulated other comprehensive loss 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 Revenue – The Company charges its broker-dealer clients variable transaction fees for trades executed on its platforms and, under certain plans, distribution fees or monthly minimum fees to use the platforms for a particular product area. Variable transaction fees are recognized on a trade date basis, are generally calculated as a percentage of the notional dollar volume of bonds traded on the platforms and vary based on the type, size, yield and maturity of the bond traded, as well as individual client incentives. Bonds that are more actively traded or that have shorter maturities generally generate lower commissions, while bonds that are less actively traded or that have longer maturities generally command higher commissions. Under the Company’s disclosed trading transaction fee plans, variable transaction fees, distribution fees and unused monthly fee commitments are invoiced and recorded on a monthly basis.

For Open Trading trades that the Company executes between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller, the Company earns its commission through the difference in price between the two trades. The commission is collected upon settlement of the trade, which typically occurs within one to two trading days after the trade date. For the majority of the Company’s U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly basis. The following table presents commission revenue by fee type:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	84,686	$	84,581	$	171,753	$	183,399
Open Trading – matched principal trading		42,624		39,881		85,615		86,201
U.S. Treasuries – matched principal trading		4,512		2,637		9,327		5,897
Total variable transaction fees		131,822		127,099		266,695		275,497
Distribution fees and unused minimum fees		31,641		29,332		62,881		56,772
Total commissions	$	163,463	$	156,431	$	329,576	$	332,269

11

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 deferred and recognized ratably over the contract period. The following table presents information services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	9,223	$	9,512	$	18,708	$	18,557
Services transferred at a point in time		173		332		497		449
Total information services revenues	$	9,396	$	9,844	$	19,205	$	19,006

Post-trade services – Post-trade services revenue is generated from regulatory transaction reporting, trade publication and trade matching services. Customers are generally billed monthly in arrears and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period. The Company also generates one-time implementation fees for onboarding clients which are invoiced and recognized in the period the implementation is completed. The following table presents post-trade services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,143	$	9,848	$	19,014	$	20,100
Services transferred at a point in time		1		—		42		9
Total post-trade services revenues	$	9,144	$	9,848	$	19,056	$	20,109

Other revenues – Other revenues primarily includes revenue from telecommunications line charges to broker-dealer clients.

Contract liabilities consist of deferred revenues that the Company records when cash payments are received or due in advance of services to be performed. The revenue recognized from contract liabilities and the remaining balance is shown below:

	December 31, 2021		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2022
	(In thousands)
Information services	$	3,528	$	4,948	$	(5,455	)	$	—		$	3,021
Post-trade services		720		8,167		(7,491	)		(72	)		1,324
Total deferred revenue	$	4,248	$	13,115	$	(12,946	)	$	(72	)	$	4,345

The majority of the Company’s contracts are short-term in nature with durations of less than one year. For contracts with original durations extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $20.0 million as of June 30, 2022. The Company expects to recognize revenue associated with the remaining performance obligations over the next 28 months.

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Stock-Based Compensation

The Company measures and recognizes compensation expense for all share-based payment awards based on their estimated fair values measured as of the grant date. These costs are recognized as an expense in the Consolidated Statements of Operations over the requisite service period, which is typically the vesting period, with an offsetting increase to additional paid-in capital. Forfeitures are recognized as they occur.

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized against deferred tax assets if it is more likely than not that such assets will not be realized in future years. Tax benefits for uncertain tax positions are recognized when it is more likely than not that the positions will be sustained upon examination based on their technical merits. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statements of Operations. All tax effects related to share-based payments are recorded in the provision for income taxes in the periods during which the awards are exercised or vest.

Business Combinations, Goodwill and Intangible Assets

Business combinations are accounted for under the purchase method of accounting. The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of certain assets acquired and liabilities assumed requires judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates, customer attrition rates and asset lives.

The Company operates as a single reporting unit. Following an acquisition, goodwill no longer retains its identification with a particular acquisition, but instead becomes identifiable with the entire reporting unit. As a result, all of the fair value of the Company is available to support the value of goodwill. An impairment review of goodwill is performed on an annual basis, at year-end, or more frequently if circumstances change. Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized over their estimated useful lives which range from one to 15 years using either a straight-line or accelerated amortization method based on the pattern of economic benefit the Company expects to realize from such assets. Intangible assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment.

Equity Investments and Consolidation

The Company evaluates equity investments for potential consolidation under the voting-interest or variable-interest models. The Company consolidates investees over which the Company determines it has control under the voting interest model, generally greater than 50% ownership, or for which the Company is the primary beneficiary under the variable-interest model. The Company uses the equity method of accounting when it exercises significant influence over the investee, but does not have operating control, generally between 20% and 50% ownership. Under the equity method of accounting, original investments are recorded at cost in prepaid expenses and other assets on the Consolidated Statements of Financial Condition and adjusted by the Company’s proportionate share of the investees’ undistributed earnings or losses. Equity investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.

Earnings Per Share

Basic earnings per share is computed by dividing the net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue common stock were converted into or exercised for common stock.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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3. Regulatory Capital Requirements

Certain U.S. subsidiaries of the Company are registered as a broker-dealer or swap execution facility (“SEF”) and therefore are subject to the applicable rules and regulations of the SEC, the Financial Industry Regulatory Authority (“FINRA”) and the Commodity Futures Trading Commission (“CFTC”). These rules contain minimum net capital requirements, as defined in the applicable regulations, and also may require that a significant part of the registrants’ assets be kept in relatively liquid form. Certain of the Company’s foreign subsidiaries are regulated by the Financial Conduct Authority (“FCA”) in the U.K. or other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of June 30, 2022, each of the Company’s subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of June 30, 2022, the Company’s subsidiaries maintained aggregate net capital and financial resources that were $477.8 million in excess of the required levels of $21.7 million.

The Company’s U.S. broker-dealer subsidiary is required to segregate funds in a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of June 30, 2022, the U.S. broker-dealer subsidiary had a balance of $50.3 million in its special reserve bank account. This U.S. broker-dealer subsidiary also maintained net capital that was $292.9 million in excess of the required level of $4.8 million.

Each of the Company’s U.S. and foreign regulated subsidiaries are subject to local regulations which generally prohibit repayment of borrowings from the Company or affiliates, paying cash dividends, making loans to the Company or affiliates or otherwise entering into transactions that result in a significant reduction in regulatory net capital or financial resources without prior notification to or approval from such regulated entity’s principal regulator.

4. Fair Value Measurements

The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2:

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2022
Assets
Money market funds	$	12,275	$	—	$	—	$	12,275
Trading securities
U.S. Treasuries		—		24,438		—		24,438
Mutual funds held in rabbi trust		—		9,859		—		9,859
Total assets	$	12,275	$	34,297	$	—	$	46,572
Liabilities
Contingent consideration payable	$	—	$	—	$	12,121	$	12,121
As of December 31, 2021
Assets
Money market funds	$	14,206	$	—	$	—	$	14,206
Trading securities
U.S. Treasuries		—		24,883		—		24,883
Mutual funds held in rabbi trust		—		11,195		—		11,195
Total assets	$	14,206	$	36,078	$	—	$	50,284
Liabilities
Contingent consideration payable	$	—	$	—	$	41,090	$	41,090

Securities classified within Level 2 were valued using a market approach utilizing prices and other relevant information generated by market transactions involving comparable assets. The mutual funds held in a rabbi trust represent investments associated with the Company’s deferred cash incentive plan.

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Liabilities classified within Level 3 reflect contingent consideration payable recognized in connection with acquisitions. Significant unobservable inputs used in the valuation of contingent consideration payable include estimates of client retention, electronic trading volume and variable fees over periods of 18 to 24 months from the acquisition dates. The following table summarizes the change in the Company's Level 3 liabilities for the six months ended June 30, 2022:

	December 31, 2021		Payments			Unrealized (Gain)/Loss		Realized (Gain)/Loss			Foreign Currency Translation			June 30, 2022
	(In thousands)
Contingent consideration payable	$	41,090	$	(26,164	)	$	313	$	(1,769	)	$	(1,349	)	$	12,121

The table below presents the range and average significant unobservable inputs used in the valuation of the Company's Level 3 liabilities:

	Valuation Technique	Unobservable Inputs	Range	Average
	($ in thousands)
As of June 30, 2022
Contingent consideration payable	Discounted cash flows	Present value factor	0.97		0.97
		April 2022-March 2023 variable fee	$3,556 - $5,658	$4,607
		Percentage of electronic trading volume	86.0% - 96.6%	91.3%
As of December 31, 2021
Contingent consideration payable	Discounted cash flows	Present value factor	0.95 - 1		0.98
		Customer retention rate	84.0%	84.0%
		April 2021-March 2022 variable fee	$2,703 - $3,086	$2,895
		Percentage of electronic trading volume	86.0% - 96.6%	91.3%

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The table below presents the carrying value, fair value and fair value hierarchy category of the Company's financial assets and liabilities that are not measured at fair value on the Consolidated Statement of Financial Condition. The carrying values of the Company's financial assets and liabilities not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximate fair value due to the short-term nature of the underlying assets and liabilities.

	Carrying Value		Fair Value		Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2022
Financial assets not measured at fair value:
Cash and cash equivalents	$	290,544	$	290,544	$	290,544	$	—	$	—	$	290,544
Cash segregated under federal regulations		50,276		50,276		50,276		—		—		50,276
Accounts receivable, net of allowance		87,475		87,475		—		87,475		—		87,475
Receivables from broker-dealers, clearing organizations and customers		617,817		617,817		87,962		529,855		—		617,817
Total	$	1,046,112	$	1,046,112	$	428,782	$	617,330	$	—	$	1,046,112
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing organizations and customers	$	375,211	$	375,211	$	—	$	375,211	$	—	$	375,211
As of December 31, 2021
Financial assets not measured at fair value:
Cash and cash equivalents	$	506,735	$	506,735	$	506,735	$	—	$	—	$	506,735
Cash segregated under federal regulations		50,159		50,159		50,159		—		—		50,159
Accounts receivable, net of allowance		63,881		63,881		—		63,881		—		63,881
Receivables from broker-dealers, clearing organizations and customers		408,346		408,346		68,565		339,781		—		408,346
Total	$	1,029,121	$	1,029,121	$	625,459	$	403,662	$	—	$	1,029,121
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing organizations and customers	$	229,325	$	229,325	$	—	$	229,325	$	—	$	229,325

The following table summarizes the Company’s investments:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
As of June 30, 2022
Trading securities
U.S. Treasuries	$	24,883	$	—	$	(445	)	$	24,438
Mutual funds held in rabbi trust		11,981		—		(2,122	)		9,859
Total investments	$	36,864	$	—	$	(2,567	)	$	34,297
As of December 31, 2021
Trading securities
U.S. Treasuries	$	24,994	$	—	$	(111	)	$	24,883
Mutual funds held in rabbi trust		9,941		1,254		—			11,195
Total investments	$	34,935	$	1,254	$	(111	)	$	36,078

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The following table summarizes the fair value of the investments based upon the contractual maturities:

	As of
	June 30, 2022		December 31, 2021
	(In thousands)
Less than one year	$	34,297	$	11,195
Due in 1 - 5 years		—		24,883
Total	$	34,297	$	36,078

There were no proceeds from the sales and maturities of investments during the six months ended June 30, 2022. Proceeds from the sales and maturities of investments during the six months ended June 30, 2021 were $19.4 million. Net unrealized losses on trading securities were $2.6 million for the six months ended June 30, 2022. Net unrealized gains on trading securities were $0.9 million for the six months ended June 30, 2021.

5. Receivables from and Payables to Broker-dealers, Clearing organizations and Customers

Receivables from and payables to broker-dealers, clearing organizations and customers consisted of the following:

	June 30, 2022		December 31, 2021
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	189,929	$	152,766
Securities failed-to-deliver – customers		333,607		182,052
Deposits with clearing organizations and broker-dealers		87,962		68,565
Other		6,319		4,963
Total	$	617,817	$	408,346
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	251,076	$	166,010
Securities failed-to-receive – customers		115,365		59,879
Other		8,770		3,436
Total	$	375,211	$	229,325

6. Acquisitions and Equity Investments

In May 2022, the Company invested $34.4 million to acquire a minority ownership stake in RFQ–hub Holdings LLC, an entity formed with a consortium of market participants to support the growth of RFQ-hub, a bilateral multi-asset request for quote platform. The Company possesses significant influence over RFQ–hub Holdings LLC and is accounting for its investment under the equity method of accounting. As of June 30, 2022, the Company’s investment is recorded at carrying value of $34.6 million within prepaid expenses and other assets on the Consolidated Statements of Financial Condition. The Company’s proportionate share of RFQ–hub Holdings LLC’s net earnings was $0.2 million for the six months ended June 30, 2022 and is recorded within equity in earnings of unconsolidated affiliate on the Consolidated Statements of Operations.

On April 9, 2021, the Company acquired MuniBrokers LLC (“MuniBrokers”), a central electronic venue serving municipal bond brokers and dealers. The purchase price consisted of $17.1 million in cash paid at closing and up to $25.0 million of contingent consideration payable within approximately two years of the acquisition date. The Company accounted for the transaction as a business combination and utilized an independent third-party to assist in determining the fair value of the acquired intangible assets. The accounting purchase price was $39.6 million, comprised of $17.1 million of cash and $22.5 million of contingent consideration payable, which was included within accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition. The Company recorded $32.0 million of amortizable intangible assets and $7.4 million of goodwill as of the acquisition date. The acquired intangible assets consist of customer relationships and technology and have useful lives ranging from 1 to 15 years. In 2022, the Company recognized a decrease of $1.6 million to the contingent consideration payable due to the finalization of the first earn-out period consideration, which was recorded as a gain in other, net on the Consolidated Statements of Operations. In May 2022, the Company made a payment of $8.3 million to settle the first earn-out period consideration. As of June 30, 2022, the remaining outstanding contingent consideration payable was $12.1 million.

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On November 30, 2020, the Company acquired Regulatory Services GmbH, the pan-European regulatory reporting business of Deutsche Börse Group (“Regulatory Reporting Hub”). The purchase price consisted of $22.5 million in cash paid at closing and up to $24.6 million in contingent consideration payable in cash within 18 months of the closing. The Company is accounting for the transaction as a purchase of assets and recorded $37.4 million in amortizable intangible assets as of the acquisition date. In April 2022, the Company made a final payment of $17.9 million to settle the contingent consideration payable.

7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives were $154.8 million as of each of June 30, 2022 and December 31, 2021. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

	June 30, 2022							December 31, 2021
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	128,942	$	(26,518	)	$	102,424	$	132,197	$	(19,813	)	$	112,384
Technology and other intangibles		11,430		(8,247	)		3,183		11,430		(7,437	)		3,993
Total	$	140,372	$	(34,765	)	$	105,607	$	143,627	$	(27,250	)	$	116,377

Amortization expense associated with identifiable intangible assets was $8.2 million and $6.1 million for the six months ended June 30, 2022 and 2021, respectively. Annual estimated total amortization expense is $16.5 million, $17.3 million, $15.0 million, $12.1 million and $10.4 million for 2022 through 2026.

8. Income Taxes

The Company's provision for income taxes includes U.S. federal, state and local, and foreign taxes. The Company’s effective tax rate was 25.3% and 21.8% for the three months ended June 30, 2022 and 2021, respectively, and 26.8% and 21.4% for the six months ended June 30, 2022 and 2021. The Company’s effective tax rate can vary from period to period depending on geographic mix of our earnings, changes in tax legislation and tax rates and the amount and timing of excess tax benefits related to share-based payments, among other factors. During the six months ended June 30, 2022, the Company’s provision for income taxes included $3.2 million of expense related to a settlement with the New York State tax authorities to resolve the 2010 to 2014 audits. The Company recognized excess tax detriments on share-based payments of $0.1 million and less than $0.1 million for the three and six months ended June 30, 2022, respectively, and $5.6 million and $9.7 million of excess tax benefits on share-based payments for the three and six months ended June 30, 2021, respectively.

The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. The Company is currently under a New York State income tax examination for the tax years 2015 through 2017 and a New York City income tax examination for the tax years 2016 through 2018. At this time, the Company cannot estimate when the examinations will conclude or the impact such examinations will have on the Company’s Consolidated Financial Statements, if any. Generally, other than New York State and City, the Company is no longer subject to tax examinations by tax authorities for years prior to 2018.

9. Stock-Based Compensation Plans

Equity Incentive Plan

The Company maintains the MarketAxess Holdings Inc. 2020 Equity Incentive Plan (the “2020 Plan”) which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, or other stock-based awards as incentives to encourage employees, consultants and non-employee directors to participate in the long-term success of the Company. As of June 30, 2022, there were 2,475,894 shares available for grant under the 2020 Plan.

Total stock-based compensation expense was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Employees	$	6,059	$	5,920	$	13,701	$	13,023
Non-employee directors		444		214		901		535
Total stock-based compensation	$	6,503	$	6,134	$	14,602	$	13,558

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The Company records stock-based compensation expense for employees in employee compensation and benefits and for non-employee directors in general and administrative expenses in the Consolidated Statements of Operations.

During the six months ended June 30, 2022, the Company granted to employees and directors a total of 62,907 shares of restricted stock units, 23,904 options to purchase shares of common stock and performance stock units with an expected pay-out at target of 22,141 shares of common stock. The fair values of the restricted stock units and performance stock units were based on a weighted-average fair value per unit at the grant date of $354.03 and $350.85, respectively. Based on the Black-Scholes option pricing model, the weighted-average fair value for each option granted was $101.38 per share.

As of June 30, 2022, the total unrecognized compensation cost related to all non-vested awards was $51.6 million. That cost is expected to be recognized over a weighted-average period of 1.8 years.

Employee Stock Purchase Plan

In June 2022, the Company’s stockholders approved the MarketAxess Holdings Inc. Employee Stock Purchase Plan (the “ESPP”), under which a total of 121,211 shares of the Company’s Common Stock will be made available for purchase by employees. The ESPP is intended to qualify as an “employee stock purchase plan” meeting the requirements of Section 423 of the Internal Revenue Code. The ESPP was adopted by the Company’s Board of Directors in April 2022 and approved by the Company’s stockholders in June 2022. The ESPP has a series of six-month offering periods, with a new offering period beginning on the first trading day on or after February 16 and August 16 of each year. Subject to certain limitations, employees may contribute up to $2,000 of such employee’s total eligible compensation per month towards the purchase of common stock via payroll deductions. Purchase dates occur on the first trading day on or after February 15 and August 15 of each year and shares are purchased at a 15% discount off the lesser of: (i) the fair market value per share on the first day of each offering period; and (ii) the fair market value per share on the purchase date, but in no event less than par value. The Company expects the first offering period under the ESPP to begin on August 15, 2022.

The ESPP replaced the 2015 MarketAxess Holdings Inc. Employee Stock Purchase Plan, which was terminated by the Company’s Compensation & Talent Committee in February 2022.

10. Earnings Per Share

The following table sets forth basic and diluted weighted average shares outstanding used to compute earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,529		37,508		37,456		37,489
Dilutive effect of stock options and restricted stock		79		596		260		640
Diluted weighted average shares outstanding		37,608		38,104		37,716		38,129
Basic earnings per share	$	1.78	$	1.79	$	3.52	$	3.94
Diluted earnings per share		1.78		1.77		3.49		3.87

Stock options and restricted stock totaling 333,413 shares and 28,570 shares for the three months ended June 30, 2022 and 2021, respectively, and 254,028 and 44,830 for the six months ended June 30, 2022 and 2021, respectively, were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. The computation of diluted shares can vary among periods due, in part, to the change in the average price of the Company’s common stock.

11. Credit Agreements and Short-term Financing

Prior Revolving Credit Agreement

In November 2020, the Company entered into a one-year credit agreement (the “2020 Credit Agreement”) with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, that provided aggregate commitments totaling $500.0 million, consisting of a revolving credit facility and a $5.0 million letter of credit sub-limit for standby letters of credit.

Borrowings under the 2020 Credit Agreement bore interest at a rate per annum equal to the base rate or adjusted London Inter-bank Offered Rate (“LIBOR”) plus an applicable margin that varies with the Company’s consolidated total leverage ratio. The 2020 Credit Agreement required that the Company satisfy certain covenants, which include leverage ratios and minimum earnings before interest, tax, and depreciation and amortization (“EBITDA”) requirements.

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2021 Credit Agreement

On October 15, 2021, the Company replaced the 2020 Credit Agreement with a new three-year revolving credit facility (the “2021 Credit Agreement”) provided by a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, which provides aggregate commitments totaling $500.0 million, consisting of a revolving credit facility and a $5.0 million letter of credit sub-limit for standby letters of credit. The 2021 Credit Agreement will mature on October 15, 2024, with the Company's option to request up to two additional 364-day extensions at the discretion of each lender and subject to customary conditions. Subject to satisfaction of certain specified conditions, the Company is permitted to upsize the 2021 Credit Agreement by up to $250.0 million in total. As of June 30, 2022, the Company had no letters of credit outstanding and $500.0 million in available borrowing capacity under the 2021 Credit Agreement.

Borrowings under the 2021 Credit Agreement will bear interest at a rate per annum equal to the base rate or adjusted LIBOR plus an applicable margin that varies with the Company's consolidated total leverage ratio. The 2021 Credit Agreement requires that the Company satisfy certain covenants, which include a leverage ratio. The Company incurred $0.3 million of interest expense under the 2021 Credit Agreement for the six months ended June 30, 2022.

Collateralized Agreement

In connection with its self-clearing operations, the Company’s U.S. broker-dealer subsidiary entered into an agreement (the “Collateralized Agreement”) with its settlement bank to provide loans to the subsidiary in amounts up to an aggregate of $200.0 million on an uncommitted basis. Borrowings under the Collateralized Agreement are collateralized by securities pledged by the Company’s U.S. broker-dealer subsidiary to the settlement bank, subject to applicable haircuts and concentration limits. Borrowings under the Collateralized Agreement will bear interest at a base rate per annum equal to the higher of the upper range of the Federal Funds Rate, 0.25% or one-month Secured Overnight Financing Rate (“SOFR”), plus 1.00%. The Company incurred no interest expense on borrowings under the Collateralized Agreement during the six months ended June 30, 2022. As of June 30, 2022, the Company had no borrowings outstanding and $200.0 million in available borrowing capacity under the Collateralized Agreement.

Short-term Financing

Under arrangements with their settlement banks, certain of the Company’s U.S. and U.K. operating subsidiaries may receive overnight financing in the form of bank overdrafts. The Company incurred interest expense on such overnight financing of $0.2 million during the six months ended June 30, 2022. As of June 30, 2022, the Company had no overdrafts payable outstanding.

12. Leases

The Company has operating leases for corporate offices with initial lease terms ranging from one year to 15 years. Certain leases contain options to extend the initial term at the Company’s discretion. The Company accounts for the option to extend when it is reasonably certain of being exercised. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

The following table presents the components of lease expense for the three and six months ended June 30, 2022 and 2021:

		Three Months Ended June 30,						Six Months Ended June 30,
Lease cost:	Classification	2022			2021			2022			2021
		(In thousands)
Operating lease cost	Occupancy	$	3,345		$	3,346		$	6,655		$	6,669
Operating lease cost for subleased/assigned properties	Other, net		13			544			469			1,041
Variable lease costs	Occupancy		4			2			11			8
Sublease income subleased/assigned properties	Other, net		(15	)		(544	)		(405	)		(1,047	)
Net lease cost		$	3,347		$	3,348		$	6,730		$	6,671

The Company determines whether an arrangement is, or includes, a lease at contract inception. Operating lease right-of-use assets and liabilities are recognized at commencement date and are initially measured based on the present value of lease payments over the defined lease term. As the Company's leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.

20

The weighted average remaining lease term and weighted average discount rate are as follows:

	As of
Lease Term and Discount Rate	June 30, 2022			December 31, 2021
Weighted average remaining lease term (in years)		11.0			11.5
Weighted average discount rate		5.9	%		5.9	%

The following table presents the maturity of lease liabilities as of June 30, 2022:

	(In thousands)
Remainder of 2022	$	5,492
2023		10,988
2024		11,466
2025		11,274
2026		10,789
2027 and thereafter		67,975
Total lease payments		117,984
Less: interest		32,429
Present value of lease liabilities	$	85,555

13. Commitments and Contingencies

Legal

In the normal course of business, the Company and its subsidiaries included in the consolidated financial statements may be involved in various lawsuits, proceedings and regulatory examinations. The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings, if any, utilizing the latest information available. For matters where it is probable that the Company will incur a material loss and the amount can be reasonably estimated, the Company will establish an accrual for the loss. Once established, the accrual will be adjusted to reflect any relevant developments. When a loss contingency is not both probable and estimable, the Company does not establish an accrual.

Based on currently available information, the outcome of the Company’s outstanding matters is not expected to have a material adverse impact on the Company’s financial position. It is not presently possible to determine the ultimate exposure to these matters and there is no assurance that the resolution of the outstanding matters will not significantly exceed any reserves accrued by the Company.

Other

The Company, through certain of its subsidiaries, executes bond transactions between its institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades. The Company’s U.S. broker-dealer subsidiary operates under a self-clearing model for the settlement of such transactions. The Company’s subsidiaries also settle their transactions through third-party clearing brokers or settlement agents. Settlement typically occurs within one to two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded. Under both the self-clearing and the third-party clearing models, the Company may be exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is an error in executing a matched principal transaction. Pursuant to the terms of the securities clearing agreements, each third-party clearing broker has the right to charge the Company for any losses they suffer resulting from a counterparty’s failure on any of the Company’s trades. The Company did not record any liabilities or losses with regard to counterparty failures for the six months ended June 30, 2022 and 2021.

In the normal course of business, the Company enters into contracts that contain a variety of representations, warranties and indemnification provisions. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of loss to be remote.

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14. Share Repurchase Programs

In January 2021, the Board of Directors authorized a new share repurchase program for up to $100.0 million that commenced in April 2021 and was exhausted in January 2022. In January 2022, the Board of Directors authorized a new share repurchase program for up to $150.0 million. For the six months ended June 30, 2022, the Company repurchased 280,315 shares of common stock at a cost of $87.5 million. Shares repurchased under each program will be held in treasury for future use.

15. Segment and Geographic Information

The Company operates electronic platforms for the trading of fixed-income securities and provides related data, analytics, compliance tools and post-trade services. The Company considers its operations to constitute a single business segment because of the highly integrated nature of these products and services, the financial markets in which the Company competes and the Company’s worldwide business activities. The Company believes that results by geographic region or client sector are not necessarily meaningful in understanding its business.

For the six months ended June 30, 2022 and 2021, the U.K. was the only individual foreign country in which the Company had a subsidiary that accounted for 10% or more of the total revenues or total long-lived assets. Revenues and long-lived assets are attributed to a geographic area based on the location of the particular subsidiary. Long-lived assets are defined as furniture, equipment, leasehold improvements and capitalized software. Revenues for the three and six months ended June 30, 2022 and 2021 and long-lived assets as of June 30, 2022 and December 31, 2021 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Revenues
Americas	$	149,363	$	143,239	$	299,919	$	303,358
Europe		27,800		28,317		58,536		57,861
Asia		5,066		4,778		9,831		10,579
Total	$	182,229	$	176,334	$	368,286	$	371,798

	As of
	June 30, 2022		December 31, 2021
	(In thousands)
Long-lived assets, as defined
Americas	$	74,603	$	75,328
Europe		18,290		20,547
Asia		362		186
Total	$	93,255	$	96,061

16. Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported within the Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Consolidated Statements of Cash Flows.

	Statement of Financial Condition Location	June 30, 2022		December 31, 2021
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	290,544	$	506,735
Cash segregated for regulatory purposes	Cash segregated under federal regulations		50,276		50,159
Deposits with clearing organizations and broker-dealers	Receivables from broker-dealers, clearing organizations and customers		87,962		68,565
Other deposits	Prepaid expenses and other assets		108		108
Total		$	428,890	$	625,567

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future business and financial performance. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of each quarter or the year. Although these expectations may change, we undertake no obligation to revise or update any forward-looking statements contained in this report, except to the extent required by applicable law. Our company policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter. Actual future events or results may differ, perhaps materially from those contained in the projections or forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this report, particularly in the section captioned Part II, Item 1A, “Risk Factors,” and in our Form 10-K for the year ended December 31, 2021, including in Part I, Item 1A, “Risk Factors” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Executive Overview

MarketAxess operates leading electronic trading platforms delivering greater trading efficiency, a diversified pool of liquidity and significant cost savings to our clients across the global fixed-income markets. Over 1,900 institutional investor and broker-dealer firms are active users of our patented trading technology to efficiently trade U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, Eurobonds, municipal bonds, U.S. government bonds and other fixed-income securities. Our award-winning Open Trading marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets, creating a unique liquidity pool for a broad range of credit market participants. Drawing on a diverse set of trading protocols, including request-for-quote, live order books, sessions-based trading and portfolio trading solutions, as well as our deep data and analytical resources, we believe that we connect the most robust network of participants through an advanced full trading lifecycle solution that also includes automated trading solutions, intelligent data products and a range of post-trade services.

We operate in a large and rapidly growing market that provides us with a significant opportunity for future growth. Many of our largest current product areas, and areas of future growth, have relatively low levels of trading electronification, which further increases the size of our addressable market. Our platforms’ innovative technology solutions are designed to capitalize on this addressable market by increasing the number of potential trading counterparties and providing our clients with a menu of solutions to address the full lifecycle of fixed-income trading. We offer Open Trading for most of our products and trading protocols, allowing our entire global network to interact in one large pool of trading liquidity. We believe that Open Trading drives meaningful transaction cost savings to our clients and reduces risk in fixed-income markets by creating a global, diversified pool of liquidity. Institutional investors can also send trading inquiries directly to their traditional broker-dealer counterparties through a disclosed RFQ, while simultaneously accessing additional counterparties through our anonymous Open Trading solution. We also provide a number of integrated and actionable data offerings, including Composite+ and Axess All real time pricing, to assist clients with trading decisions and transaction cost analysis. We have a range of post-trade services, including straight through processing, trade matching, trade publication, regulatory transaction reporting and market and reference data across fixed-income and other products.

We derive revenue from commissions for trades executed on our platforms, information services, post-trade services and other revenues. Our expenses consist of employee compensation and benefits, depreciation and amortization, technology and communication expenses, professional and consulting fees, occupancy, marketing and advertising, clearing costs and general and administrative expenses.

Our objective is to provide the leading global electronic trading platforms for fixed-income securities, connecting broker-dealers and institutional investors more easily and efficiently, while offering a broad array of trading information and technology services to market participants across the trading cycle. The key elements of our strategy are discussed in Part 1, Item 1. “Business – Our Strategy” of our Form 10-K for the year ended December 31, 2021.

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Critical Factors Affecting Our Industry and Our Company

Economic, Political and Market Factors

The global fixed-income securities industry is risky and volatile and is directly affected by a number of economic, political and market factors that may result in declining trading volume. These factors could have a material adverse effect on our business, financial condition and results of operations. These factors include, among others, credit market conditions, the current interest rate environment, including the volatility of interest rates and investors’ forecasts of future interest rates, economic and political conditions in the United States, Europe and elsewhere, and the consolidation or contraction of our broker-dealer and institutional investor clients.

We experienced improving operating conditions in the second quarter of 2022 compared to the second quarter of 2021, with credit spreads widening, increased volatility and higher U.S high-grade market volumes. In the three months ended June 30, 2022, market volumes in U.S. high-grade corporate bonds as reported by FINRA’s Trade Reporting and Compliance Engine (“TRACE”) increased 5.1% compared to the three months ended June 30, 2021. Although our trading volumes increased during the three months ended June 30, 2022 due to higher market volumes and increases in our estimated market share, a significant rise in corporate bond yields during the three months ended June 30, 2022 contributed to an decrease in the duration of the bonds traded on our platforms, which had a negative effect on our average variable transaction fee per million.

In February 2022, following Russia's invasion of Ukraine, the U.S., the U.K., and the European Union, among others, have adopted sanctions that, in various ways, prohibit transactions with numerous Russian entities, including major Russian banks, and individuals; limit transactions in Russian sovereign debt; and constrain investment, trade and financing to, from or in certain regions of Ukraine. We did not incur any material losses on trades that were unsettled at the time sanctions were imposed. To the extent the sanctions are further expanded or the ongoing war, sanctions, or geopolitical tensions and volatility have further adverse effects on the global economy and markets or the participants on our platforms, our financial position and results of operations may be adversely affected.

During the first half of 2022, the COVID-19 pandemic (the “Pandemic”) continued to have an impact on how we manage our business. Most of our employees have transitioned to a hybrid employment model with an emphasis on safety and employee wellbeing. We continue to monitor the impact of the Pandemic on our communities, including the spread of any variants, and we remain confident that we could continue to maintain business continuity and serve our clients if a return to an all-virtual environment becomes necessary to promote employee and public safety.

There has been increased demand for green bonds and other securities linked to environmental, social and governance factors in the fixed income markets in which we operate. Based on the interest we are receiving from investors, we expect such increased demand to continue.

Because the majority of our assets are short-term in nature, they are not significantly affected by inflation. However, the rate of inflation may affect our expenses, such as employee compensation and communications expenses, which may not be readily recoverable in the prices of our services. To the extent inflation continues to result in rising interest rates and has other adverse effects on the securities markets, it may adversely affect our financial position and results of operations.

We expect that current cash and investment balances, in combination with cash flows that are generated from operations and the ability to borrow under our 2021 Credit Agreement, will be sufficient to meet our liquidity needs and planned capital expenditure requirements for at least the next twelve months. We ended the quarter with a strong balance sheet, no borrowings under our 2021 Credit Agreement and with capital significantly in excess of our regulatory requirements.

Competitive Landscape

The global fixed-income securities industry generally, and the electronic financial services markets in which we engage in particular, are highly competitive, and we expect competition to intensify in the future. Sources of competition for us will continue to include, among others, bond trading conducted directly between broker-dealers and their institutional investor clients over the telephone or electronically and other multi-dealer or all-to-all trading platforms. Competitors, including companies in which some of our broker-dealer clients have invested, have developed or acquired electronic trading platforms or have announced their intention to explore the development of electronic platforms or information networks that may compete with us.

We primarily compete on the basis of our client network, the liquidity provided by our dealer, and, to a growing extent, institutional investor clients, the total transaction costs associated with our services, the breadth of products, protocols and services offered, as well as the quality, reliability, security and ease of use of our platforms. We believe that our ability to grow volumes and revenues will largely depend on our performance with respect to these factors.

Our competitive position is also enhanced by the unique liquidity provided by our Open Trading functionalities and the familiarity and integration of our broker-dealer and institutional investor clients with our electronic trading platforms and other systems. We have focused on the unique aspects of the credit markets we serve in the development of our platforms, working closely with our clients to provide a system that is suited to their needs.

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Regulatory Environment

Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant regulatory risk and cause additional legal costs to ensure compliance. The existing legal framework that governs the financial markets is periodically reviewed and amended, resulting in the enactment and enforcement of new laws and regulations that apply to our business. For example, the SEC recently proposed rules that will expand Regulation ATS and Regulation SCI to alternative trading systems (ATS) that trade government securities and amend the SEC rule regarding the definition of an “exchange” to include Communication Protocol Systems, such as our RFQ protocols. In connection with these proposed rules, we expect that we will have to operate all of our trading protocols in compliance with Regulation ATS. The fixed-income industry has also been grappling with how to comply with Rule 15c2-11 (“Publication or submission of quotations without specified information”) of the Exchange Act, which had not previously been applied to debt securities. The impact of any of these reform efforts on us and our operations remains uncertain.

As a result of the U.K.'s departure from the European Union (“Brexit”), we obtained authorizations from the AFM for our subsidiaries in the Netherlands in 2019. We now provide regulated services to our clients within the E.U. in reliance on the cross-border services passport held by our Dutch subsidiaries. Brexit has led to an ongoing divergence between the U.K. and E.U. financial regulations, which has made it more difficult and costly to comply with the extensive government regulation to which we are subject. The cost and complexity of operating across increasingly divergent regulatory regimes has increased and is likely to continue to increase in the future.

Compliance with regulations may require us to dedicate additional financial and operational resources, which may adversely affect our profitability. However, we believe new regulations may also increase demand for our platforms and we believe we are well positioned to benefit from those regulatory changes that cause market participants to seek electronic trading platforms that meet the various regulatory requirements and help them comply with their regulatory obligations.

For further description of the regulations which govern our business, see Part1, Item 1. “Business – Government Regulation” of our Form 10-K for the year ended December 31, 2021.

Technology Environment

We must continue to enhance and improve our electronic trading platforms. The electronic financial services industry is characterized by increasingly complex systems and infrastructures and new business models. Our future success will depend on our ability to enhance our existing products and services, develop and/or license new products and technologies that address the increasingly sophisticated and varied needs of our existing and prospective broker-dealer and institutional investor clients and respond to technological advances and emerging industry and regulatory standards and practices on a cost-effective and timely basis. We plan to continue to focus on technology infrastructure initiatives and continually improve our platforms to further enhance our leading market position. We expect that our agile software development processes will help us continue to be a market leader in developing the technology solutions for our clients’ trading needs.

As the overall share of electronic trading grows in global credit products, we are experiencing continued demand for, and growth in, our automated trading solutions. Automated trading volumes rose to $57.6 billion in the second quarter of 2022, up 39.0% from $41.5 billion in the second quarter of 2021. In addition, the use of dealer algorithms is continuing to grow on our platforms, with approximately 5.7 million algorithmic responses in the second quarter of 2022, up 22.8% from the same period last year.

We experience cyber-attacks and attempted data security breaches. Cybersecurity incidents could impact revenue and operating income and increase costs. We therefore continue to make investments in our cybersecurity infrastructure and training of employees, which may result in increased costs, to strengthen our cybersecurity measures.

See also Part 1, Item 1A. - “Risk Factors, Technology, IT Systems and Cybersecurity Risks” of our Form 10-K for the year ended December 31, 2021.

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Trends in Our Business

The majority of our revenue is derived from commissions for transactions executed on our platforms between and among our institutional investor and broker-dealer clients and monthly distribution fees. We believe that there are five key variables that impact the notional value of such transactions on our platforms and the amount of commissions and distribution fees earned by us:

• the number of participants on our platforms and their willingness to use our platforms instead of competitors' platforms or execution methods;

• the frequency and competitiveness of the price responses by participants on our platforms;

• the number of markets that are available for our clients to trade on our platforms;

• the overall level of activity in these markets; and

• the duration of the bonds trading on our platforms and the level of commissions that we collect for trades executed through the platforms.

We believe that overall corporate bond market trading volume is affected by various factors including the absolute levels of interest rates, the direction of interest rate movements, the level of new issues of corporate bonds and the volatility of corporate bond spreads versus U.S. Treasury securities. Because a significant percentage of our revenue is tied directly to the volume of securities traded on our platforms, it is likely that a general decline in trading volumes, regardless of the cause of such decline, would reduce our revenues and have a significant negative impact on profitability.

As further described under “— Critical Factors Affecting our Industry and our Company — Economic, Political and Market Factors” and “— Results of Operations — Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021,” our trading volumes increased and our average variable transaction fee per million decreased compared to the three months ended June 30, 2021.

Commission Revenue

Commissions are recognized on a trade date basis, are generally calculated as a percentage of the notional dollar volume of bonds traded on our platforms and vary based on the type, size, yield and maturity of the bond traded, as well as individual client incentives. Bonds that are more actively traded or that have shorter maturities are generally charged lower commissions, while bonds that are less actively traded or that have longer maturities generally command higher commissions.

For Open Trading trades that we execute between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller, we earn our commission through the difference in price between the two trades. For the majority of U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly basis.

U.S. High-Grade Corporate Bond Commissions. Our U.S. high-grade corporate bond fee plans generally incorporate variable transaction fees and fixed distribution fees billed to our broker-dealer clients on a monthly basis. Certain broker-dealers participate in fee programs that do not contain monthly distribution fees and instead incorporate additional per transaction execution fees and minimum monthly fee commitments. Under these fee plans, we electronically add the transaction fee to the spread quoted by the broker-dealer client. The U.S. high-grade transaction fee is generally designated in basis points in yield and, as a result, is subject to fluctuation depending on the duration of the bond traded. The average U.S. high-grade fees per million may vary in the future due to changes in yield, years-to-maturity and nominal size of bonds traded on our platforms. Distribution fees include any unused monthly fee commitments under our variable fee plans.

Other Credit Commissions. Other credit includes Eurobonds, emerging markets bonds, high-yield bonds, municipal bonds and leveraged loans. Commissions for other credit products generally vary based on the type of the instrument traded using standard fee schedules. Our high-yield fee plan structure is similar to our U.S. high-grade fee plans. Certain dealers participate in a high-yield fee plan that incorporates a variable transaction fee and fixed distribution fee, while other dealers participate in a plan that does not contain monthly distribution fees and instead incorporates additional per transaction execution fees and minimum monthly fee commitments. Other credit distribution fees include subscription revenues associated with the MuniBrokers platform. The average other credit fees per million may vary in the future due to changes in product mix or trading protocols.

Rates Commissions. Rates includes U.S. Treasury, U.S. agency and European government bonds. Commissions for rates products generally vary based on the type of the instrument traded. U.S. Treasury fee plans are typically volume tiered and can vary based on the trading protocol. The average rates fee per million may vary in the future due to changes in product mix or trading protocols.

We anticipate that average fees per million may change in the future. Consequently, past trends in commissions are not necessarily indicative of future commissions.

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Information Services

We generate revenue from data licensed to our broker-dealer clients, institutional investor clients and data-only subscribers; professional and consulting services; technology software licenses; and maintenance and support services. These revenues are either for subscription-based services transferred over time, and may be net of volume-based discounts, or one-time services. Revenues for services transferred over time are recognized ratably over the contract period while 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 deferred and recognized ratably over the contract period.

Post-trade Services

We generate revenue from regulatory transaction reporting, trade publication and trade matching services. Customers are generally billed in the current month or monthly in arrears and revenue is recognized in the period that the transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period. We also generate one-time implementation fees for onboarding clients which are invoiced and recognized in the period the implementation is complete.

Other Revenue

Other revenue includes revenue generated from telecommunications line charges to broker-dealer clients.

Expenses

In the normal course of business, we incur the following expenses:

Employee Compensation and Benefits. Employee compensation and benefits is our most significant expense and includes employee salaries, stock-based compensation costs, other incentive compensation, employee benefits and payroll taxes.

Depreciation and Amortization. We depreciate our computer hardware and related software, office hardware and furniture and fixtures and amortize our capitalized software development costs on a straight-line basis over three to seven years. We amortize leasehold improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease. Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized over their estimated useful lives, which range from one to 15 years, using either a straight-line or accelerated amortization method based on the pattern of economic benefit that we expect to realize from such assets. Intangible assets are assessed for impairment when events or circumstances indicate a possible impairment.

Technology and Communications. Technology and communications expense consists primarily of costs relating to maintenance on software and hardware, our internal network connections, data center hosting costs, data feeds provided by outside vendors and U.S. treasuries technology platform licensing fees. The majority of our broker-dealer clients have dedicated high-speed communication lines to our network in order to provide fast data transfer. We charge our broker-dealer clients a monthly fee for these connections, which is recovered against the relevant expenses we incur.

Professional and Consulting Fees. Professional and consulting fees consist primarily of accounting fees, legal fees and fees paid to information technology and other consultants for services provided for the maintenance of our trading platforms, information and post-trade services products and other services.

Occupancy. Occupancy costs consist primarily of office and equipment rent, utilities and commercial rent tax.

Marketing and Advertising. Marketing and advertising expense consists primarily of print and other advertising expenses we incur to promote our products and services. This expense also includes costs associated with attending or exhibiting at industry-sponsored seminars, conferences and conventions, and travel and entertainment expenses incurred by our sales force to promote our trading platforms, information services and post-trade services.

Clearing Costs. Clearing costs consist of fees that we are charged by third-party clearing brokers and depositories for the clearing and settlement of matched principal trades, regulatory reporting fees and variable transaction fees assessed by the provider of our third-party middle office system.

General and Administrative. General and administrative expense consists primarily of general travel and entertainment, board of directors’ expenses, charitable contributions, provision for doubtful accounts and various state franchise and U.K. value-added taxes.

Expenses may grow in the future, notably in employee compensation and benefits as we increase headcount to support investment in new products, operational support and geographic expansion, depreciation and amortization due to increased investment in new products and enhancements to our trading platforms, and technology and communication costs. Expenses may also grow due to acquisitions.

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Other Income (Expense)

Investment Income. Investment income consists of interest income earned on our cash and investments.

Interest Expense. Interest expense consists of financing charges incurred on short-term borrowings.

Equity in Earnings of Unconsolidated Affiliate. Equity in earnings of unconsolidated affiliate represents the proportionate share of our equity method investee’s net income.

Other, Net. Other, net consists of unrealized gains or losses on trading security investments, realized gains or losses on investments, foreign currency transaction gains or losses, investment advisory fees, credit facility administrative fees, gains or losses on revaluations of contingent consideration payable and other miscellaneous revenues and expenses.

Critical Accounting Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting periods. We base our estimates and judgments on historical experience and on various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates under varying assumptions or conditions. Critical accounting estimates for us include stock-based compensation and contingent consideration payable.

Stock-based compensation

We maintain the 2020 Plan which provides for the grant of stock options, stock appreciation rights, restricted stock, performance shares, performance units, restricted stock units, performance stock units, or other stock-based awards as incentives and rewards to encourage employees, consultants and non-employee directors. We make critical accounting estimates related to performance shares and performance stock units granted under the 2020 Plan.

In 2020, annual performance share awards (“PSAs”), and in 2021 and 2022, performance stock units (together with the PSAs, “performance equity awards”) were granted to the executive officers and certain senior managers. Each performance equity award is earned or forfeited based on our level of achievement of certain predetermined metrics, including pre-tax adjusted operating income and market share for the 2020 and 2021 awards, and pre-tax adjusted operating income, U.S. credit market share, and revenue growth excluding U.S. credit for the 2022 awards. The vested share pay-out ranges from zero to 150% for the awards granted in 2020, and zero to 200%, for the awards granted in 2021 and 2022, of the performance equity award target. The number of performance equity awards that vest, if any, will be determined by the level of achievement of the performance metrics during the three-year performance periods, as certified by the Board following the conclusion of the performance period. In addition, participants must provide continued service through the vesting date (subject, to death, disability and, in the case of the awards granted in 2021 and 2022, qualified retirement exceptions). Compensation expense for performance equity awards is measured using the fair value of our stock at the grant date and estimates of future performance and actual share payouts. Each period, we make estimates of the current expected share payouts and adjust the life-to-date compensation expense recognized since the grant date. As of June 30, 2022, a 10% change in the expected final share payouts would increase or decrease the life-to-date compensation expense by $1.6 million. The estimated final share payouts for the 2020 and 2021 awards as of June 30, 2022 decreased 3.7% compared to December 31, 2021.

Contingent consideration payable

In connection with our acquisitions of MuniBrokers and Regulatory Reporting Hub, we recognized contingent consideration payables of up to $49.6 million with payment dates ranging from 18-24 months from the acquisition dates. These contingent consideration payables are classified as Level 3 liabilities in the fair value hierarchy and are valued using unobservable inputs and estimates of various factors, including client retention rates, electronic order flow levels, future license fees we earn and discount rates. Changes in these estimates or the final figures on the payment dates could have an impact on the contingent consideration payable liabilities we record on our balance sheet. As of June 30, 2022, a 10% change in the projected annual subscription and license fees would not have a material impact on the expected contingent consideration payable. Refer to Note 4 to the Consolidated Financial Statements for more information related to the changes in contingent consideration payable during the six months ended June 30, 2022.

Recent Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.

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Segment Results

We operate electronic platforms for the trading of fixed-income securities and provide related data, analytics, compliance tools and post-trade services. We consider our operations to constitute a single business segment because of the highly integrated nature of these product and services, the financial markets in which we compete and our worldwide business activities. We believe that results by geographic region or client sector are not necessarily meaningful in understanding our business. See Note 15 to the Consolidated Financial Statements for certain geographic information about our business required by GAAP.

Results of Operations

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

The following table summarizes our financial results for the three months ended June 30, 2022 and 2021.

	Three Months Ended June 30,
	2022		2021			$ Change			% Change
	($ in thousands, except per share amounts)
Revenues	$	182,229	$	176,334		$	5,895			3.3		%
Expenses		97,441		89,157			8,284			9.3
Operating income		84,788		87,177			(2,389	)		(2.7	)
Other income (expense)		4,790		(1,124	)		5,914		NM
Income before income taxes		89,578		86,053			3,525			4.1
Provision for income taxes		22,656		18,765			3,891			20.7
Net income	$	66,922	$	67,288		$	(366	)		(0.5	)	%
Net income per common share – Diluted	$	1.78	$	1.77		$	0.01			0.6		%

Changes in the average foreign currency exchange rates of the British pound sterling and the Euro compared to the U.S. dollar had the effect of decreasing revenues and expenses by $3.1 million and $2.7 million, respectively, for the three months ended June 30, 2022.

Revenues

Our revenues for the three months ended June 30, 2022 and 2021, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended June 30,
	2022					2021
	($ in thousands)
			% of Revenues					% of Revenues			$ Change			% Change
Commissions	$	163,463		89.7	%	$	156,431		88.7	%	$	7,032			4.5		%
Information services		9,396		5.2			9,844		5.6			(448	)		(4.6	)
Post-trade services		9,144		5.0			9,848		5.6			(704	)		(7.1	)
Other		226		0.1			211		0.1			15			7.1
Total revenues	$	182,229		100.0	%	$	176,334		100.0	%	$	5,895			3.3		%

29

Commissions. Our commission revenues for the three months ended June 30, 2022 and 2021, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended June 30,
	2022		2021		$ Change			% Change
	($ in thousands)
Variable transaction fees
U.S. high-grade	$	51,576	$	56,413	$	(4,837	)		(8.6	)	%
Other credit		74,226		67,074		7,152			10.7
Total credit		125,802		123,487		2,315			1.9
Rates		6,020		3,612		2,408			66.7
Total variable transaction fees		131,822		127,099		4,723			3.7
Distribution fees
U.S. high-grade		23,496		21,373		2,123			9.9
Other credit		8,096		7,895		201			2.5
Total credit		31,592		29,268		2,324			7.9
Rates		49		64		(15	)		(23.4	)
Total distribution fees		31,641		29,332		2,309			7.9
Total commissions	$	163,463	$	156,431	$	7,032			4.5		%

U.S. high-grade variable transaction fees decreased $4.8 million driven by a 17.7% decrease in average variable transaction fee per million, partially offset by an 11.0% increase in trading volume. Other credit variable transaction fees increased $7.2 million due to a 15.8% increase in trading volume, which was partially offset by a 4.4% decrease in average variable transaction fee per million. Open Trading credit volume totaled $231.0 billion during the three months ended June 30, 2022, up 6.8%, and represented 31.5% and 31.3% of variable transaction fees for the three months ended June 30, 2022 and 2021, respectively. The 66.7% increase in variable transaction fees for rates was mainly attributable to higher U.S. Treasury trading volume.

U.S. high-grade distribution fees increased $2.1 million mainly due to certain dealers moving to higher fixed fee plans and an increase in unused monthly minimum commitment fees.

Our trading volumes for the three months ended June 30, 2022 and 2021 were as follows:

	Three Months Ended June 30,
	2022		2021		$ Change			% Change
	($ in millions)
Trading volume data
U.S. high-grade – fixed rate	$	350,296	$	312,858	$	37,438			12.0		%
U.S. high-grade – floating rate		9,489		11,153		(1,664	)		(14.9	)
Total U.S. high grade		359,785		324,011		35,774			11.0
Other credit		399,209		344,865		54,344			15.8
Total credit	$	758,994	$	668,876	$	90,118			13.5		%
Rates		1,431,595		888,267		543,328			61.2		%
Number of U.S. Trading Days		62		63
Number of U.K. Trading Days		60		61

For volume reporting purposes, transactions in foreign currencies are converted to U.S. dollars at average monthly rates. The 11.0% increase in our U.S. high-grade volume was principally due to increases in overall market volume and our estimated market share. Estimated U.S. high-grade TRACE volume increased by 5.1% to $1.6 trillion for the three months ended June 30, 2022. Our estimated market share of total U.S. high-grade corporate bond volume increased to 22.3% for the three months ended June 30, 2022 from 21.1% for the three months ended June 30, 2021.

30

Other credit volumes increased by 15.8% due to increases of 19.6% in high-yield bond volume, 11.5% in emerging markets bond volume and 278.2% in municipal bonds volume. The increases in high-yield and emerging markets bond volume were due to increases in our estimated market share, while the increase in municipal bonds volume reflects the inclusion of MuniBrokers variable subscription related trading volume in the second quarter of 2022. Estimated U.S. high-yield, emerging markets and Eurobond market volumes decreased by 1.2%, 11.5% and 22.1%, respectively, compared to the three months ended June 30, 2021. Rates trading volume increased 61.2% primarily due to increases in U.S. treasuries dealer-to-dealer estimated average daily trading volume and our estimated market share.

Our average variable transaction fee per million for the three months ended June 30, 2022 and 2021 was as follows:

	Three Months Ended June 30,
	2022		2021		$ Change			% Change
Average variable transaction fee per million
U.S. high-grade – fixed rate	$	145.93	$	179.02	$	(33.09	)		(18.5	)	%
U.S. high-grade – floating rate		48.15		36.40		11.75			32.3
Total U.S. high-grade		143.35		174.11		(30.76	)		(17.7	)
Other credit		185.93		194.49		(8.56	)		(4.4	)
Total credit		165.75		184.62		(18.87	)		(10.2	)
Rates		4.21		4.07		0.14			3.4

Total U.S. high-grade average variable transaction fee per million decreased 17.7% to $143.35 per million for the three months ended June 30, 2022 due to a decrease in the duration of bonds traded on our platforms. Other credit average variable transaction fee per million decreased 4.4% to $185.93 per million for the three months ended June 30, 2022 mainly due to a larger percentage of trading volume in emerging market bonds that command lower fees per million and dealer migration to fixed-distribution fee plans that provide for lower transaction fees.

Information Services. Information services revenue decreased $0.4 million for the three months ended June 30, 2022 mainly due to the negative impact of foreign exchange of $0.6 million partially offset by net new data contract revenue of $0.2 million.

Post-Trade Services. Post-trade services revenue decreased $0.7 million for the three months ended June 30, 2022 principally due to the negative impact of foreign exchange of $1.1 million partially offset by net new contract revenue of $0.4 million, which includes the impact of planned customer attrition in connection with the Regulatory Reporting Hub integration.

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Expenses

The following table summarizes our expenses for the three months ended June 30, 2022 and 2021.

	Three Months Ended June 30,
	2022		2021		$ Change			% Change
	($ in thousands)
Expenses
Employee compensation and benefits	$	45,435	$	40,732	$	4,703			11.5		%
Depreciation and amortization		15,240		13,097		2,143			16.4
Technology and communications		12,490		10,544		1,946			18.5
Professional and consulting fees		8,920		10,704		(1,784	)		(16.7	)
Occupancy		3,700		3,300		400			12.1
Marketing and advertising		2,949		3,128		(179	)		(5.7	)
Clearing costs		4,263		4,372		(109	)		(2.5	)
General and administrative		4,444		3,280		1,164			35.5
Total expenses	$	97,441	$	89,157	$	8,284			9.3		%

Employee compensation and benefits increased by $4.7 million, primarily due to higher salaries, taxes and benefits of $3.5 million on higher employee headcount, higher stock‑based compensation of $0.9 million and employee incentive compensation of $0.3 million, which is impacted by operating performance.

Depreciation and amortization increased by $2.1 million primarily due to higher amortization of software development costs of $1.8 million and amortization of acquired intangibles expense of $0.6 million, offset by a decrease in depreciation of software licenses and office equipment of $0.3 million. For the three months ended June 30, 2022 and 2021, $1.3 million and $5.6 million, respectively, of equipment purchases and leasehold improvements and $9.1 million and $8.4 million, respectively, of software development costs were capitalized.

Technology and communications expenses increased by $1.9 million primarily due to higher software subscription costs of $1.2 million and higher cloud hosting costs of $0.6 million.

Professional and consulting fees decreased $1.8 million due to lower acquisition-related consulting and legal expenses of $0.7 million, lower IT and other consulting costs of $0.7 million and lower self-clearing consulting fees of $0.3 million.

General and administrative expenses increased $1.2 million primarily due to higher travel and entertainment costs of $0.5 million, higher regulatory fees of $0.3 million, higher director stock compensation expense of $0.2 million and higher office-related administration costs of $0.2 million.

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Other Income (Expense)

Our other income (expense) for the three months ended June 30, 2022 and 2021, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended June 30,
	2022			2021			$ Change			% Change
	($ in thousands)
Investment income	$	254		$	107		$	147			137.4		%
Interest expense		(337	)		(171	)		(166	)		97.1
Equity in earnings of unconsolidated affiliate		191			—			191		NM
Other, net		4,682			(1,060	)		5,742		NM
Total other income (expense)	$	4,790		$	(1,124	)	$	5,914			(526.2	)	%

Equity in earnings of unconsolidated affiliate represents the proportionate share of net income of our equity method investee.

Other, net increased by $5.7 million due to higher foreign exchange gains.

Provision for Income Taxes

The provision for income taxes and effective tax rate for the three months ended June 30, 2022 and 2021 were as follows:

	Three Months Ended June 30,
	2022			2021			$ Change		% Change
	($ in thousands)
Provision for income taxes	$	22,656		$	18,765		$	3,891		20.7	%
Effective tax rate		25.3	%		21.8	%

The provision for income taxes reflected $0.1 million of excess tax detriments and $5.6 million of excess tax benefits related to share-based compensation awards that vested or were exercised during the three months ended June 30, 2022 and 2021, respectively. Our consolidated effective tax rate can vary from period to period depending on the geographic mix of our earnings, changes in tax legislation and tax rates and the amount and timing of excess tax benefits related to share-based payments, among other factors.

33

Results of Operations

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

The following table summarizes our financial results for the six months ended June 30, 2022 and 2021.

	Six Months Ended June 30,
	2022		2021			$ Change			% Change
	($ in thousands, except per share amounts)
Revenues	$	368,286	$	371,798		$	(3,512	)		(0.9	)	%
Expenses		195,394		181,147			14,247			7.9
Operating income		172,892		190,651			(17,759	)		(9.3	)
Other income (expense)		7,105		(2,797	)		9,902			(354.0	)
Income before income taxes		179,997		187,854			(7,857	)		(4.2	)
Provision for income taxes		48,306		40,109			8,197			20.4
Net income	$	131,691	$	147,745		$	(16,054	)		(10.9	)	%
Net income per common share - Diluted	$	3.49	$	3.87		$	(0.38	)		(9.8	)	%

Changes in the average foreign currency exchange rates of the British pound sterling and the Euro compared to the U.S. dollar had the effect of decreasing revenues and expenses by $4.1 million and $3.7 million, respectively, for the six months ended June 30, 2022.

Revenues

Our revenues for the six months ended June 30, 2022 and 2021, and the resulting dollar and percentage changes, were as follows:

	Six Months Ended June 30,
	2022					2021
	($ in thousands)
			% of Revenues					% of Revenues			$ Change			% Change
Commissions	$	329,576		89.5	%	$	332,269		89.4	%	$	(2,693	)		(0.8	)	%
Information services		19,205		5.2			19,006		5.1			199			1.0
Post-trade services		19,056		5.2			20,109		5.4			(1,053	)		(5.2	)
Other		449		0.1			414		0.1			35			8.5
Total revenues	$	368,286		100.0	%	$	371,798		100.0	%	$	(3,512	)		(0.9	)	%

Commissions. Our commission revenues for the six months ended June 30, 2022 and 2021, and the resulting dollar and percentage changes, were as follows:

	Six Months Ended June 30,
	2022		2021		$ Change			% Change
	($ in thousands)
Variable transaction fees
U.S. high-grade	$	104,454	$	121,769	$	(17,315	)		(14.2	)	%
Other credit		150,030		145,973		4,057			2.8
Total credit		254,484		267,742		(13,258	)		(5.0	)
Rates		12,211		7,755		4,456			57.5
Total variable transaction fees		266,695		275,497		(8,802	)		(3.2	)
Distribution fees
U.S. high-grade		46,522		42,343		4,179			9.9
Other credit		16,248		14,299		1,949			13.6
Total credit		62,770		56,642		6,128			10.8
Rates		111		130		(19	)		(14.6	)
Total distribution fees		62,881		56,772		6,109			10.8
Total commissions	$	329,576	$	332,269	$	(2,693	)		(0.8	)	%

34

U.S. high-grade variable transaction fees decreased $17.3 million driven by a 16.0% decrease in average variable transaction fee per million, partially offset by a 2.1% increase in trading volume. Other credit variable transaction fees increased $4.1 million driven by a 9.1% increase in trading volume which was partially offset by a 5.8% decrease in the average variable transaction fee per million. Open Trading credit volume totaled $462.5 billion during the six months ended June 30, 2022, flat compared to the six months ended June 30, 2021, and represented 31.6% and 31.1% of variable transaction fees for the six months ended June 30, 2022 and 2021, respectively. The 57.5% increase in variable transaction fees for rates was mainly attributable to higher U.S. Treasury trading volume.

U.S. high-grade distribution fees increased $4.2 million mainly due to certain dealers moving to higher fixed fee plans and an increase in unused monthly minimum commitment fees. Other credit distribution fees increased $1.9 million mainly due to the migration of certain dealers from all-variable fee plans to plans that incorporate a monthly distribution fee.

Our trading volumes for the six months ended June 30, 2022 and 2021 were as follows:

	Six Months Ended June 30,
	2022		2021		$ Change			% Change
	($ in millions)
Trading volume data
U.S. high-grade - fixed rate	$	680,854	$	662,673	$	18,181			2.7		%
U.S. high-grade - floating rate		21,024		24,779		(3,755	)		(15.2	)
Total U.S. high grade		701,878		687,452		14,426			2.1
Other credit		802,927		735,885		67,042			9.1
Total credit	$	1,504,805	$	1,423,337	$	81,468			5.7		%
Rates		3,012,829		2,009,135		1,003,694			50.0
Number of U.S. Trading Days		124		124
Number of U.K. Trading Days		123		124

For volume reporting purposes, transactions in foreign currencies are converted to U.S. dollars at average monthly rates. The 2.1% increase in our U.S. high-grade volume was principally due to an increase in our estimated market share. Estimated U.S. high-grade TRACE volume decreased by 1.4% to $3.3 trillion for the six months ended June 30, 2022. Our estimated market share of total U.S. high-grade corporate bond volume increased to 21.5% for the six months ended June 30, 2022 from 20.8% for the six months ended June 30, 2021.

Other credit volumes increased by 9.1% due to increases in emerging markets bond volume of 9.0%, high-yield bond volume of 3.3% and 245.1% in municipal bonds volume. The increases in emerging markets bond volume and high-yield bond volume were due to increases in our estimated market share, while the increase in municipal bond volume reflects the inclusion of MuniBrokers variable subscription related trading volume beginning in the first quarter of 2022. Estimated emerging markets, U.S. high-yield and Eurobond market volumes decreased by 8.6%, 4.7% and 16.1%, respectively, compared to the six months ended June 30, 2021. Rates trading volume increased 50.0% primarily due to increases in U.S. treasuries dealer-to-dealer estimated average daily trading volume and our estimated market share.

Our average variable transaction fee per million for the six months ended June 30, 2022 and 2021 was as follows:

	Six Months Ended June 30,
	2022		2021		$ Change			% Change
Average variable transaction fee per million
U.S. high-grade - fixed rate	$	151.87	$	182.21	$	(30.34	)		(16.7	)	%
U.S. high-grade - floating rate		50.12		41.19		8.93			21.7
Total U.S. high-grade		148.82		177.13		(28.31	)		(16.0	)
Other credit		186.85		198.36		(11.51	)		(5.8	)
Total credit		169.11		188.11		(18.99	)		(10.1	)
Rates		4.05		3.86		0.19			4.9

35

Total U.S. high-grade average variable transaction fee per million decreased 16.0% to $148.82 per million for the six months ended June 30, 2022 due to a decrease in the duration of bonds traded on our platforms. Other credit average variable transaction fee per million decreased 5.8% to $186.85 per million for the six months ended June 30, 2022 mainly due to a larger percentage of trading volume in emerging market bonds that command lower fees per million and dealer migration to fixed-distribution fee plans that provide for lower transaction fees.

Information Services. Information services revenue increased $0.2 million for the six months ended June 30, 2022 mainly due to net new data contract revenue of $0.9 million partially offset by the negative impact of foreign exchange of $0.7 million.

Post-Trade Services. Post-trade services revenue decreased $1.1 million for the six months ended June 30, 2022 principally due to the negative impact of foreign exchange of $1.4 million partially offset by net new contract revenue of $0.3 million, which includes the impact of planned customer attrition in connection with the Regulatory Reporting Hub integration.

Expenses

The following table summarizes our expenses for the six months ended June 30, 2022 and 2021.

	Six Months Ended June 30,
	2022		2021		$ Change			% Change
	($ in thousands)
Expenses
Employee compensation and benefits	$	93,191	$	88,820	$	4,371			4.9		%
Depreciation and amortization		30,414		24,876		5,538			22.3
Technology and communications		24,682		20,580		4,102			19.9
Professional and consulting fees		18,541		20,344		(1,803	)		(8.9	)
Occupancy		7,087		6,617		470			7.1
Marketing and advertising		4,738		4,332		406			9.4
Clearing costs		8,838		9,066		(228	)		(2.5	)
General and administrative		7,903		6,512		1,391			21.4
Total expenses	$	195,394	$	181,147	$	14,247			7.9		%

Employee compensation and benefits increased by $4.4 million, primarily due to higher salaries, taxes and benefits of $4.8 million on higher employee headcount and higher stock-based compensation of $0.7 million, offset by lower employee incentive compensation of $0.9 million, which is impacted by operating performance.

Depreciation and amortization increased by $5.5 million primarily due to higher amortization of acquired intangibles expense of $2.0 million and amortization of software development costs of $3.6 million. For the six months ended June 30, 2022 and 2021, $2.7 million and $9.8 million, respectively, of equipment purchases and leasehold improvements and $18.6 million and $16.5 million, respectively, of software development costs were capitalized.

Technology and communications expenses increased by $4.1 million primarily due to higher software subscription costs of $2.4 million, higher cloud hosting costs of $1.1 million and higher market data costs of $0.6 million.

Professional and consulting fees decreased $1.8 million due to lower acquisition-related consulting and legal expenses of $1.1 million and lower self-clearing consulting fees of $0.6 million.

General and administrative expenses increased $1.4 million primarily due to higher travel and entertainment costs of $0.6 million, higher regulatory fees of $0.4 million and higher office-related administrative costs of $0.3 million.

36

Other Income (Expense)

Our other income (expense) for the six months ended June 30, 2022 and 2021, and the resulting dollar and percentage changes, were as follows:

	Six Months Ended June 30,
	2022			2021			$ Change			% Change
	($ in thousands)
Investment income	$	313		$	214		$	99			46.3		%
Interest expense		(510	)		(362	)		(148	)		40.9
Equity in earnings of unconsolidated affiliate		191			—			191		NM
Other, net		7,111			(2,649	)		9,760		NM
Total other income (expense)	$	7,105		$	(2,797	)	$	9,902			(354.0	)	%

Equity in earnings of unconsolidated affiliate represents the proportionate share of net income of our equity method investee.

Other, net increased by $9.7 million primarily due to a gain of $1.6 million on the revaluation of contingent consideration payable and higher foreign exchange gains of $8.3 million.

Provision for Income Taxes

The provision for income taxes and effective tax rate for the six months ended June 30, 2022 and 2021 were as follows:

	Six Months Ended June 30,
	2022			2021			$ Change		% Change
	($ in thousands)
Provision for income taxes	$	48,306		$	40,109		$	8,197		20.4	%
Effective tax rate		26.8	%		21.4	%

The provision for income taxes reflected less than $0.1 million in excess tax detriments and $9.7 million of excess tax benefits related to share-based compensation awards that vested or were exercised during the six months ended June 30, 2022 and 2021, respectively. The provision for income taxes for the six months ended June 30, 2022 also reflected $3.2 million of expense related to a settlement with the New York State tax authorities to resolve the 2010 to 2014 audits. Our consolidated effective tax rate can vary from period to period depending on the geographic mix of our earnings, changes in tax legislation and tax rates and the amount and timing of excess tax benefits related to share-based payments, among other factors.

Liquidity and Capital Resources

During the six months ended June 30, 2022, we have met our funding requirements through cash on hand, internally generated funds and short-term borrowings. Cash and cash equivalents and investments totaled $324.8 million as of June 30, 2022. Our investments are generally invested in U.S. treasury securities. We limit the amounts that can be invested in any single issuer and invest in short- to intermediate-term instruments whose fair values are less sensitive to interest rate changes.

In October 2021, we entered into the 2021 Credit Agreement provided by a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, that provides aggregate commitments totaling $500.0 million, consisting of a revolving credit facility and a $5.0 million letter of credit sub-limit for standby letters of credit. The 2021 Credit Agreement replaced the 2020 Credit Agreement and will mature on October 15, 2024, with our option to request up to two additional 364-day extensions at the discretion of each lender and subject to customary conditions. As of June 30, 2022, we had no borrowings or letters of credit outstanding and $500.0 million in available borrowing capacity under the 2021 Credit Agreement. The 2021 Credit Agreement requires that we satisfy certain covenants, which include a leverage ratio. We were in compliance with all applicable covenants at June 30, 2022. See Note 11 to the Consolidated Financial Statements for a discussion of the 2021 Credit Agreement.

In connection with its self-clearing operations, our U.S. broker-dealer subsidiary entered into an agreement (the “Collateralized Agreement”) with its settlement bank to provide loans up to an aggregate of $200.0 million on an uncommitted basis. Borrowings under the Collateralized Agreement are collateralized by securities pledged by the U.S. broker-dealer subsidiary to the settlement bank, subject to applicable haircuts and concentration limits. As of June 30, 2022, the U.S. broker-dealer subsidiary had no borrowings outstanding and $200.0 million in available borrowing capacity under the Collateralized Agreement. See Note 11 to the Consolidated Financial Statements for a discussion of the Collateralized Agreement.

37

Under arrangements with their settlement banks, certain of our U.S. and U.K. operating subsidiaries may receive overnight financing in the form of bank overdrafts. As of June 30, 2022, we had no overdrafts payable outstanding.

As a result of our self-clearing and settlement activities, we are required to finance certain transactions, maintain deposits with various clearing organizations and clearing broker-dealers and maintain a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Exchange Act. As of June 30, 2022, the aggregate amount of the positions financed, deposits and customer reserve balances associated with our self-clearing and settlement activities was $294.2 million. These requirements can fluctuate based on trading activity, market volatility or other factors which may impact our liquidity or require us to use our capital resources.

Our cash flows were as follows:

	Six Months Ended June 30,
	2022			2021			$ Change			% Change
	($ in thousands)
Net cash provided by operating activities	$	69,907		$	73,567		$	(3,660	)		(5.0	)	%
Net cash (used in) investing activities		(55,642	)		(43,346	)		(12,296	)		28.4
Net cash (used in) financing activities		(187,048	)		(92,765	)		(94,283	)		101.6
Effect of exchange rate changes on cash and cash equivalents		(23,894	)		(263	)		(23,631	)	NM
Net decrease for the period	$	(196,677	)	$	(62,807	)	$	(133,870	)		213.1		%

The $3.7 million decrease in net cash flows from operating activities was primarily due to lower net income of $16.1 million and an increase in the change in accounts receivable of $16.3 million, offset by an increase in the change in net receivables from broker-dealers, clearing organizations and customers associated with our clearing activities of $22.3 million, higher depreciation and amortization of $5.5 million and higher stock-based compensation expense of $1.0 million.

The $12.3 million increase in net cash used in investing activities was primarily due to an increase in cash used for an equity method investment of $34.4 million and an increase in capitalization of software costs of $2.1 million, offset by a decrease in cash used for acquisitions of $17.1 and lower purchases of furniture, equipment and leasehold improvements of $7.1 million.

The $94.3 million increase in net cash used in financing activities was principally due to an increase in repurchases of common stock of $73.6 million, an increase of $26.2 million in payments of contingent consideration related to acquisitions, lower exercises of stock options of $4.5 million, an increase in cash dividends of $3.3 million and lower proceeds from short-term borrowings of $1.0 million, offset by a decrease in withholding tax payments on restricted stock vesting and stock option exercises of $14.3 million.

The $23.6 million change in the effect of exchange rate changes on cash and cash equivalents was driven by a higher cumulative translation adjustment due to the strengthening U.S. dollar.

Past trends of cash flows are not necessarily indicative of future cash flow levels. A decrease in cash flows may have a material adverse effect on our liquidity, business and financial condition.

Other Factors Influencing Liquidity and Capital Resources

We believe that our current resources are adequate to meet our liquidity needs and requirements, including commitments for capital expenditures, in the short-term (during the next 12 months). However, our future liquidity and capital requirements will depend on a number of factors, including liquidity requirements associated with our self-clearing operations and expenses associated with product development and expansion and new business opportunities that are intended to further diversify our revenue stream. We may also acquire or invest in technologies, business ventures or products that are complementary to our business. In the event we require any additional financing, it will take the form of equity or debt financing. Any additional equity offerings may result in dilution to our stockholders. Any debt financings, if available at all, may involve restrictive covenants with respect to dividends, issuances of additional capital and other financial and operational matters related to our business. In addition, in the long-term (beyond 12 months), we believe our liquidity needs and requirements will be affected by the factors discussed above.

Certain of our U.S. subsidiaries are registered as a broker-dealer or a SEF and therefore are subject to the applicable rules and regulations of the SEC, FINRA and the CFTC. These rules contain minimum net capital requirements, as defined in the applicable regulations, and also may require that a significant part of the registrants’ assets be kept in relatively liquid form. Certain of our foreign subsidiaries are regulated by the FCA in the U.K. or other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of June 30, 2022, each of our subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of June 30, 2022, our subsidiaries maintained aggregate net capital and financial resources that were $477.8 million in excess of the required levels of $21.7 million.

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Each of our U.S. and foreign regulated subsidiaries are subject to local regulations which generally prohibit repayment of borrowings from our affiliates, paying cash dividends, making loans to our affiliates or otherwise entering into transactions that result in a significant reduction in regulatory net capital or financial resources without prior notification to or approval from such regulated entity’s principal regulator. As of June 30, 2022, the amount of unrestricted cash held by our non-U.S. subsidiaries was $142.9 million.

We execute bond transactions between our institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades. Our U.S. broker-dealer subsidiary operates under a self-clearing model for the settlement of such transactions. Our subsidiaries also settle their transactions through third-party clearing brokers or settlement agents. Settlement typically occurs within one to two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded. Under both the self-clearing and the third-party clearing models, we may be exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is an error in executing a matched principal transaction. Pursuant to the terms of the securities clearing agreements, each third-party clearing broker has the right to charge us for any losses they suffer resulting from a counterparty’s failure on any of our trades. We did not record any liabilities or losses with regard to counterparty failures for the six months ended June 30, 2022 and 2021. Substantially all of our open securities failed-to-deliver and securities failed-to-receive transactions as of June 30, 2022 have subsequently settled at the contractual amounts.

In the normal course of business, we enter into contracts that contain a variety of representations, warranties and indemnification provisions. Our maximum exposure from any claims under these arrangements is unknown, as this would involve claims that have not yet occurred. However, based on past experience, we expect the risk of material loss to be remote.

We have operating leases for corporate offices with initial lease terms ranging from one year to 15 years. We have total future contractual rent payments on these leases of $118.0 million, with $11.0 million due within the next 12 months and $107.0 million due beyond 12 months.

In January 2021, our Board authorized a new share repurchase program for up to $100.0 million that commenced in April 2021 and was exhausted in January 2022. In January 2022, our Board authorized a new share repurchase program for up to $150.0 million that commenced in March 2022. Shares repurchased under each program will be held in treasury for future use.

In July 2022, our Board of Directors approved a quarterly cash dividend of $0.70 per share payable on August 17, 2022 to stockholders of record as of the close of business on August 3, 2022. Any future declaration and payment of dividends will be at the sole discretion of our Board of Directors. Our Board of Directors may take into account such matters as general business conditions, our financial results, capital requirements, contractual obligations, legal, and regulatory restrictions on the payment of dividends to our stockholders or by our subsidiaries to their respective parent entities, and any such other factors as the Board of Directors may deem relevant.

On April 9, 2021 we acquired MuniBrokers. The purchase price consisted of $17.1 million in cash paid at closing and up to $25.0 million in contingent consideration payable in cash within approximately two years of the closing. In May 2022, we made a payment of $8.3 million to settle the first earn-out period consideration. As of June 30, 2022, the remaining outstanding contingent consideration payable was $12.1 million.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, we use certain non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margin and free cash flow. We define EBITDA margin as EBITDA divided by revenues. We define free cash flow as cash flow from operating activities excluding the net change in trading investments and net change in securities failed-to-deliver and securities failed-to-receive from broker-dealers, clearing organizations and customers, less expenditures for furniture, equipment and leasehold improvements and capitalized software development costs. We believe these non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, are important in understanding our operating results. EBITDA, EBITDA margin and free cash flow are not measures of financial performance or liquidity under GAAP and therefore should not be considered an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. We believe that EBITDA, EBITDA margin and free cash flow provide useful additional information concerning profitability of our operations and business trends and the cash flow available to pay dividends, repurchase stock and meet working capital requirements.

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The table set forth below presents a reconciliation of our net income to EBITDA and EBITDA margin:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	($ in thousands)
Net income	$	66,922		$	67,288		$	131,691		$	147,745
Add back:
Interest expense		337			171			510			362
Provision for income taxes		22,656			18,765			48,306			40,109
Depreciation and amortization		15,240			13,097			30,414			24,876
EBITDA	$	105,155		$	99,321		$	210,921		$	213,092
EBITDA margin		57.7	%		56.3	%		57.3	%		57.3	%

The table set forth below presents a reconciliation of our cash flow from operating activities to free cash flow:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	($ in thousands)
Net cash provided by operating activities	$	93,637		$	96,726		$	69,907		$	73,567
Exclude: Net change in trading investments		-			11,064			-			5,569
Exclude: Net change in fail-to-deliver/receive from broker-dealers, clearing organizations and customers		(20,376	)		(26,596	)		48,166			66,774
Less: Purchases of furniture, equipment and leasehold improvements		(1,285	)		(5,552	)		(2,681	)		(9,809	)
Less: Capitalization of software development costs		(9,136	)		(8,384	)		(18,561	)		(16,459	)
Free Cash Flow	$	62,840		$	67,258		$	96,831		$	119,642

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of the loss resulting from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.

Market Risk

The global financial services business is, by its nature, risky and volatile and is directly affected by many national and international factors that are beyond our control. Any one of these factors may cause a substantial decline in the U.S. and global financial services markets, resulting in reduced trading volume and revenues. These events could have a material adverse effect on our business, financial condition and results of operations.

As of June 30, 2022, we had $24.4 million of investments in U.S Treasuries that were classified as trading securities. Adverse movements, such as a 10% decrease in the value of these securities or a downturn or disruption in the markets for these securities, could result in a substantial loss. In addition, principal gains and losses resulting from these securities could on occasion have a disproportionate effect, positive or negative, on our financial condition and results of operations for any particular reporting period.

Interest Rate Risk

Interest rate risk represents our exposure to interest rate changes with respect to our cash, cash equivalents and investments. As of June 30, 2022, our cash and cash equivalents amounted to $290.5 million. A hypothetical 10 basis point increase in interest rates would increase our interest income by approximately $0.3 million, assuming no change in the amount or composition of our cash and cash equivalents.

We do not maintain an inventory of bonds that are traded on our platform.

Foreign Currency Exchange Rate Risk

We conduct operations in several different countries outside of the U.S., most notably the U.K., and substantial portions of our revenues, expenses, assets and liabilities are generated and denominated in non U.S. dollar currencies. Since our consolidated financial statements are presented in U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Accordingly, increases or decreases in the value of the U.S. dollar against the other currencies will affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies.

During the twelve months ended June 30, 2022, approximately 17.3% of our revenue and 29.2% of our expenses were denominated in currencies other than the U.S. dollar, most notably the British Pound Sterling. Based on actual results over the past year, a hypothetical 10% increase or decrease in the U.S. dollar against all other currencies would have increased or decreased revenue by approximately $11.9 million and operating expenses by approximately $10.8 million.

Credit Risk

Through certain of our subsidiaries, we execute bond transactions between our institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades. Our U.S. broker-dealer subsidiary operates under a self-clearing model for the settlement of such transactions. Our subsidiaries also settle their transactions through third-party clearing brokers or settlement agents. Settlement typically occurs within one to two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded.

We are exposed to credit and performance risks in our role as matched principal trading counterparty to our clients executing bond trades on our platform, including the risk that counterparties that owe us money or securities will not perform their obligations. These parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. Adverse movements in the prices of securities that are the subject of these transactions can increase our risk. In connection with Open Trading or other anonymous protocols, we expect that the number of transactions in which we act as a matched principal will increase.

We have policies, procedures and automated controls in place to identify and manage our credit risk. There can be no assurance that these policies, procedures and automated controls will effectively mitigate our credit risk exposure. Some of our risk management procedures are reliant upon the evaluation of information regarding the fixed-income markets, our clients or other relevant matters that are publicly available or otherwise acquired from third party sources. Such information may not be accurate, complete, up-to-date or properly assessed and interpreted by us. If our risk management procedures fail, our business, financial condition and results of operations may be adversely affected. Furthermore, our insurance policies are unlikely to provide coverage for such risks.

Cash and cash equivalents includes cash and money market instruments that are primarily maintained at three major global banks. Given this concentration, we are exposed to certain credit risk in relation to our deposits at these banks.

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Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. Our management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act, as of June 30, 2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by MarketAxess in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to ensure that information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2022 identified in connection with the evaluation thereof by our management, including the Chief Executive Officer and Chief Financial Officer, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — Other Information

Item 1. Legal Proceedings

In the normal course of business, we and our subsidiaries included in the consolidated financial statements may be involved in various lawsuits, proceedings and regulatory examinations. We assess liabilities and contingencies in connection with outstanding legal proceedings, if any, utilizing the latest information available. Based on currently available information, the outcome of our outstanding matters is not expected to have a material adverse impact on our financial position. It is not presently possible to determine our ultimate exposure to these matters and there is no assurance that the resolution of the outstanding matters will not significantly exceed any reserves accrued by us. See Note 13 to the Consolidated Financial Statements for a discussion of our commitments and contingencies.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in our most recent Form 10-K for the year ended December 31, 2021. For a discussion of the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our 2021 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

During the quarter ended June 30, 2022, we repurchased the following shares of common stock:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
							(In thousands)
April 1, 2022 - April 30, 2022		112,645	$	277.49		111,633	$	117,841
May 1, 2022 - May 31, 2022		67,500		265.38		67,168		100,016
June 1, 2022 - June 30, 2022		—		—		—		100,016
Total		180,145	$	272.95		178,801

During the three months ended June 30, 2022, we repurchased 180,145 shares of common stock. The repurchases included 178,801 shares repurchased in connection with our share repurchase program and 1,344 shares surrendered by employees to us to satisfy the withholding tax obligations upon the exercise of stock options and vesting of restricted shares.

In January 2022, our Board of Directors authorized a new share repurchase program for up to $150.0 million that commenced in March 2022. Shares repurchased under this program will be held in treasury for future use.

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Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Listing:

Number	Description
10.1*	Consulting Services Agreement, dated as of February 1, 2022, by and between MarketAxess Corporation and Nicholas Themelis#†
10.2*	Separation Agreement, effective as of April 8, 2022, by and between MarketAxess Corporation and Nicholas Themelis#†
10.3	MarketAxess Holdings Inc. 2022 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.1 to the registrant’s Registration Statement on Form S-8 filed on June 8, 2022)#
31.1*	Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	The cover page from the Company’s Quarterly report on Form 10-Q for the quarter ended June 30, 2022 has been formatted in Inline XBRL and is included in Exhibits 101.

*	Filed herewith.
#		Management contract or compensatory plan or agreement.
†		Certain confidential information, identified by bracketed asterisks “[*****]” has been omitted from this exhibit pursuant to Item 601(b)(10) of Regulation S-K because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MARKETAXESS HOLDINGS INC.
Date: July 27, 2022	By:	/s/ RICHARD M. MCVEY
		Richard M. McVey
		Chief Executive Officer
		(principal executive officer)
Date: July 27, 2022	By:	/s/ CHRISTOPHER N. GEROSA
		Christopher N. Gerosa
		Chief Financial Officer
		(principal financial and accounting officer)

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EX-10.1

EXHIBIT 10.1

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

CONSULTING SERVICES AGREEMENT

This agreement (hereinafter referred to as “Agreement”) is for Consulting Services (the “Consulting Services”), described in the attached Exhibit A, which is part of this Agreement, to be provided by Nicholas Themelis (the “Consultant”), located at [*****] to MarketAxess Corporation, located at 55 Hudson Yards, New York, NY 10001, as well as its subsidiaries, affiliates, and parents (collectively, “MarketAxess” or the “Company”). Consultant previously served as an employee of the Company, with April 8, 2022 (the “Separation Date”) serving as his last day of service as an employee.

1.Term. The term of this Agreement will begin on April 9, 2022 and will continue in effect until February 1, 2023 (the “Term”), unless terminated in advance as follows: (i) at any time upon the mutual written consent of the parties hereto; (ii) upon the Company terminating you for Cause (as defined in the Severance Protection Agreement, dated July 31, 2020, by and between you and the Company); or (iii) with five (5) days’ written notice by either party for any reason. The Term may be extended upon mutual agreement of the parties (email consent shall suffice).

2.Consulting Services. During the Term, the Consultant agrees to perform the Consulting Services, based on its specialized knowledge and expertise, as an independent contractor. The Company shall have no right to, and shall not, control the manner or prescribe the method the Consultant uses to complete the Consulting Services. The Consultant shall be solely responsible for determining the most effective and efficient manner to perform such services, provided that the Consultant agrees to perform the Consulting Services in a competent and professional manner with promptness and diligence in accordance with (i) all applicable United States federal, state, and local laws, rules, and regulations, and (ii) industry standard. The Consultant agrees to provide the Consulting Services as requested by the Company with respect to various matters falling within the Consultant’s expertise, as described in Exhibit A of this Agreement.

3.Consulting Fees. Unless otherwise negotiated and agreed upon by the parties in writing, as payment for the provision of the Consulting Services, the Company will pay to the Consultant $295,000, in equal monthly installments over the course of the Term. The fees the Consultant charges pursuant to this Agreement represent the value of the services provided under the Agreement, and constitute the entire amount to be paid under this Agreement. If the Agreement is terminated by the Company pursuant to Section 1(ii) or by Mr. Themelis pursuant to Section 1 (iii), no additional monthly payments will be due and payable.

4.Consultant’s Equipment and Personnel. The Consultant shall be responsible for providing, solely at the Consultant’s expense, all equipment and supplies needed to perform the Consulting Services, including general office supplies. Notwithstanding the foregoing, the Consultant shall utilize a computer provided by the Company. The Consultant shall be solely responsible for all costs and expenses of doing business, including all wages and other compensation for any employees, agents, or subcontractors the Consultant engages or hires, and all taxes and other business expenses that may be incurred in connection with the Consultant’s

performance of services under this Agreement. The Company will reimburse the consultant for expenses incurred to perform the Consulting Services; provided, however, that the Consultant shall obtain prior written approval (email shall suffice) for any expense by the Company’s Chief Executive Officer.

5.Independent Contractor Relationship; Non-Exclusive Arrangement. Nothing under this Agreement shall be construed as creating any partnership, joint venture or agency between the Company and the Consultant. The Consultant shall act solely as an independent contractor and, as such, is not authorized to bind the Company to third parties. The parties recognize that both the Consultant and the Company are, or may be, engaged in similar agreements with others. Nothing in this Agreement shall prevent or preclude the Consultant from performing services for any other company, customer, or client, including the Company’s competitors, subject to the terms of this agreement.

6.Taxes. The Company shall report all payments made to the Consultant on a calendar year basis using an appropriate IRS Form 1099, if the volume of payments to the Consultant qualify. The Consultant agrees to report all such payments to the appropriate federal, state, and local taxing authorities. Neither federal, state, nor local taxes of any kind shall be withheld or paid by the Company on behalf of the Consultant in connection with payments made by the Company under Section 3 hereof. The Consultant shall be responsible for determining the amounts of and making all applicable tax payments. The Consultant shall indemnify, defend and hold the Company, its officers, directors, agents, employees, contractors and shareholders harmless from and against any and all claims, liabilities, losses, damages, costs and expenses (including, without limitation, attorneys’ fees and expenses) arising out of or relating to the foregoing responsibility of the Consultant.

7.No Benefits. The Consultant is not an employee of the Company and is not entitled to participate in any of the Company’s employee benefit plans, including, but not limited to, any retirement, pension, profit sharing, group insurance, health insurance or similar plans that have been or may be instituted by MarketAxess for the benefit of its employees. Notwithstanding the foregoing, the Consultant may continue to participate in the Company’s employee benefit plans to the extent that such plans allow for the continued participation by the Consultant due to his prior employee status. The Consultant represents and warrants that it maintains in effect all such workers’ compensation, employee liability, comprehensive general liability and any other insurance as may be required by law.

8.Confidential Information and Acceptable Use. During the term of this Agreement, the Consultant shall abide by the confidentiality provisions of the Separation Agreement and General Release, dated April 8, 2022, by and between the Consultant and the Company.

9.Intellectual Property.

(a)The parties hereby agree that the Company shall own all right, title and interest throughout the world in and to any and all inventions, original works of authorship,

developments, concepts, know-how, improvements, and trade secrets, whether or not patentable or registrable under copyright or similar laws, that Consultant may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice during Consultant’s engagement hereunder, (collectively referred to as “Work Product”). The term “Work Product” does not include any invention that Consultant developed entirely on Consultant’s own time without using the Company’s equipment supplies, facilities, or trade secret information, except

for those inventions that either: (1) relate at the time of conception or development (a) to the Company’s business, or (b) to the Company’s actual or demonstrably anticipated research or development; or (2) result from any work performed by Consultant for the Company.

(b)Consultant hereby assigns to MarketAxess all right, title, and interest in and to any and all Work Product, and agrees to assist the Company, at MarketAxess’ expense, to further evidence, record, and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights specified to be so owned or assigned. In addition to, and not in contravention of any of, the foregoing, Consultant acknowledges that all original works of authorship that are made by Consultant (solely or jointly with others) within the scope of this engagement and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C. § 101). To the extent allowed by law, this includes all rights of paternity, integrity, disclosure, and withdrawal, and any other rights that may be known or referred to as “moral rights.” To the extent Consultant retains any such moral rights under applicable law, Consultant hereby waives such moral rights and consents to any action consistent with the terms of this Agreement with respect to such moral rights, in each case, to the full extent of such applicable law. Consultant agrees to confirm any such waivers and consents from time to time as requested by MarketAxess.

(c)If, in the course of this engagement, Consultant incorporates into a product or process a Prior Invention owned by Consultant or in which Consultant has an interest, Consultant hereby grants the Company, and the Company shall have a non-exclusive, royalty- free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product or process. For purposes of this paragraph, the term “Prior Invention” means all discoveries, developments, designs, improvements, inventions, formulae, processes, techniques, computer software, strategy, know how, and data, whether or not patentable or registrable under copyright or similar statues, made or conceived or reduced to practice or learned by Consultant, either alone or jointly with others, during the period of time before Consultant’s engagement with the Company, which directly or indirectly arise or result front tasks assigned by previous employers or from the use of premises or property owned, leased, or contracted for by such previous employers or in the course of other past engagements.

(d)Consultant hereby expressly and irrevocably waives any right or claim to any further compensation of any and all kind, under any applicable law, which Consultant may now have or which Consultant may have in the future, with respect to any Invention(s) which may be assigned to the Company. For purposes of this Agreement, the term “Invention” means all discoveries, developments, designs, improvements, inventions, formulae, processes, techniques, computer software, strategy, know how, and data, whether or not patentable or registrable under copyright or similar statues, made or conceived or reduced to practice or learned by Consultant, either alone or jointly with others, during the period of Consultant’s engagement with the Company, which directly or indirectly arise or result from tasks assigned by the Company or from

the use of premises or property owned, leased, or contracted for by the Company.

(e)If Company or its designee is unable because of Consultant’s mental or physical incapacity or unavailability or for any other reason to secure your signature to

apply for or to pursue any application for any United States or foreign patents, copyright, mask works or other registrations covering inventions or original works of authorship assigned to Company or its designee as above, then Consultant hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Consultant’s agent and attorney in fact, to act for and in Consultant’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent, copyright or other registrations thereon with the same legal force and effect as if originally executed by Consultant. Consultant hereby waives and irrevocably quitclaims to Company or its designee any and all claims, of any nature whatsoever, which Consultant now or hereafter has for infringement of any and all proprietary rights assigned to Company or such designee.

10.No-Conflicts. The Consultant represents and warrants to the Company that it is not subject to any contractual or other restriction or obligation which is inconsistent with any representation, obligation or assignment of Consultant, any rights of the Company under this Agreement or Consultant’s acceptance of engagement with or performance of the Consulting Services. This provision shall not be construed as preventing the Consultant from engaging in any other business activities, including competing business activities, so long as they do not violate this provision.

11.[Reserved].

12.Waiver. The Consultant waives any claim, right or entitlement to punitive damages, indirect damages or consequential damages in connection with any dispute under this Agreement.

13.Confidentiality of Agreement. Consultant agrees not to disclose the terms or execution of this Agreement, except in the following circumstances:

(a)The employees of Consultant may disclose the terms of this Agreement to their immediate family, so long as such family members agree to be bound by the confidential nature of this Agreement;

(b)Consultant may disclose the terms of this Agreement to (i) its tax advisors so long as such tax advisors agree in writing to be bound by the confidential nature of this Agreement; (ii) taxing authorities if requested by such authorities and so long as they are advised in writing of the confidential nature of this Agreement; or (iii) Consultant’s legal counsel; and

(c)Pursuant to the order of a court or governmental agency of competent jurisdiction, or for purposes of securing enforcement of the terms and conditions of this Agreement.

14.Notices. All notices and other communications hereunder shall be in writing and shall be mailed by first class, registered or certified mail, return receipt requested, or postage prepaid or personally delivered (including delivery by overnight couriers such as Federal Express),

addressed as follows:

If to the Company:If to the Consultant:

MarketAxess Corporation Nicholas Themelis

55 Hudson Yards [*****]

New York, NY 10001 [*****]

Email: LegalNY@marketaxess.com Email: [*****]

Each party hereto may designate in writing a new address to which any notice or other communication may thereafter be so given, served or sent. Each notice or other communication that shall be mailed in the manner described above, shall be deemed sufficiently given, served, sent or received for all purposes at such time as it is delivered to the addressee or at such time as delivery is refused by the addressee upon presentation.

15.Assignment. This Agreement may not be assigned, transferred or subcontracted, in whole or in part, by the Consultant. However, nothing in this provision shall limit or restrict the Consultant from engaging or hiring others to assist the Consultant in performing the Consulting Services contemplated by this Agreement. The Company may assign this Agreement to any successors or assigns, and Consultant shall be bound to any successor or assign of the Company.

16.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of law principles.

17.Forum Selection. Consultant irrevocably and unconditionally (i) agrees that any suit, action or other legal proceeding arising out of this Agreement shall be brought in a United States District Court in the Southern District of New York, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in New York, (ii) consents to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) waives any objection which Consultant may have to the laying of venue of any such suit, action or proceeding in any such court.

18.Service. The Consultant and the Company agree that service of process in any action or proceeding brought: (a) by the Company or any affiliate against the Consultant may be made upon the Consultant by mailing a copy of the same to him/her at the address set forth herein; and (b) by the Consultant against the Company may be made by mailing a copy of the same to it at the address set forth herein.

19.[Reserved].

20.Entire Agreement; Modification; Waiver. This Agreement sets forth the entire understanding and agreement of the parties hereto relating to the retention of the Consultant by the Company, and all other previous or contemporaneous understandings or agreements relating to the retention of the Consultant by the Company, whether written or oral, are hereby superseded. None of the terms or provisions hereof shall be modified or waived, and this Agreement may not be amended or terminated, except by a written instrument signed by the party against which modification, waiver, amendment or termination is to be enforced. No waiver of any one provision shall be construed as a waiver of any other provision and the fact that an obligation is waived for a

period of time shall not be considered to be a continuous waiver.

21.Headings. Headings appearing in this Agreement are for convenience only and do not in any way limit, amplify, modify, or otherwise affect the terms and provisions of this Agreement.

22.Savings Clause. If any provision of this Agreement shall be determined to be invalid, illegal, or unenforceable, either in whole or in part this Agreement shall be deemed amended to delete or modify, as necessary, the offending provisions and to alter the balance of this Agreement in order to render the same valid, legal and enforceable to the fullest extent permissible.

The parties enter into and execute this Agreement on the dates set forth below.

ACCEPTED AND AGREED TO:

By:	/s/ Nicholas Themelis	4/11/2022
	Nicholas Themelis	Date

MarketAxess Corporation

By:	/s/ Julie Sheffet	4/11/2022
Name:	Juliet Sheffet	Date
Title:	Chief Human Resources Officer

EX-10.2

Exhibit 10.2

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

April 8, 2022

Nicholas Themelis [*****]

[*****]

Dear Nicholas:

This Separation Agreement and General Release (the “Agreement”) serves to memorialize the terms of the termination of your employment with MARKETAXESS CORPORATION (“MarketAxess” or the “Company”). The terms of the Agreement, including your right to the payments and benefits referred to in Paragraphs 1 and 2 and are contingent upon and subject to your execution of this Agreement. As used in this Agreement, the terms “you” and “your” refer to Nicholas Themelis.

1.Termination of Employment.

(a)You hereby acknowledge and agree that your employment with MarketAxess was voluntarily terminated by you.

(b)You hereby acknowledge and agree that your employment with MarketAxess will terminate effective April 8, 2022 (the “Termination Date”), and that, following the Termination Date, you will not represent yourself as being an employee, officer, agent or representative of MarketAxess for any purpose. The Termination Date will be the termination date of your employment for purposes of participation in and coverage under all benefit plans and programs sponsored by or through MarketAxess, except as specifically set forth herein.

(c)Simultaneous with the execution of this Agreement, the parties shall also execute a consulting agreement in the form set forth as Exhibit A hereto (the “Consulting Agreement”).

(d)Your termination of employment on the Termination Date shall constitute a “separation from service” within the meaning of Section 409A of the Internal Revenue Code and the regulations thereunder. The level of services that you perform following the Termination Date under the Consulting Agreement is expected to represent less than 20 percent of the level of services that you performed with the Company on an average basis for the 36 month period prior to the Termination Date, in accordance with the Section 409A regulations.

2.Payments and Benefits.

Subject to your full compliance with all of your obligations under this Agreement, including but not limited to the covenants contained in Sections “3” and “4”:

(a)You will be paid your current semi-monthly pay, Twelve Thousand Five Hundred Dollars ($12,500) per pay period (less standard semi- monthly applicable tax withholdings and other deductions required by law), through the Termination Date (the “Accrued Payments”). You further acknowledge and agree that the Accrued Payments shall be the sole and exclusive payments or benefits to which you shall be entitled in respect of the Severance Protection Agreement between you and MarketAxess dated July 31, 2020 (“Severance Protection Agreement”);

(b)You will be eligible for a discretionary bonus on account of your work (including the success of the Rates Project and your assistance with the transition to your successor) from January 1, 2022 through the Termination Date, in an amount (if any) determined by MarketAxess in its sole discretion. Subject to the foregoing, the target for such discretionary bonus will be Two Hundred Fifty Thousand Dollars ($250,000). Any such bonus shall be less required tax withholdings and other deductions and shall be paid following the effective date of the General Release but no later than June 30, 2022;

(c)MarketAxess shall pay the cost of your medical and dental benefits(“Healthcare Benefits”), if currently elected, pursuant and subject to the terms of COBRA from May 1, 2022 through February 28, 2023, provided that you have not been offered Healthcare Benefits by another entity that employs you and you elect COBRA in the required timeframe. Following February 28, 2023, you are responsiblefor the full cost of continuing such Healthcare Benefits under COBRA. You are required to notify MarketAxess immediately if you become covered by such health insurance offered by another entity that employs you. Regardless if you elect to execute this Agreement, you will be eligible to continue your Healthcare Benefits at your sole expense under COBRA for 18 months (or longer, if local and state law so provides), providing you make such a timely election and you are currently enrolled in MarketAxess’ Healthcare Benefits; and

(d)Nothing in this Agreement shall affect your rights, if any, to any equity awarded to you under the MarketAxess Holdings Inc. Stock Incentive Plan(s) thathas already vested prior to the Termination Date. You acknowledge and agree that the vesting (or forfeiture) of equity awards that are scheduled to vest following the Termination Date will be governed by the terms and conditions of the individual grant agreements, including the terms and conditions of any applicable “Qualified Retirement” provisions set forth in any individual grant agreement. Based on the terms and conditions of the individual grant agreements executed by you, provided that you provide services pursuant to the Consulting Agreement though February 1, 2023, you will forfeit the final tranche (518 units) of the Restricted Stock Unit Award Agreement dated January 15, 2021.

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3.Employee’s General Release and Waiver.

(a)YOU HEREBY RELEASE THE COMPANY AND ALL OF ITS PAST, PRESENT, AND FUTURE AFFILIATES, AND ITS AND THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS,

EMPLOYEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE “RELEASEES”), JOINTLY AND SEVERALLY, FROM ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, WHICH YOU OR YOUR HEIRS, SUCCESSORS OR ASSIGNS HAVE OR MAY HAVE AGAINST ANY RELEASEE ARISING ON OR PRIOR TO THE TERMINATION DATE AND ANY AND ALL LIABILITY WHICH ANY SUCH RELEASEE MAY HAVE TO YOU, WHETHER DENOMINATED CLAIMS, DEMANDS, CAUSES OF ACTION, OBLIGATIONS, DAMAGES OR LIABILITIES ARISING FROM ANY AND ALL BASES, HOWEVER DENOMINATED, INCLUDING BUT NOT LIMITED TO CLAIMS FOR WRONGFUL DISCHARGE, ACCRUED BONUS OR INCENTIVE PAY, SEXUAL HARASSMENT, THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAMILY AND MEDICAL LEAVE ACT OF 1993, TITLE VII OF THE UNITED STATES CIVIL RIGHTS ACT OF 1964, 42 U.S.C. § 1981, THE CORPORATE FRAUD AND CRIMINAL FRAUD ACCOUNTABILITY ACT OF 2002, AND SECTIONS 922(H)(1) AND 1057 OF THE DODD-FRANK ACT, WORKERS ADJUSTMENT AND RETRAINING NOTIFICATION ACT, THE NEW YORK HUMAN RIGHTS LAW, INCLUDING NEW YORK EXECUTIVE LAW § 296, § 8-107 OF THE ADMINISTRATIVE CODE AND CHARTER OF NEW YORK CITY OR ANY OTHER FEDERAL, STATE, OR LOCAL LAW. THIS RELEASE IS FOR ANY AND ALL CLAIMS, INCLUDING BUT NOT LIMITED TO CLAIMS ARISING FROM AND DURING YOUR EMPLOYMENT RELATIONSHIP WITH RELEASEES OR AS A RESULT OF THE TERMINATION OF SUCH RELATIONSHIP. NOTWITHSTANDING ANY PROVISION CONTAINED IN THIS RELEASE AGREEMENT, THIS RELEASE IS NOT INTENDED TO INTERFERE WITH YOUR RIGHT TO FILE A CHARGE WITH A GOVERNMENTAL AGENCY, INCLUDING BUT NOT LIMITED TO THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR ANY STATE OR LOCAL FAIR EMPLOYMENT PRACTICES AGENCY, OR OTHER GOVERNMENTAL REGULATORY AGENCY OR SELF- REGULATORY ORGANIZATION. HOWEVER, BY EXECUTING THIS RELEASE AGREEMENT, YOU HEREBY WAIVE THE RIGHT TO RECOVER ANY RELIEF IN CONNECTION WITH ANY PROCEEDING BROUGHT BEFORE SUCH GOVERNMENTAL AGENCY OR SELF-REGULATORY ORGANIZATION. THIS RELEASE IS FOR ANY RELIEF, NO MATTER HOW DENOMINATED, INCLUDING, BUT NOT LIMITED TO, INJUNCTIVE RELIEF, WAGES, BACK PAY, FRONT PAY, COMPENSATORY DAMAGES, OR PUNITIVE DAMAGES. YOU RELINQUISH ANY RIGHT TO FUTURE EMPLOYMENT WITH THE COMPANY OR ANY OF THE RELEASEES, AND AGREES NOT TO SEEK FUTURE RE- EMPLOYMENT WITH THE COMPANY OR ANY OF THE RELEASEES. YOU ACKNOWLEDGE THAT THE COMPANY SHALL HAVE THE RIGHT TO REFUSE TO RE-EMPLOY YOU WITHOUT LIABILITY OF THE COMPANY OR ANY OF THE RELEASEES.

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(b)YOU ACKNOWLEDGE THAT THE PAYMENTS AND OTHER BENEFITS THAT YOU WILL RECEIVE UNDER THIS AGREEMENT REPRESENTGOOD AND VALUABLE CONSIDERATION FOR YOUR ENTERING INTO THIS AGREEMENT TO WHICH YOU OTHERWISE DID NOT HAVE A RIGHT.

(c)You understand that you are releasing the Releasees from claims that you may not know about as of the date of the execution of this Release Agreement, and that it is your knowing and voluntary intent even though you recognize that someday you might learn that some or all of the facts you currently believe to be true are untrue and even though you might then regret having signed this Release Agreement. Nevertheless, you understand that you are expressly assuming that risk and agree that this Release Agreement shall remain effective in all respects in any such case. You expressly and completely waives all rights you might have under any law that is intended to protect you from waiving unknown claims, and you understand the significance of doing so.

(d)In consideration of the terms set forth in this Release Agreement, you represent that you have not filed or permitted to be filed against the Releasees any charges, complaints or lawsuits, and you covenant and agree that you will not file or permit to be filed any lawsuits at any time hereafter with respect to the subject matter of this Release Agreement and claims released pursuant to this Release Agreement (including, without limitation, any claims relating to the termination of the Executive’s employment), except as may be necessary to enforce this Release Agreement or to seek a determination of the validity of the waiver of your rights under ADEA.

(e)You understand and agree that nothing in this Release Agreement limits or interferes with your right, without notice to or authorization of the Company, to communicate in good faith with any Government Agency for the purpose of reporting a possible violation of law, or to participate in any investigation or proceeding that may be conducted by any Government Agency, including by providing documents or other information, or for the purpose of filing a charge or complaint with a Government Agency. As used in this Release Agreement, “Government Agency” shall mean the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, any other self- regulatory organization or any other federal, state or local governmental agency or commission. In the event you file a charge or complaint with a Government Agency, or a Government Agency asserts a claim on your behalf, you agree that your release of claims in this Release Agreement shall nevertheless bar your right (if any) to any monetary or other recovery (including reinstatement), except you do not waive: (i) your right to receive a whistleblower award from a Government Agency for information provided to such Government Agency, (ii) any recovery to which you may be entitled pursuant to workers’ compensation and unemployment insurance laws, and (iii) any other right where a waiver is

4

expressly prohibited by law.

(f)Nothing in this Agreement shall affect your vested rights, if any, to retirement benefits under any 401(k) retirement plan(s) offered by MarketAxess. Your rights to benefits under any such 401(k) Plan(s) and any other employee benefits planswill be determined in accordance with the terms of such plans.

Nothing in this Agreement shall waive or affect any rights to advancement, indemnification or insurance, such as directors and officers insurance, that, by their terms, survive a termination of employment.

(g)Other than payment for accrued and unused vacation days throughthe Termination Date in accordance with the Company’s policy currently in place, you represent, warrant and acknowledge that MarketAxess owes you no wages, bonuses, sick pay, personal leave pay, severance pay, or other compensation other than as provided for in this Agreement.

4.Other Agreements.

(a)Confidentiality; Return of Documents.

(i)You agree not to disclose to anyone except your immediate family,accountant, attorneys, tax advisors or the Department of Labor Unemployment Insurance Division any information relating to the subject matter of this Agreement, including the payments and benefits specified in Paragraphs “1” and “2”, above, exceptto the extent required or permitted by law. Any disclosure to any of the above individuals shall be made only upon their agreement not to disclose these terms to another person. If served with a legal demand to disclose information regarding the terms of this Agreement, you will give MarketAxess at least five (5) business days’ priornotice, or as much notice as practicable, before making such disclosure. Nothing in this provision shall interfere with your right to file a charge with, or cooperate or participate in an investigation conducted by, a governmental agency or self-regulatory organization.

(ii)You further agree to comply with the Proprietary Information and Non-Competition Agreement executed by you on July 31, 2020 (the “Non- CompetitionAgreement”), which agreement is expressly incorporated herein. For the purposes of the Non-Competition Agreement, the last day of the “Engagement Term” shall be February 1, 2023.

(iii)You further agree that on or before your last day of service pursuant to the Consulting Agreement, you will return to MarketAxess all property and all information concerning the business of MarketAxess in your possession, custody or control which has been furnished to you oris held by you, at your office, residence or elsewhere, and shall not retain any copies, duplicates, reproductions or excepts thereof. If necessary, arrangements will be made by MarketAxess to ship MarketAxess property from your home to MarketAxess at no cost to you.

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(b)Non-Disparagement. You shall not make any public statements, encourage others to make statements or release information intended to disparage or defame MarketAxess, any of its past, present or future affiliates or any of their respective directors or officers. All verifications of your employment at MarketAxess should be directed to Human Resources (hrteam@marketeaxess.com) who will provideno further information than your dates of employment and position. Notwithstanding theforegoing, nothing in this Paragraph “4(b)” shall prohibit you from making truthful statements when required by order of a court or other body having

jurisdiction or as required by law or interfere with your right to cooperate or participate in an investigationconducted by a governmental agency or self-regulatory organization.

(c)Future Cooperation. You agree to reasonably cooperate with MarketAxess and its counsel (including attending meetings) with respect to any claim, arbitral hearing, lawsuit, action or governmental or other investigation relating to the conduct of the business of MarketAxess or its past, present, or future affiliates and agree to provide full and complete disclosure to MarketAxess and its counsel in response to any inquiry in connection with any such matters, without further compensation (except as to reasonable out-of-pocket expenses actually incurred by youin complying with this provision) and agree to cooperate with any other reasonable inquiry of MarketAxess.

(d)Forfeitures in Event of Breach. You acknowledge and agree that, notwithstanding any other provision of this Agreement, in the event this Agreement doesnot become effective as provided in Paragraph “10,” below, or you materially breach any of your obligations under Paragraphs “3” or “4” of this Agreement, and you fail to cure such breach, if curable, after being given notice and 5 (five) business days to cure such breach, then (i) you shall forfeit your right to receive any payments and other benefits provided for in this Agreement that you have not received as of the date of such forfeiture and (ii) any equity awards scheduled to vest after the date of such breach shall be forfeited.

5.Representations.

You represent and warrant that you are not aware of any facts that would establish that any officer or employee of MarketAxess has engaged in conduct that youbelieve would violate any federal, state or local law, regulation or ordinance.

6.Remedies.

You acknowledge and agree that the covenants, obligations and agreements contained in Paragraph “4” herein relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants, obligations or agreements will cause MarketAxess irreparable injury for which adequateremedies are not available at law. Therefore, you agree that MarketAxess shall be entitled to seek an injunction, restraining order or such other equitable relief (without therequirement to post bond or any other security) as a court of competent jurisdiction maydeem necessary or appropriate to restrain you from committing any

6

violation of such covenants, obligations or agreements. These injunctive remedies are cumulative and inaddition to any other rights and remedies MarketAxess may have. MarketAxess and you hereby irrevocably submit to the exclusive jurisdiction of the courts of New York, and the Federal courts of the United States of America, in each case located in New York City, in respect of the injunctive remedies set forth in this Paragraph “6” and the interpretation and enforcement of this Paragraph “6” insofar as such interpretation and enforcement relate to any request or application for injunctive relief in accordance with the provisions of this Paragraph “6,” and the parties hereto hereby irrevocably agree that (a) the sole and exclusive appropriate

venue for any suit or proceeding relating solely to such injunctive relief shall be in such a court, (b) all claims with respect to any request or application for such injunctive relief shall be heard and determined exclusively in such a court, (c) any such court shall have exclusive jurisdiction over the person of such parties and over the subject matter of any dispute relating to any requestor application for such injunctive relief, and (d) each hereby waives any and all objections and defenses based on forum, venue or personal or subject matter jurisdiction as they may relate to an application for such injunctive relief in a suit or proceeding brought before such a court in accordance with the provisions of this Paragraph “6,” provided that MarketAxess may seek to enforce any such injunctive relief in any court of competent jurisdiction.

7.No Admission.

This Agreement does not constitute an admission of liability or wrongdoingof any kind by the Releasees.

8.Heirs and Assigns.

The terms of this Agreement shall be binding on the parties hereto andtheir respective successors and assigns.

9.General Provisions.

(a)Integration. This Agreement constitutes the entire understanding ofMarketAxess and you with respect to the subject matter hereof and supersedes all prior understandings, written or oral, except for those agreements that are expressly incorporated herein. The terms of this Agreement may be changed, modified or discharged only by an instrument in writing signed by the parties hereto. A failure of MarketAxess or you to insist on strict compliance with any provision of this Agreement shall not be deemed a waiver of such provision or any other provision hereof. In the event that any provision of this Agreement is determined to be so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

(b)Choice of Law. This Agreement shall be construed, enforced andinterpreted in accordance with and governed by the laws of the state of New York excluding rules of law that would lead to the application of the laws of any other jurisdiction.

7

(c)Construction of Agreement. The rule of construction to the effectthat ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party.

(d)Counterparts. This Agreement may be executed in any number ofcounterparts and by different parties on separate counterparts, each of which counterpart, when so executed and delivered, shall be deemed to be an original and allof which counterparts, taken together, shall constitute but one and the same

Agreement.

10.Knowing and Voluntary Waiver.

(a)Before entering into this Agreement, you had the opportunity to consult with any attorney or other advisor of your choice, and you have been advised to do so if you choose.

(b)You have entered into this Agreement of your own free will, and that no promises or representations have been made to you by any person to induce you to enter into this Agreement other than the express terms set forth herein.

(c)You have read this Agreement and understand all of its terms, including the release of claims and covenant not to sue set forth in Section 3 above.

(d)The payments and benefits described in Section 2 are in consideration of this release of claims and covenant not to sue, and constitute consideration in addition to anything of value to which you are already entitled.

(e)You have forty-five (45)] days within which to consider this Agreement (although you may choose voluntarily to sign it earlier).

(f)You have seven (7) days following the date you signs this Agreement to revoke this Agreement by delivering a written notice of such revocation to:

MarketAxess Holdings Inc. 55 Hudson Yards Floor 15 New York, New York 10001 Attention: General Counsel

(g)This Agreement shall not become effective or enforceable until the first (1st) day (the “Effective Date”) following the end of the seven (7) day revocation period; provided that you have signed, returned and not revoked this

8

Agreement in accordance with the terms hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Separation Agreement and General Release as of the date first written above.

MARKETAXESS CORPORATION

By: /s/ Julie Sheffet_____________

Julie Sheffet

Chief Human Resources Officer

ACCEPTED AND AGREED:

/s/ Nicolas Themelis___________

Nicholas Themelis Date: 4/11/2022

9

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Richard M. McVey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MarketAxess Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ RICHARD M. MCVEY

Richard M. McVey

Chief Executive Officer

(principal executive officer)

Dated: July 27, 2022

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Christopher N. Gerosa, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MarketAxess Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ CHRISTOPHER N. GEROSA

Christopher N. Gerosa

Chief Financial Officer

(principal financial and accounting officer)

Dated: July 27, 2022

EX-32.1

Exhibit 32.1

Certification Under Section 906 of the Sarbanes-Oxley Act of 2002

(United States Code, Title 18, Chapter 63, Section 1350)

Accompanying Quarterly Report on Form 10-Q of

MarketAxess Holdings Inc. for the Quarter Ended June 30, 2022

In connection with the Quarterly Report on Form 10-Q of MarketAxess Holdings Inc. (the “Company”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard M. McVey, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ RICHARD M. MCVEY

Richard M. McVey

Chief Executive Officer

July 27, 2022

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

Certification Under Section 906 of the Sarbanes-Oxley Act of 2002

(United States Code, Title 18, Chapter 63, Section 1350)

Accompanying Quarterly Report on Form 10-Q of

MarketAxess Holdings Inc. for the Quarter Ended June 30, 2022

In connection with the Quarterly Report on Form 10-Q of MarketAxess Holdings Inc. (the “Company”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher N. Gerosa, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ CHRISTOPHER N. GEROSA

Christopher N. Gerosa

Chief Financial Officer

July 27, 2022

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Jul. 22, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Trading Symbol	MKTX
Entity Registrant Name	MARKETAXESS HOLDINGS INC.
Entity Central Index Key	0001278021
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Title of 12(b) Security	Common Stock, $0.003 par value
Security Exchange Name	NASDAQ
Entity File Number	001-34091
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-2230784
Entity Address, Address Line One	55 Hudson Yards
Entity Address, Address Line Two	15th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10001
Document Quarterly Report	true
Document Transition Report	false
City Area Code	212
Local Phone Number	813-6000
Entity Common Stock, Shares Outstanding		37,640,008

XML

Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
ASSETS
Cash and cash equivalents	$ 290,544	$ 506,735
Cash segregated under federal regulations	50,276	50,159
Investments, at fair value	34,297	36,078
Accounts receivable, net of allowance of $193 and $140 as of June 30, 2022 and December 31, 2021, respectively	87,475	63,881
Receivables from broker-dealers, clearing organizations and customers	617,817	408,346
Goodwill	154,789	154,789
Intangible assets, net of accumulated amortization	105,607	116,377
Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization	93,255	96,061
Operating lease right-of-use assets	68,602	70,960
Prepaid expenses and other assets	65,048	27,066
Total assets	1,567,710	1,530,452
Liabilities
Accrued employee compensation	35,685	59,719
Payables to broker-dealers, clearing organizations and customers	375,211	229,325
Income and other tax liabilities	27,660	40,456
Accounts payable, accrued expenses and other liabilities	42,797	71,218
Operating lease liabilities	85,555	88,425
Total liabilities	566,908	489,143
Commitments and Contingencies (Note 13)
Stockholders' equity
Preferred stock	0	0
Common stock	123	123
Additional paid-in capital	325,047	330,262
Treasury stock - Common stock voting, at cost, 3,270,512 shares and 2,992,550 as of June 30, 2022 and December 31, 2021, respectively	(320,252)	(232,712)
Retained earnings	1,035,723	956,966
Accumulated other comprehensive loss	(39,839)	(13,330)
Total stockholders' equity	1,000,802	1,041,309
Total liabilities and stockholders' equity	1,567,710	1,530,452
Series A Preferred Stock [Member]
Stockholders' equity
Preferred stock	$ 0	$ 0

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Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Allowance for accounts receivable	$ 193	$ 140
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	4,855,000	4,855,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.003	$ 0.003
Common stock, shares authorized	110,000,000	110,000,000
Common stock, shares issued	40,910,520	40,911,506
Common stock, shares outstanding	37,640,008	37,918,956
Treasury stock, shares	3,270,512	2,992,550
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	110,000	110,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Stock Non-Voting [Member]
Common stock, par value	$ 0.003	$ 0.003
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	0	0
Common stock, shares outstanding	0	0

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenues
Revenues	$ 182,229	$ 176,334	$ 368,286	$ 371,798
Expenses
Employee compensation and benefits	45,435	40,732	93,191	88,820
Depreciation and amortization	15,240	13,097	30,414	24,876
Technology and communications	12,490	10,544	24,682	20,580
Professional and consulting fees	8,920	10,704	18,541	20,344
Occupancy	3,700	3,300	7,087	6,617
Marketing and advertising	2,949	3,128	4,738	4,332
Clearing costs	4,263	4,372	8,838	9,066
General and administrative	4,444	3,280	7,903	6,512
Total expenses	97,441	89,157	195,394	181,147
Operating income	84,788	87,177	172,892	190,651
Other income (expense)
Investment income	254	107	313	214
Interest expense	(337)	(171)	(510)	(362)
Equity in earnings of unconsolidated affiliate	191	0	191	0
Other, net	4,682	(1,060)	7,111	(2,649)
Total other income (expense)	4,790	(1,124)	7,105	(2,797)
Income before income taxes	89,578	86,053	179,997	187,854
Provision for income taxes	22,656	18,765	48,306	40,109
Net income	$ 66,922	$ 67,288	$ 131,691	$ 147,745
Net income per common share
Basic	$ 1.78	$ 1.79	$ 3.52	$ 3.94
Diluted	1.78	1.77	3.49	3.87
Cash dividends declared per common share	$ 0.70	$ 0.66	$ 1.40	$ 1.32
Weighted average shares outstanding
Basic	37,529	37,508	37,456	37,489
Diluted	37,608	38,104	37,716	38,129
Commissions [Member]
Revenues
Revenues	$ 163,463	$ 156,431	$ 329,576	$ 332,269
Information Services [Member]
Revenues
Revenues	9,396	9,844	19,205	19,006
Post-trade Services [Member]
Revenues
Revenues	9,144	9,848	19,056	20,109
Other [Member]
Revenues
Revenues	$ 226	$ 211	$ 449	$ 414

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 66,922	$ 67,288	$ 131,691	$ 147,745
Net cumulative translation adjustment and foreign currency exchange hedge net of tax of $0, $(133), $0, and $(546), respectively	(21,458)	1,138	(26,509)	(794)
Comprehensive income	$ 45,464	$ 68,426	$ 105,182	$ 146,951

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Foreign currency exchange hedge, tax expense (benefit)	$ (133)	$ 0	$ (546)

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock Voting [Member]	Additional Paid-In Capital [Member]	Treasury Stock - Common Stock Voting [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Beginning Balance at Dec. 31, 2020	$ 955,061	$ 123	$ 329,742	$ (169,523)	$ 799,369	$ (4,650)
Net income	80,457				80,457
Cumulative translation adjustment and foreign currency exchange hedge, net of tax	(1,932)					(1,932)
Stock-based compensation	7,424		7,424
Exercise of stock options	244		244
Withholding tax payments on restricted stock vesting and stock option exercises	(27,422)		(27,422)
Repurchases of common stock	(520)			(520)
Cash dividend on common stock	(25,079)				(25,079)
Ending Balance at Mar. 31, 2021	988,233	123	309,988	(170,043)	854,747	(6,582)
Beginning Balance at Dec. 31, 2020	955,061	123	329,742	(169,523)	799,369	(4,650)
Net income	147,745
Cumulative translation adjustment and foreign currency exchange hedge, net of tax	(794)
Ending Balance at Jun. 30, 2021	1,021,860	123	313,683	(183,479)	896,977	(5,444)
Beginning Balance at Mar. 31, 2021	988,233	123	309,988	(170,043)	854,747	(6,582)
Net income	67,288				67,288
Cumulative translation adjustment and foreign currency exchange hedge, net of tax	1,138					1,138
Stock-based compensation	6,134		6,134
Exercise of stock options	4,421		4,421
Withholding tax payments on restricted stock vesting and stock option exercises	(6,860)		(6,860)
Repurchases of common stock	(13,436)			(13,436)
Cash dividend on common stock	(25,058)				(25,058)
Ending Balance at Jun. 30, 2021	1,021,860	123	313,683	(183,479)	896,977	(5,444)
Beginning Balance at Dec. 31, 2021	1,041,309	123	330,262	(232,712)	956,966	(13,330)
Net income	64,769				64,769
Cumulative translation adjustment and foreign currency exchange hedge, net of tax	(5,051)					(5,051)
Stock-based compensation	8,099		8,099
Exercise of stock options	50		50
Withholding tax payments on restricted stock vesting and stock option exercises	(20,292)		(20,292)
Repurchases of common stock	(38,800)			(38,800)
Cash dividend on common stock	(26,543)				(26,543)
Ending Balance at Mar. 31, 2022	1,023,541	123	318,119	(271,512)	995,192	(18,381)
Beginning Balance at Dec. 31, 2021	1,041,309	123	330,262	(232,712)	956,966	(13,330)
Net income	131,691
Cumulative translation adjustment and foreign currency exchange hedge, net of tax	(26,509)
Ending Balance at Jun. 30, 2022	1,000,802	123	325,047	(320,252)	1,035,723	(39,839)
Beginning Balance at Mar. 31, 2022	1,023,541	123	318,119	(271,512)	995,192	(18,381)
Net income	66,922				66,922
Cumulative translation adjustment and foreign currency exchange hedge, net of tax	(21,458)					(21,458)
Stock-based compensation	6,503		6,503
Exercise of stock options	86		86
Withholding tax payments on restricted stock vesting and stock option exercises	339		339
Repurchases of common stock	(48,740)			(48,740)
Cash dividend on common stock	(26,391)				(26,391)
Ending Balance at Jun. 30, 2022	$ 1,000,802	$ 123	$ 325,047	$ (320,252)	$ 1,035,723	$ (39,839)

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Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per common share	$ 0.70	$ 0.70	$ 0.66	$ 0.66	$ 1.40	$ 1.32

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities
Net income	$ 131,691	$ 147,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	30,414	24,876
Amortization of operating lease right-of-use assets	2,999	3,368
Stock-based compensation expense	14,602	13,558
Deferred taxes	(2,164)	1,600
Other	(1,068)	(176)
Changes in operating assets and liabilities:
(Increase) in accounts receivable	(23,728)	(7,434)
(Increase) in receivables from broker-dealers, clearing organizations and customers	(190,074)	(211,434)
(Increase) in prepaid expenses and other assets	(3,632)	(4,624)
(Decrease) in accrued employee compensation	(24,034)	(23,048)
Increase in payables to broker-dealers, clearing organizations and customers	145,886	144,977
(Decrease) in income and other tax liabilities	(10,175)	(3,101)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	1,141	(1,479)
(Decrease) in operating lease liabilities	(3,287)	(3,732)
Net cash provided by operating activities	69,907	73,567
Cash flows from investing activities
Acquisitions, net of cash and cash equivalents acquired	0	(17,078)
Acquisition of equity method investment	(34,400)	0
Purchases of furniture, equipment and leasehold improvements	(2,681)	(9,809)
Capitalization of software development costs	(18,561)	(16,459)
Net cash (used in) provided by investing activities	(55,642)	(43,346)
Cash flows from financing activities
Cash dividend on common stock	(53,527)	(50,238)
Exercise of stock options	136	4,665
Withholding tax payments on restricted stock vesting and stock option exercises	(19,953)	(34,282)
Repurchases of common stock	(87,540)	(13,956)
Payment of contingent consideration	(26,164)	0
Proceeds from short-term borrowings	100,000	70,348
Repayments of short-term borrowings	(100,000)	(69,302)
Net cash (used in) financing activities	(187,048)	(92,765)
Effect of exchange rate changes on cash and cash equivalents	(23,894)	(263)
Cash and cash equivalents including restricted cash
Net decrease for the period	(196,677)	(62,807)
Beginning of period	625,567	608,050
End of period	428,890	545,243
Supplemental cash flow information
Cash paid for income taxes	47,991	36,798
Cash paid for interest	429	362
Non-cash activity
Contingent consideration payable recognized in connection with acquisitions	0	22,450
Exercise of stock options - cashless	0	2,750
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	1,651	1,208
Trading Investments [Member]
Changes in operating assets and liabilities:
Decrease (increase) in trading investments	0	5,569
Mutual Funds Held In Rabbi Trust [Member]
Changes in operating assets and liabilities:
Decrease (increase) in trading investments	$ 1,336	$ (1,960)

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Organization and Principal Business Activity

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Organization and Principal Business Activity

1. Organization and Principal Business Activity

MarketAxess Holdings Inc. (the “Company” or “MarketAxess”) was incorporated in the State of Delaware on April 11, 2000. Through its subsidiaries, MarketAxess operates leading electronic trading platforms delivering expanded liquidity opportunities, improved execution quality and significant cost savings across global fixed-income markets. Over 1,900 institutional investor and broker-dealer firms are active users of MarketAxess’ patented trading technology, accessing global liquidity on its platforms in U.S. investment-grade bonds, U.S. high-yield bonds, emerging market debt, Eurobonds, municipal bonds, U.S. government bonds and other fixed-income securities. Through its Open Trading® protocols, MarketAxess executes bond trades between and among institutional investor and broker-dealer clients in the leading all-to-all anonymous trading environment for corporate bonds. MarketAxess also offers a number of trading-related products and services, including: Composite+™ pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to optimize trading environments. The Company also provides a range of pre- and post-trade services, including trade matching, trade publication, regulatory transaction reporting and market and reference data across a range of fixed-income and other products.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. These consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The consolidated financial information as of December 31, 2021 has been derived from audited financial statements not included herein. These unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to Form 10-Q and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the interim periods presented. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. Interim period operating results may not be indicative of the operating results for a full year. Certain reclassifications have been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Such reclassifications are immaterial, individually and in the aggregate, to both current and all previously issued financial statements taken as a whole and have no effect on previously reported net income.

Cash and Cash Equivalents

The Company defines cash equivalents as short-term interest-bearing investments with maturities at the time of purchase of three months or less.

Investments

The Company determines the appropriate classification of securities at the time of purchase which are recorded in the Consolidated Statements of Financial Condition on the trade date. Securities are classified as available-for-sale or trading. Available-for-sale investments are carried at fair value with the unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Trading investments include U.S. Treasuries and are carried at fair value, with realized and unrealized gains or losses included in other, net in the Consolidated Statements of Operations.

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 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 counterparty to both the buyer and the seller are recorded on a settlement date basis. The Company presents its securities failed-to-deliver and securities failed-to-receive balances on a net-by-counterparty basis within receivables from and payables to broker-dealers, clearing organizations and customers. The difference between the Company’s trade-date receivables and payables for unsettled matched principal transactions reflects commissions earned and is recorded within accounts receivable, net on a trade date basis.

Allowance for Credit Losses

All accounts receivable have contractual maturities of less than one year and are derived from trading-related fees and commissions and revenues from products and services. The Company continually monitors collections and payments from its customers and maintains an allowance for doubtful accounts. The allowance for credit losses is based on an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific collection issues that have been identified. Account balances are grouped for evaluation based on various risk characteristics, including billing type, legal entity, and geographic region. Additions to the allowance for credit losses are charged to bad debt expense, which is included in general and administrative expense in the Company’s Consolidated Statements of Operations. Balances that are determined to be uncollectable are written off against the allowance for credit losses. The allowance for credit losses was immaterial as of June 30, 2022 and December 31, 2021.

Depreciation and Amortization

Fixed assets are carried at cost less accumulated depreciation. The Company uses the straight-line method of depreciation over three to seven years. The Company amortizes leasehold improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease.

Software Development Costs

The Company capitalizes certain costs associated with the development of internal use software, including, among other items, employee compensation and related benefits and third party consulting costs at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed. Once the product is ready for its intended use, such costs are amortized on a straight-line basis over three 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.

Cloud Computing Costs

The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, employee compensation and related benefits and third party consulting costs that are part of the application development stage. These costs are recorded as a prepaid asset on the Consolidated Statement 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 previously entered into foreign currency forward contracts to hedge its net investment in its U.K. subsidiaries. Gains and losses on these transactions are included in accumulated other comprehensive loss 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 Revenue – The Company charges its broker-dealer clients variable transaction fees for trades executed on its platforms and, under certain plans, distribution fees or monthly minimum fees to use the platforms for a particular product area. Variable transaction fees are recognized on a trade date basis, are generally calculated as a percentage of the notional dollar volume of bonds traded on the platforms and vary based on the type, size, yield and maturity of the bond traded, as well as individual client incentives. Bonds that are more actively traded or that have shorter maturities generally generate lower commissions, while bonds that are less actively traded or that have longer maturities generally command higher commissions. Under the Company’s disclosed trading transaction fee plans, variable transaction fees, distribution fees and unused monthly fee commitments are invoiced and recorded on a monthly basis.

For Open Trading trades that the Company executes between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller, the Company earns its commission through the difference in price between the two trades. The commission is collected upon settlement of the trade, which typically occurs within one to two trading days after the trade date. For the majority of the Company’s U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly basis. The following table presents commission revenue by fee type:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	84,686	$	84,581	$	171,753	$	183,399
Open Trading – matched principal trading		42,624		39,881		85,615		86,201
U.S. Treasuries – matched principal trading		4,512		2,637		9,327		5,897
Total variable transaction fees		131,822		127,099		266,695		275,497
Distribution fees and unused minimum fees		31,641		29,332		62,881		56,772
Total commissions	$	163,463	$	156,431	$	329,576	$	332,269

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 deferred and recognized ratably over the contract period. The following table presents information services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	9,223	$	9,512	$	18,708	$	18,557
Services transferred at a point in time		173		332		497		449
Total information services revenues	$	9,396	$	9,844	$	19,205	$	19,006

Post-trade services – Post-trade services revenue is generated from regulatory transaction reporting, trade publication and trade matching services. Customers are generally billed monthly in arrears and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period. The Company also generates one-time implementation fees for onboarding clients which are invoiced and recognized in the period the implementation is completed. The following table presents post-trade services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,143	$	9,848	$	19,014	$	20,100
Services transferred at a point in time		1		—		42		9
Total post-trade services revenues	$	9,144	$	9,848	$	19,056	$	20,109

Other revenues – Other revenues primarily includes revenue from telecommunications line charges to broker-dealer clients.

Contract liabilities consist of deferred revenues that the Company records when cash payments are received or due in advance of services to be performed. The revenue recognized from contract liabilities and the remaining balance is shown below:

	December 31, 2021		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2022
	(In thousands)
Information services	$	3,528	$	4,948	$	(5,455	)	$	—		$	3,021
Post-trade services		720		8,167		(7,491	)		(72	)		1,324
Total deferred revenue	$	4,248	$	13,115	$	(12,946	)	$	(72	)	$	4,345

The majority of the Company’s contracts are short-term in nature with durations of less than one year. For contracts with original durations extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $20.0 million as of June 30, 2022. The Company expects to recognize revenue associated with the remaining performance obligations over the next 28 months.

Stock-Based Compensation

The Company measures and recognizes compensation expense for all share-based payment awards based on their estimated fair values measured as of the grant date. These costs are recognized as an expense in the Consolidated Statements of Operations over the requisite service period, which is typically the vesting period, with an offsetting increase to additional paid-in capital. Forfeitures are recognized as they occur.

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized against deferred tax assets if it is more likely than not that such assets will not be realized in future years. Tax benefits for uncertain tax positions are recognized when it is more likely than not that the positions will be sustained upon examination based on their technical merits. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statements of Operations. All tax effects related to share-based payments are recorded in the provision for income taxes in the periods during which the awards are exercised or vest.

Business Combinations, Goodwill and Intangible Assets

Business combinations are accounted for under the purchase method of accounting. The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of certain assets acquired and liabilities assumed requires judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates, customer attrition rates and asset lives.

The Company operates as a single reporting unit. Following an acquisition, goodwill no longer retains its identification with a particular acquisition, but instead becomes identifiable with the entire reporting unit. As a result, all of the fair value of the Company is available to support the value of goodwill. An impairment review of goodwill is performed on an annual basis, at year-end, or more frequently if circumstances change. Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized over their estimated useful lives which range from one to 15 years using either a straight-line or accelerated amortization method based on the pattern of economic benefit the Company expects to realize from such assets. Intangible assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment.

Equity Investments and Consolidation

The Company evaluates equity investments for potential consolidation under the voting-interest or variable-interest models. The Company consolidates investees over which the Company determines it has control under the voting interest model, generally greater than 50% ownership, or for which the Company is the primary beneficiary under the variable-interest model. The Company uses the equity method of accounting when it exercises significant influence over the investee, but does not have operating control, generally between 20% and 50% ownership. Under the equity method of accounting, original investments are recorded at cost in prepaid expenses and other assets on the Consolidated Statements of Financial Condition and adjusted by the Company’s proportionate share of the investees’ undistributed earnings or losses. Equity investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.

Earnings Per Share

Basic earnings per share is computed by dividing the net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue common stock were converted into or exercised for common stock.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Regulatory Capital Requirements

6 Months Ended

Jun. 30, 2022

Broker-Dealer [Abstract]

Regulatory Capital Requirements

3. Regulatory Capital Requirements

Certain U.S. subsidiaries of the Company are registered as a broker-dealer or swap execution facility (“SEF”) and therefore are subject to the applicable rules and regulations of the SEC, the Financial Industry Regulatory Authority (“FINRA”) and the Commodity Futures Trading Commission (“CFTC”). These rules contain minimum net capital requirements, as defined in the applicable regulations, and also may require that a significant part of the registrants’ assets be kept in relatively liquid form. Certain of the Company’s foreign subsidiaries are regulated by the Financial Conduct Authority (“FCA”) in the U.K. or other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of June 30, 2022, each of the Company’s subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of June 30, 2022, the Company’s subsidiaries maintained aggregate net capital and financial resources that were $477.8 million in excess of the required levels of $21.7 million.

The Company’s U.S. broker-dealer subsidiary is required to segregate funds in a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of June 30, 2022, the U.S. broker-dealer subsidiary had a balance of $50.3 million in its special reserve bank account. This U.S. broker-dealer subsidiary also maintained net capital that was $292.9 million in excess of the required level of $4.8 million.

Each of the Company’s U.S. and foreign regulated subsidiaries are subject to local regulations which generally prohibit repayment of borrowings from the Company or affiliates, paying cash dividends, making loans to the Company or affiliates or otherwise entering into transactions that result in a significant reduction in regulatory net capital or financial resources without prior notification to or approval from such regulated entity’s principal regulator.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2:

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2022
Assets
Money market funds	$	12,275	$	—	$	—	$	12,275
Trading securities
U.S. Treasuries		—		24,438		—		24,438
Mutual funds held in rabbi trust		—		9,859		—		9,859
Total assets	$	12,275	$	34,297	$	—	$	46,572
Liabilities
Contingent consideration payable	$	—	$	—	$	12,121	$	12,121
As of December 31, 2021
Assets
Money market funds	$	14,206	$	—	$	—	$	14,206
Trading securities
U.S. Treasuries		—		24,883		—		24,883
Mutual funds held in rabbi trust		—		11,195		—		11,195
Total assets	$	14,206	$	36,078	$	—	$	50,284
Liabilities
Contingent consideration payable	$	—	$	—	$	41,090	$	41,090

Securities classified within Level 2 were valued using a market approach utilizing prices and other relevant information generated by market transactions involving comparable assets. The mutual funds held in a rabbi trust represent investments associated with the Company’s deferred cash incentive plan.

Liabilities classified within Level 3 reflect contingent consideration payable recognized in connection with acquisitions. Significant unobservable inputs used in the valuation of contingent consideration payable include estimates of client retention, electronic trading volume and variable fees over periods of 18 to 24 months from the acquisition dates. The following table summarizes the change in the Company's Level 3 liabilities for the six months ended June 30, 2022:

	December 31, 2021		Payments			Unrealized (Gain)/Loss		Realized (Gain)/Loss			Foreign Currency Translation			June 30, 2022
	(In thousands)
Contingent consideration payable	$	41,090	$	(26,164	)	$	313	$	(1,769	)	$	(1,349	)	$	12,121

The table below presents the range and average significant unobservable inputs used in the valuation of the Company's Level 3 liabilities:

	Valuation Technique	Unobservable Inputs	Range	Average
	($ in thousands)
As of June 30, 2022
Contingent consideration payable	Discounted cash flows	Present value factor	0.97		0.97
		April 2022-March 2023 variable fee	$3,556 - $5,658	$4,607
		Percentage of electronic trading volume	86.0% - 96.6%	91.3%
As of December 31, 2021
Contingent consideration payable	Discounted cash flows	Present value factor	0.95 - 1		0.98
		Customer retention rate	84.0%	84.0%
		April 2021-March 2022 variable fee	$2,703 - $3,086	$2,895
		Percentage of electronic trading volume	86.0% - 96.6%	91.3%

The table below presents the carrying value, fair value and fair value hierarchy category of the Company's financial assets and liabilities that are not measured at fair value on the Consolidated Statement of Financial Condition. The carrying values of the Company's financial assets and liabilities not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximate fair value due to the short-term nature of the underlying assets and liabilities.

	Carrying Value		Fair Value		Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2022
Financial assets not measured at fair value:
Cash and cash equivalents	$	290,544	$	290,544	$	290,544	$	—	$	—	$	290,544
Cash segregated under federal regulations		50,276		50,276		50,276		—		—		50,276
Accounts receivable, net of allowance		87,475		87,475		—		87,475		—		87,475
Receivables from broker-dealers, clearing organizations and customers		617,817		617,817		87,962		529,855		—		617,817
Total	$	1,046,112	$	1,046,112	$	428,782	$	617,330	$	—	$	1,046,112
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing organizations and customers	$	375,211	$	375,211	$	—	$	375,211	$	—	$	375,211
As of December 31, 2021
Financial assets not measured at fair value:
Cash and cash equivalents	$	506,735	$	506,735	$	506,735	$	—	$	—	$	506,735
Cash segregated under federal regulations		50,159		50,159		50,159		—		—		50,159
Accounts receivable, net of allowance		63,881		63,881		—		63,881		—		63,881
Receivables from broker-dealers, clearing organizations and customers		408,346		408,346		68,565		339,781		—		408,346
Total	$	1,029,121	$	1,029,121	$	625,459	$	403,662	$	—	$	1,029,121
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing organizations and customers	$	229,325	$	229,325	$	—	$	229,325	$	—	$	229,325

The following table summarizes the Company’s investments:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
As of June 30, 2022
Trading securities
U.S. Treasuries	$	24,883	$	—	$	(445	)	$	24,438
Mutual funds held in rabbi trust		11,981		—		(2,122	)		9,859
Total investments	$	36,864	$	—	$	(2,567	)	$	34,297
As of December 31, 2021
Trading securities
U.S. Treasuries	$	24,994	$	—	$	(111	)	$	24,883
Mutual funds held in rabbi trust		9,941		1,254		—			11,195
Total investments	$	34,935	$	1,254	$	(111	)	$	36,078

The following table summarizes the fair value of the investments based upon the contractual maturities:

	As of
	June 30, 2022		December 31, 2021
	(In thousands)
Less than one year	$	34,297	$	11,195
Due in 1 - 5 years		—		24,883
Total	$	34,297	$	36,078

There were no proceeds from the sales and maturities of investments during the six months ended June 30, 2022. Proceeds from the sales and maturities of investments during the six months ended June 30, 2021 were $19.4 million. Net unrealized losses on trading securities were $2.6 million for the six months ended June 30, 2022. Net unrealized gains on trading securities were $0.9 million for the six months ended June 30, 2021.

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Receivables from and Payables to Broker-dealers, Clearing organizations and Customers

6 Months Ended

Jun. 30, 2022

Due to and from Broker-Dealers and Clearing Organizations [Abstract]

Receivables from and Payables to Broker-dealers, Clearing organizations and Customers

5. Receivables from and Payables to Broker-dealers, Clearing organizations and Customers

Receivables from and payables to broker-dealers, clearing organizations and customers consisted of the following:

	June 30, 2022		December 31, 2021
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	189,929	$	152,766
Securities failed-to-deliver – customers		333,607		182,052
Deposits with clearing organizations and broker-dealers		87,962		68,565
Other		6,319		4,963
Total	$	617,817	$	408,346
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	251,076	$	166,010
Securities failed-to-receive – customers		115,365		59,879
Other		8,770		3,436
Total	$	375,211	$	229,325

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Acquisitions and Equity Investments

6 Months Ended

Jun. 30, 2022

Business Combinations [Abstract]

Acquisitions and Equity Investments

6. Acquisitions and Equity Investments

In May 2022, the Company invested $34.4 million to acquire a minority ownership stake in RFQ–hub Holdings LLC, an entity formed with a consortium of market participants to support the growth of RFQ-hub, a bilateral multi-asset request for quote platform. The Company possesses significant influence over RFQ–hub Holdings LLC and is accounting for its investment under the equity method of accounting. As of June 30, 2022, the Company’s investment is recorded at carrying value of $34.6 million within prepaid expenses and other assets on the Consolidated Statements of Financial Condition. The Company’s proportionate share of RFQ–hub Holdings LLC’s net earnings was $0.2 million for the six months ended June 30, 2022 and is recorded within equity in earnings of unconsolidated affiliate on the Consolidated Statements of Operations.

On April 9, 2021, the Company acquired MuniBrokers LLC (“MuniBrokers”), a central electronic venue serving municipal bond brokers and dealers. The purchase price consisted of $17.1 million in cash paid at closing and up to $25.0 million of contingent consideration payable within approximately two years of the acquisition date. The Company accounted for the transaction as a business combination and utilized an independent third-party to assist in determining the fair value of the acquired intangible assets. The accounting purchase price was $39.6 million, comprised of $17.1 million of cash and $22.5 million of contingent consideration payable, which was included within accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition. The Company recorded $32.0 million of amortizable intangible assets and $7.4 million of goodwill as of the acquisition date. The acquired intangible assets consist of customer relationships and technology and have useful lives ranging from 1 to 15 years. In 2022, the Company recognized a decrease of $1.6 million to the contingent consideration payable due to the finalization of the first earn-out period consideration, which was recorded as a gain in other, net on the Consolidated Statements of Operations. In May 2022, the Company made a payment of $8.3 million to settle the first earn-out period consideration. As of June 30, 2022, the remaining outstanding contingent consideration payable was $12.1 million.

On November 30, 2020, the Company acquired Regulatory Services GmbH, the pan-European regulatory reporting business of Deutsche Börse Group (“Regulatory Reporting Hub”). The purchase price consisted of $22.5 million in cash paid at closing and up to $24.6 million in contingent consideration payable in cash within 18 months of the closing. The Company is accounting for the transaction as a purchase of assets and recorded $37.4 million in amortizable intangible assets as of the acquisition date. In April 2022, the Company made a final payment of $17.9 million to settle the contingent consideration payable.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives were $154.8 million as of each of June 30, 2022 and December 31, 2021. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

	June 30, 2022							December 31, 2021
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	128,942	$	(26,518	)	$	102,424	$	132,197	$	(19,813	)	$	112,384
Technology and other intangibles		11,430		(8,247	)		3,183		11,430		(7,437	)		3,993
Total	$	140,372	$	(34,765	)	$	105,607	$	143,627	$	(27,250	)	$	116,377

Amortization expense associated with identifiable intangible assets was $8.2 million and $6.1 million for the six months ended June 30, 2022 and 2021, respectively. Annual estimated total amortization expense is $16.5 million, $17.3 million, $15.0 million, $12.1 million and $10.4 million for 2022 through 2026.

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Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

The Company's provision for income taxes includes U.S. federal, state and local, and foreign taxes. The Company’s effective tax rate was 25.3% and 21.8% for the three months ended June 30, 2022 and 2021, respectively, and 26.8% and 21.4% for the six months ended June 30, 2022 and 2021. The Company’s effective tax rate can vary from period to period depending on geographic mix of our earnings, changes in tax legislation and tax rates and the amount and timing of excess tax benefits related to share-based payments, among other factors. During the six months ended June 30, 2022, the Company’s provision for income taxes included $3.2 million of expense related to a settlement with the New York State tax authorities to resolve the 2010 to 2014 audits. The Company recognized excess tax detriments on share-based payments of $0.1 million and less than $0.1 million for the three and six months ended June 30, 2022, respectively, and $5.6 million and $9.7 million of excess tax benefits on share-based payments for the three and six months ended June 30, 2021, respectively.

The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. The Company is currently under a New York State income tax examination for the tax years 2015 through 2017 and a New York City income tax examination for the tax years 2016 through 2018. At this time, the Company cannot estimate when the examinations will conclude or the impact such examinations will have on the Company’s Consolidated Financial Statements, if any. Generally, other than New York State and City, the Company is no longer subject to tax examinations by tax authorities for years prior to 2018.

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Stock-Based Compensation Plans

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

9. Stock-Based Compensation Plans

Equity Incentive Plan

The Company maintains the MarketAxess Holdings Inc. 2020 Equity Incentive Plan (the “2020 Plan”) which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, or other stock-based awards as incentives to encourage employees, consultants and non-employee directors to participate in the long-term success of the Company. As of June 30, 2022, there were 2,475,894 shares available for grant under the 2020 Plan.

Total stock-based compensation expense was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Employees	$	6,059	$	5,920	$	13,701	$	13,023
Non-employee directors		444		214		901		535
Total stock-based compensation	$	6,503	$	6,134	$	14,602	$	13,558

The Company records stock-based compensation expense for employees in employee compensation and benefits and for non-employee directors in general and administrative expenses in the Consolidated Statements of Operations.

During the six months ended June 30, 2022, the Company granted to employees and directors a total of 62,907 shares of restricted stock units, 23,904 options to purchase shares of common stock and performance stock units with an expected pay-out at target of 22,141 shares of common stock. The fair values of the restricted stock units and performance stock units were based on a weighted-average fair value per unit at the grant date of $354.03 and $350.85, respectively. Based on the Black-Scholes option pricing model, the weighted-average fair value for each option granted was $101.38 per share.

As of June 30, 2022, the total unrecognized compensation cost related to all non-vested awards was $51.6 million. That cost is expected to be recognized over a weighted-average period of 1.8 years.

Employee Stock Purchase Plan

In June 2022, the Company’s stockholders approved the MarketAxess Holdings Inc. Employee Stock Purchase Plan (the “ESPP”), under which a total of 121,211 shares of the Company’s Common Stock will be made available for purchase by employees. The ESPP is intended to qualify as an “employee stock purchase plan” meeting the requirements of Section 423 of the Internal Revenue Code. The ESPP was adopted by the Company’s Board of Directors in April 2022 and approved by the Company’s stockholders in June 2022. The ESPP has a series of six-month offering periods, with a new offering period beginning on the first trading day on or after February 16 and August 16 of each year. Subject to certain limitations, employees may contribute up to $2,000 of such employee’s total eligible compensation per month towards the purchase of common stock via payroll deductions. Purchase dates occur on the first trading day on or after February 15 and August 15 of each year and shares are purchased at a 15% discount off the lesser of: (i) the fair market value per share on the first day of each offering period; and (ii) the fair market value per share on the purchase date, but in no event less than par value. The Company expects the first offering period under the ESPP to begin on August 15, 2022.

The ESPP replaced the 2015 MarketAxess Holdings Inc. Employee Stock Purchase Plan, which was terminated by the Company’s Compensation & Talent Committee in February 2022.

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Earnings Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

10. Earnings Per Share

The following table sets forth basic and diluted weighted average shares outstanding used to compute earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,529		37,508		37,456		37,489
Dilutive effect of stock options and restricted stock		79		596		260		640
Diluted weighted average shares outstanding		37,608		38,104		37,716		38,129
Basic earnings per share	$	1.78	$	1.79	$	3.52	$	3.94
Diluted earnings per share		1.78		1.77		3.49		3.87

Stock options and restricted stock totaling 333,413 shares and 28,570 shares for the three months ended June 30, 2022 and 2021, respectively, and 254,028 and 44,830 for the six months ended June 30, 2022 and 2021, respectively, were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. The computation of diluted shares can vary among periods due, in part, to the change in the average price of the Company’s common stock.

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Credit Agreements and Short-term Financing

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Credit Agreements and Short-term Financing

11. Credit Agreements and Short-term Financing

Prior Revolving Credit Agreement

In November 2020, the Company entered into a one-year credit agreement (the “2020 Credit Agreement”) with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, that provided aggregate commitments totaling $500.0 million, consisting of a revolving credit facility and a $5.0 million letter of credit sub-limit for standby letters of credit.

Borrowings under the 2020 Credit Agreement bore interest at a rate per annum equal to the base rate or adjusted London Inter-bank Offered Rate (“LIBOR”) plus an applicable margin that varies with the Company’s consolidated total leverage ratio. The 2020 Credit Agreement required that the Company satisfy certain covenants, which include leverage ratios and minimum earnings before interest, tax, and depreciation and amortization (“EBITDA”) requirements.

2021 Credit Agreement

On October 15, 2021, the Company replaced the 2020 Credit Agreement with a new three-year revolving credit facility (the “2021 Credit Agreement”) provided by a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, which provides aggregate commitments totaling $500.0 million, consisting of a revolving credit facility and a $5.0 million letter of credit sub-limit for standby letters of credit. The 2021 Credit Agreement will mature on October 15, 2024, with the Company's option to request up to two additional 364-day extensions at the discretion of each lender and subject to customary conditions. Subject to satisfaction of certain specified conditions, the Company is permitted to upsize the 2021 Credit Agreement by up to $250.0 million in total. As of June 30, 2022, the Company had no letters of credit outstanding and $500.0 million in available borrowing capacity under the 2021 Credit Agreement.

Borrowings under the 2021 Credit Agreement will bear interest at a rate per annum equal to the base rate or adjusted LIBOR plus an applicable margin that varies with the Company's consolidated total leverage ratio. The 2021 Credit Agreement requires that the Company satisfy certain covenants, which include a leverage ratio. The Company incurred $0.3 million of interest expense under the 2021 Credit Agreement for the six months ended June 30, 2022.

Collateralized Agreement

In connection with its self-clearing operations, the Company’s U.S. broker-dealer subsidiary entered into an agreement (the “Collateralized Agreement”) with its settlement bank to provide loans to the subsidiary in amounts up to an aggregate of $200.0 million on an uncommitted basis. Borrowings under the Collateralized Agreement are collateralized by securities pledged by the Company’s U.S. broker-dealer subsidiary to the settlement bank, subject to applicable haircuts and concentration limits. Borrowings under the Collateralized Agreement will bear interest at a base rate per annum equal to the higher of the upper range of the Federal Funds Rate, 0.25% or one-month Secured Overnight Financing Rate (“SOFR”), plus 1.00%. The Company incurred no interest expense on borrowings under the Collateralized Agreement during the six months ended June 30, 2022. As of June 30, 2022, the Company had no borrowings outstanding and $200.0 million in available borrowing capacity under the Collateralized Agreement.

Short-term Financing

Under arrangements with their settlement banks, certain of the Company’s U.S. and U.K. operating subsidiaries may receive overnight financing in the form of bank overdrafts. The Company incurred interest expense on such overnight financing of $0.2 million during the six months ended June 30, 2022. As of June 30, 2022, the Company had no overdrafts payable outstanding.

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Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

12. Leases

The Company has operating leases for corporate offices with initial lease terms ranging from one year to 15 years. Certain leases contain options to extend the initial term at the Company’s discretion. The Company accounts for the option to extend when it is reasonably certain of being exercised. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

The following table presents the components of lease expense for the three and six months ended June 30, 2022 and 2021:

		Three Months Ended June 30,						Six Months Ended June 30,
Lease cost:	Classification	2022			2021			2022			2021
		(In thousands)
Operating lease cost	Occupancy	$	3,345		$	3,346		$	6,655		$	6,669
Operating lease cost for subleased/assigned properties	Other, net		13			544			469			1,041
Variable lease costs	Occupancy		4			2			11			8
Sublease income subleased/assigned properties	Other, net		(15	)		(544	)		(405	)		(1,047	)
Net lease cost		$	3,347		$	3,348		$	6,730		$	6,671

The Company determines whether an arrangement is, or includes, a lease at contract inception. Operating lease right-of-use assets and liabilities are recognized at commencement date and are initially measured based on the present value of lease payments over the defined lease term. As the Company's leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.

The weighted average remaining lease term and weighted average discount rate are as follows:

	As of
Lease Term and Discount Rate	June 30, 2022			December 31, 2021
Weighted average remaining lease term (in years)		11.0			11.5
Weighted average discount rate		5.9	%		5.9	%

The following table presents the maturity of lease liabilities as of June 30, 2022:

	(In thousands)
Remainder of 2022	$	5,492
2023		10,988
2024		11,466
2025		11,274
2026		10,789
2027 and thereafter		67,975
Total lease payments		117,984
Less: interest		32,429
Present value of lease liabilities	$	85,555

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Legal

In the normal course of business, the Company and its subsidiaries included in the consolidated financial statements may be involved in various lawsuits, proceedings and regulatory examinations. The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings, if any, utilizing the latest information available. For matters where it is probable that the Company will incur a material loss and the amount can be reasonably estimated, the Company will establish an accrual for the loss. Once established, the accrual will be adjusted to reflect any relevant developments. When a loss contingency is not both probable and estimable, the Company does not establish an accrual.

Based on currently available information, the outcome of the Company’s outstanding matters is not expected to have a material adverse impact on the Company’s financial position. It is not presently possible to determine the ultimate exposure to these matters and there is no assurance that the resolution of the outstanding matters will not significantly exceed any reserves accrued by the Company.

Other

The Company, through certain of its subsidiaries, executes bond transactions between its institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades. The Company’s U.S. broker-dealer subsidiary operates under a self-clearing model for the settlement of such transactions. The Company’s subsidiaries also settle their transactions through third-party clearing brokers or settlement agents. Settlement typically occurs within one to two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded. Under both the self-clearing and the third-party clearing models, the Company may be exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is an error in executing a matched principal transaction. Pursuant to the terms of the securities clearing agreements, each third-party clearing broker has the right to charge the Company for any losses they suffer resulting from a counterparty’s failure on any of the Company’s trades. The Company did not record any liabilities or losses with regard to counterparty failures for the six months ended June 30, 2022 and 2021.

In the normal course of business, the Company enters into contracts that contain a variety of representations, warranties and indemnification provisions. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of loss to be remote.

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Share Repurchase Programs

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Share Repurchase Programs

14. Share Repurchase Programs

In January 2021, the Board of Directors authorized a new share repurchase program for up to $100.0 million that commenced in April 2021 and was exhausted in January 2022. In January 2022, the Board of Directors authorized a new share repurchase program for up to $150.0 million. For the six months ended June 30, 2022, the Company repurchased 280,315 shares of common stock at a cost of $87.5 million. Shares repurchased under each program will be held in treasury for future use.

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Segment and Geographic Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment and Geographic Information

15. Segment and Geographic Information

The Company operates electronic platforms for the trading of fixed-income securities and provides related data, analytics, compliance tools and post-trade services. The Company considers its operations to constitute a single business segment because of the highly integrated nature of these products and services, the financial markets in which the Company competes and the Company’s worldwide business activities. The Company believes that results by geographic region or client sector are not necessarily meaningful in understanding its business.

For the six months ended June 30, 2022 and 2021, the U.K. was the only individual foreign country in which the Company had a subsidiary that accounted for 10% or more of the total revenues or total long-lived assets. Revenues and long-lived assets are attributed to a geographic area based on the location of the particular subsidiary. Long-lived assets are defined as furniture, equipment, leasehold improvements and capitalized software. Revenues for the three and six months ended June 30, 2022 and 2021 and long-lived assets as of June 30, 2022 and December 31, 2021 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Revenues
Americas	$	149,363	$	143,239	$	299,919	$	303,358
Europe		27,800		28,317		58,536		57,861
Asia		5,066		4,778		9,831		10,579
Total	$	182,229	$	176,334	$	368,286	$	371,798

	As of
	June 30, 2022		December 31, 2021
	(In thousands)
Long-lived assets, as defined
Americas	$	74,603	$	75,328
Europe		18,290		20,547
Asia		362		186
Total	$	93,255	$	96,061

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Cash and Cash Equivalents and Restricted Cash

6 Months Ended

Jun. 30, 2022

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents and Restricted Cash

16. Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported within the Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Consolidated Statements of Cash Flows.

	Statement of Financial Condition Location	June 30, 2022		December 31, 2021
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	290,544	$	506,735
Cash segregated for regulatory purposes	Cash segregated under federal regulations		50,276		50,159
Deposits with clearing organizations and broker-dealers	Receivables from broker-dealers, clearing organizations and customers		87,962		68,565
Other deposits	Prepaid expenses and other assets		108		108
Total		$	428,890	$	625,567

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. These consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The consolidated financial information as of December 31, 2021 has been derived from audited financial statements not included herein. These unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to Form 10-Q and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the interim periods presented. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. Interim period operating results may not be indicative of the operating results for a full year. Certain reclassifications have been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Such reclassifications are immaterial, individually and in the aggregate, to both current and all previously issued financial statements taken as a whole and have no effect on previously reported net income.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company defines cash equivalents as short-term interest-bearing investments with maturities at the time of purchase of three months or less.

Investments

Investments

The Company determines the appropriate classification of securities at the time of purchase which are recorded in the Consolidated Statements of Financial Condition on the trade date. Securities are classified as available-for-sale or trading. Available-for-sale investments are carried at fair value with the unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Trading investments include U.S. Treasuries and are carried at fair value, with realized and unrealized gains or losses included in other, net in the Consolidated Statements of Operations.

Fair Value Financial Instruments

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 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 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 counterparty to both the buyer and the seller are recorded on a settlement date basis. The Company presents its securities failed-to-deliver and securities failed-to-receive balances on a net-by-counterparty basis within receivables from and payables to broker-dealers, clearing organizations and customers. The difference between the Company’s trade-date receivables and payables for unsettled matched principal transactions reflects commissions earned and is recorded within accounts receivable, net on a trade date basis.

Allowance for Credit Losses

Allowance for Credit Losses

All accounts receivable have contractual maturities of less than one year and are derived from trading-related fees and commissions and revenues from products and services. The Company continually monitors collections and payments from its customers and maintains an allowance for doubtful accounts. The allowance for credit losses is based on an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific collection issues that have been identified. Account balances are grouped for evaluation based on various risk characteristics, including billing type, legal entity, and geographic region. Additions to the allowance for credit losses are charged to bad debt expense, which is included in general and administrative expense in the Company’s Consolidated Statements of Operations. Balances that are determined to be uncollectable are written off against the allowance for credit losses. The allowance for credit losses was immaterial as of June 30, 2022 and December 31, 2021.

Depreciation and Amortization

Depreciation and Amortization

Fixed assets are carried at cost less accumulated depreciation. The Company uses the straight-line method of depreciation over three to seven years. The Company amortizes leasehold improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease.

Software Development Costs

Software Development Costs

The Company capitalizes certain costs associated with the development of internal use software, including, among other items, employee compensation and related benefits and third party consulting costs at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed. Once the product is ready for its intended use, such costs are amortized on a straight-line basis over three 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.

Cloud Computing Costs

Cloud Computing Costs

The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, employee compensation and related benefits and third party consulting costs that are part of the application development stage. These costs are recorded as a prepaid asset on the Consolidated Statement 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

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 previously entered into foreign currency forward contracts to hedge its net investment in its U.K. subsidiaries. Gains and losses on these transactions are included in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition.

Revenue Recognition

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 Revenue – The Company charges its broker-dealer clients variable transaction fees for trades executed on its platforms and, under certain plans, distribution fees or monthly minimum fees to use the platforms for a particular product area. Variable transaction fees are recognized on a trade date basis, are generally calculated as a percentage of the notional dollar volume of bonds traded on the platforms and vary based on the type, size, yield and maturity of the bond traded, as well as individual client incentives. Bonds that are more actively traded or that have shorter maturities generally generate lower commissions, while bonds that are less actively traded or that have longer maturities generally command higher commissions. Under the Company’s disclosed trading transaction fee plans, variable transaction fees, distribution fees and unused monthly fee commitments are invoiced and recorded on a monthly basis.

For Open Trading trades that the Company executes between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller, the Company earns its commission through the difference in price between the two trades. The commission is collected upon settlement of the trade, which typically occurs within one to two trading days after the trade date. For the majority of the Company’s U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly basis. The following table presents commission revenue by fee type:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	84,686	$	84,581	$	171,753	$	183,399
Open Trading – matched principal trading		42,624		39,881		85,615		86,201
U.S. Treasuries – matched principal trading		4,512		2,637		9,327		5,897
Total variable transaction fees		131,822		127,099		266,695		275,497
Distribution fees and unused minimum fees		31,641		29,332		62,881		56,772
Total commissions	$	163,463	$	156,431	$	329,576	$	332,269

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 deferred and recognized ratably over the contract period. The following table presents information services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	9,223	$	9,512	$	18,708	$	18,557
Services transferred at a point in time		173		332		497		449
Total information services revenues	$	9,396	$	9,844	$	19,205	$	19,006

Post-trade services – Post-trade services revenue is generated from regulatory transaction reporting, trade publication and trade matching services. Customers are generally billed monthly in arrears and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period. The Company also generates one-time implementation fees for onboarding clients which are invoiced and recognized in the period the implementation is completed. The following table presents post-trade services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,143	$	9,848	$	19,014	$	20,100
Services transferred at a point in time		1		—		42		9
Total post-trade services revenues	$	9,144	$	9,848	$	19,056	$	20,109

Other revenues – Other revenues primarily includes revenue from telecommunications line charges to broker-dealer clients.

Contract liabilities consist of deferred revenues that the Company records when cash payments are received or due in advance of services to be performed. The revenue recognized from contract liabilities and the remaining balance is shown below:

	December 31, 2021		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2022
	(In thousands)
Information services	$	3,528	$	4,948	$	(5,455	)	$	—		$	3,021
Post-trade services		720		8,167		(7,491	)		(72	)		1,324
Total deferred revenue	$	4,248	$	13,115	$	(12,946	)	$	(72	)	$	4,345

The majority of the Company’s contracts are short-term in nature with durations of less than one year. For contracts with original durations extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $20.0 million as of June 30, 2022. The Company expects to recognize revenue associated with the remaining performance obligations over the next 28 months.

Stock-Based Compensation

Stock-Based Compensation

The Company measures and recognizes compensation expense for all share-based payment awards based on their estimated fair values measured as of the grant date. These costs are recognized as an expense in the Consolidated Statements of Operations over the requisite service period, which is typically the vesting period, with an offsetting increase to additional paid-in capital. Forfeitures are recognized as they occur.

Income Taxes

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized against deferred tax assets if it is more likely than not that such assets will not be realized in future years. Tax benefits for uncertain tax positions are recognized when it is more likely than not that the positions will be sustained upon examination based on their technical merits. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statements of Operations. All tax effects related to share-based payments are recorded in the provision for income taxes in the periods during which the awards are exercised or vest.

Business Combinations, Goodwill and Intangible Assets

Business Combinations, Goodwill and Intangible Assets

Business combinations are accounted for under the purchase method of accounting. The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of certain assets acquired and liabilities assumed requires judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates, customer attrition rates and asset lives.

The Company operates as a single reporting unit. Following an acquisition, goodwill no longer retains its identification with a particular acquisition, but instead becomes identifiable with the entire reporting unit. As a result, all of the fair value of the Company is available to support the value of goodwill. An impairment review of goodwill is performed on an annual basis, at year-end, or more frequently if circumstances change. Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized over their estimated useful lives which range from one to 15 years using either a straight-line or accelerated amortization method based on the pattern of economic benefit the Company expects to realize from such assets. Intangible assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment.

Equity Investments and Consolidation

Equity Investments and Consolidation

The Company evaluates equity investments for potential consolidation under the voting-interest or variable-interest models. The Company consolidates investees over which the Company determines it has control under the voting interest model, generally greater than 50% ownership, or for which the Company is the primary beneficiary under the variable-interest model. The Company uses the equity method of accounting when it exercises significant influence over the investee, but does not have operating control, generally between 20% and 50% ownership. Under the equity method of accounting, original investments are recorded at cost in prepaid expenses and other assets on the Consolidated Statements of Financial Condition and adjusted by the Company’s proportionate share of the investees’ undistributed earnings or losses. Equity investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable.

Earnings Per Share

Earnings Per Share

Basic earnings per share is computed by dividing the net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue common stock were converted into or exercised for common stock.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Summary of Commission Revenue by Fee Type

The following table presents commission revenue by fee type:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	84,686	$	84,581	$	171,753	$	183,399
Open Trading – matched principal trading		42,624		39,881		85,615		86,201
U.S. Treasuries – matched principal trading		4,512		2,637		9,327		5,897
Total variable transaction fees		131,822		127,099		266,695		275,497
Distribution fees and unused minimum fees		31,641		29,332		62,881		56,772
Total commissions	$	163,463	$	156,431	$	329,576	$	332,269

Summary of Information Services Revenue by Timing of Recognition

The following table presents information services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	9,223	$	9,512	$	18,708	$	18,557
Services transferred at a point in time		173		332		497		449
Total information services revenues	$	9,396	$	9,844	$	19,205	$	19,006

Summary of Post-Trade Services Revenue by Timing of Recognition

The following table presents post-trade services revenue by timing of recognition:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,143	$	9,848	$	19,014	$	20,100
Services transferred at a point in time		1		—		42		9
Total post-trade services revenues	$	9,144	$	9,848	$	19,056	$	20,109

Summary of Revenue Recognized from Contract Liabilities and Remaining Balance

The revenue recognized from contract liabilities and the remaining balance is shown below:

	December 31, 2021		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2022
	(In thousands)
Information services	$	3,528	$	4,948	$	(5,455	)	$	—		$	3,021
Post-trade services		720		8,167		(7,491	)		(72	)		1,324
Total deferred revenue	$	4,248	$	13,115	$	(12,946	)	$	(72	)	$	4,345

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Valuation of Company's Assets and Liabilities Measured at Fair Value

The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2:

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2022
Assets
Money market funds	$	12,275	$	—	$	—	$	12,275
Trading securities
U.S. Treasuries		—		24,438		—		24,438
Mutual funds held in rabbi trust		—		9,859		—		9,859
Total assets	$	12,275	$	34,297	$	—	$	46,572
Liabilities
Contingent consideration payable	$	—	$	—	$	12,121	$	12,121
As of December 31, 2021
Assets
Money market funds	$	14,206	$	—	$	—	$	14,206
Trading securities
U.S. Treasuries		—		24,883		—		24,883
Mutual funds held in rabbi trust		—		11,195		—		11,195
Total assets	$	14,206	$	36,078	$	—	$	50,284
Liabilities
Contingent consideration payable	$	—	$	—	$	41,090	$	41,090

Summary of the Change in the Company's Contingent Consideration Payable

The following table summarizes the change in the Company's Level 3 liabilities for the six months ended June 30, 2022:

	December 31, 2021		Payments			Unrealized (Gain)/Loss		Realized (Gain)/Loss			Foreign Currency Translation			June 30, 2022
	(In thousands)
Contingent consideration payable	$	41,090	$	(26,164	)	$	313	$	(1,769	)	$	(1,349	)	$	12,121

The table below presents the range and average significant unobservable inputs used in the valuation of the Company's Level 3 liabilities:

	Valuation Technique	Unobservable Inputs	Range	Average
	($ in thousands)
As of June 30, 2022
Contingent consideration payable	Discounted cash flows	Present value factor	0.97		0.97
		April 2022-March 2023 variable fee	$3,556 - $5,658	$4,607
		Percentage of electronic trading volume	86.0% - 96.6%	91.3%
As of December 31, 2021
Contingent consideration payable	Discounted cash flows	Present value factor	0.95 - 1		0.98
		Customer retention rate	84.0%	84.0%
		April 2021-March 2022 variable fee	$2,703 - $3,086	$2,895
		Percentage of electronic trading volume	86.0% - 96.6%	91.3%

Carrying Value of Financial Asset and Liability Not Measured at Fair Value

The table below presents the carrying value, fair value and fair value hierarchy category of the Company's financial assets and liabilities that are not measured at fair value on the Consolidated Statement of Financial Condition. The carrying values of the Company's financial assets and liabilities not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximate fair value due to the short-term nature of the underlying assets and liabilities.

	Carrying Value		Fair Value		Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2022
Financial assets not measured at fair value:
Cash and cash equivalents	$	290,544	$	290,544	$	290,544	$	—	$	—	$	290,544
Cash segregated under federal regulations		50,276		50,276		50,276		—		—		50,276
Accounts receivable, net of allowance		87,475		87,475		—		87,475		—		87,475
Receivables from broker-dealers, clearing organizations and customers		617,817		617,817		87,962		529,855		—		617,817
Total	$	1,046,112	$	1,046,112	$	428,782	$	617,330	$	—	$	1,046,112
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing organizations and customers	$	375,211	$	375,211	$	—	$	375,211	$	—	$	375,211
As of December 31, 2021
Financial assets not measured at fair value:
Cash and cash equivalents	$	506,735	$	506,735	$	506,735	$	—	$	—	$	506,735
Cash segregated under federal regulations		50,159		50,159		50,159		—		—		50,159
Accounts receivable, net of allowance		63,881		63,881		—		63,881		—		63,881
Receivables from broker-dealers, clearing organizations and customers		408,346		408,346		68,565		339,781		—		408,346
Total	$	1,029,121	$	1,029,121	$	625,459	$	403,662	$	—	$	1,029,121
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing organizations and customers	$	229,325	$	229,325	$	—	$	229,325	$	—	$	229,325

Summary of Company's Investments

The following table summarizes the Company’s investments:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
As of June 30, 2022
Trading securities
U.S. Treasuries	$	24,883	$	—	$	(445	)	$	24,438
Mutual funds held in rabbi trust		11,981		—		(2,122	)		9,859
Total investments	$	36,864	$	—	$	(2,567	)	$	34,297
As of December 31, 2021
Trading securities
U.S. Treasuries	$	24,994	$	—	$	(111	)	$	24,883
Mutual funds held in rabbi trust		9,941		1,254		—			11,195
Total investments	$	34,935	$	1,254	$	(111	)	$	36,078

Summary of Fair Value of Investments Based upon Contractual Maturities

The following table summarizes the fair value of the investments based upon the contractual maturities:

	As of
	June 30, 2022		December 31, 2021
	(In thousands)
Less than one year	$	34,297	$	11,195
Due in 1 - 5 years		—		24,883
Total	$	34,297	$	36,078

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Receivables from and Payables to Broker-dealers, Clearing organizations and Customers (Tables)

6 Months Ended

Jun. 30, 2022

Due to and from Broker-Dealers and Clearing Organizations [Abstract]

Schedule of Receivables from and Payables to Broker-dealers, Clearing Organizations and Customers

Receivables from and payables to broker-dealers, clearing organizations and customers consisted of the following:

	June 30, 2022		December 31, 2021
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	189,929	$	152,766
Securities failed-to-deliver – customers		333,607		182,052
Deposits with clearing organizations and broker-dealers		87,962		68,565
Other		6,319		4,963
Total	$	617,817	$	408,346
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	251,076	$	166,010
Securities failed-to-receive – customers		115,365		59,879
Other		8,770		3,436
Total	$	375,211	$	229,325

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Company's Intangible Assets

Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

	June 30, 2022							December 31, 2021
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	128,942	$	(26,518	)	$	102,424	$	132,197	$	(19,813	)	$	112,384
Technology and other intangibles		11,430		(8,247	)		3,183		11,430		(7,437	)		3,993
Total	$	140,372	$	(34,765	)	$	105,607	$	143,627	$	(27,250	)	$	116,377

XML

Stock-Based Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Expense

Total stock-based compensation expense was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Employees	$	6,059	$	5,920	$	13,701	$	13,023
Non-employee directors		444		214		901		535
Total stock-based compensation	$	6,503	$	6,134	$	14,602	$	13,558

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Basic and Diluted Weighted Average Shares Outstanding Used to Compute Earnings Per Share

The following table sets forth basic and diluted weighted average shares outstanding used to compute earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,529		37,508		37,456		37,489
Dilutive effect of stock options and restricted stock		79		596		260		640
Diluted weighted average shares outstanding		37,608		38,104		37,716		38,129
Basic earnings per share	$	1.78	$	1.79	$	3.52	$	3.94
Diluted earnings per share		1.78		1.77		3.49		3.87

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Schedule of Components of Lease Expense

The following table presents the components of lease expense for the three and six months ended June 30, 2022 and 2021:

		Three Months Ended June 30,						Six Months Ended June 30,
Lease cost:	Classification	2022			2021			2022			2021
		(In thousands)
Operating lease cost	Occupancy	$	3,345		$	3,346		$	6,655		$	6,669
Operating lease cost for subleased/assigned properties	Other, net		13			544			469			1,041
Variable lease costs	Occupancy		4			2			11			8
Sublease income subleased/assigned properties	Other, net		(15	)		(544	)		(405	)		(1,047	)
Net lease cost		$	3,347		$	3,348		$	6,730		$	6,671

Summary of Weighted Average Remaining Lease Term and Discount Rate

The weighted average remaining lease term and weighted average discount rate are as follows:

	As of
Lease Term and Discount Rate	June 30, 2022			December 31, 2021
Weighted average remaining lease term (in years)		11.0			11.5
Weighted average discount rate		5.9	%		5.9	%

Schedule of Maturity of Lease Liabilities

The following table presents the maturity of lease liabilities as of June 30, 2022:

	(In thousands)
Remainder of 2022	$	5,492
2023		10,988
2024		11,466
2025		11,274
2026		10,789
2027 and thereafter		67,975
Total lease payments		117,984
Less: interest		32,429
Present value of lease liabilities	$	85,555

XML

Segment and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Summary of Revenue and Long-lived Assets

Revenues for the three and six months ended June 30, 2022 and 2021 and long-lived assets as of June 30, 2022 and December 31, 2021 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Revenues
Americas	$	149,363	$	143,239	$	299,919	$	303,358
Europe		27,800		28,317		58,536		57,861
Asia		5,066		4,778		9,831		10,579
Total	$	182,229	$	176,334	$	368,286	$	371,798

	As of
	June 30, 2022		December 31, 2021
	(In thousands)
Long-lived assets, as defined
Americas	$	74,603	$	75,328
Europe		18,290		20,547
Asia		362		186
Total	$	93,255	$	96,061

XML

Cash and Cash Equivalents and Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2022

Cash and Cash Equivalents [Abstract]

Summary of Reconciliation of Cash and Cash Equivalents with Restricted or Segregated Cash

The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported within the Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Consolidated Statements of Cash Flows.

	Statement of Financial Condition Location	June 30, 2022		December 31, 2021
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	290,544	$	506,735
Cash segregated for regulatory purposes	Cash segregated under federal regulations		50,276		50,159
Deposits with clearing organizations and broker-dealers	Receivables from broker-dealers, clearing organizations and customers		87,962		68,565
Other deposits	Prepaid expenses and other assets		108		108
Total		$	428,890	$	625,567

XML

Organization and Principal Business Activity - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2022 Institutional_Investor_and_BrokerDealer_Firm
Accounting Policies [Line Items]
Date of incorporation	Apr. 11, 2000
Minimum [Member]
Accounting Policies [Line Items]
Number of institutional investor and broker-dealer firms	1,900

XML

Significant Accounting Policies - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2022 Revenue
Significant Accounting Policies [Line Items]
Maximum maturity period for classification of investments as cash equivalents	3 months
Number of revenue streams	4
Description of commission revenue	For Open Trading trades that the Company executes between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller, the Company earns its commission through the difference in price between the two trades.
Settlement days of bond transaction	within one to two trading days
Ownership percentage	50.00%
Maximum [Member]
Significant Accounting Policies [Line Items]
Contractual maturities accounts receivable	1 year
Estimated useful life of fixed assets	7 years
Hosting service contract, amortization period	5 years
Ownership percentage	50.00%
Maximum [Member] | Business Combinations [Member]
Significant Accounting Policies [Line Items]
Estimated life of intangible assets	15 years
Minimum [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of fixed assets	3 years
Hosting service contract, amortization period	1 year
Ownership percentage	20.00%
Minimum [Member] | Business Combinations [Member]
Significant Accounting Policies [Line Items]
Estimated life of intangible assets	1 year
Minimum [Member] | Internally Developed Software [Member]
Significant Accounting Policies [Line Items]
Estimated life of intangible assets	3 years

XML

Significant Accounting Policies - Summary of Commission Revenue by Fee Type (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Commission revenue by fee type
Revenues	$ 182,229	$ 176,334	$ 368,286	$ 371,798
Commissions [Member]
Commission revenue by fee type
Disclosed trading	84,686	84,581	171,753	183,399
Matched principal trading	42,624	39,881	85,615	86,201
Total variable transaction fees	131,822	127,099	266,695	275,497
Distribution fees and unused minimum fees	31,641	29,332	62,881	56,772
Revenues	163,463	156,431	329,576	332,269
Commissions [Member] | U.S. Treasuries [Member]
Commission revenue by fee type
Matched principal trading	$ 4,512	$ 2,637	$ 9,327	$ 5,897

XML

Significant Accounting Policies - Summary of Information Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Significant Accounting Policies [Line Items]
Revenues	$ 182,229	$ 176,334	$ 368,286	$ 371,798
Information Services [Member]
Significant Accounting Policies [Line Items]
Revenues	9,396	9,844	19,205	19,006
Information Services [Member] | Transferred over Time [Member]
Significant Accounting Policies [Line Items]
Revenues	9,223	9,512	18,708	18,557
Information Services [Member] | Transferred at a Point in Time [Member]
Significant Accounting Policies [Line Items]
Revenues	$ 173	$ 332	$ 497	$ 449

XML

Significant Accounting Policies - Summary of Post-Trade Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Significant Accounting Policies [Line Items]
Revenues	$ 182,229	$ 176,334	$ 368,286	$ 371,798
Post-trade Services [Member]
Significant Accounting Policies [Line Items]
Revenues	9,144	9,848	19,056	20,109
Post-trade Services [Member] | Transferred over Time [Member]
Significant Accounting Policies [Line Items]
Revenues	9,143	9,848	19,014	20,100
Post-trade Services [Member] | Transferred at a Point in Time [Member]
Significant Accounting Policies [Line Items]
Revenues	$ 1	$ 0	$ 42	$ 9

XML

Significant Accounting Policies - Summary of Revenue Recognized from Contract Liabilities and Remaining Balance (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	$ 4,248
Payments received in advance of services to be performed	13,115
Revenue recognized for services performed during the period	(12,946)
Foreign Currency Translation	(72)
Deferred revenues, ending balance	4,345
Information Services [Member]
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	3,528
Payments received in advance of services to be performed	4,948
Revenue recognized for services performed during the period	(5,455)
Deferred revenues, ending balance	3,021
Post-trade Services [Member]
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	720
Payments received in advance of services to be performed	8,167
Revenue recognized for services performed during the period	(7,491)
Foreign Currency Translation	(72)
Deferred revenues, ending balance	$ 1,324

XML

Significant Accounting Policies - Additional Information (Detail 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-07-16 $ in Millions	Jun. 30, 2022 USD ($)
Significant Accounting Policies [Line Items]
Aggregate amount of transaction price allocated to remaining performance obligations	$ 20.0
Expected time to recognize revenue for remaining performance obligation	28 months

XML

Regulatory Capital Requirements - Additional Information (Detail) $ in Millions	Jun. 30, 2022 USD ($)
Brokers And Dealers [Line Items]
Securities reserve deposit	$ 50.3
U.S. Subsidiaries
Brokers And Dealers [Line Items]
Aggregate net capital and financial resources in excess of required level	477.8
Aggregate net capital and financial resources, minimum capital requirement	21.7
U.S. Broker-Dealer Subsidiaries
Brokers And Dealers [Line Items]
Aggregate net capital and financial resources in excess of required level	292.9
Aggregate net capital and financial resources, minimum capital requirement	$ 4.8

XML

Fair Value Measurements - Valuation of Company's Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Assets
Money market funds	$ 12,275	$ 14,206
Assets Fair Value Total	46,572	50,284
Liabilities
Contingent consideration payable	12,121	41,090
Mutual Funds Held In Rabbi Trust [Member]
Assets
Trading securities	9,859	11,195
U.S. Treasuries [Member]
Assets
Trading securities	24,438	24,883
Level 1 [Member]
Assets
Money market funds	12,275	14,206
Assets Fair Value Total	12,275	14,206
Level 2 [Member]
Assets
Assets Fair Value Total	34,297	36,078
Level 2 [Member] | Mutual Funds Held In Rabbi Trust [Member]
Assets
Trading securities	9,859	11,195
Level 2 [Member] | U.S. Treasuries [Member]
Assets
Trading securities	24,438	24,883
Level 3 [Member]
Liabilities
Contingent consideration payable	$ 12,121	$ 41,090

XML

Fair Value Measurements - Summary of the Change in the Company's Contingent Consideration Payable (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Fair Value Disclosures [Abstract]
Contingent Consideration Payable	$ 41,090
Payments	(26,164)
Unrealized (Gain)/Loss	313
Realized (Gain)/Loss	(1,769)
Foreign Currency Translation	(1,349)
Contingent Consideration Payable	$ 12,121

XML

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Proceeds from the sales and maturities of securities available-for-sale	$ 0.0	$ 19.4
Net unrealized (losses) gains on trading securities	$ (2.6)	$ 0.9
Minimum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Business combination, contingent consideration payment period	18 months
Maximum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Business combination, contingent consideration payment period	24 months

XML

Fair Value Measurements - Carrying Value of Financial Asset and Liability Not Measured at Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Financial assets not measured at fair value:
Assets Fair Value Total	$ 46,572	$ 50,284
Level 1 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	12,275	14,206
Level 2 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	34,297	36,078
Financial Assets and Liabilities not Measured [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	1,046,112	1,029,121
Financial Assets and Liabilities not Measured [Member] | Payables to Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Assets Fair Value Total		229,325
Financial liabilities not measured at fair value:
Financial liabilities not measured at fair value	375,211
Financial Assets and Liabilities not Measured [Member] | Cash and Cash Equivalents [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	290,544	506,735
Financial Assets and Liabilities not Measured [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	50,276	50,159
Financial Assets and Liabilities not Measured [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	87,475	63,881
Financial Assets and Liabilities not Measured [Member] | Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	617,817	408,346
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	428,782	625,459
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member] | Cash and Cash Equivalents [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	290,544	506,735
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	50,276	50,159
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member] | Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	87,962	68,565
Financial Assets and Liabilities not Measured [Member] | Level 2 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	617,330	403,662
Financial Assets and Liabilities not Measured [Member] | Level 2 [Member] | Payables to Broker-Dealers, Clearing Organizations and Customers [Member]
Financial liabilities not measured at fair value:
Financial liabilities not measured at fair value	375,211	229,325
Financial Assets and Liabilities not Measured [Member] | Level 2 [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	87,475	63,881
Financial Assets and Liabilities not Measured [Member] | Level 2 [Member] | Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	529,855	339,781
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	1,046,112	1,029,121
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Payables to Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	375,211
Financial liabilities not measured at fair value:
Financial liabilities not measured at fair value		229,325
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Cash and Cash Equivalents [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	290,544	506,735
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	50,276	50,159
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	87,475	63,881
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	617,817	408,346
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	1,046,112	1,029,121
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Payables to Broker-Dealers, Clearing Organizations and Customers [Member]
Financial liabilities not measured at fair value:
Financial liabilities not measured at fair value	375,211	229,325
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Cash and Cash Equivalents [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	290,544	506,735
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	50,276	50,159
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	87,475	63,881
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	$ 617,817	$ 408,346

XML

Fair Value Measurements - Summary of Significant Unobservable Inputs Used in the Valuation of Company's Liabilities (Details) - Discounted Cash Flow [Member] $ in Thousands	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($) Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Present value factor	0.97
Customer retention rate | Rate		84.00%
Average present value factor	0.97	0.98%
Average customer retention rate | Rate		84.00%
Average April 2022-March 2023 variable fee	$ 4,607
Average April 2021-March 2022 variable fee		$ 2,895
Average percentage of electronic trading volume	0.913	0.913
Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Present value factor		0.01
April 2022-March 2023 variable fee	$ 5,658
April 2021-March 2022 variable fee		$ 3,086
Percentage of electronic trading volume	96.60%	96.60%
Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Present value factor | Rate		0.95%
April 2022-March 2023 variable fee	$ 3,556
April 2021-March 2022 variable fee		$ 2,703
Percentage of electronic trading volume	86.00%	86.00%

XML

Fair Value Measurements - Summary of Company's Investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Schedule Of Available For Sale Securities [Line Items]
Investments, Amortized cost	$ 36,864	$ 34,935
Investments, Gross unrealized gains		1,254
Investments, Gross unrealized losses	(2,567)	(111)
Investments, Fair value	34,297	36,078
U.S. Treasuries [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost	24,883	24,994
Trading securities, Gross unrealized losses	(445)	(111)
Trading securities, Fair value	24,438	24,883
Mutual Funds Held In Rabbi Trust [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost	11,981	9,941
Trading securities, Gross unrealized gains		1,254
Trading securities, Gross unrealized losses	(2,122)
Trading securities, Fair value	$ 9,859	$ 11,195

XML

Fair Value Measurements - Summary of Fair Value of Investments Based upon Contractual Maturities (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Less than one year	$ 34,297	$ 11,195
Due in 1 - 5 years	0	24,883
Total	$ 34,297	$ 36,078

XML

Receivables from and Payables to Broker-dealers, Clearing organizations and Customers - Schedule of Receivables from and Payables to Broker-dealers, Clearing Organizations and Customers (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Receivables from broker-dealers, clearing organizations and customers:
Securities failed-to-deliver - broker-dealers and clearing organizations	$ 189,929	$ 152,766
Securities failed-to-deliver - customers	333,607	182,052
Deposits with clearing organizations and broker-dealers	87,962	68,565
Other	6,319	4,963
Total	617,817	408,346
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive - broker-dealers and clearing organizations	251,076	166,010
Securities failed-to-receive - customers	115,365	59,879
Other	8,770	3,436
Total	$ 375,211	$ 229,325

XML

Acquisitions and Equity Investments - Additional Information (Detail) - USD ($) $ in Thousands			6 Months Ended
	Apr. 09, 2021	Nov. 30, 2020	Jun. 30, 2022	May 01, 2022	Apr. 01, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Ownership percentage			50.00%
Contingent consideration payable			$ 1,600
Goodwill			154,789			$ 154,789
Contingent consideration paid			12,121			$ 41,090
RFQ hub Holdings LLC [Member]
Business Acquisition [Line Items]
Recorded investments				$ 34,400
Proportionate share in net earnings			200
RFQ hub Holdings LLC [Member] | Prepaid Expenses and Other Assets [Member]
Business Acquisition [Line Items]
Recorded investments			34,600
Muni Brokers L L C [Member]
Business Acquisition [Line Items]
Cash consideration	$ 17,100
Amortizable intangible assets	32,000
Contingent consideration payable			$ 12,100
Goodwill	$ 7,400
Business combination, contingent consideration payment period	2 years
Contingent consideration paid				$ 8,300
Muni Brokers L L C [Member] | Accounts Payable, Accrued Expenses and Other Liabilities [Member]
Business Acquisition [Line Items]
Cash consideration	$ 17,100
Contingent consideration payable	22,500
Accounting purchase price	39,600
Regulatory Services GmbH of Deutsche Borse Group [Member]
Business Acquisition [Line Items]
Cash consideration		$ 22,500
Amortizable intangible assets		$ 37,400
Business combination, contingent consideration payment period		18 months
Contingent consideration paid					$ 17,900
Maximum [Member]
Business Acquisition [Line Items]
Ownership percentage			50.00%
Business combination, contingent consideration payment period			24 months
Maximum [Member] | Muni Brokers L L C [Member]
Business Acquisition [Line Items]
Contingent consideration payable	$ 25,000
Maximum [Member] | Muni Brokers L L C [Member] | Customer Relationships and Technology [Member]
Business Acquisition [Line Items]
Useful lives	15 years
Maximum [Member] | Regulatory Services GmbH of Deutsche Borse Group [Member]
Business Acquisition [Line Items]
Contingent consideration payable		$ 24,600
Minimum [Member]
Business Acquisition [Line Items]
Ownership percentage			20.00%
Business combination, contingent consideration payment period			18 months
Minimum [Member] | Muni Brokers L L C [Member] | Customer Relationships and Technology [Member]
Business Acquisition [Line Items]
Useful lives	1 year

XML

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Goodwill [Line Items]
Amortization expense associated with identifiable intangible assets	$ 8.2	$ 6.1
Estimated total amortization expense on intangible assets 2021	16.5
Estimated total amortization expense on intangible assets 2022	17.3
Estimated total amortization expense on intangible assets 2023	15.0
Estimated total amortization expense on intangible assets 2024	12.1
Estimated total amortization expense on intangible assets 2025	10.4
Indefinite-lived Intangible Assets [Member]
Goodwill [Line Items]
Goodwill and intangible assets with indefinite lives	$ 154.8		$ 154.8

XML

Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Finite Lived Intangible Assets [Line Items]
Cost	$ 140,372	$ 143,627
Accumulated amortization	(34,765)	(27,250)
Net carrying amount	105,607	116,377
Customer Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Cost	128,942	132,197
Accumulated amortization	(26,518)	(19,813)
Net carrying amount	102,424	112,384
Technology and Other Intangibles [Member]
Finite Lived Intangible Assets [Line Items]
Cost	11,430	11,430
Accumulated amortization	(8,247)	(7,437)
Net carrying amount	$ 3,183	$ 3,993

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Schedule Of Pre Tax Income [Line Items]
Excess tax benefits on share based payments	$ 100	$ 5,600		$ 9,700
Effective income tax rate	25.30%	21.80%	26.80%	21.40%
Provision for income taxes	$ 22,656	$ 18,765	$ 48,306	$ 40,109
Maximum [Member]
Schedule Of Pre Tax Income [Line Items]
Excess tax benefits on share based payments			100
New York State [Member]
Schedule Of Pre Tax Income [Line Items]
Provision for income taxes			$ 3,200
New York State [Member] | Earliest Tax Year [Member]
Schedule Of Pre Tax Income [Line Items]
Income tax year under examination			2015
New York State [Member] | Latest Tax Year [Member]
Schedule Of Pre Tax Income [Line Items]
Income tax year under examination			2017
New York City [Member] | Earliest Tax Year [Member]
Schedule Of Pre Tax Income [Line Items]
Income tax year under examination			2016
New York City [Member] | Latest Tax Year [Member]
Schedule Of Pre Tax Income [Line Items]
Income tax year under examination			2018

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Stock-Based Compensation Plans - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 6,503	$ 6,134	$ 14,602	$ 13,558
Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	6,059	5,920	13,701	13,023
Non-Employee Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 444	$ 214	$ 901	$ 535

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Stock-Based Compensation Plans - Additional Information (Detail) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($) $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant under the stock incentive plan	2,475,894
Unrecognized compensation costs related to non-vested | $	$ 51,600
Weighted-average period over which cost is expected to be recognized	1 year 9 months 18 days
Employees Stock Purchase Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant under the stock incentive plan	121,211
Employee contribution on purchase of common stock | $	$ 2,000
Percentage of purchase price of common stock	15.00%
Employees [Member] | Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average grant date fair value per share | $ / shares	$ 354.03
Employees [Member] | Performance Based Share [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of non-option equity instruments granted during the period	23,904
Number of stock option equity instruments granted during the period	22,141
Weighted-average fair value each option granted | $ / shares	$ 101.38
Weighted-average grant date fair value per share | $ / shares	$ 350.85
Employees and Directors [Member] | Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of non-option equity instruments granted during the period	62,907

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Earnings Per Share - Basic and Diluted Weighted Average Shares Outstanding Used to Compute Earnings Per Share (Detail) - $ / shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Earnings Per Share [Abstract]
Basic weighted average shares outstanding	37,529	37,508	37,456	37,489
Dilutive effect of stock options and restricted stock	79	596	260	640
Diluted weighted average shares outstanding	37,608	38,104	37,716	38,129
Basic earnings per share	$ 1.78	$ 1.79	$ 3.52	$ 3.94
Diluted earnings per share	$ 1.78	$ 1.77	$ 3.49	$ 3.87

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Stock Options and Restricted Stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Stock options and restricted stock excluded from the computation of diluted earnings per share	333,413	28,570	254,028	44,830

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Credit Agreements and Short-term Financing - Additional Information (Detail) - USD ($)			6 Months Ended
	Oct. 15, 2021	Nov. 30, 2020	Jun. 30, 2022
Line Of Credit Facility [Line Items]
Interest expense on borrowings			$ 0
Interest expense on short-term debt			200,000
Outstanding overdrafts payable			$ 0
Line of Credit Facility, Description			On October 15, 2021, the Company replaced the 2020 Credit Agreement with a new three-year revolving credit facility (the “2021 Credit Agreement”) provided by a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent
Collateralized Agreement [Member]
Line Of Credit Facility [Line Items]
Maximum available borrowings to subsidiary under agreement			$ 200,000,000.0
Outstanding borrowings under agreement			0
Unused borrowing capacity, amount under agreement			$ 200,000,000.0
Collateralized Agreement [Member] | Base Rate [Member]
Line Of Credit Facility [Line Items]
Interest rate, stated percentage			1.00%
Prior Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Period of credit agreement		1 year
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Revolving loans and letters of credit	$ 500,000,000.0	$ 500,000,000.0
Expiration period of credit agreement	Oct. 15, 2024
Period of credit agreement	3 years		364 days
Letter of credit outstanding			$ 0
Amount available under credit agreement			500,000,000.0
Additional borrowings under credit agreement			250,000,000.0
Interest expense on borrowings			$ 300,000
Standby Letters of Credit [Member]
Line Of Credit Facility [Line Items]
Sub-limit for letter of credit	$ 5,000,000.0	$ 5,000,000.0

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Leases - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2022
Lessee Lease Description [Line Items]
Operating lease, option to extend	Certain leases contain options to extend the initial term at the Company’s discretion
Operating lease, existence of option to extend [true false]	true
Minimum [Member]
Lessee Lease Description [Line Items]
Term of lease contract	1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Term of lease contract	15 years

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Leases - Schedule of Components of Lease Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Lease Cost [Line Items]
Net lease cost	$ 3,347	$ 3,348	$ 6,730	$ 6,671
Other, net [Member]
Lease Cost [Line Items]
Operating lease cost for subleased/assigned properties	13	544	469	1,041
Sublease income subleased/assigned properties	(15)	(544)	(405)	(1,047)
Occupancy [Member]
Lease Cost [Line Items]
Operating lease cost	3,345	3,346	6,655	6,669
Variable lease costs	$ 4	$ 2	$ 11	$ 8

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Leases - Summary of Weighted Average Remaining Lease Term and Discount Rate (Details)	Jun. 30, 2022	Dec. 31, 2021
Leases [Abstract]
Weighted average remaining lease term (in years)	11 years	11 years 6 months
Weighted average discount rate	5.90%	5.90%

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Leases - Schedule of Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Leases [Abstract]
Remainder of 2022	$ 5,492
2023	10,988
2024	11,466
2025	11,274
2026	10,789
2027 and thereafter	67,975
Total lease payments	117,984
Less: interest	32,429
Present value of lease liabilities	$ 85,555	$ 88,425

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Commitments and Contingencies - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Settlement days of bond transaction	within one to two trading days

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Share Repurchase Programs - Additional Information (Detail) - Share Repurchase Program [Member] - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Jan. 31, 2021	Jun. 30, 2022	Jan. 31, 2022
Equity Class Of Treasury Stock [Line Items]
Total shares repurchased		280,315
Cost of common stock shares repurchased		$ 87.5
Shares repurchase program authorized	$ 100.0		$ 150.0
Commencement date	2021-04
Share repurchase program, expiration date	Jan. 31, 2022

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Segment and Geographic Information - Additional Information (Detail) - Segment	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Revenues From External Customers And Long Lived Assets [Line Items]
Number of operating segment	1
Geographic Concentration Risk [Member] | Total Revenue and Long-lived Assets [Member] | United Kingdom [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Concentration Risk, Percentage	10.00%	10.00%

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Segment and Geographic Information - Summary of Revenue and Long-lived Assets (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Segment Reporting Information [Line Items]
Revenues	$ 182,229	$ 176,334	$ 368,286	$ 371,798
Long-lived assets	93,255		93,255		$ 96,061
Americas [Member]
Segment Reporting Information [Line Items]
Revenues	149,363	143,239	299,919	303,358
Long-lived assets	74,603		74,603		75,328
Europe [Member]
Segment Reporting Information [Line Items]
Revenues	27,800	28,317	58,536	57,861
Long-lived assets	18,290		18,290		20,547
Asia [Member]
Segment Reporting Information [Line Items]
Revenues	5,066	$ 4,778	9,831	$ 10,579
Long-lived assets	$ 362		$ 362		$ 186

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Cash and Cash Equivalents and Restricted Cash - Summary of Reconciliation of Cash and Cash Equivalents with Restricted or Segregated Cash (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	$ 290,544	$ 506,735
Cash segregated under federal regulations	50,276	50,159
Deposits with clearing organizations and broker-dealers	87,962	68,565
Total	428,890	625,567
Cash and Cash Equivalents [Member]
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	290,544	506,735
Cash Segregated under Federal Regulations and Other [Member]
Cash And Cash Equivalents [Line Items]
Cash segregated under federal regulations	50,276	50,159
Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Cash And Cash Equivalents [Line Items]
Deposits with clearing organizations and broker-dealers	87,962	68,565
Prepaid Expenses and Other Assets [Member]
Cash And Cash Equivalents [Line Items]
Other deposits	$ 108	$ 108