MarketAxess Holdings Inc, the operator of an electronic trading platform for US and European high-grade corporate bonds, emerging markets bonds and other types of fixed-income securities, has announced Q4 2011 revenues of USD45.1 million. This compares with USD38.6 million for the fourth quarter of 2010.

Pre-tax income was USD18.9 million, compared to USD14.4 million for the fourth quarter of 2010, an increase of 30.6%, while pre-tax margin was 41.8%, compared to 37.4% for the fourth quarter of 2010. Net income totalled USD11.5 million, or USD0.29 per share on a diluted basis, compared to USD8.9 million, or USD0.23 per share on a diluted basis, for the fourth quarter of 2010.

Commission revenue for the fourth quarter of 2011 totalled USD38.8 million on total trading volume of USD125.2 billion, compared to USD32.3 million in commission revenue on total trading volume of USD104.3 billion for the fourth quarter of 2010. U.S. high-grade trading volume as a percentage of FINRA’s high-grade TRACE trading volume increased to an estimated 12.2%, compared to an estimated 9.6% for the fourth quarter of 2010.

All other revenue, which consists of technology products and services, information and user access fees, investment income and other revenue, increased slightly to USD6.4 million, compared to USD6.3 million for the fourth quarter of 2010.

Total expenses for the fourth quarter of 2011 increased 8.7% to USD26.3 million, compared to USD24.2 million for the fourth quarter of 2010. The increase in expenses during the fourth quarter of 2011 was primarily due to a 100% reserve against accounts receivable due from MF Global Inc. and a write-off of a minority investment. These two charges totaled USD1.5 million, or USD0.02 per share, in the aggregate.
The effective tax rate for the fourth quarter of 2011 was 38.8%, compared to 38.1% for the fourth quarter of 2010.

Employee headcount as of 31 December, 2011 was 232, compared to 227 as of December 31, 2010.

“We closed the year on a strong note and are pleased to report record revenues, pre-tax income and pre-tax margins for the full year of 2011,” says Richard M McVey (pictured), chairman and chief executive officer of MarketAxess. “Our estimated U.S. high grade market share continued to progress higher throughout 2011, culminating in a record 12.2% in the fourth quarter. We believe that the ongoing changes to global market structure, driven in part by regulatory reform, will continue to favor e-trading in the cash and derivative credit markets.”