MarketAxess 4Q25 Sneak Peek: ADV Cools, Eurobonds Cushion the Fall

Core Insights - MarketAxess Holdings Inc. reported a total trading average daily volume (ADV) of $37.9 billion in Q4 2025, reflecting an 8% year-over-year decrease, primarily due to declines in U.S. Government Bond Rates and other government bond rates [1][8] - Despite the overall decline in ADV, the electronic trading platform facilitated $958.5 billion in total credit trading volume, marking an 11% year-over-year growth [1][8] Trading Performance - Eurobonds and Emerging Markets credit businesses experienced significant growth, with ADV increasing by 20% and 15% year-over-year, respectively [2] - High-grade markets saw a 6% increase in ADV compared to the previous year, while rates trading in agency and other government bonds fell by 43%, and U.S. government bonds decreased by 16%, leading to an overall 17% decline in rates trading [2] Transaction Fees and Market Share - Total credit average variable transaction fees per million (FPM) declined by 8% year-over-year, while total rates FPM grew by 10% year-over-year [3] - MarketAxess' estimated market share of U.S. credit portfolio trading rose to 20.6%, up from 16.2% a year ago [3] Strategic Initiatives - The company is expanding its dealer-initiated and workflow tools, diversifying beyond core fixed-income trading through enhanced protocol solutions and electronic execution offerings [4] - In June 2025, MarketAxess launched the first fully electronic trading workflow for Indian Government Bonds accessible to Foreign Portfolio Investors, and now offers electronic access to the entire JP Morgan Global Bond Index – Emerging Markets [4] Peer Comparison - CME Group is expanding through global growth initiatives and product innovation, including the launch of Spot-Quoted XRP and SOL futures [5] - Intercontinental Exchange, Inc. is also expanding through strategic investments and technological innovations, with a focus on digitization in the U.S. residential mortgage industry [6] Valuation and Earnings Estimates - MarketAxess shares have declined by 21.9% over the past year, contrasting with the industry's growth of 37.7% [7] - The company trades at a forward price-to-earnings ratio of 21.32X, which is higher than the industry average, and carries a Value Score of D [10] - The Zacks Consensus Estimate for MarketAxess' Q4 2025 earnings indicates a 1.2% decline year-over-year, while the full-year earnings consensus predicts a 1.9% increase from the previous year [11]