Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thanks for standing by. Welcome to the MarketAxess First Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] And as a reminder, this conference call is being recorded on April 26, 2023.

to call like to now would turn over the Mr. I at Head of Davidson, MarketAxess. Investor Steve Relations Please go ahead, sir.

Steve Davidson

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

environment you Chief Chris McVey, trends; Chief Founder the then will company. results Financial and you Chairman, Officer, Concannon, for key walk Gerosa, Chris provide will and on the call, update on Executive ahead the will For the opportunity an Rick provide for through with Officer, the an business and market Executive long-term update financial quarter; the

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

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

over Now Chris let Concannon. turn the to me call

Chris Concannon

first Good morning. my CEO first call earnings I'm on very pleased results as to MarketAxess. share strong with you quarter our of

shown of have protocols geographies, were driven the our on reflecting the years. underlying and the the on as the We reflecting per record continue we in X. Slide grew a Earnings growth results products, to basis. diversification quarter These which and over improvement delivered several investments currency share broad-based increased model by continued past and powerful execute during made across strategy or our earnings constant growth strong trends, revenues X% XX% our revenue XX%,

and volume and market The a strong record protocols. consecutive Specifically, of across quarter levels records nearly we new products. contribution and volumes estimated average strong U.S. businesses share of levels high revenue record In we of levels trading products across had commission gains, emerging all initiatives levels quarter fourth across delivered eurobonds, of markets trading record record of from daily international client key revenue with volume from segments, and summary, record very of newer our automation. levels yield, and

dislocation rate the filtered impact The rise in into XXXX resulting rapid market, now market of the in has in the banking broader March. sector

markets a seen in last Reserve. over as pause we the on a events for hikes of the weeks, March their and temporary retracement volumes industry digest the this believe Federal several of While the the is have we rate trajectory impact

brings not be have Director Nancy Independent and diversity wealth Nancy talent could announced I to management, Lastly, earlier the was a pleased this Lead as I'm week. which audit, experience our looking Board, collaboration partnership. of corporate and and of role, culture to the our Altobello continued more new to forward

were the the highlights pleased Open Trading March. performance Trading. all-to-all X in of unique very We Open strength Slide our with solution, of

grade saw in in we Trading of daily in XX% highs share became liquidity As March, grow and more yield. to high challenging Open high XX%

we of XX%, high-grade volume Trading up daily with For the billion, of record record quarter, registered $X.X share average U.S. XX%. Open

total per well excess total credit. trades Open XX,XXX our approximately million, Trading in $XXX improvement across approximately XX,XXX Open and executing are price trades day quarterly We of revenue. delivered per day in of Trading also

and multi-dimensional highlights initiatives, growth Slide client new new geographies. X products, new our across segments

share record grew municipal estimated trading. we X.X% quarter in firms in market new products, to active XXX the with First a client

options. with of liquidity with system to provide integrated have more trading recently also the We the pool clients broker muni MarketAxess

year. up In offering our with on platform active the XXX treasury from the in client growth participants prior U.S. continue we treasuries, XXX to see in

private very future dealer a our across Europe. initiative growth end established and Axess dealer our for of trading, IQ, in strong have front diversity record cylinders RFQ, We banks with portfolio volume pipeline

We systematic are contributions from dealer also seeing and strong funds, funds, including to banks. private flow, initiated segments, our newer growth client hedge

record important represent client these billion a XXX volume. which our trading in volume credit of generated XX% We from now total trading segments,

in various Our our U.S. grade outside activity, can fluctuate high issuance, estimated share of banking and of factors trading client new institutional flow. on crisis, focus given including the market block segments growth client

and combined we up from that of segments the high XX% grew grade in now estimate example, year-over-year retail XX% the a For TRACE of dealer-to-dealer year. XX% TRACE represent prior

volume Slide ADV, X market of XXX,XXX volume growing Lastly, increased in XX% trading continued shows we record had Automated CP+. billion and this a record a in in our with clients, automation to to $XX by strong $XX powered the record tools quarter billion trades. year-over-year local record by emerging markets, quarter. the a adoption

of continued through of is Importantly, quality accuracy grow dislocation, our automation periods a our to data. the CP+ have tools and significant testament to market which

world-class count credit engine, represents trade pricing credit in revenue the data a trading our our record core of At was workflow total our and Today, CP+, driver Auto-X X% of which is and XX% our algorithmic tools volume. of quarter. of the total automation key

With improve Auto-X, solution currently we seeking quality. trading while protocol their pool automates the greatly and execution recent to are pilot, of trading delivering Adaptive that which an liquidity is in launch across algo

update to trading are U.S. volumes over but I to from running levels. first estimated Chris in weaker market March on in improved turn and market quarter month. three remaining wanted Before days an Market high grade provide call April, with is the is trends share the I important above Gerosa,

financial Chris strong the call our turn for a Now let results. review of to over me

Chris Gerosa

of On we Thank summary quarterly X, financials. our provide Slide a Chris. you,

XX%. Axess a strong market of All performance. is excluding of million, signed share Prints driven CP+, was constant driver the For up of exchange. in $XXX record we and approximately gains The information benefit the would've the increased basis, Record the TraX X% services quarter, increased or strong of XX% foreign and a year-over-year by delivered most revenue data across up On quarter a products. of adoption revenues revenue XX%, fourth impact contract positive currency

on approximately strengthening compared quarter. the $XXX,XXX First the impact post-trade dollar negative year the quarter prior revenue of U.S. included to

Excluding financials. lower to the been The contribution growth year-over-year by was adjustment period. hub The related XXXX prior driven exchange, the the foreign effective tax tax from RFQ below rate would've impact was year approximately of a the X%. rate XX%

Slide more XX%. On our on revenue our commission increased commission X, revenue per million. we provide Total detail fees and

average record Our principally prior U.S. increases was and estimated volume, high healthy growth of in market reduction bonds in lower was lower driven driven capture year credit across but our The compared in duration grade traded by high commission by total grade. the prior capture U.S. high fee by increases our in partially fee the offset platform share grade over trading year. from was to revenue

grade bond in U.S. as While duration capture index. declined the high stable the year-over-year, has duration reflected remained fee corporate relatively several months last over

provide a of XX, expenses. we Slide On summary operating our

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

the growth facing in support Excluding increased increase XX%. million roles compensation increased exchange, of technology in customer headcount, would’ve $X revenue benefits to Employee initiatives. and mainly and on foreign expenses impact a XX%

flat, expenses increased despite data clearing to and due foreign exchange. $X U.S. Tech were expenses. and and subscription costs fees renegotiated Clearing hosting favorable communications to volumes to impact treasuries related due the higher higher Open Trading of million

been costs, the office higher principally in in advertising. year G&A related and have a increased G&A to due expenses increases due reduced that marketing pandemic. expenses Our prior to

flow, On provide XX, Slide management. cash on update balance our we an sheet, and capital

at outstanding million, Our debt we totaling be investments quarter solid end. continues $XXX balance sheet had and to with no and cash

continue We are prudently to a investing interest deliver coming environment in net quarters. take to cash advantage of our income to rate interest the strong favorable

We strong million. at free XX-month trailing a flow cash our came as are in flow generator $XXX cash

financial XX $X.XX in to quarterly we our And of cash million $XXX paid dividend During quarterly out on dividends declared our based Directors performance of of months, company. the shareholders. the a regular Board the past

let call provide market the of opportunity over a conditions an and Now turn us. growth the update ahead on Rick long-term me to

Rick McVey

conditions an Slide Chris. you, U.S. credit. update XX on market and Thank provides

conditions index rate rate and impacted noted several to last distressed returns, environment in names through TRACE As over sector rapid phone, trading to investors portfolios have The higher flow the the meeting. is highest XX due beginning to we environment sector recent reported last and have to yield that for the distress investment year’s bank in Fed in dramatically years opportunity and the believe back parts is some we finance TRACE investment temporary the led the into transactions banking seen and extreme The short-term with due to in to is volumes back in to bank volatility. banks. moving increase increases the March grade fixed be bond the overriding the a reallocate assets May view quarters, and my over of global now income. theme corporate uncertainty We upcoming the the softness in volumes to to the likely of in

That the normally volumes trend calendars. in due Market high trading fall volumes from TRACE credit in the was velocity. in in April to QX apparent holiday reflecting grade record, March higher

asset automation reenter are sizes investors in average fixed class investors what higher of to investible trade are and the trading XX% part TRACE seeing leading income seasonal. is to QX institutional an count essential a ticket again, we efficiency. an grew currently So Both and grade embrace count Investment retail need becomes market. ticket as declined and seeing XX% for

around was greater XXXX, the market an are manifesting velocity high the are Yields at of trading improved annualized their increased U.S. efficiency. quarter turnover in quarter trading was benefits the themselves higher XXXX. velocity these of Trading participation Turnover all highest from level in at time, Lastly, first drivers benefiting grade is that and XX% yields, from market and technology grade trading. in since annual XX%. high of positive XX% in up first

The total we as that expand has gave addressable $X a the market approximately our in have last XXXX significantly illustrates years of us had we access expanded before XX set have product Slide opportunity total product in revenue. few us, offering. in to the invested we billion revenue which to

expanded have we our products XXXX, protocols and Since and diversified geographically.

brokers. market. organic unique with acquired example, complemented U.S. For and the We capabilities in growth we bonds municipal our treasury mini

trading We have expanded and data our reporting with acquisition regulatory RFQ in post-trade accelerate investment of hub, the our hub. into growth ETF in with we share

we high to data in made total our comprehensive last into addressable that entry space real We product by index current the have $X have several indices. and billion over CP-plus, a of the grade The high also estimate products, market and our years increased including both with our billion. investments expanded have $X investment data time yield our

early in We these of in us. of areas, are runway many long of growth front stages more the feel in in of opportunities we still than ever confident executing and

improved and well continue combination summary, our across accelerating consecutive share quarter fourth the In market delivered revenue of against XX, We by volumes. we Slide strong to market strategy. on gains a of driven execute growth growth

broaden global to product Our diversify offering. our as footprint continues we and deepen

strong dealer private a of order new by driven pipeline hedge growth client banks, diversification and trading products initiated have flow. and We increase new protocols funds, and with

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

Operator

Thank Repetto you, Sandler. question Instructions] first this Mr. [Operator take We’ll our of morning Piper from Rich McVey.

RichRepetto

Yes. Chris Rick Good Chris. and morning, and

for I a in over Chris is, first that trade you smaller a the this other congrats of or taking here sizes, point increased other talked long about asset metrics from to background classes velocity, helm. electronification. experience First the lot come of automation that guess question you and

going besides one So impact conversion? what that other Auto-X automation tools the is see of really further is are think what do you key I a Auto-X, what kind you to that – Adaptive question spur or that guess, trend along to this do

Chris Concannon

congrats. bond – probably of already know Well, Data for you’ve quite you’ve a key I’ll a ingredient question I’m first our by years record covered volume is long the my of electronification question. ingredient. data. have the in automation automation market. thanks the Rich, suite. for answer the me about did to number that first we bullish for revenue and enough But thanks record the mentioning you start to and probably key is

If good good you automation. data, have you’re have going to

better efficiencies. gain do, and liquidity than automating it to then is manual automation, identically replication, you’ll it it does will human growth achieves that’s results across results constant key a is it pools really efficiently. what people by traders to protocols, do And achieve or execution, what Second, if the automation better growth similar solution of replicates we’re automation Adaptive the Auto-X in unique giving and The adopt have accelerated meaning which I’d call if across ingredient to what data. execution targeting

And records. to municipal, XX% Our suite suite, automation, grow in exempt grew we quickly ago. just saw a point Adaptive to XX% out which those and just impressive growth. important recently growth saw automation overall pilot we Auto-X total in is is it’s is our But of our healthy Auto-X quite pretty hit year-over-year which more launched launched to now couple we trades, automation which in that just – and weeks

So it’s saw my have The in even adopted, point starts that we automation the is, in Rich, pretty that healthy can held of it growth be the the tools market automation more up quarter. throughout first March. to rates, when difficulties challenging

growth and really With that up when all the and bond total under all it’s just that automation you the of said add our in those all footprint market. U.S. corporate market, X% records

when the algos a To comes the algos – client market. put has have XX% comparison, we achieve way FX automation. So really that it to to seen go long over of now market in

we’ve still volume while seen in and suite. So record automation growth our record

bond the automating of stages early the at full We’re market.

RichRepetto

investors bit, seeing guys seasonality mid-March you for addressed now of talked little make But pause and sort this, anything for April are just outlook credit of it. Got we or the think for you has – I some say? I or is a I still And volumes up a lighten it. that volumes can thought still case think just from but the strong. year has a about super this of you reallocation Chris, momentary XXXX, going volumes is I Got on. Is outlook changed would the and

Chris Concannon

Rich, I about momentary couldn’t are market, the the any the call question. mean, I’ll great So again. temporary cool more what – disruption we in despite market. bond or bullish be bonds

of as clients I say that heels providing But seeing market. stock a the dollars I FX, a yield of all environment our are terms you fixed and – is will banking the of a unique principal certainly holidays. investment off we the seeing volumes. in from protection market It’s and their sector. derivatives, equities, market. a the month the they’re my as friends in clients income market, crypto also disruption interest coming allocation well of are higher a We’re would risk the than better we towards the the tell even in about April complaining off market better in

season the seeing do a wide income this Fed So We we’re really market. off not it’s to activity. Fed moves, waiting we through we investors to so unique do see higher the It’s lot think of some of the as week are that seeing risk are on next line sitting market have going fine I are and the fixed earning week, well. This environment. levels of

seeing all So vacation over, it’s the levels higher and encouraging we’re spring now that activity. are of breaks

importantly, see More higher issue expect new do we May. in and market

So around in the issue new May. market hearing positive more things we’re

RichRepetto

Got it. it. Got

level of most are skilled income fixed golfers. the platforms Lastly, and top trading managers

have So I what golf improve guess you Chris, question, done my to your skills?

Chris Concannon

market question golf Rich. to say my that’s So very appropriate correlated I a revenue score our and would is share.

up, As my handicap share it goes and rise. our – market golf to continue will my as revenue score,

RichRepetto

you. Thank it. Got

Operator

Citi. of to Thank Allen Chris you. We’ll now next go

Chris Allen

guys. game. know, Good golf won’t I Yes. I it challenge is. how your morning, comment on

just feedback give CP-plus the us up maybe the data. of market just an been the or formally what marketplace? could And be a trend pilot when in Just broader then has there the color anticipation just that’ll around longer-term and launched on kind some to of phase expectations on maybe Is uptake is showing that you ongoing that Auto-X Adaptive on the launch?

Chris Concannon

market Sure. your And just CP-plus first or generally. data question on

Chris Allen

flowing through market into driving how that’s Just of kind what’s like data, that?

Chris Concannon

Yes.

we CP-plus in becoming the and the largely the bond It’s U.S. in seeing we saw and QX, of yield across growth market growth real-time – the that’s high demand our where driven market grade, by benchmark corporate and record U.S. certainly data, obviously in market where pricing we’re for revenues Eurobonds. So of the EM in as high mentioned, data CP-plus.

which on to and different allows well all success. based of as of excited is and superiority protocols to Adaptive that. a CP-plus automation suite advantage advantage by record in record That pricing. driver we’re about Auto-X, providing CP-plus a our key So our CP-plus. also take of our take revenue automation It’s of of our Again, ingredient key volumes across driven the clients liquidity

it’s a we to price overwhelming about. into get what our demand they’re largest and with early largest days, but tell So out access and it’s I sign that super of clients CP-plus across Europe, the excited Auto-X’s of to pilot, actually the are U.S. price in We institutional pilot the because terms all Adaptive about that Auto-X. extremely early clients the certainly we’re point talk of the went to U.S. excited days bonds. reduced and something to you to of excitement will our produces comfortable Adaptive it as had

Chris Allen

Thanks, the guys. queue. I’ll get back in

Operator

you. Thank

go Kyle Voigt to will now next of We KBW.

Kyle Voigt

Hey, on quarter user flat segments. all five in I the the addition I there. some growth the newer one hedge growth that wanted this the morning. of record guess that was hone like clients good from fund these of I and that’s shows in volume that volume chart to on

wondering you from as last funds? of Just it seeing funds is also from to a bit you lot ramped or and to whether is on segment color the hedge a think provide the has see in credit fund is couple And that’s onboarded you’re number ahead? – how this we on you’re momentum about over look could whether the clients more being the if we where as from that platform continuing from to of hedge can growth if years could comment those as sustainable and growth to – growth this try systematic

Chris Concannon

Kyle, Yes, time spent lot no, that it’s on. a of we’ve an area, exciting

known fixed exciting that’s all a gearing fund to and dedicated particularly complex. is cross of my FX ingredient fixed days liquidity up the the equity advantage see to take segment income to income on I’ve our market. they hedge the key – That’s and have clients from market that focused to All they their launch are to current providers fund importantly, are trading them. We the they’re huge in structure. spread, a strategies me They and of up and area to all these ramping more and team because an opportunity a systematic both but some both of as

difficult spread, a strategies hedge platform you engage with market. funds ability cross provide that in at there's as that's our much all-to-all well And pipeline In systematic for strategy. cross entry key very trading them And both provides would new where the cost. environment healthy of to from a group. part their their more I say reasonable fund spread it's an liquidity as only to systematic of the the

entry I think other credit healthy groups U.S. fund from long into and segment. have they're and I'd days. But success say seen still we're off product still market high-yield it's a and we're more pipeline, the expanding mature substantial early across that both of areas. We've in success that some a high-grade, way certainly a

Kyle Voigt

And business. That's really ask if helpful. muni on I follow-up just the a can

Just business. talk of revenue wondering through then maybe potential for you that MuniBrokers bond updated long-term revenue that revenues you you and go for that see if And captures transition captures kind means business muni – transition. thoughts on could the and we that as rates the about revenue what the of provide some capture

$XXX that million. per per the time could recall opportunity $XXX at But the think under that or I it just be muni maybe fee you felt closer space, capture into rates like million think $XXX the quarter. the I I launched when was in to

opportunity maybe today, maybe we market and can an wondering then of view of share is kind long-term, the So terms you what if opportunity it updated is in too. see capture the as get what fee just

Chris Concannon

Sure.

the did MuniBrokers. another the First, We muni of super a record muni for on hit so about integration We're overall the share the is quarter. thriving. record excited market muni, market, again in business

volume, are the Our and our acquisition MuniBrokers quantity acquisition it's integration. build of the It's into our excited and vision was capture, large not MarketAxess liquidity Chris and to our quarter. jump business across that integrating only one, data of more about a the over integration so that MuniBrokers bang to the of very acquisition it pool next question. business, products of the collection so of step integration all outcome and not I'll far, big a but of answer let final more data but the a also was, but also us started With help in capture of transaction course products; liquidity. the We've regard multistep

Chris Gerosa

a was this Trading, to it Open just reminder, a And fee which model subscription-based $XXX that $XX we'll minding tax-exempt And MuniBroker a Kyle. into is $XX team $XXX is product, capture volume ranged And model. to Hi, And Trading million. to per typically muni Open model. between anywhere million. our per plan ranges where the from everyone, our convert

to looking fee that as capture our we're transition that card we platform. So into either volume

Kyle Voigt

Great, thank you.

Operator

go Goldman Alex Sachs. Thank next We'll of you. now to Blostein

Alex Blostein

update wanted Good Thanks little for market a the high-yield question. guys. think, Chris, gave share. Hi, morning. high-grade bit I business. you jump on on the to in an I

kind share just more could for comment is over So seen I consistent what you of And high was call volatility a think we've seen wondering comment market within on market is do it, picture, bigger of yields sort on if as the bigger X shifts the Maybe yield sort you to accelerate to April. month-to-month, about environment share the of and in high-yield last, basis? ideal well in just X driver you months. what high share the could of more we've

Chris Concannon

Sure.

First all, revenue in obviously our we high-yield saw a volume and market record quarter. in record of first the

number of quarter. So the first records again, in a

– down yield. volumes TRACE both volumes and and obviously, high April, at look we high across As substantially grade are

a more – high-yield but about. the market, super it's So excited then I'm And challenging overall, market.

make headway the in high-yield We continue market. to

enjoying liquidity, Trading of high-yield see the a continues deal particularly high-yield stressed. we're get participants obviously is penetration liquidity, overall, be great of when through market gaining ingredient OT saw in key a market to that share. yield. high our alternative where XX% But is which volume We Open Our we

as So opening when in in there's I remarks. mentioned volatility Trading spike, the Open market, my does high-yield

And bonds market, market Open we historically volatility, volatility additional into for volatility that see the to continue extent does So that has to to high-grade we'll the of Trading. dropping high-yield share led there's -- course to the year. higher throughout the see the extent our

Alex Blostein

I dynamic Got that you too guess with kind market was share volatility. in decline it? the in much you. And March of the high-yield how Okay. almost Is describe

Chris Concannon

a Well, of don't that was solution. volatility But March, in clear in those and led some bonds there which distressed throughout number we Trading trade shares yes, there's market volatility substantial those also in Open importantly Trading Open our March in saw more during to times. of spike we

Alex Blostein

And there in you what then Thanks. in how trading Okay. over just platform fee fee million of what blended guys retail is trading help more the you ultimately delineate maybe Maybe my per the and improvement could follow-up. drive hoping credit million on across opportunity I was see. bit kind little hone a is time. frame contribution Thanks. today the an could maybe difference in per that the and the retail

Chris Concannon

been our institutional Well, business. and income the That's business distribution Yes. the has first, institutional channel credit our business, is fixed historically. primary

we've market, seen an IQ, Asia that offering. have demand for it We and We're haven't retail client recent offering opportunity headway a retail, do Europe. resources an dedicated with well. a We We've we the see in rise seeing private area Axess higher to. our launched in in that made bank as to in full in

given particularly the institutional an in terms see opportunity where of sits quality market. execution retail, we our in So do

overall trade is from level. market the look you a size high high at and declining yield, If market, the muni historic even grade

the smaller market. our trade and across So sizes platform across TRACE we're seeing

higher price sizes have Open very we with much at the viable a smaller think historically. being do price deliver able just offering an we we can deliver that quality to execution, So quality than trade Trading retail given and

in wonderful market yields a the think opportunity this there So given we the income retail reinvest showing. retail is that is fixed market as

Alex Blostein

much. so thanks Awesome,

Operator

next Thank Bedell go Deutsche you. We'll now at to Brian Bank.

Brian Bedell

of bit Maybe to, guess, you – view in more you those in the about that I to desks? distressed alluded like Open Good usage the get we merits could really general, type Great. share what and if can education the see tend extreme battle And you in and more this obviously market How you about is types do say, you across in off that of and trading a volatility the March, trading morning of that of of little it's dynamic talk Thanks. Chris? environment do try just thinking or the Trading to achievable? terms Or behavior phone? you on year. – an just the sort – that on of more zone of if in process, Do have think platform environments? more folks. if some should bonds is the the sort price improvement of really gain And to of share? you in uphill do can Or I like

Chris Concannon

if we there you So thrive at volatile in do We records – look first, markets. back XXXX, was obviously set XXXX. across

in thrive So volatile our does offering our platform, markets.

ran the is a tools in was disruption – volatility and XXXX. March like evidence throughout of from prior differentiator volatile our and key this, consistently March More automation so which importantly, times

our that volatile the So all-to-all good good times. exceptionally liquidity we offering. really about feel is about through feel We the during provided more

spike As during March, that traditional providers times upwards market. all-to-all did most volatile providers of market share or liquidity the mentioned, OT markets our Open stepping stepping alternative reflecting the market are Trading when back I from into

So we market in the the around our feel and volatility distressed good in We market. good particularly about there's if really but that's bonds, And – – where feel again, market. the position a is distressed to not go go there we enjoy situation. chat the they're again, to do that but tend of when market a or a bond volatility. the to benefits But frequent, does phone that's

expect is quite offering comfortable So for an market, we comes that into if the our volatility would back clients.

Brian Bedell

in market the slide your other just share contributor in growth versus a but – to market expect those showed you and guess, a the penetrate segments markets, the share? should to going strategies. systematic to In going back areas hedge share we about where your growth funds be not market your Okay, the overall follow-up, market that talk And I forward? words, those you positive great. actually you to then you segments, new or where new Can in particularly showed continue if

Chris Concannon

particularly all, the Well, think that entry, into before. I turnover the systematic the we seen income in first overall fund has that to a These the fixed but of complex, being market benefit share, our actually market. new market it haven't launched new strategies are are

providers new bank attractive turnover our of kind clients and both liquidity with it's us So interact and clients, liquidity. that to our and really our to

advantage entry Obviously, velocity and not also even takes only obviously our positive place to all-to-all new and of favored but of is all entry entry. full product liquidity the all-to-all, of the market, treasury our high-yield new bond the so products turnover So offering another a seeing trading given we're to bond overall is market. the for from high-grade the we're and munis, where across in our

So market, all-to-all across and for positive offerings the all the our products. turnover in positive but fixed positive income for market, the velocity super particularly for super and MarketAxess

Brian Bedell

Great, great. Thank you so much.

Operator

Daniel you. of We'll Jefferies. next Thank to now Fannon go

Daniel Fannon

that don't in. always or discussion market Good been factors obviously, talked you comments think Thanks. growth new morning. your I but the about, that around to follow you something and And of I your you've remarks participate on that there impact in parts or also the – market wanted up, issuance share. of some prepared has Chris, your products areas was don't around

addressable look in of like plan share So enter and to of going market markets additional you what high about you the in, maybe or what true currently expand you terms grade factors are kind could what can forward. think upon maybe if based your as should what we in what within upon your is market

Chris Concannon

Sure.

a also volumes want certainly record share over – and to sizable had across most we point we in percentage growth had record had And across revenues well, high we U.S. products. in out products three quarter First, I in first that our points of in bonds and trading U.S. share. corporate market ADV yield corporate well. as We our grew records open as

segment on, have to investment we the at us, across course clients some want growth across market the average that's the levels grow lower the in high quite granular resources that bonds grade of TRACE quarter. look of overall if connectivity our first do trade retail the saw spent look products a or higher chased as of client explains corporate we but have at, overall after grade, we market is TRACE exciting, retail get when And over we in market size a U.S. did So well. and retail. to of records not That's and share

we're But revenues our and quite quite corporate corporate frankly, record happy market. happy across with with growth and market market the U.S. record quite across share our volumes U.S.

Daniel Fannon

Understood.

well the upgrades Okay. was separate from said some I following up distribution guess dealers think higher, as question, existing fees plans. new just fee on there a I dealer as then you or

be So here, we would upgrade good as from that about we the more Any think ongoing? that is that think run helpful? about maybe something color as rate cycle should

Chris Concannon

we're as really for But would dealers or we dissipate recognizing that. consolidation to new it that recommend, that Dan, board but could it upgrades was and also extent dealers risk number signing From sector, there fees at as the QX and perspective, new both looking fees Yes, or fixed modeling a point distribution is run we there's to and the how we difficult on to could dealer fixed year-over-year see fee in see anticipate offset could alternatively change combination our the on out, it's it going plans. being sequentially come a you what to forward. rate,

Operator

Simon next now Clinch to go Atlantic We of Equities. you. Thank

Simon Clinch

with your question. at that, guess, value such if trading update could a taking could that around to, creation your in thoughts expect share was on I thanks time to, mentioned clients. that recall meaningful And strategy be? it over I how my implement just you ways and how of of you wondering the I think open that you'd I us last were you I quarter for guess, was looking more Hi,

Chris Concannon

Sure.

trading open to all, of First continues set records.

to remarks, also substantial So as a of attractive open trading market. to in mentioned our that cost are we our our revenue And overall trading we our record And had savings in share I open obviously base. very open spikes my to total of deliver record actually market continues so than see saw revenue, client savings and higher cost it clients.

open execution attractive for reduce the is other crossing quality. that their to piece improve spread – The and delivers avoid trading and ability clients overall

a to It's all ours we of open an more to key focus trading clients that's clients, of with to as clients encourage liquidity. our And provide use other offering area ingredient treasury trading and in of the that number market offering. as to for well, first we're very treasury advantage open taking all or time the seeing all where of clients offering a large

So in in exciting our share our activities yield in munis, across in emerging to high market in but our offering treasuries all of continues be a it high trading open markets and also open – across products, grade. driver trading

on client clients to exciting trading quarter And open we're see continuing all offering. and to take of to super in activity change our that. behavior So the advantage all

Simon Clinch

share then we share. in And above market grade Okay, terms thanks. for back levels. being was so about far you're the April market in high you if I perhaps terms, the could just put think of it wondering QX comments secondarily about U.S. when in

stable bonds a adjust has distorted you If adjusted that April? of market for out has everything, been sort sort March the Or even the been you through of there sort level? pickup after adjust distress pretty to that of relative share in to that

Chris Gerosa

– I There's in the the there's end. days three important Obviously, So question. left it's month appreciate month.

we market next activity be of levels month volumes putting higher share around enjoy monthly we'll and out and our week. So end certainly

just above I So our share grade early little it's QX. bit market high where a in going as to share open seeing are predict the But are we up. remarks, in market too end to levels mentioned

Simon Clinch

right. All Thank you.

Chris Gerosa

Thanks.

Operator

go to you. Cyprys next Morgan Thank Stanley. of Michael We now

Michael Cyprys

pricing if just of fee question. you're maybe the theme far moving around seeing trends maybe then the taking capture in the of up April, yield stack on sort quarter? per the you continue some for IG elaborate April. on you side million pieces fee How's the the And high you could could Maybe that just just versus what versus quarter? first bit a on thank around so the little first Great, of in comment with

Chris Concannon

comments Bloomberg seen to and Duration it's this we've that everybody grade stability made high fee for take our of capture. respect my a in remarks with one. the capture, that's lot I'll to factors that prepared Yes, fee out contribute there's And I there the to very index indicative monitor. of

product the the product heavier product I'll our a month the volumes protocol and is you mix QX trading, which mix the point product our of to month so really fee quarters saw And in depends is in we to elevated with mix have upside saw it historical mix, month we high market that in yield, coming was this sequentially, of You on relative across through. And one where products. have open to set. seeing highest capture the we're we're which Eurobonds seeing volumes lower of is fee what

seeing that So we're not really same compressing goes our the we duration fee grade year-over-year. high the down mix impact saw to what's capture product with because the

Michael Cyprys

up of great. a Okay, open and more clearing success guys I just more follow more then clear. believe, up you tie have working self you're capital And as because does, trades, with trading question, those for that

were sheet to into for help translating are So how do just balance and remind us about the driving customer incremental over support that should being maybe to you trading that we how more support say time? efficiency of balance much being volumes double, think resources balance clearing think trades, of if about And can how you to sheet that? sheet resources the used open then used

Chris Concannon

were so clearing contributing of light fails in support and had increased residing of within elevated a in peak to deposit Yes, two dealers volumes March, it enough our increased to broker trading requirements. the capital seeing we that we

the million that two $XXX of to cash end clearing March, support entities within of you of $XXX open the million residing that trading. of roughly at saw So was the

of didn't borrowing with we debt any unsecured but in So ability amount have today, the late, about end, funds to. we company at we the on to have secured holding balance dealers, to $XXX outstanding $XXX facility million if do support sheet of our to have feel million business on and additional company broker access to balance million facilities, holding the a at quarter do borrow not seen $XXX need of think capital very as comfortable had which secure we the residing we company we facility at the our secured and have and but the We to sheet. not

Chris Gerosa

trading out point a trading additional just to current a would margins. will in pretty produce open and sheet given our growth cash of dramatically I balance doubling corporate particularly our open

sheet. open that's the to you more healthy as problem balance So trading to have cash a into produce grow

So mentioned Chris spikes in open again, trading.

trading today. it spikes support We open to growth open have plenty trading and of as capital stands

Michael Cyprys

Great. Thank you.

Operator

Raymond of We go next now O'Shaughnessy to James. Patrick

Patrick O'Shaughnessy

volume recently the an of competitive market Can represent? component that the issued provide segment corporate much the does update a and market bond morning. on total how you in good Hey, current dynamics

Chris Concannon

bond corporate So of market? dynamic the competitive

Patrick O'Shaughnessy

The recently issued component,

Chris Concannon

those So calendar. a for Patrick, with flow but in as here, the jump time, and I'll us numbers following long you ebb know,

issued probably So the can the something they peak periods average And XX% TRACE get in newly up that, of bonds and X%. lower to short-term. more XX% like than

terms the flows and new calendar, around dynamic with don't think in issues. I but ebbs the competitive has it changed landscape So quite of honestly, the

Patrick O'Shaughnessy

in you. Got what client of in your terms an provide seeing you then Thank update And interest it. can on portfolio you're trading solution?

Chris Concannon

Sure.

grown Our solution It's portfolio year-over-year. trading substantially volume QX. in record had

throughout delivering of constantly delivering features clients today course we're and to the functionality We XXXX numerous functionality. been have obviously and even

is trading that seen part portfolio of in the volatile and records in I little particularly portfolio times. portfolio do trading. provide numbers in So challenged we've March more first the bit a is think to quarter reception the trading the given during

part portfolio market trading solution here high clients important we'll the as to deliver and their value continue is tool to workflow for a But and to we be manage an for clients of continue portfolio.

demand, we're in in portfolio trading. in portfolio they clients to what hearing the from next very building landscape. is portfolio. our the pleased certainly and either portfolio want around the think pricing out step trading to bonds their portfolio performance really adjust of a put decide not to portfolio what your understand is to I in But or terms to analytics bonds our to Which portfolio, of really trading what put the pull improve with the in analytics

Patrick O'Shaughnessy

you. Thank Great.

Operator

morning. Thank no you. like further have it company. back turn the this And I we conference the appears would to questions to

Chris Concannon

to Thank today in you and talking look time the you for your all next to we quarter. forward

Operator

conference earnings you quarter for call. gentlemen, Goodbye. XXXX the will a so first conclude and Ladies sir. you, day. like joining MarketAxess Would you much to all all that us and wish thank great Thank

MarketAxess (MKTX) 26 Apr 232023 Q1 Earnings call transcript