MarketAxess (MKTX) 21 Jul 212021 Q2 Earnings call transcript

Company Profile

Participants

Dave Cresci	IR Manager
Rick McVey	Chairman and CEO
Chris Concannon	President and COO
Tony DeLise	CFO
Rich Repetto	Piper Sandler
Patrick O'Shaughnessy	Raymond James
Dan Fannon	Jefferies
Kyle Voigt	KBW
Chris Allen	Compass Point
Alex Blostein	Goldman Sachs
Sean Horgan	Rosenblatt Securities
Michael Cyprys	Morgan Stanley

Call transcript

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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 on July 21, 2021. I would now like to turn the call over to Dave Cresci, Investor Relations Manager at MarketAxess. ahead. go Please

Dave Cresci

welcome call. and MarketAxess quarter second Good to conference XXXX morning, the

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

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

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

turn me Rick. call let Now, over the to

Rick McVey

revenue were operating XX% million up comparisons at down when challenging $X.XX, in morning, a up credit when Operating was you and us conditions joining Year-over-year review markets and was margin year-over-year. second million, was looking Good our income quarter revenue $XX market Quiet last led for our to of was with XX%. soft of results. Diluted and XX% X%. EPS XX%. quarter QX to $XXX thank EPS global year down

for they high-grade and quarter consistent adjust last market ATS July volume. double fixed volumes our announced high-yield in Market on levels income and revenue strong similar FINRA quarter revise XXth long-term that growth year. to growth rapid of counting growth to quarter XXXX, for the increase However, XX% with income historical two-year also compound showed second their rates will TRACE in this of this XX% the annual operating has rates. share were versus growth of

share once see market We FINRA. will we adjustments our from the revisit estimates

add to the with market globally. XX% X,XXX and our with estimated network, was highlight total year-over-year, XX%. for the volume an set continue active We to while Emerging up volumes were quarter, active markets new a we quarter, clients growth records firms for down EM

highs Our estimated set EM quarter. market share the new for

volume in Li, municipal to We volumes has volume Earlier high-yield. in quarter. lower with the quieter in especially much a during and for the are represented market by quarter. diversification. and ETF Hong MarketAxess provides activity experience of second brings conditions Clearing record client our quarter, Directors. Board led experience especially clients Exchanges X in progress Charles market update exchanges bond International electronic global participants important Board, geographic add report this normal, than were extensive encouraged Asia former we trading credit on lower Slide to that Institutional Charles record ongoing Chief in conditions. the fixed much trading new announced Kong the market XX% an of region. trading, will investors Executive Limited structure, in income and and the week, market joined our the second the Subdued the of market

regression. lower versus normal Fixed versus XX% trading shows ETF year. year. XX% ago. a second down high-grade in of down high-yield share volume the was were For X locked the multi-year trading chart The last left XXX TRACE down corporate range following quarter, range, last and volume point in and high-grade a share points income indices high-grade high-yield basis TRACE the bond gains in versus deviations was quarter at year basis linear one XX%

has that volatility trading an through We and lead increase the reversion fixed market a quarter, in fee will expect lower trading capture. increase once Open all-to-all provides automation trading during an second Slide remain for up to X corporate again. since high-grade moved and the optimistic and Treasury and ticked fully update Treasury quiet mean trading income velocity. bond yields duration on our We in also Trading. before but periods been yields trading have volumes. impact

environment. day central average, Open marketplace. pool. and vast high reduces per network to Open increases over the over Trading initiated $XXX orders transaction of unique an that spite X,XXX on liquidity costs investor institutional reduces drive majority during in Open in improvements and We in the Our with are Trading market network cost our XX,XXX to low estimated opportunities, quarter in and to into in single the orders trading global billion pool value active transaction of our price during believe our one costs million $XX Trading. volatility On notional continues savings important periods. delivered firms The liquidity Trading Open risk transaction unique clients, in saved dealer MarketAxess available volatility due Clients

Trading are was Open XX% year-over-year. finding initiated dealer is system. DXD electronic on taking great volume The segment markets client rapidly solutions. the trading moving Dealers making both in embrace MarketAxess Our value liquidity up and to

pleased success also in our Diversity are the Dealer with early We Initiative.

with expand example We dealers year-over-year to in is relationships Open for new This trading of dealer important investors days. and minority onboarded the great women-owned using investors a Trading the XX is have up program now and early dealers. for and volume diversity XX%

to call and on products let Now, automation. over me update new Chris trading turn provide to an the

Chris Concannon

Rates hedging platform. net capabilities, been unique products provides on enhancements XX an update completed spotting including Slide and supported solution, our more Rick. to have We investor firms and MarketAxess Thanks, new our protocols. and - portfolio May, trades dealers. portfolio Since trading on MarketAxess than announced recently in in investment X integrating late XX through XX with release the technology the integrated

between up portion portfolio committed somewhere trades, X% small and our portfolio a trading are the of makes of solution. further we While market, enhancing to trading X%

through in and adoption. seen XXXX from Mid-X the the billion XX% fall in prior quarter. in the up of second significant quarter, traded sessions protocol has $X.X Mid-X Our was volume was launched Eurobond

Also bond to year. We billion to areas, credit the new of product second U.S. quarter, announced MarketAxess in $X.X million quarter. focus of extend volume which expect to the municipal to approximately currently completed not in volume day, bond MuniBrokers, we Mid-X trading record municipal $XXX grew is the in which products muni per within on a in totals. acquisition transacts bond the Shifting included half this our

being offering beyond launched treasuries is initial with launching Our all-to-all expanding month later MarketAxess Trading this Click-to-Trade functionality Rates Open year. solution our and this RFQ our for

Responder adoption by from income total of the automation X regularly with step volume. summary algo to set with growing of The responses continuing Slide year. liquidity all-to-all continue with the on deliver prior. combination XX% quarter our in trades. We This firms a trade trading. clients Auto billion trading breadth We've and Today seen Responder over continued products, the dealer reached across leveraged use to Slide and automatically X.X in represents a up our of product also cost quarter, platform last allows new from clients dealer $XX.X of count of XX in algorithms this volume credit in approximately XX same Auto our continued our automated our period Auto-X supported functionality. choice of MarketAxess momentum the across criteria. trading trading the client a records demonstrates up XX% X full pre-defined liquidity. XXX,XXX the quarter, protocols in and trading crossing grow second of to avoid a fixed based a of is to the Automated year protocols million the X% in helping functionality total of provides volume categories. on firms breadth. respond critical of of is on our

volumes the largely market XX% quarter. due volumes conditions $XXX the volumes to up Volumes for billion in our $XXX quarter. benign down year-over-year. other were category Estimated XX% for in U.S. high-grade the X% year-over-year quarter, and year-over-year in significant Our to TRACE credit U.S. high-grade second to billion were market were down decline market

market weighing and decline most U.S. on in outpaced Similar estimated volume volume to trading market in our Our decline the the market volumes. U.S. in Eurobonds the emerging in bonds the double-digit change factor trading was significant high-grade, estimated high-yield volumes.

clients' Our on billion platform, mandates. XX,XXX to bonds traded our trees worth investment green of green were support over being quarter, the over second in bond trading $XX resulting initiative ESG-related In planted. continues

We our XXXX surpasses have which now year planted full over XXX,XXX year, trees since nearly the of beginning record. the

Now, to turn call let Tony on me financials. our over the to an update provide

Tony DeLise

clients X% you, favorably personnel the dollar expense conditions, both Chris. XX% quarter. Slide $XXX trading If intangible weaker quarterly services was in Thank X% $XXX,XXX. to $X.X excluded volume. On each lower, were revenue year-over-year and operating by The costs, and a doubled continue than operating add more Despite of tax basis. XX% was services The provide initiatives. Commissions earnings summary year-over-year. new and Revenue XX%. Reporting revenue on to XX% year-to-date Regulatory weaker invest organic decline reflects market a our non-recurring resulting clients revenue the performance. impacted down and Operating and the acquisition-related from million, credit margin information Post-trade X, and second and impact difficult information and was we volumes down XX.X% added million, due effective in integration inorganic healthy data would The and organic $X.X income we $XX rate from around we services. principally million million sales. driven market in was margin trade was the reporting post-trade to growth have by the XX.X% of of amortization been Hub acquisition recurring new up year-over-year, services revenue through

per basis. in of are and decrease any of rates in was trading X% year Slide full laid and the quarter XX%. to to Lower a of were transaction decline credit million. our the market majority the the and estimated U.S. market expect million a effective volumes. the On We We factors, estimated make variety the maintaining Treasury XX, due half rate U.S. per didn't was volumes. our fees decline decrease fee a slightly plan quarter-to-quarter sequential fee to driven duration. including lower the revenue, fees down rate around On by due have out commission effective principally sequential on of in vary XX% fees basis, year to year-over-year tax XX% volumes changes tax and in composite high-grade both was transaction during second we guidance

both product than shift quarter of second and Our lower to the a in change million levels, was first other $XXX credit fee XXXX protocols. and XXXX of the quarter impact due category mix principally per in

In of provides subscription we the $X.X will expense run other fees license emerging quarter, license and a million inclusion you distribution near-term, During MuniBrokers subscription Slide was fees of with $X.X the to in due the weighting in and detail. XX around the quarter. million. a and expect per volume there to increase high-yield Eurobond the fees credit to second weighting heavier The volume. markets principally was lighter

were Second quarter year-over-year. up XX% expenses

Excluding integration return the first Pure of performance in of amortization versus were Marketing businesses, expenses up can and reflects always down and first benefits against Reporting million expenses, operating Hub active Sequentially, and amortization incentive non-recurring our Higher almost half of $X.X X.X%. and to was are quarter expense MuniBrokers is were tied and Regulatory the reflects amortization decline quarter. the T&E which the seasonally period-to-period continued the $X year-over-year. costs more the we employer residual and related operating expense. MuniBrokers to up pay, intangibles X% expenses the million hiring and the level quarter on was a acquired transaction. intangibles swing plan. execute of and lower acquired some which advertising advertising salary Approximately of depreciation costs as lower to second campaigns taxes, in variable the of higher due due directly compensation to was to

expecting million. end $XXX free We million year provide months million. flow and of as are XX $XXX On and XX, are may up range trailing of at at mid-year the $XXX mark information. million and expense expenses we low Slide and Cash the were our $XXX now cash guidance flow end was XXth that of investments cash full management capital to June

approved second dividend and $XXX million program. borrow repurchased Open of cost to cash activity the second $XX a against buyback and a the During at paid on facility a million option and activity the total exercise combination of We settlement quarterly results, out net-down revolving we quarterly vesting through of used the shares our the a $XX of secured credit XX,XXX share our and in facilitate second million restricted the regular quarter, or has didn't $XXX facility quarter Based Trading million quarter. $X.XX Board syndicated dividend. stock

the Rick. Now, let me turn back to call

Rick McVey

Tony. you, Thank

In us. revenue see impacted optimistic our the front and opportunity in be opportunity will market to growth attractive conditions. We we and continue be to growing a short deliver Long-term, run, earnings and the large always continue of rates long-term for growth about business. growth set by

a share growing and business, investments markets Our products off are new emerging accelerating international promising with paying momentum and protocols. in

passed the close sincere with and integrity to management the Relations. job Tony outstanding corporate on great thank with to Head Investor capital the senior on always an our operating of terrific Chris an remarks been run done our Tony and me He CFO Let transparency. prepared a as and over Tony focus a done the will baton former development, has team, has essential CFO Finance. Gerosa, on CFO. you last XX company and remain Tony MarketAxess' years. with Well as Tony DeLise. of partner has business part MarketAxess' a

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

Operator

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

Your ahead. line is open. Please go

Rich Repetto

the I seen the and slight for same from volatility market conditions feel back bit seeing last of - - first any in the some how question I least you're think more markets little you sort have to friendly credit same give but at markets access? environment in movement the a market is we year overall in volatility guess, and more changed dramatically of July. us quarter upticks Can the a Rick, - in whether

Rick McVey

which share. in three just better a Sure. bit we've in And come especially take happy Rich, question. to four our weird, trading on it the has some volumes high Xnd. short and in little Xth This yield days, July really It's it that has midway July, the - and why last through the because the mark first with volatility very holiday July seen or the didn't is on volumes comment at on day half we of weekend low

is left, days to best month with trading to right. - But think you're eight it's got come. of the yet So, we the absolutely

four most signs noticeable If product, high-yield more with obviously back, there you for at spreads, look it's which our engaged it in just And recently. trading ETF high-yield some in place days three beneficial volatility been the community seen the is particular, has coming or volatility even business. in we last our where is gets when of that have

So, on knows lasts who it signs but volatility not, at least some whether the or positive front.

Rich Repetto

all-to-all Trading, to accustomed and protocol into and we guess think you fit the that, new How that guess, the MuniBrokers. in Chris, I that did Rick. - when we it well. mention both about think think LiquidityEdge Understood. into network. muni acquisitions as treasury And market. RFQ that And you done maybe fit? what Open Open That's I believe, I will helpful, I it? market confidence does haven't Trading this gives longer-term, then, I the I in it guess, markets been do you've about think how talk MarketAxess, can guess, the you're about And the take you going with you - and to

Chris Concannon

crossing opportune penetrate do great I and We into markets. our think Sag pace, But that think are providers to a saw your growing and be also for think effect Trading, to I moment It in Trading has have participate we really as offering. Harbor. noticed. question, allows alternative avoid about faster when Open Open markets. across unique Trading, we Well, mention It liquidity. all a than want the of And it's Rich. you spread It clients And to running liquidity Open network brings liquidity on volumes is I I those them.

about a XX% all across Trading part the market. Trading munis, of see our muni Trading we as market. of is of Open in a portion sizable In key is the the volume Open Open products long-term. So, strategy

component actually market MuniBrokers the of network an with it's our effect. to that So, muni intend Open populate we the important Obviously, and to data. content acquisition MuniBrokers, Trading

that the one market. a really Fed So, actually we published sees come report, the unique challenges and as Trading leveraging will linkage that year's a study Trading a market, treasury that on opportunity the through well well, and in Open the In last it's MuniBrokers rates recently again, solution. see, with as Open

attribute today. is only that a plan will well. the across don't our of which on both Trading product and our products, full strategy our treasury in be offering that run of market. before year-end very And the Open off plan Trading the deploy around, treasuries So, another but solution in Open RFQ, key market have solution treasury We the deliver not run, as Trading to in to a the nice unique see breadth we and allows Open

in Trading sizable EM quarter just as that see of all to I a growth, more So, like witnessed. Eurobonds, things in even coming. mentioned, Open challenging we continues And that's

Operator

question Raymond the line next James. from with comes O'Shaughnessy of Our Patrick

line Your ahead. is go open. Please

Patrick O'Shaughnessy

you impacted so volatility, more MarketAxess's credit do Why by to more be U.S. share that your think competitors? than market market seems

Rick McVey

happy And best that dispersion currently. take different high is in think credit Patrick. higher And was saw when year price it volatility environments. us different one, to in the ago you period Yes, during that a try much I do protocols than work

is there's from lower shortage even rates As a as we Open an platform. our are liquidity as to Open is and investors is our like What so world. the of is system Trading much improvement and the there and now hearing liquidity institutional very in are limited right this, was from are, result, dispersion. very price volatility, environment significant where because actually the through price additive less in elsewhere rates there a Trading market In low there drove the of share bonds volumes participants

increases are margin focus and the and at business calendar some issue that dealers. managers inflows drive asset on getting new So, to the the back

vol But finally, that releases of have that close very one gaps to been of have driven a down you're share market had really very one enhancements TRACE to mentioned, community series of trading credit arbitrage because or that's see of we're very in trading you recent was believe, that well going Trading. the want do that the levels trading Patrick, driven most less think not result, has trading, with is low their trading, lot investors protocols. less. watch wouldn't that of have and in look we swing new high-yield and differentiated. and directed significantly. behind from of and vol market focus levels well We're market our market days Open strength us just earlier, and We of their made they introduced the the is And gap. active and investors. ETF, we the MarketAxess. or It I opportunity we do I pleased trading. through anywhere will lot think institutional really is share been And XX% is And recently. away solution when when there, release you encouragement it's entirely that in keep to It's have high that share are really to our when active difference, volatility A We by is working because Trading as a aware our at on dealers The our from but closed as a else by it's early XX% point that electronic at I we to other on participants is almost getting The with that of they there. admit the then portfolio hard gone Chris continue been we're are dealer high. up, participants, Open of DXD perfect. solutions were success the don't ETF and not they've in the and portfolio trade, to none much coming great has portfolio And a as the much general, we

solutions, are participating have embraced into that have dealers of more encouraged in RFQ as it dealer in that some benefiting our that slightly brokers are, from we businesses and we're transition short Trading. Open dealer-to-dealer through but So, run competitors electronic we're than voice the

volatility. factors, get of I'm longer-term normal a advantages I the when and So, more Trading we back through but think confident to Open variety of come quite it's of levels that

Patrick O'Shaughnessy

sales client meetings the And you or portfolio protocols your get that walking place Mid-X. your are and sales or these right initiatives clients of spoke new days? of efforts some of taking doing starting back you efforts lot the new them it's Are about to then nature underway, whether clients you're a in-person live office markets trading now? What's have or and these through in how your the

Chris Concannon

question. Good

many months We clients have outside now. for actually seeing been the office

U.S., is sampling need So, of became as automation, opened in outside Virtual the sales technique engagement also Europe of demos in like quite you're our up effective, team. office launching a when things the that sales and data. particularly regular and client products things

few really products in portfolio and so, sales the force has bonds, look last and demos. like EM, to comp muni and our demos demos, and things virtually a And growth pandemic during market trading months the across stepped from - doing live was numbers you year-over-year up And selling very the last throughout various difficult year. if at our what to Eurobonds, sizable to

feel that we we but to actually we virtual their engaging and their outside to XXXX. comfortable in and see offices offices quite arena, started continue in not still expect So, clients throughout clients have the

Operator

of comes line Jefferies. our question Fannon with next And from Dan the

open. ahead. Please is line go Your

Dan Fannon

follow-up the to as you give back wanted today. in And of some low means industry kind comments could of guidance around the think end maybe the sense half environment about tracking you your revenue on where of us year for I what the that the Tony, of you're if the backdrop terms of with volumes?

Tony DeLise

to there And do year looking some are at in now, variables the that, Dan. full that forecast. right Happy forecast sure. No,

One people with around XXX ended is of we them around the quarter right and people.

on has is that least fairly people, the variable to muted volumes sight more fairly muted on half the our with tied at to market those XX a of of another and But program. year, grad are college And of line do big we've what which factor albeit another the clear we of lot performance. of are saw a have adding into and add conditions. a market to of operating expect now, We model first is right what compensation, XX built continuation swing got

performance. So, or depending that variable operating down, compensation can on swing up

other piece clearing around the largely expense result the a that of self-clearing market to conditions our tied volumes this of that expenses. The fluctuate year, you that And as came transition market will and and be does savings saw activities in is again U.S. conditions down transition our settlement in market the the transition volumes, depending those and the U.K. can agent then U.K. and - activities agent I'm market clearing the costs settlement and sorry, as But on well. in or through swing up

predict, right now, we're hard first to we've in of assuming what of the a year. So, half seen but the continuation

Dan Fannon

And other then of post-trade, the get bit of here to integrate well remainder kind line revenue a acquisition kind items, about as with the an just as the outlook thinking of just as non-transactional as those well. the for year for of of the you kind opportunity hoping segments

Tony DeLise

post-trade, the Yes. the million information in see And of did also of organic of Reporting seen half It's Dan, a contribution. in It's our the in around integration revenue. pretty revenue post-trade pickup big expectations first revenue of half $X the than of be do Hub year more And really in and because the on side. a terms Regulatory on the year. in the services meeting happy that. first We've about increase will non-transaction you the to big business.

would new on proxy overlay the that good be at There's We what look couple the side market. transaction pretty we the year. back would reporting the Reporting have half and half be Reg first see the the repo organic SFTR side. then in post-trade, of services you and client new in as months When a Hub would past additions have what of exited translate And XX XX%-plus for to growth firms the matching. around year reporting of

back the similar. half of the So, is year

proxy transaction pretty tell I a so somewhat post-trade are is tiered half first there you does tied something volume, so volume of plans, there - is Although, there. our is volume in to but - is use good matter, reporting revenue it will

underlying information it the around recurring the of at side, at about was when look up was services really the look The revenue news On half year revenue, you you first XX%. good and there, XX%. up

So, one-off in some They we're here any one-time were bigger sales. in XXXX XXXX. than may quarter, seeing have we what given much

we've into at We've got when for and growth pretty looking of at you in look the year, talked second about the services grown XX% the sort rest of So, information opportunities the year-over-year of revenue, really the in services growth of you we've into back a past, we're carve revenue. around information information this decent revenue recurring side. Guidance low if at services year-over-year year. And double-digits. we're half double-digit looking pipeline forecast the on the looking of that, sort historically

continuation half. you a saw what of So, the first in

Operator

KBW. And from Voigt with the our Kyle line next question comes of

Your line ahead. Please is open. go

Kyle Voigt

Maybe trading. my first question on portfolio

ago? updated thoughts a portfolio the peers I'm curious to your just As you your electronification historically. on you to alluded maybe to much as role that play compares of the how the earlier, credit it's thoughts a protocol that hear in this trading And maybe hadn't long-term invested years will as in market? Rick, few

Rick McVey

I'm happy Yes. to.

investors I tool transfer both and in risk value situations think certain dealers. for has that in it's new a

As from X% now, a year around TRACE Chris volume we ago. We X.X% do probably of think in believe that's up it's so mentioned, situational, or right.

certain you're think investors but don't there and are over going situations something I So, in see or of X% kind to results good the certain market that trades this basket are more of reporting. XX% become than time,

to really clients. good as start. for around off the So, we're mentioned, work a to it's our And really for enhancing important I continue protocols us

see some in on balancing You portfolios do indexation currently. going

the to earlier. that tax between and part is dealer somewhere now, You three trades see usually about going talked right going one of some I They on and tax on. dealers so this directed swaps business go

at volatility. investors a in really part is and all It's and are risk be I we're that, constructing tool trades use for market of last you volatility new the to making in what It's also of future. it we're the piece if of quarter The assist I it's mind a the the to the and was, part the portfolio also it's today, even basket the more key trading and as second my year it's say, limited ebb I and do to more of trade a model it's that dealers pure And that - I because time low. processing. trades of around at and more in transformation say benefits that price model. doing is much when dealers flow transfer what pricing conduct the in the look ecosystem with And will look is basket. when as invest of shed to number So, This to others, and of the will using, of basket with that moving are again, negotiating - basket protocol. transactions. think expect number the heavily pleased difficult require and trade will STP much client now the easier

a too it's trades about So, the might that change as not down people portfolio different that execute solution to but is they road. subject liquidity currently, think ways

Chris Concannon

from mentioned, we're in something very focus is, offerings offer as less. quite thing I'll lists. both add made to line portfolio, value we And of versus of on powerful as trading Diversity pricing our decision that understand well can from to unique current is environment. all as is individual client as to to the portfolio And Initiative, seeing Portfolio clients and strategic as a with make the sure one none high the And Dealer it MarketAxess both change, Diversity enhancements demand our the as risk the to provision and both well trading the the dynamic as market, marketplace solutions, in Initiative. in limits item portfolio to fixed value We natural a from Rick liquidity quarter-to-quarter. side. And clients income transfer, trading from Dealer part a like or trading execute has the side

So, it while a of it a as market it percentage X% limits think or the is do market growth X%, has and portion certain change during we will environments. sizable at to

Kyle Voigt

on it's And volume I Mid-X. already. you. Thank great. like be follow-up my That's of Looks would Eurobond think, X%, about your actually

you believe when market. success of to or market to think lead just it you think see corporates, thus U.S. liquidity launched uptake saw the can about the so a pretty being U.S. the launch? would I with to you recall rollout that far. But rollout high-grade year than the I U.S. similar I was guess characteristics But a than less good anything less what pretty just the if Eurobond wondering, more to there's Eurobond really the you that would ago, point

Chris Concannon

mentioned Well, corporates. in rolling remarks, we my on I out Mid-X yeah, U.S. - we're to as plan

it's We a and is we dealer-to-dealer trade U.S. much a similarities excited in you'll Europe see portfolio than from in clients, off success solution. in many dealers the sessions times, And come are a It do demand see more really about the trade. of demand

want inventory trade well. So, that session as portfolios those find don't will bonds Mid-X their some are dealers that trading in into in of way a

happening seeing another huge really solution. offering demand see be dealer U.S. RFQ solution see corporates. matches sizable expect solution demand, see Eurobond our our it dealer-to-dealer and we're But U.S. in even we do dealer rolls Mid-X we So, Mid-X we maybe in matching as in our growth the similar and out in and really larger we This would would do sizes in do client

Operator

our next Allen question And from comes Compass of Chris with line the Point.

Your ahead. line go is Please open.

Chris Allen

if I penetration change there trading the perspective is give could to bit, opportunities? touch maybe markets strength of mean, in landscape there Maybe competitive emerging you're any little on terms just where an from perspective? seeing a us a where from update an electronic you regional is

Rick McVey

Yes.

Chris Concannon

Yes.

Rick McVey

question competitive was the you, was bit a the landscape. hard It Chris. was to think EM hard it - hear I little about But

Chris Concannon

And growth where you're seeing?

Rick McVey

yeah. So,

presence So, new APAC, clients primarily on adding CEEMEA landscape, internationally and with of competitive desktop America. are quickly and Latin it's in we their because the Bloomberg

But because really superior So, so clients active And that bonds all around runway liquidity importantly, we're on a solution see we internationally. share just left then that the and XX And clients market, in the we're regions. local trading about and, the EM is too. and not currencies we we and so trading currency, - market have promoting think EM much local we trading world. electronic hard we're have markets onboarding there bonds we're excited that there importantly, one it's gains in momentum we're and volume the

made coming is it's the both long-term regions. in the opportunity year markets there first local that currency half and a progress in there the massive So, hard is coming of in and all in we

even of markets lack U.S. in the has you suffering this half year, in So, volatility really are the held business see same the that EM the first international general though results from in up markets. of credit

So, APAC but very got growing competitive more market We've base - space much underlying so excited own is to really share client quite actively only EM. We're is the too. the and about share to in the volume market that we growing and is growing our watch. and do. not and the market size of position quickly, have opportunity

Operator

And our the Sachs. next Blostein Alex question of with comes from line Goldman

go Please is line Your open. ahead.

Alex Blostein

thinking looks back little pushing couple the IG hoping percentage give other of in at and take across XX%-ish electronically a traded of thinking MarketAxess it the And U.S. was like bit the maybe take, something or I least step of is in last landscape. range, a and between platforms, to the months.

that's muted. it than to other of actually to same guess, guys feels I space? turnover of of update thoughts IG sort for key penetration solve of periods higher - what see you you need you guys your kind higher? what pretty that? does kind that about take will of get customer share to sort question, like It you in been can XXX, that like you then, of think think What electronic elevated ultimate XX, along like pain but there, opportunity how the And been platforms us path volatility do points are So, think like latest XX, has the the on to do you here? secondly, drive looks i.e., again, lines growth about

Rick McVey

you take that, venues to have standards. estimates that first is But by Happy for estimates that that reporting the Thank question. you different see a are first shot wildly at the disclaimer Alex. the they Yes. are just provided

to electronic electronic processed fully across So, there differences even versus that all-to-all. trying I to reporting the counting, analysts all the around get CXD, and some double through DXD parse are through differences think reporting are and then segment

differences. reform quarters second trading of absent standards, you the on aware increase and do like in get that, velocity. you FIMSAC the said standards last that in hard that's down sheets. on now the are velocity. It's road share citing. bigger very benefits automation that's there and the been of ours for opportunity investment as This all other velocity connecting like than reducing really any wouldn't today a and But double trading nice is what increase XX% use are one regulatory of models. bank we have trading that ATS starting of uptrend the different marketplaces of an and over back those central grade, market, something that came higher more accurate trading. on ever of an the been And or up And we down using took trading Investors XX%, an transformed had regularly middle electronic every go balance number in They're share you're because for that in in growing easier pool when I their it's liquidity see up that to because at we're in we've issues that up are people some the and something least to electronic that so constraints share FINRA, believe velocity. participants actually with that XX% probably going probably Auto-R see dealers part that more central having have follow counting trades are trends the should market thinking of are of And I the to think that recommendation the have to So, is getting the five and on making too. quarter, costs, automated the in following to trading, do And to you addressing because answer Auto-X it's four why a reason before. do don't I be get really bank have tools showing which market

when the hold So, other asset part to what Alex, five, classes it's credit. automation when happened we years, but potentially it is an you story or away, gains velocity to has of out if are XX greater equal looks takes in the look even of story, at part velocity starting in think share the like

Alex Blostein

And on then curious, specific question. update if to working through later, you're jumped hoping on is But spotting on the and with us I was bit little going? Thanks. how that. could a you specifically respect not I'm what there. and a update LiquidityEdge net I maybe there that guys sure an was call initiative

Chris Concannon

that I'll Sure, take one. Alex.

is over trading, So, regard been our live We're credit our is how Rates Click-to-Trade and With we solution rolled clients. Rates high-grade offering do our now out our and has XXX growing. trading, to with price price on Clients feeling spotting the Rates it's as on platforms. net platform, the other benefits a that have of the result tighter already platform. are seeing the a integrated of than we're from slightly integration

is Our live. and client-by-client. fully in net hedging out rolling It's production

on the a dealers the over the platform. auto which helps that queue dealers of well, providing just as number have rolled support liquidity Auto dealers in out. is XX hedging We to also with hedging

XX close auto from and dealers live benefiting to We have hedging.

to platform comfortable and and production has trading with of our integration credit Rates platform full quite we're the our So, gotten really that.

don't in clients, our out both breadth run on response can the across As we're in before remarks, other where run. unique really large offering to is opportunity Open excited space, in out year-end. coming Click-to-Trade dealer a off And the we Trading, group, dealer shortly. the of will found which around solution that the about but liquidity in RFQs rolling be offering full both the and product and be liquidity any place the our Trading, I treasury and to and competitor here that's one is see RFQ alternative Open across mentioned out in treasury more which particular,

So, the really XXXX excited U.S. space about treasury and here the in

Operator

Sean comes from Horgan of with Securities. our next line the question And Rosenblatt

ahead. line Your open. Please is go

Sean Horgan

just on is allocation. capital question first the So,

buybacks were continue to aggressive more year? half expect we quarter. of back a think I that Should little through second the in this the

Tony DeLise

we the have Sean, on of programs. in management two sort we've place, capital So, programs got the the

use we our were really, dilution aggregate We the and flow. on On buybacks dependent you dilution you're looking have the when correct, have on recurring the from look paying targeting But Board those share at we continue to earnings where we dividend seven in dependent in And share from dilution. cash option count our of to to on quarter-to-quarter. equity using why our quarter. repurchases And QX those share last to net-downs authorized share buybacks. share the place, under We've it's free first Board vary got That's And out buyback use restricted it's price. in do to stock we're and plans, one-third grants. And repurchases, some the But plans. place, then then and the in got about higher diluted years. offset really varied they hasn't plans, the stock in repurchases offset the we've exercises. two come vesting philosophy forms. it buybacks or offset approved in buyback vary, grid just going maintain they that of does than repurchases at the But we're of

revisit in capital balance conversation our both is Board We this to quarter. we So, right dividends feel no and with repurchases, we place. right programs. today, the the now, change have and like plans But the return every

Sean Horgan

are I'm was more how you more success this investments? more quarter. wondering, marketing or you this those seasonality of focused effort? little if that's is aggressive a of and regular what And if just so, spending And question, second if measuring a the I the on know are

Tony DeLise

tends second and little of - resumption to campaigns bit it's bit vary a it has client uplift the around does pandemic of T&E. near-term an a episodic, So, bit spend. it's around months little a period-to-period again of T&E conferences, on the on the look trade advertising campaigns, in events, a been some shows. advertising Last at an Sean, the and be quarter, by from of little dependent but you marketing, XX the and and uplift When impacted

look rate you're to we of second expect thinking second the If the quarter. about that to the year, similar half would run

Operator

Patrick comes question James. next our And line the with from of Raymond O'Shaughnessy

go Your is your phone ahead. Please Patrick, mute. be on open. line might

Patrick O'Shaughnessy

my to distributed ledger use additional for starting cases some Thanks taking technology. for see follow-up. We're

ledger threat? some see solution say opportunity? at least the for you repo to a distributed bond do there trades. trying to ledger guys going an use And to even for in Is I entity a distributed maybe, starting is there's and is is there a develop particular, the relevant? Is we're process want there? it very think maybe and one in case see I I it to lengthy opportunity settlement loans, trading. leveraged Is think loans. What be complicated it

Chris Concannon

for technology years it watching Patrick, and following we've distributed a number now been of ledger closely.

there of offer in the efficiencies cleared. centrally As you places settlement. The to trade piece mentioned, key for distributed that are probably ledger appropriate products are we

And are ledger thrive centrally comes so, of when - efficiencies. benefits if Those clearinghouse. into it of clearinghouse of the distributed only market, guarantee the cleared can move with key you a some a a central

as not provide benefit settlement, see that efficiency the centralized the ledger. And the full and in what it market, ledger so, everyone's come But turnover - clearing products, unless of to where impact efficiency. they settlement challenging turnover distributed becomes towards given of liquid steps securitized into with the because the guaranteed they efficiencies. settlement are is racing do of netting areas guarantee can there securities in distributed some limited the Real-time

in actually a see interesting it We efficient. to couple of bring instruments product to So, it's maybe much quicker securitized market. where markets, it may issue watch. distributed where a It is more ledger be new in

highly product. continue right will trade liquid stepping that, So, it see watch distributed there we is we we now, And ledger to it. a but entering, but number of applications see cleared don't into that we obviously centrally

Operator

And Michael Cyprys comes with from Morgan line our Stanley. next question the of

ahead. go is open. Your Please line

Michael Cyprys

the bit a MarketAxess talk And we from what for might your of opportunity could new fixed side, on there, you bit that specifically hoping little years would over and you some index was just on a you're actions the little taking income of indices. next of question. talk the some you taking that about the initiatives see front? the I see Maybe about around creating thanks couple

Chris Concannon

a topic. area, great A great

originally Obviously, of the clients exciting the index-related We in form. in products. that look following fixed in indexation products, are We for I'd liquid income. in or in indexation there's the call and future indices ETF either many income they our not were market, closely. the at quite and offer the market tradable managed an are highly designed what We market do fixed think

offering have So, index across have to in market. to fixed income a and market liquid currently We we start new products. published highly that we providing think indices indices the several there's the globally opportunity are

indexation a You market. in on our the think can is of the there see great we further opportunity them but do a - website,

that for. see and custom We demand custom clients indices in in baskets also the market are growing

And opportunities classes, index you, think So, it's other the at early days unique I across indexation look we landscape of in very equities. tell asset some some fixed I particularly income. will in when the

also the So, only for ETF our indexation, We and we're benefits the not but about for competitive of overall volume. benefits thrive excited in market landscape. our the clients,

position. months competitive new about coming indexation, fixed an and of as income to is future our index-based looking impacted our ETFs, role our So, excited in years. we make future the products was see where and the and example into excited way business ETF thriving. their forward But this the certainly very quarter of products indexation And in launched trading volume about down in being that

Michael Cyprys

area And strength quick question the of on guys an in you for certainly maybe our markets, just emerging quarter. a follow-up

on what corporate and EM? byproducts, the I biggest then business, you bit where you EM of little You has been the sovereign area, opportunity, are just side regions you that of big opportunity some mentioned about the of was could in a geographic initiatives your talk there terms if about lot momentum hoping within know have I the there. in a a see set but

Rick McVey

Yes, it's the above, Michael. all really

both EM. Trading We dealer and in have Open at work RFQ

the all sales and clients. attractive in as more we Latin to is local participants, the Americas, to XX% certainly utilize local participate and network be of our hope debt growth you compete we think adding paying regions in We enormous. markets in and dealers well. market to The and we've active to up being our or resources by mentioned, markets effort And to the and XX% XX in have more able the local with CEEMEA the in local help opportunity APAC long and APAC open been I onboard there been markets see APAC given us, onboarded. Typically, region region is all too mentioned, dividends the the clients that especially I is of and traded before Chinese as sales

couldn't nearly going about we real the in we've So, years space a more fact acceleration on XX been EM opportunity that is the investments now. there excited that making be And and that for adoption e-trading world. think in in around

Chris Concannon

market And in volumes I would in market EM, difficult only CP+ just transparent is in EM growth, add, a data offering. given market, we're a product, it's not our healthy our market. not very our EM, seeing but and

to automation in as well help clients overall for a seeing professional in feed adoption data a offering. as our result traders helps We're in drive automated any So, and as data both that growth EM. strong of tools our

now as well. EM are We trading portfolio in offering

our automation we all and of Trading, both being a really of but data. in by just protocols, Open opportunity So, of lot EM healthy the from valuable driven have offering some product in

Rick McVey

quarter. like today, updating Thank us next Q&A. you looks to ends trends It the look for forward joining that you on business we and

Operator

over would questions showing that remarks. time we no any I'm to like further to And further turn and at conference I this McVey Rick have the back for

Rick McVey

quarter. I joining think thanks already next for you We'll closed to but the I talk call, us.

Operator

and thank participating. for you gentlemen, Ladies

disconnect. may all day. You have great Everyone, a now

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