MarketAxess Holdings, Inc.

Ladies and gentlemen, thank you for standing by. At this time, all participants are listening on remote. Later, we'll conduct a question and answer session. At that time, if you have a question, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key at any time. Please note, each person is limited to one question before being asked to rejoin the queue. As a reminder, this conference call is being recorded on April 29, 2020. I would now like to turn the call over to Dave Cressy, Investor Relations Manager at Market Access,

Good morning, and welcome to the Market Access First Quarter 2020 Conference Call. For the call, Rick McVeigh, Chairman and Chief Executive Officer, will review the highlights for the quarter. Chris Concannon, President and COO, will discuss automation and our operational resiliency. And then Tony DeLise, Chief Financial Officer, will review the financial results. Before I turn the call over to Rick, let me remind you that today's call may include forward-looking statements. These statements represent the company's belief regarding future events that, by their nature, are uncertain. The company's actual results and financial condition may differ materially from what is indicated in those forward-looking statements. For discussion of some of the risks and factors that could affect the company's future results, please see the description of risk factors in our annual report on Form 10-K, for the year ended December 31st, 2019, and our quarterly report on Form 10-Q for the first quarter. I would also direct you to read the forward-looking statement disclaimer in our quarterly earnings release, which was issued earlier this morning and is now available on our website. Now let me turn the call over to Rick.

Good morning, and thank you for joining us to review our first quarter 2020 results. Let me start by sending our heartfelt thoughts to all of those suffering through hardship and loss caused by the COVID-19 pandemic around the world. These are extraordinarily difficult times, and we hope to begin to see the seeds of recovery in the coming months. The sharp increase in credit market volatility beginning in late February led to record quarterly credit trading volume on market access of $660 billion, up 29% versus Q1 2019. The value of our leading electronic trading platform was evident in record quarterly volumes for all of our core products, U.S. high-grade, high-yield, emerging markets, and Euro bonds. We also set new volume records in new and important product areas including municipal bonds and U.S. Treasuries. High-grade market share was 20% for the quarter, up from 17.6% one year ago. Open trading provided unique trading connectivity to institutional market participants during the crisis, and volumes were a record $209 billion, up 55% year-over-year. The acceleration of trading activity led to record financial results as well. Revenues of $169 million were up 36%, operating income jumped 44%, and EPS was $1.96 of 41%. Operating leverage came through clearly during the quarter, with operating margins of 54%, up from 51%. Slide four highlights market conditions. The sharp increase in credit market volatility started during the week of February 24th. Unlike the global financial crisis in 2008, average daily market volume reported to trace increased 27% in high grade and 24% in high yield in the last five weeks of the quarter. Market share on market access also jumped higher during the volatile weeks. Unique liquidity available through open trading differentiated our platform. Open trading average daily volume was up 67% in the last five weeks of the quarter versus levels seen before the event. The speed of credit widening in Q1 was far greater than 2008. For example, The high yield spread index jumped from 400 over treasuries to 1,300 over in just four weeks in Q1. That same level of spread widening occurred over 11 months in 2008. We have seen an improvement in credit trading conditions over the last three to four weeks, partly due to the liquidity programs launched by the Fed and other central banks. Corporations rushed to issue more debt as markets began to stabilize in late March, leading to a record $480 billion of new high-grade debt in the quarter. Many companies also tapped their bank credit lines to improve their liquidity position. It is likely that debt issuance will continue to grow in both the private and public sectors, leading to even greater secondary trading opportunities. Slide 5 provides an update on open trading. Open trading played a valuable role in keeping global market participants connected for trading throughout this credit event. 1,500 institutional firms utilized the unique open trading liquidity available on market access during the quarter. Open trading average daily volume grew to a record $3.4 billion, up 53% from a year ago. Open Trading represented 31% of total trading volume for the full quarter, up from 26%. As price dispersion in credit markets exploded in March, Open Trading delivered sharply higher transaction cost savings to clients. Liquidity taker estimated savings reached $201 million for the quarter, and liquidity providers saved an estimated $87 million. Estimated client transaction cost savings on the trading system exceeded company revenues for the quarter. During the quarter, investment managers reached a new volume record for providing liquidity on market access, and dealers reached a new volume record as liquidity takers. We believe this demonstrates a trading behavior change that will lead to an even better global fixed income market The Open Trading Marketplace is the only broad-based, continuous, all-to-all electronic market in global fixed income. For the quarter, Market Access had over 30,000 daily institutional client orders available to both dealers and investors in open trading, totaling $16 billion in notional value on average per day. We believe we play an important role in improving overall market liquidity and reducing market risk during times like this. We also believe that our significant competitive lead in electronic credit trading for the institutional market widened even further during the quarter. Now let me turn the call over to Chris to provide an update on automation and our operational resiliency.