Total revenues for the fourth quarter of 2008 decreased 2.4% to $21.8 million, compared to $22.4 million for the fourth quarter of 2007. Pre-tax income for the fourth quarter of 2008 was $3.0 million, compared to $3.1 million for the fourth quarter of 2007, a decrease of 2.8%. Net income for the fourth quarter of 2008 totaled $1.9 million, or $0.05 per share on a diluted basis, compared to $1.9 million, or $0.06 per share on a diluted basis, for the fourth quarter of 2007.

For the fourth quarter of 2008, pre-tax margin was 13.8%, compared to 13.9% for the fourth quarter of 2007.

Richard M. McVey, chairman and chief executive officer of MarketAxess, commented, "Our expanded product offering, broader liquidity alternatives and disciplined expense management helped to offset the impact of the continued credit market dislocations on our results for the fourth quarter. Our expenses, which were below the prior year quarter, reflect synergies from the acquisition of Greenline Financial Technologies in March, as well as expense reduction initiatives undertaken earlier in the year."

Mr. McVey added: "During 2008 we greatly expanded our secondary trading connections with 19 new dealers and a new open order book for investors. Direct order management system connections with investor clients increased by 48%. Our acquisition of Greenline, whose full year revenue increased 64% compared to 2007, broadened the range of technology solutions we offer clients. Free cash flow and the balance sheet remain strong and as a result we enter 2009 well positioned to take advantage of new opportunities in the fast-evolving credit markets."

For the full year ended December 31, 2008, total revenue decreased 0.6% to $93.1 million, from $93.6 million for the full year ended December 31, 2007. Pre-tax income for 2008 was $12.8 million, compared to $17.3 million for 2007, a decrease of 25.6%. Net income for 2008 was $7.9 million, or $0.22 per diluted share, compared to $10.3 million, or $0.30 per diluted share, for 2007.

For the full year 2008, pre-tax margin was 13.8%, compared to 18.4% for 2007.

Fourth Quarter Results

Total revenue for the fourth quarter of 2008 decreased 2.4% to $21.8 million, compared to $22.4 million for the fourth quarter of 2007. Commission revenue totaled $16.9 million on total trading volume of $43.2 billion, compared to $19.1 million in commission revenue on total trading volume of $68.4 billion for the fourth quarter of 2007.

U.S. high-grade corporate bond commissions decreased 12.4% to $10.8 million on trading volume of $25.6 billion for the fourth quarter of 2008, compared to $12.3 million in commissions on trading volume of $40.9 billion for the fourth quarter of 2007. U.S. high-grade trading volume as a percentage of FINRA's high-grade TRACE trading volume decreased to an estimated 5.2%, compared to an estimated 9.0% for the fourth quarter of 2007.

Eurobond commissions decreased 15.2% to $4.0 million on trading volume of $7.2 billion for the fourth quarter of 2008, compared to $4.7 million in commissions on trading volume of $10.6 billion for the fourth quarter of 2007.

Other commissions, which include emerging markets, high yield, credit default swaps and agencies, increased 1.9% to $2.1 million on trading volume of $10.4 billion, compared to $2.0 million in commissions on $16.9 billion in trading volume for the fourth quarter of 2007.

Technology products and services, which reflect revenue for technology licenses, support and professional services, totaled $2.5 million, compared to $0.1 million for the fourth quarter of 2007 primarily due to the acquisition of Greenline Financial Technologies Inc.

Other revenue, which consists of information and user access fees, investment income and other revenue, decreased 22.2% to $2.5 million, compared to $3.2 million for the fourth quarter of 2007, primarily due to a decline in investment income as a result of lower interest rates.

There were a total of 62 and 64 trading days in the U.S. and U.K., respectively, in the fourth quarter of 2008 and the fourth quarter of 2007.

Total expenses for the fourth quarter of 2008, which include expenses from acquisitions of $2.8 million, decreased 2.4% to $18.8 million, compared to $19.3 million for the fourth quarter of 2007. Excluding expenses related to acquisitions, total expenses decreased 15.8%. Employee compensation and benefits expense decreased 2.3% to $10.0 million, compared to $10.3 million for the fourth quarter of 2007, due to lower cash incentive compensation and benefit expense, partially offset by higher stock compensation expense. Professional and consulting expenses decreased 21.5% to $1.7 million, compared to $2.1 million for the fourth quarter of 2007. General and administrative expenses decreased 18.0% to $1.6 million, compared to $1.9 million for the fourth quarter of 2007. Marketing and advertising expenses increased 60.6% to $0.9 million, compared to $0.5 million for the fourth quarter of 2007.

Pre-tax income for the fourth quarter of 2008 was $3.0 million, compared to $3.1 million for the fourth quarter of 2007. Pre-tax margin was 13.8%, compared to 13.9% for the fourth quarter of 2007.

The effective tax rate for the fourth quarter of 2008 was 35.7%, compared to 38.5% for the fourth quarter of 2007.

Net income for the fourth quarter of 2008 was $1.9 million, or $0.05 per diluted share, compared to $1.9 million, or $0.06 per diluted share, for the fourth quarter of 2007.

Employee headcount as of December 31, 2008 was 185, compared to 182 as of December 31, 2007.

Full Year 2008 Results

Total revenue for the year ended December 31, 2008, decreased 0.6% to $93.1 million, compared to $93.6 million for 2007. Commission revenue totaled $73.5 million on total trading volume of $226.5 billion, compared to $80.2 million in commission revenue on total trading volume of $359.9 billion for 2007.

U.S. high-grade corporate bond commissions decreased 11.4% to $46.5 million on trading volume of $134.6 billion for 2008, compared to $52.5 million in commissions on trading volume of $209.2 billion for 2007. U.S. high-grade trading volume as a percentage of FINRA's high-grade TRACE trading volume decreased to an estimated 6.6%, compared to an estimated 9.4% for 2007.

Eurobond commissions decreased 3.6% to $18.1 million on trading volume of $35.8 billion for 2008, compared to $18.8 million in commissions on trading volume of $77.4 billion for 2007.

Other commissions, which include emerging markets, high yield, credit default swaps and agencies, decreased 0.1% to $8.8 million on trading volume of $56.0 billion, compared to $8.8 million in commissions on $73.3 billion in trading volume for 2007.

Technology products and services totaled $8.6 million, compared to $0.7 million for 2007, primarily due to the acquisition of Greenline Financial Technologies Inc..

Other revenue, which consists of information and user access fees, investment income and other revenue, decreased 13.3% to $11.0 million, compared to $12.7 million for 2007, primarily due to a decline in investment income as a result of lower interest rates.

There were a total of 251 and 254 trading days in the U.S. and U.K., respectively, in 2008, compared to 250 and 253 trading days in the U.S. and U.K., respectively, in 2007.

Total expenses for 2008, which include expenses from acquisitions of $9.7 million, increased 5.1% to $80.3 million, compared to $76.4 million for 2007. Excluding expenses related to acquisitions, total expenses decreased 7.3%. Employee compensation and benefits expense increased 1.8% to $43.8 million, compared to $43.1 million for 2007, due to higher salary, employee severance and stock compensation expense, partially offset by reduced cash incentive compensation expense. Marketing and advertising expenses increased 46.0% to $2.8 million, compared to $1.9 million for 2007. Technology and communications expenses increased 11.4% to $8.3 million, compared to $7.5 million for 2007, due to higher market data expense. Depreciation and amortization expense increased 9.9% to $7.9 million, compared to $7.2 million for 2007, primarily due to the amortization of intangible assets related to acquisitions, which was partially offset by lower software and hardware depreciation expense.

Pre-tax income for 2008 was $12.8 million, compared to $17.3 million for 2007. Pre-tax margin was 13.8%, compared to 18.4% for 2007.

The effective tax rate for 2008 was 38.5%, compared to 40.2% for 2007.

Net income for 2008 was $7.9 million, or $0.22 per diluted share, compared to $10.3 million, or $0.30 per diluted share, for 2007.

Free cash flow, defined as net cash provided by operating activities less purchases of furniture, equipment and leasehold improvements and capitalized software development costs, was $23.6 million for 2008, compared to $24.2 million for 2007.

Balance Sheet Data

As of December 31, 2008, total assets were $246.4 million and included $142.6 million in cash, cash equivalents and securities, and a deferred tax asset of $36.4 million. Total assets as of December 31, 2007 were $198.4 million and included $124.3 million in cash, cash equivalents and securities and a deferred tax asset of $37.2 million. Total shareholders' equity, including the Series B preferred stock, as of December 31, 2008 was $224.8 million.

Guidance for 2009

The Company expects total expenses for 2009 to be in the range of $77.0 million to $84.0 million.

The Company expects its full year 2009 capital spending, which includes hardware and software, to be in the range of $4.0 million to $7.0 million.