MarketAxess Q3 revenue rises 1% year over year as ICE merger costs cut GAAP EPS to $1.53

MarketAxess Holdings said third-quarter 2026 revenue rose 1% to $210.4 million, but costs tied to its pending sale to Intercontinental Exchange cut GAAP diluted earnings to $1.53 a share from $1.84 a year earlier. Excluding notable items, EPS was $1.86 on net income of $65.7 million.

Merger costs split the quarter in two

MarketAxess filed the results as Exhibit 99.1 to a current report on Form 8-K on the morning of October 23. GAAP net income was $54.0 million, or $1.53 a diluted share, against $68.3 million and $1.84 in the third quarter of 2025, a 21% decline. The company booked $13.1 million of pre-tax notable items in the quarter, all described as merger-related expenses; after tax those items totaled $11.6 million and carried an EPS impact of $0.33, and adding them back reconciles the $1.53 reported figure to the $1.86 adjusted one. Deal costs were therefore most of the fall but not all of it: net income excluding notable items was $65.7 million, still about 4% below the $68.3 million earned a year earlier. The release records a second, unrelated drag. Other income was $400,000 against $8.1 million a year earlier, a decrease it attributes largely to a tax credit received in the prior year, lower interest income on smaller cash balances and higher interest expense.

Total expenses rose 10% to $136.0 million; excluding notable items they were $122.9 million and flat year over year. Professional and consulting fees, the line that carries adviser costs, nearly doubled from a year earlier, according to the consolidated statement of operations. The operating margin fell to 35.4% from 41.0%, a 560-basis-point decline, but was 41.6% excluding notable items, 60 basis points better than a year earlier and equal to 100 basis points of positive operating leverage.

Block volumes grow while credit fees per million slide

Revenue of $210.4 million was 1% higher than a year earlier. Commission revenue of $179.9 million was unchanged, and the mix inside it moved sharply. Credit commissions fell 2% to $161.2 million from $164.9 million, while rates commissions rose 34% to $8.9 million and other commissions 14% to $9.8 million.

The credit decline came from price rather than volume. Total credit average daily volume rose 7% from a year earlier, but the variable transaction fee per million fell 9% to $127, which the company attributed to protocol and product mix and to lower duration of bonds traded in U.S. high-grade. That combination, more trades at a thinner fee, is why a 7% volume gain produced a 2% revenue decline in credit.

Volume growth was concentrated in the protocols the company has been building out. Block trading ADV rose 21% from a year earlier to $5.4 billion, as U.S. credit gained 24%, Eurobonds 16% and emerging markets 15% against the same quarter. Portfolio trading ADV rose 37% from a year earlier to $1.9 billion, including 39% growth in U.S. credit and 41% in emerging markets, and Mid-X volume rose 196% from a year earlier. Total ADV was 13% higher.

Services revenue, the subscription-like side of the business, rose 6% from a year earlier to $30.5 million. Information services revenue rose 10% from a year earlier to $15.2 million on net new contracts, post-trade services added 1% to reach $11.4 million, and technology services rose 8% to $3.9 million. Because services are billed on contracts rather than per trade, they cushion the effect of a falling fee per million; the release attributes the revenue increase mainly to services growth.

Cash price of $167.00 per share, no call and no guidance

The quarter's other dominant fact is the pending sale. MarketAxess agreed on July 29, 2026 to be acquired by Intercontinental Exchange at $167.00 per share in cash, and on October 21, 2026 the Department of Justice and the Federal Trade Commission granted early termination of the antitrust waiting period. The release states that completion still depends on stockholder approval, other required regulatory approvals and the remaining closing conditions.

While the deal is pending, MarketAxess has stopped communicating the way it used to. "In light of the Merger, MarketAxess has suspended the practice of hosting an earnings conference call", the release says, adding that 2026 annual guidance and medium-term targets are withdrawn and monthly volume releases suspended. There is therefore no management commentary on the fee-per-million trend beyond the written release.

The balance sheet reflects both deal preparation and earlier capital returns. Cash, equivalents and corporate bond and Treasury investments totaled $539.6 million, down from $678.9 million at December 31, 2025, while credit facility borrowings fell to $92.0 million from $220.0 million. Free cash flow, a non-GAAP measure, was $85.7 million for the quarter, down 23% from $111.78 million a year earlier. The board declared a quarterly dividend of $0.78 per share, payable November 25, 2026 to stockholders of record on November 11.

What remains is the stockholder vote, for which the release gives no date, and the closing conditions it lists. Until the vote and the remaining approvals arrive, the quarterly report that follows this release is the only scheduled document likely to carry more detail on merger costs and fee trends.