In its debut public earnings following the company’s IPO in June, Markit reports second quarter revenue of $264.6 million, an 11% increase year over year, with growth in all three of its business segments including Information (up 5.7%), Processing (up 1.7%) and Solutions (up 35.7%).
The $18.5 million revenue increase in the Solutions segment, which includes a variety of data tools such as Markit Enterprise Data Management and Markit | Genpact KYC Services, was driven by new business wins across both the Enterprise Software and Managed Services subdivisions, as well as revenue linked to assets under management in the loan market, says Markit. Plus, the firm benefited from acquiring Markit Corporate Actions and front-office software thinkFolio.
For the Information segment, Markit’s largest group by total revenue, revenue increased by $6.6 million, due largely to the positive impact of foreign exchange movements across the segment and by new business wins within the Pricing and Reference Data subdivision, says the firm. The Pricing Data subdivision includes Markit’s securities lending data platform.
The Processing segment saw a $1.2 million revenue increase, though the gain came from favorable foreign exchange movements, while Markit’s derivatives processing product, MarkitSERV, saw slight drop in revenue.
For the company as a whole, on a constant currency basis, revenue grew by 7.1%, with organic revenue growth of 4.3% and acquisition-related revenue growth of 2.8%.
Total profit for the quarter did fall to $29.4 million, down from $53.4 million during the second quarter last year. This drop was due to a variety of cost increases, including an $11.7 million (15.1%) increase in personnel costs, due to adding employees through acquisitions, investments in products, higher employee cash compensation levels, and adverse movements in foreign exchange rates.
The second quarter also accounts for $29.5 million in IPO-related costs, plus $1.8 million in legal advisory fees related to ongoing antitrust investigations by the U.S. Department of Justice and the European Commission, along with an associated consolidated class action lawsuit relating to credit derivatives and related markets, says Markit.
“We are committed to delivering on the promises made to investors during the IPO, and to seizing opportunities to grow the business profitably,” says Lance Uggla, chairman and chief executive officer of Markit.
He adds: “Notwithstanding the continuing challenges in the financial markets, particularly in fixed income, we remain well positioned to deliver on our longterm financial objectives of organic revenue growth of 5% to 7%, overall double digit revenue growth including acquisitions and Adjusted EBITDA margin in the low to mid 40s.” (This quarter had adjusted EBITDA margin of 45.4% compared to 46.7% in the second quarter of last year.)
Markit Sees 11% Revenue Growth Led by Data Products
In its debut public earnings following the company’s IPO in June, Markit reports second quarter revenue of $264.6 million, an 11% increase year over year, with growth in all three of its business segments including Information (up 5.7%), Processing (up 1.7%) and Solutions (up 35.7%).