Financial Data and Key Metrics Changes - Revenue for the third quarter was $209 million, reflecting a slight increase from the prior year, with a 1% growth overall [16] - Total commission revenue remained flat compared to the prior year, while services revenue increased by 9% to a record $29 million [16][17] - The effective tax rate rose to 27.1%, up from 23% in the prior year, due to increased accrual for uncertain tax positions [17] Business Line Data and Key Metrics Changes - U.S. credit commission revenue decreased by 2% to $165 million, with strong growth in emerging markets (11%) and Eurobonds (9%) offsetting declines in U.S. high-grade (9%) and flat growth in U.S. high-yield [18] - Block trading ADV across U.S. credit, emerging markets, and Eurobonds increased by 23% year-to-date, with cumulative block trading volume reaching approximately $12 billion [11] - Portfolio trading ADV year-to-date is running 50% above the prior year, with U.S. credit portfolio trading market share over 18%, up 210 basis points [11] Market Data and Key Metrics Changes - 36% of global credit trading volume is now driven by clients outside of North America, up from 29% in 2020 [9] - In October, U.S. high-yield ADV growth was strong at 9%, despite a tough comparison to the prior year due to heightened activity before the U.S. presidential election [8] - The average size of non-block trades is decreasing, while the average block size is increasing, with blocks greater than or equal to $5 million representing approximately 45% of trade volume in U.S. high-grade [12] Company Strategy and Development Direction - The company is focused on providing a protocol-agnostic platform that utilizes data and analytics to assist clients in choosing the appropriate trading protocol [4][5] - Investments are being made in technology transformation, portfolio trading, dealer-to-dealer business, and automation tools to enhance competitive positioning [27][28] - The introduction of closing auctions to the fixed income market is aimed at providing an end-of-day liquidity solution and improving market organization [6][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by limited volatility and tight spreads, impacting revenue growth in U.S. credit [5][15] - There is optimism regarding the potential for higher revenue growth in the coming quarters due to ongoing investments and technology enhancements [16][21] - The current market environment is showing signs of increased volatility, which could enhance the attractiveness of the company's all-to-all liquidity solutions [45][46] Other Important Information - The company generated $385 million in free cash flow over the trailing 12 months and repurchased 595,000 shares year-to-date for a total of $120 million [20] - Total operating expenses increased by only 3%, driven by higher employee compensation and technology costs, while headcount rose by 2% [19] Q&A Session Summary Question: Can you talk about the pipeline to add additional dealers for MIDEX and how it's interacting with portfolio trading? - The MIDEX solution is seeing good early volumes, and plans are in place to increase the number of sessions to enhance dealer participation [24][25] Question: What actions are being taken to deliver faster technology enhancements and address competition? - The company is investing in multiple technology areas to address competitive dynamics and enhance overall service offerings [27][28] Question: Can you provide insights on the closing auctions and their potential impact on market share? - The closing auction is designed to support the growing indexation of the fixed income market, with significant partnerships established to enhance liquidity [33][34] Question: How does the company plan to grow in a low-volatility environment? - The strategy includes focusing on portfolio trading and dealer-to-dealer initiatives, which are expected to perform well even in low-volatility conditions [50][51] Question: What are the expectations for the block trading market and its growth? - The block market is seen as a significant opportunity, with recent growth rates indicating positive momentum, particularly in U.S. investment-grade [41][42]

3Q25 Earnings Conference Call November 7, 2025 2 3Q25 highlights¹ | | • | 1% increase in revenue to $209 million; 10% growth in revenue outside U.S. credit | | --- | --- | --- | | FINANCIAL PERFORMANCE | • | 9% increase in services revenue2 to a record $29 million | | | • | 3% decline in earnings per share to $1.84 | | | • | $385 million in TTM free cash flow3 generation | | | • | 14% increase in ADV across credit products (ex. U.S. credit) | | | • | Solid progress with our new initiatives across our three ...

Group 1: Earnings Performance - MarketAxess reported quarterly earnings of $1.84 per share, exceeding the Zacks Consensus Estimate of $1.69 per share, but down from $1.90 per share a year ago, representing an earnings surprise of +8.88% [1] - The company posted revenues of $208.82 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.17%, compared to $206.71 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - MarketAxess shares have declined approximately 26.7% since the beginning of the year, contrasting with the S&P 500's gain of 14.3% [3] - The current consensus EPS estimate for the upcoming quarter is $1.75 on revenues of $214.94 million, and for the current fiscal year, it is $7.24 on revenues of $852.89 million [7] Group 3: Industry Context - The Financial - Investment Bank industry, to which MarketAxess belongs, is currently ranked in the top 11% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Total revenues for Q3 2025 were $208.8 million, a 1% increase year-over-year, including approximately $3.5 million from RFQ-hub and a $1.3 million increase from foreign currency fluctuations[10]. - Net income for Q3 2025 was $68 million, a 4% decrease from the previous quarter and a 4% decrease year-over-year[7]. - Diluted earnings per share (EPS) for Q3 2025 was $1.84, down 3% compared to Q3 2024[8]. - Record services revenue reached $28.7 million, a 9% increase year-over-year[15]. - Total revenues for Q3 2025 reached $208.82 million, a slight increase of 1% compared to $206.71 million in Q3 2024[30]. - Commission revenue for Q3 2025 was $180.17 million, showing a marginal decrease of less than 1% from $180.39 million in Q3 2024[31]. - Operating income for Q3 2025 was $85.58 million, a decrease of 2% from $87.06 million in Q3 2024[30]. - Net income available for common stockholders in Q3 2025 was $68.18 million, down 5% from $71.49 million in Q3 2024[30]. - EBITDA for Q3 2025 was $107,622 thousand, compared to $105,018 thousand in Q3 2024, reflecting a slight increase[36]. Expenses and Costs - Total expenses for Q3 2025 were $123.2 million, a 3% increase from the prior year, including $2.9 million in RFQ-hub expenses[19]. - Total credit commission revenue decreased by $3.5 million, or 2%, compared to the prior year, driven by a 7% decrease in U.S. credit commission revenue[12]. - Employee compensation and benefits expenses increased by 3% to $59.98 million in Q3 2025, compared to $58.43 million in Q3 2024[30]. - The company reported a provision for income taxes of $25.37 million in Q3 2025, an increase of 18% from $21.41 million in Q3 2024[30]. - The effective tax rate increased to 27.1% from 23.0% in the prior year, primarily due to increased accruals for uncertain tax positions[22]. Trading and Volume - U.S. credit portfolio trading average daily volume (ADV) increased 43% year-to-date compared to full-year 2024, with market share rising approximately 210 basis points[5]. - Block trading ADV in U.S. credit is 19% above full-year 2024 levels, with a 10% growth in the client-initiated channel[5]. - Total trading volume for Q3 2025 was $2,488,457 million, a decrease of 4% compared to Q3 2024's $2,595,888 million[32]. - Total credit trading volume increased by 3% in Q3 2025 to $932,426 million from $905,290 million in Q3 2024[32]. - U.S. government bonds trading volume decreased by 9% in Q3 2025 to $1,480,317 million compared to $1,619,337 million in Q3 2024[32]. - High-yield credit trading volume increased by 5% in Q3 2025 to $86,228 million from $81,761 million in Q3 2024[32]. Shareholder Actions - The company repurchased 239,026 shares at a cost of $45.3 million during Q3 2025, with a total of $105 million remaining under the share repurchase authorization[22]. - Cash dividends declared per common share increased to $0.76 in Q3 2025, up from $0.74 in Q3 2024[30]. Assets and Liabilities - Total assets as of September 30, 2025, were $2,013,908 thousand, an increase from $1,789,216 thousand as of December 31, 2024[34]. - Total liabilities increased to $623,725 thousand as of September 30, 2025, from $400,556 thousand as of December 31, 2024[34]. - Total stockholders' equity as of September 30, 2025, was $1,378,450 thousand, a slight decrease from $1,388,660 thousand as of December 31, 2024[34]. Cash Flow - Net cash provided by operating activities for Q3 2025 was $90,164,000, a decrease from $103,714,000 in Q2 2025 and $95,089,000 in Q3 2024[38]. - Free cash flow for Q3 2025 was $111,776,000, slightly down from $112,985,000 in Q2 2025 but up from $86,285,000 in Q3 2024[38]. - Year-to-date (YTD) free cash flow for 2025 reached $271,828,000, compared to $214,816,000 in YTD 2024, indicating a 26.5% increase[38]. Other Financial Metrics - The average variable transaction fee per million for credit decreased by 6% to $140 in Q3 2025, compared to $149 in Q3 2024[31]. - The net change in trading investments for Q3 2025 was $264,000, contrasting with a negative change of $(66,000) in Q2 2025[38]. - The net change in fail-to deliver/receive from broker-dealers, clearing organizations, and customers was $34,338,000 in Q3 2025, up from $22,053,000 in Q2 2025[38]. - Purchases of furniture, equipment, and leasehold improvements totaled $(1,496,000) in Q3 2025, compared to $(1,206,000) in Q2 2025[38]. - Capitalization of software development costs was $(11,494,000) in Q3 2025, consistent with $(11,510,000) in Q2 2025[38].

Core Insights - MarketAxess Holdings Inc. reported total revenues of $208.8 million for Q3 2025, reflecting a 1% increase compared to the previous year, which included an approximate $1.3 million increase due to foreign currency fluctuations [1] Financial Performance - Total commission revenue reached $180.2 million, consistent with previous performance [1]

Core Insights - MarketAxess Holdings Inc. is scheduled to report its third-quarter 2025 results on November 7, 2025, with earnings estimated at $1.69 per share and revenues of $206.42 million [1] Earnings Estimates - Third-quarter earnings estimates have been revised downward by 18 cents over the past 60 days, indicating an 11.1% decrease from the previous year [2] - The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year decline of 0.1% [2] Full-Year Projections - For the full year 2025, the revenue estimate is $852.89 million, reflecting a 4.4% year-over-year increase, while the earnings per share estimate is $7.24, indicating a 0.6% decline year-over-year [3] Historical Performance - MarketAxess has a strong track record of exceeding earnings estimates, having beaten the consensus in each of the last four quarters with an average surprise of 3% [4] Earnings Prediction Model - The current model does not predict an earnings beat for MarketAxess, as it has an Earnings ESP of 0.00% and a Zacks Rank of 5 (Strong Sell) [5] Factors Influencing Q3 Results - Lower transaction fees and increased expenses may counterbalance gains from Eurobond and Emerging Markets trading growth [8] - The total trading volume is expected to decrease by 0.4% year-over-year, with U.S. high-grade trading volume projected to decline by 3% [9] Trading Volume Insights - Eurobonds trading volumes are estimated to grow by 16.6% year-over-year, while Emerging Markets are expected to see a 12.6% increase [10] Revenue and Fee Estimates - The consensus estimate for commissions is $178.6 million, indicating a 1% decline from the prior year, with a 7% year-over-year fall in average variable transaction fees per million [11] - Total expenses are projected to rise to approximately $126.4 million, reflecting a 5.6% year-over-year increase [12] Information Services Revenue - Higher information services revenues are anticipated, with a consensus estimate of $13.4 million, indicating a 3.5% rise from the previous year [13]

Core Insights - MarketAxess Holdings Inc. is launching Opening and Closing Auctions, a standardized market-wide auction protocol aimed at enhancing price discovery and providing unique liquidity for trading U.S. credit [1] Company Developments - The new auction protocol is designed to improve the trading environment for fixed income securities [1] - MarketAxess consulted a diverse group of buy-side and sell-side participants during the development of the Opening & Closing Auctions [1]

MarketAxess Holdings is seeking to bring a feature of fast-twitch equity markets to the relatively sedate $9 trillion universe of corporate bonds: the daily closing auction. https://t.co/8sM1sTNzio ...

Core Insights - MarketAxess Holdings Inc. is valued at $6.4 billion and operates an electronic trading platform for institutional investors and broker-dealer companies globally, focusing on liquidity, execution quality, and cost savings in fixed-income markets [1] Financial Performance - MarketAxess is expected to report a non-GAAP profit of $1.70 per share for Q3, a decrease of 10.5% from $1.90 in the same quarter last year, but has consistently surpassed Wall Street's bottom-line estimates for the past four quarters [2] - For the full fiscal year 2025, adjusted EPS is projected at $7.27, slightly down from $7.28 in fiscal 2024, with a forecasted increase of 9.9% to $7.99 per share in fiscal 2026 [3] Stock Performance - MKTX stock has declined by 40.8% over the past 52 weeks, underperforming the Financial Select Sector SPDR Fund's 10.9% gains and the S&P 500 Index's 14.8% returns during the same period [4] - Following the Q2 results announcement, MKTX stock prices fell by 10.1%, despite reporting a 12% increase in commissions revenues to $191.8 million and a 10.9% year-over-year revenue growth to $219.5 million, which exceeded expectations [5] Analyst Ratings - Analysts maintain a consensus "Moderate Buy" rating for MKTX, with 16 analysts providing insights: five "Strong Buys," one "Moderate Buy," nine "Holds," and one "Moderate Sell." The mean price target of $203 indicates an 18.8% upside potential from current levels [6]

Core Insights - MarketAxess Holdings Inc. (MKTX) reported a total trading average daily volume (ADV) of $38.8 billion in Q3 2025, reflecting a 4% year-over-year decrease due to declines in U.S. High-Grade Credit and U.S. Government Bonds [1][9] - The electronic trading platform facilitated over $932.4 billion in total credit trading volume during the same period [1] Trading Performance - Eurobonds and Emerging markets credit businesses experienced significant growth, with ADV increasing by 16% and 14% year-over-year, respectively, driven by new client-initiated and dealer-initiated trading initiatives [2] - High-grade markets saw a 7% decrease in ADV compared to the previous year, while agency and other government bonds experienced a 6% growth in ADV, with U.S. government bonds declining by 9%, leading to an overall 8% decrease in total rates trading [3] Transaction Fees and Market Share - Total credit average variable transaction fees per million (FPM) declined by 6% year-over-year due to protocol mix, while total rates fees remained stable [4] - MarketAxess' estimated market share of U.S. credit portfolio trading decreased to 19.1%, down from 20% a year ago [4] Strategic Initiatives - The company is expanding its dealer business and rolling out new tools for sell-side traders, diversifying beyond core fixed-income trading [5] - In June 2025, MarketAxess launched the first fully electronic trading workflow for Indian Government Bonds, accessible to Foreign Portfolio Investors [5] Peer Comparison - CME Group is expanding through global growth and product innovation, planning to offer 24/7 trading for cryptocurrency futures and options [6] - Intercontinental Exchange, Inc. (ICE) is focusing on sustainability and emerging markets, with plans to launch ICE GreenTrac targeting global carbon markets [7] Valuation and Earnings Estimates - MarketAxess shares have declined by 25.7% year-to-date, contrasting with the industry's growth of 28.3% [8][9] - The company trades at a forward price-to-earnings ratio of 20.78X, which is higher than the industry average, and carries a Value Score of D [11] - The Zacks Consensus Estimate for Q3 2025 earnings indicates a 2.6% decline year-over-year, while the full-year earnings consensus predicts a 2.2% increase [12]