"We are pleased to report another quarter of record revenues and earnings and the strongest quarterly free cash flow generation in the firm's history," said Richard M. McVey, chairman and chief executive officer of MarketAxess. "In addition to the strong current results, we are actively engaged in the regulatory reform process and look forward to participating as a swap execution facility in the new e-trading market structure."

Second Quarter Results

Total revenues for the second quarter of 2010 increased 36.7% to $35.3 million, compared to $25.8 million for the second quarter of 2009. Pre-tax income was a record $11.9 million, compared to $5.7 million for the second quarter of 2009, an increase of 106.7%. Pre-tax margin was 33.6%, compared to 22.2% for the second quarter of 2009. Net income totaled $7.2 million, or $0.18 per share on a diluted basis, compared to $3.2 million, or $0.08 per share on a diluted basis, for the second quarter of 2009.

Commission revenue for the second quarter of 2010 totaled $29.5 million on total trading volume of $98.3 billion, compared to $21.8 million in commission revenue on total trading volume of $66.8 billion for the second quarter of 2009. U.S. high-grade trading volume as a percentage of FINRA's high-grade TRACE trading volume increased to an estimated 8.1%, compared to an estimated 4.7% for the second quarter of 2009.

Technology products and services revenue, which includes revenue for technology licenses, support and professional services, totaled $3.3 million for the second quarter of 2010, compared to $2.1 million for the second quarter of 2009. Other revenue, which consists of information and user access fees, investment income and other revenue, increased 36.7% to $2.6 million, compared to $1.9 million for the second quarter of 2009.

Total expenses for the second quarter of 2010 increased 16.7% to $23.5 million, compared to $20.1 million for the second quarter of 2009. The majority of the increase was due was due to higher employee compensation and benefits expense of $2.3 million. The Company now expects total expenses for 2010 to be in the range of $94.0 million to $96.0 million.

The effective tax rate for the second quarter of 2010 was 39.5%, compared to 44.4% for the second quarter of 2009.

Employee headcount as of June 30, 2010 was 222, compared to 200 as of June 30, 2009.

Dividend

The Company's board of directors declared a quarterly cash dividend of $0.07 per share of common stock outstanding or issuable upon conversion of outstanding shares of non-voting common stock and Series B preferred stock, to be paid on August 25, 2010 to stockholders of record as of the close of business on August 11, 2010.

Share Repurchase Program

In June 2010, the Company's board of directors approved a $30 million share repurchase program, which authorizes the Company to repurchase shares of its common stock in the open market or in privately negotiated transactions, at times and prices considered appropriate by the Company. The Company initiated repurchases under the program in July 2010.

Balance Sheet Data

As of June 30, 2010, total assets were $285.4 million and included $187.6 million, or $4.75 per diluted share in cash, cash equivalents and securities. Total stockholders' equity, including the Series B preferred stock, as of June 30, 2010 was $260.4 million.