10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2024

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 August 2, 2024, the number of shares of the Registrant’s voting common stock outstanding was 37,751,975.

2

MARKETAXESS HOLDINGS INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

TABLE OF CONTENTS

		Page
PART I — Financial Information
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Statements of Financial Condition as of June 30, 2024 and December 31, 2023	3
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	47
PART II — Other Information
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50

2

PART I — Financial Information

Item 1. Financial Statements

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	As of
	June 30, 2024			December 31, 2023
	(In thousands, except share  and per share amounts)
ASSETS
Cash and cash equivalents	$	434,063		$	451,280
Cash segregated under federal regulations		46,141			45,122
Investments, at fair value		135,908			134,861
Accounts receivable, net of allowance of $609 and $577 as of     June 30, 2024 and December 31, 2023, respectively		92,350			89,839
Receivables from broker-dealers, clearing organizations and customers		577,992			687,936
Goodwill		236,706			236,706
Intangible assets, net of accumulated amortization		108,420			119,108
Furniture, equipment, leasehold improvements and capitalized software, net of     accumulated depreciation and amortization		108,802			102,671
Operating lease right-of-use assets		60,500			63,045
Prepaid expenses and other assets		85,831			84,499
Total assets	$	1,886,713		$	2,015,067
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accrued employee compensation		41,002			60,124
Payables to broker-dealers, clearing organizations and customers		392,846			537,398
Securities sold, not yet purchased, at fair value		9,167			—
Income and other tax liabilities		2,058			7,892
Accounts payable, accrued expenses and other liabilities		36,338			37,013
Operating lease liabilities		76,081			79,677
Total liabilities	$	557,492		$	722,104
Commitments and Contingencies (Note 13)
Stockholders' equity
Preferred stock, $0.001 par value, 4,855,000 shares authorized, no shares issued     and outstanding as of June 30, 2024 and December 31, 2023, respectively		—			—
Series A Preferred Stock, $0.001 par value, 110,000 shares authorized, no shares     issued and outstanding as of June 30, 2024 and December 31, 2023,     respectively		—			—
Common stock voting, $0.003 par value, 110,000,000 shares authorized,     41,032,190 shares and 40,940,769 shares issued and 37,783,610 shares     and 37,899,688 shares outstanding as of June 30, 2024 and December 31, 2023,     respectively		123			123
Common stock non-voting, $0.003 par value, 10,000,000 shares authorized, no     shares issued and outstanding as of June 30, 2024 and December 31, 2023,     respectively		—			—
Additional paid-in capital		335,641			333,292
Treasury stock – Common stock voting, at cost, 3,248,580 shares     and 3,041,081 shares as of June 30, 2024 and December 31, 2023,     respectively		(302,455	)		(260,298	)
Retained earnings		1,325,139			1,244,216
Accumulated other comprehensive loss		(29,227	)		(24,370	)
Total stockholders' equity		1,329,221			1,292,963
Total liabilities and stockholders' equity	$	1,886,713		$	2,015,067
The accompanying notes are an integral part of these consolidated financial statements.

3

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023			2024	2023
	(In thousands, except per share amounts)
Revenues
Commissions	$	171,679	$	158,586	$	356,552	$	340,577
Information services		12,544		11,655		24,425		22,665
Post-trade services		10,400		9,415		21,130		19,395
Technology services		3,037		190		5,871		378
Total revenues		197,660		179,846		407,978		383,015
Expenses
Employee compensation and benefits		56,790		48,383		118,054		100,698
Depreciation and amortization		18,356		17,005		36,556		33,466
Technology and communications		17,771		15,235		34,822		30,234
Professional and consulting fees		7,669		8,023		14,064		15,150
Occupancy		3,714		3,199		7,139		6,810
Marketing and advertising		3,010		3,308		4,843		6,303
Clearing costs		4,122		4,182		9,033		8,727
General and administrative		4,889		4,784		9,628		10,544
Total expenses		116,321		104,119		234,139		211,932
Operating income		81,339		75,727		173,839		171,083
Other income (expense)
Interest income		6,401		5,312		12,374		9,561
Interest expense		(621)		(53)		(937)		(183)
Equity in earnings of unconsolidated affiliate		354		250		724		454
Other, net		(1,136)		(2,286)		(2,946)		(3,770)
Total other income (expense)		4,998		3,223		9,215		6,062
Income before income taxes		86,337		78,950		183,054		177,145
Provision for income taxes		21,399		19,091		45,501		43,658
Net income	$	64,938	$	59,859	$	137,553	$	133,487
Net income per common share
Basic	$	1.72	$	1.60	$	3.65	$	3.56
Diluted	$	1.72	$	1.59	$	3.64	$	3.55
Cash dividends declared per common share	$	0.74	$	0.72	$	1.48	$	1.44
Weighted average shares outstanding
Basic		37,655		37,485		37,698		37,482
Diluted		37,689		37,588		37,740		37,617
The accompanying notes are an integral part of these consolidated financial statements.

4

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	(In thousands)
Net income	$	64,938		$	59,859		$	137,553		$	133,487
Cumulative translation adjustment		(563	)		4,206			(4,804	)		9,961
Net unrealized (loss) on securities available-for-sale,    net of tax of $5, $41, $38, and $56, respectively		(13	)		(126	)		(53	)		(167	)
Comprehensive income	$	64,362		$	63,939		$	132,696		$	143,281
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, 2024	$	123	$	333,292	$	(260,298)	$	1,244,216	$	(24,370)	$	1,292,963
Net income		—		—		—		72,615		—		72,615
Cumulative translation adjustment		—		—		—		—		(4,241)		(4,241)
Unrealized net gain (loss) on    securities available-for-sale,    net of tax		—		—		—		—		(40)		(40)
Stock-based compensation		—		7,298		—		—		—		7,298
Exercise of stock options		—		1,977		—		—		—		1,977
Withholding tax payments on    full value awards vesting and    stock option exercises		—		(14,893)		—		—		—		(14,893)
Reissuance of treasury stock		—		(155)		1,440		(581)		—		704
Repurchases of common stock		—		—		(10,147)		—		—		(10,147)
Cash dividend on common stock    ($0.74 per share)		—		—		—		(28,003)		—		(28,003)
Balance at March 31, 2024		123		327,519		(269,005)		1,288,247		(28,651)		1,318,233
Net income		—		—		—		64,938		—		64,938
Cumulative translation adjustment		—		—		—		—		(563)		(563)
Unrealized net gain (loss) on    securities available-for-sale,    net of tax		—		—		—		—		(13)		(13)
Stock-based compensation		—		8,328		—		—		—		8,328
Exercise of stock options		—		—		—		—		—		—
Withholding tax payments on    full value awards vesting and    stock option exercises		—		(206)		—		—		—		(206)
Repurchases of common stock		—		—		(33,450)		—		—		(33,450)
Cash dividend on common stock    ($0.74 per share)		—		—		—		(28,046)		—		(28,046)
Balance at June 30, 2024	$	123	$	335,641	$	(302,455)	$	1,325,139	$	(29,227)	$	1,329,221
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, 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    full value awards 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    full value awards 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
The accompanying notes are an integral part of these consolidated financial statements.

7

MARKETAXESS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2024			2023
	(In thousands)
Cash flows from operating activities
Net income	$	137,553		$	133,487
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		36,556			33,466
Amortization of operating lease right-of-use assets		3,238			2,717
Stock-based compensation expense		15,084			14,378
Deferred taxes		(2,461	)		(2,442	)
Foreign currency transaction (gains) losses		1,220			3,932
Other		509			(2,641	)
Changes in operating assets and liabilities:
(Increase) in accounts receivable		(2,882	)		(13,078	)
Decrease in receivables from broker-dealers, clearing organizations and customers		87,335			19,154
(Increase) in prepaid expenses and other assets		(260	)		(12,413	)
Decrease in trading investments		155			471
(Increase) in mutual funds held in rabbi trust		(698	)		(1,024	)
(Decrease) in accrued employee compensation		(17,843	)		(20,746	)
(Decrease) in payables to broker-dealers, clearing organizations and customers		(144,404	)		(21,749	)
Increase in securities sold, not yet purchased		9,167			—
(Decrease) in income and other tax liabilities		(5,197	)		(7,720	)
Increase/(decrease) in accounts payable, accrued expenses and other liabilities		1,106			(9,762	)
(Decrease) in operating lease liabilities		(4,278	)		(3,109	)
Net cash provided by operating activities		113,900			112,921
Cash flows from investing activities
Available-for-sale investments
Proceeds from maturities and sales		7,464			1,971
Purchases		(7,866	)		(26,751	)
Purchases of furniture, equipment and leasehold improvements		(8,892	)		(1,272	)
Capitalization of software development costs		(24,459	)		(21,715	)
Net cash (used in) investing activities		(33,753	)		(47,767	)
Cash flows from financing activities
Cash dividends on common stock		(57,296	)		(55,248	)
Exercise of stock options		1,977			725
Withholding tax payments on full value awards vesting and stock option exercises		(15,099	)		(20,647	)
Repurchases of common stock		(43,597	)		—
Payment of contingent consideration		—			(12,500	)
Proceeds from short-term borrowings		100,000			50,000
Repayments of short-term borrowings		(100,000	)		(50,000	)
Net cash (used in) financing activities		(114,015	)		(87,670	)
Effect of exchange rate changes on cash and cash equivalents		(3,674	)		7,181
Cash and cash equivalents including restricted cash
Net decrease for the period		(37,542	)		(15,335	)
Beginning of period		611,672			572,664
End of period	$	574,130		$	557,329
Supplemental cash flow information
Cash paid for income taxes	$	47,207		$	63,801
Cash paid for interest		857			241
Non-cash investing and financing activity
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		760			—
Furniture, equipment, software and leasehold improvement additions    included in accounts payable		485			—
Stock-based and accrued incentive compensation relating to capitalized    software development costs		2,431			—
Exercise of stock options - cashless		1,735			—
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: CP+™ 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 post-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, 2023. The consolidated financial information as of December 31, 2023 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 and securities sold, not yet purchased 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 securities sold, not yet purchased. 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 the estimated expected credit losses in 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 June 30, 2024 and December 31, 2023. The provision for bad debts for each of the three and six months ended June 30, 2024 and 2023 was $0.1 million. Write-offs and other charges against the allowance for credit losses were immaterial for each of the three and six months ended June 30, 2024 and 2023.

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 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.

10

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Cloud Computing Costs

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

Foreign Currency Translation and Forward Contracts

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

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

Revenue Recognition

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

Commission 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.

Following its acquisition of Pragma LLC and Pragma Financial Systems LLC (collectively, “Pragma”) in the fourth quarter of 2023, the Company also earns other commissions on equities and foreign exchange products for algorithmic trading services. These fees incorporate variable transaction fees, which are calculated as a percentage of the notional dollar volume traded and are billed on a monthly basis.

The following table presents commission revenue by fee type:

		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$		86,778	$		78,424	$		181,556	$		166,552
Open Trading – matched principal trading			42,439			41,606			90,619			95,842
U.S. government bonds - matched principal trading			4,147			3,227			7,859			8,091
Other			5,076			—			9,925			—
Total variable transaction fees			138,440			123,257			289,959			270,485
Distribution fees and unused minimum fees			33,239			35,329			66,593			70,092
Total commissions	$		171,679	$		158,586	$		356,552	$		340,577

11

MARKETAXESS HOLDINGS INC.

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	12,103	$	11,487	$	23,977	$	22,146
Services transferred at a point in time		441		168		448		519
Total information services revenues	$	12,544	$	11,655	$	24,425	$	22,665

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	10,358	$	9,397	$	20,898	$	19,352
Services transferred at a point in time		42		18		232		43
Total post-trade services revenues	$	10,400	$	9,415	$	21,130	$	19,395

Technology services – Technology services revenue primarily includes technology services revenue generated by Pragma and revenue from telecommunications line charges to broker-dealer clients. Customers may be billed monthly or quarterly in arrears or in advance, and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Technology services revenue by timing of recognition
Services transferred over time	$	3,024	$	190	$	5,853	$	378
Services transferred at a point in time		13		—		18		—
Total technology services revenues	$	3,037	$	190	$	5,871	$	378

12

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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, 2023			Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2024
		(In thousands)
Information services	$		3,049	$	7,158	$	(7,176	)	$	—		$	3,031
Post-trade services			923		11,671		(10,871	)		(6	)		1,717
Technology services			567		4,101		(4,248	)		—			420
Total deferred revenue	$		4,539	$	22,930	$	(22,295	)	$	(6	)	$	5,168

The majority of the Company’s information services and post-trade services contracts are short-term in nature with durations of one year or less. For contracts with original durations extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $63.4 million as of June 30, 2024. The Company expects to recognize revenue associated with the remaining performance obligations over the next 52 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, revenue growth rates, customer attrition rates, royalty rates, obsolescence and asset lives. Intangible assets are valued using various methodologies, including the relief-from-royalty method and multi-period excess earnings method.

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.

13

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation and income taxes paid. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The guidance may be applied on a prospective or retrospective basis and early adoption is permitted. Adoption of this ASU will result in additional disclosures, but will not have an impact on the Company’s consolidated statements of financial condition, operations and cash flows.

In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU also requires the disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. All disclosure requirements under ASU 2023-07 and existing segment disclosures in ASC 280, Segment Reporting are also required for public entities with a single reportable segment. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The ASU must be applied retrospectively to all periods presented in the financial statements. Adoption of this ASU will result in additional disclosures, but will not have an impact on the Company’s consolidated statements of financial condition, operations and cash flows.

14

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

3. Regulatory Capital Requirements

Certain of the Company’s U.S. subsidiaries are registered as broker-dealers and therefore are subject to the applicable rules and regulations of the SEC and the Financial Industry Regulatory Authority (“FINRA”). 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 United Kingdom (“U.K.”) or other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of June 30, 2024, each of the Company’s subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of June 30, 2024, the Company’s subsidiaries maintained aggregate net capital and financial resources that were $565.6 million in excess of the required levels of $35.8 million.

One of the Company’s U.S. broker-dealer subsidiaries is required to segregate funds in a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of June 30, 2024, this U.S. broker-dealer subsidiary had a balance of $46.1 million in its special reserve bank account. This U.S. broker-dealer subsidiary also maintained net capital that was $318.9 million in excess of the required level of $4.4 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 June 30, 2024
Assets
Money market funds	$	25,220	$	—	$	—	$	25,220
Securities available-for-sale
Corporate debt		—		25,198		—		25,198
Trading securities
U.S. Treasuries		—		99,527		—		99,527
Mutual funds held in rabbi trust		—		11,183		—		11,183
Foreign currency forward position		—		500		—		500
Total assets	$	25,220	$	136,408	$	—	$	161,628
Liabilities
Securities sold, not yet purchased		—		9,167		—		9,167
Total liabilities	$	—	$	9,167	$	—	$	9,167
As of December 31, 2023
Assets
Money market funds	$	18,634	$	—	$	—	$	18,634
Securities available-for-sale
Corporate debt		—		24,694		—		24,694
Trading securities
U.S. Treasuries		—		99,682		—		99,682
Mutual funds held in rabbi trust		—		10,485		—		10,485
Foreign currency forward position		—		1,901		—		1,901
Total assets	$	18,634	$	136,762	$	—	$	155,396

15

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 included in either other assets or accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition, and 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. Securities sold, not yet purchased reflects a short U.S. Treasury inventory position held overnight in relation to the Company’s U.S. broker dealer subsidiary’s self-clearing operations.

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 June 30, 2024
Financial assets not measured at fair value:
Cash	$	408,843	$	408,843	$	408,843	$	—	$	—	$	408,843
Cash segregated under federal regulations		46,141		46,141		46,141		—		—		46,141
Accounts receivable, net of allowance		92,350		92,350		—		92,350		—		92,350
Receivables from broker-dealers, clearing    organizations and customers		577,992		577,992		93,754		484,238		—		577,992
Total	$	1,125,326	$	1,125,326	$	548,738	$	576,588	$	—	$	1,125,326
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	392,846	$	392,846	$	—	$	392,846	$	—	$	392,846
As of December 31, 2023
Financial assets not measured at fair value:
Cash	$	432,646	$	432,646	$	432,646	$	—	$	—	$	432,646
Cash segregated under federal regulations		45,122		45,122		45,122		—		—		45,122
Accounts receivable, net of allowance		89,839		89,839		—		89,839		—		89,839
Receivables from broker-dealers, clearing    organizations and customers		687,936		687,936		115,151		572,785		—		687,936
Total	$	1,255,543	$	1,255,543	$	592,919	$	662,624	$	—	$	1,255,543
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	537,398	$	537,398	$	—	$	537,398	$	—	$	537,398

During the three and six months ended June 30, 2024 and 2023, there were no transfers of securities between Level 1, Level 2 and Level 3.

16

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 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
	June 30, 2024		December 31, 2023
	(In thousands)
Notional value	$	62,730	$	61,858
Fair value of notional		63,230		63,759
Fair value of the asset	$	500	$	1,901

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 loss of $0.7 million and a net realized gain of $1.6 million for the three months ended June 30, 2024 and 2023, respectively, and a net realized gain of $0.6 million and a net realized loss of $0.1 million for the six months ended June 30, 2024 and 2023, respectively. The Company recorded a net unrealized gain of $0.7 million and a net unrealized loss of $0.2 million for the three months ended June 30, 2024 and 2023, respectively, and a net unrealized loss of $1.4 million and net unrealized gain $2.3 million for the six months ended June 30, 2024 and 2023, respectively. The Company records collateral deposits with its counterparty bank in prepaid expenses and other assets on the Consolidated Statements of Financial Condition. As of June 30, 2024, the Company did not maintain a collateral deposit with its counterparty bank.

The following table summarizes the Company’s investments and securities positions:

	Amortized cost			Gross unrealized gains		Gross unrealized losses			Fair value
		(In thousands)
As of June 30, 2024
Securities available-for-sale
Corporate debt	$		25,300	$	19	$	(121	)	$	25,198
Trading securities
U.S. Treasuries			99,877		—		(350	)		99,527
Mutual funds held in rabbi trust			10,315		878		(10	)		11,183
Total investments	$		135,492	$	897	$	(481	)	$	135,908
Securities sold, not yet purchased
U.S. Treasuries	$		9,211	$	44	$	—		$	9,167
As of December 31, 2023
Securities available-for-sale
Corporate debt	$		24,705	$	55	$	(66	)	$	24,694
Trading securities
U.S. Treasuries			99,236		446		—			99,682
Mutual funds held in rabbi trust			10,962		172		(649	)		10,485
Total investments	$		134,903	$	673	$	(715	)	$	134,861

Purchases of investments during the six months ended June 30, 2024 and 2023 were $7.9 million and $51.6 million, respectively. Proceeds from the sales and maturities of investments during the six months ended June 30, 2024 and 2023 were $7.5 million and $27.0 million, respectively.

17

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 June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	(In thousands)
Unrealized gains/(losses)
Securities available-for-sale
Corporate debt	$	(18	)	$	(168	)	$	(91	)	$	(223	)
Trading securities
U.S. Treasuries		262			(766	)		7			(346	)
Mutual funds held in rabbi trust		671			520			1,345			1,105
Total investments	$	915		$	(414	)	$	1,261		$	536
Liabilities:
Securities sold, not yet purchased	$	44		$	—		$	44		$	—
Realized gains/(losses)
Securities available-for-sale
Corporate debt	$	—		$	—		$	2		$	(17	)
Trading securities
Mutual funds held in rabbi trust		(412	)		(59	)		(377	)		(59	)
Total investments	$	(412	)	$	(59	)	$	(375	)	$	(76	)

Unrealized gains and losses on securities available-for-sale are included in accumulated other comprehensive loss on the Consolidated Statements of Financial Condition. Realized gains and losses on securities available-for-sale and realized and unrealized gains and losses on trading securities are included in other, net on the Consolidated Statements of Operations.

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 June 30, 2024
Securities available-for-sale
Corporate debt	$	10,637	$	14,561	$	25,198
Trading securities
U.S. Treasuries		74,615		24,912		99,527
Mutual funds held in rabbi trust		11,183		—		11,183
Total	$	96,435	$	39,473	$	135,908
As of December 31, 2023
Securities available-for-sale
Corporate debt	$	10,727	$	13,967	$	24,694
Trading securities
U.S. Treasuries		49,756		49,926		99,682
Mutual funds held in rabbi trust		10,485		—		10,485
Total	$	70,968	$	63,893	$	134,861

18

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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 positions:

	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 June 30, 2024
Corporate debt	$	8,645	$	(41	)	$	11,635	$	(79	)	$	20,280	$	(121	)
As of December 31, 2023
Corporate debt	$	17,658	$	(66	)	$	—	$	—		$	17,658	$	(66	)

During the three and six months ended June 30, 2024 and 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.

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:

	As of
	June 30, 2024		December 31, 2023
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	135,313	$	282,125
Securities failed-to-deliver – customers		333,048		284,322
Cash deposits with clearing organizations and broker-dealers		93,754		115,151
Other		15,877		6,338
Total	$	577,992	$	687,936
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	226,163	$	125,022
Securities failed-to-receive – customers		157,822		405,186
Other		8,861		7,190
Total	$	392,846	$	537,398

19

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

6. Acquisitions and Equity Investments

Acquisition of Pragma

On October 2, 2023, the Company completed its acquisition (the “Pragma Acquisition”) of all of the outstanding ownership interests of Pragma LLC and Pragma Financial Systems LLC (collectively “Pragma”) pursuant to the terms and conditions of a Membership Interest Purchase Agreement entered into among the Company, Pragma Weeden Holdings LLC, Pragma Financial Systems LLC, Pragma LLC and, solely for certain limited purposes, David Mechner, Pragma’s chief executive officer, on August 5, 2023 (the “Purchase Agreement”). Following customary adjustments for cash, debt, transaction expenses and working capital, the aggregate purchase price for the Pragma Acquisition was $125.0 million, comprised of approximately $81.2 million in cash and 224,776 shares of common stock of the Company, valued at approximately $43.8 million as of the closing date of the Pragma Acquisition, as described below. A portion of the stock consideration, amounting to 8,603 shares of common stock, was placed in escrow for 12 months to secure the sellers’ indemnification obligations under the Purchase Agreement. In addition, pursuant to the Purchase Agreement and subject to certain exceptions, the sellers and their affiliates were prohibited from transferring any of the Company common stock received in the Pragma Acquisition for a period of six months following the October 2, 2023 closing date. The value ascribed to the shares by the Company was discounted from the market value on the date of closing to reflect the non-marketability of such shares during the restriction period.

Pragma is a quantitative trading technology provider specializing in algorithmic and analytical services. Pragma LLC is a registered broker-dealer. The Company has performed an allocation of the purchase price to the fair value of assets acquired and liabilities assumed at the date of acquisition. The Company utilized an independent third-party to assist in determining the fair value of the acquired intangible assets. The purchase price allocation is as follows (in thousands):

Purchase price	$	125,002
Less: acquired cash		(2,685	)
Purchase price, net of acquired cash		122,317
Intangible assets		(38,900	)
Accounts receivable		(2,637	)
Prepaid expenses and other assets		(4,181	)
Accounts payable, accrued expenses and other liabilities		5,318
Goodwill	$	81,917

The acquired developed technology and customer relationships intangible assets were valued using the relief-from-royalty method and multi-period excess earnings method, respectively. The fair values of the intangible assets acquired are as follows (in thousands, except for useful lives):

	Costs		Useful Lives
Developed technology	$	28,500	7 years
Customer relationships		9,200	15 years
Tradename - finite life		1,200	15 years
Total	$	38,900

The goodwill recognized in connection with the Pragma Acquisition is primarily attributable to the acquisition of an assembled workforce and expected future technology and synergies from the integration of the operations of Pragma into the Company’s operations. All of the goodwill recognized in connection with the Pragma Acquisition is expected to be deductible for income tax purposes.

Pro forma financial information and current period results for the Pragma Acquisition were not material to the Company’s consolidated financial statements and therefore have not been presented.

20

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

RFQ Hub LLC Equity Investment

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 June 30, 2024, the Company’s investment is recorded at carrying value of $37.0 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 is recorded within equity in earnings of unconsolidated affiliate on the Consolidated Statements of Operations and was $0.4 million and $0.3 million for the three months ended June 30, 2024 and 2023, respectively, and $0.7 million and $0.5 million for the six months ended June 30, 2024 and 2023, respectively.

Under a services agreement, the Company charges its equity method investee for certain reimbursable support costs incurred by the Company, including personnel compensation, and certain operational overhead costs. The amounts billed for the three and six months ended June 30, 2024 were $0.5 million and $1.0 million, respectively, and are included within other, net on the Consolidated Statements of Operations. The receivable from the equity method investee was $1.0 million as of June 30, 2024 and is included within accounts receivable, net on the Consolidated Statements of Financial Condition.

On April 19, 2024, the Company entered into an agreement to acquire an additional 49.0% interest in RFQ–hub Holdings LLC for approximately $37.9 million of cash consideration. The acquisition is subject to various closing conditions, including the receipt of certain regulatory approvals. The acquisition is expected to close during the second half of 2024. Upon the closing of the acquisition, the Company will hold a 92.0% controlling stake in RFQ-hub Holdings LLC.

7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives were $236.7 million as of each of June 30, 2024 and December 31, 2023. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

	June 30, 2024							December 31, 2023
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	139,178	$	(57,973	)	$	81,205	$	140,348	$	(50,987	)	$	89,361
Technology and other intangibles		41,130		(13,915	)		27,215		41,130		(11,383	)		29,747
Total	$	180,308	$	(71,888	)	$	108,420	$	181,478	$	(62,370	)	$	119,108

Amortization expense associated with identifiable intangible assets was $5.0 million and $4.5 million for the three months ended June 30, 2024 and 2023, respectively, and $10.0 million and $8.6 million for the six months ended June 30, 2024 and 2023. Annual estimated total amortization expense is $19.8 million, $16.9 million, $15.2 million, $13.8 million and $12.3 million for the years ended December 31, 2024 through 2028, respectively.

21

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 24.8% and 24.2% for the three months ended June 30, 2024 and 2023, respectively, and 24.9% and 24.6% for the six months ended June 30, 2024 and 2023, respectively. 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 2020 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 2020.

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 restricted stock, restricted stock units, performance shares, performance stock units (collectively, “full value awards”), stock options and other stock-based awards as incentives to encourage employees, consultants and non-employee directors to participate in the long-term success of the Company. As of June 30, 2024, there were 2,468,562 shares available for grant under the 2020 Plan.

Total stock-based compensation expense was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Employees	$	7,929	$	6,647	$	14,822	$	13,747
Non-employee directors		399		243		804		631
Total stock-based compensation	$	8,328	$	6,890	$	15,626	$	14,378

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. Total stock-based compensation for employees includes $0.3 million and $0.2 million of capitalized software development costs for the three months ended June 30, 2024 and 2023, respectively, and $0.5 million and $0.4 million of capitalized software development costs for the six months ended June 30, 2024 and 2023, respectively.

During the six months ended June 30, 2024, the Company granted (i) 143,975 restricted stock units, (ii) 20,793 stock options and (iii) performance stock units with an expected pay-out at target of 32,608 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 $218.48 and $219.32, respectively. The weighted-average fair value for stock options of $77.16 per share was based on the Black-Scholes option pricing model.

As of June 30, 2024, the total unrecognized compensation cost related to all non-vested awards was $60.7 million. That cost is expected to be recognized over a weighted-average period of 2.2 years.

22

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”), pursuant to which a total of 121,221 shares of the Company’s common stock is available for purchase by employees. The Company issued 3,756 shares of common stock on February 15, 2024 under the ESPP. As of June 30, 2024, there were 112,810 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,655		37,485		37,698		37,482
Dilutive effect of stock options and full value awards		34		103		42		135
Diluted weighted average shares outstanding		37,689		37,588		37,740		37,617
Basic earnings per share	$	1.72	$	1.60	$	3.65	$	3.56
Diluted earnings per share		1.72		1.59		3.64		3.55

Stock options and full value awards totaling 445,089 shares and 240,079 shares for the three months ended June 30, 2024 and 2023, respectively, and 508,117 shares and 209,614 shares for the six months ended June 30, 2024 and 2023, 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.

23

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

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, including 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, but was replaced by the 2023 Credit Agreement (as defined below).

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 $0.1 million of interest expense under the 2021 Credit Agreement for each of the three and six months ended June 30, 2023.

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, including 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 June 30, 2024, 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 Secured Overnight Financing Rate (“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 $0.2 million of interest expense under the 2023 Credit Agreement for each of the three and six months ended June 30, 2024.

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 did not incur any interest expense on borrowings under such agreements during the three months ended June 30, 2024 and 2023, and the six months ended June 30, 2024. The Company incurred $0.1 million of interest expense during the six months ended June 30, 2023. As of June 30, 2024, 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 $0.5 million and $0.1 million during the three months ended June 30, 2024 and 2023, respectively, and $0.8 million and $0.1 million during the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the Company had no overdrafts payable outstanding.

24

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 Company also has operating and finance leases for equipment with initial lease terms ranging from one-year to 5 years.

The following table presents the components of operating lease expense for the three and six months ended June 30, 2024 and 2023:

		Three Months Ended June 30,				Six Months Ended June 30,
Lease cost:	Classification	2024		2023		2024		2023
		(In thousands)
Operating lease cost - office space	Occupancy	$	2,750	$	2,882	$	5,504	$	5,993
Operating lease cost - equipment	Technology and communications		98		—		195		—
Variable lease costs	Occupancy		882		347		1,469		398
Total operating lease cost		$	3,730	$	3,229	$	7,168	$	6,391

Finance lease expense was $0.1 million for each of the three and six months ended June 30, 2024.

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

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

	As of
Lease Term and Discount Rate	June 30, 2024			December 31, 2023
Weighted average remaining lease term (in years) - operating leases		9.2			9.6
Weighted average discount rate - operating leases		6.0	%		6.0	%
Weighted average remaining lease term (in years) - finance leases		1.3			1.8
Weighted average discount rate - finance leases		7.2	%		7.2	%

The following table presents the maturity of lease liabilities as of June 30, 2024:

	Operating Leases		Finance Leases
	(In thousands)
Remainder of 2024	$	6,548	$	59
2025		12,351		88
2026		11,765		—
2027		9,010		—
2028		8,615		—
2029 and thereafter		51,306		—
Total lease payments		99,595		147
Less: imputed interest		23,514		7
Present value of lease liabilities	$	76,081	$	140

25

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 six months ended June 30, 2024 and 2023.

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

14. Share Repurchase Programs

In January 2022, the Board of Directors authorized a share repurchase program for up to $150.0 million that commenced in March 2022 (the “2022 Repurchase Program”). During the six months ended June 30, 2024, the Company repurchased 211,255 shares of common stock under the 2022 Repurchase Program at a cost of $43.6 million. In August 2024, the Board of Directors authorized a new share repurchase program for up to $200.0 million (the “2024 Repurchase Program and, together with the 2022 Repurchase Program, the “Repurchase Programs”), in addition to the $50.0 million currently remaining under the 2022 Repurchase Program. Shares repurchased under the Repurchase Programs will be held in treasury for future use.

15. Segment and Geographic Information

The Company operates electronic platforms for the trading of fixed-income securities and provides related data, analytics, compliance tools, post-trade services and technology 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.

26

MARKETAXESS HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

For the six months ended June 30, 2024 and 2023, 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 six months ended June 30, 2024 and 2023, and long-lived assets as of June 30, 2024 and December 31, 2023 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Revenues
Americas	$	156,538	$	141,999	$	323,371	$	303,572
Europe		35,863		33,518		73,591		70,254
Asia		5,259		4,329		11,016		9,189
Total	$	197,660	$	179,846	$	407,978	$	383,015

	As of
	June 30, 2024			December 31, 2023
		(In thousands)
Long-lived assets, as defined
Americas	$		93,870	$	87,513
Europe			14,637		14,717
Asia			295		441
Total	$		108,802	$	102,671

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:

		As of
	Statement of Financial Condition Location	June 30, 2024		December 31, 2023
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	434,063	$	451,280
Cash segregated for regulatory    purposes	Cash segregated under federal    regulations		46,141		45,122
Cash deposits with clearing organizations    and broker-dealers	Receivables from broker-dealers,    clearing organizations    and customers		93,754		115,151
Other cash deposits	Prepaid expenses and other assets		172		119
Total		$	574,130	$	611,672

27

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, 2023, 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. We leverage our diverse set of trading protocols, automated and algorithmic trading solutions, intelligent data and index products and a range of post-trade services to provide an end-to-end trading solution to our robust network of platform participants.

We provide automated and algorithmic trading solutions that we believe, when combined with our integrated and actionable data offerings, will help our clients make faster, better-informed decisions on when and how to trade on our platforms. In 2023, we introduced X-Pro, our newest trading platform, to more seamlessly combine our trading protocols with our proprietary data and pre-trade analytics. We expect that our recent acquisition of Pragma, a quantitative trading technology provider specializing in algorithmic and analytical trading services, will accelerate our development of artificial intelligence driven execution algorithms across many of our key product areas.

We operate in a large and growing market that provides us with a significant opportunity for future growth, due, in part, to the relatively low levels of electronic trading in many of our largest current product areas. We offer Open Trading for most of our products in order to capitalize on this addressable market by increasing the number of potential trading counterparties and providing our clients with a menu of solutions at each step in the trading process. 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, dealer and alternative liquidity provider clients can all interact on an anonymous basis. Institutional investors can also send trading inquiries directly to their traditional broker-dealer counterparties on a disclosed basis, while simultaneously accessing additional counterparties through our anonymous Open Trading solutions.

We also provide a number of integrated and actionable data offerings, including CP+™ 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, post-trade matching, trade publication, regulatory transaction reporting and market and reference data across fixed-income and other products.

We derive revenue from commissions for transactions executed on our platforms, information services, post-trade services and technology services. 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, 2023.

28

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.

In the second quarter of 2024, the new issue calendar continued to be strong across U.S. credit, but not as robust as in the first quarter of the year. U.S. high-grade and U.S. high-yield new issuance increased 8.9% and 43.9% to $344.3 billion and $77.9 billion, respectively. In addition, credit spread volatility remained low in the second quarter of 2024. A strong new issue calendar and low levels of credit spread volatility can contribute to a decrease in exchange-trade fund (“ETF”) market maker activity on our platforms, as the increased availability of new issues may lead to reduction in secondary market trading, especially in U.S. high-yield. A strong new issue calendar can also negatively impact our market share in the short-term, but is expected to positively impact secondary trading volumes over the long term. The decrease in U.S. high-yield activity during the quarter negatively impacted our total credit average variable fee per million.

There has been increased demand for green bonds in the fixed-income markets in which we operate.

Because the majority of our assets are short-term in nature, they are not significantly affected by inflation. However, the rate of inflation impacts 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 high 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 $749.9 million in available borrowing capacity under the 2023 Credit Agreement and 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 and fees 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. During periods of relatively lower credit spread volatility, clients are beginning to use portfolio trading workflows in lieu of more established trading protocols designed to generate price competition on individual bonds. Our dealer clients have also increased their usage of matching sessions offered by competing platforms in recent periods. To the extent that our clients increase their use of portfolio trading and matching session protocols offered by other platforms, our market share in those products could decrease.

Our competitive position is enhanced by the unique liquidity provided by our Open Trading functionalities and the 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.

29

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. In January 2022, the SEC 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 request-for-quote 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 became effective in May 2024 and shortened 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 has led to a reduction in the length of exposure to trading counterparties and lower margin requirements for our clearing operations. The SEC also recently adopted final rules regarding the central clearing of certain secondary market transactions involving U.S. Treasury securities, which will become effective for certain cash market transactions on December 31, 2025 and repurchase and reverse repurchase transactions on June 30, 2026. This central clearing mandate will impact certain of our participants who do not centrally clear such trades today, and some have expressed concerns about the potential impact of additional clearing costs. The impact of any of these reform efforts on us and our operations remains uncertain.

As a result of the U.K.’s departure from the E.U. in 2020 (commonly referred to as “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 applicable to portions of our business in 2025, will require us to dedicate additional financial and operational resources to meet the significant additional information communication technologies services-related governance, risk management, resilience testing and sub-contracting 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.

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, 2023.

Technology Environment

We must continue to enhance and improve our electronic trading platforms. The markets in which we compete are characterized by increasingly complex protocols, systems and technology infrastructure requirements. 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 introduced MarketAxess X-Pro, our new trading platform, which provides traders with a flexible user experience, intuitive workflows and access to our proprietary data and pre-trade analytics. 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 and algorithmic trading solutions. We also support a large and growing base of dealer market making algorithms. In the second quarter of 2024, trading volumes in Auto-X, one of our automated trading protocols, rose to $88.3 billion, an increase of 20.9% from $73.1 billion in the second quarter of 2023. Trade count on Auto-X increased 37.3% to approximately 580,000 from approximately 423,000 in the second quarter of 2023. There were 248 active client firms using Auto-X in the second quarter of 2024, an increase of 69.9% from the prior year. In the second quarter of 2024, dealer algorithmic responses on our platforms increased 37.9% from the second quarter of 2023 to 10.2 million.

We experience cybersecurity threats and incidents from time to time. However, as of the date of this report, MarketAxess has not experienced a cybersecurity threat or incident that has materially affected the Company 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” and Part I, Item 1C – “Cybersecurity.” of our Form 10-K for the year ended December 31, 2023.

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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 and protocol 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,” “— Results of Operations — Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023” and “— Results of Operations — Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023,” our trading volumes increased and our average variable transaction fee per million decreased compared to the three and six months ended June 30, 2023.

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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Other Commissions. Other commissions include equities and foreign exchange commissions for Pragma's algorithmic trading services. Commissions for equities and foreign exchange are volume-tiered and consist of variable transaction fees that are billed monthly.

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 post-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.

Technology Services

Technology services includes technology services revenue generated by Pragma and 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 five 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.

32

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.

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 full value awards, stock options and other stock-based awards to encourage employees, consultants and non-employee directors to participate in our long-term success. We make critical accounting estimates related to performance stock units granted under the 2020 Plan (the “PSUs”).

In 2022, 2023 and 2024, the PSUs were granted to the executive officers and certain senior managers. Each PSU is earned or forfeited based on our level of achievement of certain predetermined metrics, including pre-tax adjusted operating margin, U.S. credit market share and revenue growth excluding U.S. credit. The vested share pay-out ranges from zero to 200% of the PSU target. The number of PSUs that vest, if any, is 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, as applicable. Compensation expense for the PSUs is measured using the fair value of our stock at the grant date and estimates of future performance and actual share payouts. Each period, we make estimates of the current expected share payouts and adjust the life-to-date compensation expense recognized since the grant date. As of June 30, 2024, a 10.0% change in the expected final share payouts would increase or decrease the life-to-date compensation expense by $1.5 million. The estimated final share payouts for the 2022 and 2023 awards as of June 30, 2024 decreased 20.7% compared to December 31, 2023.

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.

33

Results of Operations

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

The following table summarizes our financial results for the three months ended June 30, 2024 and 2023:

	Three Months Ended June 30,
	2024		2023		$ Change		% Change
	($ in thousands, except per share amounts)
Revenues	$	197,660	$	179,846	$	17,814		9.9	%
Expenses		116,321		104,119		12,202		11.7
Operating income		81,339		75,727		5,612		7.4
Other income (expense)		4,998		3,223		1,775		55.1
Income before income taxes		86,337		78,950		7,387		9.4
Provision for income taxes		21,399		19,091		2,308		12.1
Net income	$	64,938	$	59,859	$	5,079		8.5	%
Net income per common share – Diluted	$	1.72	$	1.59	$	0.13		8.2	%

Changes in average foreign currency exchange rates compared to the U.S. dollar had the effect of increasing revenues and expenses by $0.3 million and $0.2 million, respectively, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Revenues

Our revenues for the three months ended June 30, 2024 and 2023, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended June 30,
	2024					2023
	($ in thousands)
			% of Revenues					% of Revenues			$ Change		% Change
Commissions	$	171,679		86.9	%	$	158,586		88.2	%	$	13,093		8.3	%
Information services		12,544		6.3			11,655		6.5			889		7.6
Post-trade services		10,400		5.3			9,415		5.2			985		10.5
Technology services		3,037		1.5			190		0.1			2,847	NM
Total revenues	$	197,660		100.0	%	$	179,846		100.0	%	$	17,814		9.9
NM - not meaningful

Total revenues for the three months ended June 30, 2024 include Pragma revenues of $7.9 million.

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Commissions. Our commission revenues for the three months ended June 30, 2024 and 2023, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended June 30,
	2024		2023		$ Change			% Change
	($ in thousands)
Variable transaction fees
Credit	$	127,645	$	118,710	$	8,935			7.5		%
Rates		5,719		4,547		1,172			25.8
Other		5,076		—		5,076		NM
Total variable transaction fees		138,440		123,257		15,183			12.3
Fixed distribution fees
Credit		33,177		35,268		(2,091	)		(5.9	)
Rates		62		61		1			1.6
Total fixed distribution fees		33,239		35,329		(2,090	)		(5.9	)
Total commissions	$	171,679	$	158,586	$	13,093			8.3		%
NM - not meaningful

Credit variable transaction fees increased $8.9 million driven by a 14.2% increase in total credit trading volume, partially offset by a 5.9% decrease in total credit average variable transaction fee per million. Open Trading credit volume totaled $247.4 billion during the three months ended June 30, 2024, an increase of 9.7%, and Open Trading credit variable transaction fees represented 30.2% and 33.4% of total variable transaction fees for the three months ended June 30, 2024 and 2023, respectively. Rates variable transaction fees increased $1.2 million driven principally by a 32.9% increase in trading volumes, partially offset by a 5.3% decrease in average variable transaction fee per million. Other variable transaction fees include equities and foreign exchange commissions earned by Pragma.

Credit fixed distribution fees decreased $2.0 million mainly due to the consolidation of two global dealers and migrations to variable fee plans, partially offset by the addition of new dealer fixed fee plans.

Our trading volumes for the three months ended June 30, 2024 and 2023 were as follows:

	Three Months Ended June 30,
	2024		2023		$ Change			% Change
	($ in millions)
Trading volume data
Credit
High-grade	$	405,440	$	353,239	$	52,201			14.8		%
High-yield		84,248		91,390		(7,142	)		(7.8	)
Emerging markets		210,205		168,257		41,948			24.9
Eurobonds		128,266		116,495		11,771			10.1
Other credit		33,376		24,729		8,647			35.0
Total credit		861,535		754,110		107,425			14.2
Rates
U.S. government bonds		1,236,917		940,127		296,790			31.6
Agency and other government bonds		48,506		26,721		21,785			81.5
Total rates		1,285,423		966,848		318,575			32.9
Total trading volume	$	2,146,958	$	1,720,958	$	426,000			24.8		%
Number of U.S. Trading Days		63		62
Number of U.K. Trading Days		61		60

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

35

The 14.8% increase in our U.S. high-grade volume was principally due to an increase in estimated market volumes, partially offset by a decrease in our estimated market share. Estimated U.S. high-grade market volume as reported by FINRA’s Trade Reporting and Compliance Engine (“TRACE”) increased by 27.0% to $2.2 trillion for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 18.7% for the three months ended June 30, 2024 from 20.7% for the three months ended June 30, 2023.

U.S. high-yield volume decreased by 7.8% mainly due to a decrease in our estimated market share. Emerging markets volumes increased by 24.9%, mainly due to an increase in local markets trading volumes. Eurobond volumes increased by 10.1%. Other credit volumes increased by 35.0% due to higher municipal bond volumes on higher estimated market share. Rates trading volume increased 32.9%, primarily due to higher estimated market volumes and an increase in our estimated market share.

Our average variable transaction fee per million for the three months ended June 30, 2024 and 2023 was as follows:

	Three Months Ended June 30,
	2024		2023		$ Change			% Change
Average variable transaction fee per million
Credit	$	148.16	$	157.42	$	(9.26	)		(5.9	)	%
Rates		4.45		4.70		(0.25	)		(5.3	)

Credit average variable transaction fee per million decreased by 5.9% to $148.16 per million for the three months ended June 30, 2024, 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 $0.9 million for the three months ended June 30, 2024, mainly due to net new data contract revenue.

Post-Trade Services. Post-trade services revenue increased by $1.0 million for the three months ended June 30, 2024, principally due to price increases and net new contract revenue.

Technology Services. Technology services revenue increased by $2.8 million for the three months ended June 30, 2024 due to technology services revenue generated by Pragma.

Expenses

The following table summarizes our expenses for the three months ended June 30, 2024 and 2023:

	Three Months Ended June 30,
	2024				2023		$ Change			% Change
		($ in thousands)
Expenses
Employee compensation and benefits	$		56,790	$		48,383	$	8,407			17.4		%
Depreciation and amortization			18,356			17,005		1,351			7.9
Technology and communications			17,771			15,235		2,536			16.6
Professional and consulting fees			7,669			8,023		(354	)		(4.4	)
Occupancy			3,714			3,199		515			16.1
Marketing and advertising			3,010			3,308		(298	)		(9.0	)
Clearing costs			4,122			4,182		(60	)		(1.4	)
General and administrative			4,889			4,784		105			2.2
Total expenses	$		116,321	$		104,119	$	12,202			11.7		%

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Total expenses for the three months ended June 30, 2024 include Pragma expenses of $7.8 million.

Employee compensation and benefits increased by $8.4 million, primarily due to an increase in salaries, taxes and benefits of $5.0 million on higher employee headcount, largely driven by the Pragma Acquisition, higher employee incentive compensation of $2.3 million and higher stock compensation expense of $1.2 million.

Depreciation and amortization increased by $1.4 million, primarily due to higher amortization of software development costs of $0.8 million and higher amortization of intangibles of $0.5 million.

Technology and communications expenses increased by $2.5 million, primarily due to higher software subscription costs of $0.8 million, higher connectivity costs of $0.7 million, higher production data costs of $0.3 million, higher market data costs of $0.2 million, higher data center hosting costs of $0.2 million and higher U.S. Treasury platform licensing fees of $0.2 million.

Professional and consulting fees decreased by $0.4 million, primarily due to lower IT consulting costs of $0.4 million, lower acquisition-related integration consulting fees of $0.4 million and lower recruiting fees of $0.3 million, offset by higher legal expenses of $0.6 million and higher audit and tax costs of $0.2 million.

Marketing expenses decreased by $0.3 million, primarily due to lower advertising and promotional costs.

Other Income (Expense)

Our other income (expense) for the three months ended June 30, 2024 and 2023, and the resulting dollar and percentage changes, were as follows:

	Three Months Ended June 30,
	2024					2023			$ Change			% Change
		($ in thousands)
Interest income	$		6,401		$		5,312		$	1,089				20.5		%
Interest expense			(621	)			(53	)		(568	)		NM
Equity in earnings of unconsolidated affiliate			354				250			104				41.6
Other, net			(1,136	)			(2,286	)		1,150				(50.3	)
Total other income (expense)	$		4,998		$		3,223		$	1,775				55.1		%
NM - not meaningful

Interest income increased by $1.1 million driven by higher interest rates.

Interest expense increased by $0.6 million primarily due to higher financing charges incurred under our short-term borrowings.

Other, net increased by $1.2 million primarily due to unrealized gains of $0.3 million on our U.S. Treasury investments in the current period compared to unrealized losses of $0.8 million in the prior period.

Provision for Income Taxes

The provision for income taxes and effective tax rate for the three months ended June 30, 2024 and 2023 were as follows:

	Three Months Ended June 30,
	2024					2023			$ Change		% Change
		($ in thousands)
Provision for income taxes	$		21,399		$		19,091		$	2,308		12.1	%
Effective tax rate			24.8	%			24.2	%

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.

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Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

The following table summarizes our financial results for the six months ended June 30, 2024 and 2023:

	Six Months Ended June 30,
	2024		2023		$ Change		% Change
	($ in thousands, except per share amounts)
Revenues	$	407,978	$	383,015	$	24,963		6.5	%
Expenses		234,139		211,932		22,207		10.5
Operating income		173,839		171,083		2,756		1.6
Other income (expense)		9,215		6,062		3,153		52.0
Income before income taxes		183,054		177,145		5,909		3.3
Provision for income taxes		45,501		43,658		1,843		4.2
Net income	$	137,553	$	133,487	$	4,066		3.0	%
Net income per common share – Diluted	$	3.64	$	3.55	$	0.09		2.5	%

Changes in average foreign currency exchange rates compared to the U.S. dollar had the effect of increasing revenues and expenses by $1.2 million and $0.8 million, respectively, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Revenues

Our revenues for the six months ended June 30, 2024 and 2023, and the resulting dollar and percentage changes, were as follows:

	Six Months Ended June 30,
	2024					2023
	($ in thousands)
			% of Revenues					% of Revenues			$ Change		% Change
Commissions	$	356,552		87.4	%	$	340,577		88.9	%	$	15,975		4.7	%
Information services		24,425		6.0			22,665		5.9			1,760		7.8
Post-trade services		21,130		5.2			19,395		5.1			1,735		8.9
Technology services		5,871		1.4			378		0.1			5,493	NM
Total revenues	$	407,978		100.0	%	$	383,015		100.0	%		24,963		6.5	%
NM - not meaningful

Total revenues for the six months ended June 30, 2024 include Pragma revenues of $15.5 million.

Commissions. Our commission revenues for the six months ended June 30, 2024 and 2023, and the resulting dollar and percentage changes, were as follows:

	Six Months Ended June 30,
	2024		2023		$ Change			% Change
	($ in thousands)
Variable transaction fees
Credit	$	269,149	$	259,680	$	9,469			3.6		%
Rates		10,885		10,805		80			0.7
Other		9,925		—		9,925		NM
Total variable transaction fees		289,959		270,485		19,474			7.2
Fixed distribution fees
Credit		66,465		69,952		(3,487	)		(5.0	)
Rates		128		140		(12	)		(8.6	)
Total fixed distribution fees		66,593		70,092		(3,499	)		(5.0	)
Total commissions	$	356,552	$	340,577	$	15,975			4.7		%
NM - not meaningful

38

Credit variable transaction fees increased $9.5 million driven by a 10.6% increase in trading volume, partially offset by a 6.3% decrease in average variable transaction fee per million. Open Trading credit volume totaled $516.8 billion during the six months ended June 30, 2024, an increase of 2.4%, and Open Trading credit variable transaction fees represented 30.9% and 35.1% of total variable transaction fees for the six months ended June 30, 2024 and 2023, respectively.

Credit fixed distribution fees decreased $3.5 million mainly due to the consolidation of two global dealers and migrations to variable fee plans, partially offset by the addition of new dealer fixed fee plans.

Our trading volumes for the six months ended June 30, 2024 and 2023 were as follows:

	Six Months Ended June 30,
	2024		2023		$ Change			% Change
	($ in millions)
Trading volume data
Credit
High-grade	$	861,438	$	745,954	$	115,484			15.5		%
High-yield		169,627		214,263		(44,636	)		(20.8	)
Emerging markets		431,632		360,098		71,534			19.9
Eurobonds		257,115		234,861		22,254			9.5
Other credit		59,705		53,412		6,293			11.8
Total credit		1,779,517		1,608,588		170,929			10.6
Rates
U.S. government bonds		2,282,713		2,431,419		(148,706	)		(6.1	)
Agency and other government bonds		80,132		53,782		26,350			49.0
Total rates		2,362,845		2,485,201		(122,356	)		(4.9	)
Total trading volume	$	4,142,362	$	4,093,789	$	48,573			1.2		%
Number of U.S. Trading Days		124		124
Number of U.K. Trading Days		124		124

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

The 15.5% increase in our U.S. high-grade volume was principally due to an increase in overall market volume, partially offset by a decrease in our estimated market share. Estimated U.S. high-grade market volume as reported by TRACE increased by 22.8% to $4.5 trillion for the six months ended June 30, 2024. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 19.1% for the six months ended June 30, 2024 from 20.3% for the six months ended June 30, 2023.

U.S. high-yield volume decreased by 20.8%, mainly due to a decrease in our estimated market share. Emerging markets volumes increased by 19.9%, mainly due to an increase in local markets trading volumes. Eurobonds volume increased by 9.5%. Other credit volumes increased 11.8%, driven by higher municipal bonds volume on higher estimated market share. Rates trading volume decreased 4.9%, primarily due to a decrease in our estimated market share.

Our average variable transaction fee per million for the six months ended June 30, 2024 and 2023 was as follows:

	Six Months Ended June 30,
	2024		2023		$ Change			% Change
Average variable transaction fee per million
Credit	$	151.25	$	161.43	$	(10.18	)		(6.3	)	%
Rates		4.61		4.35		0.26			6.0

39

Credit average variable transaction fee per million decreased by 6.3% to $151.25 per million for the six months ended June 30, 2024, 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 $1.8 million for the six months ended June 30, 2024, mainly due to net new data contract revenue of $1.5 million and the positive impact of foreign currency fluctuations of $0.3 million.

Post-Trade Services. Post-trade services revenue increased by $1.7 million for the six months ended June 30, 2024, principally due to price increases and net new contract revenue of $1.5 million and the positive impact of foreign currency fluctuations of $0.2 million.

Technology Services. Technology services revenue increased by $5.5 million for the six months ended June 30, 2024 due to technology services revenue generated by Pragma.

Expenses

The following table summarizes our expenses for the six months ended June 30, 2024 and 2023:

	Six Months Ended June 30,
	2024				2023		$ Change				% Change
		($ in thousands)
Expenses
Employee compensation and benefits	$		118,054	$		100,698		$	17,356			17.2		%
Depreciation and amortization			36,556			33,466			3,090			9.2
Technology and communications			34,822			30,234			4,588			15.2
Professional and consulting fees			14,064			15,150			(1,086	)		(7.2	)
Occupancy			7,139			6,810			329			4.8
Marketing and advertising			4,843			6,303			(1,460	)		(23.2	)
Clearing costs			9,033			8,727			306			3.5
General and administrative			9,628			10,544			(916	)		(8.7	)
Total expenses	$		234,139	$		211,932			22,207			10.5		%

Total expenses for the six months ended June 30, 2024 include Pragma expenses of $15.6 million.

Employee compensation and benefits increased by $17.4 million, primarily due to an increase in salaries, taxes and benefits of $12.1 million on higher employee headcount, largely driven by the Pragma Acquisition, higher employee incentive compensation of $4.3 million and higher stock compensation expense of $0.9 million.

Depreciation and amortization increased by $3.1 million, primarily due to higher amortization of software development costs of $1.8 million and higher amortization of intangibles of $1.4 million.

Technology and communications expenses increased by $4.6 million, primarily due to higher software subscription costs of $1.4 million, higher connectivity costs of $1.4 million, higher market data costs of $0.5 million, higher production data costs of $0.3 million, higher data center hosting costs of $0.3 million, higher IT support costs of $0.3 million and higher U.S. treasury platform licensing fees of $0.2 million.

Professional and consulting fees decreased by $1.1 million, primarily due to lower IT consulting costs of $2.3 million, offset by higher audit and tax costs of $0.9 million and higher acquisition-related integration consulting fees of $0.2 million.

Marketing expenses decreased by $1.5 million, primarily due to lower advertising and promotional expenses of $2.0 million, offset by higher sales-related travel and entertainment costs of $0.5 million.

General and administrative expenses decreased by $0.9 million, primarily due to lower reserves related to a dispute with a vendor of $0.5 million and lower employee relocation expense of $0.2 million.

40

Other Income (Expense)

Our other income (expense) for the six months ended June 30, 2024 and 2023, and the resulting dollar and percentage changes, were as follows:

	Six Months Ended June 30,
	2024					2023			$ Change			% Change
		($ in thousands)
Interest income	$		12,374		$		9,561		$	2,813		NM
Interest expense			(937	)			(183	)		(754	)		412.0	%
Equity in earnings of unconsolidated affiliate			724				454			270			59.5
Other, net			(2,946	)			(3,770	)		824		NM
Total other income (expense)	$		9,215		$		6,062		$	3,153			52.0	%
NM - not meaningful

Interest income increased by $2.8 million driven by higher interest rates.

Interest expense increased by $0.8 million due to higher financing charges incurred under our short-term borrowing arrangements.

Other, net increased by $0.8 million primarily driven by lower foreign currency transaction losses compared to the prior period.

Provision for Income Taxes

The provision for income taxes and effective tax rate for the six months ended June 30, 2024 and 2023 were as follows:

	Six Months Ended June 30,
	2024				2023			$ Change		% Change
		($ in thousands)
Provision for income taxes	$		45,501		$	43,658		$	1,843		4.2	%
Effective tax rate			24.9	%		24.6	%

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.

41

Liquidity and Capital Resources

During the six months ended June 30, 2024, we have met our funding requirements through cash on hand, internally generated funds and short-term borrowings. Cash and cash equivalents and corporate bond and U.S. Treasury investments totaled $558.8 million as of June 30, 2024. 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, including 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 June 30, 2024, 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 June 30, 2024. See Note 11 to the Consolidated Financial Statements for a discussion of the 2023 Credit Agreement.

In connection with their self-clearing operations, certain of our operating subsidiaries maintain agreements with a settlement bank to allow the subsidiaries to borrow an 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 June 30, 2024, 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 June 30, 2024, we had no overdrafts payable outstanding.

As a result of our self-clearing and settlement activities, we are required to finance certain transactions, maintain deposits with various clearing organizations and clearing broker-dealers and maintain a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Exchange Act. As of June 30, 2024, the aggregate amount of the positions financed, cash deposits and customer reserve balances associated with our self-clearing and settlement activities was $223.0 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 Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

Our cash flows were as follows:

	Six Months Ended June 30,
	2024			2023			$ Change			% Change
	($ in thousands)
Net cash provided by operating activities	$	113,900		$	112,921		$	979			0.9		%
Net cash (used in) investing activities		(33,753	)		(47,767	)		14,014			(29.3	)
Net cash (used in) financing activities		(114,015	)		(87,670	)		(26,345	)		30.1
Effect of exchange rate changes on cash and    cash equivalents		(3,674	)		7,181			(10,855	)	NM
Net decrease for the period	$	(37,542	)	$	(15,335	)	$	(22,207	)		144.8		%
NM - not meaningful

The $1.0 million increase in net cash provided by operating activities was primarily due to higher net income of $4.1 million, higher depreciation and amortization of $3.1 million, lower accounts receivable of $10.2 million, lower prepaid expenses and other assets of $12.2 million and an increase in accrued compensation, income and other tax liabilities, and accounts payable, accrued expenses and other liabilities of $16.3 million, partially offset by higher net receivables from broker-dealers, clearing organizations and customers and securities sold, not yet purchased associated with our clearing activities of $45.3 million.

The $14.0 million decrease in net cash used in investing activities was primarily due to lower net purchases of available-for-sale investments of $24.4 million, offset by higher capital expenditures of $10.4 million.

The $26.3 million increase in net cash used in financing activities was principally due to higher repurchases of common stock of $43.6 million and higher cash dividends of $2.0 million, offset by lower withholding tax payments on full value awards vesting of $5.5 million, lower payments of contingent consideration of $12.5 million and higher exercises of stock options of $1.3 million.

42

The $10.9 million change in the effect of exchange rate changes on cash and cash equivalents was driven by changes in the cumulative translation adjustment.

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

Other Factors Influencing Liquidity and Capital Resources

We believe that our current resources are adequate to meet our liquidity needs and requirements, including commitments for capital expenditures, in the short-term (during the next 12 months). However, our future liquidity and capital requirements will depend on a number of factors, including liquidity requirements associated with our self-clearing operations and expenses associated with product development and expansion and new business opportunities that are intended to further diversify our revenue 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 June 30, 2024, each of our subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of June 30, 2024, our subsidiaries maintained aggregate net capital and financial resources that were $565.6 million in excess of the required levels of $35.8 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.

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 using 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 six months ended June 30, 2024 and 2023. Substantially all of our open securities failed-to-deliver and securities failed-to-receive transactions as of June 30, 2024 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.

We have leases for corporate offices and equipment with initial lease terms ranging from one year to 15 years. We have total future contractual rent payments on these leases of $99.7 million, with $12.8 million due within the next 12 months and $86.9 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 June 30, 2024, the notional value of our foreign currency forward contract outstanding was $62.7 million and the fair value of the asset was $0.5 million.

In January 2022, our Board of Directors authorized the 2022 Repurchase Program for up to $150.0 million. As of June 30, 2024, we had $56.4 million of remaining capacity under the 2022 Repurchase Program. In August 2024, the Board of Directors authorized the 2024 Repurchase Program for up to $200.0 million, in addition to the $50.0 million remaining under the 2022 Repurchase Program. Shares repurchased under the Repurchase Programs will be held in treasury for future use.

In July 2024, our Board of Directors approved a quarterly cash dividend of $0.74 per share payable on September 4, 2024 to stockholders of record as of the close of business on August 21, 2024. Any future declaration and payment of dividends will be at the sole discretion of our Board of Directors.

43

On April 19, 2024, we entered into an agreement to acquire an additional 49.0% interest in RFQ–hub Holdings LLC for approximately $37.9 million of cash consideration. The acquisition is subject to various closing conditions, including the receipt of certain regulatory approvals. The acquisition is expected to close during the second half of 2024. Upon the closing of the acquisition, we will hold a 92.0% controlling stake in RFQ-hub Holdings LLC.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, we use certain non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margin and free cash flow. We define EBITDA margin as EBITDA divided by revenues. We define free cash flow as 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 six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	($ in thousands)
Net income	$	64,938		$	59,859		$	137,553		$	133,487
Interest income		(6,401	)		(5,312	)		(12,374	)		(9,561	)
Interest expense		621			53			937			183
Provision for income taxes		21,399			19,091			45,501			43,658
Depreciation and amortization		18,356			17,005			36,556			33,466
EBITDA	$	98,913		$	90,696		$	208,173		$	201,233
Net income margin		32.9	%		33.3	%		33.7	%		34.9	%
Interest income		(3.2	)		(3.0	)		(3.0	)		(2.5	)
Interest expense		0.3			—			0.2			—
Provision for income taxes		10.7			10.6			11.1			11.4
Depreciation and amortization		9.3			9.5			9.0			8.7
EBITDA margin		50.0	%		50.4	%		51.0	%		52.5	%

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 six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	($ in thousands)
Net cash provided by operating activities	$	118,849		$	105,394		$	113,900		$	112,921
Exclude: Net change in trading investments		100			(890	)		(155	)		(471	)
Exclude: Net change in fail-to-deliver/receive from broker-dealers, clearing organizations and customers		(3,151	)		(46,010	)		48,137			757
Less: Purchases of furniture, equipment and leasehold improvements		(7,695	)		(1,055	)		(8,892	)		(1,272	)
Less: Capitalization of software development costs		(10,496	)		(11,025	)		(24,459	)		(21,715	)
Free Cash Flow	$	97,607		$	46,414		$	128,531		$	90,220

44

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Market Risk

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

As of June 30, 2024, we had $99.5 million of investments in U.S. Treasuries that were classified as trading securities and $25.2 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 $10.0 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 cash deposits. As of June 30, 2024, our cash and cash equivalents, restricted cash and cash deposits amounted to $574.1 million. A hypothetical 100 basis point change in interest rates would increase or decrease our annual interest income by approximately $5.7 million, assuming no change in the amount or composition of our cash and cash equivalents, restricted cash and cash deposits.

As of June 30, 2024, 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 $0.6 million. The hypothetical unrealized gain (loss) of $0.6 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 June 30, 2024, approximately 15.9% of our revenues and 24.7% 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 $12.4 million and operating expenses by approximately $11.4 million.

45

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 using 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 June 30, 2024, the notional amount of our foreign currency forward contract was $62.7 million. We do not hold derivative instruments for purposes other than economically hedging foreign currency risk.

46

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. Our management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act, as of June 30, 2024. Based on that evaluation, the Chief Executive Officer and the 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 the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2024 identified in connection with the evaluation thereof by our management, including the Chief Executive Officer and the Chief Financial Officer, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

47

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, 2023. For a discussion of the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our 2023 Form 10-K.

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

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

During the quarter ended June 30, 2024, we repurchased the following shares of common stock:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
							(In thousands)
April 1, 2024 - April 30, 2024		37,223	$	212.35		36,279	$	82,172
May 1, 2024 - May 31, 2024		41,927		207.48		41,927		73,473
June 1, 2024 - June 30, 2024		86,205		197.83		86,205		56,419
Total		165,355	$	203.55		164,411

During the three months ended June 30, 2024, we repurchased 165,355 shares of common stock. The repurchases included 164,411 shares repurchased in connection with our share repurchase program and 944 shares surrendered by employees to satisfy the withholding tax obligations upon the vesting of full value awards and upon the exercise of stock options.

In January 2022, our Board of Directors authorized the 2022 Repurchase Program for up to $150.0 million. As of June 30, 2024, we had $56.4 million of remaining capacity under the 2022 Repurchase Program. In August 2024, the Board of Directors authorized the 2024 Repurchase Program for up to $200.0 million, in addition to the $50.0 million remaining under the 2022 Repurchase Program. Shares repurchased under the Repurchase Programs will be held in treasury for future use.

48

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(c) Trading Plans

In the second quarter of 2024, 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.

49

Item 6. Exhibits

Exhibit Index:

Number	Description
3.1	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of MarketAxess Holdings Inc. (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated June 5, 2024).
3.2	Amended and Restated Bylaws of MarketAxess Holdings Inc. (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K dated July 17, 2024).
10.1	Letter Agreement dated as of May 27, 2024, by and between Ilene Fiszel Bieler and MarketAxess Holdings Inc. (incorporated by reference to Exhibit 10.1 to the registrant’s Amended Current Report in Form 8-K/A dated February 21, 2024 and filed on May 30, 2024).#
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
104	The cover page from the Company’s Quarterly report on Form 10-Q for the quarter ended June 30, 2024 has been formatted in Inline XBRL and is included in Exhibits 101.

*	Filed herewith.
#	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.

50

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: August 6, 2024	By:	/s/ CHRISTOPHER R. CONCANNON
		Christopher R. Concannon
		Chief Executive Officer
		(principal executive officer)

Date: August 6, 2024	By:	/s/ ILENE FISZEL BIELER
		Ilene Fiszel Bieler
		Chief Financial Officer
		(principal financial officer)

51

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: August 6, 2024

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Ilene Fiszel Bieler, 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/ ILENE FISZEL BIELER

Ilene Fiszel Bieler

Chief Financial Officer

(principal financial officer)

Dated: August 6, 2024

EX-32.1

Exhibit 32.1

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

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

Accompanying Quarterly Report on Form 10-Q of

MarketAxess Holdings Inc. for the Quarter Ended June 30, 2024

In connection with the Quarterly Report on Form 10-Q of MarketAxess Holdings Inc. (the “Company”) for the quarter ended June 30, 2024, 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

August 6, 2024

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

EX-32.2

Exhibit 32.2

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

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

Accompanying Quarterly Report on Form 10-Q of

MarketAxess Holdings Inc. for the Quarter Ended June 30, 2024

In connection with the Quarterly Report on Form 10-Q of MarketAxess Holdings Inc. (the “Company”) for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ilene Fiszel Bieler, 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/ ILENE FISZEL BIELER

Ilene Fiszel Bieler

Chief Financial Officer

August 6, 2024

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2024	Aug. 02, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Trading Symbol	MKTX
Entity Registrant Name	MARKETAXESS HOLDINGS INC.
Entity Central Index Key	0001278021
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Title of 12(b) Security	Common Stock, $0.003 par value
Security Exchange Name	NASDAQ
Entity File Number	001-34091
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-2230784
Entity Address, Address Line One	55 Hudson Yards
Entity Address, Address Line Two	15th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10001
Document Quarterly Report	true
Document Transition Report	false
City Area Code	212
Local Phone Number	813-6000
Entity Common Stock, Shares Outstanding		37,751,975

XML

Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
ASSETS
Cash and cash equivalents	$ 434,063	$ 451,280
Cash segregated under federal regulations	46,141	45,122
Investments, at fair value	135,908	134,861
Accounts receivable, net of allowance of $609 and $577 as of June 30, 2024 and December 31, 2023, respectively	92,350	89,839
Receivables from broker-dealers, clearing organizations and customers	577,992	687,936
Goodwill	236,706	236,706
Intangible assets, net of accumulated amortization	108,420	119,108
Furniture, equipment, leasehold improvements and capitalized software, net of accumulated depreciation and amortization	108,802	102,671
Operating lease right-of-use assets	60,500	63,045
Prepaid expenses and other assets	85,831	84,499
Total assets	1,886,713	2,015,067
Liabilities
Accrued employee compensation	41,002	60,124
Payables to broker-dealers, clearing organizations and customers	392,846	537,398
Securities sold, not yet purchased, at fair value	9,167	0
Income and other tax liabilities	2,058	7,892
Accounts payable, accrued expenses and other liabilities	36,338	37,013
Operating lease liabilities	76,081	79,677
Total liabilities	557,492	722,104
Commitments and Contingencies (Note 13)
Stockholders' equity
Preferred stock	0	0
Common stock	123	123
Additional paid-in capital	335,641	333,292
Treasury stock - Common stock voting, at cost, 3,248,580 shares and 3,041,081 shares as of June 30, 2024 and December 31, 2023 respectively	(302,455)	(260,298)
Retained earnings	1,325,139	1,244,216
Accumulated other comprehensive loss	(29,227)	(24,370)
Total stockholders' equity	1,329,221	1,292,963
Total liabilities and stockholders' equity	1,886,713	2,015,067
Series A Preferred Stock [Member]
Stockholders' equity
Preferred stock	$ 0	$ 0

XML

Consolidated Statements of Financial Condition (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Allowance for accounts receivable	$ 609	$ 577
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	41,032,190	40,940,769
Common stock, shares outstanding	37,783,610	37,899,688
Treasury Stock, Common, Shares	3,248,580	3,041,081
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 (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues
Revenues	$ 197,660	$ 179,846	$ 407,978	$ 383,015
Expenses
Employee compensation and benefits	56,790	48,383	118,054	100,698
Depreciation and amortization	18,356	17,005	36,556	33,466
Technology and communications	17,771	15,235	34,822	30,234
Professional and consulting fees	7,669	8,023	14,064	15,150
Occupancy	3,714	3,199	7,139	6,810
Marketing and advertising	3,010	3,308	4,843	6,303
Clearing costs	4,122	4,182	9,033	8,727
General and administrative	4,889	4,784	9,628	10,544
Total expenses	116,321	104,119	234,139	211,932
Operating income	81,339	75,727	173,839	171,083
Other income (expense)
Interest income	6,401	5,312	12,374	9,561
Interest expense	(621)	(53)	(937)	(183)
Equity in earnings of unconsolidated affiliate	354	250	724	454
Other, net	(1,136)	(2,286)	(2,946)	(3,770)
Total other income (expense)	4,998	3,223	9,215	6,062
Income before income taxes	86,337	78,950	183,054	177,145
Provision for income taxes	21,399	19,091	45,501	43,658
Net income	$ 64,938	$ 59,859	$ 137,553	$ 133,487
Net income per common share
Basic	$ 1.72	$ 1.6	$ 3.65	$ 3.56
Diluted	1.72	1.59	3.64	3.55
Cash dividends declared per common share	$ 0.74	$ 0.72	$ 1.48	$ 1.44
Weighted average shares outstanding
Basic	37,655	37,485	37,698	37,482
Diluted	37,689	37,588	37,740	37,617
Commissions [Member]
Revenues
Revenues	$ 171,679	$ 158,586	$ 356,552	$ 340,577
Information Services [Member]
Revenues
Revenues	12,544	11,655	24,425	22,665
Post-trade Services [Member]
Revenues
Revenues	10,400	9,415	21,130	19,395
Technology Services [Member]
Revenues
Revenues	$ 3,037	$ 190	$ 5,871	$ 378

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net Income (Loss)	$ 64,938	$ 59,859	$ 137,553	$ 133,487
Cumulative translation adjustment	(563)	4,206	(4,804)	9,961
Net unrealized (loss) on securities available-for-sale, net of tax of $5, $41, $38, and $56, respectively	(13)	(126)	(53)	(167)
Comprehensive income	$ 64,362	$ 63,939	$ 132,696	$ 143,281

XML

Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Securities available-for-sale, tax expense (benefit)	$ 5	$ 41	$ 38	$ 56

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - 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, 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
Exercise of stock options	707		707
Withholding tax payments on full value awards vesting and stock option exercises	(20,492)		(20,492)
Reissuance of treasury stock	454		(57)	511
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)	133,487
Cumulative translation adjustment	9,961
Ending Balance at Jun. 30, 2023	1,165,092	123	339,867	(327,815)	1,180,820	(27,903)
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 full value awards 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)
Beginning Balance at Dec. 31, 2023	1,292,963	123	333,292	(260,298)	1,244,216	(24,370)
Net Income (Loss)	72,615				72,615
Cumulative translation adjustment	(4,241)					(4,241)
Unrealized net gain (loss) on securities available-for-sale, net of tax	(40)					(40)
Stock-based compensation	7,298		7,298
Exercise of stock options	1,977		1,977
Withholding tax payments on full value awards vesting and stock option exercises	(14,893)		(14,893)
Reissuance of treasury stock	704		(155)	1,440	(581)
Repurchases of common stock	(10,147)			(10,147)
Cash dividend on common stock	(28,003)				(28,003)
Ending Balance at Mar. 31, 2024	1,318,233	123	327,519	(269,005)	1,288,247	(28,651)
Beginning Balance at Dec. 31, 2023	1,292,963	123	333,292	(260,298)	1,244,216	(24,370)
Net Income (Loss)	137,553
Cumulative translation adjustment	(4,804)
Ending Balance at Jun. 30, 2024	1,329,221	123	335,641	(302,455)	1,325,139	(29,227)
Beginning Balance at Mar. 31, 2024	1,318,233	123	327,519	(269,005)	1,288,247	(28,651)
Net Income (Loss)	64,938				64,938
Cumulative translation adjustment	(563)					(563)
Unrealized net gain (loss) on securities available-for-sale, net of tax	(13)					(13)
Stock-based compensation	8,328		8,328
Withholding tax payments on full value awards vesting and stock option exercises	(206)		(206)
Repurchases of common stock	(33,450)			(33,450)
Cash dividend on common stock	(28,046)				(28,046)
Ending Balance at Jun. 30, 2024	$ 1,329,221	$ 123	$ 335,641	$ (302,455)	$ 1,325,139	$ (29,227)

XML

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (Unaudited) - $ / shares	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per common share	$ 0.74	$ 0.74	$ 0.72	$ 0.72	$ 1.48	$ 1.44

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities
Net Income (Loss)	$ 137,553	$ 133,487
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	36,556	33,466
Amortization of operating lease right-of-use assets	3,238	2,717
Stock-based compensation expense	15,084	14,378
Deferred taxes	(2,461)	(2,442)
Foreign currency transaction (gains) losses	1,220	3,932
Other	509	(2,641)
Changes in operating assets and liabilities:
(Increase) in accounts receivable	(2,882)	(13,078)
Decrease in receivables from broker-dealers, clearing organizations and customers	87,335	19,154
(Increase) in prepaid expenses and other assets	(260)	(12,413)
(Decrease) in accrued employee compensation	(17,843)	(20,746)
(Decrease) in payables to broker-dealers, clearing organizations and customers	(144,404)	(21,749)
Increase in securities sold, not yet purchased	9,167	0
(Decrease) in income and other tax liabilities	(5,197)	(7,720)
Increase/(decrease) in accounts payable, accrued expenses and other liabilities	1,106	(9,762)
(Decrease) in operating lease liabilities	(4,278)	(3,109)
Net cash provided by operating activities	113,900	112,921
Cash flows from investing activities
Proceeds from maturities and sales	7,464	1,971
Purchases	(7,866)	(26,751)
Purchases of furniture, equipment and leasehold improvements	(8,892)	(1,272)
Capitalization of software development costs	(24,459)	(21,715)
Net cash (used in) investing activities	(33,753)	(47,767)
Cash flows from financing activities
Cash dividends on common stock	(57,296)	(55,248)
Exercise of stock options	1,977	725
Withholding tax payments on full value awards vesting and stock option exercises	(15,099)	(20,647)
Repurchases of common stock	(43,597)	0
Payment of contingent consideration	0	(12,500)
Proceeds from short-term borrowings	100,000	50,000
Repayments of short-term borrowings	(100,000)	(50,000)
Net cash (used in) financing activities	(114,015)	(87,670)
Effect of exchange rate changes on cash and cash equivalents	(3,674)	7,181
Cash and cash equivalents including restricted cash
Net decrease for the period	(37,542)	(15,335)
Beginning of period	611,672	572,664
End of period	574,130	557,329
Supplemental cash flow information
Cash paid for income taxes	47,207	63,801
Cash paid for interest	857	241
Non-cash investing and financing activity
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	760	0
Furniture, equipment, software and leasehold improvement additions included in accounts payable	485	0
Stock-based and accrued incentive compensation relating to capitalized software development costs	2,431	0
Exercise of stock options - cashless	1,735	0
Trading Investments [Member]
Changes in operating assets and liabilities:
Decrease/(increase) in trading investments	155	471
Mutual Funds Held In Rabbi Trust [Member]
Changes in operating assets and liabilities:
Decrease/(increase) in trading investments	$ (698)	$ (1,024)

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 64,938	$ 72,615	$ 59,859	$ 73,628	$ 137,553	$ 133,487

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Organization and Principal Business Activity

6 Months Ended

Jun. 30, 2024

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: CP+™ 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 post-trade matching, trade publication, regulatory transaction reporting and market and reference data across a range of fixed-income and other products.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

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, 2023. The consolidated financial information as of December 31, 2023 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 and securities sold, not yet purchased 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 securities sold, not yet purchased. 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 the estimated expected credit losses in 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 June 30, 2024 and December 31, 2023. The provision for bad debts for each of the three and six months ended June 30, 2024 and 2023 was $0.1 million. Write-offs and other charges against the allowance for credit losses were immaterial for each of the three and six months ended June 30, 2024 and 2023.

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 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.

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.

Following its acquisition of Pragma LLC and Pragma Financial Systems LLC (collectively, “Pragma”) in the fourth quarter of 2023, the Company also earns other commissions on equities and foreign exchange products for algorithmic trading services. These fees incorporate variable transaction fees, which are calculated as a percentage of the notional dollar volume traded and are billed on a monthly basis.

The following table presents commission revenue by fee type:

		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$		86,778	$		78,424	$		181,556	$		166,552
Open Trading – matched principal trading			42,439			41,606			90,619			95,842
U.S. government bonds - matched principal trading			4,147			3,227			7,859			8,091
Other			5,076			—			9,925			—
Total variable transaction fees			138,440			123,257			289,959			270,485
Distribution fees and unused minimum fees			33,239			35,329			66,593			70,092
Total commissions	$		171,679	$		158,586	$		356,552	$		340,577

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	12,103	$	11,487	$	23,977	$	22,146
Services transferred at a point in time		441		168		448		519
Total information services revenues	$	12,544	$	11,655	$	24,425	$	22,665

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	10,358	$	9,397	$	20,898	$	19,352
Services transferred at a point in time		42		18		232		43
Total post-trade services revenues	$	10,400	$	9,415	$	21,130	$	19,395

Technology services – Technology services revenue primarily includes technology services revenue generated by Pragma and revenue from telecommunications line charges to broker-dealer clients. Customers may be billed monthly or quarterly in arrears or in advance, and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Technology services revenue by timing of recognition
Services transferred over time	$	3,024	$	190	$	5,853	$	378
Services transferred at a point in time		13		—		18		—
Total technology services revenues	$	3,037	$	190	$	5,871	$	378

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, 2023			Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2024
		(In thousands)
Information services	$		3,049	$	7,158	$	(7,176	)	$	—		$	3,031
Post-trade services			923		11,671		(10,871	)		(6	)		1,717
Technology services			567		4,101		(4,248	)		—			420
Total deferred revenue	$		4,539	$	22,930	$	(22,295	)	$	(6	)	$	5,168

The majority of the Company’s information services and post-trade services contracts are short-term in nature with durations of one year or less. For contracts with original durations extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $63.4 million as of June 30, 2024. The Company expects to recognize revenue associated with the remaining performance obligations over the next 52 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, revenue growth rates, customer attrition rates, royalty rates, obsolescence and asset lives. Intangible assets are valued using various methodologies, including the relief-from-royalty method and multi-period excess earnings method.

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.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation and income taxes paid. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The guidance may be applied on a prospective or retrospective basis and early adoption is permitted. Adoption of this ASU will result in additional disclosures, but will not have an impact on the Company’s consolidated statements of financial condition, operations and cash flows.

In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU also requires the disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. All disclosure requirements under ASU 2023-07 and existing segment disclosures in ASC 280, Segment Reporting are also required for public entities with a single reportable segment. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The ASU must be applied retrospectively to all periods presented in the financial statements. Adoption of this ASU will result in additional disclosures, but will not have an impact on the Company’s consolidated statements of financial condition, operations and cash flows.

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Regulatory Capital Requirements

6 Months Ended

Jun. 30, 2024

Broker-Dealer [Abstract]

Regulatory Capital Requirements

3. Regulatory Capital Requirements

Certain of the Company’s U.S. subsidiaries are registered as broker-dealers and therefore are subject to the applicable rules and regulations of the SEC and the Financial Industry Regulatory Authority (“FINRA”). 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 United Kingdom (“U.K.”) or other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of June 30, 2024, each of the Company’s subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of June 30, 2024, the Company’s subsidiaries maintained aggregate net capital and financial resources that were $565.6 million in excess of the required levels of $35.8 million.

One of the Company’s U.S. broker-dealer subsidiaries is required to segregate funds in a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of June 30, 2024, this U.S. broker-dealer subsidiary had a balance of $46.1 million in its special reserve bank account. This U.S. broker-dealer subsidiary also maintained net capital that was $318.9 million in excess of the required level of $4.4 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

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

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

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2024
Assets
Money market funds	$	25,220	$	—	$	—	$	25,220
Securities available-for-sale
Corporate debt		—		25,198		—		25,198
Trading securities
U.S. Treasuries		—		99,527		—		99,527
Mutual funds held in rabbi trust		—		11,183		—		11,183
Foreign currency forward position		—		500		—		500
Total assets	$	25,220	$	136,408	$	—	$	161,628
Liabilities
Securities sold, not yet purchased		—		9,167		—		9,167
Total liabilities	$	—	$	9,167	$	—	$	9,167
As of December 31, 2023
Assets
Money market funds	$	18,634	$	—	$	—	$	18,634
Securities available-for-sale
Corporate debt		—		24,694		—		24,694
Trading securities
U.S. Treasuries		—		99,682		—		99,682
Mutual funds held in rabbi trust		—		10,485		—		10,485
Foreign currency forward position		—		1,901		—		1,901
Total assets	$	18,634	$	136,762	$	—	$	155,396

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 included in either other assets or accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition, and 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. Securities sold, not yet purchased reflects a short U.S. Treasury inventory position held overnight in relation to the Company’s U.S. broker dealer subsidiary’s self-clearing operations.

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 June 30, 2024
Financial assets not measured at fair value:
Cash	$	408,843	$	408,843	$	408,843	$	—	$	—	$	408,843
Cash segregated under federal regulations		46,141		46,141		46,141		—		—		46,141
Accounts receivable, net of allowance		92,350		92,350		—		92,350		—		92,350
Receivables from broker-dealers, clearing    organizations and customers		577,992		577,992		93,754		484,238		—		577,992
Total	$	1,125,326	$	1,125,326	$	548,738	$	576,588	$	—	$	1,125,326
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	392,846	$	392,846	$	—	$	392,846	$	—	$	392,846
As of December 31, 2023
Financial assets not measured at fair value:
Cash	$	432,646	$	432,646	$	432,646	$	—	$	—	$	432,646
Cash segregated under federal regulations		45,122		45,122		45,122		—		—		45,122
Accounts receivable, net of allowance		89,839		89,839		—		89,839		—		89,839
Receivables from broker-dealers, clearing    organizations and customers		687,936		687,936		115,151		572,785		—		687,936
Total	$	1,255,543	$	1,255,543	$	592,919	$	662,624	$	—	$	1,255,543
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	537,398	$	537,398	$	—	$	537,398	$	—	$	537,398

During the three and six months ended June 30, 2024 and 2023, there were no transfers of securities between Level 1, Level 2 and Level 3.

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 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
	June 30, 2024		December 31, 2023
	(In thousands)
Notional value	$	62,730	$	61,858
Fair value of notional		63,230		63,759
Fair value of the asset	$	500	$	1,901

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 loss of $0.7 million and a net realized gain of $1.6 million for the three months ended June 30, 2024 and 2023, respectively, and a net realized gain of $0.6 million and a net realized loss of $0.1 million for the six months ended June 30, 2024 and 2023, respectively. The Company recorded a net unrealized gain of $0.7 million and a net unrealized loss of $0.2 million for the three months ended June 30, 2024 and 2023, respectively, and a net unrealized loss of $1.4 million and net unrealized gain $2.3 million for the six months ended June 30, 2024 and 2023, respectively. The Company records collateral deposits with its counterparty bank in prepaid expenses and other assets on the Consolidated Statements of Financial Condition. As of June 30, 2024, the Company did not maintain a collateral deposit with its counterparty bank.

The following table summarizes the Company’s investments and securities positions:

	Amortized cost			Gross unrealized gains		Gross unrealized losses			Fair value
		(In thousands)
As of June 30, 2024
Securities available-for-sale
Corporate debt	$		25,300	$	19	$	(121	)	$	25,198
Trading securities
U.S. Treasuries			99,877		—		(350	)		99,527
Mutual funds held in rabbi trust			10,315		878		(10	)		11,183
Total investments	$		135,492	$	897	$	(481	)	$	135,908
Securities sold, not yet purchased
U.S. Treasuries	$		9,211	$	44	$	—		$	9,167
As of December 31, 2023
Securities available-for-sale
Corporate debt	$		24,705	$	55	$	(66	)	$	24,694
Trading securities
U.S. Treasuries			99,236		446		—			99,682
Mutual funds held in rabbi trust			10,962		172		(649	)		10,485
Total investments	$		134,903	$	673	$	(715	)	$	134,861

Purchases of investments during the six months ended June 30, 2024 and 2023 were $7.9 million and $51.6 million, respectively. Proceeds from the sales and maturities of investments during the six months ended June 30, 2024 and 2023 were $7.5 million and $27.0 million, respectively.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	(In thousands)
Unrealized gains/(losses)
Securities available-for-sale
Corporate debt	$	(18	)	$	(168	)	$	(91	)	$	(223	)
Trading securities
U.S. Treasuries		262			(766	)		7			(346	)
Mutual funds held in rabbi trust		671			520			1,345			1,105
Total investments	$	915		$	(414	)	$	1,261		$	536
Liabilities:
Securities sold, not yet purchased	$	44		$	—		$	44		$	—
Realized gains/(losses)
Securities available-for-sale
Corporate debt	$	—		$	—		$	2		$	(17	)
Trading securities
Mutual funds held in rabbi trust		(412	)		(59	)		(377	)		(59	)
Total investments	$	(412	)	$	(59	)	$	(375	)	$	(76	)

Unrealized gains and losses on securities available-for-sale are included in accumulated other comprehensive loss on the Consolidated Statements of Financial Condition. Realized gains and losses on securities available-for-sale and realized and unrealized gains and losses on trading securities are included in other, net on the Consolidated Statements of Operations.

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 June 30, 2024
Securities available-for-sale
Corporate debt	$	10,637	$	14,561	$	25,198
Trading securities
U.S. Treasuries		74,615		24,912		99,527
Mutual funds held in rabbi trust		11,183		—		11,183
Total	$	96,435	$	39,473	$	135,908
As of December 31, 2023
Securities available-for-sale
Corporate debt	$	10,727	$	13,967	$	24,694
Trading securities
U.S. Treasuries		49,756		49,926		99,682
Mutual funds held in rabbi trust		10,485		—		10,485
Total	$	70,968	$	63,893	$	134,861

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 positions:

	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 June 30, 2024
Corporate debt	$	8,645	$	(41	)	$	11,635	$	(79	)	$	20,280	$	(121	)
As of December 31, 2023
Corporate debt	$	17,658	$	(66	)	$	—	$	—		$	17,658	$	(66	)

During the three and six months ended June 30, 2024 and 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

6 Months Ended

Jun. 30, 2024

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:

	As of
	June 30, 2024		December 31, 2023
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	135,313	$	282,125
Securities failed-to-deliver – customers		333,048		284,322
Cash deposits with clearing organizations and broker-dealers		93,754		115,151
Other		15,877		6,338
Total	$	577,992	$	687,936
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	226,163	$	125,022
Securities failed-to-receive – customers		157,822		405,186
Other		8,861		7,190
Total	$	392,846	$	537,398

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Acquisitions and Equity Investments

6 Months Ended

Jun. 30, 2024

Business Combinations [Abstract]

Acquisitions and Equity Investments

6. Acquisitions and Equity Investments

Acquisition of Pragma

On October 2, 2023, the Company completed its acquisition (the “Pragma Acquisition”) of all of the outstanding ownership interests of Pragma LLC and Pragma Financial Systems LLC (collectively “Pragma”) pursuant to the terms and conditions of a Membership Interest Purchase Agreement entered into among the Company, Pragma Weeden Holdings LLC, Pragma Financial Systems LLC, Pragma LLC and, solely for certain limited purposes, David Mechner, Pragma’s chief executive officer, on August 5, 2023 (the “Purchase Agreement”). Following customary adjustments for cash, debt, transaction expenses and working capital, the aggregate purchase price for the Pragma Acquisition was $125.0 million, comprised of approximately $81.2 million in cash and 224,776 shares of common stock of the Company, valued at approximately $43.8 million as of the closing date of the Pragma Acquisition, as described below. A portion of the stock consideration, amounting to 8,603 shares of common stock, was placed in escrow for 12 months to secure the sellers’ indemnification obligations under the Purchase Agreement. In addition, pursuant to the Purchase Agreement and subject to certain exceptions, the sellers and their affiliates were prohibited from transferring any of the Company common stock received in the Pragma Acquisition for a period of six months following the October 2, 2023 closing date. The value ascribed to the shares by the Company was discounted from the market value on the date of closing to reflect the non-marketability of such shares during the restriction period.

Pragma is a quantitative trading technology provider specializing in algorithmic and analytical services. Pragma LLC is a registered broker-dealer. The Company has performed an allocation of the purchase price to the fair value of assets acquired and liabilities assumed at the date of acquisition. The Company utilized an independent third-party to assist in determining the fair value of the acquired intangible assets. The purchase price allocation is as follows (in thousands):

Purchase price	$	125,002
Less: acquired cash		(2,685	)
Purchase price, net of acquired cash		122,317
Intangible assets		(38,900	)
Accounts receivable		(2,637	)
Prepaid expenses and other assets		(4,181	)
Accounts payable, accrued expenses and other liabilities		5,318
Goodwill	$	81,917

The acquired developed technology and customer relationships intangible assets were valued using the relief-from-royalty method and multi-period excess earnings method, respectively. The fair values of the intangible assets acquired are as follows (in thousands, except for useful lives):

	Costs		Useful Lives
Developed technology	$	28,500	7 years
Customer relationships		9,200	15 years
Tradename - finite life		1,200	15 years
Total	$	38,900

The goodwill recognized in connection with the Pragma Acquisition is primarily attributable to the acquisition of an assembled workforce and expected future technology and synergies from the integration of the operations of Pragma into the Company’s operations. All of the goodwill recognized in connection with the Pragma Acquisition is expected to be deductible for income tax purposes.

Pro forma financial information and current period results for the Pragma Acquisition were not material to the Company’s consolidated financial statements and therefore have not been presented.

RFQ Hub LLC Equity Investment

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 June 30, 2024, the Company’s investment is recorded at carrying value of $37.0 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 is recorded within equity in earnings of unconsolidated affiliate on the Consolidated Statements of Operations and was $0.4 million and $0.3 million for the three months ended June 30, 2024 and 2023, respectively, and $0.7 million and $0.5 million for the six months ended June 30, 2024 and 2023, respectively.

Under a services agreement, the Company charges its equity method investee for certain reimbursable support costs incurred by the Company, including personnel compensation, and certain operational overhead costs. The amounts billed for the three and six months ended June 30, 2024 were $0.5 million and $1.0 million, respectively, and are included within other, net on the Consolidated Statements of Operations. The receivable from the equity method investee was $1.0 million as of June 30, 2024 and is included within accounts receivable, net on the Consolidated Statements of Financial Condition.

On April 19, 2024, the Company entered into an agreement to acquire an additional 49.0% interest in RFQ–hub Holdings LLC for approximately $37.9 million of cash consideration. The acquisition is subject to various closing conditions, including the receipt of certain regulatory approvals. The acquisition is expected to close during the second half of 2024. Upon the closing of the acquisition, the Company will hold a 92.0% controlling stake in RFQ-hub Holdings LLC.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives were $236.7 million as of each of June 30, 2024 and December 31, 2023. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

	June 30, 2024							December 31, 2023
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	139,178	$	(57,973	)	$	81,205	$	140,348	$	(50,987	)	$	89,361
Technology and other intangibles		41,130		(13,915	)		27,215		41,130		(11,383	)		29,747
Total	$	180,308	$	(71,888	)	$	108,420	$	181,478	$	(62,370	)	$	119,108

Amortization expense associated with identifiable intangible assets was $5.0 million and $4.5 million for the three months ended June 30, 2024 and 2023, respectively, and $10.0 million and $8.6 million for the six months ended June 30, 2024 and 2023. Annual estimated total amortization expense is $19.8 million, $16.9 million, $15.2 million, $13.8 million and $12.3 million for the years ended December 31, 2024 through 2028, respectively.

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Income Taxes

6 Months Ended

Jun. 30, 2024

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 24.8% and 24.2% for the three months ended June 30, 2024 and 2023, respectively, and 24.9% and 24.6% for the six months ended June 30, 2024 and 2023, respectively. 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 2020 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 2020.

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Stock-Based Compensation Plans

6 Months Ended

Jun. 30, 2024

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 restricted stock, restricted stock units, performance shares, performance stock units (collectively, “full value awards”), stock options and other stock-based awards as incentives to encourage employees, consultants and non-employee directors to participate in the long-term success of the Company. As of June 30, 2024, there were 2,468,562 shares available for grant under the 2020 Plan.

Total stock-based compensation expense was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Employees	$	7,929	$	6,647	$	14,822	$	13,747
Non-employee directors		399		243		804		631
Total stock-based compensation	$	8,328	$	6,890	$	15,626	$	14,378

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. Total stock-based compensation for employees includes $0.3 million and $0.2 million of capitalized software development costs for the three months ended June 30, 2024 and 2023, respectively, and $0.5 million and $0.4 million of capitalized software development costs for the six months ended June 30, 2024 and 2023, respectively.

During the six months ended June 30, 2024, the Company granted (i) 143,975 restricted stock units, (ii) 20,793 stock options and (iii) performance stock units with an expected pay-out at target of 32,608 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 $218.48 and $219.32, respectively. The weighted-average fair value for stock options of $77.16 per share was based on the Black-Scholes option pricing model.

As of June 30, 2024, the total unrecognized compensation cost related to all non-vested awards was $60.7 million. That cost is expected to be recognized over a weighted-average period of 2.2 years.

Employee Stock Purchase Plan

The Company maintains the MarketAxess Holdings Inc. 2022 Employee Stock Purchase Plan (the “ESPP”), pursuant to which a total of 121,221 shares of the Company’s common stock is available for purchase by employees. The Company issued 3,756 shares of common stock on February 15, 2024 under the ESPP. As of June 30, 2024, there were 112,810 shares available for purchase under the ESPP.

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Earnings Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share

10. Earnings Per Share

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,655		37,485		37,698		37,482
Dilutive effect of stock options and full value awards		34		103		42		135
Diluted weighted average shares outstanding		37,689		37,588		37,740		37,617
Basic earnings per share	$	1.72	$	1.60	$	3.65	$	3.56
Diluted earnings per share		1.72		1.59		3.64		3.55

Stock options and full value awards totaling 445,089 shares and 240,079 shares for the three months ended June 30, 2024 and 2023, respectively, and 508,117 shares and 209,614 shares for the six months ended June 30, 2024 and 2023, respectively, were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. The computation of diluted shares can vary among periods due, in part, to the change in the average price of the Company’s common stock.

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Credit Agreements and Short-term Financing

6 Months Ended

Jun. 30, 2024

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, including 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, but was replaced by the 2023 Credit Agreement (as defined below).

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 $0.1 million of interest expense under the 2021 Credit Agreement for each of the three and six months ended June 30, 2023.

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, including 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 June 30, 2024, 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 Secured Overnight Financing Rate (“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 $0.2 million of interest expense under the 2023 Credit Agreement for each of the three and six months ended June 30, 2024.

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 did not incur any interest expense on borrowings under such agreements during the three months ended June 30, 2024 and 2023, and the six months ended June 30, 2024. The Company incurred $0.1 million of interest expense during the six months ended June 30, 2023. As of June 30, 2024, 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 $0.5 million and $0.1 million during the three months ended June 30, 2024 and 2023, respectively, and $0.8 million and $0.1 million during the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the Company had no overdrafts payable outstanding.

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Leases

6 Months Ended

Jun. 30, 2024

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 Company also has operating and finance leases for equipment with initial lease terms ranging from one-year to 5 years.

The following table presents the components of operating lease expense for the three and six months ended June 30, 2024 and 2023:

		Three Months Ended June 30,				Six Months Ended June 30,
Lease cost:	Classification	2024		2023		2024		2023
		(In thousands)
Operating lease cost - office space	Occupancy	$	2,750	$	2,882	$	5,504	$	5,993
Operating lease cost - equipment	Technology and communications		98		—		195		—
Variable lease costs	Occupancy		882		347		1,469		398
Total operating lease cost		$	3,730	$	3,229	$	7,168	$	6,391

Finance lease expense was $0.1 million for each of the three and six months ended June 30, 2024.

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

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

	As of
Lease Term and Discount Rate	June 30, 2024			December 31, 2023
Weighted average remaining lease term (in years) - operating leases		9.2			9.6
Weighted average discount rate - operating leases		6.0	%		6.0	%
Weighted average remaining lease term (in years) - finance leases		1.3			1.8
Weighted average discount rate - finance leases		7.2	%		7.2	%

The following table presents the maturity of lease liabilities as of June 30, 2024:

	Operating Leases		Finance Leases
	(In thousands)
Remainder of 2024	$	6,548	$	59
2025		12,351		88
2026		11,765		—
2027		9,010		—
2028		8,615		—
2029 and thereafter		51,306		—
Total lease payments		99,595		147
Less: imputed interest		23,514		7
Present value of lease liabilities	$	76,081	$	140

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

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 six months ended June 30, 2024 and 2023.

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

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Share Repurchase Programs

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Share Repurchase Programs

14. Share Repurchase Programs

In January 2022, the Board of Directors authorized a share repurchase program for up to $150.0 million that commenced in March 2022 (the “2022 Repurchase Program”). During the six months ended June 30, 2024, the Company repurchased 211,255 shares of common stock under the 2022 Repurchase Program at a cost of $43.6 million. In August 2024, the Board of Directors authorized a new share repurchase program for up to $200.0 million (the “2024 Repurchase Program and, together with the 2022 Repurchase Program, the “Repurchase Programs”), in addition to the $50.0 million currently remaining under the 2022 Repurchase Program. Shares repurchased under the Repurchase Programs will be held in treasury for future use.

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Segment and Geographic Information

6 Months Ended

Jun. 30, 2024

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, post-trade services and technology services. The Company considers its operations to constitute a single business segment because of the highly integrated nature of these products and services, the financial markets in which the Company competes and the Company’s worldwide business activities. The Company believes that results by geographic region or client sector are not necessarily meaningful in understanding its business.

For the six months ended June 30, 2024 and 2023, 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 six months ended June 30, 2024 and 2023, and long-lived assets as of June 30, 2024 and December 31, 2023 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Revenues
Americas	$	156,538	$	141,999	$	323,371	$	303,572
Europe		35,863		33,518		73,591		70,254
Asia		5,259		4,329		11,016		9,189
Total	$	197,660	$	179,846	$	407,978	$	383,015

	As of
	June 30, 2024			December 31, 2023
		(In thousands)
Long-lived assets, as defined
Americas	$		93,870	$	87,513
Europe			14,637		14,717
Asia			295		441
Total	$		108,802	$	102,671

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Cash and Cash Equivalents and Restricted Cash

6 Months Ended

Jun. 30, 2024

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:

		As of
	Statement of Financial Condition Location	June 30, 2024		December 31, 2023
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	434,063	$	451,280
Cash segregated for regulatory    purposes	Cash segregated under federal    regulations		46,141		45,122
Cash deposits with clearing organizations    and broker-dealers	Receivables from broker-dealers,    clearing organizations    and customers		93,754		115,151
Other cash deposits	Prepaid expenses and other assets		172		119
Total		$	574,130	$	611,672

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

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, 2023. The consolidated financial information as of December 31, 2023 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 and securities sold, not yet purchased 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 securities sold, not yet purchased. 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 the estimated expected credit losses in 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 June 30, 2024 and December 31, 2023. The provision for bad debts for each of the three and six months ended June 30, 2024 and 2023 was $0.1 million. Write-offs and other charges against the allowance for credit losses were immaterial for each of the three and six months ended June 30, 2024 and 2023.

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 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.

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.

Following its acquisition of Pragma LLC and Pragma Financial Systems LLC (collectively, “Pragma”) in the fourth quarter of 2023, the Company also earns other commissions on equities and foreign exchange products for algorithmic trading services. These fees incorporate variable transaction fees, which are calculated as a percentage of the notional dollar volume traded and are billed on a monthly basis.

The following table presents commission revenue by fee type:

		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$		86,778	$		78,424	$		181,556	$		166,552
Open Trading – matched principal trading			42,439			41,606			90,619			95,842
U.S. government bonds - matched principal trading			4,147			3,227			7,859			8,091
Other			5,076			—			9,925			—
Total variable transaction fees			138,440			123,257			289,959			270,485
Distribution fees and unused minimum fees			33,239			35,329			66,593			70,092
Total commissions	$		171,679	$		158,586	$		356,552	$		340,577

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	12,103	$	11,487	$	23,977	$	22,146
Services transferred at a point in time		441		168		448		519
Total information services revenues	$	12,544	$	11,655	$	24,425	$	22,665

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	10,358	$	9,397	$	20,898	$	19,352
Services transferred at a point in time		42		18		232		43
Total post-trade services revenues	$	10,400	$	9,415	$	21,130	$	19,395

Technology services – Technology services revenue primarily includes technology services revenue generated by Pragma and revenue from telecommunications line charges to broker-dealer clients. Customers may be billed monthly or quarterly in arrears or in advance, and revenue is recognized in the period transactions are processed. Revenues billed in advance are deferred and recognized ratably over the contract period.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Technology services revenue by timing of recognition
Services transferred over time	$	3,024	$	190	$	5,853	$	378
Services transferred at a point in time		13		—		18		—
Total technology services revenues	$	3,037	$	190	$	5,871	$	378

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, 2023			Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2024
		(In thousands)
Information services	$		3,049	$	7,158	$	(7,176	)	$	—		$	3,031
Post-trade services			923		11,671		(10,871	)		(6	)		1,717
Technology services			567		4,101		(4,248	)		—			420
Total deferred revenue	$		4,539	$	22,930	$	(22,295	)	$	(6	)	$	5,168

The majority of the Company’s information services and post-trade services contracts are short-term in nature with durations of one year or less. For contracts with original durations extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations was $63.4 million as of June 30, 2024. The Company expects to recognize revenue associated with the remaining performance obligations over the next 52 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, revenue growth rates, customer attrition rates, royalty rates, obsolescence and asset lives. Intangible assets are valued using various methodologies, including the relief-from-royalty method and multi-period excess earnings method.

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.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation and income taxes paid. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The guidance may be applied on a prospective or retrospective basis and early adoption is permitted. Adoption of this ASU will result in additional disclosures, but will not have an impact on the Company’s consolidated statements of financial condition, operations and cash flows.

In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU also requires the disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. All disclosure requirements under ASU 2023-07 and existing segment disclosures in ASC 280, Segment Reporting are also required for public entities with a single reportable segment. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The ASU must be applied retrospectively to all periods presented in the financial statements. Adoption of this ASU will result in additional disclosures, but will not have an impact on the Company’s consolidated statements of financial condition, operations and cash flows.

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Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Commission Revenue by Fee Type

The following table presents commission revenue by fee type:

		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
	(In thousands)
Commission revenue by fee type
Variable transaction fees
Disclosed trading	$		86,778	$		78,424	$		181,556	$		166,552
Open Trading – matched principal trading			42,439			41,606			90,619			95,842
U.S. government bonds - matched principal trading			4,147			3,227			7,859			8,091
Other			5,076			—			9,925			—
Total variable transaction fees			138,440			123,257			289,959			270,485
Distribution fees and unused minimum fees			33,239			35,329			66,593			70,092
Total commissions	$		171,679	$		158,586	$		356,552	$		340,577

Summary of Information Services Revenue by Timing of Recognition

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Information services revenue by timing of recognition
Services transferred over time	$	12,103	$	11,487	$	23,977	$	22,146
Services transferred at a point in time		441		168		448		519
Total information services revenues	$	12,544	$	11,655	$	24,425	$	22,665

Summary of Post-Trade Services Revenue by Timing of Recognition

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Post-trade services revenue by timing of recognition
Services transferred over time	$	10,358	$	9,397	$	20,898	$	19,352
Services transferred at a point in time		42		18		232		43
Total post-trade services revenues	$	10,400	$	9,415	$	21,130	$	19,395

Summary of Technology Services Revenue by Timing of Recognition

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Technology services revenue by timing of recognition
Services transferred over time	$	3,024	$	190	$	5,853	$	378
Services transferred at a point in time		13		—		18		—
Total technology services revenues	$	3,037	$	190	$	5,871	$	378

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, 2023			Payments received in advance of services to be performed		Revenue recognized for services performed during the period			Foreign Currency Translation			June 30, 2024
		(In thousands)
Information services	$		3,049	$	7,158	$	(7,176	)	$	—		$	3,031
Post-trade services			923		11,671		(10,871	)		(6	)		1,717
Technology services			567		4,101		(4,248	)		—			420
Total deferred revenue	$		4,539	$	22,930	$	(22,295	)	$	(6	)	$	5,168

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

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

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

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of June 30, 2024
Assets
Money market funds	$	25,220	$	—	$	—	$	25,220
Securities available-for-sale
Corporate debt		—		25,198		—		25,198
Trading securities
U.S. Treasuries		—		99,527		—		99,527
Mutual funds held in rabbi trust		—		11,183		—		11,183
Foreign currency forward position		—		500		—		500
Total assets	$	25,220	$	136,408	$	—	$	161,628
Liabilities
Securities sold, not yet purchased		—		9,167		—		9,167
Total liabilities	$	—	$	9,167	$	—	$	9,167
As of December 31, 2023
Assets
Money market funds	$	18,634	$	—	$	—	$	18,634
Securities available-for-sale
Corporate debt		—		24,694		—		24,694
Trading securities
U.S. Treasuries		—		99,682		—		99,682
Mutual funds held in rabbi trust		—		10,485		—		10,485
Foreign currency forward position		—		1,901		—		1,901
Total assets	$	18,634	$	136,762	$	—	$	155,396

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 June 30, 2024
Financial assets not measured at fair value:
Cash	$	408,843	$	408,843	$	408,843	$	—	$	—	$	408,843
Cash segregated under federal regulations		46,141		46,141		46,141		—		—		46,141
Accounts receivable, net of allowance		92,350		92,350		—		92,350		—		92,350
Receivables from broker-dealers, clearing    organizations and customers		577,992		577,992		93,754		484,238		—		577,992
Total	$	1,125,326	$	1,125,326	$	548,738	$	576,588	$	—	$	1,125,326
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	392,846	$	392,846	$	—	$	392,846	$	—	$	392,846
As of December 31, 2023
Financial assets not measured at fair value:
Cash	$	432,646	$	432,646	$	432,646	$	—	$	—	$	432,646
Cash segregated under federal regulations		45,122		45,122		45,122		—		—		45,122
Accounts receivable, net of allowance		89,839		89,839		—		89,839		—		89,839
Receivables from broker-dealers, clearing    organizations and customers		687,936		687,936		115,151		572,785		—		687,936
Total	$	1,255,543	$	1,255,543	$	592,919	$	662,624	$	—	$	1,255,543
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	537,398	$	537,398	$	—	$	537,398	$	—	$	537,398

Summary of Foreign Currency Forward Contracts

The following table summarizes the Company’s foreign currency forward position:

	As of
	June 30, 2024		December 31, 2023
	(In thousands)
Notional value	$	62,730	$	61,858
Fair value of notional		63,230		63,759
Fair value of the asset	$	500	$	1,901

Summary of Company's Investments and Securities Positions

The following table summarizes the Company’s investments and securities positions:

	Amortized cost			Gross unrealized gains		Gross unrealized losses			Fair value
		(In thousands)
As of June 30, 2024
Securities available-for-sale
Corporate debt	$		25,300	$	19	$	(121	)	$	25,198
Trading securities
U.S. Treasuries			99,877		—		(350	)		99,527
Mutual funds held in rabbi trust			10,315		878		(10	)		11,183
Total investments	$		135,492	$	897	$	(481	)	$	135,908
Securities sold, not yet purchased
U.S. Treasuries	$		9,211	$	44	$	—		$	9,167
As of December 31, 2023
Securities available-for-sale
Corporate debt	$		24,705	$	55	$	(66	)	$	24,694
Trading securities
U.S. Treasuries			99,236		446		—			99,682
Mutual funds held in rabbi trust			10,962		172		(649	)		10,485
Total investments	$		134,903	$	673	$	(715	)	$	134,861

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 June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	(In thousands)
Unrealized gains/(losses)
Securities available-for-sale
Corporate debt	$	(18	)	$	(168	)	$	(91	)	$	(223	)
Trading securities
U.S. Treasuries		262			(766	)		7			(346	)
Mutual funds held in rabbi trust		671			520			1,345			1,105
Total investments	$	915		$	(414	)	$	1,261		$	536
Liabilities:
Securities sold, not yet purchased	$	44		$	—		$	44		$	—
Realized gains/(losses)
Securities available-for-sale
Corporate debt	$	—		$	—		$	2		$	(17	)
Trading securities
Mutual funds held in rabbi trust		(412	)		(59	)		(377	)		(59	)
Total investments	$	(412	)	$	(59	)	$	(375	)	$	(76	)

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 June 30, 2024
Securities available-for-sale
Corporate debt	$	10,637	$	14,561	$	25,198
Trading securities
U.S. Treasuries		74,615		24,912		99,527
Mutual funds held in rabbi trust		11,183		—		11,183
Total	$	96,435	$	39,473	$	135,908
As of December 31, 2023
Securities available-for-sale
Corporate debt	$	10,727	$	13,967	$	24,694
Trading securities
U.S. Treasuries		49,756		49,926		99,682
Mutual funds held in rabbi trust		10,485		—		10,485
Total	$	70,968	$	63,893	$	134,861

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 positions:

	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 June 30, 2024
Corporate debt	$	8,645	$	(41	)	$	11,635	$	(79	)	$	20,280	$	(121	)
As of December 31, 2023
Corporate debt	$	17,658	$	(66	)	$	—	$	—		$	17,658	$	(66	)

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

6 Months Ended

Jun. 30, 2024

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:

	As of
	June 30, 2024		December 31, 2023
Receivables from broker-dealers, clearing organizations and customers:	(In thousands)
Securities failed-to-deliver – broker-dealers and clearing organizations	$	135,313	$	282,125
Securities failed-to-deliver – customers		333,048		284,322
Cash deposits with clearing organizations and broker-dealers		93,754		115,151
Other		15,877		6,338
Total	$	577,992	$	687,936
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive – broker-dealers and clearing organizations	$	226,163	$	125,022
Securities failed-to-receive – customers		157,822		405,186
Other		8,861		7,190
Total	$	392,846	$	537,398

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Acquisitions and Equity Investments (Tables)

6 Months Ended

Jun. 30, 2024

Business Combinations [Abstract]

Summary of Purchase Price Allocation

The purchase price allocation is as follows (in thousands):

Purchase price	$	125,002
Less: acquired cash		(2,685	)
Purchase price, net of acquired cash		122,317
Intangible assets		(38,900	)
Accounts receivable		(2,637	)
Prepaid expenses and other assets		(4,181	)
Accounts payable, accrued expenses and other liabilities		5,318
Goodwill	$	81,917

Summary of Fair Value of Acquired Intangible Assets

The fair values of the intangible assets acquired are as follows (in thousands, except for useful lives):

	Costs		Useful Lives
Developed technology	$	28,500	7 years
Customer relationships		9,200	15 years
Tradename - finite life		1,200	15 years
Total	$	38,900

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Company's Intangible Assets

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

	June 30, 2024							December 31, 2023
	Cost		Accumulated amortization			Net carrying amount		Cost		Accumulated amortization			Net carrying amount
	(In thousands)
Customer relationships	$	139,178	$	(57,973	)	$	81,205	$	140,348	$	(50,987	)	$	89,361
Technology and other intangibles		41,130		(13,915	)		27,215		41,130		(11,383	)		29,747
Total	$	180,308	$	(71,888	)	$	108,420	$	181,478	$	(62,370	)	$	119,108

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Stock-Based Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Expense

Total stock-based compensation expense was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Employees	$	7,929	$	6,647	$	14,822	$	13,747
Non-employee directors		399		243		804		631
Total stock-based compensation	$	8,328	$	6,890	$	15,626	$	14,378

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

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

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands, except per share amounts)
Basic weighted average shares outstanding		37,655		37,485		37,698		37,482
Dilutive effect of stock options and full value awards		34		103		42		135
Diluted weighted average shares outstanding		37,689		37,588		37,740		37,617
Basic earnings per share	$	1.72	$	1.60	$	3.65	$	3.56
Diluted earnings per share		1.72		1.59		3.64		3.55

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Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Components of Operating Lease Expense

The following table presents the components of operating lease expense for the three and six months ended June 30, 2024 and 2023:

		Three Months Ended June 30,				Six Months Ended June 30,
Lease cost:	Classification	2024		2023		2024		2023
		(In thousands)
Operating lease cost - office space	Occupancy	$	2,750	$	2,882	$	5,504	$	5,993
Operating lease cost - equipment	Technology and communications		98		—		195		—
Variable lease costs	Occupancy		882		347		1,469		398
Total operating lease cost		$	3,730	$	3,229	$	7,168	$	6,391

Summary of Weighted Average Remaining Lease Term and Discount Rate

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

	As of
Lease Term and Discount Rate	June 30, 2024			December 31, 2023
Weighted average remaining lease term (in years) - operating leases		9.2			9.6
Weighted average discount rate - operating leases		6.0	%		6.0	%
Weighted average remaining lease term (in years) - finance leases		1.3			1.8
Weighted average discount rate - finance leases		7.2	%		7.2	%

Schedule of Maturity of Lease Liabilities

The following table presents the maturity of lease liabilities as of June 30, 2024:

	Operating Leases		Finance Leases
	(In thousands)
Remainder of 2024	$	6,548	$	59
2025		12,351		88
2026		11,765		—
2027		9,010		—
2028		8,615		—
2029 and thereafter		51,306		—
Total lease payments		99,595		147
Less: imputed interest		23,514		7
Present value of lease liabilities	$	76,081	$	140

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Segment and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Summary of Revenue and Long-lived Assets

Revenues for the three and six months ended June 30, 2024 and 2023, and long-lived assets as of June 30, 2024 and December 31, 2023 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In thousands)
Revenues
Americas	$	156,538	$	141,999	$	323,371	$	303,572
Europe		35,863		33,518		73,591		70,254
Asia		5,259		4,329		11,016		9,189
Total	$	197,660	$	179,846	$	407,978	$	383,015

	As of
	June 30, 2024			December 31, 2023
		(In thousands)
Long-lived assets, as defined
Americas	$		93,870	$	87,513
Europe			14,637		14,717
Asia			295		441
Total	$		108,802	$	102,671

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Cash and Cash Equivalents and Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2024

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:

		As of
	Statement of Financial Condition Location	June 30, 2024		December 31, 2023
		(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	434,063	$	451,280
Cash segregated for regulatory    purposes	Cash segregated under federal    regulations		46,141		45,122
Cash deposits with clearing organizations    and broker-dealers	Receivables from broker-dealers,    clearing organizations    and customers		93,754		115,151
Other cash deposits	Prepaid expenses and other assets		172		119
Total		$	574,130	$	611,672

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Organization and Principal Business Activity - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2024 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		6 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) Revenue	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Significant Accounting Policies [Line Items]
Allowance for credit losses	$ 609		$ 609		$ 577
Provision for bad debts	$ 100	$ 100	$ 100	$ 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
Maximum [Member] | Internally Developed Software [Member]
Significant Accounting Policies [Line Items]
Estimated life of intangible assets	5 years		5 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		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Commission revenue by fee type
Revenues	$ 197,660	$ 179,846	$ 407,978	$ 383,015
Commissions [Member]
Commission revenue by fee type
Disclosed trading	86,778	78,424	181,556	166,552
Open Trading - matched principal trading	42,439	41,606	90,619	95,842
Other Variable Transaction	5,076	0	9,925	0
Total variable transaction fees	138,440	123,257	289,959	270,485
Distribution fees and unused minimum fees	33,239	35,329	66,593	70,092
Revenues	171,679	158,586	356,552	340,577
Commissions [Member] | US Government Bonds [Member]
Commission revenue by fee type
Open Trading - matched principal trading	$ 4,147	$ 3,227	$ 7,859	$ 8,091

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Significant Accounting Policies - Summary of Information Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Significant Accounting Policies [Line Items]
Revenues	$ 197,660	$ 179,846	$ 407,978	$ 383,015
Information Services [Member]
Significant Accounting Policies [Line Items]
Revenues	12,544	11,655	24,425	22,665
Information Services [Member] | Transferred over Time [Member]
Significant Accounting Policies [Line Items]
Revenues	12,103	11,487	23,977	22,146
Information Services [Member] | Transferred at a Point in Time [Member]
Significant Accounting Policies [Line Items]
Revenues	$ 441	$ 168	$ 448	$ 519

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Significant Accounting Policies - Summary of Post-Trade Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Significant Accounting Policies [Line Items]
Revenues	$ 197,660	$ 179,846	$ 407,978	$ 383,015
Post-trade Services [Member]
Significant Accounting Policies [Line Items]
Revenues	10,400	9,415	21,130	19,395
Post-trade Services [Member] | Transferred over Time [Member]
Significant Accounting Policies [Line Items]
Revenues	10,358	9,397	20,898	19,352
Post-trade Services [Member] | Transferred at a Point in Time [Member]
Significant Accounting Policies [Line Items]
Revenues	$ 42	$ 18	$ 232	$ 43

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Significant Accounting Policies - Summary of Technology Services Revenue by Timing of Recognition (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Significant Accounting Policies [Line Items]
Revenues	$ 197,660	$ 179,846	$ 407,978	$ 383,015
Technology Services [Member]
Significant Accounting Policies [Line Items]
Revenues	3,037	190	5,871	378
Technology Services [Member] | Transferred over Time [Member]
Significant Accounting Policies [Line Items]
Revenues	3,024	190	5,853	378
Technology Services [Member] | Transferred at Point in Time [Member]
Significant Accounting Policies [Line Items]
Revenues	$ 13	$ 0	$ 18	$ 0

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Significant Accounting Policies - Summary of Revenue Recognized from Contract Liabilities and Remaining Balance (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	$ 4,539
Payments received in advance of services to be performed	22,930
Revenue recognized for services performed during the period	(22,295)
Foreign Currency Translation	(6)
Deferred revenues, ending balance	5,168
Information Services [Member]
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	3,049
Payments received in advance of services to be performed	7,158
Revenue recognized for services performed during the period	(7,176)
Deferred revenues, ending balance	3,031
Post-trade Services [Member]
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	923
Payments received in advance of services to be performed	11,671
Revenue recognized for services performed during the period	(10,871)
Foreign Currency Translation	(6)
Deferred revenues, ending balance	1,717
Technology Services [Member]
Significant Accounting Policies [Line Items]
Deferred revenues, beginning balance	567
Payments received in advance of services to be performed	4,101
Revenue recognized for services performed during the period	(4,248)
Deferred revenues, ending balance	$ 420

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Significant Accounting Policies - Additional Information (Detail 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-07-01 $ in Millions	Jun. 30, 2024 USD ($)
Significant Accounting Policies [Line Items]
Aggregate amount of transaction price allocated to remaining performance obligations	$ 63.4
Expected time to recognize revenue for remaining performance obligation	52 months

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Regulatory Capital Requirements - Additional Information (Detail) $ in Millions	Jun. 30, 2024 USD ($)
U.S. Subsidiaries
Brokers And Dealers [Line Items]
Aggregate net capital and financial resources in excess of required level	$ 565.6
Aggregate net capital and financial resources, minimum capital requirement	35.8
U.S. Broker-Dealer Subsidiaries
Brokers And Dealers [Line Items]
Aggregate net capital and financial resources in excess of required level	4.4
Aggregate net capital and financial resources, minimum capital requirement	318.9
Securities reserve deposit	$ 46.1

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Fair Value Measurements - Valuation of Company's Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Assets
Money market funds	$ 25,220	$ 18,634
Assets Fair Value Total	161,628	155,396
Liabilities
Securities sold, not yet purchased	9,167
Liabilities, Fair Value Disclosure, Total	9,167
Foreign Currency Forward Position [Member]
Assets
Foreign currency forward position	500	1,901
Mutual Funds Held In Rabbi Trust [Member]
Assets
Trading securities	11,183	10,485
Mutual funds held in rabbi trust	11,183	10,485
U.S. Treasuries [Member]
Assets
Trading securities	99,527	99,682
Liabilities
Securities sold, not yet purchased	9,167
Corporate Debt [Member]
Assets
Securities available-for-sale	25,198	24,694
Trading securities	25,198	24,694
Level 1 [Member]
Assets
Money market funds	25,220	18,634
Assets Fair Value Total	25,220	18,634
Level 2 [Member]
Assets
Assets Fair Value Total	136,408	136,762
Liabilities
Securities sold, not yet purchased	9,167
Liabilities, Fair Value Disclosure, Total	9,167
Level 2 [Member] | Foreign Currency Forward Position [Member]
Assets
Foreign currency forward position	500	1,901
Level 2 [Member] | Mutual Funds Held In Rabbi Trust [Member]
Assets
Mutual funds held in rabbi trust	11,183	10,485
Level 2 [Member] | U.S. Treasuries [Member]
Assets
Trading securities	99,527	99,682
Level 2 [Member] | Corporate Debt [Member]
Assets
Securities available-for-sale	$ 25,198	$ 24,694

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Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Proceeds from the sales and maturities of securities available-for-sale			$ 7,500,000	$ 27,000,000
Purchases of investments			7,900,000	51,600,000
Transfers between Level 1, Level 2 and Level 3 securities			0	0
Realized loss on investments	$ 700,000			100,000
Net realized gain		$ 1,600,000	600,000
Unrealized gain on investments	700,000			2,300,000
Net unrealized loss		200,000	1,400,000
Credit losses on available-for-sale securities	$ 0	$ 0	$ 0	$ 0

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Fair Value Measurements - Carrying Value of Financial Asset and Liability Not Measured at Fair Value (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financial assets not measured at fair value:
Financial assets not measured at fair value	$ 161,628	$ 155,396
Level 1 [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	25,220	18,634
Level 2 [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	136,408	136,762
Financial Assets and Liabilities not Measured [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	1,125,326	1,255,543
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	392,846	537,398
Financial Assets and Liabilities not Measured [Member] | Cash [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	408,843	432,646
Financial Assets and Liabilities not Measured [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	46,141	45,122
Financial Assets and Liabilities not Measured [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	92,350	89,839
Financial Assets and Liabilities not Measured [Member] | Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	577,992	687,936
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	548,738	592,919
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member] | Cash [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	408,843	432,646
Financial Assets and Liabilities not Measured [Member] | Level 1 [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	46,141	45,122
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:
Financial assets not measured at fair value	93,754	115,151
Financial Assets and Liabilities not Measured [Member] | Level 2 [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	576,588	662,624
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	392,846	537,398
Financial Assets and Liabilities not Measured [Member] | Level 2 [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	92,350	89,839
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:
Financial assets not measured at fair value	484,238	572,785
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	1,125,326	1,255,543
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	392,846	537,398
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Cash [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	408,843	432,646
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	46,141	45,122
Financial Assets and Liabilities not Measured [Member] | Carrying Value [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	92,350	89,839
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:
Financial assets not measured at fair value	577,992	687,936
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	1,125,326	1,255,543
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	392,846	537,398
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Cash [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	408,843	432,646
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Cash Segregated under Federal Regulations [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	46,141	45,122
Financial Assets and Liabilities not Measured [Member] | Fair Value [Member] | Accounts Receivable, Net of Allowance [Member]
Financial assets not measured at fair value:
Financial assets not measured at fair value	92,350	89,839
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:
Financial assets not measured at fair value	$ 577,992	$ 687,936

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Fair Value Measurements - Summary of Foreign Currency Forward Contracts (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Notional value	$ 62,730	$ 61,858
Fair value of notional	63,230	63,759
Fair value of the asset	$ 500	$ 1,901

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Fair Value Measurements - Summary of Company's Investments and Securities Positions (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Schedule Of Available For Sale Securities [Line Items]
Investments, Amortized cost	$ 135,492	$ 134,903
Investments, Gross unrealized gains	897	673
Investments, Gross unrealized losses	(481)	(715)
Investments, Fair value	135,908	134,861
Liabilities, Fair Value Disclosure [Abstract]
Securities sold, not yet purchased gross unrealized gains	44
Securities sold, not yet purchased gross unrealized losses			$ 0
Securities sold, not yet purchased, at fair value	9,167
U.S. Treasuries [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost	99,877	99,236
Trading securities, Gross unrealized gains		446
Trading securities, Gross unrealized losses	(350)
Trading securities, Fair value	99,527	99,682
Investments, Fair value	99,527	99,682
Liabilities, Fair Value Disclosure [Abstract]
Securities sold, not yet purchased amortized cost	9,211
Securities sold, not yet purchased gross unrealized gains	44
Securities sold, not yet purchased gross unrealized losses	0
Securities sold, not yet purchased, at fair value	9,167
Mutual Funds Held In Rabbi Trust [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost	10,315	10,962
Trading securities, Gross unrealized gains	878	172
Trading securities, Gross unrealized losses	(10)	(649)
Trading securities, Fair value	11,183	10,485
Investments, Fair value	11,183	10,485
Corporate Debt [Member]
Schedule Of Available For Sale Securities [Line Items]
Trading securities, Amortized cost	25,300	24,705
Trading securities, Gross unrealized gains	19	55
Trading securities, Gross unrealized losses	(121)	(66)
Trading securities, Fair value	25,198	24,694
Investments, Fair value	$ 25,198	$ 24,694

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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		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Gain (Loss) on Securities [Line Items]
Unrealized gains/(losses)	$ 915	$ (414)	$ 1,261	$ 536
Realized gains/(losses)	(412)	(59)	(375)	(76)
Liabilities, Fair Value Disclosure [Abstract]
Securities sold, not yet purchased gross unrealized gains	44		44
Securities sold, not yet purchased gross unrealized losses		0		0
Corporate Debt [Member]
Gain (Loss) on Securities [Line Items]
Unrealized gains/(losses)	(18)	(168)	(91)	(223)
Realized gains/(losses)	0	0	2	(17)
U.S. Treasuries [Member]
Gain (Loss) on Securities [Line Items]
Unrealized gains/(losses)	262	(766)	7	(346)
Liabilities, Fair Value Disclosure [Abstract]
Securities sold, not yet purchased gross unrealized gains	44		44
Securities sold, not yet purchased gross unrealized losses	0		0
Mutual Funds Held In Rabbi Trust [Member]
Gain (Loss) on Securities [Line Items]
Unrealized gains/(losses)	671	520	1,345	1,105
Realized gains/(losses)	$ (412)	$ (59)	$ (377)	$ (59)

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Fair Value Measurements - Summary of Fair Value of Investments Based upon Contractual Maturities (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale [Line Items]
Less than one year	$ 96,435	$ 70,968
Due in 1 - 5 years	39,473	63,893
Total	135,908	134,861
U.S. Treasuries [Member]
Debt Securities, Available-for-Sale [Line Items]
Less than one year	74,615	49,756
Due in 1 - 5 years	24,912	49,926
Total	99,527	99,682
Mutual Funds Held In Rabbi Trust [Member]
Debt Securities, Available-for-Sale [Line Items]
Less than one year	11,183	10,485
Total	11,183	10,485
Corporate Debt [Member]
Debt Securities, Available-for-Sale [Line Items]
Less than one year	10,637	10,727
Due in 1 - 5 years	14,561	13,967
Total	$ 25,198	$ 24,694

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Fair Value Measurements - Summary of Fair Values and Unrealized Losses on Investments (Detail) - Corporate Debt [Member] - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Less than Twelve Months, Estimated Fair value	$ 8,645	$ 17,658
Less than Twelve Months, Gross unrealized losses	(41)	(66)
Twelve Months or More, Estimated Fair value	11,635	0
Twelve Months or More, Gross unrealized losses	(79)	0
Estimated Fair value, Total	20,280	17,658
Gross unrealized losses, Total	$ (121)	$ (66)

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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	Jun. 30, 2024	Dec. 31, 2023
Receivables from broker-dealers, clearing organizations and customers:
Securities failed-to-deliver - broker-dealers and clearing organizations	$ 135,313	$ 282,125
Securities failed-to-deliver - customers	333,048	284,322
Cash deposits with clearing organizations and broker-dealers	93,754	115,151
Other	15,877	6,338
Total	577,992	687,936
Payables to broker-dealers, clearing organizations and customers:
Securities failed-to-receive - broker-dealers and clearing organizations	226,163	125,022
Securities failed-to-receive - customers	157,822	405,186
Other	8,861	7,190
Total	$ 392,846	$ 537,398

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Acquisitions and Equity Investments - Additional Information (Detail) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended
	Apr. 19, 2024	Oct. 02, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	May 01, 2022
RFQ hub Holdings LLC [Member]
Business Acquisition [Line Items]
Cash consideration	$ 37,900
Recorded investments							$ 34,400
Proportionate share in net earnings			$ 400	$ 300	$ 700	$ 500
Receivable from the equity method investee					1,000
Reimbursable support costs for equity method investee			500		1,000
Additional interest acquired	49.00%
RFQ hub Holdings LLC [Member] | Other Investees [Member]
Business Acquisition [Line Items]
Equity Method Investment, Ownership Percentage	92.00%
RFQ hub Holdings LLC [Member] | Prepaid Expenses and Other Assets [Member]
Business Acquisition [Line Items]
Recorded investments			$ 37,000		$ 37,000
Pragma [Member]
Business Acquisition [Line Items]
Aggregate purchase price		$ 125,002
Cash consideration		$ 81,200
Business combination, shares of common stock		224,776
Business acquisition value of common stock transferrable		$ 43,800
Business combination, period for shares of common stock placed in escrow		12 months
Business combination, shares of common stock received period		6 months
Pragma [Member] | Escrow [Member]
Business Acquisition [Line Items]
Business combination, shares of common stock		8,603

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Acquisitions and Equity Investments - Summary of Purchase Price Allocation (Detail) - USD ($) $ in Thousands	Oct. 02, 2023	Jun. 30, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill		$ 236,706	$ 236,706
Pragma [Member]
Business Acquisition [Line Items]
Purchase price	$ 125,002
Less: acquired cash	(2,685)
Purchase price, net of acquired cash	122,317
Intangible assets	(38,900)
Accounts receivable	(2,637)
Prepaid expenses and other assets	(4,181)
Accounts payable, accrued expenses and other liabilities	5,318
Goodwill	$ 81,917

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Acquisitions and Equity Investments - Summary of Fair Value of Acquired Intangible Assets (Detail) - Pragma [Member] $ in Thousands	Oct. 02, 2023 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Cost	$ 38,900
Developed Technology [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Cost	$ 28,500
Useful Lives	7 years
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Cost	$ 9,200
Useful Lives	15 years
Tradename - Finite Life [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Cost	$ 1,200
Useful Lives	15 years

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Goodwill [Line Items]
Amortization expense associated with identifiable intangible assets	$ 5.0	$ 4.5	$ 10.0	$ 8.6
Estimated total amortization expense 2024	19.8		19.8
Estimated total amortization expense 2025	16.9		16.9
Estimated total amortization expense 2026	15.2		15.2
Estimated total amortization expense 2027	13.8		13.8
Estimated total amortization expense 2028	12.3		12.3
Indefinite-lived Intangible Assets [Member]
Goodwill [Line Items]
Goodwill and intangible assets with indefinite lives	$ 236.7		$ 236.7		$ 236.7

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Goodwill and Intangible Assets - Summary of Company's Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Finite Lived Intangible Assets [Line Items]
Cost	$ 180,308	$ 181,478
Accumulated amortization	(71,888)	(62,370)
Net carrying amount	108,420	119,108
Customer Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Cost	139,178	140,348
Accumulated amortization	(57,973)	(50,987)
Net carrying amount	81,205	89,361
Technology and Other Intangibles [Member]
Finite Lived Intangible Assets [Line Items]
Cost	41,130	41,130
Accumulated amortization	(13,915)	(11,383)
Net carrying amount	$ 27,215	$ 29,747

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Income Taxes - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Schedule Of Pre Tax Income [Line Items]
Effective income tax rate	24.80%	24.20%	24.90%	24.60%
New York State [Member]
Schedule Of Pre Tax Income [Line Items]
Income tax year under examination			2015 2016 2017
New York City [Member]
Schedule Of Pre Tax Income [Line Items]
Income tax year under examination			2016 2017 2018

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Stock-Based Compensation Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Feb. 15, 2024	Dec. 31, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant under the stock incentive plan	2,468,562		2,468,562
Unrecognized compensation costs related to non-vested	$ 60.7		$ 60.7
Weighted-average period over which cost is expected to be recognized			2 years 2 months 12 days
Common stock, shares issued	41,032,190		41,032,190			40,940,769
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of non-option equity instruments granted during the period			143,975
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	112,810		112,810
Common stock, shares issued					3,756
Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment arrangement, amount capitalized	$ 0.3	$ 0.2	$ 0.5	$ 0.4
Employees [Member] | Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average grant date fair value per share			$ 218.48
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			20,793
Number of stock option equity instruments granted during the period			32,608
Weighted-average fair value each option granted			$ 77.16
Weighted-average grant date fair value per share			$ 219.32
Employees [Member] | Employees Stock Purchase Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant under the stock incentive plan	121,221		121,221

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Stock-Based Compensation Plans - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 8,328	$ 6,890	$ 15,626	$ 14,378
Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	7,929	6,647	14,822	13,747
Non-Employee Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 399	$ 243	$ 804	$ 631

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Earnings Per Share - Basic and Diluted Weighted Average Shares Outstanding Used to Compute Earnings Per Share (Detail) - $ / shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Earnings Per Share [Abstract]
Basic weighted average shares outstanding	37,655	37,485	37,698	37,482
Dilutive effect of stock options and full value awards	34	103	42	135
Diluted weighted average shares outstanding	37,689	37,588	37,740	37,617
Basic earnings per share	$ 1.72	$ 1.6	$ 3.65	$ 3.56
Diluted earnings per share	$ 1.72	$ 1.59	$ 3.64	$ 3.55

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Stock Options and Full Value Awards [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	445,089	240,079	508,117	209,614

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Credit Agreements and Short-term Financing - Additional Information (Detail) - USD ($)			3 Months Ended		6 Months Ended
	Aug. 09, 2023	Oct. 15, 2021	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Line Of Credit Facility [Line Items]
Interest expense on borrowings			$ 0	$ 0	$ 0	$ 100,000
Interest expense on short-term debt			500,000	100,000	800,000	100,000
Outstanding overdrafts payable			0		0
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]
Revolving loans and letters of credit		$ 500,000,000
Expiration period of credit agreement		Oct. 15, 2024
Period of credit agreement		3 years
Sub-limit for letter of credit		$ 5,000,000
Sub-limit for swingline loans		$ 50,000,000
Interest expense on borrowings				$ 100,000		$ 100,000
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
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			$ 200,000		$ 200,000
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] | 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] | 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) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2024 USD ($)
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
Finance lease expense	$ 0.1	$ 0.1
Minimum [Member]
Lessee Lease Description [Line Items]
Term of lease contract	1 year	1 year
Operating and finance leases for equipment	1 year	1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Term of lease contract	15 years	15 years
Operating and finance leases for equipment	5 years	5 years

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Leases - Schedule of Components of Operating Lease Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Lease Cost [Line Items]
Total operating lease cost	$ 3,730	$ 3,229	$ 7,168	$ 6,391
Occupancy [Member]
Lease Cost [Line Items]
Operating lease cost - office space	2,750	2,882	5,504	5,993
Variable lease costs	882	347	1,469	398
Technology and Communications [Member]
Lease Cost [Line Items]
Operating lease cost - equipment	$ 98	$ 0	$ 195	$ 0

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Leases - Summary of Weighted Average Remaining Lease Term and Discount Rate (Details)	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Weighted average remaining lease term (in years) - operating leases	9 years 2 months 12 days	9 years 7 months 6 days
Weighted average discount rate - operating leases	6.00%	6.00%
Weighted average remaining lease term (in years) - finance leases	1 year 3 months 18 days	1 year 9 months 18 days
Weighted average discount rate - finance leases	7.20%	7.20%

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Leases - Schedule of Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Remainder of 2024	$ 6,548
2025	12,351
2026	11,765
2027	9,010
2028	8,615
2029 and thereafter	51,306
Total lease payments	99,595
Less: imputed interest	23,514
Present value of lease liabilities	76,081	$ 79,677
Remainder of 2024	59
2025	88
2026	0
2027	0
2028	0
2029 and thereafter	0
Total lease payments	147
Less: imputed interest	7
Present value of lease liabilities	$ 140
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Liabilities

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Commitments and Contingencies - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2024
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) - USD ($) $ in Millions	1 Months Ended		6 Months Ended
	Aug. 31, 2024	Jan. 31, 2022	Jun. 30, 2024
2022 Repurchase Program [Member]
Equity Class Of Treasury Stock [Line Items]
Shares repurchase program authorized, value		$ 150.0
Shares repurchase program, value	$ 50.0		$ 43.6
Shares repurchase program, shares			211,255
Commencement date		2022-03
2024 Repurchase Program and 2022 Repurchase Program [Member]
Equity Class Of Treasury Stock [Line Items]
Shares repurchase program authorized, value	$ 200.0

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Segment and Geographic Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Geographic Concentration Risk [Member] | Total Revenue and Long-lived Assets [Member] | United Kingdom [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Concentration Risk, Percentage	10.00%	10.00%

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Segment and Geographic Information - Summary of Revenue and Long-lived Assets (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Segment Reporting Information [Line Items]
Revenues	$ 197,660	$ 179,846	$ 407,978	$ 383,015
Long-lived assets	108,802		108,802		$ 102,671
Americas [Member]
Segment Reporting Information [Line Items]
Revenues	156,538	141,999	323,371	303,572
Long-lived assets	93,870		93,870		87,513
Europe [Member]
Segment Reporting Information [Line Items]
Revenues	35,863	33,518	73,591	70,254
Long-lived assets	14,637		14,637		14,717
Asia [Member]
Segment Reporting Information [Line Items]
Revenues	5,259	$ 4,329	11,016	$ 9,189
Long-lived assets	$ 295		$ 295		$ 441

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Cash and Cash Equivalents and Restricted Cash - Summary of Reconciliation of Cash and Cash Equivalents with Restricted or Segregated Cash (Detail) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	$ 434,063	$ 451,280
Cash segregated under federal regulations	46,141	45,122
Total	574,130	611,672
Cash and Cash Equivalents [Member]
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	434,063	451,280
Cash Segregated under Federal Regulations [Member]
Cash And Cash Equivalents [Line Items]
Cash segregated under federal regulations	46,141	45,122
Receivables from Broker-Dealers, Clearing Organizations and Customers [Member]
Cash And Cash Equivalents [Line Items]
Cash deposits with clearing organizations and broker-dealers	93,754	115,151
Prepaid Expenses and Other Assets [Member]
Cash And Cash Equivalents [Line Items]
Other cash deposits	$ 172	$ 119