MARKETAXESS HOLDINGS INC

Previous wording

We provide automated and algorithmic trading solutions that we believe, when combined with our integrated and actionable data offerings, help our clients make faster, better-informed decisions on when and how to trade on our platforms. In 2024, we continued our roll-out of X-Pro, our newest trading platform, to more seamlessly combine our trading protocols with our proprietary data and pre-trade analytics. Our AI-driven technology, such as CP+, our real-time pricing engine, is a critical data input and pricing source for multiple MarketAxess trading protocols and solutions, including Auto-X™ and portfolio trading. In 2024, we leveraged our recent acquisition of Pragma, a quantitative trading technology provider specializing in algorithmic and analytical trading services, to accelerate our development of AI driven execution algorithms across all of our key product areas. We believe that we will be able to enhance our capabilities and increase our efficiency by leveraging Pragma technology across our technology stack.

Current wording

We provide automated and algorithmic trading solutions that we believe help our clients make faster, better-informed decisions on when and how to trade on our platforms. We also provide a number of integrated and actionable data offerings to assist clients with real-time pricing and trading decisions and transaction cost analysis. Our AI-driven technology, such as CP+, our real-time pricing engine, is a critical data input and pricing source for multiple MarketAxess trading protocols and solutions, including Auto-X™ and portfolio trading. Further, through our acquisition of Pragma, we are increasing our capabilities and efficiency across our technology stack. We also offer a range of post-trade services, including post-trade matching, trade publication, regulatory transaction reporting and market and reference data, across fixed-income and other products.

Previous wording

In the first quarter of 2025, the market backdrop for the Company showed strong increases in estimated U.S. credit market volumes, with U.S. high-grade and U.S. high-yield market average daily volume up 8.4% and 14.1%, respectively, compared to the prior year. However, despite an increase in volatility during March, credit spreads and credit spread volatility remained at relatively low levels throughout much of the first quarter of 2025. With regard to the international products traded on our platforms, emerging markets estimated market volumes increased significantly compared to the prior year.

Current wording

In the first half of 2025, the market backdrop for the Company showed strong increases in estimated U.S. credit market volumes, with U.S. high-grade and U.S. high-yield market average daily volume up 12.3% and 23.9%, respectively, compared to the prior year. However, despite an increase in volatility during March and April, credit spreads and credit spread volatility remained at relatively low levels throughout much of the first half of 2025. With regard to the international products traded on our platforms, estimated market volumes of emerging markets and eurobonds increased significantly compared to the prior year.

Previous wording

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. 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. In January 2022, the SEC proposed rules that will expand Regulation ATS and Regulation SCI to alternative trading systems (ATS) that trade government securities and amend the SEC rule regarding the definition of an “exchange” to include Communication Protocol Systems, such as our request-for-quote protocols. Based on these proposed rules, we expect that we will have to operate additional trading protocols in compliance with Regulation ATS and we could become subject to Regulation SCI for certain parts of our business in the future. The SEC also recently adopted final rules regarding the central clearing of certain secondary market transactions involving U.S. Treasury securities, which are currently set to become effective for certain cash market transactions on December 31, 2026. Once effective, this central clearing mandate will impact certain of our participants who do not centrally clear such trades today, and some of our investor clients have expressed concerns about using platforms that will require the clearing of any resultant trades executed on such platforms. While we expect this change will increase our own platform efficiency, it is still unknown at this time the full impact of this change, and what effect it will have, whether positive or negative, on our industry, our clients or us. In addition, following the change in U.S. presidential administrations in January 2025, it is unknown to what extent new legislation will be passed into law or whether pending or new regulatory proposals will be adopted, abandoned or modified, or what effect such passage, adoption, abandonment or modification will have, whether positive or negative, on our industry, our clients or us.

Current wording

Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant regulatory risk and cause us to incur additional expense. 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. The SEC recently adopted final rules regarding the central clearing of certain secondary market transactions involving U.S. Treasury securities, which are currently set to become effective for certain cash market transactions on December 31, 2026. Once effective, this central clearing mandate will impact certain of our participants who do not centrally clear such trades today, and some of our investor clients have expressed concerns about using platforms that will require the clearing of any resultant trades executed on such platforms. While we expect this change will increase our own platform efficiency, it is still unknown at this time the full impact of this change, and what effect it will have, whether positive or negative, on our industry, our clients or us. In addition, following the change in U.S. presidential administrations in January 2025, the SEC withdrew multiple rule proposals, including those relating to the expansion of Regulation ATS and Regulation SCI. It remains unknown to what extent new legislation will be passed into law or whether other pending or new regulatory proposals will be adopted, abandoned or modified, or what effect such passage, adoption, abandonment or modification will have, whether positive or negative, on our industry, our clients or us.

Previous wording

We must continue to enhance and improve our electronic trading platforms. The markets in which we compete are characterized by increasingly complex protocols, systems, technology and infrastructure requirements that require us to devote substantial resources to modify and adapt our services. Our future success will depend on our ability to enhance our existing products and services, develop and/or license new products and technologies that address the increasingly sophisticated and varied needs of our existing and prospective broker-dealer and institutional investor clients and respond to technological advances and emerging industry and regulatory standards and practices, including cloud and AI technologies, on a cost-effective and timely basis. For example, in 2023, we introduced MarketAxess X-Pro, our newest trading platform, which provides traders with a flexible user experience, intuitive workflows and access to our proprietary data and pre-trade analytics. In addition, as the overall share of electronic trading grows in global credit products, we are experiencing continued demand for, and growth in, our automated and algorithmic trading solutions. We also support a large and growing base of dealer market making algorithms. We plan to continue to focus on technology infrastructure and automation initiatives to support more efficient trade execution by our clients.

Current wording

We must continue to enhance and improve our electronic trading platforms. The markets in which we compete are characterized by increasingly complex protocols, systems, technology and infrastructure requirements that require us to devote substantial resources to modify and adapt our services. Our future success will depend on our ability to enhance our existing products and services, develop and/or license new products and technologies that address the increasingly sophisticated and varied needs of our existing and prospective broker-dealer and institutional investor clients and respond to technological advances and emerging industry and regulatory standards and practices, including cloud and AI technologies, on a cost-effective and timely basis. For example, in the first half of 2025, we continued our roll-out of Targeted RFQ, which highlights our AI-driven dealer selection tool, a machine learning model that predicts which counterparties are most likely to provide competitive pricing for high-touch workflows. We have also recently expanded our global Mid-X offering, a sessions-based mid-point matching tool for broker-dealers, to emerging market bonds. In addition, as the overall share of electronic trading grows in global credit products, we are experiencing continued demand for, and growth in, our automated and algorithmic trading solutions. We also support a large and growing base of dealer market making algorithms. We plan to continue to focus on technology infrastructure and automation initiatives to support more efficient trade execution by our clients.

Previous wording

As further described under “— Critical Factors Affecting our Industry and our Company — Economic, Political and Market Factors,” and “— Results of Operations — Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024,” our trading volumes increased and our average variable transaction fee per million decreased compared to the three months ended March 31, 2024.

Current wording

As further described under “— Critical Factors Affecting our Industry and our Company — Economic, Political and Market Factors,” “— Results of Operations — Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024,” and “— Results of Operations — Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024,” our trading volumes increased and our average variable transaction fee per million decreased compared to the three and six months ended June 30, 2024.

Previous wording

Other Commissions. Other commissions include equities and foreign exchange commissions for Pragma’s algorithmic trading services. Commissions for equities and foreign exchange are volume-tiered and consist of variable transaction fees that are billed monthly.

Current wording

Other Commissions. Other commissions include equities and foreign exchange commissions for algorithmic trading services and derivative and exchange-traded-fund (“ETF”) commissions earned by RFQ-hub. Commissions for equities, foreign exchange, derivatives and ETFs are volume-tiered and consist of variable transaction fees that are billed monthly.

Previous wording

Technology services include technology services revenue generated by Pragma and revenue generated from telecommunications line charges to broker-dealer clients.

Current wording

Technology services include technology-related license fees, connectivity fees and revenue generated from telecommunications line charges to broker-dealer clients.

Previous wording

In 2023, 2024 and 2025, the PSUs were granted to the executive officers and certain senior managers. Each PSU is earned or forfeited based on our level of achievement of certain predetermined metrics, including pre-tax adjusted operating margin, U.S. credit market share and revenue growth excluding U.S. credit. The vested share payout ranges from zero to 200% of the PSU target. The number of PSUs that vest, if any, is determined by the level of achievement of the performance metrics during the three-year performance periods, as certified by the Compensation and Talent Committee following the conclusion of the performance period. In addition, participants must provide continued service through the vesting date, subject to death, disability and qualified retirement exceptions, as applicable. Compensation expense for the PSUs is measured using the fair value of our stock at the grant date and estimates of future performance and actual share payouts. Each period, we make estimates of the current expected share payouts and adjust the life-to-date compensation expense recognized since the grant date. As of March 31, 2025, a 10.0% change in the expected final share payouts would increase or decrease the life-to-date compensation expense by $1.7 million. The estimated final share payouts for the 2022 and 2023 awards as of March 31, 2025 decreased 7.2% compared to December 31, 2024. See Note 9 for a discussion of the Company’s stock-based compensation expense.

Current wording

In 2023, 2024 and 2025, the PSUs were granted to the executive officers and certain senior managers. Each PSU is earned or forfeited based on our level of achievement of certain predetermined metrics, including pre-tax adjusted operating margin, U.S. credit market share and revenue growth excluding U.S. credit. The vested share payout ranges from zero to 200% of the PSU target. The number of PSUs that vest, if any, is determined by the level of achievement of the performance metrics during the three-year performance periods, as certified by the Compensation and Talent Committee following the conclusion of the performance period. In addition, participants must provide continued service through the vesting date, subject to death, disability and qualified retirement exceptions, as applicable. Compensation expense for the PSUs is measured using the fair value of our stock at the grant date and estimates of future performance and actual share payouts. Each period, we make estimates of the current expected share payouts and adjust the life-to-date compensation expense recognized since the grant date. As of June 30, 2025, a 10.0% change in the expected final share payouts would increase or decrease the life-to-date compensation expense by $1.4 million. The estimated final share payouts for the 2022 and 2023 awards as of June 30, 2025 decreased 23.2% compared to December 31, 2024. See Note 9 for a discussion of the Company’s stock-based compensation expense.

Previous wording

Changes in average foreign currency exchange rates compared to the U.S. dollar had the effect of decreasing each of revenues and expenses by $0.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Changes in average foreign currency exchange rates compared to the U.S. dollar had the effect of increasing revenues and expenses by $2.1 million and $1.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

Credit variable transaction fees decreased by $5.7 million, driven by a 9.7% decrease in total credit average variable transaction fee per million offset by a 6.3% increase in trading volume. Rates variable transaction fees increased by $1.8 million, driven principally by a 52.9% increase in trading volumes, partially offset by a 12.3% decrease in average variable transaction fee per million. Other variable transaction fees include equities and foreign exchange commissions earned by Pragma.

Current wording

Credit variable transaction fees increased by $15.3 million, driven by a 20.2% increase in trading volume offset by a 6.8% decrease in total credit average variable transaction fee per million. Rates variable transaction fees increased by $2.3 million, driven principally by a 55.2% increase in trading volumes, partially offset by a 9.4% decrease in average variable transaction fee per million. Other variable transaction fees include equities and foreign exchange commissions and, beginning in May 2025, derivative and ETF commissions earned by RFQ-hub.

Previous wording

Credit average variable transaction fee per million decreased by 9.7% to 139.18 per million for the three months ended March 31, 2025, mainly due to product and protocol mix-shift reflecting lower levels of U.S. high-yield activity and increased portfolio trading, which was partially offset by an increase in the duration of U.S. high-grade bonds traded on our platforms.

Current wording

Credit average variable transaction fee per million decreased by 6.8% to $138.02 per million for the three months ended June 30, 2025, mainly due to protocol mix-shift reflecting increased portfolio trading.

Previous wording

Information Services. Information services revenue increased by $1.0 million for the three months ended March 31, 2025, mainly due to net new data contract revenue.

Current wording

Information Services. Information services revenue increased by $0.5 million for the three months ended June 30, 2025 due to positive impact of foreign currency fluctuations of $0.4 million and net new contract revenue of $0.1 million

Previous wording

Technology Services. Technology services revenue increased by $0.4 million for the three months ended March 31, 2025 due to higher Pragma-related license and technology fees.

Current wording

Technology Services. Technology services revenue increased by $0.5 million for the three months ended June 30, 2025 due to higher license and connectivity fees.

Previous wording

General and administrative expenses increased by $1.0 million, primarily due to higher subscription costs.

Current wording

General and administrative expenses increased by $0.5 million, primarily due to higher subscription costs.

Previous wording

Interest expense decreased by $0.1 million due to lower financing charges incurred under our short-term borrowing arrangements.

Current wording

Interest expense decreased by $0.5 million due to lower financing charges incurred under our short-term borrowing arrangements.

Previous wording

Our consolidated effective tax rate can vary from period to period depending on the geographic mix of our earnings, provisions for unrecognized tax benefits, changes in tax legislation and tax rates and the amount and timing of excess tax benefits or detriments related to share-based payments, among other factors. The provision for income taxes for the three months ended March 31, 2025 includes provisions for unrecognized tax benefits of $54.9 million and $1.4 million for uncertain tax positions related to prior periods and the current period, respectively.

Current wording

Our consolidated effective tax rate can vary from period to period depending on the geographic mix of our earnings, provisions for unrecognized tax benefits, changes in tax legislation and tax rates and the amount and timing of excess tax benefits or detriments related to share-based payments, among other factors. The increase in the effective tax rate for the three months ended June 30, 2025 is due to current period accruals related to the reserve for unrecognized tax benefits established in the first quarter of 2025.

Previous wording

The 1.2% increase in our U.S. high-grade volume was principally due to an increase in estimated market volumes, partially offset by a decrease in our estimated market share. Estimated U.S. high-grade market volume as reported by TRACE increased by 8.4% to $2.6 trillion for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 18.0% for the three months ended March 31, 2025 from 19.3% for the three months ended March 31, 2024. U.S. high-yield volume increased by 5.4% primarily due to an increase in estimated market volumes partially offset by a decrease in our estimated market share. Our estimated market share of total U.S. high-yield corporate bond volume decreased to 11.9% for the three months ended March 31, 2025 from 12.9% for the three months ended March 31, 2024.

Current wording

The 9.4% increase in our U.S. high-grade volume was principally due to an increase in estimated market volumes offset by a decrease in our estimated market share. Estimated U.S. high-grade market volume as reported by TRACE increased by 11.4% to $5.0 trillion for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 18.7% for the six months ended June 30, 2025 from 19.1% for the six months ended June 30, 2024. U.S. high-yield volume increased by 14.9% primarily due to an increase in estimated market volumes offset by a decrease in our estimated market share. Our estimated market share of total U.S. high-yield corporate bond volume decreased to 12.3% for the six months ended June 30, 2025 from 13.2% for the six months ended June 30, 2024.

Previous wording

Emerging markets and Eurobond volumes increased by 8.5% and 14.8%, respectively. Other credit volumes increased 38.5%, mainly due to an increase in estimated municipal bond market volumes. Rates trading volume increased 52.9%, primarily due to an increase in estimated market volumes.

Current wording

Emerging markets and Eurobond volumes increased by 13.4% and 20.1%, respectively. Other credit volumes increased 28.0%, mainly due to an increase in estimated municipal bond market volumes. Rates trading volume increased 54.2%, primarily due to an increase in estimated market volumes.

Previous wording

Post-Trade Services. Post-trade services revenue increased by $0.4 million for the three months ended March 31, 2025, principally due to net new contract revenue of $0.6 million, partially offset by the negative impact of foreign currency fluctuations of $0.2 million.

Current wording

Post-Trade Services. Post-trade services revenue increased by $1.0 million for the six months ended June 30, 2025 due to net new contract revenue of $0.6 million and the positive impact of foreign currency fluctuations of $0.4 million.

Previous wording

Technology and communications expenses increased by $1.0 million primarily due to higher cloud hosting costs.

Current wording

Technology and communications expenses increased by $2.6 million primarily due to higher cloud hosting and software service costs.

Previous wording

Interest income increased by $1.2 million, driven by higher cash and investment balances.

Current wording

Interest income increased by $0.7 million, driven by higher investment balances compared to the prior period.

Previous wording

Other, net increased by $2.3 million primarily driven by unrealized gains of $1.1 million on our U.S. Treasury investments in the current period compared to unrealized losses of $0.3 million in the prior period and lower foreign currency transaction losses in the current period compared to the prior period of $0.9 million.

Current wording

Other, net increased by $3.1 million primarily driven by the impact of net foreign currency transaction gains in the current period compared to losses in the prior period of $3.0 million and higher unrealized gains of $1.3 million on our U.S. Treasury investments in the current period, offset by expense reflecting an increase to redeemable noncontrolling interest related to the 2025 RFQ-hub Acquisition of $0.9 million and a charge associated with the 2025 RFQ-hub acquisition of $0.6 million.

Previous wording

During the three months ended March 31, 2025, we have met our funding requirements through cash on hand, internally generated funds and short-term borrowings. Cash and cash equivalents and corporate bond and U.S. Treasury investments totaled $642.1 million as of March 31, 2025. Our investments generally consist of investment-grade corporate bonds and U.S. Treasury securities. We limit the amounts that can be invested in any single issuer and invest in short- to intermediate-term instruments whose fair values are less sensitive to interest rate changes.

Current wording

During the six months ended June 30, 2025, we have met our funding requirements through cash on hand, internally generated funds and short-term borrowings. Cash and cash equivalents and corporate bond and U.S. Treasury investments totaled $620.9 million as of June 30, 2025. Our investments generally consist of investment-grade corporate bonds and U.S. Treasury securities. We limit the amounts that can be invested in any single issuer and invest in short- to intermediate-term instruments whose fair values are less sensitive to interest rate changes.

Previous wording

As a result of our self-clearing and settlement activities, we are required to finance certain transactions, maintain deposits with various clearing organizations and clearing broker-dealers and maintain a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Exchange Act. As of March 31, 2025, the aggregate amount of the positions financed, restricted cash deposits and customer reserve balances associated with our self-clearing and settlement activities was $227.3 million. These requirements can fluctuate based on trading activity, market volatility or other factors which may impact our liquidity or require us to use our capital resources.

Current wording

As a result of our self-clearing and settlement activities, we are required to finance certain transactions, maintain deposits with various clearing organizations and clearing broker-dealers and maintain a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Exchange Act. As of June 30, 2025, the aggregate amount of the positions financed, restricted cash deposits and customer reserve balances associated with our self-clearing and settlement activities was $278.8 million. These requirements can fluctuate based on trading activity, market volatility or other factors which may impact our liquidity or require us to use our capital resources.

Previous wording

Cash Flows for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Current wording

Cash Flows for the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

Previous wording

Cash flows from operating activities consist primarily of net income adjusted for non-cash items that primarily include depreciation and amortization, stock-based compensation expense, deferred tax expense and changes in receivables and payables on the consolidated statement of financial condition. The $34.6 million increase in net cash provided by operating activities was primarily due to favorable changes in income and other tax liabilities and net receivables from broker-dealers, clearing organizations and customers associated with our clearing activities, offset by lower net income and an unfavorable change in accounts receivable.

Current wording

Cash flows from operating activities consist primarily of net income adjusted for non-cash items that primarily include depreciation and amortization, stock-based compensation expense, deferred tax expense and changes in receivables and payables on the consolidated statement of financial condition. The $19.4 million increase in net cash provided by operating activities was primarily due to favorable changes in income and other tax liabilities, offset by lower net income and unfavorable changes in accounts receivable and accounts payable, accrued expenses and other liabilities.

Previous wording

The $1.3 million increase in net cash used in investing activities was primarily due to higher capital expenditures.

Current wording

The $34.4 million increase in net cash used in investing activities was primarily due to net cash outflows for the 2025 RFQ-hub Acquisition.

Previous wording

The $24.5 million increase in net cash used in financing activities was principally due to higher repurchases of common stock and lower exercises of stock options, offset by lower withholding tax payments on the vesting of Full Value Awards.

Current wording

The $28.3 million increase in net cash used in financing activities was principally due to higher repurchases of common stock and lower exercises of stock options, offset by lower withholding tax payments on the vesting of Full Value Awards.

Previous wording

The $11.8 million change in the effect of exchange rate changes on cash and cash equivalents was driven by changes in the cumulative translation adjustment.

Current wording

The $30.8 million change in the effect of exchange rate changes on cash and cash equivalents was due to changes in the cumulative translation adjustment, principally driven by the strengthening of the British Pound and Euro versus the U.S. Dollar in the current period.

Previous wording

Certain of our U.S. subsidiaries are registered as broker-dealers and are subject to the applicable rules and regulations of the SEC, FINRA and the CFTC. These rules contain minimum net capital requirements, as defined in the applicable regulations. Certain of our foreign subsidiaries are regulated by the FCA in the U.K. or other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of March 31, 2025, each of our subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of March 31, 2025, our subsidiaries maintained aggregate net capital and financial resources that were $552.1 million in excess of the required levels of $36.6 million.

Current wording

Certain of our U.S. subsidiaries are registered as broker-dealers and are subject to the applicable rules and regulations of the SEC, FINRA and the CFTC. These rules contain minimum net capital requirements, as defined in the applicable regulations. Certain of our foreign subsidiaries are regulated by the FCA in the U.K. or other foreign regulators and must maintain financial resources, as defined in the applicable regulations, in excess of the applicable financial resources requirement. As of June 30, 2025, each of our subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of June 30, 2025, our subsidiaries maintained aggregate net capital and financial resources that were $603.8 million in excess of the required levels of $42.4 million.

Previous wording

We execute securities transactions between our institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades. Our operating subsidiaries settle such transactions using their self-clearing operations or through the use of third-party clearing brokers or settlement agents. Settlement typically occurs within one to two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded. Under both the self-clearing and the third-party clearing models, we may be exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is an error in executing a matched principal transaction. Pursuant to the terms of the securities clearing agreements, each third-party clearing broker has the right to charge us for any losses they suffer resulting from a counterparty’s failure on any of our trades. We did not record any liabilities or losses with regard to counterparty failures for the three months ended March 31, 2025 and 2024. Substantially all of our open securities failed-to-deliver and securities failed-to-receive transactions as of March 31, 2025 have subsequently settled at the contractual amounts.

Current wording

We execute securities transactions between our institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades. Our operating subsidiaries settle such transactions using their self-clearing operations or through the use of third-party clearing brokers or settlement agents. Settlement typically occurs within one to two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded. Under both the self-clearing and the third-party clearing models, we may be exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is an error in executing a matched principal transaction. Pursuant to the terms of the securities clearing agreements, each third-party clearing broker has the right to charge us for any losses they suffer resulting from a counterparty’s failure on any of our trades. We did not record any liabilities or losses with regard to counterparty failures for the six months ended June 30, 2025 and 2024. Substantially all of our open securities failed-to-deliver and securities failed-to-receive transactions as of June 30, 2025 have subsequently settled at the contractual amounts.

Previous wording

We have leases for corporate offices and equipment with initial lease terms ranging from one year to 15 years. We have total future contractual rent payments on these leases of $91.1 million, with $12.8 million due within the next 12 months and $78.3 million due beyond 12 months.

Current wording

We have leases for corporate offices and equipment with initial lease terms ranging from one year to 15 years. We have total future contractual rent payments on these leases of $88.5 million, with $12.9 million due within the next 12 months and $75.6 million due beyond 12 months.

Previous wording

We enter into foreign currency forward contracts to economically hedge our exposure to variability in certain foreign currency transaction gains and losses. As of March 31, 2025, the notional value of our foreign currency forward contract outstanding was $62.0 million and the fair value of the asset was $2.6 million.

Current wording

We enter into foreign currency forward contracts to economically hedge our exposure to variability in certain foreign currency transaction gains and losses. As of June 30, 2025, the notional value of our foreign currency forward contract outstanding was $66.9 million and the fair value of the asset was $1.7 million.

Previous wording

In January 2022, our Board of Directors authorized the 2022 Repurchase Program for up to $150.0 million. In August 2024, our Board of Directors authorized the 2024 Repurchase Program for up to an additional $200.0 million. As of March 31, 2025, the 2022 Repurchase Program has been exhausted and we had $187.0 million of remaining capacity under the 2024 Repurchase Program. As of April 30, 2025, we had $173.4 million of remaining capacity under the 2024 Repurchase Program. Shares repurchased under the Repurchase Programs will be held in treasury for future use.

Current wording

In January 2022, our Board of Directors authorized the 2022 Repurchase Program for up to $150.0 million. In August 2024, our Board of Directors authorized the 2024 Repurchase Program for up to an additional $200.0 million. The 2022 Repurchase Plan was exhausted during the first quarter of 2025 and, as of June 30, 2025, we had $150.3 million of remaining capacity under the 2024 Repurchase Program. As of July 31, 2025, we had $145.0 million of remaining capacity under the 2024 Repurchase Program. Shares repurchased under the Repurchase Programs will be held in treasury for future use.

Previous wording

The table set forth below presents a reconciliation our net income to net income, excluding notable items, diluted EPS to diluted EPS, excluding notable items, and the effective tax rate to effective tax rate, excluding notable items for the three months ended March 31, 2025 and 2024:

Current wording

The table set forth below presents a reconciliation of our total expenses to total expenses, excluding notable items, other income (expense) to other income (expense) excluding notable items, net income to net income, excluding notable items, diluted EPS to diluted EPS, excluding notable items, and the effective tax rate to effective tax rate, excluding notable items for the three and six months ended June 30, 2025 and 2024:

Previous wording

The table set forth below presents a reconciliation of our net income to EBITDA and net income margin to EBITDA margin, as defined above, for the three months ended March 31, 2025 and 2024:

Current wording

The table set forth below presents a reconciliation of our net income to EBITDA and net income margin to EBITDA margin, as defined above, for the three and six months ended June 30, 2025 and 2024:

Previous wording

The table set forth below presents a reconciliation of our net cash provided by operating activities to free cash flow, as defined above, for the three months ended March 31, 2025 and 2024:

Current wording

The table set forth below presents a reconciliation of our net cash provided by operating activities to free cash flow, as defined above, for the three and six months ended June 30, 2025 and 2024: