Markit Ltd Meets Earnings Expectations Beats on Revenue, Shares Rise Almost 5%

Global provider of financial information services, Markit Ltd (NASDAQ:MRKT), has announced its financial results for the third quarter of 2014, in its second earnings release in its short publicly traded history.

The company has met market expectations in terms of earnings per share (EPS), while beating forecasts on revenues, posting a 13.1% year-on-year increase to $269.7 million, which was higher by $9 million when compared to the consensus.

On a constant currency basis, the revenues of Markit Ltd (NASDAQ:MRKT) increased by 11.1%, comprised of 8.1% in organic revenue and 3% attributed to mergers and acquisitions (M&A).

The information segment of the firm’s business contributed 4.8%, processing +9.4% and solutions (+13.1%).

The company’s CEO Lance Uugla, shared, “The company's three business segments all produced solid results as customer demand for our products and services continued to grow. As the market adapts to new regulations and reporting requirements, we are focused on helping customers comply with these requirements and achieve operating efficiencies, which means we are well positioned to reach our long-term financial objectives.”

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA of Markit Ltd (NASDAQ:MRKT) totaled $126.8 million for the three months ending on September 30th, 2014, which was higher by $16.1 million, or 14.5% from $110.7 million reported a year ago.

This growth was across all three segments, however, the better part of the company’s business is its continuing ability to increase its margins, namely in the processing and information segments.

The firm's adjusted EBITDA margin increased to 47.3% for the three months ended September 30, 2014, compared to the adjusted EBITDA margin of 46.4% for the three months ended September 30, 2013, due to positive contributions from our Processing and Information segments in the quarter, largely as a result of the revenue performance mentioned above.

The company’s share prices reacted positively to the announcement after the market open. Subsequently, after almost giving up all of the daily gains made throughout New York trading, buying picked up towards the end of the trading session to drive Markit Ltd’s (NASDAQ:MRKT) share price to $25.11 which is higher by 4.3% from yesterday’s close.