MarketAxess (MKTX) 29 Apr 202020 Q1 Earnings call transcript

Company Profile

Participants

Dave Cresci	Investor Relations Manager
Rick McVey	Chairman and Chief Executive Officer
Chris Concannon	President and Chief Operating Officer
Tony DeLise	Chief Financial Officer
Rich Repetto	Piper Sandler
Dan Fannon	Jefferies
Jeremy Campbell	Barclays
Ari Ghosh	Credit Suisse
Kyle Voigt	KBW
Chris Allen	Compass Point
Chris Shutler	William Blair
Alex Blostein	Goldman Sachs
Brian Bedell	Deutsche Bank
Ken Hill	Rosenblatt

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. [Operator Instructions] As a reminder, this conference call is being recorded on April 29, 2020. I would now like to turn the call over to Dave Cresci, Investor Relations Manager at MarketAxess. Please go ahead, sir.

Dave Cresci

Good morning, and welcome to the MarketAxess First Quarter 2020 Conference Call.

our McVey, for Chief President Officer, the will automation Rick review Officer, and will call, then discuss highlights and results. the quarter; and review the the Chairman Chief Executive and will COO, Tony financial For DeLise, resilliency; Financial operational Chris Concannon,

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

For a report annual on Form XXXX first XX-K results, that future please quarterly factors discussion see ended the quarter. and for the our the report and on year risk of December our of risks description XX, Form affect in company's the could for the of XX-Q some factors

you which would earlier to release, earnings read direct statement and our website. quarterly forward-looking the is on now was I our also available disclaimer issued morning this in

Now over turn call to the Rick. me let

Rick McVey

you thank for us our first to and quarter XXXX morning Good review results. joining

in the world. coming through and heartfelt First, of pandemic suffering all sending the caused to begin hardship hope COVID-XX we seeds These the by recovery let months. and the our thoughts around are of those extraordinarily loss times me by start to difficult see to

U.S. evident emerging led billion value in credit Eurobonds. was to high-yield, for The sharp up quarterly February The electronic QX increase of in core versus of XXXX. our volumes leading quarterly and of trading record late volatility credit volume products, all in XX% on high-grade, market record trading markets, our beginning platform MarketAxess $XXX

was including volume year for and We XX% ago. one High-grade records municipal the share market in areas new also and up quarter XX.X% U.S. set from treasuries. bonds product important new

XX% up jumped XX%. Operating of leverage year-over-year. unique to XX%, $X.XX margins Revenues with results from were $XXX provided activity well. trading record XX%. operating were The up institutional up led operating trading market and EPS volumes acceleration was XX% and the XX% record conductivity a during million $XXX income the Trading clearly quarter, crisis came billion of to a during financial through Open participants of as up

during Slide increase volatility X daily The highlights quarter. during in high five liquidity conditions. the Open financial February TRACE available share credit crisis week sharp in Unique in the yield market XX, the volatile market the of our market started of to differentiated in on XX% weeks XX% high-grade jumped volume global average through Trading increased also and Market last weeks. XXXX higher in reported MarketAxess the unlike platform.

last The daily far credit Open Trading was XX% weeks of seen of than greater before the levels speed in five versus volume QX quarter the was up event. in widening XXXX. average the

For from X,XXX in treasuries four over example, of just spread level occurred months high the yield weeks to XXX XXXX. QX. over spread same in index XX widening That over jumped in

to due credit improvement to banks. partly the and central We launched fed trading have other last conditions the four liquidity the an three in over weeks, programs seen by

Many Corporations public greater to debt record a even rushed as to is private markets to grow and issue that began billion in of sectors in new the to lines to leading secondary high likely both more credit late It March, $XXX the debt will their improve opportunities. trading issuance liquidity in position. bank stabilize debt to continue quarter. their leading also grade tapped companies

unique represented XX% institutional Trading the Open this from XX%. liquidity utilize of credit XX% Trading. $X.X event, trading firms update up a total played from to an quarter, the provides up trading Open billion, volume the Trading full grew during X Open in record for volume ago. daily role valuable average on Open participants quarter. a a MarketAxess year connected for Slide Trading keeping available market X,XXX Trading Open global on throughout

price savings $XXX in an trading for liquidity the As markets clients. dispersion delivered estimated $XX savings Trading costs, revenues to transaction company on estimated transaction credit and reached million Estimated savings taker, the Liquidity quarter exploded Open exceeded providers cost client sharply quarter. higher in saved system million. the March, for

providing record new During volume managers the as new reached volume liquidity investment on MarketAxess quarter, takers. reached liquidity a a record dealers and for

will in that global market ahead. We believe years income this continuous fixed income. better in all-to-all only Open behavior a broad-based even The trading Trading the global demonstrates market lead is fixed an the electronic change to marketplace

both MarketAxess on quarter billion value average like an client XX,XXX institutional Open per play in investors daily we the dealers had times and Trading during this. For market believe role We in in day. reducing liquidity overall notional to over and $XX orders market improving available important risk totaling

further that We quarter. believe market during also even in credit our trading lead institutional significant widened electronic for the the competitive

to over turn an and Chris our Now, resiliency. provide automation the to on let me operational call update

Chris Concannon

The Thank you, growing trading in demonstrates of XXX,XXX billion in billion the use auto the in quarter algorithms million quarter, of dealer first rose over X the trading. first and XX also approximately quarter growing trades. responses credit first prior to algo resulting from our used functionality volumes up X in execution from Automated firms momentum XXXX, XX.X of Rick. XX XX with the Slide in the automation first quarter, the is up year.

in modest Thus largely have per reduction was While inquiry, half number the believe extreme average April, algo of in we the both a market of both this functionality. in we a and actively are for second and providers to adoption we responses the our volatility the levels. liquidity due quarter. saw far seen of we growing working seeing liquidity tools pre-crisis trading enhancing on with takers We're our returned automated them of responses to

summary a volume our provides product across X trading categories. Slide of

XX% estimated an market March, share, up estimated volumes high-grade up billion up TRACE for quarter. year-over-year for market in year-over-year the full U.S. Our entirely while marginally due in the increase were were volumes almost high-grade U.S. XX% XXX year-over-year to volumes are quarter, to

each increase In a of the markets to was other XX% category, volume high the on record XXXX. more XX% yield standout, U.S. trading quarter heels of up were share on XXX or year. XX% coupled XX.X% Eurobond traded estimated high first with up compared X.X credit estimated bond the of yield U.S. emerging We're the record encouraged market dealer TRACE up market trading. and XXX% volumes. firms adoption in client also growing from MarketAxess the bond highly quarter the municipal and municipal platform, a of billion volume the the first prior by In unique

Treasuries now known as of post-acquisition Rates. contribution LiquidityEdge, mainly is category in and rates from the Our composed trading reflects MarketAxess U.S. volume

an in pro average On year-over-year. estimated these U.S. for share. XX% a primarily daily market increase We forma believe were basis, volume up treasuries gains driven by volume was

related the which critical investment worth over mandates. progress April also QX is volume the month-to-date billion across thrilled were daily with In with initiative, than $X.X quarter, world. of level. announced the average in have in and tracking trees our XX% more above the traded Our regions bonds April ESG over trading supports green being the green recently first I'm higher made credit than over resulting currently planted clients we XX,XXX platform, XXXX, bond

from swiftly Slide our to while interrupted a I'm COVID-XX say the clients. X, safely home to response to work environment, information pandemic. unknown operational, providing proud and and able the that transition across our globe provides an resiliency to of level on to all teams a our were service

home system service remain trading to enabled engaged MarketAxess XX,XXX client’s this them trading the over to and teams Our connect time, from system operational and individual the users allowing with market. during seamlessly

trading we Given open the MarketAxess settlements. resilient, average quickly and number mobilize our The while volumes significant MarketAxess transactions volume, clients level of saw high trade of active marketplace, and to a and platform access. March. user’s a a daily trading experiencing record credit ability remained to trading This inquiry and drove active broad trade our rise in firms in connect system over

Our – were risk processes control period. risk throughout effective control this and

walk Now, call detail. Tony let will results more to the in the financial turn through me who over

Tony DeLise

record earnings the a up XX% Information of uplifting We're year-over-year. U.S. million, operating X, in XX% revenue a volume quarter of Thank commissions. $XXX you, pleased with Slide particularly resulted in XX% quarterly approximately revenue our and up trading Chris. were in On credit our up of Overall XX% of in The inclusion the data and XX% provide sales was commissions $XXX,XXX. one-time we performance. margin Expenses quarter. operating first includes in XX% and was income first XX% year-over-year. a Treasury services summary was trading up the increase

to share tax reflects new of are providing the increase investments compensation increase The to trading dividends awards. million shareholders. our in in the growth rate areas benefits results first resources margins, excess tax was related XX.X% $X.X simultaneously and expand to Strong and effective quarter based required

previously variability in year stated expect to be quarterly continue tax XX% rate exercises full equity do and will our guidance We of range XX% award to effective the expect the on vestings. although within based timing we of rate our

was record acquisition. issued LiquidityEdge the was to of XXX,XXX diluted shares part in due Our largely a diluted share The year-over-year $X.XX. EPS increase our the count as

platform. out revenue, the up transaction driven per fees million. maturity due variable XX, U.S. inclusion years XX% high-grade was Slide high-grade to On on on a capture million volumes commissions. and were of $X fee year-over-year higher higher Total the U.S. our traded fee we longer increase mainly over per basis, bonds have trading volume, to credit the by commission U.S. trading Treasury in laid sequential trading slightly fees and

sequential credit categories in volume to $X million a products. fee mix a increased basis, among per on shift Our due other principally

quarter. individual the fourth Fee was capture to at very the similar product level

million and sequentially trading of activity. full As Treasuries declined per expected reflecting and $X.XX quarter rates U.S. a fee was QX

variability the category mix agencies of plans. plans to could and As due tiering than U.S. a under transitions the quarter higher dealer to fee in high-grade to and volume fee there due $X.X level, distribution and fees the quarter. due combination our several rates treasury's fourth to rates a million during product be fee treasuries as some U.S. reminder, capture were distribution primarily

bonus trading our higher of of rise based with Compensation On in the for half year-over-year compensation change for add to A main increase Slide the costs initiatives. are of which of was tied contributors And count expenses year-over-year growth the were the trading benefits. stock compensation increase up the principal and amortization development we continuing basis, in trading over personnel and treasury the XX% support matched investment provision more the reflecting in inclusion year-over-year and reflects in depreciation increase amortization The XX% accounted in and with and influencing along XX benefits technology product variable Clearing trading fees, and higher as than continue to head the to platform volume. quarter. in the a detail. acquired some year-over-year factor expense licensing and and for volume biggest costs expenses increase in the of doubled to XX expense of you provides communication open intangibles. the the software activity. uplift

of provide XXst information. million XX $XXX cash we and XX, months March Cash balance Slide On investments and flow sheet were trailing reached record a as free $XXX million.

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

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

results, regular We bank revolving a didn't first outstanding Based $X.XX our approved quarter credit board borrow have continue has dividend. our on to and no against debt those quarterly facility.

let to back the call turn Rick. Now me

Rick McVey

that the most will This world. in times quarters around Thank an the pandemic to advancements challenging modern and medical in you, quarter good hope judgment end bring economies this the was people ahead. for We certainly Tony. and

We markets to role credit the MarketAxess keep helping in of are proud functioning. played

markets. invest We I lasting to to achieved have to not create without employees their continue fixed thank and our would heavily for income these extraordinary improvements client their efforts. in focus. will dedication results all We like unwavering of could global

your open to for questions. happy be now would We line the

Operator

Instructions] first Sandler. from of Repetto comes Our Rich question [Operator Piper

Your line open. is

Rich Repetto

open said algo but making Good it had back believe I that to correct, I if the get Rick percentage morning, April-to-date If just sure Tony. pre-crisis of wanting that responses up I and he said Yes. just sort is, Chris think was year-over-year. trading guess and and to and that's – Chris levels. XX% gone

that to does trading as So open well? speak

Chris Concannon

hear did Sure. for Rich, yes, volumes. April comments I'll take the correctly you question. In – my

have of open have market stabilize We consistent platform. liquidity we trading in the seen and April share market our across seen

clearly March much As in throughout hard but of paper you trading liquidity ecosystem was was solution or well are find critical like the part to aware March OT a crisis. toilet the open was

volume high robust And trading levels assets trading EM its even on relative did so products; the the but quite and across continued quarter share to so first the to performance minis, in in other market we to of increase, platform, see the overall individual at terms see solution. perform continue like like open but open

Rich Repetto

volume percentage So I and interpret I similar last... the trading is that basis? XQ as open guess guess, And to percentage of I the on the

Rick McVey

actually I March would levels. to just say similar it's

So market of layer is we and that trading spread and the still open liquidity levels. closer trading our new volatility March have to through volume is high an credit important very of creating percentage open actually

Rich Repetto

quarter. how lot of then the month I over Improved that Fed would impressive. of the carried just in? That's of there get in end yet Wow. issuance volumes the the did does during – liquidity new at stepping impacts, Fed And my a improved to was the and can follow-up that and the parse of see to know be, and you trying out sort whether stepping sort

trading secondary on freely of of those probably market more impacts to in so parse that sort now, two things is the out trying the So just volumes?

Rick McVey

Happy Yes, sure. too.

ETF focus functioning the the where short-term markets continue markets the primary Fed's liquidity that actively to the make to to on repo short-term we're focused and secondary think corporate funding they I shares. programs initial to markets funding income were understanding our It's on markets was and other be that sure generally they and preparations able properly. bond fixed in for make participate and

that but making able that We certain are to do their of to has not we any preparations started that yet, so. be believe they're

activity, but terms obviously related is improving financing think had short-term I liquidity conditions material So of they that directly a Fed, right now, markets. the and bond to the in impact in the don't

Rich Repetto

by So do volumes issuance? by the volumes incremental the that – the in the you all think least driven volumes – appositive on with while at more in

Rick McVey

to last has is at we've others in on this in the are create for the it been I is issue have around ongoing spreads following balance be that markets March month for out March high you remarkable context, have we some were the Credit second around short-term grade over as for new credit those in think been numbers XXX up know share. their since most issuance in case issuance that a XXrd tapping over row time, the are we've particular that driven that a weeks that market and higher in $XXX really new is grade long new it see they're half will you'll – like new a of high billion us days good the to dip billion. in more we're up that the And March credit April. high our to liquidity month be of But narrowing retraced and been bit are when sheet. these XX by normally around And than That as, And four the issue not going you and a and move corporations put April. normally billion, $XXX fortunately even bottomed spread the in in and been that new in issuance volatility. about month and looks it lows. unbelievable numbers

think in robust. it I the to share long-term trend speaks So MarketAxess though market are that new even levels share so well the has issue very remained system high on

Rich Repetto

all and your safe healthy. and Thank you, you hope team families and stay Rick, your and

Rick McVey

Thanks. Rich. too, You

Tony DeLise

much. very Thanks

Operator

you. Thank

Dan Fannon from comes question next Our from Jefferies.

open. is line Your

Dan Fannon

trying Thanks. of long-term to that widening. structural up desegregate last the term to some be at I spread following versus on near benefit continue portion, changes the guess that your just of benefits

been how level sort of and of one around and start interacting terms could good this interesting your think can perspective. the of kick normalization of that you with some guess, some that. we would catalyst improvement around is behavioral think of a new I adoption And work some one electronic thing about so around customers or be from has of you the trading you're at I wondering thinking a is, I'm think been you elaborate if dynamics just or home have either about environment, a from user how – venue activity. kind gave stats in price if of

Rick McVey

I easier Sure. just the everyone way Happy and in the volume transition. market the the that trading was the from the interesting month personally electronic from major by I managers grew investment their using grew electronic volumes floors. one month MarketAxess major because one, difficult to work March, that and system. with But take that was the TRACE It's a of the And reasons off trading. trading middle you. dealers trading way was in and that month think through of share home entire main premium for home we the started to And thank that really venues. it's puts did that And remarkable home. they did think And of volumes environment a think from access all on do on our do they uplift I

We to we through expect and second the when to main return look back plans last of quarter at the most headquarters trading floors. to that

gradual a in begin process people expect very It's June. to that most

So of home. a be work I from full will this quarter quarter think

users. only new number record new we of in total new the of individual the first of but Third net bit what March main terms trading quarter record and will existing individual both be time, very using gains active system were our carrying new new saw was the volume trading a for a mix And as clients into and active volume had from getting a a result their test into within But in little firms. users back of clients in that March, trading offices. not healthy is April total and firms and firms mix existing the people terms we in of of more

individuals of electronic firms advantage point as taking inflection that as So efficiency transaction available. we're the more an really the well and savings seeing are are trading as more where this of cost

Operator

you. Campbell from [Operator next Thank Barclays. of comes Instructions] question Our Jeremy

open. is line Your

Jeremy Campbell

purchases you. MarketAxess’ kind in of disproportionate the of user seeing Fed BlackRock large on, or purchase maybe ETFs pipes? Fed the just order or trade venue themselves like a of Hey, bonds the the baskets credit second first BlackRock very electronic cash purchasing might is Rick, a so of the like the level, level, venue, flow taps thank electronic you to the electronic BlackRock any part oddlot you either quarterback Fed to order credit a if are through market. I'm through And platform. purchases through the the electronic Fed wondering underlying know, obviously guys

Rick McVey

Sure.

in all, advising corporate don't comment client on of sign First there's fixed bond belief We is we system. individual primary activity and actively program the all any our aspects yet. purchases. secondary that any and they've ETF, we –it's Fed believe been on the share don't income, the But including the market on activity of that been trading BlackRock that

you're high through this likely high So year. seeing credit is what spread volatility of to platform optimistic right the I at flowing through is dealer and levels. that traditional business remain customer balance our now And very remain

than to in seen on more quarters. that leads more prepared a last given of remarks; to many for long likely also made and are a different the throughout trading would the across There's my activity. corporations high we for I we've issuers going sectors comment and stay spread year different this levels are time across credit few dispersion balance expect that very the that challenges issuance to

to that, issuance elevated that balance market keep and is this we is higher you're expected volumes new likely the trading and credit volatility to spread expectation of throughout have combination with of year active going year. levels our So combined throughout the than

Jeremy Campbell

Thanks. Great.

Operator

Thank you.

Ari from comes question Ghosh Credit next with Suisse. Our

is line Your open.

Ari Ghosh

Hey, good everyone. morning

you was different year, expansion several the portfolio have live rates markets, There these of of trading, into from heading place. initiatives in a complex. lot growth initiatives your So

give you as ins disruption? stands it look of the that of near-term on as pushed others the could might these us these this right easier Thank So outlook might well given then outs of crisis to and despite because perhaps versus the that the year some update expense ones are execute into back way like now? for year, an maybe the you. And how initiatives COVID just filter some for get

Rick McVey

throughout home situations can. And see open-ended, even their little while Great. office, as as question, you cover were from in levels our a ability that performance to much I'll of as we've great but migrate and and maintaining phenomenal employees our in the their COVID remarks, could improving high overall some prepared performance Obviously crisis I to try seen.

across the a track the for volumes slightly terms XXXX. rates that all going on excited to parties And business in obviously the we're be are of DXD But third initiatives so quarter, we relying are are delayed. initiatives likely rates our performance on There certainly couple on about I'm some there. record where in of first

of platform the rates continue With unimpeded regard forward current to our the by we to integration crisis. move

Our out. went QX hedging live continues in is roll which to

pipeline right We them. behind have live robust dealer’s dealers several already and of a

Our integration platform underway LiquidityEdge of the well. liquidity into – the as is formerly business institutional our known

trading that will into phase Rates first of institutional Our broker-dealer have network, the through where the begins May platform. clients the MarketAxess of integration the at end MarketAxess we

So second happy that that's see integration use OMS X schedule. integration where on of our full smoothly. can of moving integration clients half and our into and that rates XXXX institutional in platform Phase I'm to is

part second rates of a across of piece the hedging where half solution, net second half net on-track XXXX platform. certainly our the is for provide which to hedging be client able earlier is last The orders integration we'll well as of of

of major products clients muni several wanted the which use EU areas those immediate in those that saw solutions access adoption introduction our we Other our the institutional a integrations. and well. MTF. to taxable needing the and for initiative muni initiatives an about quarter, as That’s UK. to that MTFs. of first So important quarter in rolled excited municipal about out obviously, had first by talked volume bond an We we're record

trades products growth eight an credit solution crisis. an and now in our the active in we a plan of active European in phenomenal roll Portfolio the to have provide competition active saw quarter, additional And of adoption March, functionality those also saw and in came in we component dealers, billion six solution. first clients We XX% that trading and the portfolio out in products important is so QX. in we first multi-dealer $X – quarter. portfolio over trading

portfolio So which important the improve can your a time, have same on is at price to you actually the dealers bidding efficiency.

we Plus, product We've analytical our tool success continue data Obviously composite to a rollout our in The CP great the in quarter had well. business pre-trade product data first as and launched business. treasury continues to grow.

I we're So self project, impact the the think the a as we crisis really right in now delay only is reliance third that pandemic largely seeing our that and roll clearing project to from out. slight on our parties due

are prepared the fully the we're – is into really to potentially the until delay second quarter, potentially beginning third the second delaying the while into sorry, the quarter the So of quarter. end of internally end we slightly of

Ari Ghosh

you much. Great, color. Thank very

Rick McVey

Okay.

Operator

you. Thank

Voigt next comes KBW. of Kyle from Our question

is open. line Your

Kyle Voigt

for Thanks my morning. Good question. you. Thank taking

in U.S. U.S. Treasury liquidity, liquidity is the just press kind March. the off-the-runs. providing lot there's on treasury The especially market, in market a stepped back from of dealers late cash First of around in

eventually your stepped away? all-to-all credit open Did market could be solution being experience confident? successful a if of in the treasuries? as wondering, That's U.S. form solution the cash some Just make experience U.S. with markets trading you more to real that trading dealers in

Rick McVey

a challenge the obviously even liquidity on-the-runs. in but question, great hampered not a across as we've was U.S. market, because Treasury all It's off-the-runs, by just the seen market

solutions liquidity the platforms was treasury dealer for market. for market our share allow liquidity It We did see for provides. it liquidity customized we so event a traditional provision unusual club. for however because that unique rates our clients. increase think the an platform and And It's both does not on

do It So is that liquid that, anonymous think model product market. future the of was we an the also all-to-all.

to well your all-to-all allow rates of does that that to would expect forward. open the viable solution point for of times be crisis solution challenging that all-to-all the liquidity a performed middle you challenging We anonymous most exceptionally are we trading most in the solution do crisis. an so customize And go as very –

of with for most both of credit start us those confidence a moments performance great two to platform the severe we provides and in the So performance rates trading our our markets. the really of open integrate stress as

Kyle Voigt

Thank you.

Operator

you. Thank

next Allen Point. question of from Chris Our Compass is

open. Your line is

Chris Allen

yield-to-maturity the morning quick guys. of and then how terms one quarter trying filtered to up quarter outlook I'm about just specifically dynamics, how is of just that pricing, the wanted in ask of just the duration, moving and just there? good you Hey, be through on through investment yields could and walk in forward? kind I second Maybe how setting to changing that a the would grade. some think

Tony DeLise

Sure. Chris, Tony. this is

On the investment fee of grade lots side, you factors investment-grade the influence different that know there's capture.

activity variable you fee capture where of in to the at mix a sequentially, it was you it whether impact trade a floating You've size tiered there. mix got when But or changes little was fee also look the there yields Dealer note a bit matters – on At times, our There year’s we're look maturity all from under rate plan. plans. matters. a year are matters longer size a dealers are the at distribution plans quarter of than little dealer bit the was longer buckets. from years-to-maturity no the fourth $X first up less quarter, and change half fee

was years-to-maturity. about really it So all

quarter to much longer first that on you average quarter this When yields. bigger years-to-maturity, But look all was It year duration year. of year-over-year was related. last lower change of first again, year-over-year,

fee capture are now what now. that you're grade, It's influence across looking just capture, not There activities, there the lots factors April I April on, markets, right not quarter. looks you to investment early on of emerging only on could But I right it first on similar could investment early just fee for the April forward is Going quarter Board. numbers, that the tell looking but right is mentioned but and at if in any product, the quarter but first right similar a high change. quarter. the all note any lot looks not and at the that to grade Eurobonds, yield, now of the though, variance for to report now Remember in

Chris Allen

guys. it. Got Thanks

Operator

you. Thank

next Our Blair. comes William of from Chris Shutler question

is line open. Your

Chris Shutler

Can you're platform providing Yes. longer and asset see on loan-only seeing morning, the April, you the term breadth been from what makers Everyone, talk hope about managers March? well. in client price you of or being good to you've liquidity the in workflows? all crisis any also changes then current touch on depth And

Rick McVey

the number happy system and of continues connections be the to take in volatility The have, last the think had in and liquidity of trading transaction that's you providing we differentiator. sourcing better When like on terms more are off to that that you weeks we firms liquidity five quarter, Yes, costs. the the one, you have Chris. of the reducing grow client will

had a quarter The record managers. XXX of over were MarketAxess during of on the we that system. provided vast over asset those majority firms So the liquidity XXX

where world So making stress of our and this can big technology the connects difference when levels, we're from markets that and we is sorts dealers investors the to is all price anywhere. a think get around these come best

market, to see the advantage they heavy And the taking you to saw take when needed risk. reduce using opportunities selling dealers taking in asset advantage platform of you when there was did managers of liquidity

able days what clients value what the because changes, significantly find of all-to-all means. the validate as and an this that approximately just the trading. the were to than advancement cost in greater better pricing So three important during create And were oftentimes terms transaction behavioral the were of quarter through think of the savings that clearly times we're so quarter other we XXXX than stressful doing average in

providers, important So credit. firms Trading X,XXX very for It's during broad-based in global a quarter. liquidity really very active becoming the utilized marketplace terms of Open

Operator

from And Goldman of Sachs. you. Thank Alex comes next our Blostein question

Your line open. is

Alex Blostein

the the on part larger the the really question. of curious I bit the that Thanks morning. the size of some the layers side. or smaller size in peel was trading I'm margin, both kind activity rest you're whether you of of for seeing think story the was of yield predicated of trades the and saw trade hoping liquidity just penetrating also back of sized the the to Good increase MarketAxess. IG guys. taking a on terms typical average of to about, the given high the little majority maybe for Hey market the today in side some what here, trades the on in was course

Tony DeLise

question. Alex, its the take I'll Yes. Tony,

looking gains sizes across buckets. those share You're healthy all share all the and and gains market we're trade where maturity year-over-year market pretty were at obviously

So, trading looked market even realizing, our and than it XX% in more was at X.X. around share block year-over-year, it if up was you

size, the of regardless maturities did trade of improve year-over-year. regardless market share So

Alex Blostein

downgrades through just the guys a Okay. I IG opportunities you a opportunity wondering That's give role as on then number us helpful. probably of or high the follow-up, how market play Do sense was of a a could for kind come to yield of of quick MarketAxess could they occur. large into a in is higher we're potential, trade? And as yield MarketAxess a BBB if obviously IG see obviously those bunch part side, market, the meaning going for a downgrades that, big at an high a a of as capture trade rate

Rick McVey

bonds fallen to move have happy a that Those more or and in seeing when like does Alex, yield you opportunity. period a flexibility it time with that portfolios portfolios insurance oftentimes or either take operate currently in to question, trading the to angels, we've downgrades than have high have come one. Two we're portfolios and place. investment seen crossover grade Yes. long create Good of out things, into

margin begin activity from positive spread you standout, not see good slide like yield trade into trading yield So up yes, high were at high nearly and capture. by but fee to volumes was more first issuers overall, also volumes is can our the for as the XX%. overall XX% for high And product, quarter yield grade on high it's price large and that the

been. been where has and the there standout share year. This We're taking the have something throughout is high would volumes yield robust. expect So to carry on that's two I

of quarter. had hasn't XX not have nearly the distressed until active in large We defaults years; an been first crisis default a this market, got about into earlier really concerns concerns period in there we

think in all-to-all place And the continue very we reasons, that credit market importance require of year trading leads also of is secondary to I any for from source transfer, this which we it to in a will the than I bring more host trading. we'll a different January. think what the world. expected liquidity out to And started risk when do So

Alex Blostein

the Great, thanks for answers there.

Operator

Thank you.

Our Deutsche next from Bank. Bedell of question Brian comes

Brian Bedell

the if the just do when environment answered, issuance kind normalize, underlying of Maybe question the of you might remaining what of you did other new share. your of there Yes, guys. this likely occur assess Good actually the underlying share? the and issuance share questions way headwind to think maybe any and that that words, in been have electronification thanks. think changes is the the most market increase, new is – issuances? on market increasing market sort permanent by your the the dip obviously the heavy. there on intense. And your calendar is of much growth new tends is to Great, appreciate morning But that comments how masked – how issuance, to is being would much pretty but question follow in is market trading share In about having that in

Rick McVey

start months, with lower of It bonds percentage factors our many issue more come also the not vary, you months over in market overall distributed trading get a secondary varies does terms that last it as those weeks. as there see are the volume are those as but the volume well the so market of can share it's four play during new rest and than often X% share couple the of trading when grow three or block TRACE as of following that into and be X%, the high you been electronic and before

well going grade, volume, that, XX%. of institutional up for look around good is it's when for given our institutional TRACE on above clear there's anyone's be about on feel that It's do year. issue expectations and share new we March expense, transition So pace we this the that activity April would really a customer customers. institutional initiated at by of with behavior, institutional And flow our for client now high is share we XX% order

to So taking the institutional we're activity a with place the quarter close on getting clients of platform.

of trading in the efficiency only Open completed the think can combination orders was that We that incredible we also Trading price. transaction number were and we March costs an saw and where reduce, that of

that this behavioral is in permanent time. sourcing liquidity to our a underlying So given difficult all frankly. at most share quite all create the us place clients our And trends are across have to the see more products, of experience platform, the taking we're had going in change pleased to

Brian Bedell

perspective. That's Thank a great you.

Operator

you. Thank

from question Rosenblatt. Hill next comes Our Ken with

open. is line Your

Ken Hill

platform of markets new of hoping but issuance the of any still clients build you’ve maybe into supposed activity success a going live morning. you quarter, new gets I that's in Thanks. of get as has on markets so with a you're I to interest early little days, kind but that. on build into kind live seen increased of was something which the along their was it on good the the flow to had Open Wanted had I secondary of or maybe also Hey, Trading helped activity, some Trading market guys during market could seeing of the kind lot the kind guys you exposed help in Open bit on, that we to kind issuance like because getting comment, activity thought there. know more if recent

Chris Concannon

I'll No. Great question, take that one.

because as bid techniques and mentioned join solution side seeking to a providing to can markets late we've live a liquidity, crisis, live a number they our quarter their obviously of of is Rick what is focused but or market. is have first in that on-boarding streams. looking current for we dealers That the markets process them for we setback quarter, were piloting So obviously provide offer liquidity methods of an the provide side liquidity, the been the provide seen fourth given on clients, which to bit obvious

seeing levels those from our looking we huge cost So and demand some market to savings that of achieve is are liquidity OT base, providing. the client of provide higher

been with as the crisis in slight and side a current setback So needs, but client challenges. the to the continues the again, given technology internal liquidity their crisis distracted of dealers demand again result have grow own

Ken Hill

Got for it. update Thanks there. the

Operator

comes Our your question Instructions] KBW, open. Thank line Voigt is you. Kyle from [Operator next of

Kyle Voigt

late in lot and Hi. NAVs were a pretty HYG discounts other Thanks that especially liquidity for trading have at of press, time. taking their around follow-up. could significant to worse at been due ETFs lack made my the March today, what bond There's some in of to that

priority liquidity or market think you or do bond of underlying on you on holdings for going the think in regulators? the in will requirements of list be of if wondering the this nature that regulators be Just DTF wake certain to the looking putting something terms at that's low maybe

Chris Concannon

you guess that issues on were that important and volatile it's there price. extremely the my I have the oftentimes perspective NAVs the happy to the fragmented I seeing different market ETF So one, that to many take a in is opinion times, was remember credit the, during performance ETF share are not that so behind what unique were so bond

volatility fixed look ETF place X,XXX, for around. whipping two are over And So were a of taking you major the that's and the anyone up is the an parties share March, over in XXX% actual between with discovery dealing level in prices when There's income form an real is market bonds of for great quarter. opinion, time mechanism and March, the And actual a full risk that shares up best different X,XXX pricing those when transaction. with transaction ETFs it's volumes at trade. in XX% we when income major story an transfer you've got the price had in during a liquidity, the fixed and is shares share my

up of not problem. think held actually it solution, was the incredibly the liquidity well, the market part I of part ETF that So liquidity

of risk trading transfer that Portfolio for March trading in in an March. risk of as well another and when all they it. that's clearly market very shares And ETF think, a definitely ETF well. share this part dealers to clearly of income to now, all-to-all model as course liquidity investors transfer trading essential you're all market almost evolve where is providing for seeing I fixed participants layer way new using institutional is way did the are held They you're, liquidity the and up need fabric and

think XXXX reason volumes it during to Open TRACE great to those through in so chaotic the of a tools crisis, they that MarketAxess, all-to-all March clients were because why were I and liquidity ETF shares, the at those risk is able all was transfer when indication during the in up were fell weeks. grow the able volumes That's and they were able So dealers needed Trading. market portfolio trading to to work that go trading sharply and

Kyle Voigt

environment Thanks. the year-over-year to And strong remainder if been similar for question we XX% of range. year the the growth, type it's a start growth then maybe year a volume XX% that volume and type really April, second see through Obviously for Tony. especially over and

of TNE you how the going leaves impact expense year, of expense think about specifically; expenses. wondering Obviously that you COVID-XX certain the volumes reduces I there's up the the guide because and in in current some think are where Just you the of multiple that to from started areas expenses, maybe guide terms push when but other areas things. then

put kind pieces great. how So we should there just because together, wondering be that'd those of Thank you. help any

Tony DeLise

about of got be entered range. balance of hiring as could that variabilities in year people; volumes the number fairly scenario, say expense got under you $XXX probably still plan be near we're first No. the news. you would the quarter, be in didn't we we this of or expecting if to the suggest guidance can original guidance, we've tell guidance we've The that, you from high-end million. with that to were anything prepared And within answer million the expenses range assume good so for the market propose, And $XXX happy would fact there the that. of XXXX. that there, a But remarks that healthy I a consistent we am I to that

with level in new in hiring XWe're or through our effectively April. – but can't can't the of we on-boarding some budget attrition We environment. hires ways hiring of necessarily, we're timing this on control even the

We support initiatives, news. expect to hire, to to growth our good continue all that's

trading first costs continued expense had like quarter and in treasuries because are If year-over-year imagine expectations. doubled in If as higher a great would costs, volumes. is massively results, to that could item that results than you quarter line Same directly significant with we running of thing exceptional volume of off that the items line we the Other tied we was back that's variable news. had compensation that clearing market good and open up be clearing well.

clearing than expectations costs good higher news. those are So that's running all

range, So well. topline it higher I revenue of that as hit means the would is suggest that that high-end expectations that likely we also if topline than performance, growth

Kyle Voigt

it, Got you. thank

Operator

at any this time. Thank you. I further Rick back I'm over questions like closing McVey for showing conference remarks. no would turn to to the

Rick McVey

joining be us and for much. very well getting crisis much through this and be Thanks wish this so you Thank and best morning we safe. the you all

Operator

conclude Thank you. does conference. Thank Ladies today's and gentlemen, for this you participating.

You may all disconnect.

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