MKTX - Earnings call transcript Q1 2019 | MarketAxess Holdings Inc.

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Operator

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, April 24, 2019. I would now like to turn the call over to David Cresci, Investor Relations Manager at MarketAxess. sir. ahead go Please

David Cresci

welcome MarketAxess' and conference quarter call. to morning first the XXXX Good

Rick Chief financial us provide Chairman review the Officer also And McVey, For call, joins Chief DeLise, and Concannon, trends our for Financial President quarter then COO Tony on review the the Executive Chris and for update will the Q&A. an will in businesses. results. highlights will Officer, and

include nature that forward-looking call the to let today's over materially the call in is you belief and that may Company's from These Before future I turn indicated differ results those company's statements. me Rick, condition represent are statements events remind statements. may forward-looking actual what financial regarding by uncertain. their

also that the company's results, on For statements a discussion of issued quarterly of to description Form year XXXX. some Web XX, you read our direct site. factors December affect morning this please XX-K earlier release, forward-looking future the could available of Annual earnings is and I see on ended, factors now our our and the in risk in the Report for which the would risks disclaimer was

me call the let to over Now, Rick. turn

Rick McVey

high-grade institutional the believe bond with volume our fully we $XXX grew year-over-year year-over-year. Eurobonds available XX.X%. had trading record record QX, Europe you up quarter billion emerging driven we thank activity. markets billion. $XXX U.S. high-grade, fully us market U.S. quarter And to corporate morning. also and open high-yield volumes products This electronic Based record of record our was reported to U.S. all electronic in compared volume for was on first trading across and Overall, joining Good open position in XX% share leadership trading data QX discuss experienced XXXX volumes substantially and strong and to by first for trading Estimated U.S. results morning, results. XX% quarter volume XXXX. up a our core

This international trading record XX% activity levels with billion. quarter U.S. the up reached volume $XXX client outside of to

up Operating were to and record $X.XX. record the revenues up XXXX. $XX compared X% quarter $XXX QX was First EPS for to quarter X% diluted million was also million a income

are conditions. Board In the In Directors. X of Nancy addition at at highlights Nancy our audit we call brings firm's results, of the to where X served decades global Vice our pleased more global Chair Altobello last also Board and Slide our experience as Global she management financial EY. from than to market initiatives. led EY, Nancy of to Talent talent talent

volume open results and secondary is record environment typically levels and conditions to trade's and rose In flows believe for bonds. very strong High-grade fourth spreads. move favor. sharply, approximately average orders highlights this remains spite quarter. makers in another on $X quarter, growth see completed to corporate strong of ago. of open the U.S. buy share, XXX,XXX traded shorter QX $XXX open volume featured trading international were on XXX,XXX continues curve experienced activity market issue, achieved to up rates billion this scarce system. treasure XX% last in new high while one-year credit with to $X.X trading price XXXX. record our providers and from bond transactions surged risk strong activity; price demand doubling for we a slightly quarter year trading XX% the rapidly market QX volume on the the up quarter represented first for narrowing in sentiment liquidity Our of new kind million our level were platform Open market, yield of that year-over-year responses a up work set or not daily volume in leading bonds trading new live when records billion. flat the this orders, Over Unlike do in runs of the drove maturity XX% to The Adoption open nearly ago. were volumes to QX MarketAxess encouraging period. years during issue due Open trading to year. demand accelerate similar corporate trading to very X from record we trading bonds. on domestic for High-grade Slide It

million liquidity X.X benefited quarter, in up XX% open from costs points on through they open takers U.S. first trading last high-grade a approximately the provided year. savings trading. firms protocols. transaction cost the XXX through $XX Participants average when saved completed open an from basis of trading through the approximately Liquidity in system During estimated transaction transaction quarter yield

Slide we international progress. In liquidity core update quarter X $XX to an embrace and of million up grow volume Open the four source liquidity. saved investor that year-over-year. on XX% in an as an estimated all addition, products important trading dealer clients provides estimate trading continues providers as open across

business of international quarter Our growth. experienced strong another

are automation operate. trading the local XX% growth up the strengthening fully we had confident, over markets EM on especially rate up Emerging we both with our XX a of year-over-year. in continued noting increase strong client on XX% highly competitive MTF trading last competitive benefits is we including investment was new results based worth preparation credit credit We and our active in the technology institutions where successfully where MarketAxess volumes launched our expands have trading to now compared QX APA It's and XX% significantly XXXX in electronic believe client quarter. over volume annual entities in Activity talent with years XX% EU that We and well three orders. platform. debt greater now creating to platform regulated in the for in Europe for growth Growing are with demonstrates Slide as trading as the our represents representing the small in increased a compound growth by gratified volumes volume clients region. year-over-year. of on Brexit, automation XXX the the of XX% firms environment We capture X international required arm currently we feel platform markets this all European potential XX% from have opportunity the number Eurobond long-term micro-light external international volume market international and trading. shareholders. the the

last tools. approximately are making We now XXX% high-grade QX, dealer in rapidly year-over-year. activity in execution active grown In with took increased trades platform asset trades firms same on this a in up and providing the same both large QX, by million XXXX place seeing increase are auto investor the has generated responses using XXX,XXX algo XX quarter. year XX,XXX year. generated in investor was trades This automation embrace trading a clients execution U.S. global firms XX period dealer rapidly managers use XX executing algo algorithms via market to of versus ago. period X.X functionality the quarter, the auto responses from The

number this of dealer the the higher firms year cost reference, last clients believe execution investment continue credit auto in period area. was investor that to efficiency we We of levels will same to in trading automation and benefits drive and and XX. using will trading For our continue and

greater the Now let Tony discuss to in me results over turn financial detail. call to the

Tony DeLise

product to driven narrowing Rick U.S. XX% trading were for spread despite volume Thank to high-grade Please categories. volumes. the increase earlier. trade a volumes year-over-year Overall, up estimated you, hybrid mentioned the summary in the turn X of environment that for XX% $XXX Rick. Slide quarter up across billion volumes our U.S. trading by

year-over-year up on were other XX% category share. advances trading credit volumes Our estimated market and

point far bonds volume was trading XX% emerging European conditions QX quarter, estimated market in but a are down Our in X% look Eurobond similar market markets, April U.S. market in levels. trading quarter tracking X.X increase gains April and volume first high-yield corporate to volumes. high-yield in this posting share. outpaced around both from a and changes standout on market estimated U.S. an trading percentage increase high-grade volumes the

tracking quarter. than the April months-to-date daily market are share average and While lower high-grade first volume overall

of Slide Information revenue basis Overall resulted quarterly than X% was provide was April Our XX% on ADV our is than X% in up On commissions. performance. earnings XX% higher overall a up more year-over-year, X%. currency April and we volume trading revenue in currently a uplift X, XXXX. increase constant services summary in a XX% up

in benefits recognized related was was million a up in QX, one-time revenue the trade first II XX% slightly to up were record rate effective $X of in first MiFID QX. quarter year-over-year. implementation fees awards. and and XX.X% the X% share was In XXXX quarter. we The services based year-over-year. million was up tax impact post up Excluding Expenses X% income compensation excess $XX currency and foreign recognized operating EBITDA tax in reached

increase million were XX.X XX% EPS was out million. and share revenue, slightly down stable our size fees XX, trading on shares. lower have Slide of in volumes offset a up as of $X.XX laid we high-grade was volume commission variable fourth Total Our On by million count transaction fee buckets. from XX% in capture. fees a trading a diluted per mixed year-over-year was was U.S. favorable diluted slightly impact overall per and lower shift quarter yields fee this by the offset trade

million in level per quarter. at due product individual to mix. product decreased the fee solely was on capture little category shift credit fee other the sequential a change $XX basis Our There in by the a during

U.S. earnings variable high had U.S. in all one distribution sequential January As discussed call, in decline plan the grade distribution the a fee plan January in fees. fee the from dealer effective migrate X, resulting to we high-grade

and XX Slide with The the were the On fees to absolute in compensation were largely to the Cash XX, of Our headcount free in in and benefits. in strong advertising sheet expense million XX flow wage sequential change variable costs led in and and contributors provide minimum of $XXX of benefits million year-over-year expenses. compensation in due growth each volume main marketing compensation higher and with benefits trading credit million. by was contributed higher open XX% typical the compensation and rise the to investments a we accrual represented $XXX balance quarter higher up Sequentially costs. increase. you the Slide the increase XX cash reduction stock-based of higher improved related benefits offset to a basis expense March provides and information. record benefits were clearing On lower activity in bonus an to $X.X expenses financial XX%. cost unused as other $X.X results, A in and million, up an taxes trailing and the year-over-year in uplift increase reached almost of for in stock-based accounted XX-month The year-over-year increase compensation coupled awards X% headcount reflecting detail. category. seasonality, compensation increase higher senior a increase first rate and on employment expenses

During we quarter, the bonuses of of and a $XX roughly related year-end employee cash paid taxes million million. first quarterly out dividend and $XX

our net also in associated XX,XXX XX,XXX and XX,XXX program tax repurchased upon awards. vesting total shares the of downs during including employee share We buyback stock with under obligation, quarter

April. on on sheet. repurchase Based requirements. new a of Our adopted we share quarter assets did the new impact Board into $XXX lease, lease the capital our accounting of not liabilities standard the new have balance approved regular the quarterly results, program Adoption effect Effective recognition million the a operating an January dividend. X, $X.XX first at has on regulatory and requiring beginning went of standard

turn to some Rick closing Now, to back comments. I'm going for the call

Rick McVey

Thank you, Tony.

market resilience results environments. growth of Our the and our of first consistency variety demonstrate across rates quarter a

in trading. provides evidence international We credit inflection investment growth are open trading trading for point automation in as electronic an encouraged markets. the by global investor of activity well client The in ongoing as

with trading we share in continues are to agenda initiatives data, data expand partner new with recently and ETFs. growth note, distribution for ETF Our and with Of Refinitiv pleased Virtu for trading. to

would happy your questions. the I line open to Now, for be

Operator

Barclays. from with Thank our question you. Instructions] comes [Operator And first Jeremy Campbell

line open. is Your

Jeremy Campbell

Thank you. Hey.

on could So space. of brought an yours wondering the electronic of view fixed dynamics of the competitor if to income a lot space competitive updated are the I'm share IPO just you the a now? in obviously of trading attention kind

Rick McVey

of that. But the with team does trading It institutional competitive financial provide way think their a on insight there successful team demand presenting the congratulating And get the information $XX apples-to-apples differs pretty credit, Tradeweb retail know about those is, Billy have provide institutional that interdealer I starts tremendous which we was entire Sure. has landscape in $XXX one I to section ways well done million information and the around to exists in to last of investor the ours. me voice million. as good the all for does interdealer $XXX Tradeweb Lee credit well of to is half start it's and year per three Thanks little by and or year XXXX business from do revenue exactly on brokerage fixed over it million million business think would on a the comparisons. And about Jeremy. right business, a businesses, further that as electronic income business. good that three, include Jeremy And They brokerage where But the year estimates first $XX so but client had the let to the for start with hard to the electronic sign Happy if really trading there. some are and another look $XX parsing quality a segments, IPO. guess. at It's we at retail million. estimate probably you voice highly that

line $XX gets don't think and electronic combination CDS about credit further is revenue. has acquisition institutional have one for that we've I right, what And is million We revenue believe that about to business. business to an the we year other to million thinking company that that bonds SDP the attribute of apologies million through left X% the retail. and about $XX down business known is strong it would And and the BondDesk the and in that what a around all trading. way we a important or what represents Tradeweb total and something of along half global you $XX of estimates reflects So half very corporate annual is in institutional But business that's institutional it. now electronic true of trading but rates

in is great. in would that demonstrate good So, not corporate Growth probably that rates not the area is but of overlap bond very area cases, also great. trading institutional that just the both overlap of that

And is out, we for about both the in the electronic not the the credit XX% institutional went Tradeweb for look credit. three would And credit. And quarter that STP we and I the was $XXX I year-over-year products electronic high-grade, a European really euro mechanics flat our $XXX three business the those was are those an numbers year-over-year. just every to that at you put place volume first we where reports high-yield our Eurobond month. you full for products with credit as other have number The out business and the is the if and high-grade about electronic up for U.S. year-over-year $XXX took and electronic million that able XX% Tradeweb Tradeweb three the look was U.S. And or and for was euro that three million, numbers or XX%. year-over-year. that are put three suggest in high-yield that from different but it was number put they down believe and roughly electronic But ADV between U.S. has STP. flat reporting of about because institutional those if U.S. been those products fully ADV million than up about million is million estimate already credit do year-over-year. find would at you $XX trading $XXX way. what business electronic volume we just their But credit together The split know other compete

at ATS platforms see interesting institutional and is clues as XX% electronic that thing you that it represents growth also of I X.X% is that as to retail report of one aggregate Jeremy the registered comment as and in TRACE in within demand trading is So volumes venues the in on credit year-over-year much might work And retail client is systems credit on some another interdealer cross is reported the and or trading. their provide one of than reported space the know that X% all rates But probably and only space for volume guide the we markets. the TRACE I more of in you led share what's our to And what ever of just QX, as that would competitive about well that some a sign And the fully look D-to-D flag is institutional of carries position which were are you this in TRACE volume if ATS. other U.S. all the all that whether segments. was confident matching are to TRACE to client and will that business. to ATS the it volume electronic the market think D-to-D as you of client dealer

about interdealer still platforms or you almost Tradeweb So little when those source D-to-D there BondPoint as do the business. TMC about think primarily coming venues. been is there's as from is competition lesson has clients Bloomberg talked like that institutional Tradeweb The or other within ATS retail today that entirely regulated of RFQ the evidence or operating ATS. or MarketAxess, dealers report venues. of platforms institutional And not very today are broker The

you. are from volumes those I ATS numbers just gave separate So the

Jeremy Campbell

mentioned detailed or brokers buy color for the I response that words managers either it -- think you the usage might on How maybe coming it asset do the already using share? have and involving those your with you signing new already or impact over that brokers greater Got auto I the it. envision of year side market of guess on business execution, and the number of Thanks quick much auto increased on there. for follow-up the just know side. so the firms the you here. both guys

Chris Concannon

that take I'll Chris. one. It's

you really reduce our how side the can automated and is both you market that RFQ of and have trading so no clients their clients their can an delivered from is to be day execution some execution. area certainly mostly because friction of on is, experience can have a on you an hear market, what that but how a services, auto to even that where having touch we auto are this RFQ around dealer exciting the interact through So, point buy much we

market upside clients only are as of clients Auto-Ex around the that's dramatic to it's remember clients today XX globally. So for our our close using it features see growth our in I XXXX just out not

execution a executing it have road auto a it market we of So job diverse ahead across very of orders their long But, of daily reduces growth. does, what products.

one the it's on put you and hear looking trade. solve have how are products So expense the thing reducing they -- reductions reduce where how on to their about side, buy many people to of they broad number desk much, to that they

would the high also side, ability and have from just buy demand And from not clients algos the I our it's platform. say dealer is to So the on increase it's looking higher. their getting to

Operator

from Thank next you. And with our Rich question O'Neill. is Sandler Repetto

is line open. Your

Rich Repetto

I was were Rick, out XX%. just you see guess It's feel was more it's still trades, and number morning be. trading of was the My much than mentioned the the last like quarter? and see would at open holding at And Good that or is, trades. just What point XXx you of on at I XXx it automated further on year-over-year. question trying just it what trading. guys. thought resilient to we color how up me inflection jumped an the Yes. topic And we're just number we I was

inflection on think this we're more in automation. reaching you guess I point So color

Rick McVey

Yes.

first another around and And we the and of on very, out seven are efficiency point happen the higher I to because that the Rich trade these low are the page quality goes a difference count think to is the now managers fully our early so increase that XX,XXX, focused trading enabling quarter sequentially. go I ticket, QX this can that morning. extent fourth they asset efficiency. numbers Auto-Ex data. very it automate big what smaller would these think makes the right can significantly is represent real-time so trading does big impact in was days, question to And good your to

as to back. So to automated composite a have to driver on see primary you execute the responses where think investors their expected about particular come in how plus price in relative they willingness basis an would

very thing help combination higher having be see based managers So I'd will numbers a as our the dealer both are and credit. over we an XX ago, it's of quarter in made ahead. change. on lots in years firms And the algo algo with them. side; But plus about data sea responses just see million That's those markets in in in dealer on had we investment technology to sign substantially a now with automation would be And you excited two asset making of trading we're And say, of so large and the three expectation you little we the same the the see quarters clients. we've algos. that investor conversations the by enormous investment

Rich Repetto

duration the Got for X. there market And Rick in be comment have as on that you did follow-up and -- didn't would page little be and share share right I down mention trends it I -- market And seems the as see you the pointing hear it. the march -- you surprising to-date talk whether be in XQ not the on guess caught sure I April on -- Thanks well that chart pricing, all That April. -- in would about that we did anyway, April? what out question given a you helps. I'm

Tony DeLise

Yes.

to one favor what On wanted the the said the you market first April, more side. look that the nature similar at remark Tony. a to prepared the means platform, flow it's in level, Rich, conditions of on that offer if we it is was And look granular the So, continues quarter.

that on the lower versus wanted are rates bid the know hit side offer side. the You wanted

continues. trend that So

healthy spreads, in which volatility for a out would more or environment again been fairly more spread be to gapping We continue April. us favorable narrowing and has new see issuance

percent continuation at of is a up pieces other about U.S. block April XX%. The a is that of in QX is through high-grade which coming

the So high watermark. that be close would

what or us market of you quarter as as continue to saw constructive be conditions not fourth the first quarter 'XX for in the say of So, 'XX.

you So less of saw it the conditions the in is quarter. constructive first a continuation

Operator

Thank question from Fannon our Jefferies. you. And Dan with next is

Your line is open.

Dan Fannon

Good a trends. Slide about some last quarter the expand I any could international first kind also was regulatory and here X several the of and bit was of morning. saw the Thanks. hoping level wondering I if of on you higher over talk the MiFID really Hi. on progress pickup kind you part of or that in changes quarters.

Rick McVey

I wouldn't is really trading MiFID are say impact QX point That an to and first that place. benefiting markets. and Eurobonds that was I in trading expansion from clearly QX is dealers things year, went behavior MiFID European driving this the of or time now investors that any last open around II would with clients. emerging changes would The into

competitors our So in down costs from the is us take Europe. key liquidity and to that share that main pool terms differentiator allowing is clearly of in transaction driving of factors one

are greater of vast II that's so protocols. breadth currently, by clients third currently. We've European specific real-time MiFID for made European is majority has reporting. the in deemed available because And bonds some big we than I corporate data as the open in reiterate APAs what's liquid they the then, well through regulators some don't qualify of real-time protocols participants far from not new for our the And EM. clients that surprised that quality the and investments around market piece done that is to trading Secondly, things would as

also all use and investment to clients in data provide So Axess driving quarter. think to real-time of what's tools part each CP+ MarketAxess more our is we

Dan Fannon

in from low-end year is guidance the just then, And a towards helpful. progressing is of on quarter just first Tony the how That's expenses. it. run Got of the question color tracking any expenses? rate The on terms

Tony DeLise

Dan. Yes,

So, you're right.

all and get this the when guidance quarter talked But that on January support year range. the took four think the about investments you headcount and reach, new of now We on expense three balance low-end If And of the -- when the plans. forward throughout we this variables we're about expand going and year headcount market, going this at geographic the multiplied year. of one grow products to rest that to track for of is to headcount our expand we've guidance. embedded right are the we're be hiring you call, have and headcount. about the typically protocols, there's first fast by point would big with in our -- making talk the to you variable addressable around about do the simply expectations And that the you're the the you'd

So the headcount numbers we're feel -- good we about that.

variable a had quarter last April over is now and we volumes very around first compensation other The tracking and variable up typically we of are good XX% right April was year. what said April

expect to continue to We deliver.

compensation on the is where So consistent had variable the view with we planned.

sterling The of other foreign factor in million expenses. XX there will be around exchange, we have do

right rate down, to movement is close that FX could FX influence up tracking expenses now, budget. So or that

the upper we a range. think So in comfortable with or I I middle probably lower half the at more half group range the of estimate, as know the provided. looking range the or the than everybody that of toward We're still consensus

Dan Fannon

you. Thank it. Got

Operator

is question next KBW. Voigt our from And you. with Thank Kyle

Your is open. line

Kyle Voigt

morning. Good Hi.

broad-based Just clients or your for you wasn't the [indiscernible] offering. platform. that just just ETF, more agreement sure the ETF on than Can demand it's credit but credit with adding from I access Virtu, if traders that. to functionality get suspect I for

Chris Concannon

solution. Kyle. given the with obviously a building Chris. credit own and It's We've economics quite has been for different made solutions partnering high demand the solutions including our and sense. been someone But looking a economics at variety Yes. ETF for the of of trading It's Thanks trading in been some lot share time. -- building new

now access our experience our -- the giving is remain hub ETF lot a partner, our are the of in they particular a ETF targeted the acquisition our are that similar through at great it really owned been RFQ asking accustomed clients clients much experience ITG RFQ to. on really And so, that a their a real trading them is competitive which can and which provided easier for an it's clients on to life great with very was offering Virtu And on their just have makes by platform, liquidity. platform through RFQ a ETF currently And our while platform. to directly fixed of solution income market so focus

Kyle Voigt

And wanted follow we a hold. said the but there up, -- continues I lot spoke Okay. open Thank already, Eurobond, you. trading know, just about the a just it I to just then, take on

move I ago higher. And trading I range low digit think XQ think of well. penetration even terms open as in from two single just sequentially years in substantially grown business is XQ Eurobond and the to that

not if some wondering around and given between the the but competitive is provide side. dynamics you could there between already, the you've you what Eurobond and Tradeweb on just player larger you commentary Just Bloomberg,

Just can Bloomberg believe shift market wondering staying here technology maybe standpoint terms market liquidity from pool ahead is share share that the kind shift. of and open do how protocol the trading of terms and in competitive sustainable competitive slow of you they and suggesting in of to a

Rick McVey

got as it's the work or We're that and all on and lots risk in documentation. a to technology, major lots ago five in to trading open know of it or involves is investment Happy years trading you very client of management lots happy take out front work in one. and we Kyle Sure. infrastructure, all six of

full well our not I Europe plans aware trading which And have and all of to growth go there. so, progress by that the I in institutional aware all the we to fledged we structure all sure the broker investments with in into new we're in they for a yet. flexibility making space credit. all am infrastructure and which that of Tradeweb dollar got significant require own ownership I'm move do any on determining there, around would lead Bloomberg course to the seen are a that have competitors expect their trading. believe that make we've to of not open that would all the establish really dealer more will all path

will So, more. are we continue to expecting competitors all invest that

model important mix, growing making as a and transformation to right all credit trading and and Given it's to dealers an that we at electronic clearly expect stay having institutional all the getting more growing ETF we market from grow. liquidity. much the Portfolio investors, total is in would the the shares and to continue are of both active and you're center success of here very is that we are is trading it seeing are where to demand source in the

Chris Concannon

And Rick in certainly features. the Europe, algos seeing We platform. dealers on execution many for of auto add, demand just I providing a would we're the high our see

Eurobond high for execution the growing. is the electronic So demand in and market quite

growing is which the market benefit. I overall to market Europe in So electronic think our that share is

We are the solution. also in electronic the in And to converting that growing but growing market and that's feeling Europe. clearly share, an we're benefit some of

Operator

O'Shaughnessy from Thank question And with James. is Patrick Raymond you. our Instructions] [Operator next

open. is line Your

Patrick O'Shaughnessy

Good morning.

core and bond particular So, bond income or fixed maybe inroads. a In other space really that sort start asset in treasuries, for just illiquid, because Rick. think market to the so structure seen one viable really and providers classes the core fragmented Do question you liquidity universe it work. is solution some market thing a wouldn't solution -- [indiscernible] of your is in make we've like edge

Rick McVey

especially small little of issues bonds environments, we think we having both. the live a When most ticket. and Well, about a huge we that could corporate new on also move direction. in think I bit impact automation really liquid see And really believe that market

on during that market operate around though, you model. is could corporates central that could limit the of The XX order are parts think I in turnover actually that small see subset there somewhere that book go where regular that bonds the So, [indiscernible] bonds XX a of enough they day are liquid in to number basis way. a have enough

broadly segments but where it's market the corporates, us hold of take lead could are there to I think don't throughout So direction. automation that likely in

Patrick O'Shaughnessy

in electrification Any Got classes it. quarter. with I kind particular trading volumes now have the were an Thanks. is And impact driving industry-wide sense what industry first maybe to outlier and then, most think? up do starting volumes, first in growing curious you to I wide year-over-year volumes of in nicely of about is of that guess and asset that high-grade point pretty on on pretty velocity bonds kind down corporate corporate significantly just bond quarter think or the

Rick McVey

move bond doubt the all the trillion. that question triggered, about for and belief in policy government down and is one there's for And world credit. up almost back internationally. Very demand U.S. comments market I was Fed of from rapid negative shift around around concerns the on about in extremely a but elsewhere it made in QX spiked Patrick not is example what lot high and about was our that yields model triggers just just the higher demand $XX corporate the the debt the follows rates. that changing. toward for no that much It thanks because running the the the trillion amount making of from And by look central to U.S. and triggered messaging trading $X And bank slowing the economy in

in like of that's the So at I about to point with we embracing levels And be I beginning XX%. see market that moving been crisis. debt about impact do head of automation thing could have with those amount since entrants we believe financial that turnover to numbers volume transferring higher. think was now dollar dealers that up greater model what rates now including combined up overall I to market bond X%, we're to And those the And that's see trading is positive starting was all the TRACE stages positive a new drivers. the of now business But, the and trading new the very a our of is because back of a clearly really exactly have be generally your may with ways outstanding lower trending one electronic corporate but and what U.S. turnover investors year-over-year risk that in starting on turnover. new for

Operator

our question from Hugh is Thank with you. Buckingham. next Miller And

now Your line open. is

Hugh Miller

benefit institutional Virtu appreciate more sense us I on Refinitiv Refinitiv expect great with your guys wondering about that growth? think could give for have if it my we investors, question. we with Thanks on the a data. do any should majority little connections you revenue was market non-commercial I and bit to but any the vast I brought how redistribute insight the reach agreement you that you extending taking know of of the partnership

Chris Concannon

I'll Chris. that. It's Sure. take

products are agreement. we're look really how about our it's on Refinitiv So, It about of data many data vendors great these price on users future forward We revenue per All $XXXX distribution between platform. and available platform popular channel Refinitiv and and of their distribution one month. -- partner. structured. Refinitiv on sales our distribution to has products products. but a this been CP+, out and third data excited a the have most the Axess is about a They clearly both unique a partnership of split we're talking each forward Refinitiv other us to our These tag is that's going party vendors, obviously

So, very attractive us at and really Refinitiv. for It's story. growth our pricing a partner

model So really it. it's can't help you

come But the April already. our users all pretty was Refinitiv just and we're is known which can of the OTC or for presence in launched products their data. select announcement and versions about they As product. Again, in platform onto partnership our efforts excited different and it's the XX, our select and several

them they use many the data to are to market over-the-counter So, clients plan. subscription for already distributing access of their that

Hugh Miller

guys indicated impact the Appreciate migration XQ. the deal would on I being there. up that. follow on; I distribution just previously color Great guess from And had fees know you that

to unchanged, which we of relatively and coming migration sight should of line fees the to of adjustments anything Just in just consider distribution check any kind wanted see do deal or on being assuming quarters? be should double you you kind

Rick McVey

Sure.

distribution step in fee a variable. is then, products, monthly on plan if all plans a it's or minimum we choice a them back, And couple give do is one plan most we a taking variable commitment. dealer dealers plan give if a Just in fee of of there a

fees So, guidance other cautious where sequentially. the particular depending because just and unused activity Eurobond plan saw we under first point for can period-to-period on vary distribution in in XX% you dealers volumes and multiple as And that we're on quarter options. minimum the fees where up reminder we them always give these so a they choice, were is, about giving the our give

fees unused us. Great minimum You would fees zero. for saw We to down. go be unused the like minimum news

QX You lot look where where to in There's have commitments, in right the question a complete going minor some what have that more we're at on tracking but if aggregate. we changes specific expecting like QX looked expectations the forward. now are you visibility QX we're

Operator

from our William with next is And question Chris you. Blair. Thank Shutler

Your line is open.

Chris Shutler

guys. Hey Good morning.

Rick McVey

Chris. morning, Good

Chris Shutler

venues investors maker? to going your certain more of on how do maybe you trade about the a willing move ETF protocol and and recently any of increase about does the Could it trading long-term over makers open think on talk impact market market risk to the specifically from disclosed other you that with being business

Rick McVey

Sure. Yes, listen.

highly good are. are we had to be they outcome credit of investor is it -- with is not on business for great a disclosed highly a also respect technology new feel around view look and that's the are clients off was that the that about are scale bringing that in need they great the confident that market all trading took decision position the great to market this to market markets become really makers you has market make the -- with liquidity. investors That's trading our the they a the in in terms about going sophisticated to credit made what business as a credit comes the big industrial is so think their I grow markets news market what and had very been and that they've on working when and going overall institutional new lead With of And make orders to maker We've where relevant liquidity us think start that to and our outcome to and -- in and open entrants have today. with just a overall particular to that to growing that open sure we've anonymous orders to we benefit is lead makers really that able right. counterparty and market When trading. here, represents like models started a to tell basis. a would and we direct and clients trading that pricing trading from

Tony DeLise

to really of that built two it at has just the been asset impossible. would important this it all that global, here a the international MarketAxess, of managers for market a the and add truly electronically, includes the end is, to network each really and way that for client. organize out well client I they individually sizes And is price one in client that Rick and of for connect value network the transition maker demand sufficient near that aggregate go to then, And such a is reflects to milestones; as and clients, the international one connect power someone and need

So, I many here of next reflective also think built over been in that that's the powerful very market years. has trading. network for open the It's maker

the see makers less. of opportunity higher coming what by into We with from unique call the the growth trading more trading new liquidity not further and trading that open demand will open market and seeing proprietary is because will are presented drive I they open value

parties, a instantaneously. So new great to close to market all for the maker XXXX clients access really getting outcome it's

the obviously power trading us and then, our of liquidity that's now being enhanced as the For network, open in well.

Chris Shutler

of kind market we if you TRACE a just then, lot. buckets, that. the share in mind Thanks And look you that separately, of believe would have each that us the Okay. at you giving those Thanks for different updated buckets?

Tony DeLise

assuming So about Chris product. to high-grade as I'm asking asking you're you're by U.S. opposed asking, about

Chris Shutler

Tony. That's right,

Tony DeLise

Yes.

So little bit in thing terms one of color. of you just a

market best do which is non-blocks, was even we in we though first where million and down. X share believe to quarter do continue We overall and best under,

well side, trades. did did flip market to year-over-year. help post market and the block share in conditions as reflective as non-block of where on the is we increase quarter this year-over-year in more not And perform First we

back was conditions ago repeat into go not a of the factors year And there amount we selling blocks just of and did not dated you lot that's go was where lots and why did a and short bank itself. flow -- what the in and that market. of about well. in around large there's if share repeat marketplace programs the market there just itself and very the it And of you that tremendous type Now, central happened activity market market positioning a in trading think of did share

So market on share side, side flip blocked the block down on year-over-year. was trading block a

Operator

Sachs. Thank you. with Alex from Goldman And our next Blostein is question

is open. line Your

Alex Blostein

A around Thanks around guys. one Good another morning. question open trading.

on the So switch? self that the you guys how potentially offer route guys you just go to to as clearing grow thoughts remind it in us scale, down platform continues much around you big to platform needs your can how cost to to would get ultimately

Rick McVey

Alex, great and a global at is question. trading product. remember, We look of success open open the trading

So on we experience it's importantly to the cross more important is how how across and we -- cleared but very efficiency clear the our client jurisdiction, growing on us. we products how control the clearinghouses, so solutions depend

So continue that. we look to at

have as We compelling time in and U.S. the And they make quite putting trading time. self clearing more efficient trading continue that open just ways point to over open grows we're in in to grow the the of up at at and time. over both clearing in will numbers Europe look this economics

Alex Blostein

the dynamic How kind kind question is. the then, impact but capture does Tony, basis, the we've more the and talk of you rates guys you. maybe as if a of where curve spreads macro as you I potential in that yield rates go about a reminder that heard and market on so, stays share second would to Got and how be it obviously forward that the lower And little with there a think about been your helpful just related, curve but impacts typically forward rates. capture

Tony DeLise

Yes.

seen market the there. you rising the We've which pick items on or to the yield two share rates. to pick of in. So you know flattening of we have curve. with maturity seen a are yield got And where two things curve, know If we right more where the you're have on capture year the an to environment come flattening is and we yields here,

now But, the moved. lower. high-grade U.S. one means duration are a quarters past past that has bit when factor for the over fee us million So little per five quarters not is look that's you five

So there see could that factors flatten years are you curve know other in the maturity. further continues to you to decline If influence it. some yield

share do yield a yield On all side, shorter of if shorter environment flattening the to trades clients paper trade tending rising piece flip a are the -- with curve, of paper. it, and dated on across better better the with or do when we market We sizes. dated

is share higher. market typically Our

the things you lots million things being see equation. dampening in if curve, our all up fee share into go equal go go probably yields as per see in But up of some our probably market again across that well. you So,

Alex Blostein

Got it. Thanks.

Operator

with Allen our you. And Thank Point. question from Compass last Chris is

open. is line Your

Chris Allen

existing Good morning I just the ups. guess, of seeing, increased growth international of guys. couple volumes you're what the curious And your client gains international seeing, the business. share of I'm kind think on follow they've base. clients. in busy one you been driven by just new coming clients guys on terms wise the or do business the international A penetration from clients, you're in

Tony DeLise

secondary comes system that more do would from on in just sure favor in you numbers those are continue managers helping and the it's in well the specific Europe, Chris, from the turning clients new have. drive model with largest in and international not broader of But the some expect not we of that volume but more lion's highs. but on clearly are other liquidity are little to benefiting that share us active obviously contribution, We're of past the Asia on still been definitely on-boarding the bit platforms I'm our both. we really a Latin asset as the and pleased to have we numbers MarketAxess to America and the have as

Chris Concannon

platform. of been adding institutional investors accessed on being across I growth need the and market. to EM on the the of those That's dealers the the by that driven that local liquidity dealers The add some to diversity we've our Yes. that's liquidity that Chris international of some And global local platform. by platform of local would some the key is is you the being markets

can't network So have a that dealers you products. all have diversity grow to valuable international just these have important largest is with you it across the to dealers a of

Chris Allen

Thanks. to, and open uses just next And just many data. data forward. a then of how market incremental opportunities the for on that quick market what your agreement, then, data moving are Thanks. one up set Refinitiv

Rick McVey

truly institutional around highly one credit the see interested platform, are world And from We lots Refinitiv. for data real-time specialized there the in quality the in but that conversations with a base our other the that's and contemplating There terms XXX,XXX client them, trading in community. data of of they're that additive are And clients of have XXX,XXX we on expect we parties And trading we purposes. massive partnership, distribution network were to right. the fraction their is global. really of are had distribution this small when or that I

reach we places world And own. on so an just offer in to application able the can't broad we're our what some like things EM around

think makes and we for So Refinitiv this partnership great both for sense MarketAxess.

Chris Allen

Thanks guys.

Operator

gentlemen, for you. Thank like Rick for the McVey ladies And Q&A concludes our call I'd his this turn to session today. and remarks. to final back

Rick McVey

us survive of We all celebrate Admin today you Day and for like you. much joining Thank National out for to very you couldn't I there. without

up for with to to your enjoy thanks quarter. us next everyone the rest We of all support catching So and look day. forward of your dedicated

Operator

ladies And program. gentlemen, for concludes This conference. and in we you with thank today's that participating the

a You wonderful disconnect. day. may all Have

MarketAxess (MKTX) 24 Apr 192019 Q1 Earnings call transcript