MarketAxess(US:MKTX)2026-02-09 19:52MarketAxess 2026 Conference Summary Company Overview - Company: MarketAxess (NasdaqGS: MKTX) - Industry: Financial Services, specifically focused on electronic trading in fixed income markets Key Points and Arguments Growth Initiatives - MarketAxess has set three-year revenue growth targets of 8%-9% annually, with margin targets also established [5][71] - The company is focusing on regaining market share in U.S. credit and expanding its global presence across various channels, including High-Grade, High-Yield, and Emerging Markets (EM) [4][6] Blocks Protocol - The Blocks protocol is a significant focus, with a 24% increase in average daily volume (ADV) in 2025, including an 18% increase in the U.S. and 66% in Eurobonds [12][38] - The U.S. market is seen as having substantial untapped potential, particularly in electronic trading of Blocks [7][12] Portfolio Trading (PT) - MarketAxess reported a 19% share in U.S. PT, a 270 basis point increase year-over-year, with notable growth in High-Yield PT [18][19] - The company acknowledges that while PT is important for client relationships, it is not a significant revenue driver [20] Dealer-Initiated Trades - The Mid-X solution was launched at the end of the previous year, with $3.2 billion in volume recorded in January [21][22] - Positive feedback from dealers indicates that the protocol helps contain information leakage and streamlines the trading process [22] Emerging Markets (EM) - EM is expected to contribute significantly to growth, with 20% of incremental growth in year one projected to come from the U.S. and 35% by year three [36][37] - ADV in EM Blocks increased by 27%, with a 172% increase in portfolio trading [38][39] Eurobonds - MarketAxess has seen success in Eurobonds, leveraging its protocols to navigate the fragmented liquidity market across different jurisdictions [44] Automation and AI - Automation initiatives, such as the Auto-X protocol, have shown strong adoption, with 54% of trades above $2 million processed through automation [48] - MarketAxess is also focusing on AI-driven products, such as CP+, which utilizes proprietary data for pricing algorithms [58][59] Pricing Strategy - The company maintains steady pricing in traditional RFQ, while acknowledging competitive pressures in dealer pricing and the need for a diverse protocol mix [63][64] - Blocks pricing is positioned between RFQ and PT, with automation being a premium-priced service [66] Expense Guidance and Investment - MarketAxess has provided expense guidance of $530-$545 million for 2026, with a focus on self-funding investments through efficiency measures [71][72] - Investments will continue in protocols, algo suites, and enhancements to the X-Pro front end [73] Capital Allocation - The company has increased its capital return profile, including a $300 million ASR and $120 million in buybacks, alongside a $0.78 per share dividend increase [76][77] - M&A opportunities are considered but are subject to a high bar for accretion and alignment with business strategy [78][79] Additional Important Insights - The market structure in fixed income has shifted, with a decrease in client-initiated trades from 80% to 58%, indicating a need for MarketAxess to adapt its strategies [32][33] - The company emphasizes the importance of maintaining strong client relationships and adapting to market changes to sustain its competitive edge [41][42]