Financial Data and Key Metrics Changes - In 2025, the company generated record revenue of $846 million, reflecting a strong 10% growth in product areas outside U.S. credit [6][7] - The company reported annual free cash flow generation of $347 million, with a disciplined approach to expense management resulting in a 5% growth in non-GAAP expenses [8][21] - The diluted earnings per share for the fourth quarter were $2.51, or $1.68 per share excluding notable items [18] Business Line Data and Key Metrics Changes - Block trading ADV increased by 29%, with record block trading ADV in emerging markets [7][12] - U.S. high-yield portfolio trading market share increased by 270 basis points in 2025, with a 126% increase in total portfolio trading ADV in January 2026 [13] - Dealer-initiated ADV grew by 33% for the year, with over $3 billion in trading volume in the new Mid-X protocol [13][15] Market Data and Key Metrics Changes - In January, total credit ADV reached record levels, driven by strong growth across all credit product areas, with emerging markets business ADV up 50% [9] - U.S. high-grade turnover increased by 95% in January, marking levels not seen since approximately 2011 [9] - The company’s estimated market share in U.S. high-yield portfolio trading increased significantly in the second half of 2025 [16] Company Strategy and Development Direction - The company is focused on enhancing its global network and liquidity through investments in multi-protocol solutions for both buy-side and sell-side [5] - A clear technology and product roadmap has been established to achieve three-year targets announced in December [6] - The company aims to capture the expanding e-trading opportunity, particularly in the block market, which remains under-penetrated [17][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to higher levels of revenue growth in U.S. credit, supported by new initiatives and strategic investments [25] - The company is optimistic about the growth potential in emerging markets, with electronic penetration still low [49] - Management acknowledged the need to address U.S. credit market share while highlighting the positive trends in other areas [11][25] Other Important Information - The company returned a total of $474 million to investors through share repurchases and dividends in 2025 [8][22] - The board of directors welcomed two new members with extensive fintech experience [10] - The company expects total services revenue to grow in the mid-single-digit percentage range in 2026 [23] Q&A Session Summary Question: About block trading strength and market dynamics - Management noted a 24% increase in block trading in 2025 and a 56% increase in January, attributing growth to investments in key initiatives and protocols [27][28] Question: On average fee rate in credit and competitive pressures - Management discussed the impact of product mix and protocol selection on fee per million, indicating that while fee rates may decline, overall revenue growth remains a priority [36][39] Question: Update on emerging markets and competitive dynamics - Management highlighted strong growth in emerging markets, with electronic penetration still low, presenting a significant opportunity [46][49] Question: Capital return strategy and share repurchases - Management confirmed ongoing capital return plans, including a recent increase in dividends and remaining authorization for share repurchases [61][62] Question: Electronification slowdown in U.S. credit and capital allocation - Management emphasized the importance of investing in block solutions across product sets, indicating high returns on such investments [73][75] Question: AI ambitions and automation potential - Management discussed ongoing investments in AI and the potential for automating client flows, emphasizing the growing bond market driven by AI funding needs [81][82]

Financial Data and Key Metrics Changes - In 2025, the company generated record revenue of $846 million, reflecting a strong 10% growth in product areas outside US credit [5] - Record total revenue was supported by record total ADV, leading to record commission revenue and services revenue, resulting in annual free cash flow generation of $347 million [5][19] - The company reported a 3.5% revenue growth to $209 million in Q4 2025, with diluted earnings per share of $2.51 [16] Business Line Data and Key Metrics Changes - Block trading ADV increased by 29% in 2025, with record block trading ADV in emerging markets [5] - U.S. credit portfolio trading market share increased by 270 basis points in 2025, with a 126% increase in total portfolio trading ADV in January 2026 [11] - Dealer-initiated ADV grew by 33% for the year, with over $3 billion in trading volume in the new MIDX protocol [11] Market Data and Key Metrics Changes - In January 2026, total credit ADV reached record levels, driven by a 50% increase in emerging markets [7] - U.S. high-grade turnover increased by 95% in January, marking levels not seen since 2011 [7] - The company’s estimated market share in U.S. high-yield portfolio trading increased significantly in the second half of 2025 [13] Company Strategy and Development Direction - The company aims to enhance its market access advantage through investments in technology and product development, focusing on multi-protocol solutions [4] - A clear three-year plan has been established to achieve growth targets, with a focus on executing new initiatives in 2026 [5] - The company is addressing U.S. credit market share challenges with a detailed plan embedded in its three-year targets [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to higher levels of revenue growth in U.S. credit, supported by ongoing investments and strategic initiatives [23] - The company is optimistic about capturing expanding e-trading opportunities, particularly in the block market [15] - Management noted that while electronification in U.S. credit has plateaued, there remains significant growth potential in emerging markets [70] Other Important Information - The company returned a total of $474 million to investors through share repurchases and dividends in 2025 [19] - The board of directors welcomed two new members with extensive fintech experience [8] - The company plans to invest $65 million to $75 million in capital expenditures for technology enhancements in 2026 [22] Q&A Session Summary Question: Strength in block trading - Management highlighted a 24% increase in block trading in 2025 and a 56% increase in January 2026, driven by various protocols and increased liquidity [25][26] Question: Average fee rate in credit - Management discussed the impact of protocol mix and market conditions on fee per million, emphasizing the importance of growing incremental revenue despite lower fees [34][35] Question: Update on emerging markets - Management noted significant growth in emerging markets, with a record ADV of over $5 billion in January 2026, and highlighted the low electronic penetration as a major opportunity [46][47] Question: Capital return strategy - Management confirmed ongoing capital return plans, including share repurchases and increased dividends, while also focusing on debt repayment [61][62] Question: Electronification slowdown in U.S. credit - Management expressed confidence in the potential for re-acceleration in electronification, particularly in the block market, and discussed ongoing investments in technology [66][70] Question: Artificial intelligence ambitions - Management outlined plans to leverage AI for increased productivity and transparency in trading, emphasizing the growing dataset as a key asset [80][82]

Core Insights - MarketAxess reported revenue of $209.41 million for the quarter ended December 2025, a year-over-year increase of 3.5% [1] - The EPS for the same period was $1.68, down from $1.73 a year ago, with a surprise of +1.45% compared to the consensus estimate of $1.66 [1] Financial Performance - The reported revenue fell short of the Zacks Consensus Estimate of $212.7 million, resulting in a surprise of -1.55% [1] - Average Variable Transaction Fee Per Million for Credit was $138.00, slightly below the average estimate of $138.67 [4] - Total Average Daily Volume was $37.89 billion, compared to the average estimate of $39.35 billion [4] Revenue Breakdown - Commissions revenue was $181.34 million, compared to the average estimate of $183 million, reflecting a year-over-year change of +3.8% [4] - Post-trade services revenue was $11.03 million, slightly below the average estimate of $11.36 million, with a year-over-year change of +0.5% [4] - Information services revenue was $13.45 million, compared to the average estimate of $13.95 million, representing a year-over-year change of +2.3% [4] Commission Revenue Details - Total variable transaction fees for Rates were $6.7 million, below the average estimate of $6.84 million, showing a year-over-year decline of -7.8% [4] - Total variable transaction fees for Credit were $132.36 million, compared to the average estimate of $134.06 million, reflecting a year-over-year increase of +2.3% [4] - Total fixed distribution fees were $32.9 million, slightly below the average estimate of $33.97 million, with no year-over-year change [4] Stock Performance - MarketAxess shares returned -5.2% over the past month, while the Zacks S&P 500 composite changed by -1.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

4Q & FY 2025 Earnings Conference Call February 6, 2026 Update on our strategy & business | • Record revenue of $846 million; | 10% growth in revenue outside U.S. credit | | --- | --- | | • Record total ADV, record commission revenue and record services revenue2 FINANCIAL | | | PERFORMANCE • $6.64 earnings per share; $7.39 per share, or 2% increase, excluding notable items3 | | | • Record $347 million in free cash flow4 generation • 10% increase in total credit ADV, 16% growth in credit ADV outside U.S. cred ...

Core Viewpoint - MarketAxess reported quarterly earnings of $1.68 per share, exceeding the Zacks Consensus Estimate of $1.66 per share, but down from $1.73 per share a year ago, indicating an earnings surprise of +1.45% [1] Financial Performance - The company posted revenues of $209.41 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 1.55%, compared to $202.4 million in the same quarter last year [2] - Over the last four quarters, MarketAxess has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance - MarketAxess shares have declined approximately 10.2% since the beginning of the year, while the S&P 500 has only decreased by 0.7% [3] - The current Zacks Rank for MarketAxess is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $2.06 on revenues of $229.07 million, and for the current fiscal year, it is $8.08 on revenues of $914.6 million [7] - The estimate revisions trend for MarketAxess was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Financial - Investment Bank industry, to which MarketAxess belongs, is currently in the top 17% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - The performance of MarketAxess may be influenced by the overall industry outlook [8]

Revenue and Trading Performance - Record total revenue of $846 million in 2025, a 4% increase year-over-year, with a 10% increase in revenue outside U.S. credit products[1][6][8] - Block trading average daily volume (ADV) increased by 24% to a record $5 billion in 2025[1][6][9] - Portfolio trading ADV rose by 48% to a record $1.4 billion, with U.S. credit portfolio trading ADV increasing by 43%[1][6][9] - Dealer-initiated ADV increased by 33% to $1.7 billion, including a 29% increase in dealer request for quote (RFQ) ADV[1][6][9] - Total revenues for Q4 2025 reached $209.40 million, a 4% increase from $202.40 million in Q4 2024[34] - Commission revenue for Q4 2025 was $181.33 million, up 4% from $174.76 million in Q4 2024[35] - Total trading volume for Q4 2025 was $2,355.10 million, a decrease of 8% compared to $2,549.92 million in Q4 2024[36] - Average daily trading volume (ADV) for credit in Q4 2025 was 15,381 million, an increase of 11% from 13,883 million in Q4 2024[36] Expenses and Income - Total expenses for 2025 were $504 million, a 6% increase year-over-year, including $4.5 million from foreign currency fluctuations[1][9][21] - Total expenses for Q4 2025 were $133.39 million, an increase of 9% from $122.42 million in Q4 2024[34] - Other income decreased to $3.8 million from $4.6 million due to lower interest income and higher interest expense[24] - Net income for Q4 2025 was $92.39 million, compared to $65.14 million in Q4 2024, reflecting a significant increase[34] - Full year net income for FY 2025 was $246,912 thousand, a decrease of 9.9% compared to $274,181 thousand in FY 2024[39] - The company reported a 28% increase in total other income for the year, reaching $25.16 million compared to $19.68 million in 2024[34] Earnings and Shareholder Returns - Diluted earnings per share (EPS) for 2025 was $6.64, down 9% from the previous year[1][9][8] - The company declared cash dividends of $3.04 per common share for the year, up from $2.96 in the previous year[34] - The Board authorized a share repurchase of up to $400.0 million, with $300.0 million executed through an ASR agreement, resulting in the repurchase of 1,980,715 shares at a cost of $360.0 million for the full year 2025[24] - A quarterly cash dividend of $0.78 per share was declared, payable on March 4, 2026[24] Tax and Financial Metrics - The effective tax rate for 2025 was 15.8%, with an effective tax rate of 23.4% excluding notable items[1][8][21] - The effective tax rate was (15.8%), down from 23.0% in the prior year, with a notable items-adjusted rate of 23.4%[24] - The effective tax rate for FY 2025 was 32.7%, compared to 24.0% in FY 2024, indicating an increase in the tax burden[39] - The effective tax rate for 2026 is expected to be between 24.0% and 26.0%[28] Assets and Liabilities - Cash and cash equivalents totaled $678.9 million as of December 31, 2025, down from $698.6 million a year earlier, with $220.0 million in borrowings outstanding[24] - Total assets increased to $1,808,606 thousand as of December 31, 2025, compared to $1,789,216 thousand in 2024, reflecting a growth of 1.1%[38] - Total liabilities rose significantly to $650,347 thousand in 2025 from $400,556 thousand in 2024, marking a 62.2% increase[38] - Operating lease liabilities decreased to $64,938 thousand in 2025 from $72,654 thousand in 2024, a reduction of 10.4%[38] - Goodwill increased to $283,667 thousand in 2025 from $236,706 thousand in 2024, representing a growth of 19.8%[38] Future Projections - Services revenue is expected to grow in the mid-single digits percentage range for the full year 2026[28] - Total expenses, excluding notable items, are projected to be between $530.0 million and $545.0 million, indicating an 8% increase based on the midpoint[28] - Capital expenditures for new protocols and trading platform enhancements are anticipated to be in the range of $65.0 million to $75.0 million[28] Non-GAAP Measures - The Company utilizes non-GAAP financial measures, including EBITDA and free cash flow, to provide additional insights into its operating results[26] - EBITDA for Q4 2025 was $94,908 thousand, while FY 2025 EBITDA totaled $420,784 thousand, indicating a year-over-year increase from $409,925 thousand in FY 2024[40] - Free cash flow for Q4 2025 was $75,056 thousand, with a full year total of $346,884 thousand, compared to $328,183 thousand in FY 2024, showing a growth of 5.2%[42]

Core Insights - MarketAxess Holdings Inc. reported total revenues of $209.4 million for Q4 2025, reflecting a 3.5% increase compared to the previous year, which included an approximate $1.6 million contribution from foreign currency fluctuations [1]. Financial Highlights - Total revenues for Q4 2025 reached $209.4 million, marking a 3.5% year-over-year increase [1]. - The revenue growth was partially driven by foreign currency fluctuations, contributing around $1.6 million to the total [1]. Operational Highlights - The company has made strong progress with new initiatives across its operations, indicating a focus on innovation and expansion within the fixed-income securities trading platform [1].

Core Insights - MarketAxess Holdings Inc. reported a 28% year-over-year growth in total credit with an average daily volume (ADV) of $18.6 billion for January 2026 [1] - The company also experienced a 19% growth in total rates during the same period [1] - In the credit segment, the ADV for emerging markets surged by 50% [1]

Core Viewpoint - Nomura Holdings (NMR) is currently viewed as a more attractive investment option compared to MarketAxess (MKTX) based on valuation metrics and earnings outlook [1][6]. Valuation Metrics - NMR has a forward P/E ratio of 10.51, significantly lower than MKTX's forward P/E of 20.59 [5]. - The PEG ratio for NMR is 2.03, while MKTX has a PEG ratio of 4.20, indicating NMR's better valuation relative to its expected earnings growth [5]. - NMR's P/B ratio stands at 1.02, compared to MKTX's P/B of 4.51, further highlighting NMR's superior valuation [6]. Analyst Outlook - NMR holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while MKTX has a Zacks Rank of 3 (Hold) [3]. - The solid earnings outlook for NMR contributes to its higher Value grade of A, in contrast to MKTX's Value grade of D [6].

Core Viewpoint - MarketAxess (MKTX) is expected to report a year-over-year decline in earnings despite higher revenues for the quarter ended December 2025, with the consensus outlook being crucial for assessing the company's earnings picture [1] Earnings Expectations - The consensus EPS estimate for MarketAxess is $1.66 per share, reflecting a year-over-year decrease of 4.1% [3] - Revenues are anticipated to reach $212.7 million, which is a 5.1% increase from the same quarter last year [3] Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 0.06%, indicating a reassessment by analysts [4] - The Most Accurate Estimate for MarketAxess is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.05% [12] Earnings Surprise Potential - MarketAxess has a Zacks Rank of 3, suggesting a moderate outlook, but the positive Earnings ESP indicates a likelihood of beating the consensus EPS estimate [12] - The company has consistently beaten consensus EPS estimates in the past four quarters, with a notable surprise of +8.88% in the last reported quarter [13][14] Industry Context - Tradeweb Markets (TW), another player in the Zacks Financial - Investment Bank industry, is expected to post earnings of $0.85 per share for the same quarter, indicating a year-over-year increase of 11.8% [18] - Tradeweb's revenues are projected to be $516.57 million, up 11.5% from the previous year, but it has a negative Earnings ESP of -0.32% [19][20]