"Our ongoing success in broadening and deepening our trading network put the company in a position to benefit from the improved credit market conditions in the second quarter, resulting in record revenue that was driven by a 32% increase in variable transaction fees," said Richard M. McVey, chairman and chief executive officer of MarketAxess. "The narrowing of credit spreads, inflows of new capital and growth in overall TRACE volumes all point to progress in the normalization of credit market conditions. Our expanded dealer group and strong institutional investor engagement present significant opportunities for our shareholders to benefit from further improvement in market conditions."

Second Quarter Results

Total revenues for the second quarter of 2009 increased 0.8% to $25.8 million, compared to $25.6 million for the second quarter of 2008. Pre-tax income was $5.7 million, compared to $4.8 million for the second quarter of 2008, an increase of 20.5%. Pre-tax margin was 22.2%, compared to 18.6% for the second quarter of 2008. Net income totaled $3.2 million, or $0.08 per share on a diluted basis, compared to $2.8 million, or $0.08 per share on a diluted basis, for the second quarter of 2008.

A 21.1% change in the average exchange rate of the pound sterling compared to the U.S. dollar from the second quarter of 2008 had the effect of reducing revenues and expenses from our European operations by $1.3 million and $0.8 million, respectively.

Commission revenue for the second quarter of 2009 totaled $21.8 million on total trading volume of $66.8 billion, compared to $20.1 million in commission revenue on total trading volume of $69.8 billion for the second quarter of 2008. U.S. high-grade trading volume as a percentage of FINRA's high-grade TRACE trading volume decreased to an estimated 4.7%, compared to an estimated 7.5% for the second quarter of 2008.

Technology products and services revenue, which includes revenue for technology licenses, support and professional services, totaled $2.1 million for the second quarter of 2009, compared to $2.7 million for the second quarter of 2008. Other revenue, which consists of information and user access fees, investment income and other revenue, decreased 32.2% to $1.9 million, compared to $2.8 million for the second quarter of 2008, due primarily to a decline in investment income as a result of lower interest rates.

Total expenses for the second quarter of 2009 decreased 3.7% to $20.1 million, compared to $20.9 million for the second quarter of 2008. The decrease was primarily due to a decline in professional and consulting expenses of $0.9 million, offset by higher employee compensation and benefits of $0.3 million. The Company now expects total expenses for 2009 to be in the range of $79.5 million to $82.5 million. The effective tax rate for the second quarter of 2009 was 44.4%, compared to 40.2% for the second quarter of 2008 and 38.5% for full year 2008. The higher effective tax rate reflects an increase in the projected rate on foreign source income.

Employee headcount as of June 30, 2009 and June 30, 2008 was 200.

Balance Sheet Data

As of June 30, 2009, total assets were $252.1 million and included $145.0 million in cash, cash equivalents and securities, and a deferred tax asset of $32.1 million. Total stockholders' equity, including the Series B preferred stock, as of June 30, 2009 was $235.1 million.

Webcast and Conference Call Information

Richard M. McVey, MarketAxess' chairman and chief executive officer, T. Kelley Millet, president, and James N.B. Rucker, chief financial officer, will host a conference call to discuss the Company's financial results and outlook this morning at 8:30 a.m. Eastern time. To access the conference call, please dial 866-831- 6243 (U.S.) or 617- 213-8855 (international). The passcode for all callers is 28828766.