Total revenues for the three months ended September 30, 2024 include Pragma revenues of $7.7 million. The acquisition expands MarketAxess's capabilities in algorithmic and analytical services.

Following its acquisition of Pragma LLC and Pragma Financial Systems LLC (collectively, "Pragma") in the fourth quarter of 2023, the Company also earns other commissions on equities and foreign exchange products for algorithmic trading services.

On April 19, 2024, the Company entered into an agreement to acquire an additional 49.0% interest in RFQ-hub Holdings LLC for approximately $37.9 million of cash consideration. Upon the closing of the acquisition, the Company will hold a 92.0% controlling stake in RFQ-hub Holdings LLC.

Net income increased by 30.1% to $71.5 million for the three months ended September 30, 2024, compared to $54.9 million for the same period in 2023. This increase was driven by revenue growth and effective expense management.

Technology and communications expenses increased by $3.2 million, primarily due to higher software subscription costs of $0.5 million, higher connectivity costs of $1.2 million, higher market data costs of $0.6 million, higher data center and cloud hosting costs of $0.4 million and higher U.S. Treasury platform licensing fees of $0.3 million.

During the nine months ended September 30, 2024, the Company repurchased 277,604 shares of common stock under the Repurchase Programs at a cost of $58.6 million. As of September 30, 2024, the Company had $241.4 million of remaining capacity under the Repurchase Programs.

The existing legal framework that governs the financial markets is periodically reviewed and amended, resulting in the enactment and enforcement of new laws and regulations that apply to our business. Compliance with regulations may require us to dedicate additional financial and operational resources, which may adversely affect our profitability.

We experience cybersecurity threats and incidents from time to time. Cybersecurity incidents could impact revenue and operating income and increase costs. We therefore continue to make investments in our cybersecurity infrastructure and training of employees, which may result in increased costs, to strengthen our cybersecurity measures.

We are exposed to credit and performance risks in our role as matched principal trading counterparty to our clients executing bond trades on our platform, including the risk that counterparties that owe us money or securities will not perform their obligations.

There has been increased demand for portfolio trading workflows over the last few years, which has resulted in heightened competition among trading platforms to enhance their portfolio trading offerings and expand them across different geographies and products.

Our competitive position is enhanced by the unique liquidity provided by our Open Trading functionalities and the integration of our broker-dealer and institutional investor clients with our electronic trading platforms and other systems.

Our estimated market share of total U.S. high-grade corporate bond volume decreased to 19.5% for the three months ended September 30, 2024 from 20.0% for the three months ended September 30, 2023. Our estimated market share of total U.S. high-yield corporate bond volume decreased to 13.0% for the three months ended September 30, 2024 from 16.1% for the three months ended September 30, 2023.

EBITDA margin was 50.8% for the three months ended September 30, 2024, compared to 48.1% for the same period in 2023. This indicates efficient operations and profitability.

Clearing costs consist of fees that we are charged by third-party clearing brokers and depositories for the clearing and settlement of matched principal trades, regulatory reporting fees and variable transaction fees assessed by the provider of our third-party middle office system.

General and administrative expense consists primarily of general travel and entertainment, board of directors' expenses, regulatory fees, subscription costs, charitable contributions, provision for doubtful accounts, various state franchise and U.K. value-added taxes and other miscellaneous expenses.

Technology and communications expenses increased by $3.2 million, primarily due to higher software subscription costs of $0.5 million, higher connectivity costs of $1.2 million, higher market data costs of $0.6 million, higher data center and cloud hosting costs of $0.4 million and higher U.S. Treasury platform licensing fees of $0.3 million.

In 2023, we introduced MarketAxess X-Pro, our new trading platform, which provides traders with a flexible user experience, intuitive workflows and access to our proprietary data and pre-trade analytics.

We expect that our recent acquisition of Pragma, a quantitative trading technology provider specializing in algorithmic and analytical trading services, will accelerate our development of artificial intelligence driven execution algorithms across many of our key product areas.

During the nine months ended September 30, 2024, the Company repurchased 277,604 shares of common stock under the Repurchase Programs at a cost of $58.6 million. As of September 30, 2024, the Company had $241.4 million of remaining capacity under the Repurchase Programs.

In October 2024, our Board of Directors approved a quarterly cash dividend of $0.74 per share payable on December 4, 2024 to stockholders of record as of the close of business on November 20, 2024.

The $11.7 million increase in net cash used in investing activities was primarily due to higher net purchases of available-for-sale investments of $5.2 million and higher capital expenditures of $6.5 million.

The 10-Q filing does not contain any specific information regarding environmental, social, or governance initiatives. No mention of sustainability targets, diversity and inclusion programs, or ethical sourcing policies.

In the third quarter of 2024, the market backdrop for the Company continued to improve with strong increases in estimated U.S. credit market volumes, a modest increase in credit spread volatility relative to second quarter 2024 levels, and an increase in the velocity of trading in U.S. high-grade.

On the international side of our business, Eurobonds and emerging markets estimated market volumes have increased significantly compared to the prior year.

Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant regulatory risk and cause additional legal costs to ensure compliance.