MarketAxess Holdings, Inc.

Ladies and gentlemen, thank you for standing by. At this time, our participants are in a listen-only mode. Later, we will 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 22, 2021. I would now like to turn the call over to Dave Cressy, Investor Relations Manager at Market Access. Please go ahead, sir.

Good morning, and welcome to the Market Access first quarter 2021 conference call. For the call, Rick McVeigh, Chairman and Chief Executive Officer, will review the highlights for the quarter. Chris Kincannon, President and COO, will discuss automation and product expansion. And then Tony DeLese, 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 a 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, 2020. 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.

Thank you for joining us for our first quarter earnings call. First quarter revenue reached a new quarterly record of $195 million, up 16%. Operating income of $103 million was up 14%, and EPS of $2.11 was up 8%. Record revenue was driven primarily by market share gains in our core credit products. New quarterly volume records were set for total credit trading volume as well as new volume records for high-yield trading, emerging markets, euro bonds, and municipal bonds. Open trading volumes grew 20% year-over-year, and estimated transaction cost savings delivered to our clients were $197 million. International client volume was up 18% and reached a new record of $237 billion. It is important to remember that in Q1 last year, we had five full weeks of elevated credit market activity due to the onset of the pandemic. In light of the significant difference in market conditions this year, we feel very good about the volume, revenue, and earnings growth this quarter. Slide four provides an update on market conditions. The top left chart displays just how different the market environment was one year ago. Our business thrives when credit spread volatility increases. During Q1 last year, credit spread volatility was 10 times greater than this year, and credit spreads in high grade were nearly 200 basis points wider. New issue activity was strong during the quarter and similar to last year. Trace volumes in high grade were up 7% in Q1, reflecting a continuing trend toward higher secondary market turnover. Average years to maturity for investment-grade bonds traded on the system continues to climb and reach the high end of the historical range at 10 years this quarter. Slide five provides an update on open trading. Our market-leading all-to-all marketplace, Open Trading, set new records this quarter with an average of 34,000 orders per day, totaling over $19 billion in notional value per day in credit products. High-grade, high-yield, and emerging markets all show healthy open trading volume increases in excess of 20%. Dealer-initiated open trading orders were up 78% year-over-year. Our D2D business now represents 8% of our credit trading volumes and 7% of credit trading revenue as we compete effectively in this client segment with more traditional D2D competitors through open trading. This quarter, two-thirds of our system-wide open orders traded with a traditional dealer counterparty, while one-third found price improvement in open trading. Open trading ADV reached a new record of $4 billion per day, up 22% year-over-year. For the fifth quarter in a row, estimated transaction cost savings of $197 million delivered to our clients were in excess of total company credit trading revenue. Now let me turn the call over to Chris to provide an update on product and client expansion.