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 September 30, 2023

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 October 23, 2023, the number of shares of the Registrant’s voting common stock outstanding was 37,905,448.

2

MARKETAXESS HOLDINGS INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

		Page
PART I — Financial Information
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Statements of Financial Condition as of September 30, 2023 and December 31, 2022	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	44
PART II — Other Information
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47

2

PART I — Financial Information

Item 1. Financial Statements

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	As of
	September 30, 2023			December 31, 2022
	(In thousands, except share  and per share amounts)
ASSETS
Cash and cash equivalents	$	420,497		$	430,746
Cash segregated under federal regulations		52,601			50,947
Investments, at fair value		132,844			83,792
Accounts receivable, net of allowance of $580 and $590 as of September 30,     2023 and December 31, 2022, respectively		90,548			78,450
Receivables from broker-dealers, clearing organizations and customers		548,081			476,335
Goodwill		154,789			154,789
Intangible assets, net of accumulated amortization		84,687			98,065
Furniture, equipment, leasehold improvements and capitalized software, net of     accumulated depreciation and amortization		101,654			100,256
Operating lease right-of-use assets		63,101			66,106
Prepaid expenses and other assets		88,710			68,289
Total assets	$	1,737,512		$	1,607,775
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accrued employee compensation	$	43,881		$	56,302
Payables to broker-dealers, clearing organizations and customers		364,086			303,993
Income and other tax liabilities		19,379			28,448
Accounts payable, accrued expenses and other liabilities		40,019			55,263
Operating lease liabilities		79,169			82,676
Total liabilities		546,534			526,682
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 September 30, 2023 and December 31, 2022		—			—
Series A Preferred Stock, $0.001 par value, 110,000 shares authorized, no shares     issued and outstanding as of September 30, 2023 and December 31, 2022		—			—
Common stock voting, $0.003 par value, 110,000,000 shares authorized,     40,946,522 shares and 40,918,660 shares issued and 37,680,665 shares     and 37,648,148 shares outstanding as of September 30, 2023 and     December 31, 2022, respectively		123			123
Common stock non-voting, $0.003 par value, 10,000,000 shares authorized, no      shares issued and outstanding as of September 30, 2023 and     December 31, 2022		—			—
Additional paid-in capital		346,947			345,468
Treasury stock – Common stock voting, at cost, 3,265,857 shares and 3,270,512     shares as of September 30, 2023 and December 31, 2022, respectively		(327,091	)		(328,326	)
Retained earnings		1,208,607			1,101,525
Accumulated other comprehensive loss		(37,608	)		(37,697	)
Total stockholders' equity		1,190,978			1,081,093
Total liabilities and stockholders' equity	$	1,737,512		$	1,607,775
The accompanying notes are an integral part of these consolidated financial statements.

3

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(In thousands, except per share amounts)
Revenues
Commissions	$	150,496		$	153,164		$	491,073		$	482,740
Information services		11,801			9,711			34,466			28,916
Post-trade services		9,833			9,000			29,228			28,056
Other		154			237			532			686
Total revenues		172,284			172,112			555,299			540,398
Expenses
Employee compensation and benefits		48,872			44,805			149,570			137,996
Depreciation and amortization		17,561			15,302			51,027			45,716
Technology and communications		15,339			14,169			45,573			38,851
Professional and consulting fees		9,181			7,560			24,331			26,101
Occupancy		3,503			3,381			10,313			10,468
Marketing and advertising		2,100			1,797			8,403			6,535
Clearing costs		3,665			4,211			12,392			13,049
General and administrative		5,154			4,576			15,698			12,479
Total expenses		105,375			95,801			317,307			291,195
Operating income		66,909			76,311			237,992			249,203
Other income (expense)
Interest income		6,590			1,433			16,151			1,746
Interest expense		(164	)		(138	)		(347	)		(648	)
Equity in earnings of unconsolidated affiliate		125			869			579			1,060
Other, net		(1,717	)		388			(5,487	)		7,499
Total other income (expense)		4,834			2,552			10,896			9,657
Income before income taxes		71,743			78,863			248,888			258,860
Provision for income taxes		16,802			19,556			60,460			67,862
Net income	$	54,941		$	59,307		$	188,428		$	190,998
Net income per common share
Basic	$	1.47		$	1.58		$	5.03		$	5.10
Diluted	$	1.46		$	1.58		$	5.01		$	5.07
Cash dividends declared per common share	$	0.72		$	0.70		$	2.16		$	2.10
Weighted average shares outstanding
Basic		37,491			37,479			37,485			37,464
Diluted		37,574			37,567			37,603			37,666
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 September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(In thousands)
Net income	$	54,941		$	59,307		$	188,428		$	190,998
Cumulative translation adjustment		(9,687	)		(20,248	)		274			(46,757	)
Net unrealized (loss) on securities available-for-sale,    net of tax of $(5), $0, $(61) and $0, respectively		(18	)		—			(185	)		—
Comprehensive income	$	45,236		$	39,059		$	188,517		$	144,241
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, 2023	$	123	$	345,468		$	(328,326	)	$	1,101,525		$	(37,697	)	$	1,081,093
Net income		—		—			—			73,628			—			73,628
Cumulative translation adjustment		—		—			—			—			5,755			5,755
Unrealized net gain (loss) on    securities available-for-sale,    net of tax		—		—			—			—			(41	)		(41	)
Stock-based compensation		—		7,488			—			—			—			7,488
Reissuance of treasury stock		—		(57	)		511			—			—			454
Exercise of stock options		—		707			—			—			—			707
Withholding tax payments on    restricted stock vesting    and stock option exercises		—		(20,492	)		—			—			—			(20,492	)
Cash dividend on common stock    ($0.72 per share)		—		—			—			(27,060	)		—			(27,060	)
Balance at March 31, 2023		123		333,114			(327,815	)		1,148,093			(31,983	)		1,121,532
Net income		—		—			—			59,859			—			59,859
Cumulative translation adjustment		—		—			—			—			4,206			4,206
Unrealized net gain (loss) on    securities available-for-sale,    net of tax		—		—			—			—			(126	)		(126	)
Stock-based compensation		—		6,890			—			—			—			6,890
Exercise of stock options		—		18			—			—			—			18
Withholding tax payments on    restricted stock vesting    and stock option exercises		—		(155	)		—			—			—			(155	)
Cash dividend on common stock    ($0.72 per share)		—		—			—			(27,132	)		—			(27,132	)
Balance at June 30, 2023		123		339,867			(327,815	)		1,180,820			(27,903	)		1,165,092
Net income		—		—			—			54,941			—			54,941
Cumulative translation adjustment		—		—			—			—			(9,687	)		(9,687	)
Unrealized net gain (loss) on    securities available-for-sale,    net of tax		—		—			—			—			(18	)		(18	)
Stock-based compensation		—		7,481			—			—			—			7,481
Reissuance of treasury stock		—		(185	)		724			—			—			539
Withholding tax payments on    restricted stock vesting    and stock option exercises		—		(216	)		—			—			—			(216	)
Cash dividend on common stock    ($0.72 per share)		—		—			—			(27,154	)		—			(27,154	)
Balance at September 30, 2023	$	123	$	346,947		$	(327,091	)	$	1,208,607		$	(37,608	)	$	1,190,978
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, 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
Net income		—		—			—			59,307			—			59,307
Cumulative translation adjustment		—		—			—			—			(20,248	)		(20,248	)
Stock-based compensation		—		7,351			—			—			—			7,351
Exercise of stock options		—		148			—			—			—			148
Withholding tax payments on    restricted stock vesting and    stock option exercises		—		(2,252	)		—			—			—			(2,252	)
Repurchases of common stock		—		—			—			—			—			—
Cash dividend on common stock    ($0.70 per share)		—		—			—			(26,368	)		—			(26,368	)
Balance at September 30, 2022	$	123	$	330,294		$	(320,252	)	$	1,068,662		$	(60,087	)	$	1,018,740

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

7

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2023			2022
	(In thousands)
Cash flows from operating activities
Net income	$	188,428		$	190,998
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		51,027			45,716
Amortization of operating lease right-of-use assets		4,207			4,232
Stock-based compensation expense		21,859			21,953
Deferred taxes		(5,502	)		(3,346	)
Foreign currency transaction (gains) losses		1,587			(13,595	)
Other		847			730
Changes in operating assets and liabilities:
(Increase) in accounts receivable		(11,650	)		(24,011	)
(Increase) in receivables from broker-dealers, clearing organizations and customers		(46,146	)		(148,558	)
(Increase) in prepaid expenses and other assets		(18,240	)		(4,693	)
(Increase)/decrease in trading investments		(24,300	)		445
(Increase)/decrease in mutual funds held in rabbi trust		(206	)		2,339
(Decrease) in accrued employee compensation		(12,406	)		(14,502	)
Increase in payables to broker-dealers, clearing organizations and customers		58,710			107,560
(Decrease) in income and other tax liabilities		(3,921	)		(8,337	)
(Decrease)/increase in accounts payable, accrued expenses and other liabilities		(7,491	)		2,762
(Decrease) in operating lease liabilities		(4,721	)		(4,688	)
Net cash provided by operating activities		192,082			155,005
Cash flows from investing activities
Available-for-sale investments
Proceeds from maturities and sales		3,311			—
Purchases		(27,871	)		—
Acquisition of equity method investment		—			(34,400	)
Purchases of furniture, equipment and leasehold improvements		(7,255	)		(6,642	)
Capitalization of software development costs		(31,802	)		(27,109	)
Net cash (used in) investing activities		(63,617	)		(68,151	)
Cash flows from financing activities
Cash dividend on common stock		(82,139	)		(79,855	)
Exercise of stock options		725			284
Withholding tax payments on restricted stock vesting and stock option exercises		(20,863	)		(22,205	)
Repurchases of common stock		—			(87,540	)
Payment of contingent consideration		(12,500	)		(26,164	)
Proceeds from short-term borrowings		53,995			100,000
Repayments of short-term borrowings		(50,000	)		(100,000	)
Net cash (used in) financing activities		(110,782	)		(215,480	)
Effect of exchange rate changes on cash and cash equivalents		(1,451	)		(28,111	)
Cash and cash equivalents including restricted cash
Net increase/(decrease) for the period		16,232			(156,737	)
Beginning of period		572,664			625,567
End of period	$	588,896		$	468,830
Supplemental cash flow information
Cash paid for income taxes	$	83,142		$	69,085
Cash paid for interest		396			658
Non-cash activity
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		1,178			1,670
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 2,000 institutional investor and broker-dealer firms are active users of MarketAxess’ patented trading technology, accessing global liquidity on its platforms in 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. 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, 2022. The consolidated financial information as of December 31, 2022 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.

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 unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition and realized gains or losses reported in other, net in the Consolidated Statements of Operations. 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.

The Company assesses whether an impairment loss on its available-for-sale debt securities has occurred due to declines in fair value or other market conditions. When the amortized cost basis of an available-for-sale debt security exceeds its fair value, the security is deemed to be impaired. The portion of an impairment related to credit losses is determined by comparing the present value of cash flows expected to be collected from the security with the amortized cost basis of the security and is recorded as a charge in the Consolidated Statements of Operations. The remainder of an impairment is recognized in accumulated other comprehensive loss if the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery.

9

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Fair Value Financial Instruments

Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” A three-tiered hierarchy for determining fair value has been established that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as Level 1 (unadjusted quoted prices for identical assets or liabilities in active markets), Level 2 (inputs that are observable in the marketplace other than those inputs classified in Level 1) and Level 3 (inputs that are unobservable in the marketplace). The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of its money market funds, trading securities, available-for-sale securities, foreign currency forward contracts and contingent consideration payables associated with acquisitions. All other financial instruments are short-term in nature and the carrying amounts reported on the Consolidated Statements of Financial Condition approximate fair value.

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

Receivables from broker-dealers, clearing organizations and customers include amounts receivable for securities not delivered by the Company to the purchaser by the settlement date (“securities failed-to-deliver”) and cash deposits held at clearing organizations and clearing brokers to facilitate the settlement and clearance of matched principal transactions. Payables to broker-dealers, clearing organizations and customers include amounts payable for securities not received by the Company from a seller by the settlement date (“securities failed-to-receive”). Securities failed-to-deliver and securities failed-to-receive for transactions executed on a matched principal basis where the Company serves as a 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 $0.6 million as of each of September 30, 2023 and December 31, 2022. The provision for bad debts was $0.2 million for each of the three months ended September 30, 2023 and 2022, and $0.3 million for each of the nine months ended September 30, 2023 and 2022. Write-offs and other charges against the allowance for credit losses were $0.1 million for each of the three months ended September 30, 2023 and 2022, and $0.2 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively.

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.

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MARKETAXESS HOLDINGS INC.

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(Unaudited)

Cloud Computing Costs

The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, vendor software development costs billed to us that are part of the application development stage. These costs are recorded as a prepaid asset on the Consolidated Statements of Financial Condition and are amortized over the period of the hosting service contract, which ranges from one to five years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable.

Foreign Currency Translation and Forward Contracts

Assets and liabilities denominated in foreign currencies are translated using exchange rates at the end of the period; revenues and expenses are translated at average monthly rates. Gains and losses on foreign currency translation are a component of accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Transaction gains and losses are recorded in other, net in the Consolidated Statements of Operations.

The Company enters into foreign currency forward contracts to economically hedge its foreign currency transaction gains and losses. Realized and unrealized gains and losses on these forward contracts are included in other, net in the Consolidated Statements of Operations. The Company records the fair value of the forward contract asset in prepaid expenses and other assets or the fair value of the forward contract liability in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

Revenue Recognition

The Company’s classification of revenues in the Consolidated Statements of Operations represents revenues from contracts with customers disaggregated by type of revenue. The Company has four revenue streams as described below.

Commission 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	73,763	$	74,767	$	240,315	$	246,520
Open Trading – matched principal trading		36,682		42,845		132,524		128,460
U.S. government bonds - matched principal trading		3,829		4,160		11,920		13,487
Total variable transaction fees		114,274		121,772		384,759		388,467
Distribution fees and unused minimum fees		36,222		31,392		106,314		94,273
Total commissions	$	150,496	$	153,164	$	491,073	$	482,740

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Information services – Information services includes data licensed to the Company’s broker-dealer clients, institutional investor clients and data-only subscribers; professional and consulting services; technology software licenses; and maintenance and support services. The nature and timing of each performance obligation may vary as these contracts are either subscription-based services transferred over time, and may be net of volume-based discounts, or one-time services that are transferred at a point in time. Revenues for services transferred over time are recognized ratably over the contract period as the Company’s performance obligation is met, whereas revenues for services transferred at a point in time are recognized in the period the services are provided. Customers are generally billed monthly, quarterly, or annually; revenues billed in advance are deferred and recognized ratably over the contract period. The following table presents information services revenue by timing of recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	11,341	$	9,524	$	33,487	$	28,232
Services transferred at a point in time		460		187		979		684
Total information services revenues	$	11,801	$	9,711	$	34,466	$	28,916

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,774	$	9,000	$	29,126	$	28,014
Services transferred at a point in time		59		—		102		42
Total post-trade services revenues	$	9,833	$	9,000	$	29,228	$	28,056

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. Deferred revenues are included in accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition. The revenue recognized from contract liabilities and the remaining balance is shown below:

	December 31, 2022		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation		September 30, 2023
	(In thousands)
Information services	$	3,121	$	9,042	$	(9,329	)	$	—	$	2,834
Post-trade services		869		17,373		(17,341	)		6		907
Total deferred revenue	$	3,990	$	26,415	$	(26,670	)	$	6	$	3,741

The majority of the Company’s information services and post-trade services 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 $63.9 million as of September 30, 2023. The Company expects to recognize revenue associated with the remaining performance obligations over the next 56 months.

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(Unaudited)

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.

13

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

3. Regulatory Capital Requirements

As of September 30, 2023, one of the Company’s U.S. subsidiaries was registered as a broker-dealer and therefore subject to the applicable rules and regulations of the SEC and the Financial Industry Regulatory Authority (“FINRA”). In October 2023, the Company acquired a company that is registered as a broker-dealer and likewise is subject to the applicable rules and regulations of the SEC and FINRA (see Note 17). These rules contain minimum net capital requirements, as defined in the applicable regulations. 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 September 30, 2023, 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 September 30, 2023, the Company’s subsidiaries maintained aggregate net capital and financial resources that were $505.6 million in excess of the required levels of $31.5 million.

The Company’s sole U.S. broker-dealer subsidiary as of September 30, 2023 was 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 September 30, 2023, this U.S. broker-dealer subsidiary had a balance of $52.6 million in its special reserve bank account. This U.S. broker-dealer subsidiary also maintained net capital that was $295.2 million in excess of the required level of $3.6 million.

Each of the Company’s U.S. and foreign regulated subsidiaries are subject to local regulations which generally limit, or require the prior notification to or approval from such regulated entity’s principal regulator before, the 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.

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 September 30, 2023
Assets
Money market funds	$	6,293	$	—	$	—	$	6,293
Securities available-for-sale
Corporate debt		—		24,546		—		24,546
Trading securities
U.S. Treasuries		—		98,711		—		98,711
Mutual funds held in rabbi trust		—		9,587		—		9,587
Total assets	$	6,293	$	132,844	$	—	$	139,137
Liabilities
Foreign currency forward position	$	—	$	2,852	$	—	$	2,852
As of December 31, 2022
Assets
Money market funds	$	59,173	$	—	$	—	$	59,173
Trading securities
U.S. Treasuries		—		74,409		—		74,409
Mutual funds held in rabbi trust		—		9,383		—		9,383
Total assets	$	59,173	$	83,792	$	—	$	142,965
Liabilities
Contingent consideration payable	$	—	$	—	$	12,340	$	12,340
Foreign currency forward position		—		1,688		—		1,688
Total liabilities	$	—	$	1,688	$	12,340	$	14,028

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MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Money market funds are included in cash and cash equivalents on the Consolidated Statements of Financial Condition. Securities available-for-sale and trading securities are included in investments, at fair value on the Consolidated Statements of Financial Condition. 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 foreign currency forward contracts are classified within Level 2 as the valuation inputs are based on quoted market prices. 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. In May 2023, the Company made final payment on the remaining contingent consideration. The following table summarizes the change in the Company's Level 3 liabilities for the nine months ended September 30, 2023:

	December 31, 2022		Payments			Realized (Gain)/Loss		September 30, 2023
	(In thousands)
Contingent consideration payable	$	12,340	$	(12,500	)	$	160	$	—

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 Statements 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 September 30, 2023
Financial assets not measured at fair value:
Cash	$	414,204	$	414,204	$	414,204	$	—	$	—	$	414,204
Cash segregated under federal regulations		52,601		52,601		52,601		—		—		52,601
Accounts receivable, net of allowance		90,548		90,548		—		90,548		—		90,548
Receivables from broker-dealers, clearing    organizations and customers		548,081		548,081		112,489		435,592		—		548,081
Total	$	1,105,434	$	1,105,434	$	579,294	$	526,140	$	—	$	1,105,434
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	364,086	$	364,086	$	—	$	364,086	$	—	$	364,086
As of December 31, 2022
Financial assets not measured at fair value:
Cash	$	371,573	$	371,573	$	371,573	$	—	$	—	$	371,573
Cash segregated under federal regulations		50,947		50,947		50,947		—		—		50,947
Accounts receivable, net of allowance		78,450		78,450		—		78,450		—		78,450
Receivables from broker-dealers, clearing    organizations and customers		476,335		476,335		88,923		387,412		—		476,335
Total	$	977,305	$	977,305	$	511,443	$	465,862	$	—	$	977,305
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	303,993	$	303,993	$	—	$	303,993	$	—	$	303,993

During the three and nine months ended September 30, 2023, there were no transfers between Level 1, Level 2 and Level 3 securities.

15

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

The Company enters into foreign currency forward contracts as an economic hedge against certain foreign currency transaction gains and losses in the Consolidated Statements of Operations. These forward contracts are for one- or three-month periods and are used to limit exposure to foreign currency exchange rate fluctuations. The Company records the fair value of the asset in prepaid expenses and other assets or the fair value of the liability in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. The following table summarizes the Company’s foreign currency forward position:

	As of
	September 30, 2023			December 31, 2022
	(In thousands)
Notional value	$	63,870		$	62,160
Fair value of notional		61,018			60,472
Fair value of the (liability)	$	(2,852	)	$	(1,688	)

Realized and unrealized gains and losses on foreign currency forward contracts are included in other, net in the Consolidated Statements of Operations. The Company recorded a net realized gain of $0.8 million and a net unrealized loss of $3.5 million for the three months ended September 30, 2023. The Company recorded a net realized gain of $0.7 million and a net unrealized loss of $1.2 million for the nine months ended September 30, 2023. The Company records collateral deposits with its counterparty bank in prepaid expenses and other assets on the Consolidated Statements of Financial Condition. As of September 30, 2023, the Company maintained a collateral deposit of $3.2 million with its counterparty bank.

The following table summarizes the Company’s investments:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
As of September 30, 2023
Securities available-for-sale
Corporate debt	$	24,791	$	14	$	(259	)	$	24,546
Trading securities
U.S. Treasuries		99,211		—		(500	)		98,711
Mutual funds held in rabbi trust		10,442		79		(934	)		9,587
Total investments	$	134,444	$	93	$	(1,693	)	$	132,844
As of December 31, 2022
Trading securities
U.S. Treasuries	$	74,943	$	—	$	(534	)	$	74,409
Mutual funds held in rabbi trust		11,474		—		(2,091	)		9,383
Total investments	$	86,417	$	—	$	(2,625	)	$	83,792

Purchases of investments during the nine months ended September 30, 2023 were $77.7 million. Proceeds from the sales and maturities of investments during the nine months ended September 30, 2023 were $28.3 million.

16

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

The following table summarizes the Company’s unrealized and realized gains and losses on investments:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(In thousands)
Unrealized gains/(losses)
Securities available-for-sale
Corporate debt	$	(22	)	$	—		$	(245	)	$	—
Trading securities
U.S. Treasuries		(154	)		—			(500	)		(445	)
Mutual funds held in rabbi trust		(200	)		(496	)		905			(2,618	)
Total investments	$	(376	)	$	(496	)	$	160		$	(3,063	)
Realized gains/(losses)
Securities available-for-sale
Corporate debt	$	—		$	—		$	(17	)	$	—
Trading securities
Mutual funds held in rabbi trust		(79	)		—			(138	)		—
Total investments	$	(79	)	$	—		$	(155	)	$	—

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

	Less than one year		Due in 1 - 5 years		Total
	(In thousands)
As of September 30, 2023
Securities available-for-sale
Corporate debt	$	8,948	$	15,598	$	24,546
Trading securities
U.S. Treasuries		—		98,711		98,711
Mutual funds held in rabbi trust		9,587		—		9,587
Total	$	18,535	$	114,309	$	132,844
As of December 31, 2022
Trading securities
U.S. Treasuries	$	24,618	$	49,791	$	74,409
Mutual funds held in rabbi trust		9,383		—		9,383
Total	$	34,001	$	49,791	$	83,792

The following table provides fair values and unrealized losses on the Company’s available-for-sale investments and the aging of securities’ continuous unrealized loss position as of September 30, 2023:

	Less than Twelve Months					Twelve Months or More				Total
	Fair value		Gross unrealized losses			Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
	(In thousands)
As of September 30, 2023
Corporate debt	$	22,468	$	(259	)	$	—	$	—	$	22,468	$	(259	)

During the three and nine months ended September 30, 2023, the Company did not recognize any credit losses on its available-for-sale securities. The unrealized losses on securities are due to changes in interest rates and market liquidity.

17

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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:

	September 30, 2023		December 31, 2022
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	195,727	$	144,523
Securities failed-to-deliver – customers		232,892		235,056
Deposits with clearing organizations and broker-dealers		112,489		88,923
Other		6,973		7,833
Total	$	548,081	$	476,335
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	151,639	$	224,816
Securities failed-to-receive – customers		206,387		71,828
Other		6,060		7,349
Total	$	364,086	$	303,993

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 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 September 30, 2023, the Company’s investment is recorded at carrying value of $36.1 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 $0.1 million and $0.6 million for the three and nine months ended September 30, 2023, respectively, and $0.9 million and $1.1 million for the three and nine months ended September 30, 2022, respectively.

On April 9, 2021, the Company acquired MuniBrokers LLC, a central electronic venue serving municipal bond brokers and dealers. As part of the purchase price, the Company recorded $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. In May 2022, the Company made a payment of $8.3 million to settle the first earn-out period consideration. In May 2023, the Company made a payment of $12.5 million to settle the second earn-out period consideration. As of September 30, 2023, the Company had no remaining outstanding contingent consideration payable.

7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives were $154.8 million as of each of September 30, 2023 and December 31, 2022. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

	September 30, 2023							December 31, 2022
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	129,460	$	(46,183	)	$	83,277	$	129,991	$	(34,310	)	$	95,681
Technology and other intangibles		11,430		(10,020	)		1,410		11,430		(9,046	)		2,384
Total	$	140,890	$	(56,203	)	$	84,687	$	141,421	$	(43,356	)	$	98,065

Amortization expense associated with identifiable intangible assets was $4.5 million and $3.9 million for the three months ended September 30, 2023 and 2022, respectively, and $13.1 million and $12.1 million for the nine months ended September 30, 2023 and 2022, respectively. Annual estimated total amortization expense is $17.4 million, $15.0 million, $12.1 million, $10.4 million and $9.1 million for the years ended December 31, 2023 through 2027, respectively.

18

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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 23.4% and 24.8% for the three months ended September 30, 2023 and 2022, respectively, and 24.3% and 26.2% for the nine months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, 2022, the Company's provision for income taxes included $3.2 million of expense related to a settlement with New York State to resolve the 2010 to 2014 audits. 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.

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 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 the New York City and New York State audits, the Company is no longer subject to tax examinations by tax authorities for years prior to 2019.

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 September 30, 2023, there were 2,429,303 shares available for grant under the 2020 Plan.

Total stock-based compensation expense was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Employees	$	7,118	$	6,958	$	20,865	$	20,659
Non-employee directors		363		393		994		1,294
Total stock-based compensation	$	7,481	$	7,351	$	21,859	$	21,953

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 nine months ended September 30, 2023, the Company granted a total of (i) 74,683 restricted stock units, (ii) 13,908 options to purchase shares of common stock and (iii) performance stock units with an expected pay-out at target of 23,302 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 $351.27 and $386.14, respectively. Based on the Black-Scholes option pricing model, the weighted-average fair value for each option granted was $123.47 per share.

Included in the above totals are shares granted in April 2023 to the Company’s Chief Executive Officer in connection with his appointment to the position, consisting of: (i) 2,729 restricted stock units with a grant date fair value of $1.05 million, as determined by the Company’s Compensation and Talent Committee by dividing the award value by the average closing price of the Company’s common stock on the ten trading days leading up to and including the grant date, rounded to the nearest whole number; and (ii) 5,039 target performance stock units with a grant date fair value of $2.45 million, as determined by the Company’s Compensation and Talent Committee using the Monte Carlo method. The restricted stock units vest 25.0% on each of the third and fourth anniversary of the grant date and 50.0% on the fifth anniversary of the grant date, subject to continued service through the respective vesting dates. The performance stock units vest 25.0% on each of the third and fourth anniversaries of the grant date and 50.0% on the fifth anniversary of the grant date, subject to certification of the performance criteria and continued service through the respective vesting dates.

As of September 30, 2023, the total unrecognized compensation cost related to all non-vested awards was $45.8 million. That cost is expected to be recognized over a weighted-average period of 1.4 years.

19

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Employee Stock Purchase Plan

The Company maintains the MarketAxess Holdings Inc. 2022 Employee Stock Purchase Plan (the “ESPP”). 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. Shares are purchased at a 15.0% 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 issued 1,928 shares and 2,727 shares of common stock on February 15, 2023 and August 15, 2023, respectively, under the ESPP. As of September 30, 2023, there were 116,566 shares available for purchase under the ESPP.

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,491		37,479		37,485		37,464
Dilutive effect of stock options and restricted stock		83		88		118		202
Diluted weighted average shares outstanding		37,574		37,567		37,603		37,666
Basic earnings per share	$	1.47	$	1.58	$	5.03	$	5.10
Diluted earnings per share		1.46		1.58		5.01		5.07

Stock options and restricted stock totaling 420,590 shares and 379,764 shares for the three months ended September 30, 2023 and 2022, respectively, and 279,939 shares and 295,940 shares for the nine months ended September 30, 2023 and 2022, 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

2021 Credit Agreement

On October 15, 2021, the Company entered into a 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 provided aggregate commitments totaling $500.0 million, consisting of a revolving credit facility, a $5.0 million letter of credit sub-limit for standby letters of credit and a $50.0 million sub-limit for swingline loans. The 2021 Credit Agreement was scheduled to 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 was permitted to upsize the 2021 Credit Agreement by up to $250.0 million in total.

Borrowings under the 2021 Credit Agreement bore 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. On March 28, 2023, the Company entered into a first amendment to the 2021 Credit Agreement, which among other things, established customary Secured Overnight Financing Rate (“SOFR”) provisions in lieu of the London Interbank Offered Rate (“LIBOR”) provisions set forth in the 2021 Credit Agreement. Following such amendment, borrowings under the 2021 Credit Agreement bore interest at a rate per annum equal to the alternate base rate or the adjusted term SOFR rate, plus an applicable margin that varies with the Company’s consolidated total leverage ratio.

The 2021 Credit Agreement required that the Company satisfy certain covenants, including a requirement to not exceed a maximum consolidated total leverage ratio. The Company incurred no interest expense under the 2021 Credit Agreement for the three months ended September 30, 2023 and 2022, respectively, and $0.1 million and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively.

20

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

2023 Credit Agreement

On August 9, 2023, the Company replaced the 2021 Credit Agreement with a new three-year revolving credit facility (the “2023 Credit Agreement”) provided by a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, which provides aggregate commitments totaling $750.0 million, consisting of a revolving credit facility, a $5.0 million letter of credit sub-limit for standby letters of credit and a $380.0 million sub-limit for swingline loans. The 2023 Credit Agreement will mature on August 9, 2026, 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 2023 Credit Agreement by up to $375.0 million in total. As of September 30, 2023, the Company had $0.1 million in letters of credit outstanding and $749.9 million in available borrowing capacity under the 2023 Credit Agreement.

Borrowings under the 2023 Credit Agreement will bear interest at a rate per annum equal to the alternate base rate or the adjusted term SOFR rate, plus an applicable margin that varies with the Company’s consolidated total leverage ratio. The 2023 Credit Agreement requires that the Company satisfy certain covenants, including a requirement not to exceed a maximum consolidated total leverage ratio. The Company incurred no interest expense under the 2023 Credit Agreement for the three months ended September 30, 2023.

Uncommitted Collateralized Agreements

In connection with their self-clearing operations, certain of the Company’s U.S. and U.K. operating subsidiaries maintain agreements with a settlement bank to allow the subsidiaries to borrow in the aggregate of up to $500.0 million on an uncommitted basis, collateralized by eligible securities pledged by the subsidiaries to the settlement bank, subject to certain haircuts. Borrowings under these agreements 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 SOFR, plus 1.00%.

The Company incurred no interest expense on borrowings under such agreements during the three months ended September 30, 2023 and $0.1 million of interest expense during nine months ended September 30, 2023. The Company incurred no interest expense on borrowings under such agreements during the three and nine months ended September 30, 2022. As of September 30, 2023, the Company had no borrowings outstanding and up to $500.0 million in available uncommitted borrowing capacity under such agreements.

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 and $0.1 million during the three months ended September 30, 2023 and 2022, respectively, and $0.3 million and $0.4 million of interest expense during the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the Company had $4.0 million of overdrafts payable outstanding. Overdrafts payable are included in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

21

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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 nine months ended September 30, 2023 and 2022:

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease cost:	Classification	2023		2022		2023		2022
		(In thousands)
Operating lease cost	Occupancy	$	2,941	$	3,274	$	8,934	$	9,929
Operating lease cost for subleased/assigned properties	Other, net		—		—		—		469
Variable lease costs	Occupancy		341		49		739		60
Sublease income subleased/assigned properties	Other, net		—		—		—		(405	)
Net lease cost		$	3,282	$	3,323	$	9,673	$	10,053

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	September 30, 2023			December 31, 2022
Weighted average remaining lease term (in years)		10.0			10.6
Weighted average discount rate		6.0	%		5.9	%

The following table presents the maturity of lease liabilities as of September 30, 2023:

	(In thousands)
Remainder of 2023	$	2,803
2024		11,782
2025		11,598
2026		11,103
2027		8,747
2028 and thereafter		59,838
Total lease payments		105,871
Less: imputed interest		26,702
Present value of lease liabilities	$	79,169

22

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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 securities 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 operating subsidiaries settle such transactions pursuant to their self-clearing operations or through the use of 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 nine months ended September 30, 2023 and 2022.

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 material loss to be remote.

14. Share Repurchase Programs

In January 2021, the Board of Directors authorized a 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. There were no shares repurchased in connection with the Company’s share repurchase program during the three and nine months ended September 30, 2023. Shares repurchased under each program will be held in treasury for future use.

23

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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 nine months ended September 30, 2023 and 2022, the U.K. was the only individual foreign country in which the Company had a subsidiary that accounted for 10.0% 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 nine months ended September 30, 2023 and 2022 and long-lived assets as of September 30, 2023 and December 31, 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Revenues
Americas	$	136,398	$	140,020	$	439,970	$	439,939
Europe		31,401		28,124		101,655		86,660
Asia		4,485		3,968		13,674		13,799
Total	$	172,284	$	172,112	$	555,299	$	540,398

	As of
	September 30, 2023		December 31, 2022
	(In thousands)
Long-lived assets, as defined
Americas	$	86,006	$	82,008
Europe		15,187		17,723
Asia		461		525
Total	$	101,654	$	100,256

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	September 30, 2023		December 31, 2022
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	420,497	$	430,746
Cash segregated for regulatory    purposes	Cash segregated under federal regulations		52,601		50,947
Deposits with clearing organizations    and broker-dealers	Receivables from broker-dealers, clearing    organizations and customers		112,489		88,923
Other deposits	Prepaid expenses and other assets		3,309		2,048
Total		$	588,896	$	572,664

24

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

17. Subsequent Events

In October 2023, the Company acquired all of the outstanding ownership interests of Pragma LLC and Pragma Financial Systems LLC (collectively “Pragma”). Pragma is a quantitative trading technology provider specializing in algorithmic and analytical services. Pragma LLC is a registered broker-dealer. The purchase consideration, after giving effect to adjustments in the purchase agreement, was approximately $128.6 million, consisting of approximately $80.4 million of cash and 216,173 shares of the Company’s common stock, valued at approximately $48.2 million on the closing date.

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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’s 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, 2022, 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 2,000 institutional investor and broker-dealer firms use 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 a full trading lifecycle solution that also includes automated trading solutions, intelligent data and index 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. We believe that many of our largest current fixed-income product areas have relatively low levels of trading electronification as compared to other markets, such as U.S. exchange traded cash equities, U.S. equity options and the foreign exchange spot 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 and automated trading solutions for most of our products. We believe that Open Trading drives meaningful price improvement for our clients and reduces risk in fixed-income markets by creating a global, diversified pool of liquidity whereby our institutional investor clients, dealer clients and alternative liquidity providers can all interact on an anonymous basis. Institutional investors can also send trading inquiries directly to their traditional broker-dealer counterparties through a disclosed request-for-quote (“RFQ”), while simultaneously accessing additional counterparties through our anonymous Open Trading solutions.

We also provide a number of integrated and actionable data offerings, including Composite+ and Axess All, to assist clients with real-time pricing and 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. Following our acquisition of Pragma in October 2023, we also provide algorithmic trading and analytical services in the equities, FX and fixed-income markets.

We derive revenue from commissions for transactions 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 I, Item 1. “Business – Our Strategy” of our Form 10-K for the year ended December 31, 2022.

26

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 impact trading volume. These factors could have a material adverse or positive 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, the duration of bonds traded, economic and political conditions in the United States, Europe and elsewhere, and the consolidation or contraction of our broker-dealer and institutional investor clients.

Challenging operating conditions for the fixed-income markets persisted during the third quarter as the prospect of renewed inflation triggered a rapid rise in long-term bond yields. The 10-year U.S. Treasury yield rose more than 70 basis points to above 4.50% during the quarter, creating downward pressure on the value of fixed-income securities. The continued rise in bond yields coupled with lower years to maturity of bonds traded on our platforms relative to the first half of 2023 resulted in a decrease in the duration of U.S. high-grade bonds traded on our platforms, which had a negative effect on our average variable transaction fee per million, principally in U.S. high-grade. The low levels of credit spread volatility during the third quarter contributed to a decrease in ETF market maker activity, which we believe had a negative impact on our ability to increase our U.S. high-yield volumes.

The closures of Silicon Valley Bank and Signature Bank in March 2023 created bank-specific and broader financial institution liquidity risk and concerns, which may result in stricter bank capital and liquidity requirements. Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access working capital needs, and create additional market and economic uncertainty.

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 has, and may continue to affect our expenses, such as employee compensation, technology 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 or has other adverse effects on the securities markets or the economy, 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 2023 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, $749.9 million in available borrowing capacity under the 2023 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 lesser 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.

There has been increased demand for portfolio trading workflows over the last few years, which has resulted in heightened competition among trading platforms to enhance their portfolio trading offerings and expand them across different geographies and products.

Our competitive position is 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.

27

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. 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. Based on these proposed rules, we expect that we will have to operate all of our trading protocols in compliance with Regulation ATS and we could become subject to Regulation SCI for certain parts of our business in the future. The SEC has also adopted final rule amendments that, effective May 2024, will shorten the standard settlement cycle for most broker-dealer securities transactions from two business days after the trade date (T+2) to one business day after the trade date (T+1). The shortening of the settlement cycle will lead to a reduction in the length of exposure to trading counterparties and lower margin requirements for our clearing operations, but it is also expected to increase the operational costs and complexities associated with cross border transactions conducted on our platforms. The impact of any of these reform efforts on us and our operations remains uncertain.

As a result of 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. For example, the E.U.’s Digital Operational Resilience Act (“DORA”), which will become effective in 2025, will require us to dedicate additional financial and operational resources to meet the additional governance, risk management, incident reporting, resilience testing and information sharing requirements created by the legislation. However, we also believe new regulations may 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 I. “Business – Government Regulation” of our Form 10-K for the year ended December 31, 2022.

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. For example, in 2023, we launched MarketAxess X-Pro, our new trading platform, which we believe integrates the full suite of our data tools and trading protocols for our broker-dealer and institutional investor clients. We plan to continue to focus on technology infrastructure initiatives and improving our platforms with the goal of further enhancing our leading market position.

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. We also support a large and growing base of dealer market making algorithms. In the third quarter of 2023, trading volumes in our automated trading protocols rose to $75.3 billion, up 45.7% from $51.7 billion in the third quarter of 2022. There were 167 active client firms using our automated trading protocols in the third quarter of 2023, up 24.6% from the third quarter of 2022. In addition, there were 8.2 million dealer algorithmic responses on our platforms, up 40.7% from the third quarter of 2022.

We experience, and are not immune from, cyber-attacks and attempted data security breaches from time to time. However, MarketAxess has not experienced any material information security breaches in at least the past three years. 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 I, Item 1A. - “Risk Factors, Technology, IT Systems and Cybersecurity Risks” of our Form 10-K for the year ended December 31, 2022.

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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 the following are the 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 other 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;

• the duration of the bonds trading on our platforms; and

• the particular fee plan under which we earn commissions and distribution fees.

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 — Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022,” our trading volumes and average variable transaction fee per million decreased compared to the nine months ended September 30, 2022.

Components of Our Results of Operations

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.

Credit Commissions. Credit includes U.S. high-grade corporate bonds, high-yield bonds, emerging markets bonds, Eurobonds, municipal bonds and leveraged loans. 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.

Commissions for high-yield bonds, emerging markets bonds, Eurobonds, municipal bonds and leveraged loans 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 a 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.

The average credit fees per million may vary in the future due to changes in yield, years-to-maturity and nominal size of high-grade bonds traded on our platforms and changes in product mix or trading protocols.

Credit distribution fees include any unused monthly fee commitments under our variable fee plans.

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 software and licenses, maintenance on software and hardware, cloud hosting costs, data feeds provided by outside vendors, U.S. government bonds technology platform licensing fees, data center hosting costs and our internal network connections. 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 branding 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, regulatory fees, media subscription costs, charitable contributions, provision for doubtful accounts, various state franchise and U.K. value-added taxes and other miscellaneous expenses.

Expenses may continue to 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 increased regulatory complexity, acquisitions or the continued effects of inflation.

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Other Income (Expense)

Interest Income. Interest income consists of interest income earned on our cash and cash equivalents, restricted cash, deposits 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 realized and unrealized gains and losses on trading security investments and foreign currency forward contracts, 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.

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 to encourage employees, consultants and non-employee directors to participate in our long-term success. We make critical accounting estimates related to performance shares and performance stock units granted under the 2020 Plan.

In 2021, 2022 and 2023, annual performance-based equity awards (the “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 margin and market share for the 2021 awards, and pre-tax adjusted operating margin, U.S. credit market share, and revenue growth excluding U.S. credit for the 2022 and 2023 awards. The vested share pay-out ranges from zero to 200% 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 Compensation and Talent Committee following the conclusion of the performance period. In addition, participants must provide continued service through the vesting date, subject to death, disability and qualified retirement exceptions. Compensation expense for the 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 September 30, 2023, a 10.0% change in the expected final share payouts would increase or decrease the life-to-date compensation expense by $1.3 million. The estimated final share payouts for the 2021 and 2022 awards as of September 30, 2023 decreased 22.1% compared to December 31, 2022.

Recent Accounting Pronouncements

See Note 2 for a discussion of any recent accounting pronouncements relevant to our Consolidated Financial Statements.

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 products 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.

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Results of Operations

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

The following table summarizes our financial results for the three months ended September 30, 2023 and 2022:

	Three Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in thousands, except per share amounts)
Revenues	$	172,284	$	172,112	$	172			0.1		%
Expenses		105,375		95,801		9,574			10.0
Operating income		66,909		76,311		(9,402	)		(12.3	)
Other income (expense)		4,834		2,552		2,282			89.4
Income before income taxes		71,743		78,863		(7,120	)		(9.0	)
Provision for income taxes		16,802		19,556		(2,754	)		(14.1	)
Net income	$	54,941	$	59,307	$	(4,366	)		(7.4	)	%
Net income per common share – Diluted	$	1.46	$	1.58	$	(0.12	)		(7.6	)	%

Changes in average foreign currency exchange rates compared to the U.S. dollar had the effect of increasing revenues and expenses by $1.9 million and $1.7 million, respectively, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

Revenues

Our revenues for the three months ended September 30, 2023 and 2022, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended September 30,
	2023					2022
	($ in thousands)
			% of Revenues					% of Revenues			$ Change			% Change
Commissions	$	150,496		87.4	%	$	153,164		89.1	%	$	(2,668	)		(1.7	)	%
Information services		11,801		6.8			9,711		5.6			2,090			21.5
Post-trade services		9,833		5.7			9,000		5.2			833			9.3
Other		154		0.1			237		0.1			(83	)		(35.0	)
Total revenues	$	172,284		100.0	%	$	172,112		100.0	%	$	172			0.1		%

Commissions. Our commission revenues for the three months ended September 30, 2023 and 2022, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in thousands)
Variable transaction fees
Credit	$	109,065	$	116,309	$	(7,244	)		(6.2	)	%
Rates		5,209		5,463		(254	)		(4.6	)
Total variable transaction fees		114,274		121,772		(7,498	)		(6.2	)
Fixed distribution fees
Credit		36,167		31,328		4,839			15.4
Rates		55		64		(9	)		(14.1	)
Total fixed distribution fees		36,222		31,392		4,830			15.4
Total commissions	$	150,496	$	153,164	$	(2,668	)		(1.7	)	%

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Credit variable transaction fees decreased $7.2 million driven by a 6.5% decrease in average variable transaction fee per million, partially offset by a 0.3% increase in trading volume. Open Trading credit volume totaled $201.5 billion during the three months ended September 30, 2023, down 11.7%, and Open Trading credit variable transaction fees represented 31.7% and 34.7% of total variable transaction fees for the three months ended September 30, 2023 and 2022, respectively. Rates variable transaction fees decreased $0.3 million driven principally by a 12.8% decrease in trading volumes, partially offset by a 16.3% increase in average variable transaction fee per million.

Credit fixed distribution fees increased $4.8 million mainly due to new dealers on fixed distribution fee plans and certain dealers moving to plans with higher fixed distribution fees.

Our trading volumes for the three months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in millions)
Trading volume data
Credit
High-grade	$	326,304	$	327,916	$	(1,612	)		(0.5	)	%
High-yield		81,511		104,066		(22,555	)		(21.7	)
Emerging markets		176,334		165,910		10,424			6.3
Eurobonds		94,980		80,305		14,675			18.3
Other credit		25,185		24,159		1,026			4.2
Total credit		704,314		702,356		1,958			0.3
Rates
U.S. government bonds		1,115,889		1,288,543		(172,654	)		(13.4	)
Agency and other government bonds		26,467		21,281		5,186			24.4
Total rates		1,142,356		1,309,824		(167,468	)		(12.8	)
Total trading volume	$	1,846,670	$	2,012,180	$	(165,510	)		(8.2	)	%
Number of U.S. Trading Days		63		64
Number of U.K. Trading Days		64		64

For volume reporting purposes, transactions in foreign currencies are converted to U.S. dollars at average monthly rates.

The 0.5% decrease in our U.S. high-grade volume was principally due to a decrease in our estimated market share, partially offset by an increase in estimated market volumes. Estimated U.S. high-grade market volume as reported by FINRA’s Trade Reporting and Compliance Engine (“TRACE”) increased by 4.8% to $1.6 trillion for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 20.0% for the three months ended September 30, 2023 from 21.1% for the three months ended September 30, 2022. High-yield volume decreased by 21.7% due to decreases in our estimated market share and estimated market volumes. Emerging markets volumes increased by 6.3%, mainly due to an increase in our estimated market share. Eurobond volumes increased by 18.3%, mainly due to an increase in estimated market volumes, partially offset by a decrease in our estimated market share. Rates trading volume decreased 12.8%, primarily due to a decrease in our estimated market share.

Our average variable transaction fee per million for the three months ended September 30, 2023 and 2022 was as follows:

	Three Months Ended September 30,
	2023		2022		$ Change			% Change
Average variable transaction fee per million
Credit	$	154.85	$	165.60	$	(10.75	)		(6.5	)	%
Rates		4.56		3.92		0.64			16.3

Credit average variable transaction fee per million decreased by 6.5% to $154.85 per million for the three months ended September 30, 2023, mainly due to a decrease in the duration of U.S. high-grade bonds traded on our platforms and product mix-shift in other credit products.

Information Services. Information services revenue increased by $2.1 million for the three months ended September 30, 2023, mainly due to net new data contract revenue of $1.7 million and the positive impact of foreign currency fluctuations of $0.4 million.

Post-Trade Services. Post-trade services revenue increased by $0.8 million for the three months ended September 30, 2023, principally due to net new contract revenue of $0.2 million and the positive impact of foreign currency fluctuations of $0.6 million.

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Expenses

The following table summarizes our expenses for the three months ended September 30, 2023 and 2022:

	Three Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in thousands)
Expenses
Employee compensation and benefits	$	48,872	$	44,805	$	4,067			9.1		%
Depreciation and amortization		17,561		15,302		2,259			14.8
Technology and communications		15,339		14,169		1,170			8.3
Professional and consulting fees		9,181		7,560		1,621			21.4
Occupancy		3,503		3,381		122			3.6
Marketing and advertising		2,100		1,797		303			16.9
Clearing costs		3,665		4,211		(546	)		(13.0	)
General and administrative		5,154		4,576		578			12.6
Total expenses	$	105,375	$	95,801	$	9,574			10.0		%

Employee compensation and benefits increased by $4.1 million, primarily due to increases in salaries, taxes and benefits on higher employee headcount of $5.6 million, offset by lower employee incentive compensation of $1.7 million.

Depreciation and amortization increased by $2.3 million, primarily due to higher amortization of software development costs of $1.4 million, higher depreciation of production hardware and software of $0.6 million, and higher amortization of intangibles of $0.5 million, partially offset by lower depreciation of software licenses of $0.3 million. For the three months ended September 30, 2023 and 2022, $6.0 million and $4.0 million, respectively, of equipment purchases and leasehold improvements and $10.1 million and $8.5 million, respectively, of software development costs were capitalized.

Technology and communications expenses increased by $1.2 million, primarily due to higher software subscription costs of $0.7 million and higher cloud hosting costs of $0.5 million.

Professional and consulting fees increased by $1.6 million, primarily due to higher acquisition related legal costs of $1.0 million, higher acquisition related consulting fees of $0.1 million and higher audit and tax fees of $0.3 million.

Marketing expenses increased by $0.3 million, primarily due to higher advertising and sales-related travel and entertainment costs.

General and administrative expenses increased by $0.6 million, primarily due to higher office-related administration costs of $0.4 million and higher regulatory fees of $0.1 million.

Other Income (Expense)

Our other income (expense) for the three months ended September 30, 2023 and 2022, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended September 30,
	2023			2022			$ Change			% Change
	($ in thousands)
Interest income	$	6,590		$	1,433		$	5,157		NM
Interest expense		(164	)		(138	)		(26	)		18.8		%
Equity in earnings of unconsolidated affiliate		125			869			(744	)		(85.6	)
Other, net		(1,717	)		388			(2,105	)	NM
Total other income (expense)	$	4,834		$	2,552		$	2,282			89.4		%
NM - not meaningful

Interest income increased by $5.2 million driven by higher interest rates and interest earned on our investments.

Interest expense increased by $0.1 million primarily due to higher financing charges incurred under our short-term borrowings for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022.

Equity in earnings of unconsolidated affiliate decreased due to lower net income of our equity method investee.

Other, net decreased by $2.1 million driven by foreign currency transaction losses in the current period compared to foreign currency transaction gains in the prior period.

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Provision for Income Taxes

The provision for income taxes and effective tax rate for the three months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,
	2023			2022			$ Change			% Change
	($ in thousands)
Provision for income taxes	$	16,802		$	19,556		$	(2,754	)		(14.1	)	%
Effective tax rate		23.4	%		24.8	%

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.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

The following table summarizes our financial results for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in thousands, except per share amounts)
Revenues	$	555,299	$	540,398	$	14,901			2.8		%
Expenses		317,307		291,195		26,112			9.0
Operating income		237,992		249,203		(11,211	)		(4.5	)
Other income (expense)		10,896		9,657		1,239			12.8
Income before income taxes		248,888		258,860		(9,972	)		(3.9	)
Provision for income taxes		60,460		67,862		(7,402	)		(10.9	)
Net income	$	188,428	$	190,998	$	(2,570	)		(1.3	)	%
Net income per common share - Diluted	$	5.01	$	5.07	$	(0.06	)		(1.2	)	%

Changes in average foreign currency exchange rates compared to the U.S. dollar had the effect of decreasing revenues and expenses by $0.8 million and $0.5 million, respectively, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

Revenues

Our revenues for the nine months ended September 30, 2023 and 2022, and the resulting dollar and percentage changes, were as follows:

	Nine Months Ended September 30,
	2023					2022
	($ in thousands)
			% of Revenues					% of Revenues			$ Change			% Change
Commissions	$	491,073		88.4	%	$	482,740		89.3	%	$	8,333			1.7		%
Information services		34,466		6.2			28,916		5.4			5,550			19.2
Post-trade services		29,228		5.3			28,056		5.2			1,172			4.2
Other		532		0.1			686		0.1			(154	)		(22.4	)
Total revenues	$	555,299		100.0	%	$	540,398		100.0	%	$	14,901			2.8		%

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Commissions. Our commission revenues for the nine months ended September 30, 2023 and 2022, and the resulting dollar and percentage changes, were as follows:

	Nine Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in thousands)
Variable transaction fees
Credit	$	368,745	$	370,793	$	(2,048	)		(0.6	)	%
Rates		16,014	$	17,674		(1,660	)		(9.4	)
Total variable transaction fees	$	384,759	$	388,467		(3,708	)		(1.0	)
Fixed distribution fees
Credit		106,119	$	94,098		12,021			12.8
Rates		195	$	175		20			11.4
Total fixed distribution fees		106,314		94,273		12,041			12.8
Total commissions	$	491,073	$	482,740	$	8,333			1.7		%

Credit variable transaction fees decreased $2.0 million driven by a 5.1% decrease in average variable transaction fee per million, partially offset by a 4.8% increase in trading volume. Open Trading credit volume totaled $706.4 billion during the nine months ended September 30, 2023, up 2.3%, and Open Trading credit variable transaction fees represented 34.1% and 32.6% of total variable transaction fees for the nine months ended September 30, 2023 and 2022, respectively.

Credit fixed distribution fees increased $12.0 million mainly due to new dealers on fixed distribution fee plans and certain dealers moving to plans with higher fixed distribution fees.

Our trading volumes for the nine months ended September 30, 2023 and 2022 were as follows:

	Nine Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in millions)
Trading volume data
Credit
High-grade	$	1,072,258	$	1,029,794	$	42,464			4.1		%
High-yield		295,774		314,721		(18,947	)		(6.0	)
Emerging markets		536,432		530,964		5,468			1.0
Eurobonds		329,841		263,862		65,979			25.0
Other credit		78,597		67,820		10,777			15.9
Total credit		2,312,902		2,207,161		105,741			4.8
Rates
U.S. Government Bonds		3,547,308		4,248,009		(700,701	)		(16.5	)
Agency and other government bonds		80,249		74,644		5,605			7.5
Total rates		3,627,557		4,322,653		(695,096	)		(16.1	)
Total trading volume	$	5,940,459	$	6,529,814	$	(589,355	)		(9.0	)	%
Number of U.S. Trading Days		187		188
Number of U.K. Trading Days		188		187

For volume reporting purposes, transactions in foreign currencies are converted to U.S. dollars at average monthly rates.

The 4.1% increase in our U.S. high-grade volume was principally due to an increase in overall market volume. Estimated U.S. high-grade market volume as reported by TRACE increased by 10.3% to $5.3 trillion for the nine months ended September 30, 2023. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 20.2% for the nine months ended September 30, 2023 from 21.4% for the nine months ended September 30, 2022. High-yield volume decreased by 6.0%, mainly due to a decrease in estimated market volumes. Eurobonds volume increased by 25.0% due to increases in our estimated market share and estimated market volumes. Emerging markets volumes increased by 1.0%, mainly due to an increase in our estimated market share. Other credit volumes increased 15.9%, driven by higher municipal bonds volume on higher estimated market share. Rates trading volume decreased 16.1%, primarily due to a decrease in our estimated market share.

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Our average variable transaction fee per million for the nine months ended September 30, 2023 and 2022 was as follows:

	Nine Months Ended September 30,
	2023		2022		$ Change			% Change
Average variable transaction fee per million
Credit	$	159.43	$	168.00	$	(8.57	)		(5.1	)	%
Rates		4.41		4.09		0.32			7.8

Credit average variable transaction fee per million decreased by 5.1% to $159.43 per million for the nine months ended September 30, 2023, mainly due to a decrease in the duration of U.S. high-grade bonds traded on our platforms and product mix-shift in other credit products.

Information Services. Information services revenue increased by $5.6 million for the nine months ended September 30, 2023, mainly due to net new data contract revenue of $5.8 million partially offset by the negative impact of foreign currency fluctuations of $0.2 million.

Post-Trade Services. Post-trade services revenue increased by $1.2 million for the nine months ended September 30, 2023, principally due to net new contract revenue of $1.4 million, partially offset by the negative impact of foreign currency fluctuations of $0.2 million.

Expenses

The following table summarizes our expenses for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023		2022		$ Change			% Change
	($ in thousands)
Expenses
Employee compensation and benefits	$	149,570	$	137,996	$	11,574			8.4		%
Depreciation and amortization		51,027		45,716		5,311			11.6
Technology and communications		45,573		38,851		6,722			17.3
Professional and consulting fees		24,331		26,101		(1,770	)		(6.8	)
Occupancy		10,313		10,468		(155	)		(1.5	)
Marketing and advertising		8,403		6,535		1,868			28.6
Clearing costs		12,392		13,049		(657	)		(5.0	)
General and administrative		15,698		12,479		3,219			25.8
Total expenses	$	317,307	$	291,195	$	26,112			9.0		%

Employee compensation and benefits increased by $11.6 million, primarily due to increases in salaries, taxes and benefits on higher employee headcount of $14.2 million and higher stock compensation expense of $0.3 million, offset by lower employee incentive compensation of $3.0 million.

Depreciation and amortization increased by $5.3 million, primarily due to higher amortization of software development costs of $3.9 million, higher amortization of production hardware and software of $1.9 million and higher amortization of intangibles of $0.9 million, offset by lower amortization of software licenses of $1.4 million. For the nine months ended September 30, 2023 and 2022, $7.3 million and $6.6 million, respectively, of equipment purchases and leasehold improvements and $31.8 million and $27.1 million, respectively, of software development costs were capitalized.

Technology and communications expenses increased by $6.7 million, primarily due to higher software subscription costs of $3.9 million, higher data center hosting costs of $1.9 million and higher cloud hosting costs of $1.4 million, offset by lower U.S. treasury platform licensing fees of $0.6 million.

Professional and consulting fees decreased by $1.8 million, primarily due to lower acquisition-related integration consulting fees of $1.0 million, lower recruiting fees of $1.0 million and lower audit and tax fees of $0.7 million, offset by higher acquisition-related legal expenses of $0.9 million.

Marketing expenses increased by $1.9 million, primarily due to higher advertising and sales-related travel and entertainment costs.

General and administrative expenses increased by $3.2 million, primarily due to higher media subscription costs of $1.1 million, higher travel and entertainment costs of $0.9 million, higher office-related administration costs of $0.8 million, and higher regulatory fees of $0.4 million.

37

Other Income (Expense)

Our other income (expense) for the nine months ended September 30, 2023 and 2022, and the resulting dollar and percentage changes, were as follows:

	Nine Months Ended September 30,
	2023			2022			$ Change			% Change
	($ in thousands)
Interest income	$	16,151		$	1,746		$	14,405		NM
Interest expense		(347	)		(648	)		301			(46.5	)	%
Equity in earnings of unconsolidated affiliate		579			1,060			(481	)		(45.4	)
Other, net		(5,487	)		7,499			(12,986	)	NM
Total other income (expense)	$	10,896		$	9,657		$	1,239			12.8		%
NM - not meaningful

Interest income increased by $14.4 million driven by higher interest rates and interest earned on our investments.

Interest expense decreased by $0.3 million due to lower financing charges incurred under our short-term borrowing arrangements.

Equity in earnings of unconsolidated affiliate decreased due to lower net income of our equity method investee.

Other, net decreased by $13.0 million driven by foreign currency transaction losses in the current period compared to foreign currency transaction gains in the prior period.

Provision for Income Taxes

The provision for income taxes and effective tax rate for the nine months ended September 30, 2023 and 2022 were as follows:

	Nine Months Ended September 30,
	2023			2022			$ Change			% Change
	($ in thousands)
Provision for income taxes	$	60,460		$	67,862		$	(7,402	)		(10.9	)	%
Effective tax rate		24.3	%		26.2	%

During the nine months ended September 30, 2022, the Company's provision for income taxes included $3.2 million of expense related to a settlement with New York State 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 nine months ended September 30, 2023, we have met our funding requirements through cash on hand, internally generated funds and short-term borrowings. Cash and cash equivalents and investments totaled $553.3 million as of September 30, 2023. Our investments generally consist of investment-grade corporate bonds and 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 August 2023, we entered into the 2023 Credit Agreement, which provides aggregate commitments totaling $750.0 million, consisting of a revolving credit facility, a $5.0 million letter of credit sub-limit for standby letters of credit and a $380.0 million sub-limit for swingline loans. The 2023 Credit Agreement will mature on August 9, 2026, 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 September 30, 2023, we had $0.1 million in letters of credit outstanding and $749.9 million in available borrowing capacity under the 2023 Credit Agreement. Borrowings under the 2023 Credit Agreement will bear interest at a rate per annum equal to the alternate base rate or the adjusted term SOFR rate, plus an applicable margin that varies with our consolidated total leverage ratio. The 2023 Credit Agreement requires that we satisfy certain covenants, including a requirement to not exceed a maximum consolidated total leverage ratio. We were in compliance with all applicable covenants at September 30, 2023. See Note 11 to the Consolidated Financial Statements for a discussion of the 2023 Credit Agreement.

38

In connection with their self-clearing operations, certain of our operating subsidiaries maintain agreements with a settlement bank to allow the subsidiaries to borrow in the aggregate of up to $500.0 million on an uncommitted basis, collateralized by eligible securities pledged by the subsidiaries to the settlement bank, subject to certain haircuts. Borrowings under these agreements 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 SOFR, plus 1.00%. As of September 30, 2023, the subsidiaries had no borrowings outstanding and up to $500.0 million in available uncommitted borrowing capacity under such agreements. See Note 11 to the Consolidated Financial Statements for a discussion of these agreements.

Under arrangements with their settlement banks, certain of our operating subsidiaries may receive overnight financing in the form of bank overdrafts. As of September 30, 2023, we had $4.0 million of 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 September 30, 2023, the aggregate amount of the positions financed, deposits and customer reserve balances associated with our self-clearing and settlement activities was $234.7 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.

Cash Flows for the Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

Our cash flows were as follows:

	Nine Months Ended September 30,
	2023			2022			$ Change		% Change
	($ in thousands)
Net cash provided by operating activities	$	192,082		$	155,005		$	37,077		23.9		%
Net cash (used in) investing activities		(63,617	)		(68,151	)		4,534		(6.7	)
Net cash (used in) financing activities		(110,782	)		(215,480	)		104,698		(48.6	)
Effect of exchange rate changes on cash and    cash equivalents		(1,451	)		(28,111	)		26,660	NM
Net increase/(decrease) for the period	$	16,232		$	(156,737	)	$	172,969		(110.4	)	%
NM - not meaningful

The $37.1 million increase in net cash provided by operating activities was primarily due to a larger change in net receivables from broker-dealers, clearing organizations and customers associated with our clearing activities of $53.6 million and lower accounts receivable of $12.4 million, offset by lower net income of $2.6 million, lower deferred taxes of $2.2 million and an increase in trading investments of $24.7 million.

The $4.5 million decrease in net cash used in investing activities was primarily due to a decrease in cash used for the acquisition of equity method investments of $34.4 million, offset by higher net purchases of available-for-sale investments of $24.6 million, higher purchases of furniture, equipment and leasehold improvements of $0.6 million, and higher capitalization of software development costs of $4.7 million.

The $104.7 million decrease in net cash used in financing activities was principally due to lower repurchases of common stock of $87.5 million, lower payments of contingent consideration of $13.7 million, higher net proceeds from short-term borrowings of $4.0 million, lower withholding tax payments on restricted stock vesting of $1.3 million and higher exercises of stock options of $0.4 million, offset by higher cash dividends of $2.3 million.

The $26.7 million change in the effect of exchange rate changes on cash and cash equivalents was driven by changes in the cumulative translation adjustment which reflects the strengthening of the U.S. dollar during the nine months ended September 30, 2022.

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.

39

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 streams. 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 broker-dealers and therefore are subject to the applicable rules and regulations of the SEC and FINRA. These rules contain minimum net capital requirements, as defined in the applicable regulations. 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 September 30, 2023, each of our subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of September 30, 2023, our subsidiaries maintained aggregate net capital and financial resources that were $505.6 million in excess of the required levels of $31.5 million.

Each of our U.S. and foreign regulated subsidiaries are subject to local regulations which generally limit, or require the prior notification to or approval from such regulated entity’s principal regulator before, the 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. As of September 30, 2023, the amount of unrestricted cash held by our non-U.S. subsidiaries was $215.8 million.

We execute securities 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 operating subsidiaries settle such transactions pursuant to their self-clearing operations or through the use of 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 nine months ended September 30, 2023 and 2022. Substantially all of our open securities failed-to-deliver and securities failed-to-receive transactions as of September 30, 2023 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 experience, the Company expects 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 $105.9 million, with $11.7 million due within the next 12 months and $94.2 million due beyond 12 months.

We enter into foreign currency forward contracts to economically hedge our exposure to variability in certain foreign currency transaction gains and losses. As of September 30, 2023, the notional value of our foreign currency forward contract outstanding was $63.9 million and the fair value of the liability was $2.9 million.

In January 2021, our Board authorized a 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 share repurchase program for up to $150.0 million that commenced in March 2022. Shares repurchased under the program will be held in treasury for future use. As of September 30, 2023, we had $100.0 million of remaining capacity under the program.

In October 2023, our Board of Directors approved a quarterly cash dividend of $0.72 per share payable on November 22, 2023 to stockholders of record as of the close of business on November 8, 2023. Any future declaration and payment of dividends will be at the sole discretion of our Board of Directors.

In October 2023, we closed our acquisition of Pragma. The purchase consideration, after giving effect to adjustments in the purchase agreement, was approximately $128.6 million, consisting of approximately $80.4 million of cash and 216,173 shares of our common stock, valued at approximately $48.2 million on the closing date.

40

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. Starting with the first quarter of 2023, our calculation of EBITDA has been revised to adjust for interest income in addition to interest expense. In prior periods, we only adjusted for interest expense because interest income amounts were insignificant. Prior comparable periods have now been recast to conform to the current presentation. Likewise, starting with the first quarter of 2023, EBITDA margin is calculated by adjusting for interest income in addition to interest expense and prior comparable periods have been recast to conform to the current presentation. We define EBITDA margin as EBITDA divided by revenues. We define free cash flow as net cash provided by/(used in) 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 these non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, provide additional information regarding our operating results because they assist both investors and management in analyzing and evaluating the performance of our business.

The table set forth below presents a reconciliation of our net income to EBITDA and net income margin to EBITDA margin, as defined above, for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	($ in thousands)
Net income	$	54,941		$	59,307		$	188,428		$	190,998
Interest income		(6,590	)		(1,433	)		(16,151	)		(1,746	)
Interest expense		164			138			347			648
Provision for income taxes		16,802			19,556			60,460			67,862
Depreciation and amortization		17,561			15,302			51,027			45,716
EBITDA	$	82,878		$	92,870		$	284,111		$	303,478
Net income margin		31.9	%		34.5	%		33.9	%		35.3	%
Interest income		(3.8	)		(0.8	)		(2.9	)		(0.3	)
Interest expense		0			0.1			0			0.1
Provision for income taxes		9.8			11.4			10.9			12.6
Depreciation and amortization		10.2			8.9			9.2			8.5
EBITDA margin		48.1	%		54.0	%		51.2	%		56.2	%

The table set forth below presents a reconciliation of our net cash provided by operating activities to free cash flow, as defined above, for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	($ in thousands)
Net cash provided by operating activities	$	79,161		$	85,098		$	192,082		$	155,005
Exclude: Net change in trading investments		24,771			(445	)		24,300			(445	)
Exclude: Net change in fail-to-deliver/receive from broker-dealers, clearing organizations and customers		(13,099	)		(2,227	)		(12,342	)		45,939
Less: Purchases of furniture, equipment and leasehold improvements		(5,983	)		(3,961	)		(7,255	)		(6,642	)
Less: Capitalization of software development costs		(10,087	)		(8,548	)		(31,802	)		(27,109	)
Free Cash Flow	$	74,763		$	69,917		$	164,983		$	166,748

41

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 September 30, 2023, we had $98.7 million of investments in U.S. Treasuries that were classified as trading securities and $24.5 million of investments in corporate bonds that were classified as available-for-sale. Adverse movements, such as a decrease in the value of these securities or a downturn or disruption in the markets for these securities, could result in a substantial loss. A 10.0% decrease in the market value of our U.S Treasuries or available-for-sale investments would result in losses of approximately $9.9 million and $2.5 million, respectively. 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 and cash equivalents, restricted cash and deposits. As of September 30, 2023, our cash and cash equivalents, restricted cash and deposits amounted to $588.9 million. A hypothetical 100 basis point change in interest rates would increase or decrease our annual interest income by approximately $5.9 million, assuming no change in the amount or composition of our cash and cash equivalents, restricted cash and deposits.

As of September 30, 2023, a hypothetical 100 basis point increase or decrease in interest rates would decrease or increase the fair value of the available-for-sale investment portfolio by approximately $0.3 million, assuming no change in the amount or composition of the investments. The hypothetical unrealized gain (loss) of $0.3 million would be recognized in accumulated other comprehensive loss on the Consolidated Statements of Financial Condition.

A similar hypothetical 100 basis point increase or decrease in interest rates would decrease or increase the fair value of the trading securities portfolio by approximately $1.2 million. The hypothetical unrealized gain (loss) of $1.2 million would be recognized in other, net in the Consolidated Statements of Operations.

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 expenses, operating income and the value of balance sheet items denominated in foreign currencies.

During the twelve months ended September 30, 2023, approximately 15.6% of our revenue and 26.6% 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 10.0% increase or decrease in the U.S. dollar against all other currencies would have increased or decreased revenue by approximately $11.4 million and operating expenses by approximately $11.1 million.

42

Credit Risk

Through certain of our subsidiaries, we execute securities 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 operating subsidiaries settle such transactions pursuant to their self-clearing operations or through the use of 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 include 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.

Derivative Risk

Our limited derivative risk stems from our activities in the foreign currency forward contract market. We use this market to economically hedge our foreign exchange gains and losses on the Consolidated Statements of Operations that arise from our U.S. dollar versus British Pound Sterling exposure from the activities of our U.K. subsidiaries. As of September 30, 2023, the fair value of the notional amount of our foreign currency forward contract was $61.0 million. We do not hold derivative instruments for purposes other than economically hedging foreign currency risk.

43

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 September 30, 2023. 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 September 30, 2023 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.

44

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, 2022. For a discussion of the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our 2022 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 September 30, 2023, 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)
July 1, 2023 - July 31, 2023		713	$	261.42		—	$	100,016
August 1, 2023 - August 31, 2023		91		262.60		—		100,016
September 1, 2023 - September 30, 2023		—		—		—		100,016
Total		804	$	261.55		—

During the three months ended September 30, 2023, we repurchased 804 shares of common stock that were surrendered to us to satisfy the withholding tax obligations upon the vesting of restricted shares and restricted stock units. There were no shares repurchased in connection with our share repurchase program during the three months ended September 30, 2023.

In January 2022, our Board of Directors authorized a 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. As of September 30, 2023, we had $100.0 million of remaining capacity under the program.

45

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(c) Trading Plans

In the third quarter of 2023, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement for the purchase or sale of securities of the Company, within the meaning of Item 408 of Regulation S-K, except as follows:

Christopher N. Gerosa, Chief Financial Officer, adopted a Rule 10b5-1 trading arrangement on September 7, 2023, for the sale of up to 900 shares of the Company’s common stock, subject to certain conditions. The arrangement’s expiration date is February 14, 2025.

46

Item 6. Exhibits

Exhibit Index:

Number	Description
10.1*	Membership Interest Purchase Agreement, dated as of August 5, 2023, by and among MarketAxess Holdings Inc., Pragma Weeden Holdings LLC, Pragma Financial Systems LLC, Pragma LLC and David Mechner (solely for purposes specified therein).†#
10.2	Credit Agreement, dated as of August 9, 2023, among MarketAxess Holdings Inc., a Delaware corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report in Form 8-K dated August 9, 2023).†
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 September 30, 2023 has been formatted in Inline XBRL and is included in Exhibits 101.

*	Filed herewith.
†	Certain schedules and other similar attachments to this exhibit have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. The registrant will provide a copy of such omitted documents to the Securities and Exchange Commission upon request.
#	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.

47

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: October 25, 2023	By:	/s/ CHRISTOPHER R. CONCANNON
		Christopher R. Concannon
		Chief Executive Officer
		(principal executive officer)
Date: October 25, 2023	By:	/s/ CHRISTOPHER N. GEROSA
		Christopher N. Gerosa
		Chief Financial Officer
		(principal financial and accounting officer)

48

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.

EXECUTION VERSION

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

MARKETAXESS HOLDINGS INC.,

PRAGMA WEEDEN HOLDINGS LLC,

PRAGMA FINANCIAL SYSTEMS LLC,

PRAGMA LLC

and

DAVID MECHNER (solely for purposes specified herein)

Dated as of August 5, 2023

TABLE OF CONTENTS

Page
ARTICLE I	PURCHASE AND SALE	2
1.1	Purchase and Sale	2
1.2	Closing	2
1.3	Closing Payment Statement	2
1.4	Closing Payments and Deliverables	2
1.5	Closing Adjustments	4
1.6	Closing Stock Consideration	7
1.7	Withholding	8
1.8	Cancellation of Seller Options	8
1.9	Payment Cooperation	9
ARTICLE II	REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER	11
2.1	Organization; Standing	11
2.2	Authority; No Conflict; Required Filings and Consents	11
2.3	Title to Interests	12
2.4	Litigation	12
2.5	Securities Matters	12
2.6	Brokers	13
2.7	No Other Representations or Warranties; Reliance	14
ARTICLE III	REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES	14
3.1	Organization, Standing and Power	14
3.2	Capitalization	15
3.3	Subsidiaries	15
3.4	Authority; No Conflict; Required Filings and Consents	16
3.5	Financial Statements	17
3.6	Absence of Certain Changes	18
3.7	Taxes	19
3.8	Owned and Leased Real Properties	20
3.9	Intellectual Property and Data Privacy	20

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3.10	Contracts	24
3.11	Litigation	26
3.12	Employee Benefit Plans	27
3.13	Compliance With Laws; Broker-Dealer and Regulatory Matters	29
3.14	Permits	31
3.15	Insurance	32
3.16	Labor and Employment	32
3.17	Title to Personal Properties	34
3.18	Sufficiency of Assets	34
3.19	Related Party Transactions	34
3.20	Customers and Suppliers	35
3.21	International Trade and Anti-Corruption Matters	35
3.22	Brokers	36
3.23	No Other Representations or Warranties	36
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF THE BUYER	36
4.1	Organization, Standing and Power	36
4.2	Authority; No Conflict; Required Filings and Consents	37
4.3	Litigation	37
4.4	Financing	38
4.5	Brokers	38
4.6	SEC Documents	38
4.7	Capitalization	39
4.8	Investment Intent	39
4.9	R&W Insurance Policy	40
4.10	Investigation	40
4.11	No Other Representations or Warranties	40
ARTICLE V	CONDUCT OF BUSINESS	41
5.1	Covenants of the Seller and Companies	41
5.2	Confidentiality	43
ARTICLE VI	ADDITIONAL AGREEMENTS	44
6.1	No Solicitation	44
6.2	Access to Information	45

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6.3	Closing Efforts; Legal Conditions to the Purchase; Third-Party Consents	45
6.4	Public Disclosure	47
6.5	Employee Matters	48
6.6	Tax Matters	49
6.7	Non-Solicitation; Non-Competition	52
6.8	Transfer Restrictions	53
6.9	Public Information	55
6.10	Listing	55
6.11	Use of Names	56
6.12	R&W Policy	56
6.13	Seller Name Change	56
6.14	Access to Information Following the Closing	56
6.15	Pre-Closing Assignments	57
6.16	Termination of Intercompany Arrangements	57
6.17	Insurance Policies	57
6.18	Wrong Pockets; Further Assurances	58
6.19	Release	58
ARTICLE VII	CONDITIONS TO PURCHASE	60
7.1	Conditions to Each Party’s Obligation to Effect the Closing	60
7.2	Additional Conditions to Obligations of the Buyer	60
7.3	Additional Conditions to Obligations of the Seller	62
7.4	Frustration of Closing Conditions	63
ARTICLE VIII	INDEMNIFICATION	63
8.1	Indemnifiable Matters	63
8.2	Claims for Indemnification	64
8.3	Survival	65
8.4	Limitations; Priority of Payments	66
8.5	Indemnity Escrow	69
8.6	Cash Indemnification Payments	70
ARTICLE IX	TERMINATION AND AMENDMENT	71
9.1	Termination	71
9.2	Effect of Termination	72

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9.3	Fees and Expenses	72
9.4	Amendment	72
9.5	Extension; Waiver	72
ARTICLE X	DEFINITIONS	73
10.1	Definitions	73
ARTICLE XI	MISCELLANEOUS	90
11.1	Notices	90
11.2	Entire Agreement; Non-Recourse	91
11.3	Waiver of Conflicts Regarding Representation; Non-Assertion of Attorney-Client Privilege	92
11.4	No Third-Party Beneficiaries	93
11.5	Assignment	93
11.6	Severability	94
11.7	Counterparts and Signature	94
11.8	Interpretation	94
11.9	Governing Law	95
11.10	Remedies	95
11.11	Submission to Jurisdiction	95
11.12	Disclosure Schedules	96
11.13	Waiver of Jury Trial	96

Disclosure Schedule

Buyer Disclosure Schedule

Schedule 1.4(e)(iv) – Payoff Debt

Schedule 5.1 – Conduct between Signing and Closing

Schedule 6.6(e) – Purchase Price Allocation Methodology

Schedule 6.7 – Illustrative Examples of Restricted Businesses

Schedule 6.8(b) – Transfer Restrictions

Schedule 6.11 – Company Marks

Schedule 6.15(a) – Contracts to be Assigned

Schedule 6.15 (b) – Intellectual Property to be Assigned

Schedule 7.2(e)(i) – Continuing Affiliate Contracts

Schedule 7.2(h) – Extended Support Agreement

Schedule 10.1(a) – Buyer’s Knowledge

Schedule 10.1(b) – Seller’s Knowledge

Schedule 10.1(c) – Assets Included in Net Working Capital

Schedule 10.1(d) – Liabilities Included in Net Working Capital

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Exhibit A	Mechner Employment Agreement
Exhibit B	Form of Interest Assignment
Exhibit C	Form of Escrow Agreement
Exhibit D	Form of Accredited Investor Questionnaire
Exhibit E	Representation & Warranty Insurance Policy
Exhibit F	Form of Assignment Agreement
Exhibit G	Form of Release
Exhibit H	Form of Option Cancellation and Release Agreement
Exhibit I	Form of Joinder
Exhibit J	Form of Intellectual Property Assignment Agreement

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MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is entered into as of August 5, 2023, by and among (i) MarketAxess Holdings Inc., a Delaware corporation (the “Buyer”), (ii) Pragma Weeden Holdings LLC, a Delaware limited liability company (the “Seller”), (iii) Pragma Financial Systems LLC, a New York limited liability company (“PFS”), (iv) Pragma LLC, a New York limited liability company (“PLLC” and together with PFS, the “Companies” and individually, each a “Company”), and (v) David Mechner, solely for the purposes of Section 6.7, Section 6.19, Section 8.1(b), the remainder of Article VIII as it relates to Section 8.1(b) and Article XI as it relates to any of such provisions (“Mechner”). The Buyer, the Seller and the Companies (and, solely for the purposes of Section 6.7, Section 6.19, Section 8.1(b), the remainder of Article VIII as is relates to Section 8.1(b) and Article XI as it relates to any of such provisions, Mechner) are referred to, collectively, as the “Parties”. Capitalized terms used but not otherwise defined herein have the respective meanings ascribed to such terms in Article X.

WHEREAS, the Companies own and operate a business providing algorithmic trading solutions through PLLC, a FINRA-registered broker dealer, and related software and technology development and support services through PFS (such business, but excluding the Seller’s contingent contractual earnout rights relating to its former investment in Ogg Trading LLC, the “Business”), which Business comprises the entire business and operations of the Seller and its Subsidiaries other than the Seller’s contractual earnout rights relating to its former investment in Ogg Trading LLC;

WHEREAS, the Seller owns all of the issued and outstanding membership interests of each of PFS and PLLC (collectively, the “Interests”);

WHEREAS, the Board of Managers (as defined in the Operating Agreement) of the Seller (the “Seller Board”) has unanimously approved this Agreement, the execution, delivery and performance hereof by the Seller and the consummation by the Seller of the transactions contemplated hereby, including the transfer and sale by the Seller of the Interests to the Buyer on the terms and conditions of this Agreement, in accordance with the Operating Agreement and the Act (the “Seller Transaction Consent”);

WHEREAS, the Board of Directors of the Buyer (or a duly authorized committee thereof) has unanimously approved this Agreement, the execution, delivery and performance hereof by the Buyer and the consummation by the Buyer of the transactions contemplated hereby, including the purchase by the Buyer of the Interests on the terms and conditions of this Agreement, in accordance with the Buyer’s Organizational Documents and the Delaware General Corporation Law;

WHEREAS, concurrently herewith, Mechner is entering into an employment agreement with the Buyer, as attached hereto as Exhibit A (the “Mechner Employment Agreement”);

WHEREAS, Mechner is a founder of the Seller and has been affiliated with and integral to the business of the Seller and its Subsidiaries since their inception and will receive substantial consideration and other benefits in connection with the consummation of the transactions contemplated by this Agreement, including by virtue of his ownership interest in a member of the

Seller, and it is a material inducement and condition to the Buyer’s willingness to enter into this Agreement and to consummate the transactions contemplated hereby that Mechner enter into this Agreement; and

WHEREAS, upon the terms and subject to the conditions set forth herein, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, all of the Interests.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

ARTICLE I

PURCHASE AND SALE

1.1Purchase and Sale. Upon the terms and subject to the provisions of this Agreement, at the Closing, the Seller shall sell, convey, assign, transfer and deliver to the Buyer, free and clear of all Liens (other than any transfer restrictions arising under applicable securities Laws), and the Buyer shall purchase and acquire from the Seller, all of the Seller’s right, title and interest in, to and under the Interests in exchange for the consideration set forth in this Article I.

1.2Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at 10:00 a.m., Eastern time, remotely by electronic exchange of documents and signatures, on the second Business Day after the satisfaction or waiver of the conditions set forth in Article VII (other than the satisfaction of those conditions that by their nature or terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing), unless another date, place or time is agreed to in writing by the Buyer and the Seller.

1.3Closing Payment Statement. No later than the third Business Day prior to the Closing Date, the Seller shall deliver to the Buyer (a) the Closing Payment Statement and (b) to the extent Seller is requesting Buyer to direct any payments in accordance with Section 1.9, the applicable Option Payment Schedule with respect to the Aggregate Closing Option Cash-Out Payment Amount.

1.4Closing Payments and Deliverables.

(a)Closing Cash Payments. At the Closing, subject to the terms and conditions of this Agreement, the Buyer shall make (or cause to be made) the following payments, in each case, by wire transfer of immediately available funds to the accounts designated in the Closing Payment Statement:

(i)to each Person identified in the Closing Payment Statement as a recipient of a payment in respect of Unpaid Company Transaction Expenses, the amount payable to such Person as specified therein; provided, that any Unpaid Company Transaction Expenses that are compensatory payments to current or former Business Employees shall instead be paid to the applicable Company for subsequent payment to such Persons through payroll;

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(ii)to the Escrow Agent, the Purchase Price Adjustment Escrow Amount for deposit in the Purchase Price Adjustment Escrow Account; and

(iii)to the Seller, an amount equal to the Estimated Closing Cash Consideration (less, to the extent Buyer will be making, at the direction of the Seller, payments in respect of Seller Options pursuant to Section 1.9, the Aggregate Closing Option Cash-Out Payment Amount).

(b)Deposit of Indemnification Escrow Shares. At the Closing, the Buyer shall issue (or cause to be issued, effective as of the Closing Date) the Indemnity Escrow Shares in the name of the Escrow Agent or its nominee as contemplated by Section 8.5(a).

(c)Payment of Closing Stock Consideration. At the Closing, the Buyer shall, subject to Section 1.6(b), issue to the Seller the Closing Stock Consideration, which shall, unless otherwise determined by the Buyer, be in book-entry form or otherwise uncertificated (together with written evidence of such issuance in the form of an instruction letter to the Buyer’s transfer agent or other customary written evidence reasonably acceptable to the Seller), and which shall bear such legends as to the restrictions on transfer thereof or stop transfer notations with respect thereto as contemplated by this Agreement. As promptly as practicable following the Closing, the Buyer shall deliver to the Seller a direct registration statement or other customary written evidence of the registration of the issuance of the Closing Stock Consideration in the name of the Seller as of the Closing Date.

(d)Seller Closing Deliveries. At or prior to the Closing, the Seller shall deliver to the Buyer:

(i)a duly executed assignment agreement in substantially the form set forth as Exhibit B (the “Interest Assignment Agreement”), duly effecting the transfer of the Interests to the Buyer, free and clear of all Liens (other than any transfer restrictions arising under applicable securities Laws);

(ii)copies of the resolutions duly adopted by the Board of Managers, (A) authorizing and approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby in accordance with the Organizational Documents of the Seller and applicable Law and (B) providing for the treatment of any outstanding options to acquire interests of Seller in accordance with Section 1.8 and that any consideration payable by the Seller in connection with the transactions contemplated hereby to holders of Class B Units of the Seller issued in respect of the exercise of any Seller Options prior to the Closing shall be solely in the form of cash, certified by the secretary or other duly authorized officer of the Seller as being in full force and effect as of the Closing and not having been rescinded or otherwise modified;

(iii)a duly executed and valid form W-9 for the Seller; and

(iv)a release, in substantially the form attached hereto as Exhibit G, duly executed by each of Pragma Group Investors LLC and Weeden Investors LP (the “Releases”).

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(e)Companies Closing Deliveries. At or prior to the Closing, the Companies and the Seller shall deliver to the Buyer:

(i)written resignations (in form and substance reasonably acceptable to Buyer), effective as of the Closing, of those officers of either Company as are requested by the Buyer to resign at least two Business Days prior to the Closing, in each case resigning such position(s) as an officer (but not resigning employment);

(ii)copies of resolutions of the Seller, in its capacity as the sole member of each Company, as to the authorization and approval of the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby certified by the Secretary or another duly authorized officer of such Company as being in full force and effect as of the Closing and not having been rescinded or otherwise modified;

(iii)certificates of good standing issued by the Secretary of State of the State of New York not more than five Business Days prior to the Closing Date, certifying as to the good standing of each Company; and

(iv)a customary payoff letter(s) with respect to any indebtedness or commitments for borrowed money (or guarantees thereof) or evidenced by bonds, debentures, notes or other similar instruments included in the Closing Debt Amount and identified on Schedule 1.4(e)(iv), together with instruments and documents, or, in lieu thereof, customary undertakings and authorizations necessary to release any and all Liens in favor of holders thereof in connection therewith (in each case, in customary form and reasonably acceptable to Buyer).

(f)Buyer Closing Deliveries. At or prior to the Closing, the Buyer shall deliver to the Seller customary evidence in form and substance reasonably acceptable to the Seller that the R&W Policy has incepted and the coverage contemplated thereunder is in effect, subject to the satisfaction of the conditions set forth therein.

1.5Closing Adjustments.

(a)Estimated Closing Cash Consideration. No later than the third Business Day prior to the Closing Date, the Seller shall deliver to the Buyer a written statement setting forth the Seller’s calculation of the amount of the Closing Cash Consideration, including, in reasonable detail (and together with reasonable supporting documentation) and based upon its good faith estimate of, each component thereof (such amount, the “Estimated Closing Cash Consideration” and such statement, the “Estimated Closing Statement”). The Buyer shall have two Business Days from the receipt of the Estimated Closing Statement to provide the Seller with any comments with respect thereto and the Seller shall consider (in good faith) any appropriate changes thereto prior to the Closing.

(b)Post-Closing Cash Consideration Adjustment.

(i)Before 11:59 p.m., Eastern time, on the 60th day after the Closing Date, the Buyer shall prepare and deliver to the Seller a written statement setting forth the Buyer’s calculation of the Closing Cash Consideration, including, in reasonable detail (and together with reasonable supporting documentation) its calculation of each component thereof (such amount, the “Preliminary Closing Cash Consideration” and such statement, the “Preliminary Closing Statement”).

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(ii)If the Seller agrees in writing to the Preliminary Closing Cash Consideration as set forth in the Preliminary Closing Statement, or if the Seller fails to timely deliver an Objection Statement pursuant to Section 1.5(b)(iii), then the Preliminary Closing Cash Consideration shall be deemed for all purposes of this Agreement to be the “Final Closing Cash Consideration,” and each shall be final and binding on all Parties.

(iii)If the Seller disputes the calculation of any of the components of the Closing Cash Consideration as set forth in the Preliminary Closing Statement, then the Seller shall deliver to the Buyer, within 30 days after receipt of the Preliminary Closing Statement, a statement setting forth in reasonable detail each component thereof that is subject to dispute and the reason therefor (an “Objection Statement”). The Buyer and the Seller shall seek in good faith to resolve any such disputes for a period of 30 days after the Buyer’s receipt of the Objection Statement; provided, that any items not disputed in the Objection Statement shall be final and binding on all Parties as set forth in the Preliminary Closing Statement.

A.If the Buyer and the Seller reach a final resolution on all disputed items set forth in the Objection Statement within such 30 day period (or within any additional period as mutually agreed to between the Buyer and the Seller), then the Closing Cash Consideration, as calculated based on the resolution of such disputed items between the Buyer and the Seller, shall be deemed for all purposes of this Agreement to be the “Final Closing Cash Consideration,” and shall be final and binding on all Parties.

B.If the Buyer and the Seller do not reach a final resolution with respect to any disputed items within the period provided in Section 1.5(b)(iii)(A), then the Buyer and the Seller shall engage, and shall submit such unresolved disputed items immediately to RSM US LLP or other nationally recognized firm of independent certified public accountants reasonably acceptable to the Buyer and the Seller (the “Neutral Accountant”). The Seller and the Buyer shall each be entitled to make written presentations and submissions to the Neutral Accountant pursuant to procedures to be agreed to among the Seller, the Buyer and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant) regarding each of their respective calculations of the disputed items, and the Neutral Accountant shall be required to resolve such differences in accordance with the terms of this Section 1.5 and to make a determination as to each of the open disputed items within 20 Business Days after its appointment as the Neutral Accountant. The Neutral Accountant’s determination shall be based solely on the presentations and submissions of the Parties, and not on the Neutral Accountant’s own independent review. Absent fraud or manifest error (in which event the matter shall be referred back to the Neutral Accountant to correct such error), the Neutral Accountant’s determination hereunder of each disputed item shall be final and binding on the Parties and non-appealable. If any disputed amounts are submitted to the Neutral Accountant, the Closing Cash Consideration, as calculated based on the components thereof as finally determined pursuant to this Section 1.5(b)(iii), including the Neutral Accountant’s calculation of any components thereof in accordance with this Section 1.5(b)(iii)(B), shall for all purposes of this Agreement be deemed to be the “Final Closing Cash Consideration,” and shall be final and binding on all Parties.

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C.The Neutral Accountant shall be bound by the provisions of this Section 1.5, and shall not be authorized or permitted to: (1) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between the Seller and the Buyer regarding the calculation of the applicable disputed items in accordance with this Section 1.5; (2) resolve any such differences by assigning a value to any disputed item that is outside of the range for such item as proposed by the Buyer in the Preliminary Closing Statement or the Seller in the Objection Statement; or (3) apply any accounting principles, policies, methods, treatments or procedures other than as set forth in Section 1.5(d). In making any determinations with respect to the components of the Closing Cash Consideration hereunder, the Neutral Accountant shall act as an expert and not as arbitrator. The Parties agree that they will reasonably cooperate and assist the Neutral Accountant with respect to its determination of the disputed components of the Closing Cash Consideration, including the making available, to the extent reasonably necessary in connection therewith, of books, records, work papers and personnel (subject to entry into customary confidentiality and access letters).

D.The costs, fees and expenses related to the engagement of and such determination by the Neutral Accountant, including the costs relating to any negotiations with the Neutral Accountant with respect to the terms and conditions of such Neutral Accountant’s engagement, will be paid by the Buyer, on the one hand, and the Seller, on the other hand, on an inversely proportional basis, based upon the relative portions of the amounts in dispute that have been submitted to the Neutral Accountant for resolution that ultimately are awarded to each of the Buyer and the Seller (e.g., if $100,000 is in dispute, and of that amount the Neutral Accountant awards $75,000 to the Buyer and $25,000 to the Seller, then the Buyer will be responsible for 25%, and the Seller will be responsible for 75%, of the costs, fees and expenses of the Neutral Accountant).

(iv)If the Final Closing Cash Consideration is less than the Estimated Closing Cash Consideration (the “Deficiency Amount”), then the Seller and the Buyer shall promptly (and in no event later than three Business Days after) the date of determination of the Final Closing Cash Consideration) deliver instructions to the Escrow Agent instructing the Escrow Agent to pay to the Buyer from the Purchase Price Adjustment Escrow Account, by wire transfer of immediately available funds, an amount in cash equal to the Deficiency Amount. If the Deficiency Amount exceeds the amount of funds in the Purchase Price Adjustment Escrow Account, then the Buyer’s sole remaining recourse will be to recover such excess amount from any shares of Buyer Common Stock available in the Indemnity Escrow Account, in which event the Buyer and the Seller shall promptly (and in any event within three Business Days after the date of determination of the Final Closing Cash Consideration) deliver instructions to the Escrow Agent instructing the Escrow Agent to release to the Buyer from the Indemnity Escrow Account a number of shares of Buyer Common Stock having a value (based on the Buyer Applicable Stock Price with respect to the date of determination of the Final Closing Cash Consideration) equal to such deficiency (with such number of shares rounded up to nearest whole share), and the Buyer shall promptly cause any such shares to be cancelled. If the Final Closing Cash Consideration exceeds the Estimated Closing Cash Consideration (the “Excess Amount”), then promptly (and in no event later than three Business Days after the date of determination of the Final Closing Cash Consideration), the Buyer shall pay the Excess Amount to the Seller by wire transfer of immediately available funds to the account for the Seller identified in the Closing Payment

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Statement. If any funds remain in the Purchase Price Adjustment Escrow Account after payment of the Excess Amount or Deficiency Amount (the “Remaining Amount”), the Buyer and the Seller shall within three Business Days after the date of determination of the Final Closing Cash Consideration deliver instructions to the Escrow Agent instructing the Escrow Agent to release the Remaining Amount to the Seller.

(c)During the 30-day period commencing on Buyer’s delivery of the Preliminary Closing Statement (or until the earlier delivery of an Objection Statement), the Buyer shall provide or cause to be provided to the Seller and its attorneys, accountants and other representatives reasonable access (including electronic access, to the extent available), upon reasonable notice, during normal business hours and in a manner that does not unreasonably disrupt or interfere with business operations, to the books and records of the Companies and personnel of the Buyer and each Company to the extent reasonably necessary for purposes of Seller (i) evaluating the information in the Preliminary Closing Statement and the calculation of the Preliminary Closing Cash Consideration and (ii) preparing any Objection Statement; provided, however, that such access shall be subject to (A) any applicable privileges (including the attorney-client privilege), the attorney work product doctrine or any similar protections, (B) contractual confidentiality obligations (subject to entry into customary confidentiality letters) and (C) prior execution of customary access letters.

(d)The procedures set forth in this Section 1.5 shall be the sole and exclusive method for resolving any disputes with respect to the determination of the Closing Cash Consideration. For the avoidance of doubt, the Closing Cash Consideration, the Estimated Closing Cash Consideration, the Preliminary Closing Cash Consideration and the Final Closing Cash Consideration, and each of the components thereof, shall be prepared and calculated in accordance with the respective definitions thereof set forth herein. All calculations or determinations shall be made in accordance with the Accounting Principles (except that, such calculations and determinations (i) shall not include any purchase accounting or other adjustment arising out of the consummation of the transactions contemplated by this Agreement and (ii) shall follow the defined terms used in this Agreement, whether or not such terms are in accordance with GAAP).

1.6Closing Stock Consideration.

(a)Calculation of Stock Consideration. No later than the fourth Business Day prior to the Closing Date, the Buyer shall deliver to the Seller a written statement setting forth the Buyer Closing Stock Price. The Seller shall have two Business Days from the receipt of such statement to provide the Buyer with any proposed corrections with respect thereto. The Buyer shall revise such statement to reflect any corrections so proposed by the Seller to the extent such proposed corrections are required to accurately calculate the Buyer Closing Stock Price (as defined in this Agreement). Such statement (and the amount of the Buyer Closing Stock Price set forth therein), as may be so revised, shall be final and binding on all Parties. Promptly following the finalization of the Estimated Closing Statement (and no later than the Business Day prior to Closing), the Buyer shall calculate and agree with Seller the number of shares of Buyer Common Stock that comprise each of the Closing Stock Consideration and the Indemnity Escrow Shares.

(b)Fractional Shares. No fractional shares of Buyer Common Stock will be issued in connection with any payments to be made under this Agreement, but in lieu thereof the

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Seller shall receive from the Buyer an amount in cash (rounded to the nearest whole cent) equal to the product of (i) such fraction and (ii) the Buyer Closing Stock Price.

(c)Adjustment to Stock Consideration. If, from and after the date hereof and prior to the Closing (or, with respect to the Indemnity Escrow Shares, such time after the Closing that the shares are released from the Indemnity Escrow Account), any reorganization, reclassification, recapitalization, stock split, split up, reverse stock split, combination or exchange of shares, or any similar event shall have occurred with respect to the Buyer Common Stock, the Stock Consideration and any related references to shares of Buyer Common Stock, and all calculations contemplated hereby that that are based on the number of shares of Buyer Common Stock (or prices therefor), including, notwithstanding anything to the contrary, any determination of the number of shares to be released from the Indemnity Escrow Account, shall be appropriately adjusted, if and to the extent necessary, to provide to the Seller the same economic effect as contemplated by this Agreement prior to such event.

1.7Withholding. The Buyer, the Escrow Agent, each Company and any PEO, as applicable, shall be entitled to deduct and withhold from any consideration otherwise payable pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under the Code, or any other applicable state, local or non-U.S. Tax Law; provided, however, if the Buyer, the Escrow Agent or either Company, determine that any amounts are required to be deducted or withheld (other than any deduction or withholding with respect to any payments constituting compensation for services, including any payments that may be made pursuant to Section 1.9), the Buyer, the Escrow Agent or either Company, as applicable, shall use commercially reasonable efforts to provide to the Seller written notice of the intent to make such deduction or withholding prior to such deduction or withholding and to provide the Seller with the opportunity to submit documentation that no withholding or deduction is required or that a reduced rate of withholding is permitted. To the extent that amounts are so deducted or withheld by the Buyer, the Escrow Agent, or either Company and such amounts are paid over to the applicable Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made by the Buyer, the Escrow Agent or either Company, as applicable.

1.8Cancellation of Seller Options. Prior to the Closing, the Seller shall take all actions necessary, in accordance with the Seller Option Plan and Operating Agreement, to provide for the cancellation, as of immediately prior to the Closing, of all outstanding options to acquire any interests in the Seller (each such option, a “Seller Option” and each holder thereof, a “Seller Optionholder”) in connection with the Closing; provided that, if, at or prior to the Closing, a Seller Optionholder executes and delivers an Option Cancellation and Release Agreement in substantially the form attached hereto as Exhibit H (an “Option Cancellation and Release Agreement”), the Seller Optionholder shall be entitled to receive from the Seller in exchange for the cancellation of each of the Seller Optionholder’s Seller Options, one or more cash payments on the terms and conditions set forth therein (the aggregate amount of each payment payable by the Seller to a Seller Optionholder thereunder in respect of the cancellation of such Seller Optionholder’s Seller Options, an “Option Cash-Out Payment”).

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1.9Payment Cooperation.

(a)At the Seller’s request made no later than three Business Days following the date on which any amounts payable to the Seller pursuant to Section 1.5(b)(iv), Section 8.5 or Section 8.6 are determined or, in respect of any payments to be made in connection with the Closing, three Business Days prior to the Closing (as applicable, the “Option Cash-Out Payment Determination Date”), and subject to the Seller’s compliance with and the terms and conditions of this Section 1.9 and the Buyer’s receipt of a duly executed Option Cancellation and Release Agreement in respect of each applicable Seller Optionholder, the Buyer shall: (i) cause the professional employer organization of the applicable Company (the “PEO”), or if different, the Company’s then current payroll provider, to pay the applicable Option Cash-Out Payment (as set forth on the applicable Option Payment Schedule (as defined below)) directly to the applicable Seller Optionholder through payroll and (ii) direct the PEO of the applicable Company, or if different, the Company’s then current payroll provider, to pay to the applicable Governmental Entity any amount deducted and withheld under the Code or any other applicable state or local Tax Law in connection therewith.

(b)To the extent the Seller requests that the Buyer direct any payments be made pursuant to Section 1.9(a) then, with respect to each applicable payment event, subject to the other terms and conditions of this Section 1.9:

(i)on or prior to the applicable Option Cash-Out Payment Determination Date, the Seller shall deliver to the Buyer a schedule (an “Option Payment Schedule”) setting forth, (A) with respect to each Seller Optionholder, the name and address of such Seller Optionholder and the aggregate amount of the Option Cash-Out Payment to be paid to such Seller Optionholder in connection with such payment event, and (B) the aggregate amount of Option Cash-Out Payments payable pursuant thereto in respect of all such Seller Optionholders in connection with such payment event;

(ii)the Buyer shall cause the Aggregate Closing Option Cash-Out Payment Amount, if any, to be paid in accordance with the Option Payment Schedule through the next regularly scheduled payroll occurring no earlier than the fifth Business Day following the Closing; and

(iii)with respect to any Option Cash-Out Payments that become payable by the Seller in connection with its receipt of (or right to receive) amounts pursuant to Section 1.5(b)(iv), Section 8.5 or Section 8.6 (each, a “Post-Closing Option Cash-Out Payment”), the Buyer shall, (A) as promptly as practicable following receipt of the applicable Option Payment Schedule, notify the Seller of the payor’s portion of the applicable payroll, employment or similar taxes payable in respect of the Option Cash-Out Payments set forth on such Option Payment Schedule and (B) use commercially reasonable efforts to cause the applicable Option Cash-Out Payments to be paid at the next regularly scheduled payroll occurring no earlier than the fifth Business Day following the Buyer’s receipt of both (I) the applicable Option Payment Schedule and (II) immediately available funds in cash from the Seller (subject to Section 1.9(d)) sufficient for Buyer to pay (1) the Option Cash-Out Payments specified on the applicable Option Payment Schedule and (2) the payor’s portion of the applicable payroll, employment or similar taxes payable in respect thereof.

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(c)Notwithstanding anything to the contrary herein, the Seller hereby acknowledges and agrees that the Buyer and its Affiliates (including, following the Closing, the Companies), (x) will have no responsibility or Liability for the accuracy, completeness or validity of the contents of the Option Payment Schedule, (y) shall be entitled to rely thereon and to make payments in accordance with such Option Payment Schedule without any obligation to investigate or verify the accuracy or correctness thereof and (z) shall not be obligated to make, direct or cause any payments under this Section 1.9 (and shall have no Liability in respect of any amounts payable by Seller in respect of any Seller Options) unless and until the Buyer has received from the Seller the applicable Option Payment Schedule and immediately available funds in cash (subject to Section 1.9(d) and except with respect to the payment of the Aggregate Closing Option Cash-Out Payment Amount and the payor’s portion of applicable payroll, employment or similar taxes payable in respect thereof) funds sufficient for Buyer to pay (A) the Option Cash-Out Payments specified on the applicable Option Payment Schedule and (B) the payor’s portion of the applicable payroll, employment or similar taxes payable in respect thereof. None of the Buyer or any of its Affiliates (including the Companies) shall have any Liability to the Seller or any other Person (including any Seller Optionholder) arising or resulting from or otherwise in connection with the Option Payment Schedule or any payments made in accordance with this Section 1.9, including any claim that the amounts payable pursuant to or based on information set forth in the Option Payment Schedule are incomplete or inaccurate or that any Person was entitled to receive payment of any other amount or in any other form, subject to actual payment of the amounts set forth in the Option Payment Schedule to such Person (subject to applicable withholding) in accordance therewith and with this Agreement. Prior to the Closing, the Seller will use commercially reasonable efforts to ensure that each Company’s PEO has as of the Closing all information necessary with respect to each Seller Optionholder to enable the PEO to make payment of the Aggregate Closing Option Cash-Out Payment Amount, including to calculate the amount of any applicable withholding and the payor’s portion of any applicable payroll, employment or similar taxes.

(d)The funds to be used by the Buyer to make any Option Cash-Out Payments and to pay the payor’s portion of applicable payroll, employment or similar taxes payable in respect thereof pursuant to this Section 1.9 (other than the Aggregate Closing Option Cash-Out Payment Amount and the payor’s portion of applicable payroll, employment or similar taxes payable in respect thereof) shall be conveyed to Buyer via payment of immediately available funds by the Seller to the Buyer; provided that the Buyer may obtain all or a portion of such funds by (i) the Buyer’s retention (to the extent mutually agreed by the Buyer and the Seller) of funds otherwise then payable by the Buyer to the Seller in cash hereunder or (ii) the Escrow Agent’s payment to the Buyer (to the extent mutually agreed by the Buyer and the Seller) of immediately available funds in cash otherwise then payable by the Escrow Agent to the Seller hereunder.

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ARTICLE II

REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER

The Seller represents and warrants to the Buyer that, except as set forth in the corresponding section of the Disclosure Schedule (subject to Section 11.12), the statements contained in this Article II are true and correct as of the date of this Agreement and as of the Closing Date, except if a statement speaks as of a specific date, such statement was true and correct as of such specific date.

2.1Organization; Standing. The Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Seller is a holding company and other than the Equity Interests of the Companies does not otherwise own or hold any properties or assets, including any properties or assets used (or held for use) in connection with the conduct or operation of the Business.

2.2Authority; No Conflict; Required Filings and Consents.

(a)The Seller has all requisite limited liability company power and authority to enter into this Agreement, and each other Transaction Document to which it is or will be a party, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Seller of this Agreement, and each other Transaction Document to which it is or will be a party, and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized by all necessary limited liability company action on the part of the Seller. This Agreement and each other Transaction Document to which the Seller is (or will be) a party has been, or when executed and delivered will be, duly and validly executed and delivered by the Seller and constitutes, or will upon execution and delivery thereof constitute, the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to the Bankruptcy and Equity Exception.

(b)The execution, delivery and performance by the Seller of this Agreement does not, and the execution, delivery and performance of each other Transaction Document to which the Seller is or will be a party will not, and the consummation by the Seller of the transactions contemplated hereby and thereby will not, (i) conflict with, or result in any violation or breach of, any Organizational Documents of the Seller, (ii) conflict with, or result in any violation or breach of, or constitute a default (or give rise to any right of termination or result in the cancellation, acceleration of any obligation or loss of any right or benefit) under (with or without notice or lapse of time, or both), require a consent or waiver under, or require the payment of a penalty under any of the terms, conditions or provisions of any Contract to which the Seller is a party or by which the Seller or any of its properties or assets is bound, or result in the imposition of any Lien on any of the Seller’s properties or assets or (iii) subject to compliance with the requirements specified in clauses (i), (ii) and (iii) of Section 2.2(c), conflict with or violate any permit, concession, franchise, license, assessment, judgment, injunction, order, decree, or Law applicable to the Seller or any of its properties or assets, except in the case of clauses (ii) and (iii) of this Section 2.2(b) for any such conflicts, violations, breaches, defaults, terminations, cancellations, accelerations, losses, penalties or Liens, and for any consents or waivers not obtained, that, individually or in the aggregate, would not reasonably be expected to have a Seller Material Adverse Effect.

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(c)No consent, waiver, approval, license, permit, order or authorization of, or registration, declaration, notice or filing with, any Governmental Entity or Self-Regulatory Organization is required by or with respect to the Seller in connection with the execution, delivery and performance by the Seller of this Agreement and the other Transaction Documents to which it is or will be a party, or the consummation by the Seller of the transactions contemplated hereby and thereby, except for (i) the approval of FINRA with respect to the change of ownership or control of the Broker-Dealer Company pursuant to FINRA Rule 1017 with no material restrictions or conditions, (ii) compliance with the applicable requirements of the HSR Act and (iii) such notifications with state securities regulators with which any Company is registered regarding the change of ownership or control of such Company that are not subject to any consent, authorization, waiver, permit or approval on the part of the applicable regulator and which, if not made, would not, individually or in the aggregate, reasonably be expected to have a Seller Material Adverse Effect.

2.3Title to Interests.

(a)The Seller is the record and beneficial owner of, and has good and valid title, free and clear of any Liens (other than transfer restrictions under applicable securities Laws) to, the Interests. Other than as it relates to actions requiring approval of the Seller Board pursuant to the Operating Agreement (and satisfied in connection with the transactions contemplated hereby by the Seller Transaction Consent), or pursuant to the PFS Operating Agreement or the PLLC Operating Agreement, as applicable, there are no voting trusts, irrevocable proxies or other Contracts or understandings to which the Seller is a party or otherwise bound restricting the transfer of the Interests or otherwise relating to the voting or consent of, or dividend rights in respect of or other disposition of, the Interests.

(b)As of the date hereof, the Seller does not beneficially own any shares of Buyer Common Stock or any other Equity Interests in the Buyer or any of its Affiliates.

2.4Litigation. There is no action, suit, proceeding, claim, arbitration or investigation pending against the Seller, and, to the Knowledge of the Seller, no such action, suit, proceeding, claim, arbitration or investigation has been threatened since January 1, 2020, and there are no judgments, orders, writs, decrees, rulings or injunctions outstanding against the Seller, except, in each such case, as would not, individually or in the aggregate, reasonably be expected to have a Seller Material Adverse Effect.

2.5Securities Matters.

(a)Experience; Risk. The Seller has such knowledge, sophistication and experience in financial and business matters that it is capable of evaluating the merits and risks of the receipt of the Stock Consideration, and of protecting its interests in connection herewith.

(b)Investment. The Seller is acquiring the Stock Consideration for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof, and has no present intention of selling, granting any participation in or otherwise distributing the same. The Seller understands that the Stock Consideration has not been registered under the Securities Act, and is being issued to the Seller in reliance upon a specific

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exemption from the registration provisions of the Securities Act, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Seller’s representations as expressed herein.

(c)Access to Information. The Seller acknowledges that, as of the date hereof, it has been afforded: (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Buyer concerning the terms and conditions of this Agreement and the transactions contemplated hereby and the Stock Consideration, and the merits and risks of investing in the Stock Consideration, (ii) access to information about the Buyer and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment, (iii) the opportunity to obtain such additional information that the Buyer possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment, and (iv) the opportunity to ask questions of management of the Buyer. The Seller has sought such accounting, legal and Tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Stock Consideration.

(d)Accredited Investor. The Seller is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the SEC, and has accurately completed and delivered to the Buyer the Accredited Investor Questionnaire in the form attached hereto as Exhibit D.

(e)Restricted Securities; Rule 144. The Seller understands that the shares of Buyer Common Stock that comprise the Stock Consideration are characterized as “restricted securities” under U.S. federal and state securities Laws and that under such Laws and applicable regulations the Stock Consideration may be resold without registration under the Securities Act only in certain limited circumstances. The Seller acknowledges that the Stock Consideration must be held indefinitely unless a sale of such Stock Consideration is subsequently registered under the Securities Act and qualified by state securities authorities or an exemption from such registration and qualification is available. The Seller is aware of the provisions of Rule 144 promulgated under the Securities Act, which rules permit the limited resale of shares purchased in a private placement or shares owned by certain Persons subject to the satisfaction of certain conditions, which may include the time and manner of sale, the holding period for the Stock Consideration, and requirements relating to the Buyer which are outside of the Seller’s control, and which the Buyer is under no obligation and may not be able to satisfy.

(f)No General Solicitation. The Seller became aware of the transactions contemplated by this Agreement, including the Stock Consideration, solely by means of direct contact with the Buyer or one of its representatives, and not following or as a result of any form of general solicitation or general advertising, including methods described in Section 502(c) of Regulation D under the Securities Act.

(g)Residence. The principal place of business of the Seller is at the office or offices identified in the address of the Seller set forth in Section 11.1.

2.6Brokers. Except for Broadhaven Securities, LLC and its affiliates and subsidiaries, no agent, broker, investment banker, financial advisor or other Person has acted, directly or

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indirectly, as a broker, finder, or financial advisor for the Seller or any of its Affiliates in connection with the transactions contemplated by this Agreement. No Person is or shall be entitled, as a result of any action, agreement or commitment of the Seller or any of its Affiliates, to any broker’s, finder’s, financial advisor’s or other similar fee, commission or payment in connection with any of the transactions contemplated by this Agreement for which the Buyer or any of its Subsidiaries or Affiliates, including the Companies, would be liable or obligated to make any such payment.

2.7No Other Representations or Warranties; Reliance. The Seller hereby acknowledges and agrees that, except for the representations and warranties set forth in Article IV (in each case, as qualified and limited by the Buyer Disclosure Schedule) or in any certificate delivered by the Buyer at the Closing pursuant to Section 7.3(a) or 7.3(b), none of the Buyer or any of its Affiliates, equityholders, directors, managers, officers, employees, agents, representatives or advisors, or any other Person, has made or is making, and the Buyer hereby expressly disclaims, any express or implied representation or warranty with respect to the Buyer or any of its Affiliates, including with respect to any information provided or made available to the Seller, a Company or any of their respective Affiliates, equityholders, directors, managers, officers, employees, agents, representatives or advisors, or any other Person. The Seller, for itself and on behalf of its Affiliates, including the Companies, acknowledges that it is relying on its own independent investigation, verification and analysis in entering into the transactions contemplated hereby, including with respect to the financial condition, results of operations, assets, liabilities, properties and projected operations of the Buyer and, in making its determination to proceed with the transactions contemplated by this Agreement, the Seller and the Companies have relied solely on the results of their own independent investigation, verification and analysis and have relied solely on the representations and warranties of the Buyer set forth in this Agreement (in each case as qualified and limited by the Buyer Disclosure Schedule) or in the certificate(s) delivered at the Closing pursuant to Sections 7.3(a) and 7.3(b)

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES

The Seller represents and warrants to the Buyer that, except as set forth in the corresponding section of the Disclosure Schedule (subject to Section 11.12), the statements contained in this Article III are true and correct as of the date of this Agreement and as of the Closing Date, except if a statement speaks as of a specific date, such statement was true and correct as of such specific date.

3.1Organization, Standing and Power.

(a)Each Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of New York, and has all requisite limited liability company power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted.

(b)Each Company is duly qualified to do business and is in good standing as a foreign company in each jurisdiction in which the character of the properties it owns, operates or

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leases or the nature of its activities makes such qualification necessary, except for such failures to be so qualified or in good standing that, individually or in the aggregate, would not reasonably be expected to be material to the Companies, taken as a whole.

(c)The Seller has made available to the Buyer true, correct and complete copies of each Company’s Organizational Documents.

3.2Capitalization.

(a)The Seller owns of record all of the issued and outstanding Interests, which Interests represent all of the issued and outstanding membership interests of the Companies.

(b)Other than the Interests owned by the Seller, (i) there are no Equity Interests of any Company, or any security that is exchangeable for, convertible into or exercisable for or that grants the right to subscribe for (or that would otherwise require a Company to issue, sell or transfer) any such Equity Interests, issued, reserved for issuance or outstanding, (ii) there are no options, warrants, equity securities, calls, rights or Contracts obligating any Company to issue, exchange, transfer, deliver or sell additional Equity Interests of such Company or any security or rights convertible into or exchangeable or exercisable for or granting the right to subscribe for any such Equity Interests, or obligating any Company to grant, extend or amend or enter into any such option, warrant, Equity Interest, call, right or Contract, and (iii) there are no outstanding stock appreciation, phantom stock, profit participation, phantom equity or other equity appreciation or other equity or equity-based compensation rights or arrangements with respect to any Company. Except pursuant to the PFS Operating Agreement or the PLLC Operating Agreement, as applicable, there are no voting trusts, irrevocable proxies or other Contracts or understandings to which a Company is a party or otherwise bound relating to or restricting the voting or consent of, or sale, transfer or other disposition of, or any dividend rights in respect of, any Equity Interests of such Company, including the Interests issued by such Company. Neither Company is a party to or otherwise bound by any Contract or understanding with any Person obligating it, nor does either Company otherwise have any obligations, contingent or otherwise, to repurchase, redeem or otherwise acquire any Equity Interests of (or to make any payment, including any dividend or distribution in respect of any Equity Interests of) such Company, including the Interests issued by such Company.

(c)All of the outstanding Interests (i) were validly issued and are fully paid and nonassessable and (ii) were issued without violation of and in accordance with the applicable Company’s Organizational Documents. None of the Interests were issued in violation of any (and there are outstanding no) purchase options, call options, rights of first refusal, preemptive rights, subscription rights or similar rights under the Act or other applicable Law, any Company’s Organizational Documents or any Contract to which any Company is a party or is otherwise bound. All of the Interests were issued without violation of applicable Laws.

3.3Subsidiaries. Neither Company has any Subsidiaries. Neither Company owns or holds (or has the obligation or right to acquire) any Equity Interests of any other Person.

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3.4Authority; No Conflict; Required Filings and Consents.

(a)Each Company has all requisite limited liability company power and authority to enter into this Agreement, and each other Transaction Document to which it is or will be a party, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by each Company of this Agreement, and each other Transaction Document to which it is or will be a party, and the consummation by such Company of the transactions contemplated hereby and thereby have been duly authorized and approved by all necessary limited liability company action on the part of such Company. This Agreement and each other Transaction Document to which a Company is (or will be) a party has been, or when executed and delivered by such Company, will be, duly executed and delivered by such Company and constitutes, or will upon execution and delivery thereof constitute, the legal, valid and binding obligation of such Company, enforceable against such Company in accordance with its terms, subject to the Bankruptcy and Equity Exception.

(b)The execution, delivery and performance of this Agreement by the Seller and each Company does not, and the execution, delivery and performance of each other Transaction Document to which the Seller or any Company is or will be a party will not, and the consummation by the Seller and the Companies of the transactions contemplated hereby and thereby will not, (i) conflict with, or result in any violation or breach of, the Organizational Documents of either Company, (ii) conflict with, or result in any violation or breach of, or constitute a default (or give rise to any right of termination or result in the cancellation, acceleration of any obligation or loss of any right or benefit) under (with or without notice or lapse of time, or both), require a consent or waiver under, or require the payment of a penalty under any of the terms, conditions or provisions of any Contract to which any Company is a party or by which any Company’s properties or assets is bound or subject, or result in the imposition of any Lien on any of the properties or assets of any Company, or (iii) subject to compliance with the requirements specified in clauses (i), (ii) and (iii) of Section 3.4(c), conflict with or violate any permit, concession, franchise, license, assessment, judgment, injunction, order, decree, or Law applicable to any Company or any of its respective properties or assets, except in the case of clauses (ii) and (iii) of this Section 3.4(b) for any such conflicts, violations, breaches, defaults, terminations, cancellations, accelerations, losses, penalties or Liens, and for any consents or waivers not obtained, that, individually or in the aggregate, would not reasonably be expected to be, material to the Business or the Companies, taken as a whole.

(c)No consent, waiver, approval, license, permit, order or authorization of, or registration, declaration, notice or filing with, any Governmental Entity or Self-Regulatory Organization is required by or with respect to any Company in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents to which such Company is or will be a party, or the consummation by such Company of the transactions contemplated hereby and thereby, except for (i) approval of FINRA with respect to the change of ownership or control of the Broker-Dealer Company pursuant to FINRA Rule 1017 with no material restrictions or conditions, (ii) compliance with the applicable requirements of the HSR Act and (iii) such notifications with state securities regulators with which any Company is registered regarding the change of ownership or control of such Company that are not subject to any consent, authorization, waiver, permit or approval on the part of the applicable regulator and which, if not made, would not, individually or in the aggregate, reasonably be expected to be

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material to the Business or the Companies, taken as a whole, or to prevent or materially impair or delay the Seller’s or a Company’s ability perform its obligations hereunder and to consummate the transactions contemplated by this Agreement.

3.5Financial Statements.

(a)Section 3.5(a) of the Disclosure Schedule contains (i) the audited consolidated statements of financial condition of the Seller and the Companies as of each of December 31, 2022, December 31, 2021 and December 31, 2020 and, in each case, the related consolidated statements of operations, changes in the Seller’s member’s equity and consolidated statement of cash flows of the Seller and the Companies for each of the years then ended, including the related notes thereto (the “Seller Financial Statements”), (ii) the audited statements of financial condition of PLLC as of each of December 31, 2022, December 31, 2021 and December 31, 2020 and, in each case, the related statements of operations, changes in member’s equity and cash flows of PLLC for each of the years then ended, including the related notes (the “PLLC Financial Statements”) and (ii) the unaudited consolidated statement of financial condition of the Seller and the Companies as of June 30, 2023 and the related unaudited consolidated statements of operations, changes in the Seller’s members’ equity and cash flows of the Seller and the Companies for the six months ended June 30, 2023 (the “Interim Financial Statements”, and together with the Seller Financial Statements and the PLLC Financial Statements, the “Financial Statements”), in each case, including the related schedules thereto. The Financial Statements were prepared in accordance with GAAP applied on a consistent basis throughout the period involved and fairly present, in all material respects, the financial position of the Seller and the Companies (on a consolidated basis) (or, in the case of the PLLC Financial Statements, PLLC) as of the dates therein indicated and, in the case of the Seller Financial Statements the results of operations and cash flows of the Seller and the Companies (on a consolidated basis) for the periods therein specified (or, in the case of the PLLC Financial Statements, the results of operations and cash flows of PLLC for the periods therein specified), except (x) that the Interim Financial Statements do not contain notes and are subject to normal year-end adjustments (which adjustments are not material, individually or in the aggregate, to the Business or the Companies, taken as a whole) and (y) in the case of the Seller Financial Statements and the Interim Financial Statements, for those items set forth on Section 3.5(a) of the Disclosure Schedule.

(b)Other than (i) as specifically disclosed or reserved against in the Interim Financial Statements, (ii) Liabilities incurred in the ordinary course of business consistent with past practice since June 30, 2023 (the “Balance Sheet Date”) and (iii) Contractual Liabilities not required to be reflected as a liability on a balance sheet prepared in accordance with GAAP (none of which results from or arises out of any breach of such Contract or any warranty, tort, violation of Law, infringement, misappropriation, negligence or fraud), there are no Liabilities of the Companies (whether or not required to be set forth on a balance sheet prepared in accordance with GAAP) that would, individually or in the aggregate, reasonably be expected to be material to the Business or the Companies, taken as a whole.

(c)The books, records and accounts of the each Company are accurate and complete in all material respects and are maintained in all material respects in accordance with good business practice and all applicable Laws. The Seller maintains with respect to each Company a system of internal accounting controls designed to provide reasonable assurance

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regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP in all material respects, including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to accurately and fairly reflect the transactions and dispositions of the assets of such Company; and (iii) access to assets is permitted only in accordance with management’s general or specific authorization.

(d)The reports of the PLLC’s independent auditor regarding the audited financial statements of PLLC for each of the years in the three-year period end December 31, 2022 and of the Seller’s independent auditor regarding the Seller Financial Statements have not been withdrawn, supplemented or modified, and neither the Seller nor PLLC has received any written communication from its independent auditor concerning any such withdrawal, supplement or modification. There (i) are no material weaknesses or significant deficiencies (as defined in Regulation S-X promulgated under the Exchange Act) in the design or operation of the internal controls maintained by the Seller with respect to the Companies likely to adversely affect the Seller’s ability to record, process, summarize and report financial data of a Company and (ii) the system of internal control over financial reporting maintained by the Seller with respect to the Companies is reasonable and sufficient for a business of its size to record transactions as necessary in order to permit preparation of financial statements in accordance with GAAP and applicable Law. There have been no instances of fraud or corporate misappropriation, whether or not material, that involve (i) any employee or member of management of the Seller or any of the Companies who has a significant role in the Seller’s system of internal controls over financial reporting or (ii) to the Seller’s Knowledge, any other employee or member of management of Seller or a Company.

3.6Absence of Certain Changes.

(a)Since June 30, 2023, (i) no Changes have occurred that, individually or in the aggregate, have had or would reasonably be expected to have a Company Material Adverse Effect and (ii) other than (A) in connection with the transactions contemplated by this Agreement or (B) as done following the date hereof in accordance with Section 5.1, including (1) to the extent set forth on Schedule 5.1, (2) as required by applicable Law or (3) with the Buyer’s prior written consent, the Seller and the Companies have carried on the Business in the ordinary course consistent with past practice.

(b)Except as done following the date hereof in accordance with Section 5.1 (including (i) to the extent set forth on Schedule 5.1, (ii) as required by applicable Law or (iii) with the Buyer’s prior written consent), neither the Seller nor any Company has taken any action since June 30, 2023 that would require the Buyer’s consent under Section 5.1(A) through 5.1(S) if such action were taken from the date of this Agreement through the Closing.

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3.7Taxes.

(a)The Companies have filed on a timely basis all income and other material Tax Returns that they were required to file, and all such Tax Returns are true and correct in all material respects. The Companies have paid on a timely basis all material Taxes that were due and payable, whether or not shown (or required to be shown) on a Tax Return.

(b)All material Taxes that either Company is or was required by applicable Law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the appropriate Governmental Entity.

(c)No material deficiency relating to either Company with respect to Taxes of such Company has been proposed, asserted or assessed in writing against such Company the resolution of which is still pending.

(d)With the exception of customary commercial leases or Contracts that are not primarily related to Taxes entered into in the ordinary course of business and Liabilities thereunder, neither Company (i) has any Liability as a transferee or successor or pursuant to any contractual obligation for any Taxes of any Person other than such Company, or (ii) is a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement.

(e)Each Company has made available to the Buyer copies of all material Tax Returns of such Company relating to Taxes for all taxable periods beginning on or after January 1, 2019.

(f)No examination, claim, action, suit, proceeding, investigation or audit in respect of any Tax Return of either Company by any Governmental Entity is currently in progress or, to the Seller’s Knowledge, pending.

(g)Neither Company has been informed in writing by any jurisdiction in which such Company did not file a Tax Return that the jurisdiction believes that such Company was required to file any Tax Return that was not filed or is subject to Tax in such jurisdiction.

(h)Neither Company has (i) waived any statute of limitations with respect to Taxes or agreed to extend the period for assessment or collection of any Taxes, which waiver or extension is still in effect, (ii) requested any extension of time within which to file any Tax Return, which Tax Return has not yet been filed, or (iii) executed or filed any power of attorney with any taxing authority, which is still in effect.

(i)Since inception, each Company has been properly treated as disregarded entities under Treasury Regulation Section 301.7701-3(b)(1)(ii) for U.S. federal income Tax purposes.

(j)None of the assets held by either Company is a United States real property interest within the meaning of Section 897(c)(1) of the Code.

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(k)There are no material Liens with respect to Taxes upon any of the assets of either Company, other than with respect to Taxes not yet due and payable or Taxes being contested in good faith by appropriate proceedings.

(l)Neither Company has engaged in a “reportable transaction” as set forth in Treasury Regulation section 1.6011-4(b).

(m)Neither Company (i) has, or has ever had, a permanent establishment in any country other than the country in which it is organized and resident or (ii) has engaged in a trade or business in any country other than the country in which it is organized and resident that subjected it to Tax in such country.

(n)Notwithstanding anything herein to the contrary, this Section 3.7 and Section 3.12 contain the only representations or warranties of the Seller or either Company with respect to Taxes, and no other statements in this Agreement shall be deemed to be a representation or warranty relating to Taxes.

For purposes of this Section 3.7, any reference to each Company shall be deemed to include any Person that merged with or was liquidated or converted into such Company, as applicable.

3.8Owned and Leased Real Properties.

(a)Neither Company owns, or has at any time owned, any real property or any interest in any real property.

(b)Section 3.8(b) of the Disclosure Schedule sets forth a complete list of all real property leased or subleased by a Company as tenant or lessee (the “Company Leased Property”) and all of the leases and other agreements pursuant to which a Company uses or occupies the Company Leased Property (the “Leases”). The applicable Company, (i) has a valid, binding and enforceable leasehold interest in each Company Leased Property, free and clear of all Liens (other than Permitted Liens), and (ii) is not (and to the Seller’s Knowledge, the other party is not) in default on any Lease and has not exercised any termination rights with respect thereto. The Company Leased Property constitutes all interests in real property currently used, occupied or held for use in connection with the business of the Companies and which are necessary for the operation of the business of the Companies as currently operated.

3.9Intellectual Property and Data Privacy.

(a)Section 3.9(a) of the Disclosure Schedule contains a complete and accurate list of all Patent Rights, registered Trademarks, registered Copyrights, applications for each of the foregoing, domain names, and material unregistered Trademarks, in each case, owned or purported to be owned by a Company (the “Company Registered Intellectual Property”), and in each case, specifying the applicable jurisdiction, title, record owner, and application, registration or issuance date and number. All necessary registration, maintenance, renewal, and other relevant filing fees due have been timely paid and all necessary documents and certificates in connection therewith have been timely filed with the relevant Governmental Entity, Self-Regulatory Organization, domain registrar or other applicable authority for the purposes of maintaining the Company

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Registered Intellectual Property in full force and effect. All Company Registered Intellectual Property is subsisting, valid and enforceable.

(b)The Companies (i) exclusively own all right, title and interest in and to all Company Owned Intellectual Property and (ii) have valid, enforceable and continuing rights (pursuant to a written license) to use all Company Licensed Intellectual Property as the same is used in the business of the Companies, in each case of (i) and (ii), free and clear of all Liens, other than Permitted Liens. The Company Owned Intellectual Property and the Company Licensed Intellectual Property (when used within the scope of the applicable license) collectively constitute all Intellectual Property used in, necessary and sufficient for the conduct of the business of the Companies as currently conducted.

(c)Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (either alone or in combination with any other event) will result in: (i) the loss or impairment of, or any Lien on, any Company Intellectual Property; (ii) the release, disclosure or delivery of any source code included in any Company Software to any third party; (iii) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any Company Intellectual Property; or (iv) the payment of any additional consideration to, or the reduction of any payments from, any Person with respect to any Company Intellectual Property.

(d)To the Seller’s Knowledge, no third party is infringing, misappropriating, or otherwise violating or has infringed, misappropriated, or otherwise violated any Company Intellectual Property, and no such claims have been made against any Person by the Companies (or any Person on the Companies’ behalf).

(e)The Companies have taken adequate measures to maintain in confidence all trade secrets and confidential information comprising a part of the Company Intellectual Property or otherwise pertaining to the Companies or the business of the Companies (including confidential trading information and other trade secrets and confidential information of any Person to whom a Company has a confidentiality obligation), which measures are reasonable in the industry in which the Companies operate. No trade secret or confidential information material to a Company has been authorized to be disclosed or has been actually disclosed by a Company to any Person, other than pursuant to a valid and enforceable written non-disclosure agreement restricting the disclosure and use of such information. To the Seller’s Knowledge, no such Person is in violation of any such agreement or has otherwise misappropriated any such information. No source code for any Company Software has been delivered, licensed or made available by a Company to, or accessed by, any escrow agent or other Person, other than employees or contractors subject to written non-disclosure agreements restricting the disclosure and use of such source code. Neither Company is a party to any source code escrow agreement or otherwise obligated to provide to any Person (or escrow agent for the benefit of any Person) the source code for any Company Software.

(f)The Companies and the conduct and operation of the business of the Companies (including the creation, licensing, marketing, importation, offering for sale, sale, or use of the products and services of the business of the Companies) do not infringe, dilute, misappropriate, or otherwise violate, and have not, since January 1, 2020, infringed, diluted, misappropriated, or otherwise violated, any Intellectual Property of any third party. There is no

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action, suit, proceeding, claim, arbitration or investigation pending or, to the Seller’s Knowledge, threatened against a Company, or, to the Seller’s Knowledge, pending or threatened against any other Person who may be entitled to be indemnified, defended, held harmless, or reimbursed by a Company (a) involving allegations of infringement, dilution, misappropriation, or other violation of any Intellectual Property of any third party or (b) challenging the ownership, use, validity or enforceability of any Company Intellectual Property. Since, January 1, 2020, neither Company has received any written claim or notice alleging any such infringement, dilution, misappropriation, or violation or challenging any such ownership, use, validity, or enforceability, and, to the Seller’s Knowledge, there are no facts or circumstances that would reasonably form the basis for any such claim or challenge.

(g)Neither Company has received any funding from or used any facilities or personnel of any Governmental Entity or educational institution to develop the Company Owned Intellectual Property in a manner that would result in the grant of any rights to any Company Owned Intellectual Property.

(h)The Companies have executed valid and enforceable written agreements with all past and present founders, officers, directors, employees, consultants and independent contractors pursuant to which such Persons have (i) agreed to hold all trade secrets and confidential information of the Companies in confidence both during and after their employment or retention, as applicable, and (ii) validly and presently assigned to a Company all of such Person’s rights, title and interest in and to all Intellectual Property created or developed for a Company in the course of their employment, service or retention thereby.

(i)The Companies own or have a valid right to access and use all the Company IT Systems pursuant to written agreements. The Company IT Systems (i) are adequate for, and operate and perform in all material respects as required in connection with, the operation of the business of the Companies as currently conducted, and (ii) to the Seller’s Knowledge, do not contain any viruses, worms, Trojan horses, bugs, faults or other devices, errors, contaminants or effects that (A) materially disrupt or materially affect in an adverse manner the functionality of any Company IT Systems, or (B) enable or assist any Person to access without authorization any Company IT Systems. To the Seller’s Knowledge, there has been no unauthorized access to or breach or violation of, or any material disruption of or data loss, service level failure, material outage or material unscheduled downtime with respect to, any such Company IT Systems. The Companies (i) take and have taken reasonable measures to maintain and protect the performance, confidentiality, integrity and security of the Company IT Systems, and (ii) have reasonable back-up and disaster recovery arrangements in the event of a failure of the Company IT Systems.

(j)No open source software is or has been included, incorporated or embedded in, linked to, combined, made available or distributed with, or used in the development, maintenance, operation, delivery or provision of any Company Software, in each case, in a manner that requires or obligates a Company to: (i) disclose, contribute, distribute, license or otherwise make available to any Person (including the open source community) (A) the source code for any Company Software or (B) any Company Software for no or nominal charge; (ii) license any Company Software for making modifications or derivative works; or (iii) grant a license to, or refrain from asserting or enforcing any of, its Patent Rights. The Companies have complied, and

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are in compliance, in all material respects with the terms and conditions of all relevant licenses for open source software used in the business of the Companies.

(k)Neither Company has included in any Company Software, and, to the Seller’s Knowledge, none of the Company Software contains any “back door”, “drop dead device”, “time bomb” (as such terms are commonly understood in the software industry) or any other contaminants, or any other code designed or intended to have, or capable of performing or that without user intent will cause, any of the following functions: (i) disrupting, disabling, harming or otherwise impeding in any manner the operation of, or providing unauthorized access to, any computer or other device on which such Company Software is stored, installed or used; (ii) damaging or destroying any data or file without the user’s consent; or (iii) sending information to a Company or any other Person. None of the Company Software (x) constitutes, contains or is considered “spyware” or “trackware” (as such terms are commonly understood in the software industry), (y) records a user’s actions without such user’s knowledge or (z) employs a user’s Internet connection without such user’s knowledge to gather or transmit information on such user or such user’s behavior. The Companies implement and maintain in all material respects, and have implemented and maintained in all material respects, industry standard procedures to mitigate against the likelihood that the Company Software contains any contaminant or other Software routines or hardware components designed to permit unauthorized access to or disable, erase or otherwise harm Software, hardware or data. All Company Software was created and developed solely by employees of, or independent contractors engaged by, the Companies within the scope of their employment or engagement, and all such Company Software was developed in the United States.

(l)The Companies and, to the Seller’s Knowledge, all Persons acting on behalf of each Company have at all times since January 1, 2018 complied in all material respects with (i) all applicable Privacy Laws, (ii) all of the Companies’ policies and notices regarding Personal Information, and (iii) all of the Companies’ contractual obligations with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security (technical, physical or administrative), disposal, destruction, disclosure or transfer (including cross-border) (“Processing”) of Personal Information (collectively, “Privacy Requirements”). The Companies have implemented and maintain adequate policies, procedures and systems for receiving and appropriately responding to requests from individuals concerning their Personal Information. None of the Companies’ or the Business’s privacy policies or notices have contained any material omissions or been misleading or deceptive.

(m)The Companies have (i) implemented and maintained reasonable and appropriate administrative, technical and organizational safeguards, at least consistent with practices in the industry in which the Companies operate, to protect the Company IT Systems and all Personal Information and other confidential data in their possession or control against loss, theft, misuse or unauthorized access, use, modification, alteration, destruction or disclosure, including by (A) implementing, maintaining and monitoring compliance with, policies and procedures regarding the Processing of such Personal Information and (B) periodic destruction of Personal Information which no longer serves a legitimate business purpose (to the extent not prohibited by applicable Law or applicable policies or contractual commitments of the Companies or the Business) and (ii) taken reasonable steps to ensure that any third party with access to Personal Information collected by or on behalf of a Company has implemented and maintained the

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same, including by imposing applicable contractual obligations on such third parties to the extent required by applicable Privacy Laws or as otherwise appropriate. The Companies have conducted commercially reasonable privacy and data security testing or audits at reasonable and appropriate intervals and have resolved or remediated any privacy or data security issues or vulnerabilities identified. The Companies have implemented reasonable disaster recovery and business continuity plans, and taken actions consistent with such plans, to the extent required, to safeguard all data and Personal Information in their possession or under their control. To the Seller’s Knowledge, any third party who has provided any Personal Information to a Company has done so in compliance with applicable Privacy Laws, including providing any notice and obtaining any consent required.

(n)There have been no (and neither Company has provided or been legally required to provide (nor has Seller or any other Person provided on any Company’s behalf) notices to any Person in connection with any) material breaches, security incidents, unauthorized access to, use or disclosure of or any other adverse events or incidents related to any Personal Information (i) in the possession or under the control of a Company or relating to the Business or (ii) Processed by or on behalf of a Company. Neither Company has provided or been legally required to provide (nor has Seller or any other Person provided on any Company’s behalf) notices to any Person in connection with) any notice to any Person in connection with an unauthorized disclosure of Personal Information. Since January 1, 2018, the Companies have not received any written notice (including from third parties acting on its behalf) of any claims, charges, investigations or regulatory inquiries related to or alleging the violation of any Privacy Requirements. To the Seller’s Knowledge, there are no facts or circumstances that would reasonably be expected to form the basis of any such notice or claim.

(o)Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (either alone or in combination with any other event) will result in: (i) any restrictions preventing the Buyer from exploiting trade secrets, confidential information, or Processing any Personal Information of or entrusted to a Company or relating to the Business in the same manner as exploited or Processed by such Company prior to the Closing or (ii) any violations of any Privacy Requirements.

3.10Contracts.

(a)Section 3.10(a) of the Disclosure Schedule lists, as of the date of this Agreement, all of the following Contracts to which the Seller (relating to the Business) or any Company is a party or by which any Company or its properties or assets is bound:

(i)any Contract (1) containing any grant to any Person by the Seller or any Company of any license, sublicense, right, consent or covenant not to assert, under or with respect to any Intellectual Property, other than non-exclusive licenses or sublicenses of Intellectual Property granted to customers in the ordinary course of business that do not permit further resale or distribution, (2) containing any grant by any Person to the Seller or any Company pursuant to which such Company is granted a license, sublicense, right, consent or covenant not to assert, under any Intellectual Property, other than licenses or sublicenses for Open Source Software or off-the-shelf Software commercially available on standard terms for a one-time or annual fee (whichever is higher) of no more than $10,000, or (3) pertaining to the development, assignment, ownership, co-existence, or concurrent use of any Company Owned Intellectual Property;

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(ii)any (A) Lease or (B) Contract (or group of related Contracts) for the lease of personal property from or to third parties providing for lease payments the remaining balance of which is in excess of $25,000, other than agreements that can be terminated by the Company party thereto on 60 or fewer days’ notice without payment by such Company of any material penalty;

(iii)any Contract with a Major Customer or Major Supplier;

(iv)any Contract establishing or relating to the operation, management or control of any partnership, joint venture, strategic alliance or similar arrangement (other than any Organizational Document of the Seller or any Company);

(v)any Contract containing covenants of (or binding upon) any Company that restrict or purport to restrict the right of such Company or the Business to compete with any Person or in any line of business or geographic area or to hire or solicit any Person for employment or other business relationship;

(vi)any Contract (or group of related Contracts) under which a Company has created, incurred, assumed or guaranteed any Indebtedness, or which imposes a Lien (other than a Permitted Lien) on any assets of a Company or that are used or held for use by Seller in connection with the Business;

(vii)any Contract for (or providing for preferential rights with respect to) the sale, lease or disposition, whether in one transaction or series of related transactions, of any significant portion of the assets of the Business or any Company, including any Equity Interests of any Person;

(viii)any Contract relating to the acquisition (whether by merger, purchase of stock or assets or otherwise) of any operating business or Equity Interests of any other Person;

(ix)any collective bargaining agreement or any other agreement with a labor or trade union, employee association, works council, or other employee representative body;

(x)any Contract providing for any employment, independent contractor or leasing or consulting arrangement with any individual that (i) provides employees with annual salary and target bonus equal to or exceeding $350,000 or contractors or other referenced individuals with annual compensation in excess of $250,000 or (ii) cannot be terminated by the Company party thereto on 60 or fewer days’ notice without payment by a Company of any severance;

(xi)any Contract providing, directly or indirectly, for severance, retention, change in control or other similar payments;

(xii)any Contract pursuant to which a Company has granted “most favored nation” pricing rights to a counterparty, or granted exclusivity in any manner to a counterparty, or that requires or purports to require a Company to acquire all of its requirements of a particular material good or service from any Person;

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(xiii)any Contract under which a Company has any outstanding, direct or indirect, guaranty or surety obligations;

(xiv)any Affiliate Contract or any Contract to which the Seller is a party relating to the Business or the lease, sublease or license of any properties or assets used or held for use by the Seller in connection therewith; and

(xv)any Contract with any customer that includes terms materially different from the terms of the applicable Company’s standard form customer agreement that has been made available to the Buyer.

(b)Except to the extent it has expired in accordance with its terms following the date of this Agreement, each Company Material Contract is valid, in full force and effect, and is binding on and enforceable against, the Company (or, if applicable, the Seller) party thereto, and, to the Seller’s Knowledge, each other party thereto. Neither Company (nor, to the extent a party, the Seller) is in violation of or in default under any Company Material Contract nor, to the Seller’s Knowledge, is any other party thereto in violation of or in default under any Company Material Contract, and to the Seller’s Knowledge, there are no circumstances, occurrences, events, or acts that exist that, with or without the giving of notice or lapse of time or both, would become violations of or defaults thereunder. No party to any Company Material Contract has exercised, or given written notice to the Company party thereto that it intends to exercise, any termination rights with respect thereto or notified the Company party thereto in writing that there is any significant dispute thereunder. The Company has made available to the Buyer true, correct and complete copies of all Company Material Contracts, together with all amendments, modifications and/or supplements thereto.

3.11Litigation. There is no (and since January 1, 2020 has been no) action, suit, proceeding, claim, audit, arbitration or investigation pending against either Company (or, to the extent relating to the Business, or the conduct thereof, the Seller), or, to the Seller’s Knowledge, any of their respective directors, officers or Business Employees, that, individually or in the aggregate, would reasonably be expected to be, material to the business of the Companies, taken as a whole. To the Seller’s Knowledge, no such action, suit, proceeding, claim, audit, arbitration or investigation has been threatened against a Company (or, to the extent relating to the Business, the Seller) since January 1, 2020. To the Seller’s Knowledge, no event has occurred or circumstances exist that would reasonably be expected to give rise to, or serve as a basis for, any such action, suit, proceeding, judgment, claim, audit, assessment, arbitration or investigation. There are no judgments, orders, writs, decrees, rulings or injunctions outstanding against a Company and neither Company is in breach or violation of (and no event has occurred or circumstances exist that may constitute or result in (with or without notice or lapse of time, or both) a breach or violation of) any such judgment, order, writ, decree, ruling or injunction, that, individually or in the aggregate, would reasonably be expected to be, material to the business of the Companies, taken as a whole.

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3.12Employee Benefit Plans.

(a)Section 3.12(a)(i) of the Disclosure Schedule contains a complete list of each material Company Employee Plan. True and complete copies of each of the following documents have been made available to the Buyer: (i) all Company Employee Plan documents, together with all amendments thereto, including with respect to any Company Employee Plan that is not in writing, a written description of the material terms thereof and (ii) with respect to each Company Employee Plan, to the extent applicable: (A) any related trust agreement, or insurance contract or documents relating to other funding arrangements, (B) any related administrative service agreement, (C) for the most recently ended three plan years, all Internal Revenue Service Form 5500s (including all schedules and financial statements attached thereto), (D) all current summary plan descriptions and subsequent summaries of material modifications, (E) a current Internal Revenue Service determination or opinion letter, and any pending applications for a determination or opinion letter, (F) the most recent financial and actuarial valuation reports, and (G) all material written correspondence to or from a Company or any Company ERISA Affiliate and any Governmental Entity during the three years preceding the date of this Agreement relating to a Company Employee Plan; and (iii) all agreements between a Company and any third-party professional employer organization, including all amendments thereto, governing the provision of professional employer organization services (“PEO Agreements”); provided, however, that, with respect to any PEO Plans, a Company is only obligated to have made available to the Buyer such summary plan descriptions and other material documents associated with such PEO Plans that such Company has in its possession, and will use commercially reasonable efforts to obtain such other reasonable documentation from the PEO that the Buyer shall request. Each Company Employee Plan and related trust complies and, since January 1, 2020, has been in compliance, in all material respects, with all requirements of applicable Laws and has been established and administered in all material respects in accordance with its terms and with all applicable Laws (including ERISA, the Code, and applicable local Laws), and no written notice has been issued to a Company by any Governmental Entity questioning or challenging such compliance. Each Company is in compliance in all material respects with its obligations under the PEO Agreements. For the avoidance of doubt, all representations hereunder relating to any Company Employee Plan shall, to the extent applicable to any Company Employee Plan that is a PEO Plan, be made only to the Seller’s Knowledge.

(b)Each Company Employee Plan that is intended to be qualified under Section 401(a) of the Code (a “Qualified Company Employee Plan”) is so qualified and has received a favorable determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Company Employee Plan is so qualified and that the plan and the trust related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, all amendments to any such Qualified Company Employee Plan for which the remedial amendment period (within the meaning of section 401(b) of the Code and applicable regulations) has expired are covered by a favorable Internal Revenue Service determination letter or opinion letter, and to the Seller’s Knowledge no fact or event has occurred that is reasonably likely to affect adversely the qualified status of any such Qualified Company Employee Plan or the exempt status of any such trust.

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(c)Since January 1, 2020, all benefits, contributions and premiums required by and due under the terms of each Company Employee Plan, the terms of any collective bargaining agreements or applicable Law have been timely paid in accordance with the terms of such Company Employee Plan, the terms of any collective bargaining agreements, and the terms of all applicable Laws, or to the extent not due, have been properly accrued under GAAP.

(d)Neither a Company nor any Company ERISA Affiliate sponsors, contributes to, has contributed to, has ever had an obligation to contribute to, or has or could reasonably be expected to have any Liability with respect to: (i) a plan subject to Title IV of ERISA, the minimum funding standards of Section 302 of ERISA or Section 412 of the Code (including any “defined benefit plan” within the meaning of Section 3(35) of ERISA); (ii) a “multiemployer plan” (as defined in Section 3(37) of ERISA); (iii) a multiple employer plan (within the meaning of Section 4063 or 4064 of ERISA or Section 413(c) of the Code, other than through the PEO Plans); or (iv) a multiple employer welfare arrangement (within the meaning of Section 3(40) of ERISA). None of the assets of any Company Employee Plan are invested in employer securities or employer real property.

(e)Other than as required under Section 4980B of the Code or other similar applicable Law or for which the covered person pays the full cost of coverage for such person and his or her beneficiaries and dependents, neither a Company nor any Company ERISA Affiliate has or could reasonably be expected to have any Liability for providing post-termination or retiree medical, life insurance or other welfare benefits. Each Company Employee Plan that is a “group health plan” as defined in Section 733(a)(1) of ERISA has complied in all material respects with the Affordable Care Act.

(f)There is no pending or, to Seller’s Knowledge, threatened action, suit, claim, audit, inquiry or proceeding relating to a Company Employee Plan or the assets thereof or a related trust, sponsor, administrator or fiduciary of such Company Employee Plan (other than routine claims for benefits in the ordinary course of business), and to the Seller’s Knowledge, there are no facts or circumstances that could form the basis for any such action, suit, claim, audit, inquiry, or proceeding. There has been no “prohibited transaction” within the meaning of Section 4975 of the Code or Section 406 of ERISA and no breach of fiduciary duty (as determined under ERISA) has occurred with respect to any Company Employee Plan.

(g)Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, either alone or in connection with any other event, will (i) give rise to any payments or benefits that would be nondeductible to a Company under Section 280G of the Code or that could result in an excise Tax on any recipient under Section 4999 of the Code, (ii) result in any payment or benefit becoming due to any current or former Business Employee or Business Service Provider, (iii) increase the amount or value of any compensation or benefits payable under any Company Employee Plan, (iv) result in any acceleration of the time of payment or vesting of any compensation or benefits or provide any additional compensatory rights or benefits (including funding of compensation or benefits through a trust or otherwise) to any current or former Business Employee or Business Service Provider, or (v) limit or restrict the ability of the Buyer or any of its Affiliates, or any Company to merge, amend or terminate any Company Employee Plan.

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(h)Each Company Employee Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has at all times been in documentary and operational compliance with Section 409A of the Code and all applicable guidance thereunder. No Company Employee Plan or other contract to which a Company is a party or otherwise bound provides any Person with a “gross up” or similar payment in respect of any Taxes or related interest or penalties that may become payable, including under Section 409A or 4999 of the Code or otherwise.

3.13Compliance With Laws; Broker-Dealer and Regulatory Matters.

(a)Each Company is conducting, and at all times since January 1, 2020 each Company has conducted, its businesses in compliance in all material respects with all applicable Laws. Since January 1, 2020, neither Company has received any written (or, to the Seller’s Knowledge, oral) notice alleging, or has been charged with, any violation in any material respect of any Laws and, to the Seller’s Knowledge, there are no facts or circumstances which would reasonably be expected to form the basis for any such allegation or violation, or that would give rise to any obligation on the part of a Company to undertake, or to bear all or any portion of the cost of, any remedial action of any nature.

(b)Neither Company, including the Broker-Dealer Company, or any of their respective current or former associated persons is, or has been, the subject of any approval, satisfaction, determination, judgment, acceptance or similar action or event requiring disclosure on SEC Form BD, Form U-4, Form U-5 or otherwise with any Governmental Entity or Self-Regulatory Organization that has not been so disclosed and made available to the Buyer.

(c)Section 3.13(c) of the Disclosure Schedule lists, as of the date of this Agreement, each past (since January 1, 2020), pending, and to the Knowledge of the Seller, threatened action, suit, proceeding, claim, arbitration or investigation brought by a Governmental Entity or Self-Regulatory Organization against a Company, including the Broker-Dealer Company, or any Business Employee (with respect to the Business or the Companies) and all claims with respect to which the Companies or any Business Employee (with respect to the Business or the Companies, or such Person’s registrations with any Governmental Entity or Self-Regulatory Organization) has been contacted by counsel for the plaintiff or claimant against or affecting a Company or any such Business Employee (with respect to the Business or any Company) or any of the assets or businesses of a Company.

(d)Neither Company is a party to, subject to, or in default under any material outstanding judgement.

(e)Other than the Broker-Dealer Company, no Company is, or is required to be, registered, licensed or qualified as a broker-dealer (or equivalent) in any jurisdiction.

(f)Neither Company (i) is, or is required to be, registered as a futures commission merchant, commodities trading adviser, commodity pool operator or introducing broker (or equivalent) under the Commodities Exchange Act or any similar Law of any jurisdiction or the requirements of any Self-Regulatory Organization or (ii) is subject to registration under the Investment Company Act of 1940 or similar Law of any jurisdiction or any Governmental Entity or Self-Regulatory Organization.

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(g)The ownership, management or use of the assets of the Companies does not require the Seller or any of the Seller’s or the Companies’ directors, managers, officers, associated persons or Business Employees to be registered as an investment advisor under the Investment Advisers Act of 1940 or as an investment advisor or investment advisor representative or agent (or equivalent) under the Laws of any jurisdiction or of any Governmental Entity or Self-Regulatory Organization.

(h)The Broker-Dealer Company is, and since January 1, 2018 has been, duly and validly registered as a broker-dealer with the SEC, a member of the Securities Investor Protection Corporation and admitted to membership in FINRA. The Broker-Dealer Company is duly registered, licensed or qualified as a broker-dealer in each jurisdiction where the conduct of the Broker-Dealer Company’s business requires such registration, licensing or qualification.

(i)Section 3.13(i) of the Disclosure Schedule lists, as of the date of this Agreement, all Self-Regulatory Organizations, securities exchanges, boards of trade, clearing organizations, trade associations and similar organizations in which any Company holds a membership or has been granted trading privileges and which memberships or trading privileges are material to the Business or the Companies, taken as a whole.

(j)The Companies, including the Broker-Dealer Company are, and at all times since January 1, 2020 have been, (i) in compliance in all material respects with the applicable provisions of the Exchange Act and the SEC rules thereunder, including the net capital requirements and customer protection requirements (including any exemptions thereto) thereof, (ii) a member in good standing with each Self-Regulatory Organization of which it is a member and in compliance in all material respects with all applicable rules and regulations of each such Self-Regulatory Organization and (iii) in compliance in all material respects with applicable state securities Laws governing the operations of broker-dealers in each state in which it operates as a broker-dealer. The Broker-Dealer Company is not subject to any agreement or arrangement with any Governmental Entity or Self-Regulatory Organization to increase its net capital requirements and customer protection requirements above the amounts required to be maintained under applicable Laws and, since January 1, 2020, the Broker-Dealer Company has maintained sufficient net capital to avoid the notice requirement under Rule 17a-11 of the Exchange Act or FINRA Rule 4120(a).

(k)No Company nor any “person associated with” a Company (as defined in the Exchange Act), is, or since January 1, 2020 (and during which time any such person was such a “person associated with” or “associated person” of a Company) has been, (i) ineligible to serve as a broker-dealer or associated person of a broker-dealer under Section 15(b) of the Exchange Act, (ii) subject to “statutory disqualification” (as defined in the Exchange Act), (iii) is subject to heightened supervision requirements, or (iv) subject to a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or suspension or revocation of the registration of the Broker-Dealer Company as a broker-dealer. To the Seller’s Knowledge, neither a Company nor any “person associated with” a Company, is under current investigation or is subject to a proceeding, whether preliminary or otherwise, that would reasonably be expected to result in a “statutory disqualification.”

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(l)The Broker-Dealer Company and any officers, Business Employees, or associated persons of the Companies, including the Broker-Dealer Company, who are required to obtain a Governmental Authorization as a broker-dealer, a principal, a representative, an agent or a salesperson (or any limited subcategory thereof) with the SEC, FINRA or other Governmental Entity or Self-Regulatory Organization as a result of such Person’s affiliation with a Company are duly registered and licensed if required and all such registrations and licenses, including any membership in or registration with any such Governmental Entity or Self-Regulatory Organization, are set forth in Section 3.13(l) of the Disclosure Schedule.

(m)Each Company, as applicable, has timely filed, in all material respects, all periodic reports, registration statements, notices, forms, filings and other documents, together with any amendments required to be made with respect thereto, required by any Governmental Entity or Self-Regulatory Organization (including the SEC and FINRA), to be filed with it since January 1, 2020, including Form BD (collectively, the “Company B-D Regulatory Documents”). The information contained in each such Company B-D Regulatory Document was complete and accurate in all material respects as of the time of filing thereof. The Broker-Dealer Company has timely paid all material fees and assessments due and payable in connection with the Company B-D Regulatory Documents.

(n)The Seller has made available to the Buyer copies of the Company B-D Regulatory Documents.

(o)Each Company, as applicable, has established and, at all times since January 1, 2020, has had in place, written policies and procedures reasonably designed to achieve compliance, in all material respects, with (i) applicable FINRA rules, (ii) the rules of any Self-Regulatory Organization of which any Company is a member, (iii) the federal securities Laws and regulations, (iv) business continuity in the event of business disruptions, (v) anti-money laundering Laws, including a written customer identification program in material compliance with applicable Law (if applicable), (vi) privacy Laws including policies and procedures with respect to the protection of nonpublic personal information about customers, clients and other third parties (if applicable and required under applicable privacy Laws), and (vii) identity theft (if applicable and required under applicable law) (the policies described in clauses (i) through (vii), the “Broker-Dealer Compliance Policies”). Complete and correct copies of the Broker-Dealer Compliance Policies have been made available to the Buyer. Except as set forth in any of the Broker-Dealer Company’s annual or other periodic compliance reviews made available to the Buyer, the Broker-Dealer Company is in, and at all times since January 1, 2020 has been, in compliance in all material respects with the Broker-Dealer Compliance Policies.

3.14Permits. Each Company has all Company Permits required under the Laws of any jurisdiction or by any Governmental Entity or Self-Regulatory Organization, a correct and complete list of which is set forth on Section 3.14 of the Disclosure Schedule, and all such Company Permits are in full force and effect. Each Company is (and since January 1, 2020 has been) in compliance in all material respects with the terms of the Company Permits. Since January 1, 2020, neither the Seller nor any Company has received any written notice or other written communication (or, to the Seller’s Knowledge, oral notice) from any Governmental Entity regarding (a) any violation of or any failure to comply in any material respect with any term, condition, provision or requirement of any Company Permit or (b) any revocation, withdrawal,

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suspension, cancellation, termination or material modification of any Company Permit. To the Seller’s Knowledge, no event has occurred and no circumstances exist that (with or without notice or lapse of time, or both) would reasonably be expected to result in a violation or failure on the part of a Company to comply with the terms of, or a revocation, withdrawal, suspension, cancellation, termination or material modification of, any Company Permit.

3.15Insurance. Section 3.15 of the Disclosure Schedule sets forth as of the date hereof the name of each Company Insurance Policy (together with the policy number, type and amount of coverage, carrier, and annual premium). The Companies are covered by the Company Insurance Policies, each of which is in full force and effect and which together provide coverage (a) as is sufficient for all material requirements of applicable Law and all Contracts to which any Company is a party or by which any Company’s properties or assets are otherwise bound and (b) in such amounts (including as to deductibles) and scope as is reasonable for the business, assets and properties of the Companies. The Seller and each applicable Company, and to the Knowledge of the Seller, each other party thereto, is in compliance in all material respects with the provisions of each Company Insurance Policy, and all premiums and amounts due and payable have been paid. No insurer under any Company Insurance Policy has notified the Seller or any Company in writing (or, to the Seller’s Knowledge, orally) that such insurer has cancelled or generally disclaimed Liability under any such Company Insurance Policy or indicated any intent to do so or not to renew any such Company Insurance Policy, and to the Seller’s Knowledge, no event has occurred which limits or impairs the rights of a Company under any Company Insurance Policy. The Seller has made available to the Buyer a true, correct and complete copy of each Company Insurance Policy together with the claims history for each Company Insurance Policy for the three-year period ending on the date of this Agreement.

3.16Labor and Employment.

(a)Seller has provided to Buyer a complete and accurate list, as of the date of this Agreement, of all Business Employees by employee identification number, title, salary, bonus opportunity, commission opportunity, incentive compensation (including incentive equity awards), date of hire and seniority or service credit, if different, classification as exempt or non-exempt, and status (i.e., whether active or on leave of absence). Section 3.16(a) of the Disclosure Schedule sets forth a complete and accurate list as of the date of this Agreement of all Business Service Providers, which schedule identifies the category of services performed and the length of engagement.

(b)No Business Employee is represented by any labor or trade union, works council, employee association or other employee representative body. Neither Company is a party to any labor or collective bargaining agreement and there are no labor or collective bargaining agreements that otherwise pertain to any employee or group of employees of a Company. No labor or trade union, works council, employee association or other employee representative body has made a pending demand for recognition, and there are no pending or, to the Seller’s Knowledge, threatened representation proceedings or petitions seeking a representation proceeding to be brought or filed with the National Labor Relations Board or other labor relations tribunal. There have been no, and to the Seller’s Knowledge there are no threatened, strikes, lockouts, slow-downs, work stoppages, picketing, or any other manner of collective labor unrest among any Business Employees.

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(c)There are no complaints, charges or claims against the Seller or any Company pending or that have been made since January 1, 2020, or to the Seller’s Knowledge that are threatened, based on, arising out of, in connection with or otherwise relating to the employment or termination of employment or failure to employ any individual by any Company or relating to the Business, including any claims of harassment, discrimination or retaliation. There is no judgment, consent decree, or arbitration award that imposes continuing remedial obligations or otherwise limits or affects any Company’s ability to manage its employees, service providers, or job applicants.

(d)Each Company is, and since January 1, 2020, (i) has been in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, wages and hours, workplace safety, occupational health and safety, vacation pay, overtime pay, pay equity, notice of termination, immigration, employee privacy, family, medical and other leaves, classification of employees, consultants and independent contractors, workers’ compensation and assessments, human rights and nondiscrimination, nonharassment, and nonretaliation in employment, “mass layoff,” the collection and payment of withholding and/or social security taxes; (ii) has been in compliance in all material respects with all material applicable requirements of the Occupational Safety and Health Act of 1970 and comparable regulations and orders thereunder, and (iii) has not engaged in any unlawful labor or employment practice. There are no claims, lawsuits, actions, audits, investigations, or complaints pending or, to the Seller’s Knowledge, threatened with respect to any such matters or otherwise in connection with the employment or service of any current or former Business Employee or Business Service Provider that, individually or in the aggregate, would reasonably be expected to be material to the Business or Companies, taken as a whole.

(e)Within the past six (6) months: (i) there has been no “mass layoff” (as defined by the WARN Act or similar state or local laws) with respect to the Companies; and (ii) neither Company has engaged in layoffs or employment terminations sufficient in number to trigger application of the WARN Act or similar state or local laws.

(f)To the Seller’s Knowledge, all Business Employees and Business Service Providers are and have been correctly classified as employees, independent contractors or otherwise for all purposes. Neither Company has any material Liability with respect to the misclassification of any Person as a partner, independent contractor, intern or temporary employee rather than as an employee, or as an “exempt” employee rather than a “non-exempt” employee (within the meaning of the Fair Labor Standards Act of 1938, as amended), or with respect to any employee leased from another employer. Each Company is in compliance in all material respects with applicable employee licensing requirements.

(g)Since January 1, 2020, to the Seller’s Knowledge, no allegations of sexual harassment or similar misconduct have been made against or involving any current or former Business Employee or Business Service Provider in connection with their service-providing relationship, and (ii) neither Company nor the Seller has entered into any settlement agreements related to allegations of sexual harassment or similar misconduct against or involving any current or former Business Employee or Business Service Provider. Each Company has promptly, thoroughly and impartially investigated all employment discrimination and sexual harassment allegations of, or against, any employee of such Company. Each Company has taken prompt

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corrective action that is reasonably calculated to prevent further discrimination and harassment with respect to each such allegation with potential merit.

(h)The current Business Employees who work or provide services in the United States have provided appropriate documentation to work in the United States. Since January 1, 2020, neither Company has been notified in writing (or, to the Seller’s Knowledge, orally) of any pending or threatened investigation by any branch or department of U.S. Immigration and Customs Enforcement (“ICE”), or other federal agency charged with administration and enforcement of federal immigration laws concerning such Company, and neither Company has, since January 1, 2020, received any “no match” notices from ICE, the Social Security Administration, or the IRS.

(i)As of the date of this Agreement, to the Seller’s Knowledge, (i) neither Company has a basis to terminate the service of any Business Employee or Business Service Provider or any director of such Company for cause, and (ii) no current Business Employee or Business Service Provider intends to resign from their employment or service with such Company.

3.17Title to Personal Properties. The Companies have good and valid title to, or, in the case of property held under a lease or other contractual obligation, a valid leasehold interest in, or right to use, all of the tangible assets and other personal property that are necessary for or otherwise material to and used by the Seller or a Company in connection with the conduct of the Business. None of the tangible assets of the Seller (to the extent used in the operation of the Business) or either Company are subject to any Lien other than Permitted Liens. All such tangible assets are, in the aggregate, in good working order (ordinary wear and tear excepted) and are suitable for the purposes used.

3.18Sufficiency of Assets. The assets owned, leased or licensed by the Companies as of the Closing will constitute all of the assets, rights, title and interest that are necessary for the Companies to operate, as of immediately following the Closing, the Business in all material respects in the manner in which it is conducted on the date hereof and as it is conducted as of immediately prior to the Closing, and as of the Closing, the Companies will have good and valid title to (or a valid leasehold interest in or enforceable license to use) all of the assets, properties, Contracts or permits used in or held by the Seller or its Subsidiaries for use in the conduct and operations of the Business.

3.19Related Party Transactions.

(a)Neither Company is indebted to (nor has either Company or any of its Subsidiaries committed to make any loan or extend or guarantee credit for the benefit of) any director, manager, member or officer of a Company or to any of their respective spouses or children (except for amounts due as salaries and bonuses under employment agreements or Company Employee Plans and amounts payable in reimbursement of ordinary expenses) or to any Affiliate of any of the foregoing or to the Seller or any equityholder of the Seller or any Affiliate of any equityholder of the Seller.

(b)Except as set forth on Section 3.19(b) of the Disclosure Schedule, neither the Seller nor any of its Affiliates (other than a Company), or any of the directors, officers, members, managers or equityholders of any Company or of the Seller or any Affiliate of the Seller (other

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than a Company), or any immediate family member or Affiliate of the foregoing, directly or indirectly, is indebted to a Company or (i) is, or since January 1, 2020, has been involved in any material business or commercial arrangement with a Company or relating to the Business (other than in such person’s capacity as a director, manager, officer or Business Employee, as the case may be) or any of a Company’s customers, suppliers, service providers, joint venture partners, licensees or competitors, (ii) owns any material assets, tangible or intangible, that are used in the Business, (iii) is party to any agreement, arrangement or understanding or other Contract with a Company or relating to the Business (other than any employment agreement or other Employee Benefit Plan) (each, an “Affiliate Contract”), (iv) has any claim or cause of action against any Company or any of their Subsidiaries or (v) has any direct or indirect ownership interest in any Person with which any Company or the Business has a material business arrangement or relationship.

3.20Customers and Suppliers. Sections 3.20(a) and 3.20(b) of the Disclosure Schedule set forth, respectively, (a) the names of the 20 largest customers as measured by each of aggregate revenue of the consolidated business of the Companies for the twelve-month period ended on June 30, 2023 (such customers collectively, “Major Customers”) and (b) the 20 largest suppliers of products or services to the Companies as measured by the aggregate dollar amount of fees and expenses paid by the Companies for the twelve-month period ended on June 30, 2023 (such suppliers collectively, “Major Suppliers”). Since December 31, 2022 no Major Customer or Major Supplier has terminated its relationship with a Company or the Business, materially reduced or changed the pricing or other material terms of its business with a Company, or communicated in writing (or, to the Seller’s Knowledge, orally) an intention to do any of the foregoing. Since December 31, 2020, no Major Customer or Major Supplier has engaged in any material dispute with, and no action, suit, claim or other proceeding has been commenced or, to the Seller’s Knowledge, threatened by any Major Customer or Major Supplier by or against, the Seller or any Company, and no such dispute, action, claim, suit or proceeding is currently ongoing or pending or, to the Seller’s Knowledge, threatened. Each customer of a Company is a party to a customer agreement and terms of service in the forms provided to the Buyer.

3.21International Trade and Anti-Corruption Matters. Since January 1, 2020, neither Company, nor any of its respective directors, officers, or agents, or any Business Employees, have, directly or indirectly, (i) taken any actions that would constitute a violation in any material respect of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations promulgated thereunder; the UK Bribery Act 2010; or any other anti-corruption or anti-bribery Laws applicable to a Company or any of its Affiliates or (ii) engaged in any transactions or dealings connected with any government, country or other individual or entity that is the target of International Trade Laws and Sanctions (except to the extent permissible by and in accordance with applicable Law). Neither Company, nor any of its equityholders, directors, officers, or agents or any Business Employee is an individual or entity that is or is owned or controlled by one or more individuals or entities that are, (i) the subject of any International Trade Laws and Sanctions or (ii) located, organized or resident in a country or territory that is the subject of any International Trade Laws and Sanctions. Since January 1, 2020, each Company and, to the Seller’s Knowledge, each of its and their respective directors, officers, and agents and each of the Business Employees have been in compliance in all material respects with all International Trade Laws and Sanctions.

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3.22Brokers. Except for Broadhaven Securities, LLC and its affiliates and subsidiaries, no agent, broker, investment banker, financial advisor or other Person has acted, directly or indirectly, as a broker, finder, or financial advisor for a Company or any of its Affiliates in connection with the transactions contemplated by this Agreement. No Person is or shall be entitled, as a result of any action, agreement or commitment of or on behalf of a Company or its Affiliates to any broker’s, finder’s, financial advisor’s or other similar fee, commission or payment in connection with any of the transactions contemplated by this Agreement for which Buyer or any of its Subsidiaries or Affiliates, including the Companies, would be liable or obligated to make any such payment.

3.23No Other Representations or Warranties. The Seller and each Company hereby acknowledges and agrees that, except for the representations and warranties set forth in Article IV or in any certificate delivered by the Buyer at the Closing pursuant to Article VII, none of the Buyer or any of its Affiliates, equityholders, directors, managers, officers, employees, agents, representatives or advisors, or any other Person, has made or is making, and the Buyer hereby expressly disclaims, any express or implied representation or warranty with respect to the Buyer or any of its Affiliates, including with respect to any information provided or made available to the Seller, any Company or any of their Affiliates, equityholders, directors, managers, officers, employees, agents, representatives or advisors, or any other Person.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Seller that, except as otherwise disclosed or identified in the SEC Reports (excluding any disclosures of factors or risks contained in any “Risk Factors” section or any “forward looking statements” or similar general disclosure included in such SEC Reports that is predictive or forward-looking in nature), or as set forth in the corresponding section of the Buyer Disclosure Schedule (subject to Section 11.12), the statements contained in this Article IV are true and correct as of the date of this Agreement and as of the Closing Date, except if a statement speaks as of a specific date, such statement was true and correct as of such specific date.

4.1Organization, Standing and Power.

(a)The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite corporate power and authority to own, lease and operate its material properties and material assets and to carry on its business as conducted on the date of this Agreement.

(b)The Buyer is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the character of the properties it owns, operates or leases or the nature of its activities makes such qualification necessary, except for such failures to be so qualified or in good standing that, individually or in the aggregate, would not reasonably be expected to have a Buyer Material Adverse Effect.

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4.2Authority; No Conflict; Required Filings and Consents.

(a)The Buyer has all requisite corporate power and authority to enter into this Agreement, and each other Transaction Document to which it is or will be a party and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Buyer of this Agreement, and each other Transaction Document to which it is a party, and the consummation of the transactions contemplated hereby and thereby by the Buyer have been duly authorized by all necessary corporate action on the part of the Buyer. This Agreement has been, and each other Transaction Document to which the Buyer is (or will be) a party has been, or when executed and delivered will be, duly and validly executed and delivered by the Buyer and constitutes, or will upon execution and delivery thereof constitute, the legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, subject to the Bankruptcy and Equity Exception.

(b)The execution, delivery and performance of this Agreement by the Buyer does not, and the execution and delivery of each other Transaction Document to which it is or will be a party will not, and the consummation by the Buyer of the transactions contemplated hereby and thereby will not, (i) conflict with, or result in any violation or breach of, the Organizational Documents of the Buyer, (ii) conflict with, or result in any violation or breach of, or constitute a default (or give rise to any right of termination or result in the cancellation, acceleration of any obligation or loss of any right or benefit) under (with or without notice or lapse of time, or both), require a consent or waiver under, or require the payment of a penalty under any of the terms, conditions or provisions of any Contract to which the Buyer or its Subsidiaries is a party or by which any of them or any of their respective properties or assets may be bound, or result in the imposition of any Lien on the Buyer’s or any of its Subsidiaries’ properties or assets, or (iii) subject to compliance with the requirements specified in clauses (i) and (ii) of Section 4.2(c), conflict with or violate any permit, concession, franchise, license, assessment, judgment, injunction, order, decree, or Law applicable to the Buyer or any of its respective properties or assets, except in the case of clauses (ii) and (iii) of this Section 4.2(b) for any such conflicts, violations, breaches, defaults, terminations, cancellations, accelerations, losses, penalties or Liens, and for any consents or waivers not obtained, that, individually or in the aggregate, would not reasonably be expected to have a Buyer Material Adverse Effect.

(c)No consent, waiver, approval, license, permit, order or authorization of, or registration, declaration, notice or filing with, any Governmental Entity or Self-Regulatory Organization is required by or with respect to the Buyer in connection with the execution and delivery of this Agreement by the Buyer or the consummation by the Buyer of the transactions contemplated by this Agreement, except for (i) the approval of FINRA with respect to the change of ownership or control of the Broker-Dealer Company pursuant to FINRA Rule 1017 with no material restrictions or conditions, (ii) compliance with the applicable requirements of the HSR Act and (iii) such other consents, waivers, approvals, licenses, permits, orders, authorizations, registrations, declarations, notices and filings which, if not obtained or made, would not reasonably be expected to have a Buyer Material Adverse Effect.

4.3Litigation. As of the date of this Agreement, there is no action, suit, proceeding, claim, arbitration or investigation pending against the Buyer (or, to the Buyer’s Knowledge, any of its directors, officers or employees) or, to the Buyer’s Knowledge, threatened, and there are no

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judgments, orders, writs, decrees, rulings or injunctions outstanding against the Buyer, except, in each such case, as would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

4.4Financing. The Buyer has sufficient funds to perform all of its respective obligations under this Agreement. The Buyer has a sufficient number of authorized but unissued shares of Buyer Common Stock in order to pay the Closing Stock Consideration and to deposit the Indemnity Escrow Shares in the Indemnity Escrow Account.

4.5Brokers. No agent, broker, investment banker, financial advisor or other Person is or shall be entitled, as a result of any action, agreement or commitment of the Buyer or any of its Subsidiaries, to any broker’s, finder’s, financial advisor’s or other similar fee, commission or payment in connection with any of the transactions contemplated by this Agreement.

4.6SEC Documents.

(a)Since January 1, 2021 through the date hereof, the Buyer has timely filed with the SEC all forms, statements, registrations, reports and other documents required to be filed by it under the Securities Act and the Exchange Act (collectively, the “SEC Reports”). The SEC Reports, at the time filed (or if amended or superseded by a filing before the date of this Agreement, then on the date of such amending or superseding filing): (i) complied as to form in all material respects with the applicable requirements of the Securities Act or Exchange Act, as applicable, and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(b)The consolidated financial statements of the Buyer and its Subsidiaries (including, in each case, any related notes) contained (or incorporated by reference) in the SEC Reports filed by the Buyer with the SEC within the past two years (i) were prepared from, and in accordance with, the books and records of the Buyer and its Subsidiaries, (ii) fairly present in all material respects the financial position of the Buyer and its consolidated Subsidiaries and the consolidated results of operations and cash flows of the Buyer and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth (subject in the case of unaudited statements to appropriate year-end audit adjustments), (iii) complied as to form in all material respects with the applicable published rules and regulations of the SEC with respect thereto, and (iv) were prepared in accordance with GAAP (except, in the case of unaudited consolidated financial statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or as permitted by Regulation S-X promulgated by the SEC).

(c)Since June 30, 2023, no Changes have occurred that, individually or in the aggregate, have had or would reasonably be expected to have a Buyer Material Adverse Effect.

(d)As of the date of this Agreement: (i) to the Buyer’s Knowledge, none of the SEC Documents is the subject of ongoing SEC review and, to the Buyer’s Knowledge, there are no inquiries or investigations by the SEC, pending or threatened, of the Buyer or any of its

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Subsidiaries and (ii) the Buyer has not received any material written comments from the SEC staff regarding any of the SEC Reports that remain unresolved.

4.7Capitalization.

(a)The authorized capital stock of the Buyer consists of 110,000,000 shares of Buyer Common Stock, of which 37,677,426 shares were issued and outstanding as of July 24, 2023 (the “Buyer Capitalization Date”), including 66,500 restricted shares of Buyer Common Stock and 291,453 shares of Buyer Common Stock underlying outstanding restricted stock units; 10,000,000 shares of non-voting common stock, of which no shares are issued or outstanding as of the date hereof; and 5,000,000 shares of preferred stock, of which 110,000 shares have been designated as Series A preferred stock, of which no shares are issued or outstanding as of the date hereof. As of the Buyer Capitalization Date, the Buyer had outstanding options to purchase 315,048 shares of its capital stock, as well as 58,698 shares of Buyer Common Stock subject to issuance pursuant to outstanding performance shares (assuming satisfaction of target performance levels, if any) (the “Buyer Equity Awards”). All of the issued and outstanding shares of capital stock of the Buyer have been duly authorized and validly issued, are fully paid and non-assessable, and are free of preemptive rights.

(b)As of the Buyer Capitalization Date, no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on which stockholders of Buyer may vote were issued or outstanding, no trust preferred or subordinated debt securities of the Buyer were issued or outstanding and, other than the Buyer Equity Awards or pursuant to the terms of any Employee Benefit Plan or in connection with the Buyer’s share repurchase program or employee stock purchase plan, there were no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements obligating Buyer to issue, transfer, sell, purchase, redeem or otherwise acquire any Buyer Common Stock.

(c)As of the date hereof, there are no voting trusts, stockholder agreements or other similar agreements in effect pursuant to which the Buyer or any of its Subsidiaries has a contractual or other obligation with respect to the voting of the Buyer Common Stock.

(d)The shares of Buyer Common Stock comprising the Stock Consideration, when issued in accordance with this Agreement, (i) will be duly authorized, validly issued, fully paid and non-assessable, and (ii) will be free and clear of any Liens other than Liens arising as a result of any action by the Seller or its Affiliates, under applicable securities Laws pursuant to this Agreement. The issuance of the Stock Consideration is not subject to any preemptive rights or rights of first refusal or similar rights applicable to the Buyer.

4.8Investment Intent. The Buyer is acquiring the Interests for investment for its own account and not with a view to the distribution of any part thereof. The Buyer acknowledges that the Interests have not been registered under U.S. federal or any applicable state securities laws or the laws of any other jurisdiction and cannot be resold without registration under such laws or an exemption therefrom. The Buyer further acknowledges that (a) it has such knowledge and experience in financial and business matters, that it is capable of evaluating the merits and risks of an investment in the Interests and (b) it can bear the economic risk of an investment in the Interests for an indefinite period of time.

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4.9R&W Insurance Policy. On the date of this Agreement, the Buyer is entering into a binder agreement providing for the issuance, subject to the terms and conditions set forth therein, of a buyer-side representations and warranties insurance policy with respect to the representations and warranties set forth in Article II and Article III issued by Euclid Transactional, LLC (the “R&W Insurer”), the form of which is attached as Exhibit E to this Agreement (the “R&W Insurance Policy”). The Buyer has paid any fees payable in connection with the R&W Insurance Policy that have become due (other than any such fees that become due upon and are paid in connection with the Closing).

4.10Investigation.

(a)The Buyer, for itself and on behalf of its Affiliates, acknowledges that it is relying on its own independent investigation, verification and analysis in entering into the transactions contemplated hereby, including with respect to the financial condition, results of operations, assets, liabilities, properties and projected operations of the Companies, and in making its determination to proceed with the transactions contemplated by this Agreement, the Buyer has relied solely on the results of its own independent investigation, verification and analysis and has relied solely on the representations and warranties of the Companies and the Seller set forth in this Agreement (in each case as qualified and limited by the Disclosure Schedule) or in the certificate(s) delivered at the Closing pursuant to Sections 7.2(a) and 7.2(b). The Buyer is knowledgeable about the businesses and industries in which the Companies operate, is capable of evaluating the merits and risks of the transactions contemplated by this Agreement and is able to bear the economic risk of such investment, including the complete loss of such investment, for an indefinite period of time. The Buyer and its Affiliates, representatives and advisors have been afforded reasonable access to the books and records and personnel of the Companies for purposes of conducting a due diligence investigation and have conducted to their satisfaction a due diligence investigation of the Companies and their businesses.

(b)In connection with the Buyer’s investigation of the Companies and their businesses, the Buyer has received from or on behalf of the Seller or the Companies certain estimates, projections and other forecasts and plans. The Buyer acknowledges and agrees that there are uncertainties inherent in attempting to make such estimates, projections and other forecasts and plans, that the Buyer is familiar with such uncertainties, that the Buyer is taking full responsibility for making its own evaluation of the adequacy and accuracy of any estimates, projections, plans and other forecasts so furnished to it (including the reasonableness of the assumptions underlying such estimates, projections, plans and forecasts), and that (other than in the event of Fraud) the Buyer shall have no claim against a Company, the Seller or any Affiliate or direct or indirect equityholder of the Seller with respect thereto.

4.11No Other Representations or Warranties. The Buyer hereby acknowledges and agrees that, except for the representations and warranties set forth in Article II and Article III (as qualified and limited by the Disclosure Schedule) or in any certificate delivered at the Closing pursuant to Article VII or in any other Transaction Document, none of the Seller, the Companies or any of their Affiliates, equityholders, directors, managers, officers, employees, agents, representatives or advisors, or any other Person, has made or is making, and the Seller and the Companies hereby expressly disclaim, any express or implied representation or warranty with respect to the Seller, the Companies or any other Person, including with respect to any information provided or made available to the Buyer or any of its Affiliates, equityholders, directors, managers, officers, employees, agents, representatives or advisors, or any other Person.

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ARTICLE V

CONDUCT OF BUSINESS

5.1Covenants of the Seller and Companies. Except (a) as otherwise expressly permitted by this Agreement, (b) as set forth on Schedule 5.1, (c) as required by applicable Law or (d) as consented to in writing by the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), during the Pre-Closing Period: (i) the Seller and each Company shall (A) use commercially reasonable efforts to carry on its business in the ordinary course consistent with past practice and in compliance with all applicable Laws and (B) use commercially reasonable efforts to preserve intact its present business, operations, permits, rights, goodwill and relations with customers, suppliers and other Persons with which it does business; (ii) the Seller and each Company shall use commercially reasonable efforts to keep available the services of its officers, Business Employees and Business Service Providers; and (iii) without limiting the generality of clauses (i) and (ii), the Seller and each Company shall not, and the Seller shall cause the Companies not to and shall not permit the Companies to, directly or indirectly:

A.grant or subject to any Lien (other than granting or suffering to exist a Permitted Lien) any of the Business’s or any Company’s properties or assets (whether tangible or intangible);

B.sell, assign, license, transfer, convey, lease, sublease or otherwise dispose of any properties or assets of, or used (or held for use) by, any Company or the Seller in connection with the Business, other than (i) de minimis properties or assets or (ii) in the ordinary course of business of the Companies consistent with past practice, (in each case, other than Intellectual Property, which shall be subject to clause (C));

C.sell, assign, license, covenant not to sue with respect to, transfer, convey, dispose of, abandon, cancel, permit to lapse or expire, or fail to maintain any Company Intellectual Property (other than non-exclusive licenses of Intellectual Property in the ordinary course of business consistent with past practice);

D.issue, sell, pledge, encumber, dispose of or transfer to any Person any Interests or any other Equity Interest in any Company, or any securities convertible into or exchangeable or exercisable for, or options with respect to, or warrants to purchase or rights to subscribe for, any Equity Interest in any Company or any share appreciation, phantom share, profit participation or other similar rights in respect of any Company, or make any other change in the capital structure of any Company (including forming any Subsidiary of any Company);

E.change or amend the Organizational Documents of any Company;

F.declare, set aside, make or pay any dividend or other distribution in respect of the Interests or any other Equity Interest in any Company, or repurchase, redeem or otherwise acquire any outstanding Interests or other Equity Interests in any Company;

G.(i) increase the compensation payable to or to become payable to, or the benefits provided to or pay any bonus to, or grant any equity or equity-based award to, any

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current or former Business Employee or Business Service Provider; (ii) grant, increase, pay, provide or modify any severance, retention, change in control or termination payment or benefit to, or loan or advance or accelerate any amount to, any current or former Business Employee or Business Service Provider; (iii) accelerate the vesting or payment, or fund or in any other way secure the payment, of any compensation or benefit for any current or former Business Employee or Business Service Provider; (iv) approve, establish, adopt, enter into, amend or terminate any Company Employee Plan, including any employment contract, arrangement or terms, except as required by any Law or in connection with newly hired Business Employees, provided that (x) such new hire is permitted by clause (vi) of this Section 5.1(G), (y) the applicable Company Employee Plan provides such new hire with compensation and terms comparable to those provided to similarly situated Business Employees and (z) the applicable Company Employee Plan provides that such new hire may, pursuant to the terms of, be terminated on less than three months’ written notice (or pay in lieu thereof); (v) grant or forgive any loans to any Business Employee or Business Service Provider; (vi) hire or promote, or terminate or demote (other than for cause) any Business Employee or Business Service Provider with annual target cash compensation equal to or greater than $350,000; or (vii) approve, make, amend, negotiate, enter into or terminate any collective bargaining agreement or union agreement covering any Business Employee;

H.enter into, supplement or amend the terms of or extend the term of, or waive or release any material claim or right under, or terminate (excluding, for the avoidance of doubt, any expiration in accordance with a Contract’s terms), any Company Material Contract or Lease, or any Contract that would have been a Company Material Contract or Company Lease if in effect on the date of this Agreement, providedthat this subsection (H) shall not restrict (i) Contracts entered into in the ordinary course of business consistent with past practice with new customers (in a form consistent with, and no less favorable to the applicable Company than, the forms of agreement with the applicable Company’s customers made available prior to the date hereof) and (ii) renewals (including automatic renewals) and expirations in the ordinary course in accordance with the terms thereof;

I.make any material change in any method of accounting or accounting practice or policy, other than such changes as are required by GAAP or applicable Law;

J.enter into any commitment for capital expenditures (excluding compensation paid to employees or independent contractors for software development pursuant to Contracts in effect as of the date hereof or entered into during the Pre-Closing Period in accordance with this Section 5.1) in excess of $125,000 for any individual commitment and $500,000 for all such commitments in the aggregate;

K.(I) compromise or enter into any settlement or release with respect to any litigation, arbitration, investigation or other proceeding, unless such settlement or release, (x) contemplates only the payment of money damages in an amount not to exceed $100,000 for any single claim, or $250,000 in the aggregate for all proceedings and (y) does not impose any limits on the conduct or operation of any Company or the Business, or (II) commence any litigation, proceeding, or arbitration;

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L.make, change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, settle or compromise any material Tax liability or Tax Proceeding, agree to make any adjustment pursuant to Section 481(a) of the Code or any similar provision of Law or propose any such adjustment with a taxing authority, prepare or file any amended Tax Return, waive or extend any statute of limitations in respect of Taxes, except in connection with the filing of a routine extension of time to file a Tax Return, surrender any claim for a refund of Taxes, or enter into any “closing agreement” described in Section 7121 of the Code (or any similar provision of Law) with a taxing authority;

M.effect any merger, consolidation, recapitalization, reclassification, stock split, combination or other change in the capitalization of any Company, acquire (including by merger, consolidation or acquisition of stock or assets) any Equity Interests in any Person or any business or division thereof or acquire any assets that would be material to the Business (including the Companies), taken as a whole (other than pursuant to capital expenditures made without violation of clause (J) above);

N.(1) materially delay or postpone any payment of any accounts payable or other payables or expenses, (2) accelerate the collection of accounts receivable in advance of or beyond the dates when such accounts receivable would have been collected or (3) adopt or implement any change in its policies or practices with respect to the extension of any discounts or credits to customers;

O.incur, create, assume or otherwise become liable for any Indebtedness;

P.enter into any transaction with any of its Affiliates;

Q.terminate (or fail to renew) or otherwise fail to maintain any Company Insurance Policies;

R.enter into any new line of business; or

S.authorize, agree to or commit to do any of the foregoing.

Notwithstanding anything to the contrary contained herein, nothing contained in this Agreement will give the Buyer, directly or indirectly, rights to control or direct a Company prior to the Closing. During the Pre-Closing Period, the Seller and each Company will exercise, consistent with the terms and conditions of this Agreement, control of their businesses and operations.

5.2Confidentiality.

(a)The Parties acknowledge that the Confidentiality Agreement shall continue in full force and effect in accordance with its terms, which are incorporated herein by reference; provided that from and after the Closing, the Buyer, its Affiliates and Representatives (as defined in the Confidentiality Agreement) shall cease to have any obligations under the Confidentiality Agreement, including insofar as it relates to any Confidential Information (as defined therein) relating to the Companies or the Business (but shall remain bound by their respective obligations of confidentiality and non-use thereunder insofar as it relates to any information solely relating to the Seller or its Representatives).

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(b)For a period of four (4) years following the Closing, the Seller shall, and shall cause its Affiliates and Representatives (in their capacity as such) to keep confidential all non-public information relating to the Companies and their respective businesses, including this Agreement; provided that the foregoing shall not apply to the extent such information is (i) in the public domain (other than as a result of a disclosure by the Seller or any of its Affiliates or Representatives in breach of this Agreement or any other confidentiality obligation to a Company or any of its Affiliates (including the Buyer and its Affiliates)) or (ii) later acquired on a non-confidential basis from other sources than a Company, the Buyer or any of their respective Affiliates or representatives; providedfurther that the Seller and its Affiliates may disclose such information (A) to the extent required by applicable Law (including the rules of any securities exchange), (B) as compelled by judicial or administrative process (provided that in any such event in clause (A) or (B), the Seller shall, to the extent legally permissible, promptly (and in any event prior to any disclosure) notify the Buyer and reasonably cooperate with the Buyer (at the Buyer’s expense) to the extent that the Buyer may seek to limit such disclosure, including, if requested, taking all reasonable steps to resist or avoid any such judicial or administrative proceedings), (C) to its auditors and attorneys who need to know such information in their roles as such and who are subject to a duty of confidentiality owed to the Seller or any Affiliate of the Seller with respect to such information, or (D) upon request, on a confidential basis to any Governmental Entity with jurisdiction over the Seller or its Affiliates in connection with any routine inquiry or request that is not specifically targeted at the Buyer, the Companies, the Business or the transactions contemplated hereby.

ARTICLE VI

ADDITIONAL AGREEMENTS

6.1No Solicitation. During the Pre-Closing Period, none of the Seller nor the Companies shall (and each shall cause their respective Affiliates and their and their Affiliates’ respective directors, officers, employees, members and managers not to) and shall not authorize any of their or their Affiliates’ respective representatives or agents to (and shall direct them not to), directly or indirectly, (a) solicit, initiate, knowingly encourage or knowingly facilitate any Acquisition Proposal (or any inquiry, proposal, offer or indication of interest that would reasonably be expected to lead to an Acquisition Proposal) or (b) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person any information in connection with or for the purpose of encouraging or facilitating, any Acquisition Proposal (or any inquiry, proposal, offer or indication of interest that would reasonably be expected to lead to an Acquisition Proposal). The Seller and the Companies shall and shall cause their respective directors, officers, employees, agents and representatives to (i) immediately cease, discontinue and cause to be terminated any existing discussions or negotiations with any Person with respect to an Acquisition Proposal and promptly terminate any access provided to any such Person to any data room or other confidential information and (ii) notify the Buyer orally and in writing promptly (but in no event later than 24 hours) after receipt by the Seller, the Companies or any of their respective Affiliates, directors, officers, employees, representatives or agents, of any Acquisition Proposal (or any inquiry, proposal, offer or indication of interest that would reasonably be expected to lead to an Acquisition Proposal).

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6.2Access to Information.

(a)During the Pre-Closing Period, the Seller and each Company shall afford to the Buyer’s directors, managers, officers, employees, accountants, counsel and other representatives, reasonable access, upon reasonable notice, during normal business hours, in a manner that does not unreasonably disrupt or interfere with either Company’s business operations, to all of the Seller’s and each Company’s properties and facilities, books, Contracts, management personnel and records as the Buyer shall reasonably request, and, during such period, the Companies shall furnish promptly to the Buyer such information (maintained by the Seller or the Companies during the ordinary course of business or otherwise readily available or accessible without undue burden, cost or expense) concerning the business, operations, properties, assets and personnel of the Companies as the Buyer may reasonably request. Any access or information provided pursuant to this Section 6.2 shall not limit or otherwise affect the remedies available to the Buyer hereunder, or the representations or warranties of or the conditions to the obligations of the Parties set forth in this Agreement. Any information provided pursuant to this Section 6.2 shall be subject to the Confidentiality Agreement. Notwithstanding the foregoing, no Person shall be required pursuant to this Section 6.2 to provide access or disclose information where such access or disclosure would result in the loss of any attorney-client privilege or be prohibited under applicable Law or by the terms of any agreement to which the Seller or a Company is a party as of the date of this Agreement; provided that the Seller and the Companies, as applicable, shall work with the Buyer in good faith to make substitute arrangements for providing such access or information that does not result in the loss of such privilege and is not prohibited under such Law or agreement.

(b)Prior to the Closing, the Seller shall transfer to the Companies any books and records related to the business of the Companies that are in the possession of the Seller or any of its Affiliates (other than the Companies) that are not duplicates of books and records also in the possession of a Company. From and after the Closing, if any Party identifies any books and records related to the business of the Companies that are in the possession of the Seller or any of its Affiliates (that are not duplicates of books and records also in the possession of a Company, the Buyer or any of their respective Affiliates), then such Party shall promptly notify the Buyer and, upon the Buyer’s request, the Seller shall (and shall cause its Affiliates to) promptly transfer or cause the transfer of such books and records to the applicable Company as directed by the Buyer.

6.3Closing Efforts; Legal Conditions to the Purchase; Third-Party Consents.

(a)Subject to the terms hereof, the Parties shall (and shall cause their Affiliates to) each use their respective reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby as promptly as practicable, including (i) preparing and making as promptly as practicable all filings, notices, registrations, applications, waivers and other submissions that are necessary, proper or advisable with respect to this Agreement and the transactions contemplated hereby under applicable Law or otherwise (including with or to any Governmental Entity, Self-Regulatory Organization or third party) and (ii) using reasonable best efforts to make and obtain, or cause to be made and obtained, as promptly as practicable, all registrations, consents, licenses, permits, waivers, clearances, approvals, notices, registrations, authorizations or orders that are necessary,

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proper or advisable to be obtained or made by it or any of its Affiliates with or from any Governmental Entity, Self-Regulatory Organization or other third party in connection with the authorization, execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

(b)Without limiting Section 6.3(a), the applicable Parties shall (unless otherwise agreed by the Buyer and the Seller):

(i)within 10 Business Days after the date of this Agreement, make all necessary filings under the HSR Act, and thereafter make any other required submissions under the HSR Act and satisfy any related governmental request thereunder, in each case as promptly as practicable and advisable;

(ii)within 10 Business Days after the date of this Agreement, make all necessary or appropriate filings pursuant to FINRA Rule 1017 in connection with the transactions contemplated by this Agreement (on a “Fast-Track” basis if deemed eligible by FINRA), and thereafter as promptly as practicable and advisable make any other required submissions and satisfy any related governmental request or request from FINRA, as applicable, (including supplying any additional information or documentary material) in connection therewith.

(c)Except to the extent prohibited by applicable Law, and subject to the Confidentiality Agreement, the Buyer, the Companies and the Seller will coordinate, consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and provide to such other Party and its respective advisors in advance (and consider in good faith any comments of such other Party to and, if requested, accept reasonable additions, deletions or changes suggested to), any communications, filings, submissions, analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals proposed to be made or submitted by or on behalf of any Party in connection with any filings, notices or applications required by any Law or to obtain any consents, licenses, permits, waivers, approvals, authorizations or orders from any Governmental Entity or Self-Regulatory Organization in connection with the transactions contemplated hereby. Each Company, the Seller and the Buyer shall furnish to each other all information reasonably required for any application or other filing or submission to be made pursuant to any applicable Law or requested or required by any Governmental Entity or Self-Regulatory Organization in connection with the matters contemplated by this Section 6.3. The Parties shall (i) promptly notify the other Parties of, and provide copies of any written communication, correspondence or filings made to or received by such Party from, any Governmental Entity or Self-Regulatory Organization regarding the transactions contemplated hereby, and (ii) consult with each other in advance of, and if permitted by applicable Law, permit the other Parties to attend, any meetings with any Governmental Entity or Self-Regulatory Organization in connection with the transactions contemplated by this Agreement.

(d)Without limiting Sections 6.3(a), 6.3(b) or 6.3(c), the Buyer, the Companies and the Seller shall cooperate and use their respective reasonable best efforts to resolve any objections that may be asserted by any Governmental Entity or Self-Regulatory Organization with respect to the transactions contemplated by this Agreement; providedhowever, that the Buyer shall have the principal responsibility for devising and implementing the strategy for obtaining any necessary antitrust consents or approvals and shall lead and direct all submissions to, meetings and

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communications with any Governmental Authority or other party in connection with antitrust matters, including litigation matters with respect to any Antitrust Law.

(e)Notwithstanding anything to the contrary in this Agreement, the Buyer shall propose, negotiate, offer to commit and effect (and if such offer is accepted, commit to and effect), by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of such assets or businesses of the Company, effective as of the Closing, and otherwise offer to take or offer to commit to take if the offer is accepted such action that limits the Companies’ freedom of action (or otherwise provides for any behavioral or conduct remedies) with respect to, or the Buyer’s ability to retain, any of the businesses, services or assets of either Company, in order to avoid the entry of, or to effect the dissolution of, any Antitrust Order which would have the effect of preventing or delaying the Closing beyond the Outside Date. For the avoidance of doubt, the Buyer shall take all such actions (which, for the avoidance of doubt, shall not apply to any assets or businesses of Buyer other than the Companies) as soon as reasonably practicable in furtherance that (i) all suspensory waiting periods under the Hart-Scott-Rodino Act are promptly obtained, and (ii) no judgment, injunction, order or decree or any other order in any suit or proceeding under any U.S. Antitrust Laws is entered; provided however, that notwithstanding anything to the contrary in this Agreement, neither the Buyer nor any of its Subsidiaries or Affiliates will be required to take or to propose, offer or offer to commit to take (and the Seller and the Companies shall not take or propose, offer or offer to commit to take, without the prior written consent of the Buyer) any actions that, individually or in the aggregate, would reasonably be expected to result in a material adverse effect on the Business or the Companies, taken as a whole. The Seller further agrees not to extend, stay or toll any waiting period or withdraw and refile the notification under the Hart-Scott-Rodino Act or enter into any agreement with any Governmental Authority to delay, or otherwise not consummate as soon as practicable, the transactions contemplated by this Agreement, except with the prior written consent of the Buyer.

(f)Without limiting any Party’s obligations set forth in Sections 6.3(a) -6.3(d), the Seller and each Company shall give any notices required to be given by it to, and use commercially reasonable efforts to obtain any consents or waivers from, any third party that may be required under any Contracts or other agreements to which the Seller or such Company is a party in connection with the transactions contemplated hereby, including those disclosed in Section 3.4(b) of the Disclosure Schedule; provided, that (i) the Seller and each Company shall reasonably cooperate with the Buyer in giving and obtaining, and the Buyer shall be given the opportunity to review in advance any such, notices, consents, approvals or waivers and the Seller and each Company shall consider in good faith and accept any reasonable additions, deletions or changes suggested thereto and (ii) no Party shall be required to make any payments or agree to any material undertaking (and, without the prior written consent of the Buyer, neither the Seller nor a Company shall make or agree to make any payments or agree to any material undertaking) to induce any such consent, approval or waiver.

6.4Public Disclosure. Except as may be required by any applicable Law or otherwise required or requested by any Governmental Entity or Self-Regulatory Organization (including the rules of any stock exchange), and other than the press release to be issued by the Buyer in connection with the execution of this Agreement, in substantially the form previously provided to and reasonably acceptable to the Seller, none of the Buyer, the Seller or a Company shall, and each shall cause its Affiliates not to, issue any press release or otherwise make any public statement

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with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the Seller (in the case of the Buyer or any of its Affiliates) or the Buyer (in the case of any other Party or its Affiliates) (provided any such consent not to be unreasonably conditioned, withheld or delayed); provided, however, that any Person shall be permitted to make public statements and disclosures consistent with the content of any press release or other public statement previously issued in compliance with this Section 6.4 from and after the issuance of such press release or the making of such disclosure. After the date hereof, the Seller and the Buyer will work together in good faith to agree upon appropriate communications to be made to employees, customer and vendors of the Companies with respect to the transactions contemplated by this Agreement.

6.5Employee Matters.

(a)Beginning on the Closing Date and continuing until the first anniversary thereof, the Buyer shall (i) provide (or cause its Subsidiaries to provide) each Continuing Employee with an annual base salary and annual cash bonus target that are no less favorable in the aggregate than such Continuing Employee’s annual base salary and annual cash bonus target immediately prior to the Closing Date and (ii) provide (or cause its Subsidiaries to provide) employee benefits to each Continuing Employee that are substantially comparable in the aggregate to the employee benefits provided to similarly situated employees of the Buyer or its Affiliates.

(b)Following the Closing, the Buyer shall give each Continuing Employee full credit for prior service with the Companies for purposes of (i) eligibility and vesting under any Buyer Employee Plans (excluding defined benefit pension accruals, deferred compensation, or equity or equity-based incentive plans, or any plan under which such crediting would be prohibited) and (ii) determination of benefit levels under any Buyer Employee Plan or policy relating to vacation or severance, in each case for which the Continuing Employee is otherwise eligible and in which the Continuing Employee is offered participation, but not where such credit would result in a duplication of benefits. The Buyer shall use commercially reasonable efforts to waive, or cause to be waived, any limitations on benefits relating to pre-existing conditions to the same extent such limitations are waived under any comparable plan of a Company and use commercially reasonable efforts to recognize for purposes of annual deductible and out-of-pocket limits under its medical and dental plans, deductible and out-of-pocket expenses paid by Continuing Employees in the calendar year in which the Closing Date occurs.

(c)This Section 6.5 shall operate exclusively for the benefit of the Companies and the Buyer and not for the benefit of any other Person, including the current or former Business Employees, Business Service Providers or the Continuing Employees, which Persons shall have no rights to enforce this Section 6.5. Nothing in this Section 6.5 shall: (i) entitle any Continuing Employee to employment with the Buyer; (ii) change such Continuing Employee’s status as an employee-at-will or restrict the ability of the Buyer to terminate the service of any Continuing Employee at any time or for any reason; (iii) create any third party rights in any current or former service provider of a Company or any of its Affiliates (including any beneficiary or dependent thereof); (iv) be treated as an amendment of any Employee Benefit Plan or restrict the ability of a Company or any of its Affiliates to amend, modify, discontinue or terminate any Employee Benefit Plan; or (v) restrict the ability of the Buyer to amend, modify, discontinue or terminate any Company Employee Plan in which a Company is a participating employer or sponsor on or after

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the Closing or any other employee benefit plan, practice or policy established or maintained by the Buyer that is applicable to any Continuing Employee from time to time.

6.6Tax Matters.

(a)Tax Returns. The Seller shall, at its sole cost and expense, prepare or cause to be prepared in a manner consistent with past practice and timely file or cause to be timely filed when due all federal, state, local and foreign Tax Returns that are required to be filed by either Company (taking into account any valid extension of time to file) on or prior to the Closing Date (“Pre-Closing Tax Returns”). The Seller shall pay or cause to be paid any Taxes due in respect of such Pre-Closing Tax Returns to the extent such amount was not taken into account in the determination of the Closing Cash Consideration. The Seller shall provide the Buyer with copies of all such Tax Returns no later than 30 days prior to the due date for the filing thereof for the Buyer’s review and approval (such approval not to be unreasonably withheld, conditioned or delayed). The Buyer, at its sole cost and expense, shall prepare or cause to be prepared and file or cause to be filed all Tax Returns of either Company that are due after the Closing Date (“Post-Closing Tax Returns”). As soon as reasonably practicable prior to filing any Post-Closing Tax Returns, but not less than 15 Business Days prior to such filing, the Buyer shall permit the Seller to review and comment on such Post-Closing Tax Returns to the extent such Post-Closing Tax Returns relate to a Pre-Closing Tax Period, and the Buyer shall consider in good faith any reasonable comments provided by the Seller within ten (10) Business Days of receipt of such Tax Returns. The Seller shall remit to the Buyer the amount shown as due on any Post-Closing Tax Return to the extent such amount is attributable to a Pre-Closing Tax Period (allocated, with respect to a Straddle Period, in accordance with Section 6.6(b)) within five (5) Business Days after filing of such Tax Returns to the extent such amount was not taken into account in the determination of the Closing Cash Consideration.

(b)Straddle Period Tax Allocation. The Parties shall cause, to the maximum extent possible under applicable Law, any taxable period of either Company that would otherwise be a Straddle Period to end on the Closing Date. In order to apportion appropriately any Taxes relating to a Straddle Period, the Buyer shall cause each Company, to the extent permitted by Law, to elect with the relevant taxing authority to treat for all Tax purposes the Closing Date as the last day of the taxable period of such Company, as applicable. In any case where applicable Law does not treat the Closing Date as the last day of the taxable period of either Company, for purposes of this Agreement, the portion of any Tax payable with respect to a Straddle Period will be allocated in accordance with this Section 6.6(b). Any Taxes attributable to any Straddle Period shall be allocated (i) to the Seller for the period up to and including the end of the Closing Date and (ii) to the Buyer for the period subsequent to the Closing Date. For purposes of the preceding sentence, any allocation of (A) Taxes, other than those referred to in clause (B) below, shall be made by means of a closing of the books and records of each Company as of the end of the Closing Date; provided, however, that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each such period, and (B) property Taxes and ad valorem Taxes attributable to a Straddle Period shall be allocated between such two periods in proportion to the number of days in each such period.

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(c)Transfer Taxes. The Seller and Buyer shall each be responsible for the payment of 50% of any transfer, sales, use, stamp, conveyance, value added, recording, registration, documentary, filing and other non-Income Taxes and administrative fees (including, without limitation, notary fees) (“Transfer Taxes”) arising in connection with the consummation of the transactions contemplated by this Agreement. The Party required by Law to file all necessary Tax Returns or other documentation with respect to such Transfer Taxes shall timely prepare, with the other parties’ cooperation, and file such Tax Returns or other documentation. The Buyer and the Seller agree to timely sign and deliver (or to cause to be timely signed and delivered) such certificates or forms as may be necessary or appropriate and otherwise to cooperate to establish any available exemption from (or otherwise reduce) such Transfer Taxes.

(d)Tax Contests. The Seller shall promptly notify the Buyer in writing upon receipt by the Seller, and the Buyer shall promptly notify the Seller in writing upon receipt by the Buyer, any of its Affiliates or either Company, of notice of any Tax Proceeding; provided, however, that failure to provide notice of a Tax Proceeding shall not relieve any party of its obligations pursuant to this Agreement except to the extent such party was materially prejudiced by such failure. The Buyer shall control the conduct of such Tax Proceeding of either Company in which case (i) the Buyer shall conduct such Tax Proceeding diligently and in good faith, (ii) the Seller shall have the right to attend and participate as a silent observer in such Tax Proceeding (at the sole cost of the Seller), (iii) the Buyer shall keep the Seller reasonably informed as to the progress of such Tax Proceedings, and (iv) the Buyer or any of its Affiliates shall have the sole right to settle, compromise or concede any such Tax Proceeding; provided, however, the Buyer shall obtain written consent of the Seller to settle, compromise, or concede any Tax Proceeding which would reasonably be expected to affect the Tax Liabilities of the Seller or the direct or indirect owners of interests in the Seller or impose liability on the Seller pursuant to the terms of this Agreement.

(e)Purchase Price Allocation. Within ninety (90) days following the determination of the Final Closing Cash Consideration, the Buyer shall prepare and deliver to the Seller an allocation of the consideration payable under this Agreement to the Seller (including any assumed liabilities to the extent properly taken into account under the Code) among the assets of the Companies in accordance with Section 1060 of the Code and the methodology set forth on Schedule 6.6(e) (the “Proposed Allocation”). Within thirty (30) days of delivery of the Proposed Allocation, the Seller shall notify the Buyer in writing of any proposed changes or the Proposed Allocation shall be final. If Seller notifies the Buyer in writing of a proposed change within thirty (30) days, the Buyer and the Seller agree to discuss such proposed changes to the Proposed Allocation and shall endeavor to agree on an allocation mutually acceptable to the parties in accordance with this Agreement. If no such agreement can be reached within thirty (30) days following the Seller’s written notification to Buyer of the proposed changes to the Proposed Allocation, such dispute shall be submitted to and resolved by the Neutral Accountant pursuant to the dispute resolution mechanism in Section 1.5, whereby the Neutral Accountant’s decision shall be final, binding, conclusive and non-appealable by the Parties hereto absent fraud or manifest error.

(f)Termination of Tax Sharing Agreements. The Seller shall cause any Tax allocation agreement, Tax indemnity agreement, Tax sharing agreement or similar Contract between either Company and any other Person to be terminated as of the day immediately

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preceding the Closing Date such that, on, from and after the Closing Date, neither Company shall be obligated to make any payment pursuant to any such agreement for any Tax period.

(g)Assistance and Cooperation. After the Closing, each of the Buyer, each Company, and the Seller shall (and shall cause their respective Affiliates to): (i) assist the other Party or Parties, as the case may be, in preparing any Tax Returns that such other Party or Parties, as the case may be, is responsible for preparing and filing in accordance with Section 6.6(a) and any Tax Returns of the Seller, (ii) cooperate fully in responding to any inquiries from or preparing for any audits of, or any disputes with a Governmental Entity regarding, any Taxes or Tax Returns of either Company or the Seller; and (iii) make available to the other Party or Parties, as the case may be, as reasonably requested, all information in its possession relating to a Company that may be relevant to any Tax Return, audit or examination, proceeding or determination and to any Governmental Entity, as reasonably requested by the Seller or a Company, including all information, records, and documents relating to Taxes of either Company.

(h)Tax Treatment. The Parties agree to treat the transactions contemplated in this Agreement as a taxable acquisition of the assets of each Company and shall not take any position inconsistent therewith unless required by applicable Law.

(i)Refunds. The amount or economic benefit of any refunds, credits or offsets of Taxes of or relating to either Company for any Pre-Closing Tax Period shall be for the account of the Seller. Notwithstanding the foregoing, any such refunds, credits or offsets of Taxes shall be for the account of the Buyer to the extent such refunds, credits or offsets of Taxes are attributable (determined on a marginal basis) to the carryback of items of loss, deduction or credit, or other Tax items, of either Company (or any of its Affiliates, including the Buyer) from a taxable period beginning after the Closing Date. The amount or economic benefit of any refunds, credits or offsets of Taxes of either Company for any Straddle Period shall be equitably apportioned between the Seller and the Buyer. Each Party shall forward, and shall cause its Affiliates to forward, to the Party entitled to receive the amount or economic benefit of a refund, credit or offset to Tax the amount of such refund, or the economic benefit of such credit or offset to Tax, as promptly as reasonably practicable after such refund is received or after such credit or offset is allowed or applied against another Tax liability, as the case may be; provided that the Buyer shall be entitled to offset and withhold against the payment of any such refund, credit or offset, the amount of any Damages to which any Buyer Indemnified Person is entitled from the Seller pursuant to the determination of a claim asserted pursuant to Article VIII.

(j)Post-Closing Actions. Neither the Buyer nor any of its Affiliates, including either Company, shall file, amend, re-file or otherwise modify any Tax Return or Tax election, initiate any voluntary disclosure, or agree to the waiver or extension of the statute of limitations, in each case, for either Company with respect to any taxable period (or portion thereof) ending on or before the Closing Date and which (determined on a marginal basis) would reasonably be expected to increase the Tax Liabilities of the Seller or the direct or indirect owners of the interests in Seller, without the prior written consent of the Seller (which consent shall not be unreasonably withheld, conditioned, or delayed).

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6.7Non-Solicitation; Non-Competition.

(a)In order to induce the Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, Mechner covenants and agrees, for himself and each of his Controlled Affiliates, that during the period from the Closing Date until the second anniversary of the Closing Date (the “Restricted Period”), Mechner shall not, and shall cause his Controlled Affiliates not to, directly or indirectly, (i) cause, encourage, induce or attempt to induce any Continuing Employee to leave their employment with the Buyer or any of its Affiliates, or solicit or attempt to solicit any Continuing Employee for employment or to serve as an independent contractor or consultant or (ii) hire, employ, engage or otherwise retain or offer to hire, employ, engage or otherwise retain any Continuing Employee as an employee, consultant or independent contractor; provided, however, that it shall not be a violation of this Section 6.7(a) to (x) make general solicitations that are not targeted at the Continuing Employees or (y) hire, employ, engage or otherwise retain any Continuing Employee who was terminated without cause by the Buyer or its applicable Affiliate at least six months prior to the commencement of discussions between Mechner or his applicable Controlled Affiliate (or any of their respective representatives) and the Continuing Employee.

(b)In order to induce the Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, Mechner covenants and agrees, for himself and his Controlled Affiliates, that, during the Restricted Period, neither Mechner nor any of his Controlled Affiliates shall (and Mechner shall cause his Controlled Affiliates not to), directly or indirectly, establish, own, hold or otherwise control, operate, manage or engage in, or work for, consult with, render services for (including as a director or officer), or make any equity investment in any Person (other than Buyer and its Subsidiaries) that is engaged or involved in (i) the provision of any securities execution, securities order-routing or securities analytics software or services that does not normally involve active human involvement, intervention, judgment or action (provided that ancillary human activities involved in or relating to any such services or activities, such as the development and maintenance of computer systems, monitoring of orders and systems, intervention in exceptional situations, and clearance operations, shall not constitute active human involvement, intervention, judgment or action), (ii) the development or provision of any technology that integrates portfolio selection, risk management and algorithmic trading or (iii) which otherwise competes with the business of a Company as conducted as of the Closing (a “Restricted Business”); provided, however, that the foregoing shall not restrict Mechner or any of his Controlled Affiliates from, directly or indirectly, (x) acquiring or owning, in the aggregate among Mechner and his Controlled Affiliates, less than 2% of the outstanding capital stock of any publicly traded company that is engaged in a Restricted Business or (y) following any termination without cause by Buyer or its applicable Affiliate(s) being employed by or providing services to an entity (the “Employing Entity”) that has a business unit, subsidiary, or division (the “Business Unit”) that is a Restricted Business, which Business Unit comprises no more than 25% of the Employing Entity’s and its affiliates’ overall revenue, provided that such Person does not provide any services to the Business Unit. The parties acknowledge and agree that the activities and business set forth on Schedule 6.7 constitute Restricted Businesses, but that such activities are provided for illustrative purposes only and shall not be exclusive or be deemed to limit the scope of the Restricted Businesses under this Section 6.7.

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(c)Mechner acknowledges and agrees, for himself and his Controlled Affiliates, that the restrictions contained in this Section 6.7 are reasonable and necessary to protect the legitimate interests of each Company and Buyer and constitute a material inducement to each Company and the Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 6.7 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law. The covenants contained in this Section 6.7 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

(d)Mechner acknowledges and agrees, for himself and his Controlled Affiliates, that the covenants and undertakings contained in this Section 6.7 relate to matters which are of a special, unique and extraordinary character and that accordingly the provisions of Section 11.10 are integral to and shall apply to any breach or threatened breach of this Section 6.7.

6.8Transfer Restrictions.

(a)Pre-Closing. During the Pre-Closing Period, the Seller shall not, directly or indirectly, Transfer any of its Interests.

(b)Lock-Up. During the period from the Closing until the six-month anniversary of the Closing (the “Lock-Up Period”), except as set forth on Schedule 6.8(b), the Seller shall not, and shall cause its Affiliates not to, without the prior written consent of the Buyer, directly or indirectly, sell, transfer, convey, assign, pledge, encumber or otherwise dispose of (“Transfer”) any shares of Buyer Common Stock that comprise the Stock Consideration. In the event the Buyer consents (in its sole discretion) to the Transfer of any Buyer Common Stock that comprises the Stock Consideration, as a condition to any such Transfer, each transferee shall duly execute and deliver to the Buyer a joinder, in substantially the form attached hereto as Exhibit I (a “Joinder”), pursuant to which such transferee will become a party to and be bound by, and shall make the warranties, covenants and agreements set forth in, this Section 6.8. Any Transfer undertaken in breach of Section 6.8(a) or this Section 6.8(b) shall be null and void ab initio.

(c)Hedging. Notwithstanding anything in this Agreement to the contrary, the Seller (or any recipient of shares of Buyer Common Stock in a Transfer made in compliance with Section 6.8(b) that has executed and delivered a Joinder to the Buyer) may enter into or otherwise engage in any short sale (whether or not against the box) or any purchase, sale or grant of any right (including any put or call option, swap or other derivative transaction whether settled in cash or securities) to obtain a “short” or “put equivalent position” or other hedging transaction with respect to the Buyer Common Stock (including pledging its portion of the Stock Consideration (excluding any Indemnity Escrow Shares prior to the release thereof from the Indemnity Escrow Account and delivery to the Seller) in connection therewith); providedthat (i) such hedging transaction is made in compliance with the Securities Act (including Rule 144 promulgated under the Securities Act

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and the interpretative guidance from the Staff of the SEC thereunder) and other applicable Laws, (ii) any hedge in respect of which shares of Buyer Common Stock comprising the Stock Consideration is pledged as collateral may not settle prior to the expiration of the Lock-Up Period, (iii) Seller (or such applicable holder of Buyer Common Stock) is not an “affiliate” of the Buyer within the meaning of Rule 405 promulgated under the Securities Act and (iv) the Buyer shall not be required to take any action that would reasonably be expected to result in or otherwise be required to agree to incur any legal or other Liability (beyond the Buyer’s obligations under this Agreement) in connection therewith. Subject to the foregoing, the Buyer and Seller shall, at the Seller’s sole cost and expense, reasonably cooperate in connection with any actions reasonably requested by the Buyer or Seller and required in connection with any pledge of shares of Buyer Common Stock to be made in accordance with this Section 6.8(c), subject to Buyer’s receipt (if requested in connection therewith) of a legal opinion from outside counsel (reasonably acceptable to Buyer) to the Seller to the effect that such pledge complies with applicable securities Laws.

(d)Legends. The Seller hereby acknowledges and agrees that each certificate or book-entry share representing any Buyer Common Stock issued hereunder, and any securities issued in respect thereof or exchange therefor shall bear a legend substantially in the following form (in addition to any other legend required under applicable state securities Laws) (and a comparable notation or other arrangement will be made with respect to any uncertificated Stock Consideration):

(i)“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER APPLICABLE STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.”

(ii)“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN THAT CERTAIN MEMBERSHIP INTEREST PURCHASE AGREEMENT, DATED AUGUST 5, 2023, BY AND AMONG THE ISSUER, PRAGMA WEEDEN HOLDINGS LLC AND CERTAIN OTHER PARTIES IDENTIFIED THEREIN, AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH.”

(e)Removal of Legends. The Buyer shall, as promptly as practicable upon the written request of the Seller or other permitted holder, cause:

(i)the removal of the legend set forth in clause (i) of Section 6.8(d) from any certificate and any related “stop order” or equivalent restriction on any book-entry share evidencing the Stock Consideration if (A) such shares of Buyer Common Stock are registered for resale under the Securities Act (provided, that, if the holder is selling pursuant to an effective registration statement registering such shares for resale, the holder hereby agrees to only sell such

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shares during such time that such registration statement is effective and not withdrawn, or suspended, and only as permitted by such registration statement), (B) if the holder is not an affiliate of the Buyer within the meaning of Rule 405 under the Securities Act, such shares have been sold or transferred pursuant to Rule 144, or (C) such shares are eligible for sale under Rule 144, without the requirement of the Buyer to be in compliance with the current public information required under Rule 144 as to such shares and otherwise without any volume or manner-of-sale restrictions; provided that such holder delivers to the Buyer (A) such documentation, representations and warranties as may be reasonably requested by the Buyer, which request shall be solely in order for the Buyer to comply with applicable Law (e.g., representations that such holder is not an affiliate of the Buyer and other customary Rule 144 representations), and (B) a customary opinion of counsel, reasonably acceptable in form and substance to the Buyer, that either a registration statement under the Securities Act is then in effect with respect to such shares, or that such shares can be freely transferred in a public sale without such a registration statement being in effect; and

(ii)the removal of the legend set forth in clause (ii) of Section 6.8(d) from any certificate and any related “stop order” or equivalent restriction on any book-entry share evidencing the Stock Consideration upon the termination or lapse of the restrictions on Transfer identified therein.

If so requested by the holder, any certificates subject to legend removal hereunder may be surrendered in exchange for shares of Buyer Common Stock held in book-entry form and shall be transmitted by the Buyer’s transfer agent to the holder through the direct registration system.

(f)Stop-Transfer Instructions. The Seller acknowledges and agrees that, in order to ensure compliance with the restrictions imposed by this Agreement, the Buyer may issue to its transfer agent an appropriate “stop order” or equivalent instructions with respect to any shares of Buyer Common Stock held in book entry form (and may make appropriate notations to the same effect in its own records).

(g)Transfer Requirements. Prior to any Transfer of Buyer Common Stock to be made in accordance with this Section 6.8, the holder thereof shall provide to the Buyer (at the holder’s sole cost and expense), (i) such documentation, representations and warranties as the Buyer may reasonably request to evidence that the proposed Transfer will comply with the Securities Act and other applicable Laws (e.g., representations that such holder is not an affiliate of the Buyer and other customary Rule 144 representations and/or opinions) and (ii) a customary opinion of counsel, in form and substance reasonably acceptable to the Buyer, that either a registration statement under the Securities Act is then in effect with respect to such shares of Buyer Common Stock, or that the proposed Transfer is exempt from the registration requirements of the Securities Act and state securities Laws.

6.9Public Information. For a period of one year following the Closing Date, the Buyer shall timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Buyer pursuant to Section 13 or Section 15(d) of the Exchange Act.

6.10Listing. The Buyer shall, to the extent required by the applicable listing rules of the Nasdaq, use commercially reasonable efforts to list, effective upon the Closing, all of the shares

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of Buyer Common Stock that comprise the Stock Consideration on the NASDAQ Global Select Market. If, prior to the Closing, the Buyer applies to have the Buyer Common Stock traded on any other exchange, it will include in such application all of the shares of Buyer Common Stock that will comprise the Stock Consideration, and, to the extent such listing becomes effective prior to the Closing, will take such other action as is reasonably necessary to cause all of the shares of Buyer Common Stock that comprise the Stock Consideration to be listed on such other exchange as promptly as possible after the issuance thereof.

6.11Use of Names. The Seller hereby agrees that, upon the Closing, the Buyer and its Affiliates (including the Companies) shall, as between the Seller and its Affiliates, on the one hand, and the Buyer and its Affiliates (including the Companies), on the other hand, have the sole and exclusive right to use all Intellectual Property relating to the Business, including the sole right to the use of the name “Pragma” or similar names and any Trademarks, d/b/a names, fictitious names, or emblems, signs or insignia related thereto or containing or comprising the foregoing, or otherwise used in the businesses of the Companies, including any name or mark confusingly similar thereto or any variation or simulation thereof, and any Trademarks listed on Schedule 6.11 (collectively, the “Company Marks”). The Seller shall not, and shall not permit its Affiliates to, use such Company Marks. The Seller shall, and shall cause each of its Affiliates to, immediately after the Closing, cease to hold itself out as having any affiliation with the Company or any of its Affiliates. In furtherance thereof, as promptly as practicable, but in no event later than 30 days following the Closing Date, the Seller shall and shall cause its Affiliates to remove, strike over or otherwise obliterate all Company Marks from all materials held by, or under the control of, the Seller and its post-closing Affiliates, including any business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, computer software and other materials.

6.12R&W Policy. The R&W Policy, a copy of which is attached as Exhibit E, provides that the R&W Insurer waives its rights to bring any claim (by way of subrogation or otherwise) in connection with this Agreement or the transactions contemplated hereby against the Seller, any of its Affiliates, or any of its or their respective officers, directors, managers, equityholders, employees, agents, advisors or representatives, except for a claim against the Seller or any such Person for Fraud (and that such waiver may not be amended in a manner adverse to any such Person and that each such Person is a third party beneficiary thereof), and the Buyer will not permit the R&W Insurer to amend such waiver in a manner adverse to the Seller. Each Company and the Seller shall cooperate with the Buyer with any actions reasonably necessary in connection with the underwriting, binding and issuance of the R&W Policy, including with respect to executing an inception no-claims declaration and a closing no-claims declaration, and making personnel available for a bring-down due diligence call as the underwriter of the R&W Policy may require and providing copies of the virtual data room contents.

6.13Seller Name Change. Promptly following the Closing, the Seller shall and shall cause its applicable Affiliates to, in accordance with their respective Organizational Documents and applicable Law, cause the name of the Seller or such Affiliate to be modified to a name that does not include “Pragma”.

6.14Access to Information Following the Closing. Following the Closing, the Buyer shall afford to the Seller and its authorized accountants, counsel and other designated

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representatives reasonable access, during normal business hours and in a manner so as to not unreasonably interfere with the conduct of business to any records, books, and other information within the possession or control of the Buyer or any of its Affiliates (including the Companies), relating to the Business prior to the Closing, insofar as such access is reasonably requested by the Seller, but solely to the extent such information is reasonably required by the Seller for financial reporting and accounting or tax-related matters (subject in all cases to Section 6.6), including for purposes preparing financial statements of the Seller, preparing and filing any Tax Returns, prosecuting any claims for refund, and defending any Tax claims or assessment, prosecuting, defending or settling litigation (other than litigation concerning the transactions contemplated by this Agreement) or to the extent required for the Seller to perform and comply with its obligations under this Agreement or any other Transaction Document. No Person shall be required pursuant to this Section 6.14 to provide access or disclose information where such access or disclosure would result in the loss of any attorney-client privilege or be prohibited under applicable Law or by the terms of any Contract; provided that the Buyer shall use commercially reasonably efforts to make substitute arrangements for providing such access or information that does not result in the loss of such privilege and is not prohibited under such Law or Contract.

6.15Pre-Closing Assignments. Prior to the Closing, the Seller and the applicable Company(ies) shall enter into (and deliver to Buyer) (a) an assignment and assumption agreement, in substantially the form attached hereto as Exhibit F (the “Contract Assignment Agreement”), with respect to the assignment by the Seller prior to the Closing of those Contracts set forth on Schedule 6.15(a) to the applicable Company(ies), free and clear of all Liens (other than Permitted Liens) and (b) an intellectual property assignment agreement, in substantially the form attached hereto as Exhibit J (the “Intellectual Property Assignment Agreement”), with respect to the assignment and transfer by the Seller prior to the Closing of all of its right, title and interest in and to any Intellectual Property owned by the Seller and used or held for use in connection with or otherwise relating to the Business, including the Intellectual Property set forth on Schedule 6.15(b) to the applicable Company(ies), free and clear of all Liens (other than Permitted Liens)), together with any applicable short-form assignment agreements required for recordation purposes. If, prior to the Closing, the Seller identifies any other properties, Contracts or assets related to (or that are used or held for use in connection with) the Business that are owned, leased or licensed by the Seller or any of its Affiliates (other than the Companies), the Seller shall promptly notify the Buyer thereof and shall (or shall cause its applicable Affiliate to) assign, convey and transfer such properties, Contracts or assets to a Company prior to the Closing pursuant to an instrument of assignment, transfer and conveyance in form and substance reasonably acceptable to the Buyer.

6.16Termination of Intercompany Arrangements. On or prior to the Closing Date, and in any event effective prior to 12:01 a.m. Eastern time on the Closing Date, the Seller and the Companies shall, and shall cause their applicable Affiliates to, take (or cause to be taken) such actions and make (or cause to be made) such payments as may be necessary to terminate, cancel or settle or otherwise eliminate (in a manner reasonably acceptable to the Buyer) any intercompany accounts or liabilities between a Company, on the one hand, and the Seller or any of its Affiliates (other than the Companies), on the other hand.

6.17Insurance Policies. From and after the Closing, the Additional Insured shall, subject to applicable Law and the terms of such policies, remain entitled to all rights of the Additional Insured under the Applicable Insurance Policies with respect to any claim, act,

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omission, event, circumstance, occurrence or loss that occurred or existed prior to the Closing (an “Applicable Insurance Event”). In furtherance thereof, to the extent requested from time to time by the Additional Insured or its Affiliates, from and after the Closing, the Primary Insured Party shall, at the sole cost and expense of the Buyer (if the Seller is the Primary Insured Party) or the Seller (if either Company is the Primary Insured Party), reasonably cooperate with efforts by the Additional Insured to recover all amounts due to Additional Insured from any insurers under any Applicable Insurance Policies with respect to any Pre-Closing Insurance Events and shall pay such amounts actually recovered by the Primary Insured Party in respect of losses incurred by the Additional Insured (less the out of pocket costs and expenses actually incurred by the Primary Insured Party in making such recoveries) over to, the Additional Insured or its designated Affiliate. Without limiting the foregoing, to the extent requested from time to time by (and at the sole cost and expense of) the Buyer (if the Seller is the Primary Insured Party) or the Seller (if either Company is the Primary Insured Party), the Additional Insured or its Affiliates and to the extent the Additional Insured is prohibited from taking such action directly under the Applicable Insurance Policies, from and after the Closing, the Primary Insured Party shall file on behalf of the Additional Insured (or the Business) any claims under any occurrence-based Applicable Insurance Policies that were in effect at any time prior to the Closing that provide coverage, or potentially provide coverage, in whole or in part with respect to any Applicable Insurance Event, including, to the extent requested from time to time by (and at the sole cost and expense of) the Buyer (if the Seller is the Primary Insured Party) or the Seller (if either Company is the Primary Insured Party), making all necessary notifications and submitting all reasonably required supporting documentation in connection therewith.

6.18Wrong Pockets; Further Assurances. From and after the Closing, if the Seller or any of its Affiliates receives any mail, packages or other correspondence or communications, or receives any monies or checks or other funds or proceeds relating to the Business or a Company (including the properties and assets thereof), the Seller shall, and shall cause its applicable Affiliate(s) to, at Buyer’s sole costs and expense, promptly (and in any event within five Business Days following receipt thereof) remit such mail, packages, correspondence, communications, monies, receivables, funds or proceeds to the Buyer. At any time from and after the Closing, each Party shall, at the sole cost and expense of the requesting Party, as promptly as practicable, cooperate and take such further actions, provide such assurances, and execute, acknowledge and deliver any other instruments or documents, in each case, reasonably requested by a Party and necessary to give effect to the transactions contemplated hereby.

6.19Release.

(a)To the fullest extent permitted by applicable Law, the Seller and Mechner, on behalf of itself and each of its respective past, current and future Affiliates, heirs, executors or estates, and each of their respective successors and permitted assigns (each a “Seller Releasing Party”), hereby finally, unconditionally, and absolutely, releases, acquits, remises, satisfies and forever discharges, effective as of the Closing, (i) each Company, the Buyer and each of the Buyer’s respective past, current and future Subsidiaries and Affiliates and (ii) each of their respective successors and permitted assigns (each a “Seller Released Party” and collectively, the “Seller Released Parties”), from any and all actions, causes of action, proceedings, counterclaims, demands, debts, obligations, accounts, Liabilities, Liens, suits, judgments, contracts, torts and charges, whether known or unknown, mature or unmatured, absolute or contingent, now existing

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or hereafter arising or discovered, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, or due or to become due, at Law, in equity or otherwise, whether arising by statute or common Law, in contract, in tort or otherwise, that any Seller Releasing Party has, might have or ever had against any Seller Released Party in connection with, arising under, as a result of or in any way relating to (A) the business and affairs of either Company (or any of their respective predecessors) prior to the Closing, (B) the Seller’s or Mechner’s, as the case may be, and the other Seller Releasing Parties’ relationship with either Company, including as an employee and as a direct or indirect equityholder of either Company prior to the Closing and (C) any other act or omission by either Company prior to the Closing (collectively, “Seller Released Claims”). Notwithstanding anything herein to the contrary, the Seller Released Claims shall not include, and nothing contained in this Agreement is intended to, nor does it, limit, impair or otherwise modify or affect, any rights or claims of any Seller Releasing Party or the obligations of any Seller Released Party, arising from (x) any rights or obligations under this Agreement or any other Transaction Document, (y) any indemnification rights that any Seller Releasing Party may be entitled to as a manager, director or officer of a Company pursuant to applicable Law or the Organizational Documents of a Company as in effect on the date hereof or (z) any rights to compensation or employee benefits in the ordinary course of business.

(b)THE GENERAL RELEASE IN THIS SECTION 6.19 IS SPECIFICALLY INTENDED TO OPERATE AND BE APPLICABLE EVEN IF IT IS ALLEGED, CHARGED OR PROVEN THAT ALL OR SOME OF THE CLAIMS OR DAMAGES RELEASED WERE SOLELY AND COMPLETELY CAUSED BY ANY ACTS OR OMISSIONS, WHETHER NEGLIGENT, GROSSLY NEGLIGENT, INTENTIONAL, FRAUDULENT OR OTHERWISE OF OR BY BUYER OR THE COMPANIES.

(c)Effective as of the Closing, each Seller Releasing Party covenants and agrees not to sue, make, assert, or maintain, directly or indirectly, any Seller Released Claim or to bring, request, initiate or file any suit or action regarding any Seller Released Claim, all of which are released pursuant to this Agreement.

(d)Each Seller Releasing Party acknowledges and agrees that the consideration he or she is receiving (directly or indirectly) pursuant to this Agreement and any other Transaction Documents in exchange for the release of Seller Released Claims, all of which are released effective as of the Closing pursuant to this Agreement, is good and sufficient consideration and exceeds anything of value to which such Seller Releasing Party is already entitled. Each Seller Releasing Party further disclaims and releases, by operation of this Agreement effective as of the Closing, any and all rights to further distributions or payments from Buyer with respect to such Seller Releasing Party’s direct or indirect Equity Interests in the Companies, other than any rights under this Agreement or any other Transaction Document.

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ARTICLE VII

CONDITIONS TO PURCHASE

7.1Conditions to Each Party’s Obligation to Effect the Closing. The respective obligations of each Party to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the following conditions:

(a)HSR Act. The waiting period applicable to the transactions contemplated hereby under the HSR Act (or any extension thereof including the expiration or termination of any timing agreement entered into with any Governmental Entity) shall have expired or been terminated.

(b)FINRA Approval. With respect to the change of ownership or control of the Broker-Dealer Company pursuant to the transactions contemplated hereby, either (i) FINRA shall have issued its approval thereof pursuant to FINRA Rule 1017 or (ii) the 30 day period beginning the day after the Broker-Dealer Company filed its application for the approval of such change of ownership or control pursuant to FINRA Rule 1017(c) shall have expired without FINRA imposing any interim restrictions with respect to such change of ownership or control.

(c)No Injunctions. No Governmental Entity shall have issued, promulgated, or entered any order, executive order, stay, decree, judgment or injunction (whether temporary, preliminary or permanent), which remains in effect, and no Law shall have been enacted or promulgated and be in effect, in each case, which has the effect of making the transactions contemplated by this Agreement illegal or otherwise prohibiting or enjoining the consummation of the transactions contemplated hereby.

7.2Additional Conditions to Obligations of the Buyer. The obligations of the Buyer to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following additional conditions, any of which may be waived, in writing, exclusively by the Buyer:

(a)Representations and Warranties.

(i)The (A) representations and warranties of the Seller set forth in Article II (other than the Seller Fundamental Representations), shall be true and correct as of the Closing Date as though made on and as of the Closing Date, except (I) to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date, and (II) where the failure of such representations and warranties to be true and correct (without giving effect to any materiality, Seller Material Adverse Effect or similar qualifications therein) has not had a Seller Material Adverse Effect, and (B) Seller Fundamental Representations shall be true and correct in all respects as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be so true and correct as of such date. The Buyer shall have received a certificate, dated as of the Closing Date, signed by a duly authorized officer of the Seller to such effect.

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(ii)The (A) representations and warranties of the Seller set forth in Article III (other than the Company Fundamental Representations and the representations and warranties in Section 3.6(a)(i) and Section 3.18), shall be true and correct as of the Closing Date as though made on and as of the Closing Date, except (I) to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date, and (II) where the failure of such representations and warranties to be true and correct (without giving effect to any materiality, Company Material Adverse Effect or similar qualifications therein) has not had and would not reasonably be expected to have a Company Material Adverse Effect, (B) Company Fundamental Representations and the representation and warranty in Section 3.6(a)(i) shall be true and correct in all respects as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be so true and correct as of such date and (C) representations and warranties in Section 3.18 shall be true and correct in all material respects as of the Closing Date as though made on and as of the Closing Date, except to the extent such representation or warranty is qualified by materiality, Company Material Adverse Effect or any similar qualifications, in which case such representation or warranty shall be true and correct in all respects. The Buyer shall have received a certificate, dated as of the Closing Date, signed by a duly authorized officer of the Seller to such effect and to the effect that the condition in Section 7.2(d) has been satisfied.

(b)Performance of Obligations of each Company and the Seller. Each Company and the Seller shall have in all material respects performed and complied with all covenants and obligations required to be performed and complied with by them under this Agreement at or prior to the Closing; and the Buyer shall have received a certificate, dated as of the Closing Date, to such effect signed by a duly authorized officer of the Seller.

(c)Escrow Agreement. The Seller and the Escrow Agent shall have duly executed and delivered to the Buyer the Escrow Agreement.

(d)No Company Material Adverse Effect. Since the date of this Agreement, no Company Material Adverse Effect shall have occurred.

(e)Third Party Consents. The Seller and the Companies shall have obtained those consents and waivers listed on Schedule 7.2(e) (in each case, in form and substance reasonably satisfactory to the Buyer), and copies thereof shall have been delivered to the Buyer.

(f)Treatment of Certain Contracts. The Buyer shall have received (i) written evidence (in form and substance reasonably satisfactory to the Buyer) that all Affiliate Contracts (other than those Contracts set forth on Schedule 7.2(f)(i)) have been terminated, and each party to any such Affiliate Contract released from any further Liabilities or obligations with respect thereto and (ii) duly executed instruments of assignment (reasonably satisfactory to the Buyer) with respect to the transfer of any Contracts, Intellectual Property or other assets in accordance with Section 6.15.

(g)Closing Deliverables. The Buyer shall have received the items listed in Sections 1.4(d) and 1.4(e).

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(h)Mechner Employment Agreement. The Mechner Employment Agreement shall remain in full force and effect and shall not have been amended, rescinded or otherwise modified by Mechner.

(i)Extended Support Agreement. The Companies shall have entered into the Contract listed on Schedule 7.2(i) on the terms set forth therein and otherwise in form and substance reasonably acceptable to the Buyer (the “Extended Support Agreement”), and a copy of such Contract shall have been delivered to the Buyer and such Contract shall be in full force and effect as of the Closing.

7.3Additional Conditions to Obligations of the Seller. The obligation of the Seller to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following additional conditions, each of which may be waived, in writing, exclusively by the Seller:

(a)Representations and Warranties. The (i) representations and warranties of the Buyer set forth in Article IV (other than the Buyer Fundamental Representations), shall be true and correct as of the Closing Date as though made on and as of the Closing Date, except (A) to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date, and (B) where the failure of such representations and warranties to be true and correct (without giving effect to any materiality, Buyer Material Adverse Effect or similar qualifications therein) has not had a Buyer Material Adverse Effect, and (ii) the Buyer Fundamental Representations shall be true and correct in all respects (except that the representation and warranty set forth in Section 4.7(a) shall be true and correct except for de minimis inaccuracies) as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be so true and correct as of such date. The Seller shall have received a certificate, dated as of the Closing Date, signed by a duly authorized officer of the Buyer to such effect.

(b)Performance of Obligations of the Buyer. The Buyer shall have in all material respects performed and complied with all covenants and obligations required to be performed and complied with by it under this Agreement at or prior to the Closing; and the Seller shall have received a certificate, dated as of the Closing Date, to such effect signed by a duly authorized officer of the Buyer.

(c)Escrow Agreement. The Buyer and the Escrow Agent shall have duly executed and delivered to the Seller the Escrow Agreement.

(d)No Buyer Material Adverse Effect. Since the date of this Agreement, no Buyer Material Adverse Effect shall have occurred.

(e)Closing Deliverables. Seller shall have received the items listed in Section 1.4(f).

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7.4Frustration of Closing Conditions. Neither the Buyer, on the one hand, nor the Seller, on the other hand, may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was primarily caused by such Party’s or its respective Affiliates (including, in the case of the Seller, each Company) failure to act in good faith or to comply with its agreements set forth herein.

ARTICLE VIII

INDEMNIFICATION

8.1Indemnifiable Matters.

(a)Indemnification by the Seller. Subject to the terms and conditions of this Article VIII, from and after the Closing, the Seller shall indemnify and hold harmless the Buyer Indemnified Persons from and against any and all Damages incurred or suffered by the Buyer Indemnified Persons to the extent based upon, arising out of, resulting from or attributable to:

(i)any breach following the Closing by the Seller of any covenant or agreement that the Seller is obligated to perform under this Agreement following the Closing;

(ii)any Taxes of either Company (for the avoidance of doubt, including any Taxes of either Company which are the responsibility of the Seller or any direct or indirect equityholder of the Seller), (A) for any Pre-Closing Tax Period, (B) for the portion through the end of the Closing Date of any Straddle Period, and (C) by reason of either Company being or having been a member of a consolidated, combined, unitary, or similar group prior to the Closing pursuant to Treasury Regulations Section 1.1502-6 (or any similar provision of Law), except to the extent (x) such Taxes are included in the determination of the Closing Cash Consideration or (y) such Taxes result from any transactions occurring on the Closing Date after the Closing outside the ordinary course of business (except to the extent such transactions are contemplated by this Agreement or any other Transaction Document);

(iii)any breach of any Company Fundamental Representation or Seller Fundamental Representation; and

(iv)the matters disclosed in Section 3.7(a), Section 3.12(e) and the last bullet of Section 3.12(a) of the Disclosure Schedule.

(b)Indemnification by Mechner. Subject to the terms and conditions of this Article VIII, from and after the Closing, Mechner shall indemnify and hold harmless the Buyer Indemnified Persons from and against any and all Damages incurred or suffered by the Buyer Indemnified Persons to the extent based upon, arising out of, resulting from or attributable to any breach by Mechner of any covenant or agreement set forth in Section 6.7 or Section 6.19.

(c)Indemnification by the Buyer. Subject to the terms and conditions of this Article VIII, from and after the Closing, the Buyer shall indemnify and hold harmless the Seller Indemnified Persons from and against any and all Damages incurred or suffered by the Seller Indemnified Persons to the extent based upon, arising out of, resulting from or attributable to:

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(i)any breach following the Closing by the Buyer of any covenant or agreement that the Buyer is obligated to perform under this Agreement; and

(ii)any breach of any representation or warranty of the Buyer set forth in this Agreement.

8.2Claims for Indemnification.

(a)Third-Party Claims. All claims for indemnification made under this Agreement arising out of a Third-Party Action shall be made in accordance with the following procedures. If an Indemnified Party receives notice of any Third-Party Action against such Indemnified Party, or, if earlier, becomes aware of any Third-Party Action, it shall as promptly as practicable provide written notice thereof to the Indemnifying Party (a “Third-Party Claim Notice”), which notice shall describe in reasonable detail (to the extent then known by the Indemnified Party) the facts constituting the basis for such Third-Party Action and the claim for indemnification hereunder and shall include a good faith estimate (if reasonably practicable) of the amount of the claimed Damages actually suffered or incurred or that could reasonably be expected to be incurred; provided, however, that the failure to provide such notice shall not relieve the Indemnifying Party from any of its obligations under this Article VIII except to the extent the Indemnifying Party is adversely prejudiced by such failure. The Parties acknowledge and agree that a Third-Party Claim Notice must be delivered (whether or not formal legal action shall have been commenced based upon such Third-Party Action) before the expiration of any applicable survival period set forth in Section 8.3. At any time prior to the 30th day after delivery of such Third-Party Claim Notice, the Indemnifying Party may (but shall not be obligated to), upon written notice thereof to the Indemnified Party, assume control of the defense of such Third-Party Action with counsel reasonably satisfactory to the Indemnified Party; provided, however, that (x) the Indemnifying Party may not assume control of the defense of a Third-Party Action if the Indemnified Party in good faith determines that the conduct of the defense or any proposed settlement of such Third-Party Action would reasonably be expected to involve the imposition of criminal Liability against the Indemnified Party or would reasonably be expected to materially and adversely affect the Indemnified Party’s ability to conduct its business and (y) prior to the time the Indemnified Party is notified by the Indemnifying Party as to whether the Indemnifying Party will assume control of the defense of such Third-Party Action, the Indemnified Party shall take any actions reasonably necessary to timely preserve the collective rights of the Parties with respect to such Third-Party Action. If the Indemnifying Party elects not to assume, or does not timely assume control of, such defense, the Indemnified Party shall control the defense against, or may otherwise seek to negotiate or settle such Third-Party Action. If the Indemnifying Party assumes control of such defense, the Indemnified Party may participate therein with counsel of its choice, at its own expense; provided that if the Indemnified Party reasonably concludes, based on advice from counsel, that (i) the Indemnifying Party and the Indemnified Party have a conflict of interest with respect to such Third-Party Action or (ii) there are legal defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party, the reasonable fees, costs and expenses of counsel to the Indemnified Party in connection therewith shall be considered “Damages” for purposes of this Agreement; provided, however, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one (1) counsel for all Indemnified Parties in each jurisdiction for which counsel is required with respect to such Third-Party Action. The party controlling such defense shall keep the other party and its

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counsel advised of the status of such Third-Party Action and the defense thereof and shall consider recommendations made by the other party or its counsel with respect thereto. The respective parties and their counsel shall reasonably cooperate with the other parties in the defense or prosecution of any Third-Party Action, including providing copies of or reasonable access to all relevant correspondence, records, documents, testimony and information in connection with the defense, negotiation or settlement thereof and attending such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. The Indemnified Party shall not agree to any settlement or compromise of any such Third-Party Action without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed). The Indemnifying Party shall not agree to any settlement or compromise of, or permit a default or consent to entry of any judgment in, such Third-Party Action that does not include a complete and unqualified release of the Indemnified Party from all Liability with respect thereto or that imposes any Liability or obligation on the Indemnified Party without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed). To the extent of any conflict between this Section 8.2(a) and Section 6.6, Section 6.6 shall apply.

(b)Procedure for Claims Not Involving Third Parties. An Indemnified Party wishing to assert a claim for indemnification under this Agreement that does not involve a Third-Party Action shall deliver to the Indemnifying Party a Claim Notice as promptly as practicable after becoming aware of the basis for such claim; provided, however, that the failure to deliver a Claim Notice shall not relieve the Indemnifying Party from any of its obligations under this Article VIII except to the extent the Indemnifying Party is adversely prejudiced by such failure. The Parties acknowledge and agree that a Claim Notice must be delivered before the expiration of any applicable survival period set forth in Section 8.3. If the claim is not resolved within 60 days following the delivery by the Indemnified Party of the applicable Claim Notice, the Indemnifying Party and the Indemnified Party shall each have the right to submit such dispute to a court of competent jurisdiction in accordance with the provisions of Section 11.9, in addition to any other remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

8.3Survival.

(a)The Parties, intending where applicable to contractually shorten the applicable statute of limitations, agree that:

(i)none of the representations and warranties of the Seller or a Company set forth in this Agreement (other than the Company Fundamental Representations and Seller Fundamental Representations) shall survive the Closing and all such representations and warranties shall terminate upon the earlier of the Closing and the termination of this Agreement in accordance with Section 9.1;

(ii)the Company Fundamental Representations and Seller Fundamental Representations shall survive the Closing until the third anniversary of the Closing Date at which time they shall terminate;

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(iii)the representations and warranties of the Buyer set forth in this Agreement (other than the Buyer Fundamental Representations) shall survive the Closing until the first anniversary of the Closing Date at which time they shall terminate;

(iv)the Buyer Fundamental Representations shall survive the Closing until the third anniversary of the Closing at which time they shall terminate; and

(v)each of the covenants and other agreements contained in this Agreement (including the indemnification obligations set forth in this Article VIII) shall survive the Closing until the expiration of the term of the undertaking set forth in such covenant or agreement (or, if none, indefinitely); provided that each of the covenants and agreements that by their terms are to be performed (in whole or in part) at or prior to the Closing shall, to the extent relating to the performance thereof at or prior to the Closing, terminate at the Closing and no claim may be asserted or maintained following the Closing in respect of any alleged breach thereof at or prior to the Closing.

(b)Notwithstanding anything to the contrary in Section 8.3(a) or elsewhere in this Agreement, nothing in this Agreement shall be construed to limit (i) any claim for Fraud against the Party committing such Fraud or (ii) any rights of any Buyer Indemnified Person under the R&W Policy.

(c)If an indemnification claim is properly asserted pursuant to Article VIII prior to the termination or expiration of the applicable survival period as provided in Section 8.3(a) and such claim has not been finally resolved prior to the end of such survival period, then such claim shall survive such expiration until the full and final resolution of such claim. For the avoidance of doubt, and other than in the event of Fraud, no indemnification claim in respect of any alleged breach of any representation, warranty, covenant or agreement may be asserted following the termination or expiration of the survival period as provided in Section 8.3(a) with respect to the representation, warranty, covenant or agreement alleged to have been breached.

8.4Limitations; Priority of Payments.

(a)Notwithstanding anything to the contrary contained in this Agreement (other than in the case of Fraud):

(i)with respect to any Damages arising in connection with the Seller’s indemnification obligations pursuant to Section 8.1(a)(i) or Section 8.1(a)(iv), the Buyer Indemnified Persons shall first be entitled to recourse for any Damages owed by the Seller under this Article VIII from the Indemnity Escrow Account; providedthat to the extent the amounts in the Indemnity Escrow Account are insufficient to cover the Damages payable, the Buyer Indemnified Persons shall be entitled to payment in cash of such remaining Damages from the Seller;

(ii)with respect to any Damages arising in connection with matters that are the subject of the Seller’s indemnification obligations pursuant to Section 8.1(a)(ii), the Buyer Indemnified Persons’ shall be entitled to recover and such Damages shall be satisfied: (A) first, from the Indemnity Escrow Account until the retention under the R&W Policy has been met (or, to the extent the remaining amounts in the Indemnity Escrow Account are insufficient to cover

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such Damages, from the Seller); (B) second, from the R&W Policy; and (C) third, to the extent any remaining amounts are not covered by the R&W Policy due to the coverage limit being exceeded or such matters not being covered by the R&W Policy, from the Indemnity Escrow Account (providedthat to the extent the amount remaining in the Indemnity Escrow Account is insufficient, the Buyer Indemnified Persons shall be entitled to payment of such remaining Damages in cash from the Seller, it being agreed that, except to the extent the coverage limit under the R&W Policy has been met or such matter is not covered by the R&W Policy, recourse pursuant to Section 8.1(a)(ii) shall be limited to the Indemnity Escrow Account and the R&W Policy);

(iii)with respect to breaches of or inaccuracies in the representations and warranties of the Seller or a Company contained in this Agreement (other than the Company Fundamental Representations and Seller Fundamental Representations), Buyer’s sole and exclusive recourse for Damages shall be from the R&W Policy;

(iv)with respect to any Damages arising in connection with matters that are the subject of the Seller’s indemnification obligations pursuant to Section 8.1(a)(iii), such Damages shall be satisfied: (A) first, by recovery under the R&W Policy and (B) to the extent such Damages are not covered by the R&W Policy due to the coverage limit being exceeded, from the remaining amounts in the Indemnity Escrow Account; providedthat to the extent the amount remaining in the Indemnity Escrow Account is insufficient, the Buyer Indemnified Persons shall be entitled to payment of the remaining Damages in cash from the Seller, it being agreed that, except to the extent the coverage limit under the R&W Policy has been met, recourse pursuant to Section 8.1(a)(iii) shall be limited to the R&W Policy;

(v)with respect to any Damages payable to the Buyer Indemnified Persons with respect to Mechner’s indemnification obligations pursuant to Section 8.1(b), such Damages shall be satisfied exclusively by cash payment by Mechner;

(vi)in no event shall the Seller be required to provide indemnification under this Article VIII in an amount in excess of the aggregate value of the Final Closing Cash Consideration and the Stock Consideration (based on the Buyer Closing Stock Price) actually received by the Seller (including amounts received pursuant to Sections 1.5 and 8.5) under this Agreement, and in no event shall Mechner be required to provide indemnification under this Article VIII in an amount in excess of the product of the effective ownership percentage of Mechner in the Seller as of the Closing (including, for the avoidance of doubt, the effective economic ownership interest in the Seller represented by Mechner’s ownership interest in Pragma Group Investors LLC and any options to acquire interests in the Seller held by Mechner) multiplied by the aggregate value of the Final Closing Cash Consideration and the Stock Consideration (based on the Buyer Closing Stock Price) actually received by the Seller under this Agreement;

(vii)the aggregate amount of Damages for which the Buyer shall be obligated to provide indemnification under Section 8.1(c)(ii) (other than in respect of any breach of any Buyer Fundamental Representations) shall not exceed $12,800,000; and

(viii)in no event shall the Buyer be required to provide indemnification under this Article VIII in an amount that exceeds the aggregate value of the Final Closing Cash Consideration and the Stock Consideration (based on the Buyer Closing Stock Price) actually paid

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or (without duplication of amounts actually paid) that become payable (including amounts that become payable pursuant to Sections 1.5 and 8.5) to the Seller under this Agreement.

(b)Notwithstanding anything to the contrary contained in this Agreement, the Buyer shall not be required to provide indemnification under Section 8.1(c)(ii) unless and until, (i) the amount of Damages from any individual claim (or series of related claims) incurred by the Seller Indemnified Persons exceeds $25,000, and (ii) the aggregate amount of all indemnifiable Damages incurred by the Seller Indemnified Persons exceeds $320,000 (the “Deductible”); provided that the Buyer shall only be required to pay or be liable for any such indemnifiable Damages incurred in excess of the Deductible, subject to the other limitations set forth in this Article VIII. Notwithstanding the foregoing, the limitation set forth in this Section 8.4(b) shall not apply with respect to any Buyer Fundamental Representation or Fraud.

(c)In no event shall any Indemnifying Party be responsible or liable for any Damages or other amounts under this Article VIII that are claimed in a Third-Party Claim Notice or a Claim Notice received by the Indemnifying Party after the expiration of the applicable survival period in accordance with Section 8.3(a).

(d)For both purposes of determining the amount of Damages subject to indemnification pursuant to Section 8.1(a)(iii) or Section 8.1(c)(ii), and for purposes of determining whether the representations or warranties giving rise to such right to indemnification have been breached or have failed to be true and correct, no effect shall be given to any qualifications of “material,” Seller Material Adverse Effect, Company Material Adverse Effect, Buyer Material Adverse Effect or similar qualifications, as applicable, in such representations and warranties; provided further that this Section 8.4(d) shall not apply with respect to clause (i) of Section 3.6(a) or Section 4.6(a)—(c) nor shall it change the meaning of “Company Material Contract”.

(e)The amount of any Damages for which indemnification is provided under this Article VIII shall be reduced by any amounts actually recovered by the Indemnified Party or any of the Indemnified Party’s Affiliates (i) under any insurance policies (including the R&W Policy), net of any reasonable costs and expenses borne by the Indemnified Party in making such recoveries (including any documented premium increases attributable thereto) or (ii) from any third party (other than pursuant to an insurance policy) as a recovery of damages in respect of the matter giving rise to the claim in respect of which indemnification is provided. If an Indemnified Party (or any of its Affiliates) receives any insurance or other third party payment in connection with any claim for Damages for which it has already been indemnified by the Indemnifying Party to the fullest extent the Indemnifying Party is required by this Article VIII to provide indemnification for such Damages (after giving effect to any limitations set forth in this Article VIII), it shall pay to the Indemnifying Party, within ten (10) days of receiving such insurance or other third party payment, an amount equal to the excess of (x) the amount previously received by the Indemnified Person under this Article VIII with respect to such claim plus the amount of the insurance or other third party payments received (net of any reasonable costs and expenses (including Taxes) borne by the Indemnified Party in making such recoveries (including any documented premium increases attributable thereto)), over (y) the amount of Damages with respect to such claim incurred by the Indemnified Party (e.g., if (1) the Indemnified Party incurs $10 of Damages, (2) due to a limitation applicable under this Article VIII, the Indemnifying Party is only required to indemnify the

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Indemnified Party for $8 of such Damages, (3) the Indemnifying Party actually pays the full $8 of Damages for which it is required to provide indemnification and (4) the Indemnified Party subsequently collects $4 of insurance proceeds, then (5) the Indemnified Party would be obligated to pay $2 back to the Indemnifying Party (such that the Indemnified Party is made whole for the $10 of Damages it incurred – with a net of $6 coming from the Indemnifying Party and $4 coming from the insurer).

(f)All indemnification payments made under this Agreement shall be treated by the Parties as an adjustment to the aggregate purchase price (comprised of the Final Closing Cash Consideration and Stock Consideration) for all Tax purposes unless otherwise required by applicable Law.

(g)Each Party shall, and shall cause its Affiliates to, upon becoming aware thereof, take reasonable steps, including using commercially reasonable efforts to pursue any recovery to which it may be entitled from insurers (which, for the avoidance of doubt, shall not include any obligation to commence or otherwise participate in any litigation, arbitration or other proceeding) to mitigate the Damages associated with any matter for which indemnification is sought under this Article VIII.

(h)The amount of any Damages for which indemnification is provided to any Buyer Indemnified Person under this Article VIII shall not include any amounts to the extent taken into account in determining the Estimated Closing Cash Consideration or the Final Closing Cash Consideration, and in no event shall an Indemnified Party receive duplicative recoveries.

(i)Except with respect to (i) claims for equitable relief (including specific performance), (ii) claims for Fraud against the Party committing such Fraud, (iii) claims arising under Section 6.8 with respect to any Person who becomes party hereto pursuant to a Joinder or under the Mechner Employment Agreement and (iv) disputes regarding the determination of the Final Closing Cash Consideration (which shall be resolved and paid exclusively in accordance with Section 1.5), including, in each case, any and all rights, remedies, and actions in respect thereof, from and after the Closing, the rights of the Indemnified Parties under this Article VIII shall be the sole and exclusive remedies of the Indemnified Parties and their respective Affiliates with respect to claims under, or otherwise relating to the transactions that are the subject of, this Agreement.

8.5Indemnity Escrow.

(a)At the Closing, the Buyer shall issue (or shall instruct the Buyer’s transfer agent to issue) the Indemnity Escrow Shares in the name of the Escrow Agent or its nominee. As promptly as practicable following the Closing, in accordance with the Escrow Agreement, the Buyer shall deliver to the Escrow Agent and the Seller written evidence (in the form of a direct registration statement or other customary written evidence of the registration of the Indemnity Escrow Shares) of the issuance of the Indemnity Escrow Shares and registration of the Indemnity Escrow Shares in book-entry in the name of the Escrow Agent or its nominee, to be held by the Escrow Agent in accordance with the terms of this Agreement and the Escrow Agreement. In accordance with the Escrow Agreement, any dividends, distributions or other income earned on or with respect to the Indemnity Escrow Shares shall be deposited in the Indemnity Escrow Account.

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Such deposited dividends, distributions or other income earned with respect to the Indemnity Escrow Shares shall remain in the Indemnity Escrow Account and be distributed according to the provisions herein and the Escrow Agreement. During such time that the Indemnity Escrow Shares are held by the Escrow Agent, the Seller shall retain the right to vote the Indemnity Escrow Shares.

(b)Within two Business Days following the final determination of the amount of any Damages due to any Buyer Indemnified Person pursuant to Section 8.1(a) for which the Buyer is entitled to recover from the Indemnity Escrow Account, the Seller and the Buyer shall direct the Escrow Agent to release to the Buyer a number of shares of Buyer Common Stock having a value equal to the amount of such Damages (based on the Buyer Applicable Stock Price with respect to such date of determination, and with such number of shares rounded up to the nearest whole share), and the Buyer shall promptly cause any such shares to be cancelled.

(c)Within two Business Days following the Survival Date, the Buyer and the Seller shall direct the Escrow Agent to release to the Seller from the Indemnity Escrow Account the Buyer Common Stock remaining in the Indemnity Escrow Account, minus a number of shares of Buyer Common Stock having a value (based on the Buyer Applicable Stock Price with respect to the Survival Date, with such number of shares rounded up to the nearest whole share) equal to the amount of Damages in respect of any claim for indemnification timely made by the Buyer under Section 8.1(a) that has not yet been finally determined in accordance with this Article VIII.

(d)In the event any shares of Buyer Common Stock are not released from the Indemnity Escrow Account as a result of a holdback pursuant to Section 8.5(c), then following the final determination of any such outstanding claims, the Buyer and the Seller will cause the Escrow Agent to release, within two Business Days, to the Buyer a number of shares of Buyer Common Stock having a value (based on the Buyer Applicable Stock Price with respect to such date of determination, with such number of shares rounded up to the nearest whole share) equal to the amount of Damages, if any, finally determined to be owed to the Buyer Indemnified Persons in respect of such claim, and the Buyer shall promptly cause any such shares to be cancelled.

(e)Promptly following the final determination of all pending claims pursuant to Section 8.5(c) and the releases, if any, contemplated by Section 8.5(d), the Seller and the Buyer shall cause the Escrow Agent to release to the Seller any Buyer Common Stock remaining in the Indemnity Escrow Account.

(f)The Buyer and the Seller agree to the matters set forth on Schedule 8.5.

8.6Cash Indemnification Payments. Within five Business Days following the final determination of the amount of any Damages due pursuant to this Article VIII to any Indemnified Party that is not to be paid out of (or in the event there are no amounts remaining in) the Indemnity Escrow Account in accordance with this Article VIII (and subject to the limitations in Section 8.4), the Indemnifying Party shall pay the amount of such Damages to the applicable Indemnified Party in cash by wire transfer of immediately payable funds.

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ARTICLE IX

TERMINATION AND AMENDMENT

9.1Termination. This Agreement may be terminated at any time prior to the Closing (with respect to Sections 9.1(b) through 9.1(e), by written notice by the Buyer or the Seller to the other):

(a)by mutual written consent of the Buyer and the Seller; or

(b)by either the Buyer or the Seller if the Closing shall not have occurred by the Outside Date; provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to a Party if the failure of the Closing to have occurred on or before the Outside Date was primarily due to the breach by such Party (or, with respect to the Seller, either Company) of, or primarily due to the failure of such Party (or, with respect to the Seller, either Company) to perform any of its material obligations under, this Agreement; or

(c)by either the Buyer or the Seller if a Governmental Entity of competent jurisdiction shall have issued a nonappealable final order, decree or ruling or taken any other nonappealable final action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; provided, however, that the right to terminate this Agreement under this Section 9.1(c) shall not be available to a Party if the issuance of such order, decree, ruling or the taking of such action was primarily due to the breach by such Party (or, with respect to the Seller, either Company) of, or primarily due to the failure of such Party (or, with respect to the Seller, either Company) to perform any of its material obligations under, this Agreement; or

(d)by the Buyer, if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Seller or either Company set forth in this Agreement, or if any representation or warranty of the Seller or either Company shall have become untrue, which breach or failure to perform or be true (i) would cause any of the conditions set forth in Section 7.2(a) or 7.2(b) not to be satisfied and (ii) if curable, shall not have been cured or waived within 30 days following receipt by the Seller of written notice of such breach or failure to perform or be true from the Buyer; provided, however, that the right to terminate this Agreement under this Section 9.1(d) shall not be available to the Buyer if the Buyer is then in material breach of any representation, warranty, covenant or agreement of the Buyer set forth in this Agreement such that any of the conditions to Closing set forth in Section 7.3(a) or 7.3(b) would not be satisfied; or

(e)by the Seller if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Buyer set forth in this Agreement, or if any representation or warranty of the Buyer shall have become untrue, which breach or failure to perform or to be true (i) would cause the conditions set forth in Section 7.3(a) or 7.3(b) not to be satisfied and (ii) if curable, shall not have been cured or waived within 30 days following receipt by the Buyer of written notice of such breach or failure to perform or be true from the Seller; provided, however, that the right to terminate this Agreement under this Section 9.1(e) shall not be available to the Seller if the Seller or either Company is then in material breach

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of any representation, warranty, covenant or agreement of the Seller or such Company, respectively, set forth in this Agreement such that any of the conditions to Closing set forth in Section 7.2(a) or 7.2(b) would not be satisfied.

9.2Effect of Termination. In the event of the termination of this Agreement in accordance with Section 9.1, this Agreement shall immediately become void and there shall be no Liability or further obligations on the part of the Buyer, either Company, the Seller or their Affiliates or any of their respective officers, directors, managers or equityholders; provided, that (a) any such termination shall not relieve any Party from Liability for Damages for any Willful Breach or Fraud prior to such termination, including such Party’s obligation to close if it was otherwise obligated to do so under the terms of this Agreement and (b) each of Section 5.2 (Confidentiality), Section 6.4 (Public Disclosure), this Section 9.2 (Effect of Termination), Section 9.3 (Fees and Expenses), Article XI (Miscellaneous) (in each case including the respective meanings ascribed to the related capitalized terms in Article X (Definitions)) and the Confidentiality Agreement shall remain in full force and effect and survive any termination of this Agreement. Nothing shall limit or prevent any Party from exercising any rights or remedies it may have under Section 11.10.

9.3Fees and Expenses. Except as otherwise expressly provided in this Agreement (including with respect to the R&W Insurance Expenses), all fees and expenses incurred in connection with this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby shall be paid by the Party incurring such fees and expenses, whether or not the transactions are consummated; provided, however, that (a) any Unpaid Company Transaction Expenses shall be paid at the Closing in accordance with Section 1.4(a) and (b) the R&W Insurance Expenses shall be paid 50% by the Seller as Unpaid Company Transaction Expenses (subject to an aggregate cap of $150,000) and the remaining portion of the R&W Insurance Expenses shall be paid by the Buyer.

9.4Amendment. This Agreement (including the Schedules and Exhibits hereto) may not be amended, supplemented or otherwise modified except by an instrument in writing signed by the Buyer and the Seller and expressly referencing this Agreement.

9.5Extension; Waiver. At any time, each Party may, to the extent legally allowed and duly authorized, (a) extend the time for the performance of any of the obligations or other acts of any other Party, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto including any Transaction Document and (c) waive compliance with any of the agreements or conditions contained herein or in any Transaction Document; provided, that (i) any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such Party making specific reference to this Agreement or the applicable Transaction Document; and (ii) such extension or waiver shall not be deemed to apply to any time for performance, inaccuracy in any representation or warranty, or noncompliance with any agreement or condition, as the case may be, other than that which is expressly specified in such extension or waiver. Notwithstanding the foregoing, no action taken pursuant to this Agreement shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant or agreement contained herein, nor shall the failure of or any delay in any Party to assert any of its rights under this Agreement or otherwise constitute a waiver of such rights.

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Article X

DEFINITIONS

10.1Definitions. For purposes of this Agreement, each of the following terms has the meaning set forth below.

“Accounting Principles” means GAAP applied on a basis consistent with the accounting principles, policies, methods, and procedures used in the preparation of the Seller Financial Statements as of, and for the year ended, December 31, 2022.

“Accredited Investor Questionnaire” has the meaning set forth in Section 1.6(d).

“Acquisition Proposal” means any written or oral proposal, inquiry, indication of interest or offer (a) for a merger, consolidation, dissolution, sale of a significant portion of the assets, recapitalization, or other business combination or similar transaction involving the Seller or a Company, (b) involving the issuance of any Equity Interests of a Company or representing 10% or more of the Equity Interests of the Seller or (c) to acquire in any manner, directly or indirectly, and whether in one transaction or a series of related transactions, any Equity Interests of a Company or 10% or more of the total combined assets of the Companies or of the Equity Interests or consolidated assets of the Seller, in each case other than the transactions contemplated by this Agreement.

“Act” means the Delaware Limited Liability Company Act.

“Additional Insured” means (a) with respect to any Company Insurance Policy under which the Seller is the named insured, the Companies and (b) with respect to any other Company Insurance Policy, to the extent covered by such policy as an additional insured as of the date of this Agreement, the Seller.

“Additional Option Cash Out Amount” means an amount equal to the aggregate value (based on the Buyer Closing Stock Price) of the portion of the Closing Stock Consideration (without giving effect to the deduction contemplated by clause (a)(ii) thereof and net of any exercise price applicable to such options) that would be payable to holders of Seller Options outstanding as of immediately prior to the Closing in consideration of the cancellation of all such Seller Options in accordance with Section 1.8 and to holders of Class B Units of Seller issued in respect of previously exercised Seller Options; provided that the Buyer shall not be responsible for or have any Liability in respect of such calculation or any errors therein and in no event shall the Additional Option Cash Out Amount exceed $2,834,295.

“Affiliate” means, with respect to a Person, any other Person who, at the time of determination, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person. For purposes of this definition, “control” (including the terms “controlled by” and “under common control with”) means the power to, directly or indirectly, direct or cause the direction of the management and policies of such Person whether through ownership of voting securities or other ownership interests, by Contract or otherwise, including, with respect to a corporation, partnership or limited liability company, the

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direct or indirect ownership of more than 50% of the voting securities in such corporation or of the voting interest in a partnership or limited liability company.

“Affiliate Contract” has the meaning set forth in Section 3.19(b).

“Aggregate Closing Option Cash-Out Payment Amount” means the aggregate amount of the Option Cash-Out Payments payable in connection with the Closing to Seller Optionholders in accordance with Section 1.9.

“Agreement” has the meaning set forth in the preamble.

“Antitrust Laws” means the Hart-Scott-Rodino Act, as amended, the Sherman Act, as amended, the Clayton Act, the Federal Trade Commission Act and any other applicable federal, state or foreign law, regulation or decree designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or restraint of trade.

“Antitrust Order” means any judgment, injunction, order (whether temporary, preliminary or permanent) or decree issued under or with respect to any Antitrust Laws.

“Applicable Insurance Policies” means (a) with respect to any claim, act, omission, event, circumstance, occurrence or loss incurred by either Company (or its successors or permitted assigns), each Company Insurance Policy under which the Seller is the Primary Insured Party and (b) with respect to any claim, act, omission, event, circumstance, occurrence or loss incurred by the Seller, each Company Insurance Policy under which either Company is the Primary Insured Party and the Seller is an Additional Insured.

“Balance Sheet Date” has the meaning set forth in Section 3.5(b).

“Bankruptcy and Equity Exception” means the effects of bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

“Broker-Dealer Compliance Policies” has the meaning set forth in Section 3.13(o).

“Broker-Dealer Company” means Pragma LLC, a New York limited liability company.

“Business Day” means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in New York, New York are permitted or required by Law, executive order or governmental decree to remain closed.

“Business Employee” means each Person who is employed by a Company, including those employees on medical leave, family leave, military leave or personal leave under any policy of a Company or any of its Affiliates.

“Business Service Provider” means each individual who is not employed by a Company but who provides services to a Company, including any directors, independent consultants and/or contractors engaged by a Company.

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“Buyer” has the meaning set forth in the preamble.

“Buyer Applicable Stock Price” means the average of the volume weighted averages of the trading prices of Buyer Common Stock on the NASDAQ Global Select Market (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the Parties), for the Trading Days during the period of 15 days ending on the Trading Day immediately prior to the date of determination.

“Buyer Capitalization Date” has the meaning set forth in Section 4.7(a).

“Buyer Closing Stock Price” means the average of the volume-weighted average of the trading prices of Buyer Common Stock on the NASDAQ Global Select Market (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the Parties), for the Trading Days during the period of 15 days ending on, and including, the fifth Trading Day prior to the Closing Date.

“Buyer Common Stock” means the common stock, par value $0.003 per share, of the Buyer.

“Buyer Disclosure Schedule” means the disclosure schedule delivered by the Buyer to the Seller and the Companies concurrently with the execution of this Agreement.

“Buyer Employee Plan” means any Employee Benefit Plan for the benefit of, or relating to, any current employee of the Buyer or any of its Subsidiaries.

“Buyer Equity Awards” has the meaning set forth in Section 4.7(a).

“Buyer Fundamental Representations” means the representations and warranties set forth in Section 4.1(a) (Organization), Section 4.2(a) (Authority), Section 4.4 (Financing), Section 4.5 (Brokers) and Section 4.7 (Capitalization).

“Buyer Indemnified Persons” means the Buyer and its Affiliates (including, following the Closing, each Company) and, if applicable, their respective directors, officers, employees, agents and representatives, and each of their respective successors and assigns.

“Buyer Material Adverse Effect” means any Change that, individually or in the aggregate together with any other Changes, (i) would reasonably be expected to prevent or materially impair or delay the Buyer’s ability perform its obligations hereunder and to consummate the transactions contemplated by this Agreement or (ii) has had or would reasonably be expected to have, a material adverse effect on the business, financial condition or results of operations of the Buyer and its Subsidiaries, taken as a whole; provided, however, that none of the following shall constitute, or shall be considered in determining whether there has occurred, a Buyer Material Adverse Effect under the foregoing clause (ii): (a) Changes in applicable Law or GAAP or the authoritative interpretation thereof; (b) Changes generally affecting the industry in which the Buyer and its Subsidiaries operate; (c) Changes in general economic or political conditions or the financial or capital markets in general; (d) any action taken (or omitted) pursuant to the express requirements of this Agreement or at the written request of the Seller or a Company; (e) any earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters or any

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pandemics, epidemics or disease outbreaks (including COVID-19), or terrorism, military action or war (whether or not declared); (f) Changes arising out of or resulting from the pendency or announcement of the transactions contemplated by this Agreement, including actions of clients or vendors or losses of employees (except to the extent arising or resulting from any breach of this Agreement by the Buyer and without limiting Section 4.2(b)); (g) changes in the price or trading volume of the Buyer Common Stock or any other securities of the Buyer (provided that the exception in this clause (g) shall not prevent or otherwise affect any determination that the underlying cause of any such failure (to the extent not otherwise falling within any of the exceptions provided by clauses (a) through (f) or clause (h)) has had or would reasonably be expected to have a Buyer Material Adverse Effect); or (h) any failure by Buyer or its Subsidiaries to meet any internal or public projections, guidance, estimates or forecasts, or internal or published financial or operating predictions of revenue, earnings, cash flow or cash positions (provided that the exception in this clause (h) shall not prevent or otherwise affect any determination that the underlying cause of any such failure (to the extent not otherwise falling within any of the exceptions provided by clauses (a) through (g)) has had or would reasonably be expected to have a Buyer Material Adverse Effect); except that any Changes resulting from, arising out of or attributable to any of the foregoing matters referred to in any of the foregoing clauses (a), (b), (c) and (e) above shall be taken into account when determining whether a “Buyer Material Adverse Effect” has occurred or may, would or could reasonably be expected to occur to the extent such Change has a disproportionate adverse effect on the Buyer and its Subsidiaries, taken as a whole, as compared to other participants in the industries and markets in which the Buyer and its Subsidiaries conduct business.

“Buyer’s Knowledge” and words of similar effect or import mean the actual knowledge, after reasonable inquiry, of any of the Persons set forth on Schedule 10.1(a).

“Change” means any change, event, fact, circumstance, occurrence or development.

“Claim Notice” means a written notice which contains (a) a description in reasonable detail of the claim for indemnification (to the extent then known by the Indemnified Party), including a reasonable explanation of the basis therefor and a description (including an estimate of the amount) of any Damages incurred or reasonably expected to be incurred by an Indemnified Party, (b) a statement that the Indemnified Party is entitled to indemnification under Article VIII and (c) a demand for payment in the amount of such Damages.

“Closing” has the meaning set forth in Section 1.2.

“Closing Cash Amount” means the sum of the value of (a) all cash, cash equivalents and marketable securities (other than restricted cash) held by either Company as of 12:01 a.m., Eastern time on the Closing Date, minus (b) all outstanding (uncleared) checks and other negotiable instruments used like checks, drafts and wire transfers issued as of or prior to 12:01 a.m., Eastern time on the Closing Date, minus (c) $250,000 (representing PLLC’s minimum regulatory net capital requirement), minus (d) any other cash otherwise required to be held by either Company in order to comply with applicable Law (excluding cash that would be required for PLLC to meet its minimum regulatory net capital requirement), plus (e) the amount of cash held as collateral for PLLC’s letter of credit relating to its office lease, plus (f) the amount of cash held in PLLC’s deposit account with its clearing firm, if any, in the case of clauses (a) and (b), calculated in

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accordance with the Accounting Principles. For the avoidance of doubt, the “Closing Cash Amount” shall be calculated net of any amounts that are used to pay any Unpaid Company Transaction Expenses or Indebtedness following 12:01 a.m., Eastern time on the Closing Date until immediately prior to the Closing, and otherwise shall be calculated without giving effect to the consummation of the transactions contemplated by this Agreement.

“Closing Cash Consideration” means an amount in cash equal to (a) $75,000,000, plus (b) the Additional Option Cash Out Amount, plus (c) the Closing Cash Amount, minus (d) the Closing Debt Amount, plus (e) the Net Working Capital Adjustment (which, for the avoidance of doubt, may be a positive or negative number), minus (f) the Unpaid Company Transaction Expenses, minus (g) the Purchase Price Adjustment Escrow Amount.

“Closing Date” means the date on which the Closing actually occurs.

“Closing Debt Amount” means without duplication, all Indebtedness of the Companies as of immediately prior to the Closing, but without giving effect to the consummation of the transactions contemplated by this Agreement; except, for the avoidance of doubt, that the calculation of the Tax Liability Amount shall occur at the end of the day on the Closing Date.

“Closing Payment Statement” means a statement, which sets forth, in accordance with the Estimated Closing Statement, (i) the identity of each Person entitled to receive a cash payment pursuant to Section 1.4, (ii) the amount due to each such Person and (iii) the applicable wire instructions for the account or accounts of each such Person.

“Closing Stock Consideration” means a number of shares of Buyer Common Stock equal to the quotient of (a) the sum of (i) $53,000,000, minus (ii) the Additional Option Cash Out Amount, minus (iii) the Indemnity Escrow Amount divided by (b) the Buyer Closing Stock Price (rounded down to the nearest whole share), subject to any adjustments pursuant to Section 1.6(c).

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the preamble.

“Company B-D Regulatory Documents” has the meaning set forth in Section 3.13(m).

“Company Employee Plans” means Employee Benefit Plans that (i) provide benefits or compensation to any current or former Business Employee or Business Service Provider, (ii) are adopted, maintained, sponsored, contributed to, or required to be contributed to by a Company, or (iii) with respect to which a Company is a party, participates in, or has or could reasonably be expected to have any Liability with respect thereto, whether actual or contingent, or direct or indirect.

“Company ERISA Affiliate” means any entity that is a member of (a) a controlled group of corporations (as defined in Section 414(b) of the Code), (b) a group of trades or businesses under common control (as defined in Section 414(c) of the Code) or (c) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes or included a Company.

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“Company Fundamental Representations” means the representations and warranties set forth in Section 3.1(a) (Organization, Standing and Power), Section 3.2 (Capitalization) (excluding the last sentence of Section 3.2(c)), Section 3.3 (Subsidiaries) (excluding the last sentence of Section 3.3), Section 3.4(a) (Authority), and Section 3.22 (Brokers).

“Company Insurance Policies” means the insurance policies (including any self-insurance) covering, held by, maintained by or applicable to the Business or any Company or its properties, assets or personnel.

“Company Intellectual Property” means, individually or collectively, the Company Owned Intellectual Property and the Company Licensed Intellectual Property.

“Company IT Systems” means all computer systems, technology platforms, networks, hardware, software, databases, websites, and equipment used by or on behalf of a Company to process, store, maintain and operate data, information, and functions used in connection with the business of a Company.

“Company Lease” means any Contract pursuant to which any real property or any interest in any real property is leased or subleased to a Company.

“Company Leased Property” has the meaning set forth in Section 3.8(b).

“Company Licensed Intellectual Property” means all Intellectual Property that is used, practiced or held for use or practice by a Company, except for any Company Owned Intellectual Property.

“Company Marks” has the meaning set forth in Section 6.11.

“Company Material Adverse Effect” means any Change that, individually or in the aggregate with any other Changes, (i) has had or would reasonably be expected to have, a material adverse effect on the business, financial condition or results of operations of the Companies, taken as a whole, or (ii) would or would reasonably be expected to prevent or materially impair or delay the Company’s ability to perform its obligations under or to consummate the transactions contemplated by this Agreement; provided, however, that none of the following shall constitute, or shall be considered in determining whether there has occurred, a Company Material Adverse Effect under the foregoing clause (i): (a) Changes in applicable Law or GAAP or the authoritative interpretation thereof; (b) Changes generally affecting the industry in which the Companies operate; (c) Changes in general economic or political conditions or the financial or capital markets in general; (d) any action taken (or omitted) pursuant to the express requirements of this Agreement or at the written request of the Buyer; (e) any earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters or any pandemics, epidemics or disease outbreaks (including COVID-19), or terrorism, military action or war (whether or not declared); (f) Changes arising out of or resulting from the pendency or announcement of the transactions contemplated by this Agreement, including actions of clients or vendors or losses of employees (except to the extent arising or resulting from any breach of this Agreement, including Section 5.1, by the Seller or any Company and without limiting Section 3.4(b)); or (g) any failure by the Companies to meet any internal or public projections, guidance, estimates or forecasts, or internal or published financial or operating predictions of revenue, earnings, cash flow or cash positions (provided that

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the exception in this clause (g) shall not prevent or otherwise affect any determination that the underlying cause of any such failure (to the extent not otherwise falling within any of the exceptions provided by clauses (a) through (f)) has had or would reasonably be expected to have a Company Material Adverse Effect); except that any Changes resulting from, arising out of or attributable to any of the foregoing matters referred to in any of the foregoing clauses (a), (b), (c) and (e) above shall be taken into account when determining whether a “Company Material Adverse Effect” has occurred or may, would or could reasonably be expected to occur to the extent such Change has a disproportionate adverse effect on the Companies, taken as a whole, as compared to other participants in the industries and markets in which the Companies conduct business.

“Company Material Contracts” means (i) the Contracts listed, or that are required by Section 3.10(a) to be listed (or, if entered into following the date hereof, would have been required to have been listed), in Section 3.10(a) of the Disclosure Schedule and (ii) to the extent entered into after the date hereof, any Contracts providing for the purchase, acquisition or sale of materials, goods, services, equipment or other assets providing for annual payments made by or to the Company of $50,000 or more (excluding (a) any such contract solely relating to a capital expenditure made without violation of clause (J) of Section 5.1) and (b) any such Contract that is a renewal of a then existing Contract so long as the consideration payable under such renewal does not fluctuate by more than 10% from the consideration payable under such Contract prior to such renewal).

“Company Owned Intellectual Property” means any Intellectual Property owned or purported to be owned by a Company, including all Company Software and Company Registered Intellectual Property.

“Company Permits” means all approvals, authorizations, consents, certificates, permits, franchises, certificates, concessions and licenses from Governmental Entities or Self-Regulatory Organizations required for the operation or conduct of the business of a Company.

“Company Registered Intellectual Property” has the meaning set forth in Section 3.9(a).

“Company Software” means any Software owned or purported to be owned by, or developed exclusively for or on behalf of, a Company.

“Confidentiality Agreement” means the mutual confidentiality agreement, dated as of September 14, 2021, by and between MarketAxess Corporation and the Seller, as amended.

“Continuing Employees” means each of the employees of the Buyer or any of its Subsidiaries immediately following the Closing who was a Business Employee immediately prior to the Closing.

“Contract” means any lease, license, contract, indenture, note, bond, mortgage, loan, instrument, commitment or other agreement, arrangement, instrument, undertaking or obligation, whether written or oral, in each case that is legally binding.

“Controlled Affiliate” means, with respect to a Person, any other Person (excluding any natural person) who, at the time of determination, directly or indirectly, through one or more intermediaries, is controlled by such Person. For purposes of this definition, “control” (including

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the terms “controlled by” and “under common control with”) means the power to, directly or indirectly, direct or cause the direction of the management and policies of such Person whether through ownership of voting securities or other ownership interests, by Contract or otherwise, including, with respect to a corporation, partnership or limited liability company, the direct or indirect ownership of more than 50% of the voting securities in such corporation or of the voting interest in a partnership or limited liability company.

“Copyrights” means copyrights and copyrightable works, works of authorship, database and design rights, whether or not registered or published, including all data collections, “moral” rights, and mask works, and all applications therefor and registrations and recordations, along with all reversions, extensions and renewals thereof, and corresponding rights in works of authorship.

“Damages” means all claims, causes of action, actions, losses, liabilities, monetary damages, judgments, awards, fines, fees, penalties, interest, Taxes, costs and expenses (including reasonable attorneys’ fees and expenses incurred in connection therewith, whether involving a Third-Party Claim or direct claim arising out of or in connection with this Agreement or the transactions contemplated hereby).

“Deficiency Amount” has the meaning set forth in Section 1.5(b)(iv).

“Disclosure Schedule” means the disclosure schedule delivered by the Seller and the Companies to the Buyer concurrently with the execution of this Agreement.

“Divestiture Action” has the meaning set forth in Section 6.3(e).

“Employee Benefit Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA), as well as each other benefit, retirement, employment, consulting, compensation, profit sharing, commission, bonus, stock or other equity, equity-based, option, incentive compensation, restricted stock, stock appreciation right or similar right, phantom equity, profits interests, change in control, retention, severance, deferred compensation, vacation, paid time off, welfare, medical, dental, vision, flexible benefit, cafeteria, dependent care, and fringe-benefit agreement, plan, policy, arrangement and program, whether or not reduced to writing.

“Equity Interest” means, with respect to any Person, (a) any share, partnership or membership interest, unit of participation or other similar interest (however designated) in such Person and (b) any warrant, purchase right, conversion right, exchange right or other agreement which would entitle any other Person to acquire, or that is exchangeable for or convertible into, any such interest in such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Excess Amount” has the meaning set forth in Section 1.5(b)(iv).

“Escrow Agent” means Citibank, N.A., as escrow agent pursuant to the Escrow Agreement, or any successor agent pursuant to the Escrow Agreement.

“Escrow Agreement” means the Escrow Agreement substantially in the form attached hereto as Exhibit C.

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“Estimated Closing Cash Consideration” has the meaning set forth in Section 1.5(a).

“Estimated Closing Statement” has the meaning set forth in Section 1.5(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Extended Support Agreement Costs” means all fees payable pursuant to the Extended Support Agreement during the term thereof (whether or not payable prior to or following the Closing), together with (but without duplication of fees) any costs and expenses incurred thereunder prior to Closing.

“Final Closing Cash Consideration” has the meaning set forth in Section 1.5(b).

“Financial Statements” has the meaning set forth in Section 3.5(a).

“FINRA” means the Financial Industry Regulatory Authority, Inc., a Self-Regulatory Organization.

“Fraud” means, with respect to a Party, a knowing and intentional common law fraud (which includes the element of scienter) under the law of the State of Delaware in the making of a representation or warranty expressly stated in Article II (as qualified by the Disclosure Schedule), Article III (as qualified by the Disclosure Schedule) or Article IV (as qualified by the Buyer Disclosure Schedule) or contained in any certificate delivered by such Party at the Closing pursuant to Article VII; provided, that, without limiting the other elements required for Fraud to be deemed to exist, Fraud may only be deemed to exist if (a) such representation or warranty was materially false or materially inaccurate at the time such representation or warranty was made, (b) in the case of a representation or warranty made by the Buyer, the individuals listed on Schedule 10.1(a), or in the case of a representation or warranty made by the Seller or a Company, the individuals listed on Schedule 10.1(b), had actual knowledge (and not imputed or constructive knowledge), without any duty of inquiry or investigation except to the extent such representation or warranty is qualified by the Seller’s Knowledge or the Buyer’s Knowledge, that such representation or warranty was materially false or materially inaccurate when made by such Party, (c) such Party had the specific intent to deceive another Party and induce such other Party to enter into this Agreement or to consummate the transactions contemplated hereby. Notwithstanding anything to the contrary, “Fraud” shall not include equitable fraud, promissory fraud, unfair dealings fraud or any torts (including fraud), based on constructive or imputed knowledge, negligence or recklessness.

“GAAP” means United States generally accepted accounting principles.

“Governmental Entity” means any government, court, arbitrational tribunal, administrative agency or commission or other governmental, quasi-governmental, or regulatory body, authority, agency or instrumentality.

“Governmental Authorization” means all licenses, permits, registrations, memberships, certificates and/or other authorizations and approvals of Governmental Entities and Self-Regulatory Organizations.

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“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“ICE” has the meaning set forth in Section 3.16(h).

“Income Taxes” means any Tax imposed on or determined with reference to gross or net income, profits or receipts (however denominated or determined), including franchise and withholding Taxes imposed in lieu of Taxes denominated as “income” Taxes (including, for the avoidance of doubt, non-resident withholding Taxes).

“Indebtedness” means, with respect to each Company, and without duplication, any liability or obligation, including all obligations in respect of principal, accrued and unpaid interest, penalties, fees and premiums and other monetary obligations of (or assumed by) such Person (but excluding any liability or obligation to the extent owed to the other Company), (a) for borrowed money (including amounts outstanding under overdraft facilities), (b) evidenced by notes, bonds, debentures or other similar obligations, (c) for the reimbursement of any obligor on any drawn letter of credit, banker’s acceptance or similar credit transaction, (d) for the deferred purchase price for the acquisition of any business, securities, assets or other properties, including the amounts of any escrows, holdbacks, or other similar amounts, but excluding any accounts payable included in Net Working Capital (or, from time to time prior to 12:01 a.m., Eastern time, on the Closing Date, that would be included in Net Working Capital if Net Working Capital was measured at such time), (e) that are conditional sale obligations of such Person and all obligations of such Person under any title retention agreements, (f) for the liquidation value of all accrued and unpaid dividends, (g) the Tax Liability Amount, (h) accrued but unpaid severance amounts in respect of terminations of service occurring prior to the Closing and the employer’s portion of any employment, payroll or social security taxes with respect thereto, (i) in the nature of guarantees, direct or indirect, of the obligations described in clauses (a) through (h) above of any other Person or for which such Person is otherwise liable as obligor or otherwise and (j) of the type referred to in clauses (a) through (i) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien (other than a Permitted Lien) on any property or asset of such Person.

“Indemnified Party” means the applicable Buyer Indemnified Person(s) or Seller Indemnified Person(s).

“Indemnifying Party” means the Party from whom indemnification is sought under Article VIII.

“Indemnity Escrow Account” means the separate account established pursuant to the Escrow Agreement to hold the Indemnity Escrow Shares for disbursement by the Escrow Agent.

“Indemnity Escrow Amount” means $1,920,000.

“Indemnity Escrow Shares” means a number of shares of Buyer Common Stock equal to the quotient of the Indemnity Escrow Amount, divided by the Buyer Closing Stock Price (rounded up to the nearest whole share).

“Interim Financial Statements” has the meaning set forth in Section 3.5(a).

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“Intellectual Property” means all rights, title and interest in or relating to intellectual property, whether protected, created or arising under the Laws of the United States or any other jurisdiction throughout the world, including: (a) Patent Rights; (b) Trademarks; (c) Copyrights; (d) trade secrets and corresponding rights in confidential information, including ideas, Software, source code, data, processes, inventions, ideas, formulae, methods, schematics, technology, compositions, inventor’s notes, discoveries, improvements, know-how, plans, proposals, business and marketing plans, market surveys, and customer lists and information; (e) other tangible or intangible proprietary or confidential information and materials; (f) Software and technology, (g) all other intellectual property rights; (h) domain names, including registrations therefor, and social media accounts; and (i) all rights relating to or under the foregoing granted under any Contracts.

“Interests” has the meaning set forth in the recitals.

“International Trade Laws and Sanctions” means all trade, export control, economic or financial sanctions or anti-boycott requirements imposed, administered or enforced from time to time by the U.S. government (including the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce (including anti-boycott regulations), the U.S. Customs and Border Protection or the U.S. Census Bureau), the United Nations Security Council, Her Majesty’s Treasury of the United Kingdom, the European Union and all trade, export control, financial sanctions or anti-boycott requirements under all Laws in any other country in which a Company operates, except to the extent the requirements of such Laws are prohibited or penalized under U.S. Law.

“IRS” means the United States Internal Revenue Service.

“Law” means any federal, state, local, municipal, foreign, international, multinational or other administrative order, statute, law, constitution, rule, ruling, regulation, code, treaty, ordinance, principle of common law, judgment, injunction, order or decree of any Governmental Entity or Self-Regulatory Organization of which it is a member.

“Lease” has the meaning set forth in Section 3.8(b).

“Liability” means any debt, loss, damage, fine, penalty, liability or obligation (whether direct or indirect, known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, matured or unmatured, determined or determinable, liquidated or unliquidated, or due or to become due, and whether in contract, tort, strict liability or otherwise.

“Lien” means any mortgage, security interest, pledge, lien, charge, deed of trust, easement, option, right of first refusal, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement, or encumbrance.

“Lock-Up Period” has the meaning set forth in Section 6.8(b).

“Major Customer” has the meaning set forth in Section 3.20.

“Major Supplier” has the meaning set forth in Section 3.20.

“Mechner” has the meaning set forth in the preamble.

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“Mechner Employment Agreement” has the meaning set forth in the recitals.

“Net Working Capital” means (a) the aggregate amount of all current assets of the Companies, on a combined basis, as of 12:01 a.m., Eastern time, on the Closing Date (determined by reference to the line items noted on Schedule 10.1(c)), less (b) the aggregate amount of all current liabilities of the Companies, on a combined basis, as of 12:01 a.m., Eastern time, on the Closing Date (determined by reference to the line items noted on Schedule 10.1(c)), in each case, calculated in accordance with the Accounting Principles but excluding any prepaid expense amounts relating to the Extended Support Agreement. For the avoidance of doubt, the determination of Net Working Capital shall exclude all items taken into account for the calculation of the Closing Cash Amount, the Closing Debt Amount, Unpaid Company Transaction Expenses (including any Extended Support Agreement Costs) and Income Tax assets and liabilities.

“Net Working Capital Adjustment” means an amount equal to (a) the Net Working Capital minus (b) negative $850,000. For the avoidance of doubt, the Net Working Capital Adjustment may be a positive or negative number.

“Neutral Accountant” has the meaning set forth in Section 1.5(b)(iii)(B). “Non-Recourse Persons” has the meaning set forth in Section 11.2(b).

“Objection Statement” has the meaning set forth in Section 1.5(b)(iii).

“Open Source Software” means any Software that is, or that contains or is derived in any manner (in whole or in part), from any Software that is distributed as free software, open source software, copyleft software, “freeware” or “shareware” or under similar licensing or distribution models, including Software licensed pursuant to: (a) the GNU General Public License, the GNU Library General Public License, the GNU Lesser General Public License, the Affero General Public License, the Mozilla Public License, the Common Development and Distribution License, the Eclipse Public License, any Creative Commons “sharealike” license, or any license that is, or is substantially similar to, a license now or in the future approved by the Open Source Initiative and listed at http://www.opensource.org/licenses or (b) any license under which any Software or other materials are distributed or licensed as “free software,” “open source software” or under similar terms.

“Operating Agreement” means the Second Amended and Restated Limited Liability Company Operating Agreement of the Seller, effective as of the Supercession Time (as defined therein).

“Option Cash-Out Payment” has the meaning set forth in Section 1.8.

“Option Payment Schedule” has the meaning set forth in Section 1.9.

“Organizational Documents” means, with respect to any Person (other than an individual), (a) the certificate or articles of incorporation, formation or organization and any joint venture, limited liability company, operating or partnership agreement and other similar documents adopted, entered into or filed in connection with the creation, formation or organization of such Person and (b) all by-laws, shareholders’ agreements, voting agreements, investment agreement

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and similar documents, instruments or agreements relating to the organization or governance of such Person or the voting or Transfer of its securities, in each case, as amended or supplemented.

“Outside Date” means the date that is six months after the date hereof.

“Parties” has the meaning set forth in the preamble.

“Patent Rights” means domestic and foreign patents and patent applications (including provisional, continuation, divisional, continuation-in-part, reexamination, substitution, revision, renewal, extension and reissue patent applications and any patents issuing therefrom), priority rights, utility models, design patents and other governmental grants for the protection of inventions or industrial designs, however denominated.

“PEO Agreements” has the meaning set forth in Section 3.12(a).

“PEO Plan” means each Company Employee Plan that is sponsored, provided, or maintained by a professional employer organization and to which a Company has an obligation to make contributions or pay premiums with respect to their employees or otherwise have any liability.

“Permitted Liens” means any (a) mechanic’s, materialmen’s, workers’ and similar Liens imposed by Law that are not material to the business, operations or condition of the property or assets of the Companies (and do not result from any breach or violation of any Contract or applicable Law), (b) Liens for Taxes not yet due and payable (c) Liens for Taxes the amount of which is being contested in good faith and by appropriate proceedings, (d) Liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, (e) Liens created by the terms of any Lease or non-exclusive license agreement granted in the ordinary course of business (in each case, other than as a result of any breach, default or violation thereof), (f) Liens imposed by or upon the Buyer or (g) Liens referred to in Section 3.17 of the Disclosure Schedule or incurred pursuant to a lease agreement referred to on Schedule 5.1.

“Person” means any natural person, firm, limited liability company, general or limited partnership, association, corporation, unincorporated organization, company, joint venture, trust, Governmental Entity, Self-Regulatory Organization or other entity.

“Personal Information” means, in addition to any definition for any similar term (e.g., “personal data,” “personally identifiable information” or “PII”) provided by applicable Law, or by a Company in any of its privacy policies, notices or contracts, all information that identifies, could be used to identify or is otherwise related to an individual person or household (including any current, prospective, or former customer, end user or employee) of any Person and includes information in any form or media, whether paper, electronic, or otherwise.

“PFS” has the meaning set forth in the preamble.

“PFS Operating Agreement” means the amended and restated Limited Liability Company Operating Agreement of PFS, dated as of January 1, 2009.

“PLLC” has the meaning set forth in the preamble.

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“PLLC Operating Agreement” means the Amended and Restated Operating Agreement of Pragma LLC, dated as of January 1, 2009, as amended on July 9, 2019.

“Post-Closing Tax Returns” has the meaning set forth in Section 6.6(a).

“Pre-Closing Tax Returns” has the meaning set forth in Section 6.6(a).

“Pre-Closing Tax Period” means any taxable period or portion thereof ending on or before the Closing Date.

“Pre-Closing Period” means the period commencing on the date of this Agreement and ending at the Closing, or on such earlier date as this Agreement is terminated in accordance with its terms.

“Preliminary Closing Cash Consideration” has the meaning set forth in Section 1.5(b)(i).

“Preliminary Closing Statement” has the meaning set forth in Section 1.5(b)(i).

“Primary Insured Party” means, with respect to any Company Insurance Policy, the named insured or policyholder.

“Privacy Laws” means any and all applicable Laws, legal requirements and self-regulatory guidelines (including of any applicable foreign jurisdiction) relating to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security (technical, physical or administrative), disposal, destruction, disclosure or transfer (including cross-border) of Personal Information, including the Federal Trade Commission Act, EU-U.S. Privacy Shield, Swiss-U.S. Privacy Shield, General Data Protection Regulation, Regulation 2016/679/EU on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (EU GDPR), the General Data Protection Regulation as defined by the DPA as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 (UK GDPR), the Controlling the Assault of Non-Solicited Pornography And Marketing Act (CAN-SPAM), Gramm-Leach-Bliley Act (GLBA) or Personal Information Protection and Electronic Documents Act (PIPEDA) and any and all applicable Laws relating to breach notification, the use of biometric identifiers or the use of Personal Information for marketing purposes.

“Privacy Requirements” has the meaning set forth in Section 3.9(l).

“Processing” has the meaning set forth in Section 3.9(l).

“Proposed Allocation” has the meaning set forth in Section 6.6(e).

“Purchase” means the purchase of the Interests by the Buyer from the Seller in accordance with the terms of this Agreement.

“Purchase Price Adjustment Escrow Account” means the separate account established pursuant to the Escrow Agreement to hold the Purchase Price Adjustment Escrow Shares for disbursement by the Escrow Agent.

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“Purchase Price Adjustment Escrow Amount” means $500,000.

“Qualified Company Employee Plan” has the meaning set forth in Section 3.12(b).

“Remaining Amount” has the meaning set forth in Section 1.5(b)(iv).

“Restricted Business” has the meaning set forth in Section 6.7(b).

“Restricted Period” has the meaning set forth in Section 6.7(a).

“Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act and any successor rules thereto.

“R&W Insurance Expenses” means the total premium, underwriting fee owed to the R&W insurer, brokerage commission and Taxes related to the R&W Policy.

“R&W Insurer” means the insurance carrier under the R&W Policy.

“R&W Policy” means the buyer-side representation and warranty insurance policy to be purchased by the Buyer in connection with the transactions with coverage to be bound as of the date hereof.

“SEC” means the United States Securities and Exchange Commission.

“SEC Reports” has the meaning set forth in Section 4.6.

“Securities Act” means the Securities Act of 1933, as amended.

“Self-Regulatory Organization” means any U.S. or foreign commission, board, agency or body that is not a Governmental Entity but is charged with regulating its own members through the adoption and enforcement of financial, sales practice and other requirements for brokers, dealers, securities underwriting or trading, stock exchanges, electronic communications networks, insurance companies or agents, investment companies or investment advisers.

“Seller” has the meaning set forth in the preamble.

“Seller Financial Statements” has the meaning set forth in Section 3.5(a).

“Seller Fundamental Representations” means the representations and warranties set forth in the first sentence of Section 2.1 (Organization; Standing), Section 2.2(a) (Authority), Section 2.3 (Title to Interests), Section 2.5 (Securities Matters) and Section 2.6 (Brokers).

“Seller Indemnified Persons” means the Seller and its Affiliates and, if applicable, their respective directors, officers, employees, agents and representatives, and each of their respective successors and assigns.

“Seller Material Adverse Effect” means any Change that, individually or together with any other changes, would or would reasonably be expected to prevent or materially impair or delay any of the Seller’s ability to perform its obligations hereunder and consummate the transactions contemplated by this Agreement.

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“Seller Option” has the meaning set forth in Section 1.9.

“Seller Optionholder” has the meaning set forth in Section 1.9.

“Seller Released Claims” has the meaning set forth in Section 6.19(a).

“Seller Released Party” has the meaning set forth in Section 6.19(a).

“Seller Releasing Party” has the meaning set forth in Section 6.19(a).

“Seller’s Knowledge,” “Knowledge of the Seller” and words of similar effect or import mean the actual knowledge, after reasonable inquiry, of each of the individuals identified in Schedule 10.1(b).

“Software” means any and all: (a) software and computer programs of any type, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; (b) data, databases and compilations of data, including any and all collections of data, whether machine readable or otherwise; (c) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons, images, videos, models and icons; and (d) documentation and other materials related to any of the foregoing, including user manuals and training materials.

“Stock Consideration” means the Closing Stock Consideration and the Indemnity Escrow Shares.

“Straddle Period” means a taxable period beginning on or before and ending after the Closing Date.

“Subsidiary” means, with respect to any Person, any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which such Person (or a Subsidiary of such Person) holds stock or other ownership interests representing (a) more than 50% of the voting power of all outstanding stock or ownership interests of such entity or (b) the right to receive more than 50% of the net assets of such entity available for distribution to the owners of outstanding stock or ownership interests upon a liquidation or dissolution of such entity.

“Survival Date” means the date that is 12 months following the Closing Date.

“Tax Liability Amount” means an amount (not less than $0) equal to the aggregate positive amount of the unpaid Income Taxes of the Companies (whether or not such Taxes are due and payable) for any Pre-Closing Tax Period, calculated (a) on a closing of the books basis as of the end of the Closing Date as if the taxable year of each Company ended as of the end of the Closing Date and (b) by excluding all Income Tax assets of the Companies (including any Tax refunds, credits or overpayments). The Tax Liability Amount shall be calculated without taking into account any payment of Taxes made after the 12:01am Eastern time on the Closing Date.

“Tax Proceeding” means any pending or threatened federal, state, local or foreign Tax audits, examinations, or assessments for the Pre-Closing Tax Period.

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“Tax Returns” means all reports, returns, declarations, statements or other information, including any schedules or attachments thereto, required to be supplied to a taxing authority in connection with Taxes.

“Taxes” means (i) all taxes, charges, fees, levies or other similar assessments or liabilities in the nature of a tax, including income, gross receipts, corporation, net worth, capital gains, documentary, recapture, recording, profits, severance, stamp, occupation, customs duties, ad valorem, premium, value-added, alternative minimum, excise, real property, personal property, sales, use, services, transfer, withholding, social security, employment, payroll, franchise and estimated taxes imposed by any Governmental Entity, (ii) any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof, and (iii) any Liability in respect of items described in clauses (i) or (ii) payable by reason of Contract, assumption, transferee or successor liability, operation of Law, Treasury Regulations 1.1502-6(a) (or any similar provision of Law) or otherwise.

“Third-Party Action” means any pending or threatened claim or the commencement or threatened commencement of any action, suit or proceeding relating to, or any other matter or circumstance that arises that has given or could reasonably be expected to give rise to, a third-party claim for which indemnification may be sought by an Indemnified Party under Section 8.1.

“Third-Party Claim Notice” has the meaning set forth in Section 8.2(a).

“Trademarks” means trademarks, service marks, trade dress rights, logos, trade names, service names, brand names, corporate names, identifying symbols, trade styles slogans, other indicators of commercial source or business identifiers and generable intangibles of a like nature (whether registered, arising under common Law or statutory Law, or otherwise), together with the goodwill associated with any of the foregoing, along with all applications, registrations, renewals and extensions thereof.

“Trading Day” means any day on which the NASDAQ Global Select Market is open for the exchange of securities.

“Transaction Documents” means this Agreement, the Escrow Agreement, the Accredited Investor Questionnaire, the Mechner Employment Agreement, the Releases, the R&W Policy, the Interest Assignment Agreement, the Contract Assignment Agreement, the Intellectual Property Assignment Agreement and the other agreements, instruments, certificates and documents expressly contemplated hereby.

“Transfer” has the meaning set forth in Section 6.8(b).

“Transfer Taxes” has the meaning set forth in Section 6.6(c).

“Treasury Regulations” means the U.S. Treasury Regulations promulgated under the Code.

“Unpaid Company Transaction Expenses” means, in each case to the extent incurred prior to the Closing (whether payable prior to, at or following the Closing), but not paid in full as of 12:01 a.m. Eastern time on the Closing Date, the aggregate amount of all third-party costs and expenses incurred by or on behalf of, or paid or to be paid or payable by, a Company in connection

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with the negotiation, preparation and execution of this Agreement and the Transaction Documents or the transactions contemplated hereby or thereby, including the performance by the Companies (at or prior to the Closing) of their obligations hereunder or thereunder or the consummation hereof or thereof, including (a) any brokers’, finders’ or similar fees, (b) 50% of the filing fee for the any filings made prior to the Closing pursuant to FINRA 1017 in connection with the transactions contemplated hereby, (c) any sale, change of control, retention, transaction or similar bonuses, severance or other payment obligation that is or becomes payable to current or former employees of a Company on or following the Closing as a result of the consummation of the transactions contemplated by this Agreement(other than, for the avoidance of doubt, (i) any Post-Closing Option Cash-Out Payments and the payor’s portion of appliable payroll, employment or similar taxes in respect thereof, and (ii) the Aggregate Closing Option Cash-Out Payment Amount, in each case, in respect of any payments in respect of Seller Options to be made in accordance with Section 1.9), together with each Company’s portion of applicable payroll, employment or similar taxes and any “gross-up payments” (if any are due or payable as a result of or in connection with any of the foregoing), (d) fees and expenses of counsel, advisors, consultants, accountants, auditors, experts and other professionals, (e) an amount equal to 50% of the R&W Insurance Expenses (but subject to an aggregate cap on the amount to be included under this clause (e) equal to $150,000), (f) the amount of the payor’s portion of applicable payroll, employment or similar taxes payable in respect of the Aggregate Closing Option Cash-Out Payment Amount to be made in accordance with Section 1.9 and (g) any Extended Support Agreement Costs, in each case, to the extent such costs and expenses shall have been incurred by or on behalf of a Company prior to Closing (whether payable prior to, at or following the Closing), but shall not have not been paid in full as of 12:01 a.m. Eastern time on the Closing Date. Notwithstanding anything to the contrary, (i) Unpaid Company Transaction Expenses do not include any amounts included in Net Working Capital or Closing Debt Amount and (ii) “Unpaid Company Transaction Expenses” shall be reduced by any amounts that would otherwise constitute “Unpaid Company Transaction Expenses” that are paid following 12:01 a.m., Eastern Time on the Closing Date until immediately prior to the Closing and reduce the Closing Cash Amount.

“WARN” means the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar state or local Law.

“Willful Breach” means a material breach of any covenant or agreement set forth in this Agreement that is a consequence of an act, or failure to act, undertaken by the breaching Party with the actual knowledge that the taking of such act, or failure to act, would result in or constitute a breach of this Agreement.

ARTICLE XI

MISCELLANEOUS

11.1Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly delivered (i) four Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (ii) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service, (iii) on the date of transmission (or, the first Business Day following such transmission if the date of such transmission is not a Business Day) by facsimile with successful confirmation of transmission, or

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(iv) on the date of transmission, if by e-mail (provided no “bounceback” or similar notice of non-delivery is received), in each case to the intended recipient as set forth below:

(a)if to the Buyer or (after the Closing Date) a Company, to:

MarketAxess Holdings Inc.
55 Hudson Yards, 15th Floor
New York, NY 10001

Attention: Christopher N. Gerosa; Scott Pintoff

E-Mail: [*****]; [*****]

with a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Michael J. Aiello; Michelle A. Sargent
Email: [*****]; [*****]

(b)if (prior to the Closing Date) to a Company, to:

Pragma Weeden Holdings LLC

1370 Broadway, 10th Floor

New York, NY 10018

Attention: David Mechner

E-Mail: [*****]

with a copy (which shall not constitute notice) to:

Wilmer Cutler Pickering Hale and Dorr LLP

2100 Pennsylvania Avenue NW

Washington DC 20037

Attention: Stephanie C. Evans
E-Mail: [*****]

Any Party may give any notice or other communication hereunder using any other means (including personal delivery, messenger service, or ordinary mail), but no such notice or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended. Any Party may change the address to which notices and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

11.2Entire Agreement; Non-Recourse.

(a)This Agreement (including the Disclosure Schedule, the Buyer Disclosure Schedule and the Schedules and Exhibits hereto and the documents and instruments referred to herein that are to be delivered at the Closing) and the other Transaction Documents constitute the entire agreement among the Parties and supersedes any prior understandings, agreements or

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representations by or among the Parties, written or oral, with respect to the subject matter hereof; provided that the Confidentiality Agreement shall remain in effect in accordance with its terms (subject to Section 5.2). The Parties have voluntarily agreed to define their rights, liabilities and obligations respecting the acquisition of the Companies by the Buyer exclusively in contract pursuant to the express terms of this Agreement and the other Transaction Documents, and each Party expressly disclaims that it is owed any duty or is entitled to any remedies not expressly set forth in this Agreement or the other Transaction Documents. Other than in the case of Fraud, the sole and exclusive remedies for any breach of this Agreement or any other Transaction Document (including any representation or warranty set forth herein or therein, made in connection herewith or therewith or as an inducement to enter into this Agreement or any other Transaction Document) or any claim or cause of action otherwise arising out of or related to the acquisition of the Companies by the Buyer (for the avoidance of doubt, excluding the Mechner Employment Agreement) shall be those remedies available at law or in equity for breach of contract only (as such contractual remedies have been further limited or excluded pursuant to the express terms of this Agreement and the other Transaction Documents). No Person shall have any remedies or causes of action (whether in contract, tort, equity or otherwise) for any statements, communications, disclosures, failure to disclose, representations or warranties made with respect to the acquisition of the Companies by the Buyer and not set forth in this Agreement or another Transaction Document.

(b)This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against, the Parties and their respective successors and permitted assigns (and then only with respect to the specific obligations set forth herein with respect to such Party). Except to the extent actually a Party or the successor or assign thereof (and then only to the extent of the specific obligations undertaken by such Party in this Agreement and not otherwise), no past, present or future director, manager, officer, employee, incorporator, equityholder, member, partner, agent, attorney, advisor or representative of any Party (or of any Affiliate of any Party) (collectively, the “Non-Recourse Persons”) shall have any Liability (whether in contract, tort, equity or otherwise) for any representation, warranty, covenant, agreement or other obligation or Liability under this Agreement (whether for indemnification or otherwise) or for any claim based on, arising out of, or related to or by reason of this Agreement or any transaction contemplated hereby.

11.3Waiver of Conflicts Regarding Representation; Non-Assertion of Attorney-Client Privilege.

(a)Effective as of the Closing, the Buyer and each Company hereby waives and agrees not to assert, and the Buyer agrees to cause each Company to waive and not to assert, any conflict of interest arising out of or relating to any representation after the Closing (any “Post-Closing Representation”) of the Seller, any of its post-Closing Affiliates, or any director, manager, officer or employee of the Seller, any of its post-Closing Affiliates or Mechner (any such Person, a “Designated Person”) in any matter involving this Agreement or any agreement, certificate, instrument or other document executed or delivered pursuant to this Agreement or any transaction contemplated hereby or thereby (including any litigation, arbitration, mediation or other proceeding and including any matter regarding the negotiation, execution, performance or enforceability hereof or thereof) by Wilmer Cutler Pickering Hale and Dorr LLP (the “Current Representation”).

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(b)Effective as of the Closing, the Buyer hereby agrees not to control or assert, and the Buyer agrees to cause each Company not to control or assert, any attorney-client privilege, work product protection or other similar privilege or protection applicable to any communication between Wilmer Cutler Pickering Hale and Dorr LLP and any Designated Person or a Company prior to the Closing relating to the transactions contemplated by this Agreement (including the negotiation or execution hereof) (a “Covered Communication”) in connection with any Post-Closing Representation, including in connection with a dispute with the Buyer, a Company or any of their respective Affiliates, it being the intention of the Parties that all rights of any Person under or with respect to such attorney-client privilege, work product protection or other similar privilege or protection, including the right to waive, assert and otherwise control such attorney-client privilege, work product protection or other similar privilege or protection, shall be (and are hereby) transferred to or retained by (as applicable), and vested solely in, such Designated Person or the Seller (in the case of rights of any Person other than a Designated Person). No access following the Closing by the Buyer or any Company to any Covered Communication shall waive or otherwise alter the rights of any Designated Person with respect to any Covered Communication and neither the Buyer nor a Company shall, and each shall cause its Affiliates not to, use any Covered Communication or the contents of any Covered Communication in any dispute with any Designated Person in any matter relating to this Agreement or any agreement, certificate, instrument or other document executed or delivered pursuant to this Agreement or any transaction contemplated hereby or thereby (including any litigation, arbitration, mediation or other proceeding and including any matter regarding the negotiation, execution, performance or enforceability hereof or thereof).

11.4No Third-Party Beneficiaries.

(a)This Agreement is not intended to, and shall not, confer upon any Person other than the Parties (and their respective successors and permitted assigns) any rights or remedies hereunder, except for (a) the Buyer Indemnified Persons and the Seller Indemnified Persons who shall be third-party beneficiaries of Article VIII, (b) the Seller Released Parties who shall be third-party beneficiaries of Section 6.19, (c) the Non-Recourse Persons, who shall be third-party beneficiaries of Section 11.2(b) and (d) any Person who has executed and delivered a Joinder pursuant to Section 6.8, who shall be a party hereto for all purposes as set forth in such Joinder.

(b)The Seller shall cause the Companies to perform all obligations of the Companies required to be performed hereunder at or prior to the Closing. The Buyer shall cause the Companies to perform all obligations of the Companies required to be performed hereunder following the Closing.

11.5Assignment. Neither this Agreement nor any of the rights, interests, or obligations under this Agreement may be assigned or delegated, in whole or in part, by any Party without the prior written consent of the Buyer (in the case of any proposed assignment by a Company (prior to the Closing) or the Seller) or the Seller (in the case of any proposed assignment by the Buyer or, following the Closing, a Company), and any purported assignment without such prior written consent required by this Section 11.5 shall be null and void ab initio; provided, however, that the Buyer may assign this Agreement and any or all of its rights or obligations hereunder, including its rights and obligations to purchase the Interests and to indemnification hereunder, to any of its Affiliates upon prior written notice to the Seller (and provided that no such assignment shall release

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the Buyer from any Liability it may have under this Agreement); and providedfurther that Buyer may assign any of its rights, but not its obligations, under this Agreement to any insurer that underwrites the R&W Policy (or any agent thereof) without the consent of any other Party (and provided that no such assignment shall release the Buyer from any Liability it may have under this Agreement). Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns.

11.6Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction due to any applicable Law or public policy shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified so long as the economic and legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. In the event such court does not exercise the power granted to it in the prior sentence, the Parties shall replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the greatest extent possible, the economic, business and other purposes of such invalid or unenforceable term.

11.7Counterparts and Signature. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall be considered one and the same agreement. This Agreement shall become effective when counterparts have been duly signed by each Party and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. This Agreement may be executed and delivered by facsimile or by an electronic scan (including in .PDF format) or by electronic signature (including DocuSign) delivered by electronic transmission.

11.8Interpretation. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (a) “either” and “or” are not exclusive and “include,” “includes” and “including” are not limiting; (b) “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (c) “date of this Agreement” refers to the date set forth in the initial caption of this Agreement; (d) “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if”; (e) the descriptive headings and table of contents included herein are included for convenience only and shall not affect in any way the meaning or interpretation of this Agreement or any provision hereof; (f) definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (g) references to a Contract mean such Contract as amended or otherwise supplemented or modified from time to time; (h) references to a Person are also to its permitted successors and assigns; (i) references to an “Article,” “Section,” “Exhibit” or “Schedule” refer to an Article or Section of, or an Exhibit or Schedule to, this Agreement; (j) references to “$” or otherwise to dollar amounts refer to the lawful currency of the United States; (k) references to a federal, state, local or foreign Law include any rules, regulations

94

and delegated legislation issued thereunder, in each case, as in effect at the relevant time; (l) references to accounting terms used and not otherwise defined herein have the meaning assigned to them under GAAP, applied on a basis consistent with the application thereof to the Company Financial Statements; (m) any reference to “days” means calendar days unless Business Days or Trading Days are expressly specified; and (n) when calculating the period of time before which, within which or following which any act is to be done pursuant this Agreement, the date that is the reference date in calculating such period shall be excluded, and, if the last day of such period is not a Business Day, then the period shall extend to and end on the next succeeding Business Day. When reference is made in this Agreement to information that has been “made available” to the Buyer, that shall include information that was (i) contained in the Seller’s electronic data room and to which the Buyer had access therein no later than 12:00 p.m., Eastern time, on the date hereof, and continuing through, the execution of this Agreement or (ii) delivered to the Buyer or its counsel prior to such time. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party. No summary of this Agreement prepared by any Party shall affect the meaning or interpretation of this Agreement. If any date on which a Party is required to make a payment or a delivery pursuant to the terms hereof is not a Business Day, then such payment or delivery shall instead be required to be made on the next succeeding Business Day. Time shall be of the essence in this Agreement.

11.9Governing Law. This Agreement and all disputes, claims or causes of action (whether in contract, tort or statute) that may be based upon or arise out of or be related hereto or the negotiation, execution or performance hereof shall be governed by and construed in accordance with the internal Laws of the State of Delaware applicable to Contracts made and performed in such State, without giving effect to any choice or conflict of Law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than those of the State of Delaware.

11.10Remedies. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that monetary damages would not be a sufficient remedy for any such breach or failure to perform. Accordingly, each Party shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case without posting a bond, undertaking or other security, this being in addition to any other remedy to which it is entitled at law or in equity. No Party shall oppose the granting of an injunction, specific performance or other equitable relief on the basis that (i) the Party seeking such remedy has an adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or equity. Except as provided in Section 8.4(h), all remedies hereunder are cumulative and are not exclusive of any other remedies provided by Law or in equity.

11.11Submission to Jurisdiction. Except for matters to be submitted to and resolved by the Neutral Accountant pursuant to Section 1.5 or Section 6.6(e), each Party hereby irrevocably (a) consents and submits itself to the exclusive personal jurisdiction of the Court of Chancery of the State of Delaware, New Castle County (or, in the case of a claim as to which such court lacks jurisdiction, an appropriate state or federal court sitting in Wilmington, Delaware) in any dispute, claim, action or proceeding (whether in contract, tort or otherwise) that may be based upon or arise

95

out of or relating to this Agreement or any of the transactions contemplated by this Agreement or the negotiation, execution or performance thereof, (b) agrees that all claims in respect of any such dispute, action or proceeding may be heard and determined in any such court and unconditionally waives any objection to the laying of venue in such courts, (c) agrees not to attempt to deny or defeat such jurisdiction by motion or other request for leave from any such court, and (d) agrees not to bring any action or proceeding that may be based upon, arise out of or otherwise relate to this Agreement or any of the transactions contemplated by this Agreement or the negotiation, execution or performance hereof in any other court. Each Party waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto. Any Party may make service on another Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 11.1. Nothing in this Section 11.11, however, shall affect the right of any Party to serve legal process in any other manner permitted by Law.

11.12Disclosure Schedules. The Disclosure Schedule and the Buyer Disclosure Schedule shall be arranged in Sections corresponding to the numbered sections contained in Article II, Article III or Article IV, as applicable, or other relevant Sections of this Agreement, and a disclosure in any section of the Disclosure Schedule or Buyer Disclosure Schedule (as applicable) shall qualify (a) the corresponding Section of this Agreement and (b) the other Sections of this Agreement to the extent that it is reasonably apparent on its face from a reading of such disclosure that it also qualifies or applies to such other Sections. The inclusion of any information in the Disclosure Schedule or Buyer Disclosure Schedule shall not be deemed to be an admission or acknowledgment, in and of itself, that such information is required by the terms hereof to be disclosed, is material, has had or would reasonably be expected to have a Seller Material Adverse Effect, Company Material Adverse Effect or Buyer Material Adverse Effect, or is outside the ordinary course of business.

11.13Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, CLAIM OR DISPUTE DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENTS OR ANY TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF A DISPUTE, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.13. EACH PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

[Remainder of page intentionally left blank]

96

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed as of the date first written above.

MARKETAXESS HOLDINGS INC.
By:	/s/ Christopher R. Concannon
	Name: Christopher R. Concannon
	Title: Chief Executive Officer
PRAGMA WEEDEN HOLDINGS LLC
By:	/s/ David Mechner
	Name: David Mechner
	Title: Chief Executive Officer
PRAGMA financial systems LLC
By:	/s/ David Mechner
	Name: David Mechner
	Title: Chief Executive Officer
pragma llc
By:	/s/ David Mechner
	Name: David Mechner
	Title: Chief Executive Officer
david mechner (solely for the purposes of Section 6.7, Section 6.19, Section 8.1(b), the remainder of Article VIII as is relates to Section 8.1(b) and Article XI as it relates to any of such provisions)
/s/ David Mechner

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Christopher R. Concannon, 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 R. CONCANNON

Christopher R. Concannon

Chief Executive Officer

(principal executive officer)

Dated: October 25, 2023

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: October 25, 2023

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 September 30, 2023

In connection with the Quarterly Report on Form 10-Q of MarketAxess Holdings Inc. (the “Company”) for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher R. Concannon, 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/ CHRISTOPHER R. CONCANNON

Christopher R. Concannon

Chief Executive Officer

October 25, 2023

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 September 30, 2023

In connection with the Quarterly Report on Form 10-Q of MarketAxess Holdings Inc. (the “Company”) for the quarter ended September 30, 2023, 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

October 25, 2023

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	9 Months Ended
	Sep. 30, 2023	Oct. 23, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
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		37,905,448

XML

Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
ASSETS
Cash and cash equivalents	$ 420,497	$ 430,746
Cash segregated under federal regulations	52,601	50,947
Investments, at fair value	132,844	83,792
Accounts receivable, net of allowance of $580 and $590 as of September 30, 2023 and December 31, 2022, respectively	90,548	78,450
Receivables from broker-dealers, clearing organizations and customers	548,081	476,335
Goodwill	154,789	154,789
Intangible assets, net of accumulated amortization	84,687	98,065
Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization	101,654	100,256
Operating lease right-of-use assets	63,101	66,106
Prepaid expenses and other assets	88,710	68,289
Total assets	1,737,512	1,607,775
Liabilities
Accrued employee compensation	43,881	56,302
Payables to broker-dealers, clearing organizations and customers	364,086	303,993
Income and other tax liabilities	19,379	28,448
Accounts payable, accrued expenses and other liabilities	40,019	55,263
Operating lease liabilities	79,169	82,676
Total liabilities	546,534	526,682
Commitments and Contingencies (Note 13)
Stockholders' equity
Preferred stock	0	0
Common stock	123	123
Additional paid-in capital	346,947	345,468
Treasury stock - Common stock voting, at cost, 3,265,857 shares and 3,270,512 shares as of September 30, 2023 and December 31, 2022 respectively	(327,091)	(328,326)
Retained earnings	1,208,607	1,101,525
Accumulated other comprehensive loss	(37,608)	(37,697)
Total stockholders' equity	1,190,978	1,081,093
Total liabilities and stockholders' equity	1,737,512	1,607,775
Series A Preferred Stock [Member]
Stockholders' equity
Preferred stock	$ 0	$ 0

XML

Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Allowance for accounts receivable	$ 580	$ 590
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	40,946,522	40,918,660
Common stock, shares outstanding	37,680,665	37,648,148
Treasury Stock, Common, Shares	3,265,857	3,270,512
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

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues
Revenues	$ 172,284	$ 172,112	$ 555,299	$ 540,398
Expenses
Employee compensation and benefits	48,872	44,805	149,570	137,996
Depreciation and amortization	17,561	15,302	51,027	45,716
Technology and communications	15,339	14,169	45,573	38,851
Professional and consulting fees	9,181	7,560	24,331	26,101
Occupancy	3,503	3,381	10,313	10,468
Marketing and advertising	2,100	1,797	8,403	6,535
Clearing costs	3,665	4,211	12,392	13,049
General and administrative	5,154	4,576	15,698	12,479
Total expenses	105,375	95,801	317,307	291,195
Operating income	66,909	76,311	237,992	249,203
Other income (expense)
Interest income	6,590	1,433	16,151	1,746
Interest expense	(164)	(138)	(347)	(648)
Equity in earnings of unconsolidated affiliate	125	869	579	1,060
Other, net	(1,717)	388	(5,487)	7,499
Total other income (expense)	4,834	2,552	10,896	9,657
Income before income taxes	71,743	78,863	248,888	258,860
Provision for income taxes	16,802	19,556	60,460	67,862
Net income	$ 54,941	$ 59,307	$ 188,428	$ 190,998
Net income per common share
Basic	$ 1.47	$ 1.58	$ 5.03	$ 5.1
Diluted	1.46	1.58	5.01	5.07
Cash dividends declared per common share	$ 0.72	$ 0.7	$ 2.16	$ 2.1
Weighted average shares outstanding
Basic	37,491	37,479	37,485	37,464
Diluted	37,574	37,567	37,603	37,666
Commissions [Member]
Revenues
Revenues	$ 150,496	$ 153,164	$ 491,073	$ 482,740
Information Services [Member]
Revenues
Revenues	11,801	9,711	34,466	28,916
Post-trade Services [Member]
Revenues
Revenues	9,833	9,000	29,228	28,056
Other [Member]
Revenues
Revenues	$ 154	$ 237	$ 532	$ 686

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net Income (Loss)	$ 54,941	$ 59,307	$ 188,428	$ 190,998
Cumulative translation adjustment	(9,687)	(20,248)	274	(46,757)
Net unrealized (loss) on securities available-for-sale, net of tax of $(5), $0, $(61) and $0, respectively	(18)	0	(185)	0
Comprehensive income	$ 45,236	$ 39,059	$ 188,517	$ 144,241

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Securities available-for-sale, tax expense (benefit)	$ (5)	$ 0	$ (61)	$ 0

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock Voting [Member]	Additional Paid-In Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Beginning Balance at Dec. 31, 2021	$ 1,041,309	$ 123	$ 330,262	$ (232,712)	$ 956,966	$ (13,330)
Net Income (Loss)	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	(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 (Loss)	190,998
Cumulative translation adjustment	(46,757)
Ending Balance at Sep. 30, 2022	1,018,740	123	330,294	(320,252)	1,068,662	(60,087)
Beginning Balance at Mar. 31, 2022	1,023,541	123	318,119	(271,512)	995,192	(18,381)
Net Income (Loss)	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	(26,391)				(26,391)
Ending Balance at Jun. 30, 2022	1,000,802	123	325,047	(320,252)	1,035,723	(39,839)
Net Income (Loss)	59,307				59,307
Cumulative translation adjustment	(20,248)					(20,248)
Stock-based compensation	7,351		7,351
Exercise of stock options	148		148
Withholding tax payments on restricted stock vesting and stock option exercises	(2,252)		(2,252)
Repurchases of common stock	0			0
Cash dividend on common stock	(26,368)				(26,368)
Ending Balance at Sep. 30, 2022	1,018,740	123	330,294	(320,252)	1,068,662	(60,087)
Beginning Balance at Dec. 31, 2022	1,081,093	123	345,468	(328,326)	1,101,525	(37,697)
Net Income (Loss)	73,628				73,628
Cumulative translation adjustment	5,755					5,755
Unrealized net gain (loss) on securities available-for-sale, net of tax	(41)					(41)
Stock-based compensation	7,488		7,488
Reissuance of treasury stock	454		(57)	511
Exercise of stock options	707		707
Withholding tax payments on restricted stock vesting and stock option exercises	(20,492)		(20,492)
Cash dividend on common stock	(27,060)				(27,060)
Ending Balance at Mar. 31, 2023	1,121,532	123	333,114	(327,815)	1,148,093	(31,983)
Beginning Balance at Dec. 31, 2022	1,081,093	123	345,468	(328,326)	1,101,525	(37,697)
Net Income (Loss)	188,428
Cumulative translation adjustment	274
Ending Balance at Sep. 30, 2023	1,190,978	123	346,947	(327,091)	1,208,607	(37,608)
Beginning Balance at Mar. 31, 2023	1,121,532	123	333,114	(327,815)	1,148,093	(31,983)
Net Income (Loss)	59,859				59,859
Cumulative translation adjustment	4,206					4,206
Unrealized net gain (loss) on securities available-for-sale, net of tax	(126)					(126)
Stock-based compensation	6,890		6,890
Exercise of stock options	18		18
Withholding tax payments on restricted stock vesting and stock option exercises	(155)		(155)
Cash dividend on common stock	(27,132)				(27,132)
Ending Balance at Jun. 30, 2023	1,165,092	123	339,867	(327,815)	1,180,820	(27,903)
Net Income (Loss)	54,941				54,941
Cumulative translation adjustment	(9,687)					(9,687)
Unrealized net gain (loss) on securities available-for-sale, net of tax	(18)					(18)
Stock-based compensation	7,481		7,481
Reissuance of treasury stock	539		(185)	724
Withholding tax payments on restricted stock vesting and stock option exercises	(216)		(216)
Cash dividend on common stock	(27,154)				(27,154)
Ending Balance at Sep. 30, 2023	$ 1,190,978	$ 123	$ 346,947	$ (327,091)	$ 1,208,607	$ (37,608)

XML

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per common share	$ 0.72	$ 0.72	$ 0.72	$ 0.7	$ 0.7	$ 0.7	$ 2.16	$ 2.1

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net Income (Loss)	$ 188,428	$ 190,998
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	51,027	45,716
Amortization of operating lease right-of-use assets	4,207	4,232
Stock-based compensation expense	21,859	21,953
Deferred taxes	(5,502)	(3,346)
Foreign currency transaction (gains) losses	1,587	(13,595)
Other	847	730
Changes in operating assets and liabilities:
(Increase) in accounts receivable	(11,650)	(24,011)
(Increase) in receivables from broker-dealers, clearing organizations and customers	(46,146)	(148,558)
(Increase) in prepaid expenses and other assets	(18,240)	(4,693)
(Decrease) in accrued employee compensation	(12,406)	(14,502)
Increase in payables to broker-dealers, clearing organizations and customers	58,710	107,560
(Decrease) in income and other tax liabilities	(3,921)	(8,337)
(Decrease)/increase in accounts payable, accrued expenses and other liabilities	(7,491)	2,762
(Decrease) in operating lease liabilities	(4,721)	(4,688)
Net cash provided by operating activities	192,082	155,005
Cash flows from investing activities
Proceeds from maturities and sales	3,311	0
Purchases	(27,871)	0
Acquisition of equity method investment	0	(34,400)
Purchases of furniture, equipment and leasehold improvements	(7,255)	(6,642)
Capitalization of software development costs	(31,802)	(27,109)
Net cash (used in) investing activities	(63,617)	(68,151)
Cash flows from financing activities
Cash dividend on common stock	(82,139)	(79,855)
Exercise of stock options	725	284
Withholding tax payments on restricted stock vesting and stock option exercises	(20,863)	(22,205)
Repurchases of common stock	0	(87,540)
Payment of contingent consideration	(12,500)	(26,164)
Proceeds from short-term borrowings	53,995	100,000
Repayments of short-term borrowings	(50,000)	(100,000)
Net cash (used in) financing activities	(110,782)	(215,480)
Effect of exchange rate changes on cash and cash equivalents	(1,451)	(28,111)
Cash and cash equivalents including restricted cash
Net increase (decrease) for the period	16,232	(156,737)
Beginning of period	572,664	625,567
End of period	588,896	468,830
Supplemental cash flow information
Cash paid for income taxes	83,142	69,085
Cash paid for interest	396	658
Non-cash activity
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	1,178	1,670
Trading Investments [Member]
Changes in operating assets and liabilities:
(Increase)/decrease in trading investments	(24,300)	445
Mutual Funds Held In Rabbi Trust [Member]
Changes in operating assets and liabilities:
(Increase)/decrease in trading investments	$ (206)	$ 2,339

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 54,941	$ 59,859	$ 73,628	$ 59,307	$ 66,922	$ 64,769	$ 188,428	$ 190,998

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Insider Trading Arrangements

9 Months Ended

Sep. 30, 2023

shares

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

(c) Trading Plans

In the third quarter of 2023, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement for the purchase or sale of securities of the Company, within the meaning of Item 408 of Regulation S-K, except as follows:

Christopher N. Gerosa, Chief Financial Officer, adopted a Rule 10b5-1 trading arrangement on September 7, 2023, for the sale of up to 900 shares of the Company’s common stock, subject to certain conditions. The arrangement’s expiration date is February 14, 2025.

Name

Christopher N. Gerosa

Title

Chief Financial Officer

Rule 10b5-1 Arrangement Adopted

true

Non-Rule 10b5-1 Arrangement Adopted

false

Adoption Date

September 7, 2023

Rule 10b5-1 Arrangement Terminated

false

Non-Rule 10b5-1 Arrangement Terminated

false

Termination Date

February 14, 2025

Aggregate Available

900

XML

Organization and Principal Business Activity

9 Months Ended

Sep. 30, 2023

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 2,000 institutional investor and broker-dealer firms are active users of MarketAxess’ patented trading technology, accessing global liquidity on its platforms in 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. 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

9 Months Ended

Sep. 30, 2023

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, 2022. The consolidated financial information as of December 31, 2022 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.

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 unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition and realized gains or losses reported in other, net in the Consolidated Statements of Operations. 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.

The Company assesses whether an impairment loss on its available-for-sale debt securities has occurred due to declines in fair value or other market conditions. When the amortized cost basis of an available-for-sale debt security exceeds its fair value, the security is deemed to be impaired. The portion of an impairment related to credit losses is determined by comparing the present value of cash flows expected to be collected from the security with the amortized cost basis of the security and is recorded as a charge in the Consolidated Statements of Operations. The remainder of an impairment is recognized in accumulated other comprehensive loss if the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery.

Fair Value Financial Instruments

Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” A three-tiered hierarchy for determining fair value has been established that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as Level 1 (unadjusted quoted prices for identical assets or liabilities in active markets), Level 2 (inputs that are observable in the marketplace other than those inputs classified in Level 1) and Level 3 (inputs that are unobservable in the marketplace). The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of its money market funds, trading securities, available-for-sale securities, foreign currency forward contracts and contingent consideration payables associated with acquisitions. All other financial instruments are short-term in nature and the carrying amounts reported on the Consolidated Statements of Financial Condition approximate fair value.

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

Receivables from broker-dealers, clearing organizations and customers include amounts receivable for securities not delivered by the Company to the purchaser by the settlement date (“securities failed-to-deliver”) and cash deposits held at clearing organizations and clearing brokers to facilitate the settlement and clearance of matched principal transactions. Payables to broker-dealers, clearing organizations and customers include amounts payable for securities not received by the Company from a seller by the settlement date (“securities failed-to-receive”). Securities failed-to-deliver and securities failed-to-receive for transactions executed on a matched principal basis where the Company serves as a 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 $0.6 million as of each of September 30, 2023 and December 31, 2022. The provision for bad debts was $0.2 million for each of the three months ended September 30, 2023 and 2022, and $0.3 million for each of the nine months ended September 30, 2023 and 2022. Write-offs and other charges against the allowance for credit losses were $0.1 million for each of the three months ended September 30, 2023 and 2022, and $0.2 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively.

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, vendor software development costs billed to us that are part of the application development stage. These costs are recorded as a prepaid asset on the Consolidated Statements of Financial Condition and are amortized over the period of the hosting service contract, which ranges from one to five years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable.

Foreign Currency Translation and Forward Contracts

Assets and liabilities denominated in foreign currencies are translated using exchange rates at the end of the period; revenues and expenses are translated at average monthly rates. Gains and losses on foreign currency translation are a component of accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Transaction gains and losses are recorded in other, net in the Consolidated Statements of Operations.

The Company enters into foreign currency forward contracts to economically hedge its foreign currency transaction gains and losses. Realized and unrealized gains and losses on these forward contracts are included in other, net in the Consolidated Statements of Operations. The Company records the fair value of the forward contract asset in prepaid expenses and other assets or the fair value of the forward contract liability in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

Revenue Recognition

The Company’s classification of revenues in the Consolidated Statements of Operations represents revenues from contracts with customers disaggregated by type of revenue. The Company has four revenue streams as described below.

Commission 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	73,763	$	74,767	$	240,315	$	246,520
Open Trading – matched principal trading		36,682		42,845		132,524		128,460
U.S. government bonds - matched principal trading		3,829		4,160		11,920		13,487
Total variable transaction fees		114,274		121,772		384,759		388,467
Distribution fees and unused minimum fees		36,222		31,392		106,314		94,273
Total commissions	$	150,496	$	153,164	$	491,073	$	482,740

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	11,341	$	9,524	$	33,487	$	28,232
Services transferred at a point in time		460		187		979		684
Total information services revenues	$	11,801	$	9,711	$	34,466	$	28,916

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,774	$	9,000	$	29,126	$	28,014
Services transferred at a point in time		59		—		102		42
Total post-trade services revenues	$	9,833	$	9,000	$	29,228	$	28,056

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. Deferred revenues are included in accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition. The revenue recognized from contract liabilities and the remaining balance is shown below:

	December 31, 2022		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation		September 30, 2023
	(In thousands)
Information services	$	3,121	$	9,042	$	(9,329	)	$	—	$	2,834
Post-trade services		869		17,373		(17,341	)		6		907
Total deferred revenue	$	3,990	$	26,415	$	(26,670	)	$	6	$	3,741

The majority of the Company’s information services and post-trade services 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 $63.9 million as of September 30, 2023. The Company expects to recognize revenue associated with the remaining performance obligations over the next 56 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

9 Months Ended

Sep. 30, 2023

Broker-Dealer [Abstract]

Regulatory Capital Requirements

3. Regulatory Capital Requirements

As of September 30, 2023, one of the Company’s U.S. subsidiaries was registered as a broker-dealer and therefore subject to the applicable rules and regulations of the SEC and the Financial Industry Regulatory Authority (“FINRA”). In October 2023, the Company acquired a company that is registered as a broker-dealer and likewise is subject to the applicable rules and regulations of the SEC and FINRA (see Note 17). These rules contain minimum net capital requirements, as defined in the applicable regulations. 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 September 30, 2023, 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 September 30, 2023, the Company’s subsidiaries maintained aggregate net capital and financial resources that were $505.6 million in excess of the required levels of $31.5 million.

The Company’s sole U.S. broker-dealer subsidiary as of September 30, 2023 was 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 September 30, 2023, this U.S. broker-dealer subsidiary had a balance of $52.6 million in its special reserve bank account. This U.S. broker-dealer subsidiary also maintained net capital that was $295.2 million in excess of the required level of $3.6 million.

Each of the Company’s U.S. and foreign regulated subsidiaries are subject to local regulations which generally limit, or require the prior notification to or approval from such regulated entity’s principal regulator before, the 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.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

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 September 30, 2023
Assets
Money market funds	$	6,293	$	—	$	—	$	6,293
Securities available-for-sale
Corporate debt		—		24,546		—		24,546
Trading securities
U.S. Treasuries		—		98,711		—		98,711
Mutual funds held in rabbi trust		—		9,587		—		9,587
Total assets	$	6,293	$	132,844	$	—	$	139,137
Liabilities
Foreign currency forward position	$	—	$	2,852	$	—	$	2,852
As of December 31, 2022
Assets
Money market funds	$	59,173	$	—	$	—	$	59,173
Trading securities
U.S. Treasuries		—		74,409		—		74,409
Mutual funds held in rabbi trust		—		9,383		—		9,383
Total assets	$	59,173	$	83,792	$	—	$	142,965
Liabilities
Contingent consideration payable	$	—	$	—	$	12,340	$	12,340
Foreign currency forward position		—		1,688		—		1,688
Total liabilities	$	—	$	1,688	$	12,340	$	14,028

Money market funds are included in cash and cash equivalents on the Consolidated Statements of Financial Condition. Securities available-for-sale and trading securities are included in investments, at fair value on the Consolidated Statements of Financial Condition. 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 foreign currency forward contracts are classified within Level 2 as the valuation inputs are based on quoted market prices. 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. In May 2023, the Company made final payment on the remaining contingent consideration. The following table summarizes the change in the Company's Level 3 liabilities for the nine months ended September 30, 2023:

	December 31, 2022		Payments			Realized (Gain)/Loss		September 30, 2023
	(In thousands)
Contingent consideration payable	$	12,340	$	(12,500	)	$	160	$	—

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 Statements 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 September 30, 2023
Financial assets not measured at fair value:
Cash	$	414,204	$	414,204	$	414,204	$	—	$	—	$	414,204
Cash segregated under federal regulations		52,601		52,601		52,601		—		—		52,601
Accounts receivable, net of allowance		90,548		90,548		—		90,548		—		90,548
Receivables from broker-dealers, clearing    organizations and customers		548,081		548,081		112,489		435,592		—		548,081
Total	$	1,105,434	$	1,105,434	$	579,294	$	526,140	$	—	$	1,105,434
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	364,086	$	364,086	$	—	$	364,086	$	—	$	364,086
As of December 31, 2022
Financial assets not measured at fair value:
Cash	$	371,573	$	371,573	$	371,573	$	—	$	—	$	371,573
Cash segregated under federal regulations		50,947		50,947		50,947		—		—		50,947
Accounts receivable, net of allowance		78,450		78,450		—		78,450		—		78,450
Receivables from broker-dealers, clearing    organizations and customers		476,335		476,335		88,923		387,412		—		476,335
Total	$	977,305	$	977,305	$	511,443	$	465,862	$	—	$	977,305
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	303,993	$	303,993	$	—	$	303,993	$	—	$	303,993

During the three and nine months ended September 30, 2023, there were no transfers between Level 1, Level 2 and Level 3 securities.

The Company enters into foreign currency forward contracts as an economic hedge against certain foreign currency transaction gains and losses in the Consolidated Statements of Operations. These forward contracts are for one- or three-month periods and are used to limit exposure to foreign currency exchange rate fluctuations. The Company records the fair value of the asset in prepaid expenses and other assets or the fair value of the liability in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. The following table summarizes the Company’s foreign currency forward position:

	As of
	September 30, 2023			December 31, 2022
	(In thousands)
Notional value	$	63,870		$	62,160
Fair value of notional		61,018			60,472
Fair value of the (liability)	$	(2,852	)	$	(1,688	)

Realized and unrealized gains and losses on foreign currency forward contracts are included in other, net in the Consolidated Statements of Operations. The Company recorded a net realized gain of $0.8 million and a net unrealized loss of $3.5 million for the three months ended September 30, 2023. The Company recorded a net realized gain of $0.7 million and a net unrealized loss of $1.2 million for the nine months ended September 30, 2023. The Company records collateral deposits with its counterparty bank in prepaid expenses and other assets on the Consolidated Statements of Financial Condition. As of September 30, 2023, the Company maintained a collateral deposit of $3.2 million with its counterparty bank.

The following table summarizes the Company’s investments:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
As of September 30, 2023
Securities available-for-sale
Corporate debt	$	24,791	$	14	$	(259	)	$	24,546
Trading securities
U.S. Treasuries		99,211		—		(500	)		98,711
Mutual funds held in rabbi trust		10,442		79		(934	)		9,587
Total investments	$	134,444	$	93	$	(1,693	)	$	132,844
As of December 31, 2022
Trading securities
U.S. Treasuries	$	74,943	$	—	$	(534	)	$	74,409
Mutual funds held in rabbi trust		11,474		—		(2,091	)		9,383
Total investments	$	86,417	$	—	$	(2,625	)	$	83,792

Purchases of investments during the nine months ended September 30, 2023 were $77.7 million. Proceeds from the sales and maturities of investments during the nine months ended September 30, 2023 were $28.3 million.

The following table summarizes the Company’s unrealized and realized gains and losses on investments:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(In thousands)
Unrealized gains/(losses)
Securities available-for-sale
Corporate debt	$	(22	)	$	—		$	(245	)	$	—
Trading securities
U.S. Treasuries		(154	)		—			(500	)		(445	)
Mutual funds held in rabbi trust		(200	)		(496	)		905			(2,618	)
Total investments	$	(376	)	$	(496	)	$	160		$	(3,063	)
Realized gains/(losses)
Securities available-for-sale
Corporate debt	$	—		$	—		$	(17	)	$	—
Trading securities
Mutual funds held in rabbi trust		(79	)		—			(138	)		—
Total investments	$	(79	)	$	—		$	(155	)	$	—

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

	Less than one year		Due in 1 - 5 years		Total
	(In thousands)
As of September 30, 2023
Securities available-for-sale
Corporate debt	$	8,948	$	15,598	$	24,546
Trading securities
U.S. Treasuries		—		98,711		98,711
Mutual funds held in rabbi trust		9,587		—		9,587
Total	$	18,535	$	114,309	$	132,844
As of December 31, 2022
Trading securities
U.S. Treasuries	$	24,618	$	49,791	$	74,409
Mutual funds held in rabbi trust		9,383		—		9,383
Total	$	34,001	$	49,791	$	83,792

The following table provides fair values and unrealized losses on the Company’s available-for-sale investments and the aging of securities’ continuous unrealized loss position as of September 30, 2023:

	Less than Twelve Months					Twelve Months or More				Total
	Fair value		Gross unrealized losses			Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
	(In thousands)
As of September 30, 2023
Corporate debt	$	22,468	$	(259	)	$	—	$	—	$	22,468	$	(259	)

During the three and nine months ended September 30, 2023, the Company did not recognize any credit losses on its available-for-sale securities. The unrealized losses on securities are due to changes in interest rates and market liquidity.

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

9 Months Ended

Sep. 30, 2023

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:

	September 30, 2023		December 31, 2022
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	195,727	$	144,523
Securities failed-to-deliver – customers		232,892		235,056
Deposits with clearing organizations and broker-dealers		112,489		88,923
Other		6,973		7,833
Total	$	548,081	$	476,335
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	151,639	$	224,816
Securities failed-to-receive – customers		206,387		71,828
Other		6,060		7,349
Total	$	364,086	$	303,993

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Acquisitions and Equity Investments

9 Months Ended

Sep. 30, 2023

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 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 September 30, 2023, the Company’s investment is recorded at carrying value of $36.1 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 $0.1 million and $0.6 million for the three and nine months ended September 30, 2023, respectively, and $0.9 million and $1.1 million for the three and nine months ended September 30, 2022, respectively.

On April 9, 2021, the Company acquired MuniBrokers LLC, a central electronic venue serving municipal bond brokers and dealers. As part of the purchase price, the Company recorded $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. In May 2022, the Company made a payment of $8.3 million to settle the first earn-out period consideration. In May 2023, the Company made a payment of $12.5 million to settle the second earn-out period consideration. As of September 30, 2023, the Company had no remaining outstanding contingent consideration payable.

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

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 September 30, 2023 and December 31, 2022. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

	September 30, 2023							December 31, 2022
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	129,460	$	(46,183	)	$	83,277	$	129,991	$	(34,310	)	$	95,681
Technology and other intangibles		11,430		(10,020	)		1,410		11,430		(9,046	)		2,384
Total	$	140,890	$	(56,203	)	$	84,687	$	141,421	$	(43,356	)	$	98,065

Amortization expense associated with identifiable intangible assets was $4.5 million and $3.9 million for the three months ended September 30, 2023 and 2022, respectively, and $13.1 million and $12.1 million for the nine months ended September 30, 2023 and 2022, respectively. Annual estimated total amortization expense is $17.4 million, $15.0 million, $12.1 million, $10.4 million and $9.1 million for the years ended December 31, 2023 through 2027, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2023

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 23.4% and 24.8% for the three months ended September 30, 2023 and 2022, respectively, and 24.3% and 26.2% for the nine months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, 2022, the Company's provision for income taxes included $3.2 million of expense related to a settlement with New York State to resolve the 2010 to 2014 audits. 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.

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 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 the New York City and New York State audits, the Company is no longer subject to tax examinations by tax authorities for years prior to 2019.

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Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2023

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 September 30, 2023, there were 2,429,303 shares available for grant under the 2020 Plan.

Total stock-based compensation expense was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Employees	$	7,118	$	6,958	$	20,865	$	20,659
Non-employee directors		363		393		994		1,294
Total stock-based compensation	$	7,481	$	7,351	$	21,859	$	21,953

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 nine months ended September 30, 2023, the Company granted a total of (i) 74,683 restricted stock units, (ii) 13,908 options to purchase shares of common stock and (iii) performance stock units with an expected pay-out at target of 23,302 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 $351.27 and $386.14, respectively. Based on the Black-Scholes option pricing model, the weighted-average fair value for each option granted was $123.47 per share.

Included in the above totals are shares granted in April 2023 to the Company’s Chief Executive Officer in connection with his appointment to the position, consisting of: (i) 2,729 restricted stock units with a grant date fair value of $1.05 million, as determined by the Company’s Compensation and Talent Committee by dividing the award value by the average closing price of the Company’s common stock on the ten trading days leading up to and including the grant date, rounded to the nearest whole number; and (ii) 5,039 target performance stock units with a grant date fair value of $2.45 million, as determined by the Company’s Compensation and Talent Committee using the Monte Carlo method. The restricted stock units vest 25.0% on each of the third and fourth anniversary of the grant date and 50.0% on the fifth anniversary of the grant date, subject to continued service through the respective vesting dates. The performance stock units vest 25.0% on each of the third and fourth anniversaries of the grant date and 50.0% on the fifth anniversary of the grant date, subject to certification of the performance criteria and continued service through the respective vesting dates.

As of September 30, 2023, the total unrecognized compensation cost related to all non-vested awards was $45.8 million. That cost is expected to be recognized over a weighted-average period of 1.4 years.

Employee Stock Purchase Plan

The Company maintains the MarketAxess Holdings Inc. 2022 Employee Stock Purchase Plan (the “ESPP”). 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. Shares are purchased at a 15.0% 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 issued 1,928 shares and 2,727 shares of common stock on February 15, 2023 and August 15, 2023, respectively, under the ESPP. As of September 30, 2023, there were 116,566 shares available for purchase under the ESPP.

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Earnings Per Share

9 Months Ended

Sep. 30, 2023

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,491		37,479		37,485		37,464
Dilutive effect of stock options and restricted stock		83		88		118		202
Diluted weighted average shares outstanding		37,574		37,567		37,603		37,666
Basic earnings per share	$	1.47	$	1.58	$	5.03	$	5.10
Diluted earnings per share		1.46		1.58		5.01		5.07

Stock options and restricted stock totaling 420,590 shares and 379,764 shares for the three months ended September 30, 2023 and 2022, respectively, and 279,939 shares and 295,940 shares for the nine months ended September 30, 2023 and 2022, 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

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Credit Agreements and Short-term Financing

11. Credit Agreements and Short-term Financing

2021 Credit Agreement

On October 15, 2021, the Company entered into a 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 provided aggregate commitments totaling $500.0 million, consisting of a revolving credit facility, a $5.0 million letter of credit sub-limit for standby letters of credit and a $50.0 million sub-limit for swingline loans. The 2021 Credit Agreement was scheduled to 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 was permitted to upsize the 2021 Credit Agreement by up to $250.0 million in total.

Borrowings under the 2021 Credit Agreement bore 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. On March 28, 2023, the Company entered into a first amendment to the 2021 Credit Agreement, which among other things, established customary Secured Overnight Financing Rate (“SOFR”) provisions in lieu of the London Interbank Offered Rate (“LIBOR”) provisions set forth in the 2021 Credit Agreement. Following such amendment, borrowings under the 2021 Credit Agreement bore interest at a rate per annum equal to the alternate base rate or the adjusted term SOFR rate, plus an applicable margin that varies with the Company’s consolidated total leverage ratio.

The 2021 Credit Agreement required that the Company satisfy certain covenants, including a requirement to not exceed a maximum consolidated total leverage ratio. The Company incurred no interest expense under the 2021 Credit Agreement for the three months ended September 30, 2023 and 2022, respectively, and $0.1 million and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively.

2023 Credit Agreement

On August 9, 2023, the Company replaced the 2021 Credit Agreement with a new three-year revolving credit facility (the “2023 Credit Agreement”) provided by a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, which provides aggregate commitments totaling $750.0 million, consisting of a revolving credit facility, a $5.0 million letter of credit sub-limit for standby letters of credit and a $380.0 million sub-limit for swingline loans. The 2023 Credit Agreement will mature on August 9, 2026, 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 2023 Credit Agreement by up to $375.0 million in total. As of September 30, 2023, the Company had $0.1 million in letters of credit outstanding and $749.9 million in available borrowing capacity under the 2023 Credit Agreement.

Borrowings under the 2023 Credit Agreement will bear interest at a rate per annum equal to the alternate base rate or the adjusted term SOFR rate, plus an applicable margin that varies with the Company’s consolidated total leverage ratio. The 2023 Credit Agreement requires that the Company satisfy certain covenants, including a requirement not to exceed a maximum consolidated total leverage ratio. The Company incurred no interest expense under the 2023 Credit Agreement for the three months ended September 30, 2023.

Uncommitted Collateralized Agreements

In connection with their self-clearing operations, certain of the Company’s U.S. and U.K. operating subsidiaries maintain agreements with a settlement bank to allow the subsidiaries to borrow in the aggregate of up to $500.0 million on an uncommitted basis, collateralized by eligible securities pledged by the subsidiaries to the settlement bank, subject to certain haircuts. Borrowings under these agreements 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 SOFR, plus 1.00%.

The Company incurred no interest expense on borrowings under such agreements during the three months ended September 30, 2023 and $0.1 million of interest expense during nine months ended September 30, 2023. The Company incurred no interest expense on borrowings under such agreements during the three and nine months ended September 30, 2022. As of September 30, 2023, the Company had no borrowings outstanding and up to $500.0 million in available uncommitted borrowing capacity under such agreements.

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 and $0.1 million during the three months ended September 30, 2023 and 2022, respectively, and $0.3 million and $0.4 million of interest expense during the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the Company had $4.0 million of overdrafts payable outstanding. Overdrafts payable are included in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

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Leases

9 Months Ended

Sep. 30, 2023

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 nine months ended September 30, 2023 and 2022:

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease cost:	Classification	2023		2022		2023		2022
		(In thousands)
Operating lease cost	Occupancy	$	2,941	$	3,274	$	8,934	$	9,929
Operating lease cost for subleased/assigned properties	Other, net		—		—		—		469
Variable lease costs	Occupancy		341		49		739		60
Sublease income subleased/assigned properties	Other, net		—		—		—		(405	)
Net lease cost		$	3,282	$	3,323	$	9,673	$	10,053

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	September 30, 2023			December 31, 2022
Weighted average remaining lease term (in years)		10.0			10.6
Weighted average discount rate		6.0	%		5.9	%

The following table presents the maturity of lease liabilities as of September 30, 2023:

	(In thousands)
Remainder of 2023	$	2,803
2024		11,782
2025		11,598
2026		11,103
2027		8,747
2028 and thereafter		59,838
Total lease payments		105,871
Less: imputed interest		26,702
Present value of lease liabilities	$	79,169

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

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 securities 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 operating subsidiaries settle such transactions pursuant to their self-clearing operations or through the use of 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 nine months ended September 30, 2023 and 2022.

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 material loss to be remote.

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Share Repurchase Programs

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Share Repurchase Programs

14. Share Repurchase Programs

In January 2021, the Board of Directors authorized a 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. There were no shares repurchased in connection with the Company’s share repurchase program during the three and nine months ended September 30, 2023. Shares repurchased under each program will be held in treasury for future use.

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Segment and Geographic Information

9 Months Ended

Sep. 30, 2023

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 nine months ended September 30, 2023 and 2022, the U.K. was the only individual foreign country in which the Company had a subsidiary that accounted for 10.0% 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 nine months ended September 30, 2023 and 2022 and long-lived assets as of September 30, 2023 and December 31, 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Revenues
Americas	$	136,398	$	140,020	$	439,970	$	439,939
Europe		31,401		28,124		101,655		86,660
Asia		4,485		3,968		13,674		13,799
Total	$	172,284	$	172,112	$	555,299	$	540,398

	As of
	September 30, 2023		December 31, 2022
	(In thousands)
Long-lived assets, as defined
Americas	$	86,006	$	82,008
Europe		15,187		17,723
Asia		461		525
Total	$	101,654	$	100,256

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Cash and Cash Equivalents and Restricted Cash

9 Months Ended

Sep. 30, 2023

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	September 30, 2023		December 31, 2022
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	420,497	$	430,746
Cash segregated for regulatory    purposes	Cash segregated under federal regulations		52,601		50,947
Deposits with clearing organizations    and broker-dealers	Receivables from broker-dealers, clearing    organizations and customers		112,489		88,923
Other deposits	Prepaid expenses and other assets		3,309		2,048
Total		$	588,896	$	572,664

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Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

17. Subsequent Events

In October 2023, the Company acquired all of the outstanding ownership interests of Pragma LLC and Pragma Financial Systems LLC (collectively “Pragma”). Pragma is a quantitative trading technology provider specializing in algorithmic and analytical services. Pragma LLC is a registered broker-dealer. The purchase consideration, after giving effect to adjustments in the purchase agreement, was approximately $128.6 million, consisting of approximately $80.4 million of cash and 216,173 shares of the Company’s common stock, valued at approximately $48.2 million on the closing date.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

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, 2022. The consolidated financial information as of December 31, 2022 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.

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 unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition and realized gains or losses reported in other, net in the Consolidated Statements of Operations. 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.

The Company assesses whether an impairment loss on its available-for-sale debt securities has occurred due to declines in fair value or other market conditions. When the amortized cost basis of an available-for-sale debt security exceeds its fair value, the security is deemed to be impaired. The portion of an impairment related to credit losses is determined by comparing the present value of cash flows expected to be collected from the security with the amortized cost basis of the security and is recorded as a charge in the Consolidated Statements of Operations. The remainder of an impairment is recognized in accumulated other comprehensive loss if the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery.

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, available-for-sale securities, foreign currency forward contracts and contingent consideration payables associated with acquisitions. All other financial instruments are short-term in nature and the carrying amounts reported on the Consolidated Statements of Financial Condition approximate fair value.

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

Receivables from 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 $0.6 million as of each of September 30, 2023 and December 31, 2022. The provision for bad debts was $0.2 million for each of the three months ended September 30, 2023 and 2022, and $0.3 million for each of the nine months ended September 30, 2023 and 2022. Write-offs and other charges against the allowance for credit losses were $0.1 million for each of the three months ended September 30, 2023 and 2022, and $0.2 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively.

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, vendor software development costs billed to us that are part of the application development stage. These costs are recorded as a prepaid asset on the Consolidated Statements of Financial Condition and are amortized over the period of the hosting service contract, which ranges from one to five years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable.

Foreign Currency Translation and Forward Contracts

Foreign Currency Translation and Forward Contracts

Assets and liabilities denominated in foreign currencies are translated using exchange rates at the end of the period; revenues and expenses are translated at average monthly rates. Gains and losses on foreign currency translation are a component of accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. Transaction gains and losses are recorded in other, net in the Consolidated Statements of Operations.

The Company enters into foreign currency forward contracts to economically hedge its foreign currency transaction gains and losses. Realized and unrealized gains and losses on these forward contracts are included in other, net in the Consolidated Statements of Operations. The Company records the fair value of the forward contract asset in prepaid expenses and other assets or the fair value of the forward contract liability in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

Revenue Recognition

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	73,763	$	74,767	$	240,315	$	246,520
Open Trading – matched principal trading		36,682		42,845		132,524		128,460
U.S. government bonds - matched principal trading		3,829		4,160		11,920		13,487
Total variable transaction fees		114,274		121,772		384,759		388,467
Distribution fees and unused minimum fees		36,222		31,392		106,314		94,273
Total commissions	$	150,496	$	153,164	$	491,073	$	482,740

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	11,341	$	9,524	$	33,487	$	28,232
Services transferred at a point in time		460		187		979		684
Total information services revenues	$	11,801	$	9,711	$	34,466	$	28,916

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,774	$	9,000	$	29,126	$	28,014
Services transferred at a point in time		59		—		102		42
Total post-trade services revenues	$	9,833	$	9,000	$	29,228	$	28,056

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. Deferred revenues are included in accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition. The revenue recognized from contract liabilities and the remaining balance is shown below:

	December 31, 2022		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation		September 30, 2023
	(In thousands)
Information services	$	3,121	$	9,042	$	(9,329	)	$	—	$	2,834
Post-trade services		869		17,373		(17,341	)		6		907
Total deferred revenue	$	3,990	$	26,415	$	(26,670	)	$	6	$	3,741

The majority of the Company’s information services and post-trade services 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 $63.9 million as of September 30, 2023. The Company expects to recognize revenue associated with the remaining performance obligations over the next 56 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)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Commission Revenue by Fee Type

The following table presents commission revenue by fee type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$	73,763	$	74,767	$	240,315	$	246,520
Open Trading – matched principal trading		36,682		42,845		132,524		128,460
U.S. government bonds - matched principal trading		3,829		4,160		11,920		13,487
Total variable transaction fees		114,274		121,772		384,759		388,467
Distribution fees and unused minimum fees		36,222		31,392		106,314		94,273
Total commissions	$	150,496	$	153,164	$	491,073	$	482,740

Summary of Information Services Revenue by Timing of Recognition

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	11,341	$	9,524	$	33,487	$	28,232
Services transferred at a point in time		460		187		979		684
Total information services revenues	$	11,801	$	9,711	$	34,466	$	28,916

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	9,774	$	9,000	$	29,126	$	28,014
Services transferred at a point in time		59		—		102		42
Total post-trade services revenues	$	9,833	$	9,000	$	29,228	$	28,056

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, 2022		Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation		September 30, 2023
	(In thousands)
Information services	$	3,121	$	9,042	$	(9,329	)	$	—	$	2,834
Post-trade services		869		17,373		(17,341	)		6		907
Total deferred revenue	$	3,990	$	26,415	$	(26,670	)	$	6	$	3,741

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

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 September 30, 2023
Assets
Money market funds	$	6,293	$	—	$	—	$	6,293
Securities available-for-sale
Corporate debt		—		24,546		—		24,546
Trading securities
U.S. Treasuries		—		98,711		—		98,711
Mutual funds held in rabbi trust		—		9,587		—		9,587
Total assets	$	6,293	$	132,844	$	—	$	139,137
Liabilities
Foreign currency forward position	$	—	$	2,852	$	—	$	2,852
As of December 31, 2022
Assets
Money market funds	$	59,173	$	—	$	—	$	59,173
Trading securities
U.S. Treasuries		—		74,409		—		74,409
Mutual funds held in rabbi trust		—		9,383		—		9,383
Total assets	$	59,173	$	83,792	$	—	$	142,965
Liabilities
Contingent consideration payable	$	—	$	—	$	12,340	$	12,340
Foreign currency forward position		—		1,688		—		1,688
Total liabilities	$	—	$	1,688	$	12,340	$	14,028

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 nine months ended September 30, 2023:

	December 31, 2022		Payments			Realized (Gain)/Loss		September 30, 2023
	(In thousands)
Contingent consideration payable	$	12,340	$	(12,500	)	$	160	$	—

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 Statements 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 September 30, 2023
Financial assets not measured at fair value:
Cash	$	414,204	$	414,204	$	414,204	$	—	$	—	$	414,204
Cash segregated under federal regulations		52,601		52,601		52,601		—		—		52,601
Accounts receivable, net of allowance		90,548		90,548		—		90,548		—		90,548
Receivables from broker-dealers, clearing    organizations and customers		548,081		548,081		112,489		435,592		—		548,081
Total	$	1,105,434	$	1,105,434	$	579,294	$	526,140	$	—	$	1,105,434
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	364,086	$	364,086	$	—	$	364,086	$	—	$	364,086
As of December 31, 2022
Financial assets not measured at fair value:
Cash	$	371,573	$	371,573	$	371,573	$	—	$	—	$	371,573
Cash segregated under federal regulations		50,947		50,947		50,947		—		—		50,947
Accounts receivable, net of allowance		78,450		78,450		—		78,450		—		78,450
Receivables from broker-dealers, clearing    organizations and customers		476,335		476,335		88,923		387,412		—		476,335
Total	$	977,305	$	977,305	$	511,443	$	465,862	$	—	$	977,305
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	303,993	$	303,993	$	—	$	303,993	$	—	$	303,993

Summary of Foreign Currency Forward Contracts

The following table summarizes the Company’s foreign currency forward position:

	As of
	September 30, 2023			December 31, 2022
	(In thousands)
Notional value	$	63,870		$	62,160
Fair value of notional		61,018			60,472
Fair value of the (liability)	$	(2,852	)	$	(1,688	)

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 September 30, 2023
Securities available-for-sale
Corporate debt	$	24,791	$	14	$	(259	)	$	24,546
Trading securities
U.S. Treasuries		99,211		—		(500	)		98,711
Mutual funds held in rabbi trust		10,442		79		(934	)		9,587
Total investments	$	134,444	$	93	$	(1,693	)	$	132,844
As of December 31, 2022
Trading securities
U.S. Treasuries	$	74,943	$	—	$	(534	)	$	74,409
Mutual funds held in rabbi trust		11,474		—		(2,091	)		9,383
Total investments	$	86,417	$	—	$	(2,625	)	$	83,792

Purchases of investments during the nine months ended September 30, 2023 were $77.7 million.

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:

	Less than one year		Due in 1 - 5 years		Total
	(In thousands)
As of September 30, 2023
Securities available-for-sale
Corporate debt	$	8,948	$	15,598	$	24,546
Trading securities
U.S. Treasuries		—		98,711		98,711
Mutual funds held in rabbi trust		9,587		—		9,587
Total	$	18,535	$	114,309	$	132,844
As of December 31, 2022
Trading securities
U.S. Treasuries	$	24,618	$	49,791	$	74,409
Mutual funds held in rabbi trust		9,383		—		9,383
Total	$	34,001	$	49,791	$	83,792

Summary of Fair Values and Unrealized Losses on Investments

The following table provides fair values and unrealized losses on the Company’s available-for-sale investments and the aging of securities’ continuous unrealized loss position as of September 30, 2023:

	Less than Twelve Months					Twelve Months or More				Total
	Fair value		Gross unrealized losses			Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
	(In thousands)
As of September 30, 2023
Corporate debt	$	22,468	$	(259	)	$	—	$	—	$	22,468	$	(259	)

summary of Companies unrealized and realized gains and losses on investments

The following table summarizes the Company’s unrealized and realized gains and losses on investments:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(In thousands)
Unrealized gains/(losses)
Securities available-for-sale
Corporate debt	$	(22	)	$	—		$	(245	)	$	—
Trading securities
U.S. Treasuries		(154	)		—			(500	)		(445	)
Mutual funds held in rabbi trust		(200	)		(496	)		905			(2,618	)
Total investments	$	(376	)	$	(496	)	$	160		$	(3,063	)
Realized gains/(losses)
Securities available-for-sale
Corporate debt	$	—		$	—		$	(17	)	$	—
Trading securities
Mutual funds held in rabbi trust		(79	)		—			(138	)		—
Total investments	$	(79	)	$	—		$	(155	)	$	—

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

9 Months Ended

Sep. 30, 2023

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:

	September 30, 2023		December 31, 2022
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	195,727	$	144,523
Securities failed-to-deliver – customers		232,892		235,056
Deposits with clearing organizations and broker-dealers		112,489		88,923
Other		6,973		7,833
Total	$	548,081	$	476,335
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	151,639	$	224,816
Securities failed-to-receive – customers		206,387		71,828
Other		6,060		7,349
Total	$	364,086	$	303,993

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

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:

	September 30, 2023							December 31, 2022
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	129,460	$	(46,183	)	$	83,277	$	129,991	$	(34,310	)	$	95,681
Technology and other intangibles		11,430		(10,020	)		1,410		11,430		(9,046	)		2,384
Total	$	140,890	$	(56,203	)	$	84,687	$	141,421	$	(43,356	)	$	98,065

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Stock-Based Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Expense

Total stock-based compensation expense was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Employees	$	7,118	$	6,958	$	20,865	$	20,659
Non-employee directors		363		393		994		1,294
Total stock-based compensation	$	7,481	$	7,351	$	21,859	$	21,953

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2023

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,491		37,479		37,485		37,464
Dilutive effect of stock options and restricted stock		83		88		118		202
Diluted weighted average shares outstanding		37,574		37,567		37,603		37,666
Basic earnings per share	$	1.47	$	1.58	$	5.03	$	5.10
Diluted earnings per share		1.46		1.58		5.01		5.07

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Components of Lease Expense

The following table presents the components of lease expense for the three and nine months ended September 30, 2023 and 2022:

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease cost:	Classification	2023		2022		2023		2022
		(In thousands)
Operating lease cost	Occupancy	$	2,941	$	3,274	$	8,934	$	9,929
Operating lease cost for subleased/assigned properties	Other, net		—		—		—		469
Variable lease costs	Occupancy		341		49		739		60
Sublease income subleased/assigned properties	Other, net		—		—		—		(405	)
Net lease cost		$	3,282	$	3,323	$	9,673	$	10,053

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	September 30, 2023			December 31, 2022
Weighted average remaining lease term (in years)		10.0			10.6
Weighted average discount rate		6.0	%		5.9	%

Schedule of Maturity of Lease Liabilities

The following table presents the maturity of lease liabilities as of September 30, 2023:

	(In thousands)
Remainder of 2023	$	2,803
2024		11,782
2025		11,598
2026		11,103
2027		8,747
2028 and thereafter		59,838
Total lease payments		105,871
Less: imputed interest		26,702
Present value of lease liabilities	$	79,169

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Segment and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Summary of Revenue and Long-lived Assets

Revenues for the three and nine months ended September 30, 2023 and 2022 and long-lived assets as of September 30, 2023 and December 31, 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Revenues
Americas	$	136,398	$	140,020	$	439,970	$	439,939
Europe		31,401		28,124		101,655		86,660
Asia		4,485		3,968		13,674		13,799
Total	$	172,284	$	172,112	$	555,299	$	540,398

	As of
	September 30, 2023		December 31, 2022
	(In thousands)
Long-lived assets, as defined
Americas	$	86,006	$	82,008
Europe		15,187		17,723
Asia		461		525
Total	$	101,654	$	100,256

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Cash and Cash Equivalents and Restricted Cash (Tables)

9 Months Ended

Sep. 30, 2023

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	September 30, 2023		December 31, 2022
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	420,497	$	430,746
Cash segregated for regulatory    purposes	Cash segregated under federal regulations		52,601		50,947
Deposits with clearing organizations    and broker-dealers	Receivables from broker-dealers, clearing    organizations and customers		112,489		88,923
Other deposits	Prepaid expenses and other assets		3,309		2,048
Total		$	588,896	$	572,664

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Organization and Principal Business Activity - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2023 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	2,000

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Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Revenue	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Significant Accounting Policies [Line Items]
Allowance for credit losses	$ 580		$ 580		$ 590
Provision for bad debts	200	$ 200	300	$ 300
Write-offs and other charges against the allowance for credit losses	$ 100	$ 100	$ 200	$ 100
Number of revenue streams | Revenue			4
Maximum [Member]
Significant Accounting Policies [Line Items]
Contractual maturities accounts receivable			1 year
Estimated useful life of fixed assets	7 years		7 years
Hosting service contract, amortization period			5 years
Maximum [Member] | Business Combinations [Member]
Significant Accounting Policies [Line Items]
Estimated life of intangible assets	15 years		15 years
Minimum [Member]
Significant Accounting Policies [Line Items]
Estimated useful life of fixed assets	3 years		3 years
Hosting service contract, amortization period			1 year
Minimum [Member] | Business Combinations [Member]
Significant Accounting Policies [Line Items]
Estimated life of intangible assets	1 year		1 year
Minimum [Member] | Internally Developed Software [Member]
Significant Accounting Policies [Line Items]
Estimated life of intangible assets	3 years		3 years

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Significant Accounting Policies - Summary of Commission Revenue by Fee Type (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Commission revenue by fee type
Total commissions	$ 172,284	$ 172,112	$ 555,299	$ 540,398
Commissions [Member]
Commission revenue by fee type
Disclosed trading	73,763	74,767	240,315	246,520
Matched principal trading	36,682	42,845	132,524	128,460
Total variable transaction fees	114,274	121,772	384,759	388,467
Distribution fees and unused minimum fees	36,222	31,392	106,314	94,273
Total commissions	150,496	153,164	491,073	482,740
Commissions [Member] | US Government Bonds [Member]
Commission revenue by fee type
Matched principal trading	$ 3,829	$ 4,160	$ 11,920	$ 13,487

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Significant Accounting Policies - Summary of Information Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Significant Accounting Policies [Line Items]
Revenues	$ 172,284	$ 172,112	$ 555,299	$ 540,398
Information Services [Member]
Significant Accounting Policies [Line Items]
Revenues	11,801	9,711	34,466	28,916
Information Services [Member] | Transferred over Time [Member]
Significant Accounting Policies [Line Items]
Revenues	11,341	9,524	33,487	28,232
Information Services [Member] | Transferred at a Point in Time [Member]
Significant Accounting Policies [Line Items]
Revenues	$ 460	$ 187	$ 979	$ 684

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Significant Accounting Policies - Summary of Post-Trade Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Significant Accounting Policies [Line Items]
Revenues	$ 172,284	$ 172,112	$ 555,299	$ 540,398
Post-trade Services [Member]
Significant Accounting Policies [Line Items]
Revenues	9,833	9,000	29,228	28,056
Post-trade Services [Member] | Transferred over Time [Member]
Significant Accounting Policies [Line Items]
Revenues	9,774	9,000	29,126	28,014
Post-trade Services [Member] | Transferred at a Point in Time [Member]
Significant Accounting Policies [Line Items]
Revenues	$ 59	$ 0	$ 102	$ 42

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Significant Accounting Policies - Summary of Revenue Recognized from Contract Liabilities and Remaining Balance (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	$ 3,990
Payments received in advance of services to be performed	26,415
Revenue recognized for services performed during the period	(26,670)
Foreign Currency Translation	(6)
Deferred revenues, ending balance	3,741
Information Services [Member]
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	3,121
Payments received in advance of services to be performed	9,042
Revenue recognized for services performed during the period	(9,329)
Deferred revenues, ending balance	2,834
Post-trade Services [Member]
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	869
Payments received in advance of services to be performed	17,373
Revenue recognized for services performed during the period	(17,341)
Foreign Currency Translation	(6)
Deferred revenues, ending balance	$ 907

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Significant Accounting Policies - Additional Information (Detail 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-04-01 $ in Millions	Sep. 30, 2023 USD ($)
Significant Accounting Policies [Line Items]
Aggregate amount of transaction price allocated to remaining performance obligations	$ 63.9
Expected time to recognize revenue for remaining performance obligation	56 months

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Regulatory Capital Requirements - Additional Information (Detail) $ in Millions	Sep. 30, 2023 USD ($)
Brokers And Dealers [Line Items]
Securities reserve deposit	$ 52.6
U.S. Subsidiaries
Brokers And Dealers [Line Items]
Aggregate net capital and financial resources in excess of required level	505.6
Aggregate net capital and financial resources, minimum capital requirement	31.5
U.S. Broker-Dealer Subsidiaries
Brokers And Dealers [Line Items]
Aggregate net capital and financial resources in excess of required level	295.2
Aggregate net capital and financial resources, minimum capital requirement	$ 3.6

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Fair Value Measurements - Valuation of Company's Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Assets
Money market funds	$ 6,293		$ 59,173
Assets Fair Value Total	139,137		142,965
Liabilities
Contingent consideration payable	0		12,340
Total liabilities			14,028
Foreign Currency Forward Position [Member]
Liabilities
Foreign currency forward position	2,852		1,688
Mutual Funds Held In Rabbi Trust [Member]
Assets
Trading securities	9,587	$ 9,587	9,383
U.S. Treasuries [Member]
Assets
Trading securities	98,711	98,711	74,409
Level 1 [Member]
Assets
Money market funds	6,293		59,173
Assets Fair Value Total	6,293		59,173
Level 2 [Member]
Assets
Assets Fair Value Total	132,844		83,792
Liabilities
Total liabilities			1,688
Level 2 [Member] | Foreign Currency Forward Position [Member]
Liabilities
Foreign currency forward position	2,852		1,688
Level 2 [Member] | Mutual Funds Held In Rabbi Trust [Member]
Assets
Trading securities	9,587		9,383
Level 2 [Member] | U.S. Treasuries [Member]
Assets
Trading securities	98,711		74,409
Level 3 [Member]
Liabilities
Contingent consideration payable			12,340
Total liabilities			$ 12,340
Corporate Debt [Member]
Assets
Securities available-for-sale	24,546
Trading securities		$ 24,546
Corporate Debt [Member] | Level 2 [Member]
Assets
Securities available-for-sale	$ 24,546

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Fair Value Measurements - Summary of the Change in the Company's Contingent Consideration Payable (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Fair Value Disclosures [Abstract]
Contingent Consideration Payable	$ 12,340
Payments	(12,500)
Realized (Gain)/Loss	160
Contingent Consideration Payable	$ 0

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Fair Value Measurements - Additional Information (Detail) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Proceeds from the sales and maturities of securities available-for-sale		$ 28.3
Transfers between Level 1, Level 2 and Level 3 securities	$ 0.0	0.0
Net realized gain	0.8	0.7
Net unrealized loss	3.5	1.2
Collateral deposit with bank	3.2	3.2
Credit losses on available-for-sale securities	$ 0.0	0.0
Purchases of investments		$ 77.7

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Fair Value Measurements - Carrying Value of Financial Asset and Liability Not Measured at Fair Value (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial assets not measured at fair value:
Assets Fair Value Total	$ 139,137	$ 142,965
Level 1 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	6,293	59,173
Level 2 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	132,844	83,792
Financial Assets and Liabilities not Measured [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	1,105,434	977,305
Financial Assets and Liabilities not Measured [Member] | Payables to Broker-Dealers, Clearing Organizations and Customers [Member]
Financial liabilities not measured at fair value:
Financial liabilities not measured at fair value	364,086	303,993
Financial Assets and Liabilities not Measured [Member] | Cash [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	414,204	371,573
Financial Assets and Liabilities not Measured [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	52,601	50,947
Financial Assets and Liabilities not Measured [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	90,548	78,450
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	548,081	476,335
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	579,294	511,443
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member] | Cash [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	414,204	371,573
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	52,601	50,947
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	112,489	88,923
Financial Assets and Liabilities not Measured [Member] | Level 2 [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	526,140	465,862
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	364,086	303,993
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	90,548	78,450
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	435,592	387,412
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	1,105,434	977,305
Financial Assets and Liabilities not Measured [Member] | Carrying 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	364,086	303,993
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Cash [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	414,204	371,573
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	52,601	50,947
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	90,548	78,450
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	548,081	476,335
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	1,105,434	977,305
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	364,086	303,993
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Cash [Member]
Financial assets not measured at fair value:
Assets Fair Value Total	414,204	371,573
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	52,601	50,947
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	90,548	78,450
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	$ 548,081	$ 476,335

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Fair Value Measurements - Summary of Foreign Currency Forward Contracts (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Notional value	$ 63,870	$ 62,160
Fair value of notional	61,018	60,472
Fair value of the (liability)	$ 2,852	$ (1,688)

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Fair Value Measurements - Summary of Company's Investments (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]
Investments, Amortized cost		$ 134,444	$ 86,417
Investments, Gross unrealized gains		93
Investments, Gross unrealized losses		(1,693)	(2,625)
Investments, Fair value	$ 132,844	132,844	83,792
U.S. Treasuries [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost		99,211	74,943
Trading securities, Gross unrealized losses		(500)	(534)
Trading securities, Fair value	98,711	98,711	74,409
Investments, Fair value	98,711		74,409
Mutual Funds Held In Rabbi Trust [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost		10,442	11,474
Trading securities, Gross unrealized gains		79
Trading securities, Gross unrealized losses		(934)	(2,091)
Trading securities, Fair value	9,587	9,587	9,383
Investments, Fair value	9,587		$ 9,383
Corporate Debt [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost		24,791
Trading securities, Gross unrealized gains		14
Trading securities, Gross unrealized losses		(259)
Trading securities, Fair value		$ 24,546
Investments, Fair value	$ 24,546

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Fair Value Measurements - Summary of Companies Unrealized and Realized Gains and Losses on Investments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Gain (Loss) on Securities [Line Items]
Realized gains/(losses)	$ (79)		$ (155)
Unrealized gains/(losses)	(376)	$ (496)	160	$ (3,063)
Corporate Debt [Member]
Gain (Loss) on Securities [Line Items]
Realized gains/(losses)			(17)
Unrealized gains/(losses)	22		245
U.S. Treasuries [Member]
Gain (Loss) on Securities [Line Items]
Unrealized gains/(losses)	(154)		500	(445)
Mutual Funds Held In Rabbi Trust [Member]
Gain (Loss) on Securities [Line Items]
Realized gains/(losses)	(79)		(138)
Unrealized gains/(losses)	$ 200	$ 496	$ 905	$ (2,618)

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Fair Value Measurements - Summary of Fair Value of Investments Based upon Contractual Maturities (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]
Less than one year	$ 18,535		$ 34,001
Due in 1 - 5 years	114,309		49,791
Total	132,844	$ 132,844	83,792
U.S. Treasuries [Member]
Debt Securities, Available-for-Sale [Line Items]
Less than one year			24,618
Due in 1 - 5 years	98,711		49,791
Total	98,711		74,409
Mutual Funds Held In Rabbi Trust [Member]
Debt Securities, Available-for-Sale [Line Items]
Less than one year	9,587		9,383
Total	9,587		$ 9,383
Corporate Debt [Member]
Debt Securities, Available-for-Sale [Line Items]
Less than one year	8,948
Due in 1 - 5 years	15,598
Total	$ 24,546

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Fair Value Measurements - Summary of Fair Values and Unrealized Losses on Investments (Detail) - Corporate Debt [Member] $ in Thousands	Sep. 30, 2023 USD ($)
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Less than Twelve Months, Estimated Fair value	$ 22,468
Less than Twelve Months, Gross unrealized losses	(259)
Twelve Months or More, Estimated Fair value	0
Twelve Months or More, Gross unrealized losses	0
Estimated Fair value, Total	22,468
Gross unrealized losses, Total	$ (259)

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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	Sep. 30, 2023	Dec. 31, 2022
Receivables from broker-dealers, clearing organizations and customers:
Securities failed-to-deliver - broker-dealers and clearing organizations	$ 195,727	$ 144,523
Securities failed-to-deliver - customers	232,892	235,056
Deposits with clearing organizations and broker-dealers	112,489	88,923
Other	6,973	7,833
Total	548,081	476,335
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive - broker-dealers and clearing organizations	151,639	224,816
Securities failed-to-receive - customers	206,387	71,828
Other	6,060	7,349
Total	$ 364,086	$ 303,993

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Acquisitions and Equity Investments - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	May 01, 2023	Dec. 31, 2022	May 01, 2022	Apr. 09, 2021
Business Acquisition [Line Items]
Contingent consideration payable	$ 0		$ 0
Contingent consideration paid	0		0			$ 12,340
RFQ hub Holdings LLC [Member]
Business Acquisition [Line Items]
Recorded investments							$ 34,400
Proportionate share in net earnings	100	$ 900	600	$ 1,100
RFQ hub Holdings LLC [Member] | Prepaid Expenses and Other Assets [Member]
Business Acquisition [Line Items]
Recorded investments	$ 36,100		$ 36,100
Muni Brokers L L C [Member]
Business Acquisition [Line Items]
Contingent consideration paid					$ 12,500		$ 8,300
Muni Brokers L L C [Member] | Accounts Payable, Accrued Expenses and Other Liabilities [Member]
Business Acquisition [Line Items]
Contingent consideration payable								$ 22,500

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Goodwill [Line Items]
Amortization expense associated with identifiable intangible assets	$ 4.5	$ 3.9	$ 13.1	$ 12.1
Estimated total amortization expense 2023	17.4		17.4
Estimated total amortization expense 2024	15.0		15.0
Estimated total amortization expense 2025	12.1		12.1
Estimated total amortization expense 2026	10.4		10.4
Estimated total amortization expense 2027	9.1		9.1
Indefinite-lived Intangible Assets [Member]
Goodwill [Line Items]
Goodwill and intangible assets with indefinite lives	$ 154.8		$ 154.8		$ 154.8

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Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite Lived Intangible Assets [Line Items]
Cost	$ 140,890	$ 141,421
Accumulated amortization	(56,203)	(43,356)
Net carrying amount	84,687	98,065
Customer Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Cost	129,460	129,991
Accumulated amortization	(46,183)	(34,310)
Net carrying amount	83,277	95,681
Technology and Other Intangibles [Member]
Finite Lived Intangible Assets [Line Items]
Cost	11,430	11,430
Accumulated amortization	(10,020)	(9,046)
Net carrying amount	$ 1,410	$ 2,384

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule Of Pre Tax Income [Line Items]
Provision for income taxes	$ 16,802	$ 19,556	$ 60,460	$ 67,862
Effective income tax rate	23.40%	24.80%	24.30%	26.20%
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 - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	9 Months Ended
	Apr. 30, 2023	Sep. 30, 2023	Aug. 15, 2023	Feb. 15, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant under the stock incentive plan		2,429,303
Unrecognized compensation costs related to non-vested		$ 45,800
Weighted-average period over which cost is expected to be recognized		1 year 4 months 24 days
Common stock, shares issued		40,946,522			40,918,660
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of non-option equity instruments granted during the period		74,683
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		116,566
Employee contribution on purchase of common stock		$ 2,000
Percentage of fair market value of the common stock on the grant date		15.00%
Common stock, shares issued			2,727	1,928
Employees [Member] | Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average grant date fair value per share		$ 351.27
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		13,908
Number of stock option equity instruments granted during the period		23,302
Weighted-average fair value each option granted		$ 123.47
Weighted-average grant date fair value per share		$ 386.14
ChiefExecutiveOfficer [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	2,729
Grant date fair value	$ 1,050
ChiefExecutiveOfficer [Member] | Restricted Stock [Member] | Third and Fourth Anniversary [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting right, percent	25.00%
ChiefExecutiveOfficer [Member] | Restricted Stock [Member] | Fifth Anniversary [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting right, percent	50.00%
ChiefExecutiveOfficer [Member] | Performance stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of non-option equity instruments granted during the period	5,039
ChiefExecutiveOfficer [Member] | Performance Based Share [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant date fair value	$ 2,450
ChiefExecutiveOfficer [Member] | Performance Based Share [Member] | Third and Fourth Anniversary [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting right, percent	25.00%
ChiefExecutiveOfficer [Member] | Performance Based Share [Member] | Fifth Anniversary [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting right, percent	50.00%

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Stock-Based Compensation Plans - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 7,481	$ 7,351	$ 21,859	$ 21,953
Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	7,118	6,958	20,865	20,659
Non-Employee Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 363	$ 393	$ 994	$ 1,294

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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		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Basic weighted average shares outstanding	37,491	37,479	37,485	37,464
Dilutive effect of stock options and restricted stock	83	88	118	202
Diluted weighted average shares outstanding	37,574	37,567	37,603	37,666
Basic earnings per share	$ 1.47	$ 1.58	$ 5.03	$ 5.1
Diluted earnings per share	$ 1.46	$ 1.58	$ 5.01	$ 5.07

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
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	420,590	379,764	279,939	295,940

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Credit Agreements and Short-term Financing - Additional Information (Detail) - USD ($)			3 Months Ended		9 Months Ended
	Aug. 09, 2023	Oct. 15, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Line Of Credit Facility [Line Items]
Sub-limit for swingline loans		$ 50,000,000
Interest expense on borrowings			$ 0	$ 0	$ 100,000	$ 0
Interest expense on short-term debt			200,000	100,000	300,000	400,000
Outstanding overdrafts payable			4,000,000		$ 4,000,000
Line of Credit Facility, Description					On October 15, 2021, the Company entered into a 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 Agreements [Member]
Line Of Credit Facility [Line Items]
Maximum available borrowings to subsidiary under agreement			500,000,000		$ 500,000,000
Outstanding borrowings under agreement			0		0
Unused borrowing capacity, amount under agreement			$ 500,000,000		$ 500,000,000
Collateralized Agreements [Member] | Base Rate [Member]
Line Of Credit Facility [Line Items]
Interest rate, stated percentage			1.00%		1.00%
2021 Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Period of credit agreement		3 years
Line of Credit Facility, Initiation Date					Mar. 28, 2023
2023 Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Period of credit agreement	3 years
Sub-limit for swingline loans	$ 380,000,000
Interest expense on borrowings			$ 0
Line of Credit Facility, Description					On August 9, 2023, the Company replaced the 2021 Credit Agreement with a new three-year revolving credit facility (the “2023 Credit Agreement”) provided by a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Revolving loans and letters of credit		$ 500,000,000
Expiration period of credit agreement		Oct. 15, 2024
Period of credit agreement					364 days
Additional borrowings under credit agreement			250,000,000		$ 250,000,000
Interest expense on borrowings			0	$ 0	$ 100,000	$ 300,000
Revolving Credit Facility [Member] | 2023 Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Revolving loans and letters of credit	$ 750,000,000
Expiration period of credit agreement	Aug. 09, 2026
Period of credit agreement					364 days
Letter of credit outstanding			100,000		$ 100,000
Amount available under credit agreement			749,900,000		749,900,000
Additional borrowings under credit agreement			$ 375,000,000		$ 375,000,000
Standby Letters of Credit [Member]
Line Of Credit Facility [Line Items]
Sub-limit for letter of credit		$ 5,000,000
Standby Letters of Credit [Member] | 2023 Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Sub-limit for letter of credit	$ 5,000,000

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Leases - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2023
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		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lease Cost [Line Items]
Net lease cost	$ 3,282	$ 3,323	$ 9,673	$ 10,053
Other, net [Member]
Lease Cost [Line Items]
Operating lease cost for subleased/assigned properties	0	0	0	469
Sublease income subleased/assigned properties	0	0	0	(405)
Occupancy [Member]
Lease Cost [Line Items]
Operating lease cost	2,941	3,274	8,934	9,929
Variable lease costs	$ 341	$ 49	$ 739	$ 60

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Leases - Summary of Weighted Average Remaining Lease Term and Discount Rate (Details)	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Weighted average remaining lease term (in years)	10 years	10 years 7 months 6 days
Weighted average discount rate	6.00%	5.90%

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Leases - Schedule of Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Remainder of 2023	$ 2,803
2024	11,782
2025	11,598
2026	11,103
2027	8,747
2028 and thereafter	59,838
Total lease payments	105,871
Less: imputed interest	26,702
Present value of lease liabilities	$ 79,169	$ 82,676

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Commitments and Contingencies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2023
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 Thousands	1 Months Ended
	Jan. 31, 2021	Sep. 30, 2023	Jan. 31, 2022
Equity Class Of Treasury Stock [Line Items]
Shares repurchase program authorized	$ 100,000	$ 0	$ 150,000
Commencement date	2021-04
Share repurchase program, expiration date	Jan. 31, 2022

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Segment and Geographic Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
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		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Revenues	$ 172,284	$ 172,112	$ 555,299	$ 540,398
Long-lived assets	101,654		101,654		$ 100,256
Americas [Member]
Segment Reporting Information [Line Items]
Revenues	136,398	140,020	439,970	439,939
Long-lived assets	86,006		86,006		82,008
Europe [Member]
Segment Reporting Information [Line Items]
Revenues	31,401	28,124	101,655	86,660
Long-lived assets	15,187		15,187		17,723
Asia [Member]
Segment Reporting Information [Line Items]
Revenues	4,485	$ 3,968	13,674	$ 13,799
Long-lived assets	$ 461		$ 461		$ 525

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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	Sep. 30, 2023	Dec. 31, 2022
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	$ 420,497	$ 430,746
Cash segregated under federal regulations	52,601	50,947
Deposits with clearing organizations and broker-dealers	112,489	88,923
Total	588,896	572,664
Cash and Cash Equivalents [Member]
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	420,497	430,746
Cash Segregated under Federal Regulations [Member]
Cash And Cash Equivalents [Line Items]
Cash segregated under federal regulations	52,601	50,947
Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Cash And Cash Equivalents [Line Items]
Deposits with clearing organizations and broker-dealers	112,489	88,923
Prepaid Expenses and Other Assets [Member]
Cash And Cash Equivalents [Line Items]
Other deposits	$ 3,309	$ 2,048

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Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Pragma [Member] $ in Millions	Oct. 01, 2023 USD ($) shares
Subsequent Event [Line Items]
Purchase consideration	$ 128.6
Cash consideration	$ 80.4
Business acquisition shares of common stock transferrable | shares	216,173
Business acquisition value of common stock transferrable	$ 48.2