"Our record results in the first quarter were driven by strong credit market trading conditions and increases in market share across many of our product areas," said Richard M. McVey, chairman and chief executive officer of MarketAxess. "The demand for electronic trading solutions in fixed income markets is growing to address the liquidity challenges created by the new regulatory environment. We continue to invest actively in technology solutions for bond and CDS trading in order to improve secondary market liquidity and efficiency."

First Quarter Results

Total revenues for the first quarter of 2012 increased 16.3% to a record $50.7 million, compared to $43.6 million for the first quarter of 2011. Pre-tax income was a record $22.7 million, compared to $17.7 million for the first quarter of 2011, an increase of 28.8%. Pre-tax margin was 44.8%, compared to 40.5% for the first quarter of 2011. Net income totaled $13.5 million, or $0.35 per share on a diluted basis, compared to $10.8 million, or $0.27 per share on a diluted basis, for the first quarter of 2011.

Commission revenue for the first quarter of 2012 totaled $44.9 million on total trading volume of $158.0 billion, compared to $37.8 million in commission revenue on total trading volume of $135.2 billion for the first quarter of 2011. U.S. high-grade trading volume as a percentage of FINRA's high-grade TRACE trading volume increased to an estimated 11.4%, compared to an estimated 9.9% for the first quarter of 2011.

All other revenue, which consists of technology products and services, information and user access fees, investment income and other revenue, remained unchanged at $5.8 million, compared to the first quarter of 2011.

Total expenses for the first quarter of 2012 increased 7.9% to $28.0 million, compared to $25.9 million for the first quarter of 2011. This increase was primarily due to higher general and administrative expense of $1.1 million, marketing and advertising costs of $0.5 million and technology and communications costs of $0.5 million, offset by lower employee compensation and benefits of $0.4 million.

The effective tax rate for the first quarter of 2012 was 40.7%, compared to 39.0% for the first quarter of 2011.

Employee headcount as of March 31, 2012 was 238, compared to 232 as of March 31, 2011.

Dividends and Share Repurchases

The Company continues to return capital to its shareholders through dividends and share repurchases.

Dividends

The Company's board of directors declared a quarterly cash dividend of $0.11 per share of common stock outstanding, to be paid on May 24, 2012 to stockholders of record as of the close of business on May 10, 2012.

Share Repurchases

In October 2011, the Company's board of directors authorized a $35 million share repurchase program. Under the repurchase program, a total of 582,896 shares were repurchased in the first quarter of 2012 at a cost of $18.2 million. In February 2012, the Company also repurchased 1,821,730 shares at a cost of $52.9 million from selling stockholders affiliated with JP Morgan Chase & Co.

Balance Sheet Data

As of March 31, 2012, total assets were $274.5 million and included $179.9 million in cash, cash equivalents and securities available-for-sale. Total stockholders' equity as of March 31, 2012 was $248.9 million.