MKTX - Earnings call transcript Q2 2022 | MarketAxess Holdings Inc.

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Operator

Welcome to the Q2, 2022 MarketAxess Holdings Incorporated Earnings Conference Call. My name is Vanessa and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] I will now turn the call over to your host, Mr. Davidson. Stephen

begin. may You

Stephen Davidson

Good earnings welcome conference Vanessa. second the quarter, XXXX call. morning you, to and MarketAxess Thank

For the Company; through walk call, we then Officer, the and will Chris Rick for will the are McVey, Chairman a COO, Financial growth quarter. update financial and making strategic Gerosa, on results for initiatives; the Chief you the review Chris our President provide Concannon, progress Chief and Executive will Officer,

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

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

Rick. turn now over the me call Let to

Richard McVey

And quarter you review morning. us our joining results. to Good thank for second

We delivered continue the strong in operating to and execute our second results key quarter growth strategy metrics. across our

momentum strong share in credit e-trading institutional market our corporate emerging position competitors global our the we leadership with increased Importantly, have space versus bonds primary markets. in and

for paying We of share rates, have trading new credit and back across now driving levels the volume. moving favorable are estimated record investments are global we off. foundation to our both into for made credit environment record quarterly market and a trading more much a achieved expand We growth

differentiated of new for liquidity U.S. environment clients our benefits in clients emerging since traders. and Specifically, XXXX. through coming with pandemic We a The Euro pool level established U.S. high the of share yield delivered the record quarterly savings open for markets, cost record global bonds highest market and credit, trading, Treasuries. we are in active transaction

core $XXX total trading our new making in volume. Beyond achieved product with portfolio Municipal billion and business we strides was another tax Muni excellent trading in record million this a $XX record mix with bond and areas. solid And Treasuries active clients are and ADV quarter We protocols, achieved record of record taxable client a XXX quarter activity active exempt with U.S. share trading. market XXX a firms.

launch ETF on access several XXX this designed with capabilities key the an also trading data We announcements of our quarter ETF and index. made enhance market to our grade investment

MSCI in growth Our share significantly an share in improved and operating minority virtue provides strategic trading trading. ETF and conditions. collaboration on for derivative areas, market new municipal in Slide are including U.S. momentum increasing financials update performance. product based In with Treasuries and equity gains volume, RFQ-hub investment summary, X broad and our bonds market strong driving

credit policy median And operating happening over market, is as yield more has high from improvement the at spread by of would is in unusually it the open And large with we ago, what basis spread now quantitative and price a time. high-grade return bond to higher points a is key indices credit emerging spreads QX, drive which in XXXX. more term approximately up matter our One bid/ask down the year-to-date. in environment. price When a an movements yields high-grade this of a been share which much institutional sources of short predicted markets, points XX.X% of Euro is today, did differentiator maturity key as we from record in liquidity to gains in broad The diverse to in premium has high period thing wider of a liquidity short and high market is a four very our share months increase XX% in has based volatility. and was opportunity bank is is fee accompanied tightening eight inverted a central trading moved accommodative curve, Just favorable high-grade we and are just easing a today. and becomes contributor rapid end that not two That corporate market. basis share months. which has change to bonds, a yield Central substantial traded, bank corporates across average a composite in yield, XX.X% reduction capture. market headwind in the that in anticipate for and pre-pandemic to created this dollar slope estimated the short the reflected in believe led nine maturity grade, We has exactly bond

Over the the of X% last yield has been curve time. XX years, only about inverted the

illustrates XX,XXX the primarily clearly new total total active with X result, Asia. Active dealer the Slide traders traders the increasing a by expanding and X,XXX are network. to traders to strong new international Fed records and clients active a inflation global the set by depth platform, diversity increased yield comfortable, to XXX and over the client with on As shown client record we lower. to on record We expect the active platform, of investor globally. of including growth trending records international the our clients traders. on with is The firms, platform active is active curve addition also normal driven global in X,XXX our numbers liquidity when return new

in market generate. and coming in the fixed global has importance the conditions foundation clients. our record over quarter, delivered total trading how trading transaction form and the credit approximately the our in improvements gains diverse Slide activity products and have once the all excess are share. share DCF Liquidity shareholder model. proposition billion the only opportunity our growth income our all-to-all our transaction all most quarter XX% X global the market via more $XXX the trading Our institutional of Slide for To trading for growth where from to combination created some driving in strongest in become large add trading protocols in According with average and and potential. to levels and share give trade participants opportunity products strong clearly we term liquidity. and for in continue of high-grade differentiate approach the served years primary for comprehensive and annually. recently across we are delivering strong X The is which open us for illustrates our in value investing. historical gains term, our of one that of volume for We cost the quartile cost we our an cost and revenue by market products is run before increase us Wider the exceed the front trading growing of our gains total long and substantial estimated lead currently rate the the a million of this first all-to-all in savings of trading $X spreads with in market revenue access savings ever of market estimated competitors $X XXXX is one In revenue tremendous all approximately an delivered improved in terms and you of illustrates had gains access three will clients. is revenue of macro rates. post increased the sector trading market years annual growth opportunity institutional client to over the significant a the institutional in challenging have line annual illustrates else electronic assuming term perspective, of opportunity trades. that quarter estimated our significant second gains market asset we products open historical income platform. environment In percentage the is of widened for surveyed, we incremental generates quarter our executed client substantial clients. we top believe in benefits long The achieved to for backdrop well in through past million the trading, again, strong equates regions banks share was although reinforce an reminding contributor quarterly sizable to in network has platform to advantage in total the savings share The come. to clients. market in that liquidity is estimated meaningful cost point significant increase have shown open savings value in investor The many the growth All company. billion is our biggest we we top equal, share commission believe quartile. creates e-trading in X savings increases market credit trading in compelling the geographic efficiency as to mover growth and provides fixed year-over-year second Slide $XX year-over-year And conducted our all across the regions. this We our the share long market XX major were

is If years trading growing in even a you as opportunity data add the opportunity, revenue for well higher as ahead, some expectation velocity the larger.

return this model, equity at opportunity attractive financial approximately on our with EBITDA XX% capture Importantly, current of current of with margins our very we in our can XX%. north returns

detail the Now initiatives. making to with progress to we in let our more me on Chris investments over provide new are significant call turn the

Chris Concannon

savings and and Thanks, orders all-to-all was over trading well. Rick. update are unique open were Treasuries of billion XX% In providing firms to year-to-date. active year-over-year trading share respectively. an the and across diversity of savings firms open a open marketplace, with $XX XX% our XXXX as spreads delivered Slide daily liquidity. This solution A clients U.S. as network the expansion. XX% credit provides drive with in in widen for quarter, increase value quarter, notional total in trading our rates trading saw through during increase cost open our trading XXXX approximately XX protocol market significant available strong Live our continues an on innovative volume with record the second markets through XX,XXX participation increase

in year XXXX the total onboard to the clients billion to compared to increased products. launch XXX XX% new the markets active saw Live of up first and of on continue second for half X.X which half We platform. the volume rates with is credit trading clients

in our registered is record a bonds solution liquidity ADV rates and the as for Given the Municipal we also challenges markets. credit challenges liquidity viewed that believe the million. increasingly rate $XXX across both being potential recent space, of all-to-all model

grew Muni year-over-year. XX% organic volume our MuniBrokers, Excluding

over billion in of the build bond the of reached trading records days. highlights firm We on credit growing in continue and online seeing major are Auto-X automation and very the beginning Slide to on trade despite X to MarketAxess represents coming new we municipal adoption momentum in XX.X volume. liquidity with XXX,XXX trading strong reflecting with another to increasing coming trades Automated increase and the in our trading. the XX% in quarter, count volatility. Today credit trade total X% volume platform

Adoption We auto increase been in volume seeing responder XX% with has in Europe strong are particularly an also count up responses. volume up and trade XX%. trading and Auto-X automated

use quarter, year. our X.X from term illustrates million growth across responses CAGR diversification period protocols. The platform the same the Slide year dealer is on approximately shown long products last of grow impressive are we of Additionally, slide model and algorithms to second on in across strong powerful three automation our XX with experiencing this the the the trade continues XX% reflect suite. the up algo

and ADV Slide driving local We market our trending performance high-grade trading high record billion. a billion, strong XX EM second in monthly XX growth of XX of of yield in market total across achieved year, in yield represented and first second in only where last an XX of a portfolio relatively is quarter very represented executed X% record the volumes as XX.X to was in in yield quarter. was portfolio we market total PT The QX XX% active sequentially in four markets markets portfolio The Through the during XX% XX currently from yield growth driving approximately record trading emerging X% we half and volume strength new TRACE XX% record. up portfolio QX. part Estimated a a performance and have a and of with portfolio trading with increase total overall the see resulting the share. volume flat strong volume trading continue region. first on driven the trading we clients with XXX record of high-grade had high the which the high of half market first markets market remained high delivered strong high-grade slightly trading already quarter volumes record volume trace the volume markets are markets of trades quarter. July to strong from an estimated estimated billion quarters. market volume estimated a In Local of and have record in high-grade growth record We over we registered for in percent emerging trading portfolio Estimated trading share market trading increasing represents volume and the volume. markets total by local billion in local in second EM share. APAC update

continue also The strategy a XX clients trading the on Slide follows. are strategy. with EM as new clients data pillars of of outlines to record data platform. onboard active We our our X,XXX three

First, to class is our trading real and and capabilities. create solutions goal that CP+ automation time leverage best trade front our data office in

solutions creating like recently which and new bond scores. active MSCI, recently portfolio to continue enhance process XXX products our leverages proprietary collaboration protocols data MarketAxess of Next, our tradability data develop like to the that with liquidity want our tradable clients we launched our construction and announced we for and systematic liquid index. trading Last are

and be of catalysts we this implementing for in success. strategy the key are made will our the We early quarter that past announcements stages this

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

Chris Gerosa

you, Chris. XX summary a our Thank of provided slide On financials. we quarterly

the of year services from a volume the revenue. growth offset the and and X% partially currency pipeline a year, expect XXXX data share services capture in revenue credit decrease fee across around were XX% lower to total foreign Second well XX% negatively impacted the capture U.S. by was and in Considering we half the was from on a year impact market fee $XXX quarter revenue million post trading basis. as our timing. second in quarter historical revenue from U.S. information and fluctuations. data rate new in $XXX,XXX the levels trade due hybrid up information lower full and year sales Strong dollar as strengthen ago, hit prior contract our currency of credit including to rates constant gains a growth services lower Information

and margin foreign a million EBITDA other which EBITDA from gain in share RFQ-hub. gains in was quarter. U.S. increase Second due fluctuations, million trade investment the increased quarter quarter XXXX. X.X small approximately the have per revenue and revenue compared in XXX XX%. by to and our X% our of $X.X trade benefitted to would post included services negative prior combined impact The approximately million on transaction for currency dollar second year from was quarter currency the $X.XX EPS income information the Adjusting post in strengthening the was

rate Excluding to to gains guidance cash per expect rate yields due our expect On X%. to more the commission prior RFQ-hub to share be provided tax full of effective on to on revenue commission income lower million. upper previously year remaining end in was expected to zero than range from related the slide net benefits Total improved based Due the our to the XX.X% and now XX% compensation stated the tax detail compared XX, of year. we excess fees revenue we in out XX%. of and at of the in increased XXXX The estimated quarter quarters foreign our investment other balances. we tax effective currency, to our XX.X% impact

approximately growth other by $XX commission decrease decline. which capture our accounted credit. and trading bond offset the capture of credit was fee driven rates maturity, yields grade volume was of and by by and partially in fee The increases was revenue to combination The years in lower other of fees Our market shift by healthy but average a for high are across a capture increase which lower mix in lower was in these driven estimated and higher XX% trading share, other volume, has year-over-year result fee as hybrid high-grade product average impact fee lower local average fee we of EM rates provided focus other a offset markets principally slide capture you driven credit. across across credit distribution the credit Higher with detail. and our the lower as markets. helped XX, On capture expense

principally driven increased to investments the offering. our enhance expenses trading quarter product X% Second system by and data

million intangible increase software and and flow data increased subscriptions, $X Specifically an employee provided capital market higher acquired expense and on on headcount. million slide to and Depreciation amortization benefits communication On expense. we in development XX, increased due million higher fees. on management. Technology $X compensation increased expense cash X update technology amortization licensing software and and

As $XXX of month was flow free trailing were $XXX investments cash and June XX, our our million, XX million. cash and

and the million During dividends paid in to quarterly shares our cost we repurchased shareholders XXX,XXX total out million. $XX $XX a for of approximately quarter, second

We $XXX on program. existing the remaining million have capacity of repurchase

board directors of declared the a of performance regular on dividend the financial $X.XX quarterly Our cash based company. of

to me call turn Rick. let Now back the

Richard McVey

we to continue cylinders Thank hit most operating our In this on that quarter fee move have cylinders curve market growth our capture expand well higher share product are our the normal. we diversification paying future growth The clear to as of quarter a are our returns this off. level increase the we indicator made is and in to very summary, all to across gains yield registered strategy. record believe you, investments within metrics Chris. likely that We control. execute And the high-grade against we

foundation based of our footprint global ahead. gains, growth in broad new setting periods strong expansion momentum share and execution, in increasing a are very strong for market Our products

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

Operator

you. Thank

We from and will our [Operator Instructions] answer now question we And Sandler. first Richard Repetto our begin session. question Piper with have

Richard Repetto

be and the and we're like market spring on market effect way, like first guess million share, to in by question is is fee not any you've lower forward? point know surprise. And in an the not impacted market invert. But way I per good share steepens market, there guess I is I curve Chris. would Yes, I Rick. gains the not loaded a capture, my no in morning, again, nice going guess yield when impact any Rick fees Like, it it caught where should increasing Chris impact and the everyone to this have made,

Richard McVey

the clients think bonds curve our I capture are Well, likely duration that movement price is only. high-grade little high-grade that what to two for yield fee credit based been corporate to on determining primary has go trade other in matters capture. outcome in in based high-grade because yield capture. which question why those spread fee But products. institutional our a bond, client trading, about transaction the fee and is nature corporate to normal within factors is in. a for spread this client is treasuries return also institutional trading There and very of fee is There do are that for on

the the are year-over-year, higher things are period, go the year-over-year and of bonds of course, because of yields duration level there is that. us and overall in has yields curve inverted. the other traded So One platform. Both on which those is drives that into the down two key maturity worked against of much average the

of yields short So you most yield curve the curve the in attractive now you ago, have the yields year unattractive curve very the of the end have short one the because inversion. at had end

worked of both have So those us. against

which also fee back ahead, all to periods the is average you So to curve, would over get else the that capture. yes, shape of help we expect to which equal we normal returned the see should normal, the if yield maturity will

period long and question of to of seen historically But that when higher that the that is the experienced was fee capture at curve a periods we'd what the at end. overall other in what you've lower we're capture. mix and our total time, fee levels high-grade The came as off we've the end been of steep, from yield in relatively drive

fee fee all So no is trading. think though in had unfortunately, pointing both averages over changes lower, absolutely and we time we've even out. in drivers had neutralizes grade particular But model for capture our this of high period, we've

Chris Concannon

been capture we And our start we and picking Richard as increase curve don't adjusts, capture our change. just years. to share sensitive fee the yield in I would growth that curve many add, of the change And time that clients either. curve, have Obviously, as trading up over impacting across fee yield for to aren't in as starts type clients fees see these see place that

Richard Repetto

picture it and and the OpEx my answering question. looks and decline of going quarter-over-quarter, to headcount follow-up, One for guidance like of is understand forward Thanks investment. trying your Understood. that continued just sort for the the

So of guess headcount I was the sort more color any client surprising. that? on

Chris Concannon

about all look we year full as of really heads got budget it's hires. timing. at Richard, of plan, just by we When we've as year. today, XX Yes our identified the hit hiring And to over the expect year the QX full end

the of It it's when an question just was looking quarter plan. believe on sequential we're on also the end the had expenses revenue, good back to, year. this impact, a our on up it's And the timing but year-over-year to benefit operating impact a So just had matter and definitely And we're but timing the operating we're it a at hiring going hit storyline FX. strongly expense. of because It's X%. our our we headcount going you're

have basis. million expenses on would you higher X.X currency operating if Our been constant around a adjust it just

consistent of QX currencies $XX.X QX of to the X% should constant. operating last course, of exit on that a quarter. expenses level be that's and for the about in thinking like assuming the QX growth X% million rate it the are with rate quarter, When So second and you're top

Richard Repetto

his helpful. team build very Understood. further. It's Chris it. to Got I out And know wants Concannon

Chris Concannon

recognize the Yes, we unlike investment the bank, opportunities. so

to accelerate that. We're back pulling on So we're hiring trying our plans. not

Richard Repetto

Got Thank it. you.

Operator

you. Thank

is from Suisse. Sawant Our Gautam Credit with question next

Gautam Sawant

in you technology taking protocols what share for marketplace, market increase I Good my platform seeing becoming thank MarketAxess and market, primary question. in bond wanted the MarketAxess for embedded new know market? we're grow same market able to to secondary to if primary you have processes. the increasingly an the I the to technology on has in compete way opportunity been that issue morning, there's just could And want corporate and that and expand that you've

Richard McVey

There of are solutions are primary secondary bonds. in products and process. corporate variety that not our newly and active to in focused that market growing bonds, a a we the issued Having and currently live focus workflow continues most the and are around trading protocols space markets It's share and be said there. including out on almost liquid that, exclusively the is

we new workflow develop think around an by currently anonymous a the that leading time a providing issued But the and protocol expect end, we're supported over company. of not at investment live the that So we new number trading solutions newly for with liquid be would the area process issue to bonds. very banks solution are do active would the

Gautam Sawant

trading participants investors of the does that changes the to income holding more? And affect the the processes fixed I fixed that seeing you. of of how bond that are how Thank corporate a ETF taking? maturity ETF will impacting of market guess just it. versus Got and like of type the insights velocity follow-up that activity growth is as you trading share quantitative can tightening you're question, market income within And the and market,

Richard McVey

fixed transformation market we've been four past, making over real there's risk the a three transfer in seen especially of income Yes. years. in and or in credit last and the What

share heading of in transfer volume of and is risk this market, are quarter. dealers both the of Part trading, actively. quarter trading you ETFs So is participating you'll portfolio of it's dealers, this from see of variety for And see There a welcome because in trading institutional and clients futures of are accelerated a with help velocity. new transfer much is different model S&P ETF algorithmic a clients, active were it and tools. way automation and all and active another tool. is shares trading to And very the ETF just share where active a the the investors that increased there at both think good ETF is automation, that a more using trading of dealers velocity, all equation increased more to with and variety where tools view because sector. addition as trading, had trading investors risk. which underlying part my tool that I to work was outflows more we're stock But a is another growth

Chris Concannon

of I time. would for attractive, and assets income fixed flows see a as to fixed than over rise, some the rates we and just investors quite Rick, more positive ratios. managed And add, particularly funds ETFs become towards given would Obviously efficient expense retail ETFs be we rather expect fund provide income more investment strategy

fixed to more be income rate the would the increase in the seeing flows we yields that arena expect with in attractive income So we'll ETF fixed future.

Richard McVey

expectation makers obviously, a Yes. the RFQ-hub, leading to share platform. investment trading And our sign the access finally, our along in is of with market through Chris, trading some ETF offer market of

the able to quarter bring the and complete market on those be working been have with virtue second market our in to and pleased very a step toward other capabilities will we we're that So strategy to access. to makers clients

Gautam Sawant

That's Thank my taking it. questions. you helpful. very for Got

Operator

you. Thank

Sachs. Our from Blostein next Alexander Goldman with question is

Unidentified Analyst

Michael it's Alex. for Hey, guys, on

of of the So be might I help seen much kind moves last to net yield the distribution the if the and still side, on and you could us revenue high in understand payment pipeline? what's plans. was quarters, impact how potential wondering more couple we those been of dealer Thanks. of shifting kind the driver

Chris Concannon

Yes Mike.

a high two fee migration mean I fixed fee a and we've month. those migrating for. fixed seen are You're right, yield dealers to $XXX,XXX plans plan

as that it quarter a fixed of fee the because And to anticipate compared dealers as it's identified transaction minimum on still a paying fee pickup. commitment a are that more good do dealers. they're fee monthly they're that XXX us transaction But today, going you're previously. any So for those platform. the not, per means sign plans. for But to seeing planning a they fee it's lower We're haven't those additional we around charging

So the that hitting the is the fixed fee group you're the to expected for remain same of dealers distribution credit seeing future. foreseeable

Unidentified Analyst

Great, thank you.

Operator

Thank you.

question next with from Jefferies. Our is Fannon Daniel

Daniel Fannon

Obviously, to backdrop have bit the a I about Thanks, talk widened. wanted more. spreads market

I to of trace aren't some continued are Or guess automation. given surprised those volumes But are that presenting? created? overall about higher, talk of backdrop factors you have the the You've what

Richard McVey

surprised. terribly Not

that calendar is new issue dealer, catalyst One of that and all of it an clearly TRACE is overall for and And second way is bank major previously. the than factors, in the lower Dan quarter important the much [Euro] you volumes. been including is saw had earnings,

So trace see in big with volume a you in a shock drop factor prices. to that had we've second pretty certainly market quarter. XX% is that numbers the And the the from

is than the of So dollar corporates at the value work year overall beginning as well. was and the lower it at

So I'm surprised. terribly not

As you seeing tools and come participation, in just talked lots lots to XX% to investors new trading believe velocity continuing for automation compound know, credit the online of of rates that dealers the we including in interesting market new with liquidity increase see about. both in growth clients that reasons we we and trading, continue and on optimism the with we're and

of the So term, some but volumes. optimistic with surprised not term headwinds we market around are we're long overall short

Chris Concannon

seeing those Dan, we're just treasuries, And, challenges. hearing clients challenges our And some of the liquidity liquidity aren't I we're challenges from just also in would liquidity credit. in about add,

volumes, many also could products and solution our many penetration overall of volumes. the liquidity, challenges it that's or in times, products. OT But the gains open did trading overall impact given terms positive across liquidity why yield alternative actually quarter within of but those different second in some see So around

Daniel Fannon

And info services on non to revenues. transactional I Understood, within as year then run of the the the I make thank or then know a from of year. want heard that's you. was follow-up And post some half anticipated sure off outlook some there the second I trade XX%. for the whole clients.

either that. for the year thinking prospectively portion you. run business Just the want should think understand about to how not growth about and maybe Thank that rate we this of or

Chris Concannon

happy I'm Sure. tackle to both.

we saw and pipeline QX. from of strong a very a have contracts number we obviously, slipped services info QX for into So

some And see a quarter. So feel the QX have. saw very about issue. we didn't just well that services strong info revenue as items and We it's also, product time we last really offerings that year one timing this

our All profitable. our as trade Axess growth earlier. annual digit in that Prints is rate that was We're progress is number of recent newly rates. post double the All we well also saw CP+ highly see part were trade some to the growth Axess We products. hub, as were With to achieving post mentioned, an from that that clients as you product, We of attrition. some clients those about business continue as targeted referenced really changes. year-over-year which obviously were annual announced some regard the attrition, migrated acquisition impacted platform. But by to had And confident of We expected currency suite transfer the of we Reporting Reg pushing

clients, of business. a we So obviously, strong saw expected very more that much business also That has based attrition business. pipeline some on subscription clients of

I we to for that prior revenue builds quarters start So suppose up show really see products. those the in pipeline

post existing activity. that trade or of product end would to part service, of to joining we're see the newly and review number clients clients wonderful continue revenue post It's early surveillance then about, that's a allows and we [sonar] at And key new own clients. our tool our new that a trade their seeing and year. match launched to Some that on products the showing of that's year product repo offering we excited see expect a a matching progress next called for gains service which year-over-year of the is in up

Daniel Fannon

Thank you.

Operator

Thank you.

question is with Kyle next KBW. from Our Voigt

Kyle Voigt

what XX% velocity industry regarding really over do over XX% seen point related period? on And we've entire idea as that think the trading you past that the that higher near but more to we the rates from move trading hybrid higher. moves tipping trade? of given the years. question Maybe question a XX% is increase Hi, volumes so moved velocity Are several prior you to market accelerates that morning. that of haven't to guess electronic good surprised I time turnover electronification seen will

Richard McVey

transfer the and of still global transformation and I midst the the think trading we're model in credit. of risk

still haven't increase be that in of to lots terribly Kyle, velocity. seen I surprised see the mentioned But earlier, term. as I longer So not reasons we optimistic

Chris Concannon

period, over the would of income the that that we've saw just result new fixed add, as grow And time we seen additions overall years. Rick market a during dramatically I massive two last the

you a income. have So the very large growth fixed in overall

short that in class. asset turnover the the rate class Asset of term, impacted

timed trading fixed income, RFQs. electronic driven by RFQ, More importantly, it's you if about largely in think

dramatically. grew last which the even from some trading. automation you products dramatic streamlines increase from both trades and and to more pure year, expect overall sizably record I'd electronic actually our pay attention So is trades and execution, volume, numbers velocity electronic like have we're done notional automation, across doesn't can it are that close on velocity and XX% seeing impact And version would can efficient, volumes get more though of really as our traded. up

automation because accelerant So I that products suite velocity would pay close of that attention on the to of really trading. pushes

Kyle Voigt

follow-up And a you. regarding revenue thank then maybe capture. just Great,

wondering can maturity us grade the Just years historical remind high you've that And if you to average grade bucket? range in quarter. for seen high for the provide the that

Richard McVey

couple stabilization did been term second 'XX. maturity back over for low going and hit peaked hovering XXXX. nine the nines eight, of mid far the XX high QX of the for out July back just it years we've to Kyle XXXX, But Yes, in quarters, so last in the around seen for was longer at of it's Xs. it But quarter in

Kyle Voigt

a so captured yield to rather was the years than like the guess Understood, key maturity. in it shortening most curve related sounds mostly duration movement, sequentially mix the of to I the in

Richard McVey

looking at pickup if bond years had Yes the but hit you're that's were maturity, sequentially, a with mean, we to actually we $X right. on I yield movement.

Kyle Voigt

Understood. very Thank you much.

Operator

Thank you.

next Our from Patrick James. O'Shaughnessy is question Raymond with

Patrick O'Shaughnessy

to capture in obviously, then question first guys your last was quarterly relative On the And for as it in that June prior we high-grade thinking on probably peak the imply earnings so, quarter? second to we third quarter the the that then that there. in call, levels. May had the had that stabilized Good April you fee enter follow-up quarter. is And indicated of morning, down be should and $XX, what entirety XXXs? if capture Does was quarter-over-quarter

Richard McVey

we're talking in about quarter, of QX. for we if Patrick, context December, for it the averaged rate our was in the We first a Yes, the quarter. capture When mid fourth was average more exit back go XXXs. the out stabilizing you last fee to quarter, XXX go back or to

that relative capture mentioned, decline to the difficult sequentially in we bond trading XXX. April, But for last quarter, that predict Rick yields. bonds April. the quarter that's June. we where we're stabilization three on taken years were behavior months during to a platform? brought a each difficult same maturity, fee But the push So predict item and us how to to seeing as the in really dated that hit saw goes first thing And May to in short, But one the or is to is we've long on going more it's

Patrick O'Shaughnessy

probably growing so, will think per hard the over sticking about your you. local rather Thank fee million, guys we faster EM in then down is in grow as topic Got markets, coming it And it. per you market sense. with And million currency currency? that of you assumption than should if makes keep That time? emerging share fee

Richard McVey

here local hard larger aggregate is the in the the opportunity about we're recently, which super Patrick, currency been It's case market excited global opportunity. because the than

we'll the trading, of our shareholders, provide up we us EM growth very currency opens a EM currency about it. is of really all new great new to important we're local more would good part yes, as of outstrip So happy EM expect longer a trading revenue this a And the will to this term, some But franchise, is for evolution global and sign local to And starting which, But opportunity. because EM hard of there trading. market. in we're significant think go. the which news granular penetrate information we revenue large is through

Patrick O'Shaughnessy

you. thank Great,

Operator

you. Thank

Cyprys question next Our Stanley. with Morgan is Michael from

Michael Cyprys

taking good Want Hey, circle to portfolio and back morning, thanks to just the question. trading. for

Seems backdrop. a perhaps feared than in of trace about think it holding industry market up was in I to X% better you tough a bit mentioned coming overall. be levels

you uptick and portfolio just So at offering the others that to in evolving backdrop enhancements of just here? see that broadly, your industry, you be that thoughts market when to more and PT what value across and sort broadly? market curious access across industry would trading drive offering can that. the volume How then proposition made to more usage be hear around And your a tougher look do

Chris Concannon

trade do quarter on that I'll and time of Obviously, in think quarter that portfolio have market had trade Well, while of role and transferring to our trades the It's to record thoughts share spread terms I'm while portfolio and sure terms over ultimately able marketplace. perform Rick a trading is start we a also few paid. plays the were in a of in but of in a both expensive risk very grow. managing electronic that We trading. XXX we will PTs execute saw

and we've So think key dealers better also and with what become their portfolios clients seen trading dealers clients. we've I what right seen, share at trying our look we've with trace, and and to it portfolio seen the trade The much market to again was of has a see do portfolios this we of trace perfect to is out all overall a percent understand volumes. as flattened estimated trade, retrace

overall seeing quarter, as in names, the data be, our differentiators or and instead trade. list liquidity portfolio are the at really Key So portfolio than any individual clients quarter. better when the trade make clients of around would what despite trading. a even we're still portfolio what we're need was times around volatile less use portfolio of trade also the the our second a hearing not second for be it analytics it from portfolio we price not trading to saw whether a full for around growth it tools estimated But the preferred platform trading, would use of volatility,

for portfolio of a as to So a demand both the decide we're lot perform seeing whether what a put analytics parts how time helped of not clients really, be that trade trade. but real should to or their list portfolio, of analytics on list a and that's portfolio the also traded pricing or on overall portfolio also as

Richard McVey

Yes, share to I zero path X% was from pretty steep. Michael, trace would just the add, of

out pretty lot or for ago year a Chris going it's it mentioned of X.X% four flat And and so was that continue that expectations in been along earlier, a to So were there row steep trace. quarters path. of a as

trade pricing large that's clients, portfolio nine and were through difficult manage reflected on the it's coming months year ago. a portfolio from trade. ago. that's risk than conversations a we in dealers the And much change And in that's a our eight today So was with more or where in it to

in analytics. the very they focused been to promote also not integrate that dealer lots in CP+ it's very are important are that enthusiasm the we're community. to In knocking PT and and trading it's what reflected in in them to down enhancements but would lot low of terms of as client opinion, like the fall, around environment we've portfolio about of different to we things done excited volatility every see when practices of might a it month, super have last out were is They're as pricing, our added. on my So level quite enhancements the in tight there

portfolio. And with bid So the years pricing it large we're it had the that lists and world trades trading footprint makes that as credit we've makes it them up for long. a easier day offer benefiting around us them, for to working track from many they're all

and So goals trading to for on portfolio our all our track. say are very in much favor of growth those are working year pleased this around that

Michael Cyprys

that. And to see year quick on remind move a I rate. in we grade XX and the years the just rate of for to the basis points what impact capture the you rates? one Can of back capture guess up about cleanup be year from the the XXX Great, interest thanks a treasury think would capture by it's us to high maturity question if a goes curve end to here? how impact just

Richard McVey

maturity points we basis every XX. now are right a and one $X in curve year is to where to Mike, XXX is every $X Yes, around

Michael Cyprys

you. thank Great,

Operator

question have a we Thank Suisse. seems Credit follow-up you. from It Gautam Sawant with

Gautam Sawant

if share for seeing marketplace, so volatility if it's that's And taking trending you is more to up. in due driven it's the how and my trading more overall you if the Can thank help maybe like follow us macroeconomic spread the in you're July type far? or Hi, market the activity pickup then of drivers? contextualize credit fundamentally

Richard McVey

broadly The in to we share trends saw in July similar what are QX. very

holiday. of the The days volumes market around always second almost are half of the July higher trading because the July than Xth of half first

So eight have the quarter significant volume say we full second on of days that we in anything that front And went trading your part versus patterns I that trading of significant represent terms think still of there's in weeks other the of could client a us. monthly first results through. question, of two about differences I any don't in

Gautam Sawant

you. Thank it. Got

Operator

you. Thank

to presenters queue. no the have in We turn our call over closing will remarks. now for I questions further

Richard McVey

this Thank joining to you you look Enjoy next talking summer again forward we and the quarter. to of for rest this morning. us

Operator

you. gentlemen, concludes you conference. participating. We for Ladies our Thank thank and this

You may now disconnect.

Stephen Davidson	Head of Investor Relations
Richard McVey	Chairman and CEO
Chris Concannon	President and Chief Operating Officer
Chris Gerosa	Chief Financial Officer
Richard Repetto	Piper Sandler & Co.
Kyle Voigt	Keefe, Bruyette & Woods, Inc.
Gautam Sawant	Credit Suisse AG
Patrick O'Shaughnessy	Raymond James & Associates, Inc.
Daniel Fannon	Jefferies LLC
Michael Cyprys	Morgan Stanley
Alexander Blostein	Goldman Sachs Group Inc.

MarketAxess (MKTX) 20 Jul 222022 Q2 Earnings call transcript