RRH deal adds to MarketAxess’ strong Q1 earnings
23 April 2021 US
Image: MarketAxess
MarketAxess, the electronic trading platform provider and market data and post-trade services for the global fixed-income markets, saw revenue generated by the recently-acquired Regulatory Reporting Hub (RRH) continue to perform in Q1 and contribute to a double-digit revenue uplift.
The reporting business was acquired by MarketAxess’ wholly-owned Dutch subsidiary, Trax, in Q4 2020, and is understood to have earned the German stock exchange group between €10 million and €50 million.
In MarketAxess’ 2020 full-year earning report, it stated that the hub accounted for $1.3 million in revenue in the final two months of the year.
In its first full quarter under the MarketAxess banner this figure increased to $4 million.
The uptick means the hub more than offset costs associated with the internalisation of the business from Deutsche Boerse.
MarketAxess says Q1 costs associated with the RRH deal totalled $3.6 million, including non-recurring integration costs of $1.3 million and amortisation of acquired intangibles expense of $1.4 million. Excluding costs related to acquisition, total expenses for the quarter were up 13.5 per cent.
These costs are expenses related to the acquisition and do not include the total purchase price.
The hub comes under MarketAxess’ post-trade business which is bundled with information services and ‘other revenue’ in its quarterly filings.
This combined business segment saw earnings increase to $19.6 million, compared to $13.0 million for the first quarter of 2020, which MarketAxess says reflects the hub’s inclusion.
Total Q1 revenue increased 15.7 per cent to $195.5 million, up from $169.0 million in the comparable period last year.
Operating income was $103.5 million, compared to $91.1 million for Q1 2020, an increase of 13.6 per cent.
Rick McVey, chairman and CEO of MarketAxess comments: “Market share gains are driving the volume and revenue growth as electronic trading continues to advance in fixed-income markets around the world.
“We are seeing positive signs in new product areas, and in all geographic regions, as we invest to support long-term growth. Trading automation continues to accelerate with both our investor and dealer clients.”
The reporting business was acquired by MarketAxess’ wholly-owned Dutch subsidiary, Trax, in Q4 2020, and is understood to have earned the German stock exchange group between €10 million and €50 million.
In MarketAxess’ 2020 full-year earning report, it stated that the hub accounted for $1.3 million in revenue in the final two months of the year.
In its first full quarter under the MarketAxess banner this figure increased to $4 million.
The uptick means the hub more than offset costs associated with the internalisation of the business from Deutsche Boerse.
MarketAxess says Q1 costs associated with the RRH deal totalled $3.6 million, including non-recurring integration costs of $1.3 million and amortisation of acquired intangibles expense of $1.4 million. Excluding costs related to acquisition, total expenses for the quarter were up 13.5 per cent.
These costs are expenses related to the acquisition and do not include the total purchase price.
The hub comes under MarketAxess’ post-trade business which is bundled with information services and ‘other revenue’ in its quarterly filings.
This combined business segment saw earnings increase to $19.6 million, compared to $13.0 million for the first quarter of 2020, which MarketAxess says reflects the hub’s inclusion.
Total Q1 revenue increased 15.7 per cent to $195.5 million, up from $169.0 million in the comparable period last year.
Operating income was $103.5 million, compared to $91.1 million for Q1 2020, an increase of 13.6 per cent.
Rick McVey, chairman and CEO of MarketAxess comments: “Market share gains are driving the volume and revenue growth as electronic trading continues to advance in fixed-income markets around the world.
“We are seeing positive signs in new product areas, and in all geographic regions, as we invest to support long-term growth. Trading automation continues to accelerate with both our investor and dealer clients.”
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