MKTX - Earnings call transcript Q3 2024 | MarketAxess Holdings Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the MarketAxess Third Quarter 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded on November 6, 2024. I would now like to turn the call over to Steve Davidson, Head of Investor Relations at MarketAxess. Please go ahead, sir.

Stephen Davidson

to Third welcome Conference XXXX and Call. morning, the Quarter MarketAxess Earnings Good

Chris Officer; Financial of Chief with the Ilene performance Concannon, For call, and markets, Executive review update on update. then the Schiffman, of results. our will Bieler, a Rich will will Global Solutions, Head Chief Trading Cozelle you the Officer, strategic you provide financial

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

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

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

turn let Chris. over call Now to the me

Christopher Concannon

you joining Good thank third for and us our to quarter morning, results. review

fixed I Board. been reason is for and retiring the of it our access that the to announced our electronic years Rick the a his with market time trading today, has why an and me why informed access. philanthropic Executive he family the Rick's came his are Board is of His today. experience Board the pioneer As endeavors. resource arena the Chairman; is is to earlier will has his and of tenacity and Founder he spend more at McVey, market Rick in extraordinary be end from vision, innovation and year income Directors the his growing company

of we from Board, International as have still him very retiring the is Rick While to our lucky Chairman Board. are the

electronic rejoined Board. career, Chairman XXXX our about distinguished built, structure. our at passionate I'm Chairman. continuing humbled also his work like role new on his market as as been solutions a appointment highly has his to looking Rick the his Hernandez by would of in Carlos after forward trading with I financial concluding Carlos Carlos and next career and Carlos Board Throughout am has to I what congratulate JPMorgan. in

turn let's third the Now to quarter results.

of Slide update. to Turning X my strategic

We XX% growth revenue driven continue quarter in deliver by volumes. to principally strong execute strategy our and this market growth in

increase trading management, the We strong expense in which which volumes our continue operating share. in released market diluted our We October disciplined XX% year-over-year. unlock per powerful to be around model in leverage reflects our to earnings drove growth continued a helped yesterday, and metrics

in always We the into longer-term much lower our We experienced decline investors market. market trading guided a in have share the month-to-month our October. look as too and portfolio we in the share not trading fluctuations to block believe high-grade large in U.S. the by market at driven client trends shift to read was and

swings trades have changes mix in client generation. generate market the of can and we large short-term the without in before, revenue activity portfolio significant mentioned As impacting share materially in market

clear a market. share credit market deliver the global across to to strategy have We we fixed while return growth continue in U.S. growth to income

gains. seeing solution, We global enhance the in and are returns continue early trading our we of to terms are with portfolio we share pleased market

now trading capability value have key highest attack targeted of high-grade the our the representing order flow, elements block of U.S. market. the to We launched client XX%

RFQ our on ERO traditional in on first of are to track European to quarter the clients XXXX. We deliver

to trading our clients solution quarter. Last, rolling we offering continue with in this block to see market emerging out momentum a

solution. product with generated XX% our with and income from credit Slide S&P's Commission of fixed strong by X quarter CP+ partnership, this we third of quarter bond represented and U.S. the as trading With in our strategic a revenue S&P announce to Global data are diversification first data. up of pricing across our combining week. commission geographic pleased outside are highlights data market We partnership just global revenue XXXX. power last global rates, XX% illustrated credit of total evaluated

Our growth franchise cylinder is emerging story. of diversification a this markets key powerful

Slide X markets detail of strength franchise. provides on our more the expanding emerging

activity are opportunity XX% market emerging strong perspective. EM We are record and growth from in EM volume an up markets XX%, seeing markets and LatAm with respectively. in trading the trading markets largest across emerging APAC The addressable regions local

RFM our hard record Dealer fastest-growing and growth, of helping trading drive currency XX%. strong which also block up local in of One in to protocols local is request local or levels is market markets. across for is markets showing RFQ

emerging the is which about excited very are stages we opportunity market us, ahead electronification. early still of of in We very believe

our to X Slide priorities lays out market share. strategic grow

quarter portfolio that portfolio analytics. our we dividends. our September, pleased In And the to have we to automation share XPro we an are RFQ made platform new been of quarter estimated We completed rollout third solution trading delivered initial in more of ADD trading interface focused to U.S. trading, in several trading believe The of basis credit global Europe. terms and intuitive completed client the that our create higher supports of than trading traditional market points client on feedback our report has and With we hundred for I'm levels. beginning also XX%, high-touch strategy, investments that just second portfolio a recently in record proprietary pay clients update to EP portfolio strong.

on European XPro In the traditional begin coming the we our months, will of clients. initial rollout to RFQ

for trays portfolio transition focus content was block TPs while targeted in blocks. trade This our set, enriched analytics of key reducing two and pre-trade initial XPro for block we block our clients deep for phone dealer solution and the of sizes. leakage. is chat elements tool new of and the high-touch our streamlines size proprietary electronic leveraging data selection to we information strategy The AI-driven strategy from are our now have the solution trading, XPro While and

The the to and with Eurobonds down exit seeing rate are FQ dealer-to-dealer increase in that shoots in more and rate have munis. to new the XX% macro select with a an for above segment in XX% high euro We important MDX green of factors moving issue generated as robust grade markets, yield, dealer segment, The look highlights of into that we X with up environment. U.S. quarter the was recent bonds we third emerging in XX% the remain in and in up we growth dealer cuts in has quarter. XX% but believe operating we XX-fold constructive U.S. in expand Auto-X U.S. an Slide been very Last, and high RFQ indicate year-to-date. calendar attractive. come grade trading third XX% Yields XXXX velocity high September. in are

of the a XXX% flows one result, flows high-grade volatility and credit year. but coming have pick the factors As up fund that spreads into been months. in from should prior are believe we tight funds Fund keeping ETFs up the mutual do

U.S. in October capture That of duration in high cuts benefited September, client on client higher fee the rate as in Lastly, which bonds an continued trend the in quarter. grade uptick activity into advance and reflected has high-grade trading in well. the platform

with update to over provide Now our Rich you markets. let on turn me to an the call

Richard McVey

year trade the in across Thanks, products geographies, quarter. last trading in a international generated up was Chris. highlight the XX% versus of of CAGR up last volume was XX%. growth Trade with and trade trade a we and XX%, On year expansion strong workflows. client CAGR count volume Slide XX% X, with of business versus third We count our X-year X-year

in volume, up important Dealer-initiated the and hedge including trading was Mid-X We over Mid-X segments, from a dealers of now firms, over this seeing which client XX-fold included represents these trading increase in RFQ and billion total systematic XX% $XX trading the also volume, are volume, strong an quarter, prior XX% includes from and which XX% segments, representing on up our banks. generated chart, funds, volume. Eurobond's in XX% from We year growing private contributions dealer increase trading and credit $XXX client trading billion

in expanded early are the we While dealer are the we services activity our by improvement of strategy, Mid-X innings Europe. in we seeing in are encouraged

clients, management banking one business banking the increase workflow to We onboarded of access our for our year-over-year. Access IQ, XX% recently private in private IQ order beyond banks ADV designed U.S. wealth grow solution and largest execution a delivered to as and Europe. seek we

bonds, munis and liquidity we pond's share week clients growth. has for will are diversification prior the of also in ICE strong share then we week been and first in launched September later. estimated very We from have product complementary seeing market municipal is with market of X.X% believe bonds positive, X.X%, feedback received The with further corporates year. connectivity We from record the up support a

with munis, quarter also we in second are 'XX. of portfolio which We launched trading of very growth pleased from the the

$XXX Year-to-date through executed have we million October, trading over in volumes.

through up our the to are billion $X.X total Slide count in record provides fund up Trading year. CPs share Trading liquidity launch in for Open XXX quarter in the of funds X% we generated has to with the XX% with a in was pool. prior the on of on an Lastly, continued provided XX. from munis, from munis trade year. year. record protocols from year. integration and on record market-leading our activity billion all-to-all the Trading Open XX% quarter Open increase XX%, update full trading, liquidity ADV prior the hedge prior credit with the XX XX% first in trade up our Hedge own platform quarter, ADV expecting $X December prior volume A of was from expand

automation Trading improvement quarter XX% CAGRs and our products of of shown as The trade ticked client continues suite Open on this in slightly of Adoption levels to secondary experienced liquidity the quarter trade volatility. automation pool. and We in the respectively, automation another higher liquidity on strong XX%, price spread of Slide the up in single to of U.S. record X-year credit a shown source opportunity and left record slide, be diverse as count lower XX. grow, of driven Open our of by Trading, XXX side largest firms. markets, credit on the growth with volume continues active in

year-over-year. from Automation record total trade XX% credit were count. represents trade our responses an of XX% million increase algo a our and credit There of XX over now of volume volume XX% dealers, total

the based are we through to tech the PRASM will of ] increasingly Auto-X obtained us stack our into moving leveraging automation technology entire generation the acquisition with launch [ suite next allow We on its which Pragma that algorithms.

Our that clients provide all-to-all is to clients dealers a allows respond model. great Open a our RFQs, further example Algo to and Trading, Auto-X supporting other workflow of adaptive

Ilene performance. Now financial let our review me turn the call to over to

Ilene Bieler

Rich. you, Thank

million, fourth $XXX up XX, to third year. from quarter our approximately discipline, combined On positive please by results. quarter market driven the resulted of in Turning financials. prior XX% growth our of leverage quarter line the summary since robust incremental cost a the margins delivered with We top of operating XXXX, first continued of XX%. Slide provide Strong of volumes, with revenue

strong turn. included on at areas, most revenue in Looking revenue of a broad-based our $XX high lines than was from XX% Services growth and benefit Commission offsetting of decrease across each revenue U.S. XX% yield. a increased $XXX,XXX in FX. more million Information up product

of Slide our $XX fee of our and XX% quarter. increase or effective was commission our revenue by our was Total U.S. we $XXX million Trade the XX%. U.S. $XXX,XXX On an representing experience especially commission in XX% revenue on and strong new X% representing increased $XX diluted Health a revenue The was approximately XX% of capture. included up per rate on across benefit other of was suite, continue data strong contracts increase tax up XX, XX%. to as commission increase and due across grade The million income was from XX%, XX%, of to The emerging growth more increase Services CP and million, earnings municipals due driven we revenue detail reported gains $X.XX share and an Total Eurobond adoption up markets, $X Plus. to related treasury we of portfolio. tax. for mark-to-market million provide product credit high

credit in total reduction from was year the by product and The protoconics. driven fee capture prior principally

slightly agrasion provide was high in Specifically we lower the XX fee plans of principally two fee lower from The bank distribution levels. summary and Slide decline high-yield minimums consolidation U.S. increased expenses. operations, was trading. XQ desk our operating variable On in trading by driven global capture activity portfolio unused to and a of Total credit fixed fees grade. up XX,

the of year the Third quarter. Pragma fourth which impact anniversary $XXX to quarter million XX% include we operating will expenses increased in compared the of prior and

the We the in half not the about expenses as that trading that included rate from saw of activity higher-than-anticipated variable the earnings costs additional from quarter million run as year second previously in of were increased I on well $XX the XX% mentioned call. first

there know, variable at and future our come extent fixed anticipated expenses this periods. are million, takes we will can expect you through As best, market time, the variable costs that the keeping that within expenses to incremental conditions. At puts $XX based point. in we always expect in to original increase change shift of some always mind the absorb And on

capital more of On cash So low year of our of range and update Slide XX, our or full we be slightly our less with in end expenses previous to expect provide we on flow. $XXX line our million. $XXX guidance an the management XXXX to below million

repurchased be and for up to million cash at same XXXX right are totaling of September over of million remains drive XX,XXX October total authorization. at quarter. million $XXX We $XX cash including in over disciplined of investments cost from a of third the shares strong, being cash, last quarter through increase the X% $XX free million. we at believe of the a million $XXX current an $XXX to balance while treasury during time year-to-date of shares $XXX of quarter. XXX,XXX the We investing trailing future sheet continues corporate growth, Our XX stewards U.S. last capital. striking repurchased with on equivalents million, We XX, flow end the months, bond generated and as balance the

for Now turn to Chris me comments. back let closing call his the

Christopher Concannon

more Thanks, by calendar increase financial of very velocity contributing summary, all backdrop the strategy improved a issue to quarter. growth we an market XX, to third robust for delivered results and Ilene. strong continue Slide In macro are on the constructive execute a new our trading significantly volumes, in us. driven in We

base are to our our and executing products, the platform global we We rollout extending the share. most market continuing client grow are to of X-Pro and by across plan

portfolio targeted We block share and with in credit is trading The the solutions trade phase our are next seeing the gains market early extend recent signs dealer to success size with U.S. in launch our Europe. block of trades to product solution. of

continued are in the Given volumes focus believe more and to positioned on strong market coming our constructive the we well our backdrop we market deliver strategic priorities, growth quarters.

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

Operator

[Operator Instructions].

Your Chris Allen comes first of from question Citi.

Christopher Allen

solution moving say [indiscernible] to uptake plan to block Hope first in that a you current your noted And details congrats impediment on and Rick of retirement. of now? I is share. to right the out just block Can accelerating I enjoy. an is calling on you what market. game And terms solution you the the in activity the solution some provide what's forward? the client of First, want penetration now level the the I the Two, dive wanted little lower on is into recall bit to month,

Christopher Concannon

and take to that Chris, Thanks, Great. question. Sure. happy

October. volumes on which credit record the It a trillion in in volumes did month in over October. putting emerging We that our -- in we record average just in was total have Eurobonds $X platform, we October crossed in in a set daily month set the we first record. and record overall set records was perspective, of volume, a the quite volume in we traded October volumes. total market rates We volumes exciting First, set

So very I month. look across overall, when platform, strong the

in capture. reported We an U.S. increase U.S. high-grade in high-yield we and also saw share as fee market an increase

the across see overall September the slight in month overall a We market. the market, decline a trading good October. of of lot portfolio So in from stories did throughout

the offerings. I XX% level. some total impacts level spike us, not actually XX% around that September of have that that competitors natural trading. just but do a the in other think space that's that of to portfolio We was a portfolio market think the was up delivered October

at number that so that XX% was million a of close see larger size than as market. pretty up mentioned, the block XX% in the increased I that's these from natural what right out So And August, trades more haven't somewhere around XX%. levels, was norm the trading, to you of seen was, now think entire $X to it we What dramatically, is market. the overall we'll up in number

sizable overall a was in move it So volume. block

market And I that think during we year high-grade saw we a something depressed to similar of where same close in of XX% period this experience we TRACE. well. as saw April the about that level, share to did

to And and so that blocks the to those moved bad phone the news chat. is large

the that block that, refer it recent this market our launch The X-Pro. we're launched only as in ago. with high-touch very and to We good trading news targeted X attacking is the weeks just that's a was of about strategy solution

it's early but And the a So we're It good can It's the of and now the going that we information tools that market The that not key of When exact offense we're the quite the we been traders the playing the the after targeting market. around days is we've providing. information the that it's for now an are the offering that defense block it that protect be leakage ingredient. We're you ingredient the key blocks, anywhere think part market. pre-trade linked to analytics still of about overall and part time. information, about And from providing about and to to reduce sensitive talking really on in market. information fact that anymore. about offering feel XX% powerful XX% very phone some have market.

But for data, tool which So that's AI-driven been clients is dealers has increase are That dealer likelihood we're the tool selection -- that pick data been important we've of for feedback really to of select quite getting. a obviously, offering powerful selection counterparties. clients to the their also their that some access we an dealer providing, response.

large if that getting certainty have quite powerful. clients from we sharing block And the to AI feedback tool selection dealer want So that block. will just that information, is you're responsive to be

a early out with very feedback have pilot again, So We but positive. few days. it just clients, quite the is

leakage strategy for trader. -- it to better phone again, trade what is And better and done fewer and chat, is for and we're data, but get the and clicks our done reduce in overall trader do replicate information there the the on information off with

us. but days, in early about So front of sits very market that the opportunity excited

Christopher Allen

And follow-up just that. on quick a

about be tools? going a should opportunity. more This later thinking a frame maybe time of we as So client or be to the type even here educate -- on them trade-by-trade XXXX 'XX you a need where rollout to

Christopher Concannon

Definitely. a It's XXXX.

to high-touch a trading and this as continue sizes. But out and you as a again, the in those We're year targeting as by trader block part first it's the trader in and we with both platform, well of the continue moves that have those we The enhancements We see strategy. of both We in enhancements in of we're include still, strategy, portfolio you larger is as ingredient, trading portfolio before key our trading. this so categories. quarter. have mentioned, roll doing. larger it then of share series end the both to enhancements those we high-touch size,

hopeful will trading offering are that sizes. as the attract portfolio block larger sizes as we well additional So

unique just from and is think it's have. and that it's the marketplace. comes size platform, that's of data really the be with providing mentioned, to gleaned trade something bond from and on how proprietary that data we And only to as with. we is And our This our the the to breadth that traders can proprietary insights trade key who ingredient And data. I our

Richard McVey

Yes. I just that, something add Chris. to

not that trades in is automation shops firm, and flow that our I trading, our going XX% maybe electronic these block one block of meaningful that is they of comment. being around of trader-to-trader Just make traders a There the in kind or about Rich activity where large to and advantage typical IG. solutions so here. was some The sizes not It's is to as number across of Chris involved depending extra the do of things. have blocks amount doing now. taking by about from range they're done and behavior changes. Much talking where happening upon someone is business are the who's We high-touch that trades volume do. our using are or of solutions

with of the traders effort big these So part getting active the a is our in the that most high-touch at traders to are electronic time focus not this market.

Operator

next Alex from comes UBS. from question The Kramm

Alex Kramm

types gears and maybe market obviously, guys nice thinking with shift obviously, that do portfolio the good that share on your hearing kind see that trading to gains the now. clients curious and client to think embraced in that of actually share superior line there's we fully specifically, you your very here? quarter share? Or where is giving yes, to different when to the are go you're want the gains I more you quickly you basically the now far? why do so comes competitor But with trading overall market par XX% primary So portfolio see maybe for you from from are clients is to offering you having just and it during come? where of product And your

Christopher Concannon

be we're our candid, offering. Alex. in Great, I'll trading, On from behind coming portfolio Sure.

minus are trading. trading, is an weeks we portfolio an to benchmark a trading enhancement out make just It's in a feature more our in or the trading and continuing to market. used to call high-yield across we used for relative widely We So around portfolio tool important widely deliver rolled market. X benchmark more the portfolio plus seamless it solutions to what Europe benchmark ago and trading

are and the yield we I critical -- say answer. our not opportunities obviously, global PET our in both with that would and and Europe offering see par, on adding So to we're we do that components honest are high in

do part. to We work par. more exciting have be to on the That's

in our in probably asking quarter that we really crossover our tool benefits good the where in not par despite the competition. share and that first to for what on We traders an clients and we analytics perspective, their releases offering excel pricing. provides portfolio their in have. we the on unique portfolio the area that and once We to the and Again, will we how put portfolio, that's are portfolio about then analytics data And to feel manage and how their provide. address data are being the at growing to given trading dealer with continue

But encouraged the that the and I'm trading, fully you seen additional excited enhanced in adding growth, I'm product that very by mentioned, end as that first we've we're but a features about coming with quarter portfolio quarter. offering at in of by market the the first

just And quarter. so weeks first protocols excited offense as are and from to deliver I mentioned and these what's delivered we the to moving what going we're pretty ago in earlier, about being defense across X

Alex Kramm

end from I more? of since kind direction upon to And you, and something the just at about in S&P is costs clients enable going getting data what partnership revenue -- would and free getting them you they're -- trade you're what's and even your the but obviously, analytics then it hopefully just you a, help Can when were a too. lot little And here of coming? that what maybe And help degree the a you're the data because be to from Excellent. from them, think talking bit. analytics quickly touch getting new

Christopher Concannon

with the income we're in ETFs of towards our here indices. partnered on planet That one, is only important A we to given is index in data them not run do Sure. at pricing equities, their and the key footprint quite but some large Their share, end-of-day that of is When largest The power the these you ingredient They a arena. all U.S. ETFs. Well, and in U.S. CP+ tool. firm overall that's in it's past, S&P partnership substantial, relationship. and tilted heavily index great component. the powers high-grade number across well. look evaluated partnership. market know an help price the we've Global particularly the iBox income index ETFs our it's fixed their fixed large high with components does U.S. yield, them And to supplying a tool

and to like we we our the component so priced nicely how ETFs are data that's out be reference the complete relationship And the end they're providing end our day of quite exciting, an at the we'll that of the quarter. important with feel arbitrage having reference is the fit and integrated at to data data With ETF with the S&P. and in regard data, rolling

super Everything about really but through the footprint just expanding live our So that excited at is partnership. going partnership. QX, this excited the QX. early data of we're end

Operator

Barclays. from question comes Your Benjamin next Budish from

Benjamin Budish

back wanted up block trading I to follow on the discussion.

the additive be the be Just you that just and Curious endeavor? FPM. in see of comes chunk think between that's if how sounds share of this what color trading, associated like the you nonelectronified biggest dollars, but like in impact. we it you're curious up? would it I FPM sounds could Should give should if portfolio at successful trade-off And about a might sort it the on pick any volume remaining lower-than-average really It share? understand with revenues

Christopher Concannon

large income single fall would regular example, at PT would for be Right a our trades RPT, fee any free a schedule. There pricing trades single said, as scenarios, at are they where discount level Sure. dealer or our under solution. similar now, to dealer

We that offering for are doing process and also free. trading

single They're charge single for trading deliver trade phone. full to with want a competition a block trading. to from the trading a -- to of the dealer. XPro, in than trade able over chat across the feel the they're the buy-side process workflow of some breadth able process trader to dealer, trader think We clicks I make fewer

where dealers short And of of then a if and private with price can information. the request winner select list they market protecting choose, while they can they quietly that interact

at that capture far be traditional at things like our single-dealer of and strategy and trading will particularly components fee process capture, high-touch So trades. other a are components fee reduced

Richard McVey

to Yes. Benjamin, function of thing, capture can that a how I in value calls can is just bring the can add one the add fee Again, trade. said we the I definitely on that. previous we

done and So excited getting relative just as we're it a capture they've one block some in is trades, we can about directly a trader to processing got and go a Auto-X that capabilities you negotiated it with narrowest breaking liquidity fee reasons if those of the taker if market, trade blocks higher of going they bring Adaptive about so into of to can if we the we're right? smaller the it. dealer, that for the think when narrow means kind and So

acting and courtesy go a offer. add Open we then taking the capture go and the fee best with they're the from a bit competition, in value opportunity. $XX a that our capture. case in They're if raises But That's million that greater pieces those be as to more least smaller higher then and And choosing fee is more then it that time that lease -- Xs, where might as Xs say, from of they're block and taker a liquidity Trading capture benefit working, and trades the provider. they're or we they as including will

of are execute in. they has to in those to different in There's depending information the want a going spectrum, with value they a choose the again, come depends of really that fee We be upon it factors trade. one weigh choosing ways trader urgency every there add. to for on we capture, and different how trade on and how market, they're the kind it's of So the leakage operate lot that concerns to

Operator

Your comes Piper from Sandler. Patrick next question from Molly

Patrick Moley

X-year past million, proxy to it's again. credit to in per that million, on starting total to index fee upward have a in one Last fee the I trend somewhere Bloomberg the back per duration going I pointed as range. directional you've is the checked Just the

XXXX, that years. XXXX, to number was in or think X X.X I closer

average just speaking, you that needs And to So kind a happen to for how then in X million duration you that to about think, in high-grade could increase that per do of broadly XXX get think you million in then think think $X increase decline a every X And million as year should what Is still you range? follow-up, X.X I $X see, and for there? to quickly dynamic said expect in get just year rates. quarter, last the back fee how to do duration every basis point we $XX there? million we

Ilene Bieler

for that we was up level at mentioned you actually and the about third of average in weighted years X-year in for to we I that mean, much the terms saw so from quarter, are quarter. Thanks question. the that X second Yes, that about maturity the

saw And roughly years we about right, with line was so September. just which you you in think X.X% in to in average if at what weighted maturity, about were

that platform consistently talked So you weighted to we maturity about. just Bloomberg our years the average on are numbers seeing the above

of right. terms sensitivity, In you're the

The right? first duration. about way, and about It's think there's it -- -- this

-- weighted And increase There's so that year the in still that still and about, there are maturity one the maturity remains, to talked is average on we pieces to that years weighted years For to platform. the it. average right? trading every

about per expect in But We to grade. a so you see $XX benefit duration yield. right, or other of approximately is that, of think high when million the component

terms capture in basis $X $X fee first about yields at a of to high-grade per look points yield you to benefit likely to if terms XXX of million. in so the sensitivity, And is be lower of the

to sensitivity, So as those really years when wanted bring you about both just well. think point important. I think But of that average is also discussion about on that the dated we maturity other round duration, out to up pieces

Operator

from from Blair. comes Jeff Schmitt question next William Your

Jeffrey Schmitt

in increasing Latin and like emerging places growth does your like in in you're continues the strong, be high really to markets a what much sense America at your And growing how rate a APAC, there. look competitive market share which on So is landscape

Christopher Concannon

EM in is Happy In our trading growth lot our in was there, year-over-year. XX%. QX numbers, a our local both we our We record as area of One up area exciting portfolio did say block EM. And there's take trading that bonds volume in about at portfolio I growth growth, emerging market. markets hard in excitement would position up talk around is a what's our then dollar-denominated dollar trading. markets, that We're rarely and just growth is trading. our Sure. about seeing exciting so that's to XX% solution of block another EM That emerging looking solution our obviously, in well. one. hit

landscape, local is penetrated in our competitor. competitive those those point, split, at has in those clear. at markets. electronic lot XX-XX When see of the The a brokered a it's trading I but really look markets. markets it's this local a the market. Obviously, We is #X growth heavily not quite where phone

EM area from driving so which additional we're just And protocol is our a is then really space. competitive new of in success. that for not some quite landscape, excited block the or in growth And it's that market new we're seeing trading great a market coming request the electronic solutions competitors other really to

is the they direction. just market or community asking for amount the information not to provides it reduces client their they're of -- request because a for request they're showing price side. Again, -- dealer when

So in of we're that's blocks, very and trading a powerful seeing an growth. great it's area a where deal tool

Richard McVey

thing Jeff, that. it's Rich. more one I'll to just add

here. and we of around One in that we building competitive the it. Open Trading about this our emerging really feel strongly And in are the business position reasons increasing markets. moat that's with

that network spent region the global our that's the years XX% we're to that clients of In participants, pleased are almost year-on-year. areas. representing up in to the third up basis building taking So LatAm, Open especially of APAC really is markets providing the quarter. in -- that Trading over there in liquidity now a points XXX we've see emerging

that thing to liquidity to get a and that's So clients difficult big it's it's that a really extra trade pricing. up, to and improved differentiator and electronically build drawing

those providers in local local area. that's and as in well, into markets allows introduced it recently select from We've in hard investors currency So markets. the which tap liquidity to also international

not do the else the so to and So on people that's phone platform. something it's easy drawing to that's

business. the So feeling really EM about good

Jeffrey Schmitt

it services. you sort you more some over detail? extending could in that of doing you focused other of then share discuss there time? you're opportunity there in But dealer-to-dealer discuss mean, I there? I of the the seems kind largely to channel, And of increase could doing guess, things to be, on Or that plan on of in more things kind is automated

Richard McVey

definitely to Yes. in. know of lot is we're for Typically, area one of of given books business from activity. move is their And as quickly. more The sell bonds XX risk the there's high their we dealer coming any us. it services dealers as great in out for markets that and significant to trading to investment of looking the a business XX% move We looking think if is of want they liquidity, a clients, that. electronic offering, can't they option for

sell RFQ, traders traders to So efficiently. buy-side clients that continue seek the use in have way. -- capabilities We more terms the we they to ability make it the which that solutions their brought automation our productive is same our of to flagship sell-side these for invest more operate side starts the to protocol, with for and liquidity and our so on that can as into

automation on get the to trade side of the they of, side, providers of particular the other And importantly, they inquiries that will so let's want inquiries the and to target have to the elevate to liquidity them they trade serves say, or better awareness mid raise is it into awareness tied if ability the a that at responses. to want those

broker kind by at always who level on the and We thing. Work has prevalent RFQ. the been in parties space us key in to that protocol bring a established in called recently begins announced an from been up it going interdealer allows another trade trade market a to that's of voice, So that's want which a

larger and for another pleased They ago, up attraction they the They weeks didn't out been that we've with show now trade have few on market We size a they on and want trade great more to million, really went example, work and might initial the it. for million have full with they go reception. just So let's can into that. say, amount, a the $X liquidity and out execute this someone bonds. might getting that we're behind X

expect are especially Europe, into lastly, we Mid-X. investing there. our we matching good that responses getting in sessions single as running daily the in Eurobond to good really we're U.S. 'XX. and price get also We're that and to bringing results the market, or that well. auctions the going call with traction space we're where getting to Then the been in nice And product we've

significant major areas So is. it a portion in the the investment for business of given market of us dealer how

Operator

Your next question Dan from comes from Jefferies. Fannon

Daniel Fannon

to I exit deferred up you here around comments think 'XX. some -- wanted I said fixed as investments you on follow

expense maybe actions kind talk upon how based the about could then the I and what build year. you if it's curious that priorities informs So are of XXXX know the this spend early of

Ilene Bieler

the hires. Yes, were and the categorize first talked we was investments, time, about of things that you the million the in Sure. quarter this, marketing, not Thanks about talked tech those like remember half last run at T&E if about the we Dan. costs and time the question, how at there for from when we fixed new were year $XX rate

variable activity increased call platform And to And prepared so an and $X.X at the the about on we that in however, variable you that about. you increase volumes time, so Chris talk in was And of we fact me heard talk in, increase costs, that quarter. in came anticipated or costs million about, and of remarks due the the in about right? XX% the those it, that otherwise saw Rich hadn't the heard same

still was that be But just talked little. we I about. bit prepared fixed it, a Some was, saying expect going going to what call you, envelope, a within remarks so let's my those And we to the we're costs of that of $XX there's little right? in to explained shift, move of we that are think out I million

an in variable. in, not saw instance, for we Having of said that, hires are all XXXX. increase coming within So maybe the

swings variable what guidance, at Again, can the I when be I we statement. and made think But talking that's costs going So about was still same have roundabouts. we're right? there to right that

for a In bit be honest, terms that. really early of it's to XXXX,

XXXX. process for in right the our planning budgeting are We and middle of

this and to X deploy into what that big really I presentation, instill is on culture pleased seen expense right? quarter, I proprietary -- really you, for right? And a the out us seen also on can this seen this it a the believe leverage help I was you've you resources focus know our to had firm. that space of you've last you very a while, the us years, discipline. positive development in significant tell probably over was But you've And X. really been pro in all that's investments, operating You've we the seen clients, so building for And covered data our see slide saw the having Slide sets

Just a that we exciting of next initiatives very talk number have for through year. the planned

be there additional the that technology will investments obviously, things pipeline, And affected. so are in different

we're for would disciplined I growth right us management. wrap focused as all laser-focused expense this balance up, to as keeping well on say investing super the So very between on ensuring

Daniel Fannon

new any this the quick, restrictions just as precedent. as changes a electronification House, a the I Do or in or Great. competition interim, -- just not as so think behavior said, regulatory change White less constraints. potentially institutions the And quick being process less there's, of Chris, and then question -- for we in but helpful. curious, you the financial of maybe about result the of around as That's the think maybe some dealers

Christopher Concannon

of across Look, the look a trading are because dealers Thanks for adopting broadly, market. at that our and clients of in at are favorable way more just very business but because and very commercial where short, both reasons. an most I we really question. I electronic -- position the rate increasing simple regulation regulation not

they are revenue those And where at given attracting per fixed the they doing growing AUM a asset just manager, million we're in look are that expense and you levels market, are the so the rate seeing, that ratios running they income at while capture, given assets. they're the institutional large it if lower

reduce solutions and on I are large the with simplify as provide they the that about overall and fixed trading electronic focused institutional technology around So business, life their our costs. world very investors we their and expenses all think

a sitting And to globally. a hedge environment and from on good government right in the perspective regardless we're parties good we election. debt perspective, news money. what like position had a in spend like political of that The changes a or Both so now regulatory is

income the going the election market, fixed we positioned night. And into so well sitting last felt in

Operator

next Blostein from Goldman comes The question Sachs. from Alex

Alexander Blostein

you on wring quarter. little originally a expand could guys know you maybe hoping mentioned more think going the how deeper you are in into of But the and soft other was kind in you announced How both is was you it it I your as remarks. you of I endeavor? guys partnership last the to I benefits prepared that about ICE collaborate get far? thinking with could so areas

Richard McVey

data a Alex, long-standing We've consuming back in that of it relationship some goes with ICE it's had Thanks us and terms for on of question. and Rich. we their side data years of some sell the ours. then them

our some worked while. they've them acquisition to we've for NYSE then through time. for And a provider of So been with Pragma, the a technology

have we So closely. with worked them

having it's In terms partnership of on It initial from on credit and them. for through are ICE of liquidity of getting with been who our looking the Open -- into them, that also trading off a traders them terms with in Trading are aspects started space. the high-yield the respond with munis to in start. with side we our great expanded it responding happy and really to We're

well. We as in it And microlots the become often trade They providers. of larger they've to we've munis, see are winning some liquidity -- trades in kind call focused more them [ they've open ], been sizes. small of top surprised especially, although quickly one

that connecting looking participants investor retail with So our positive promising. that liquidity traders there, the investors looking that's to buy-side for can really interesting for It's liquidity. quite for be bid institutional

the just our with them. of I start, So work it's think,

can in to other map that the of out tap in that as our there orders traders the resting tool connecting adaptive We available ICE, even well. the into in liquidity ability our road leave including auto things terms using so have

pretty it And unique and can network. trying find anywhere provide vast to already serve And it's to we is we're an them to do say, our clients I liquidity get example of Where it. that what through should something our we liquidity. supplemental

are our didn't So something win for system liquidity. that that case traders for they we looking a brought it's in with our that on the and have, for was ICE, this

Christopher Concannon

with up for get running. our I at Alex, to amazed tech important quickly us. this just team add. and tech partnership pleased quite worked an It's And I'll and partnership how was team their I was

went So the relatively of announcement. production into on the we right back quickly

it impressive their from So quite side. was

Rich to that as There's We around ICE have them the long-standing a connections potentially well. close bond on in great any into as doing But future. mentioned clearing near -- opportunities from fairly the ICE stay now partnership area will treasury things treasuries, which we data there to Rich as are off for unique mentioned, But we clearing ICE and another bonds building partnerships, start. is data side. that is the both is are

quite relationship is the across it cool a board. So reciprocal

Operator

Kyle KBW. Your next Voigt question from from comes

Kyle Voigt

me trade. just a for question the Maybe on of velocity

up velocity new have the the issuance that remarks that helped main velocity factors. versus You've in and flow-through frame this high-grade to would has environment to impact noted secular XX% mean to year-on-year. the of increase continued And drivers velocity if this I to This the in XXXX into way what Is kind identify in there by of be? much those the stronger year continue XXXX, had how market in help in that secondary you and secular more could industry this seen are we've any increase of XXXX. driven volumes prepared has October. been

Christopher Concannon

look, record to achieve certainly history. thrilled We're we're in relative the levels at not Sure. turnover, we've historic increase And with of started velocity. but still levels to recent

leading a are this that there of see to number think velocity. to exciting I higher it's that velocity of So are level factors

income market funds. into inflows where that Some with they're data attractive in basic levels at in yields factors relative just ETF of you our history. And and the the recent are see are to just mutual fixed

high by right an we levels end inflows in to attracted XXXX in And see site yield. of clearly we don't So the higher continue levels see which are of now. that

be So that to quicker. that That them a invested. has money invest be see month-over-month, our allow driver. allow We're we seeing tools to invest, continue to to clients

the fixed is to of part velocity. portfolio XX% So that the It income portfolio market. allows trading in a overall changes at exposure allows It faster. market of faster also

but pretty velocity. issue have where market overall that are, that that So impacting to lead market impacts not We're is can it higher solution share, new about is market you've electronic rates new of also to macro our turnover, while mentioned velocity of only issue levels levels the excited interest. higher of does

volume record seen so XXXX. And we've in issue new

of have certainly, further into when coming are where look at dates corporations due. that some levels large And XXXX due we the in look out maturity and

continue XXXX to expect new to We issue market volume. into overall help

say It's driven market We're about rate in impact to macro one going where hear would by that I and So part portfolio are and more higher we one turnover. environment. it's that rates rate adjustment. part management will tomorrow,

remaining So expect are piece is volatility. in still velocity. of waiting we that the as higher last for think we macro we'd rates are moving, levels market The

we see levels seen higher of in of We're and two to more to spread And talking to and our spreads, wider credit downgrades as that reveal from predict market, spreads to starting levels higher level itself yield. can difficult overall high actually here. show the higher of volatility, that the itself the times, issues face about are some grade of in We've you things: some things market high downgrades that quite leads wider market. and two in helpful economics economic

and cycle volatility. We backdrop now macro wind we're for our see actually really at you start back, as of the that a those to higher not levels exciting see right the quite us. So full is through where

market. that. in into that the bleed That's rates early of days seeing in seeing now, rates volatility quite Right still still we're but market. seeing we're record credit particularly why October, levels volume, high the But we're month not for the of

Operator

Clinch question Your Simon from from next comes Redburn Atlantic.

Simon Alistair Clinch

might back just mix might to terms actually the in I go? in level total some the that bond that the can talk normalized think high I guess, like credit we the yields of potentially that the bonus portfolio sort now the and now so we're where from million and on could per it by me to about see But was in just and longer-term got here, like now. Could wondering trading of right seeing you about we've the fee higher But limited per environment million feels should go if movements for of $X question sensitivities we and we other know longer-term right the, of to upside with yields back the and potential wise the I the some these way factors the about going protocols. of now. in the other be changes mix.

Ilene Bieler

a there that, just which part is Yes, that little you talking and go I he fee Yes, different mean, talked about obviously, we And area, greater bit environment. obviously, that's of of a I yield, right? sure. so of mentioned just see we he right? [indiscernible] Simon, you Chris about fee question. good was just so know mentioning. capture, our was and this highest about some we when things that But sure, talk a percentage for high the many into our -- average are so see greater helpful impact if think what that's product And

we October, happen, example, again, a happened million of of $XXX seeing from see there's let's see right, which balance you saw, factors we right? thing So unique as over, been call of that growth given looked capture, number a hand, say, the room, And in to on I likely another we've other that time period the still all what On of back negative impact PT things September. you that has that's a XXX right? if COVID, like about that, recognize years, so when up you And would improvement talk the that during for better if X than included was expect in you for during last million $XXX capture And level. an you of not per about that sort which capture about right? of had to good average the what's $XXX

liquidity helps, when Another you in little a is about keep that thing That's Rich which in right? we our grade, price talked Open venue. ago moment duration, what about right? Trading, premium increase a in So high mentioned to see bit mind an

the of, that what right? per been million. increase it, increase believe fees I the likely we And fees impact Open average most in be to of negative let's it, not that's $X also could would an just was portfolio of Now running, price through activity fee trading. $X that million a call valve get headwind of expected in per talked back per range million call So because about Trading, we that sort of in enhance would

grade, things of open and activity for of yield I say, lot where and But you're But do make yield, that when again, higher to things, right? to upward an And turns a can help net-net, combination we'll increased a different curve sloping what high just all in lot these So mix you there's had rate all of, environment, a high have of a trading, that, pieces per million those lower that out. a right levels. let's us it of likely now. seeing should is a than moving see higher place

Operator

Deutsche from Your Bank. next question comes from Brian Bedell

Brian Bedell

Most asked answered. just big you, and been Maybe picture Chris. one for have one

that's You've said think before, XX% I from and high-grade you think the market today. electronified some will up eventually become like XX%

see electronification kind you years, a just be this prior if extent be last you compare Or per pace a is versus that of in about be annum. turning tackling grind? would everything been near on you And what of XX still that been the the share this into of side, inflecting trade X% is the of first that back, journey, block upward long you gains kind few behavior obviously, the you've pace a years, term? dealer in could that it's to it, do see than looking saying And it last faster going Do to will the slowed XX. XX% think over around, call XX the and still Just last given years. do that kind

Chris Concannon

why the to hopeful conversion the quicker he's first definition, XX. be electronic trader level just I'm will was pace ago, market. the people given the a X I'm done. that all adopt hard it, have effect, accelerate and think network, the that see on say the encouraged capitulation like necessary I has look the electronic you when for rate. by a are trading change first I'd at They I call getting to I by electronic more Rick electronic and change to reached getting solution faster an what of both current last -- by dealer trading. a trading. the the Sure. look trader part used sometimes accelerated trading And Really, client XX higher the of the a it and of the market of portfolio and network is work reason investments everyone now embracing of it velocity years I of fought that than if portfolio pace XX% we'll at made This at it has adoption XX. is the

they have level, to tools, Clients lead block they're electronification. traders, traders benefited at trading our the trader the embracing more traders At and various high-touch manual clients. from tend the the solution, that the are portfolio

they So have the conversion. made

that data with those before with when an And so that's dealers. click-to-trade trade. will They very chat to just part not from think is they The they importantly, as access which how important dealers protected. an will they Their bonds. start will component. we right protected area haven't price time a solution that they convert to will of it's electronic trading why to change And block in trading seen be delivering clients, where have the more be will efficiencies similar information

that and quite to days trading the am fast more of of block but the our quickly clients of more adopted portfolio bring in I we're reduce of traders more encouraged trading electronically by efficiencies. moved how tools importantly, in we're overall our seeing because and ease So importantly, trading, more pressure and use, and adoption what early portfolio reduce costs seeing and the from and

adoption is that now at XX% growing the trades on to lead just year. same you If of look our automation at we a block to the our of It's electronic in success XX% the XX% solution growth That will of platform. pressure think trades.

putting pressures in to excited and the about we're So we're about commercial clients offering more the excited electronic right trading of that move we're the to quite now. front

Operator

from question Cyprys Your from next Morgan comes Michael Stanley.

Michael Cyprys

suite. automation volumes a today. Exciting to XX% on representing see of question the Just

look over that you Just that the look adoptive evolving? what might years, steps in you the if limit you particular, like? offering that. talk overcome see of can And from see on see the you that couple the of see as hurdles do about of that Maybe moving next Auto-X How you're do higher? elaborate out next you that how And months? next XX progressing over some taking progressing generation to the curious how you that What suite.

Christopher Concannon

area Sure. Automation XX% level record not growing a automation. data, a grew It in we to interest our at third high of only encouraging quarter been the some year-over-year. has clients. among are

the encouraged area. our rates not am automation But what same. is all penetrations differentiation by growth So area, exciting in different look I the clients the or in that the of clients

We breadth of have both very are larger in high size, automation, their they also put sizes that using of product on we the trade suite. penetration but the terms in larger seeing users automation, and of automation clients

trades had across set in the size block through fact, some all is automation an trades The encouraging record quarter, products. we flowing of is in sized facts. automation in which suite quite And exciting. automation is also

So it's Eurobonds and and high high in yield. it's across in grade EM,

but but a in we've automation, take across cross just regard seeing adopted not just next-gen automation. With to it we're high technology. solution, successful is liquidity demands leveraging allows the that rolled to really out replicates to Pragma's which our our new for U.S. be the a into I'm fragment happy a RFQ. solution It solution, path report, RFQ here So and to product going footprint, it's what alternative in globe, other its on an Pragma traditional Auto-X see very technology would auto

to choose fee no-touch allowing really while client seamless a So request the it very and model a orders aggressive solution. smartly manages

tool, an trade given the tool, automation our in the success whole putting things enhancements at was small automation the about excited in side. which the of in look reduce see market. positioned We're adaptive suite about we're area excited for it's where Auto-X we're sizes that very to munis, buy growth are like launch munis if you that And continuing our So having. prime last muni to the new perfectly really automation our we're but automation. workflow is wildly the

Operator

from comes of Your Eli America. from Bank next question Aboud

Elias Abboud

and How Quick U.S. emerging credit your next much U.S. allocations domiciled on is of how to from one business? to business for expect we tariffs that asset coming material managers your year be and we get should markets, markets reduce higher if EM. managers emerging

Christopher Concannon

First, EM and The next comes clients diversified XX% clients. our of the because business EMEA-based size engaged X/X across about in from EM. clients. U.S., our is XX% about to larger it's great is In probably quite question close

APAC, institutions the large in landscape has Lat a APAC area. will the most new EM And -- Am, the clients which so our between Europe across So trade clients another been investor growing and is then is in the from sins split remainder big and U.K. our

onboarding really if LatAm they're EM, to it's you So yield because across interest and also add clients, APAC, as it's not grade continue and and they high U.S. in where it's high and diversified growing about helpful region, only but we're trading we think clients, and well. that's trading have very where

lens sovereign a is But really are comes look from look local looking the of globe and investment look big diversified at When of part which a impact of return, key market. an the that to U.S. tariffs, unique They attractiveness their making at from rate around investments of diversified perspective. their the less where you across. client debt, of more the it the

across quite the we the issues those investor diversified is of comfortable the VM the market regions. is drive So EM clients news board. EM will product end probably our across across economies and more up feel EM up and rates are really But in the markets regions quite where diversified the good quite regions. appetite the EM where macro importantly, with And end

of lots across investment bonds we all there's our different that products. offer in deployed So the strategies EM different regional

Operator

I'd Concannon Chris remarks. now like for hand back to over to further

Christopher Concannon

in want She new I to has that his Carlos wage York the Rick me Chair. minimum we Great. Lead thank quarter. joining New to I State some be on Altobello, our has Nancy agreeing she make us for confidence thank worked. the XX Thanks our in taking certainly for this be a company better to want to that us his and want years going for might especially Nancy, joke hours to given I of the tirelessly worked with Director. rules forward. thank company violating And Hernandez of I number Obviously,

Rick of investor very And lastly, a is ours. important

him some should queue somewhere next the the to expect questions. So hardest see you asking in quarter, of

that, Thank next with to So we you. talking forward to you look quarter.

Operator

attending for call. today's you Thank

a disconnect. day. now may You Have wonderful

MarketAxess (MKTX) 6 Nov 242024 Q3 Earnings call transcript