MarketAxess(US:MKTX)2025-09-09 17:02MarketAxess FY Conference Summary Company Overview - Company: MarketAxess (NasdaqGS: MKTX) - Event: Barclays' 23rd Global Financial Services Conference - Date: September 09, 2025 Key Points Industry and Market Dynamics - Block Trading Business: MarketAxess is focusing on enhancing its block trading capabilities, particularly in emerging markets (EM) and euro bonds, which are experiencing different trader attitudes compared to the U.S. market [3][4] - Revenue Challenges: The company faces challenges in its U.S. credit business, with flat revenue attributed to macroeconomic conditions, slow adoption of new trading protocols, leakage of small ticket trades into portfolio trading, and reduced activity in longer-term bonds [5][6][7] - Growth in Non-U.S. Credit: Non-U.S. credit revenue is growing at a rate of 13%, driven primarily by emerging markets and euro bonds, indicating a significant opportunity for electronic trading in these regions [4][9] Trading Protocols and Innovations - Portfolio Trading: MarketAxess is actively working to increase its market share in portfolio trading, which has seen a growth in block trading by 38% year-to-date. The company is investing in automation and targeted RFQ (Request for Quote) solutions to enhance trading efficiency [11][15][19] - Automation Adoption: The adoption of automation in trading is increasing, with one client reporting that automation now accounts for 35% of their volume on MarketAxess, indicating a shift towards larger block trades [12][14] - Dealer Selection Tool: A proprietary dealer selection tool has been developed to assist clients in choosing the right dealers for their trades, particularly in the EM market, where dealer diversity poses challenges [18][19] Macro Factors and Market Outlook - Market Volatility: The current macro environment is characterized by low volatility and tight spreads, which are impacting trading volumes. However, there is optimism for increased activity with potential rate cuts from the Federal Reserve [27][29][32] - Future Opportunities: The company sees significant opportunities in the U.S. investment-grade market, where 46% of TRACE trades are of larger sizes that are still primarily executed via traditional methods. MarketAxess aims to capture this segment through enhanced electronic trading solutions [10][20] Strategic Initiatives - Midex Solution: The upcoming launch of the Midex solution for dealer-to-dealer trading is expected to enhance MarketAxess's competitive position in this segment, which has been underserved [40][45] - Partnership with ICE: The integration with ICE is ongoing, with a focus on enhancing liquidity in the municipal and corporate bond markets [53] - M&A Strategy: MarketAxess is prioritizing organic growth over acquisitions, focusing on delivering new technology and solutions to meet market demands [55][56] Financial Performance and Shareholder Returns - Share Repurchase Program: The company has been active in share repurchases, reflecting its strong cash generation capabilities and commitment to returning value to shareholders [57] Additional Insights - Algorithmic Trading: There is a growing trend in algorithmic trading among buy-side clients, which is expected to improve market liquidity and turnover [47][49] - Private Credit Market: MarketAxess is exploring opportunities in the private credit market, anticipating a convergence of public and private credit trading on its platform [54] This summary encapsulates the key insights and strategic directions discussed during the MarketAxess FY Conference, highlighting the company's focus on innovation, market opportunities, and financial performance.