Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q1 2025 Earnings Presentation
25 slides from Marketaxess's earnings presentation, May 7, 2025
Slide 1: 1Q25 Earnings Conference Call
1Q25 Earnings Conference Call May 7, 2025
Slide 2: Update on our strategy & trading businesses
Update on our strategy & trading businesses ❖ Chris Concannon, CEO 2
Slide 3: 1Q25 highlights
1Q25 highlights¹ • Revenue of $209 million compared to $210 million in the prior year • Record commission revenue in emerging markets, up 6%, eurobonds, up 5%, and municipal bonds, up 6% FINANCIAL • 34% increase in total rates commission revenue PERFORMANCE • Services2 revenue growth of 7% • Earning
Slide 4: Continued strong growth across our key performance indicators
Continued strong growth across our key performance indicators Key Performance Indicators 1Q25 1Q24 Growth Client-Initiated1 Record U.S. Credit ADV $9.0B $8.9B +2% Notional Trading / ADV Record Intl. Product Trading ADV (EM & Eurobonds) $6.3B $5.7B +11% Record EM Local Markets ADV $1.5B $1.4B +8% Mun
Slide 5: Driving growth in 2025: enhanced functionality, differentiated data and innovative client solutions
Driving growth in 2025: enhanced functionality, differentiated data and innovative client solutions Focusing on three strategic channels Optimizing trade execution and client workflow in key products & protocols o High-touch: rollout of block trading solutions for larger trades/EM, eurobonds, and U.
Slide 6: Driving growth in 2025: strong progress across client-initiated, portfolio trading and dealer-initiated channels
Driving growth in 2025: strong progress across client-initiated, portfolio trading and dealer-initiated channels 1Q25 COMMENTARY¹ RECORD LEVELS OF CLIENT-INITIATED BLOCK TRADING3 ADV • Record block trading ADV of U.S. high-grade, emerging markets, U.S. High-Grade Emerging Markets Eurobonds and eurob
Slide 7: Volatility continued in April, driving strong YoY ADV growth
Volatility continued in April, driving strong YoY ADV growth (in $ millions) $57,436 +68% $2 $737 NM +66% $2,785 $34,149 +37% $4,273 $7 $444 +27% $1,968 $2,027 +38% $3,371 +30% $8,595 $1,428 $6,589 +93% $39,076 $20,283 April 2024 April 2025 Rates U.S. High-Grade U.S. High-Yield Emerging Markets Euro
Slide 8: Financial review
Financial review ❖ Ilene Fiszel Bieler, CFO 8
Slide 9: 1Q25 financial summary
1Q25 financial summary (in $ thousands, except EPS data) Notable items2 1Q25 4Q24 1Q24 Reserve for uncertain tax positions related $ 54,939 - - to prior periods EPS impact $ 1.47 - - 1Q25 PERFORMANCE 3 • Revenue of $209 million compared to $210 million in the prior year. • Solid performance in emerg
Slide 10: 1Q25 commission revenue detail
1Q25 commission revenue detail COMMISSION REVENUE DETAIL 1Q25 PERFORMANCE 2 (in $ thousands, except transaction fees per million data) Commission Revenue 1Q25 4Q24 1Q24 YoY % Δ Credit Variable Transaction Fees $ 147,991 $ 141,848 $ 151,519 (2)% Credit 135,840 129,351 141,504 (4)% • Total credit vari
Slide 11: 1Q25 expense detail
1Q25 expense detail (in $ thousands) +2% 1Q25 PERFORMANCE 1 (2)% • Total expenses of $120 million, up 2% YoY, down 2% $120,194 $122,428 $117,818 QoQ. $4,185 $5,716 $7,241 $4,444 $4,911 $4,739 $2,061 $3,971 $1,833 • Lower level of expense growth driven by continued cost $3,622 $6,410 $3,717 $6,329 $6
Slide 12: Capital management and cash flow
Capital management and cash flow (in $ millions, except shares repurchased and cash dividend data ) TTM QUARTERLY DIVIDENDS CAPITAL MANAGEMENT TTM Quarterly Dividends (in $ millions) 115 • Total cash, cash equivalents, corporate bond and U.S. 100 Treasury investments of $642 million as of March 31,
Slide 13: Key takeaways
Key takeaways • Operating environment has improved for MarketAxess, driving higher levels of ADV and market share. • Well positioned to assist our clients through this period of increased credit market volatility. • Strong progress across the three strategic channels: client-initiated, portfolio tra
Slide 14: Appendix
Appendix 14
Slide 15: Macro conditions – volatility has driven trading volume/market share higher
Macro conditions – volatility has driven trading volume/market share higher U.S. HIGH-GRADE AND U.S.HIGH-YIELD SPREAD RANGES TURNOVER IN U.S. HIGH-GRADE U.S. High-Grade Spread Range U.S. High-Yield Spread Range U.S. High-Grade Spread Range Avg. U.S. High-Yield Spread Range Avg. 55 250 120% Benchmark
Slide 16: Our client network continues to expand
Our client network continues to expand # OF ACTIVE CLIENT FIRMS, ACTIVE U.S. CREDIT AND CLIENT FIRMS PERCENT CONTRIBUTION FROM HEDGE FUND AND PRIVATE BANK TRADING 3 OR MORE PRODUCTS CLIENTS TO TOTAL CREDIT TRADE VOLUME Active Clients Trading 3 or More Products Active U.S. Credit Clients Total Active
Slide 17: Strong geographic and product / protocol expansion
Strong geographic and product / protocol expansion 3-Year CAGR Trade Volume: 11% RECORD EMERGING MARKETS AND EUROBONDS TRADE VOLUME RECORD HEDGE FUND AND DEALER-INITIATED1 TRADE VOLUME; PRIVATE Trade Count: 14% AND TRADE COUNT BANK TRADE VOLUME Emerging Markets, Eurobonds Trade Volume Emerging Marke
Slide 18: Open Trading: the single largest source of liquidity in the credit markets
Open Trading: the single largest source of liquidity in the credit markets 1Q25 COMMENTARY¹ RECORD TOTAL CREDIT OPEN TRADING TRADE VOLUME; TOTAL CREDIT OPEN TRADING TRADE COUNT • Record Open Trading ADV of ~$5 billion, up 8%. Open Trading Total Credit Volume Open Trading Total Credit Trade Count 350
Slide 19: Continued strong contribution from our emerging markets franchise
Continued strong contribution from our emerging markets franchise 1Q25 COMMENTARY¹ EMERGING MARKETS TRADE VOLUME BY REGION North America EMEA APAC LATAM • 6% growth in commission revenue. 250 Q1 YoY Growth: 9% Trade Volume (in $ billions) • Record 1,510 active client firms. 200 3-Year CAGR: 8% • Con
Slide 20: Integrating our full ecosystem through automation
Integrating our full ecosystem through automation 1Q25 COMMENTARY¹ AUTO-X ACTIVE CLIENT FIRMS • 249 automation active client firms, up 8%. 280 Q1 YoY Growth: 8% 240 3-Year CAGR: 25% # Active Client Firms • Record automation volume of ~$110 billion, up 17%, and record 200 160 trade count of ~663 thou
Slide 21: Reconciliation of certain GAAP-basis financial results, excluding notable items
Reconciliation of certain GAAP-basis financial results, excluding notable items Reconciliation of certain GAAP-basis financial results, excluding notable items 1Q25 4Q24 1Q24 Net income, GAAP-basis $ 15,065 $ 65,139 $ 72,615 Exclude: Notable items Reserve for uncertain tax positions related to prior
Slide 22: Reconciliation of net income to EBITDA and net Income margin to EBITDA margin
Reconciliation of net income to EBITDA and net Income margin to EBITDA margin Reconciliation of net income to EBITDA and net Income margin to EBITDA margin 1Q25 4Q24 1Q24 Net income $ 15,065 $ 65,139 $ 72,615 Add back: Interest income (7,169) (6,719) (5,973) Interest expense 213 318 316 Provision fo
Slide 23: Reconciliation of TTM net cash provided by operating activities to TTM free cash flow
Reconciliation of TTM net cash provided by operating activities to TTM free cash flow Reconciliation of TTM net cash provided by operating activities to TTM free cash flow 1 1Q25 4Q24 1Q24 Net cash provided by operating activities $ 419,815 $ 385,237 $ 321,291 Exclude: Net change in trading investme
Slide 24: Disclosures
Disclosures ©2025 MarketAxess Holdings Inc. (the "Company"). MarketAxess Corporation is a member of FINRA and SIPC. MarketAxess Canada Company is a member of the Canadian Investment Regulatory Organization (CIRO). MarketAxess Europe Limited (04017160), MarketAxess Capital Limited (09777893), and Mar
Slide 25: Now you're in the market
\Y, NX Now you're in the market”