MarketAxess Holdings, Inc.

Ladies and gentlemen, thanks for standing by. Welcome to the Market Access first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, simply press the pound key. And as a reminder, this conference call is being recorded on April 26, 2023. I would now like to turn the call over to Mr. Steve Davidson, head of investor relations at Market Access. Please go ahead, sir.

Thank you, Beau. Good morning and welcome to the Market Access first quarter 2023 earnings conference call. For the call, Chris Kincannon, chief executive officer, will provide you with an update on key business trends. Chris DeRosa, chief financial officer, will walk you through the financial results for the quarter. And then Rick McVeigh, founder and executive chairman, will provide an update on the market environment and the long-term opportunity ahead for the company. Before I turn the call over to Chris Concannon, 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, 2022. 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 Kristen Cannon.

Good morning. I'm very pleased to share with you our strong first quarter results on my first earnings call as CEO of Market Access. We continued to execute our growth strategy during the quarter and delivered record revenues, which increased 9% or 11% on a constant currency basis. Earnings per share grew 15%, reflecting the continued improvement in our underlying revenue and earnings growth trends, as shown on slide three. These strong results were broad-based across products, protocols, and geographies, reflecting the powerful diversification of our model, driven by the investments we have made over the past several years. Specifically, we delivered record levels of average daily trading volumes across nearly all products. The fourth consecutive quarter of strong estimated market share gains, record levels of commission revenue across U.S. high yields, emerging markets, and euro bonds, record levels of revenue and trading volume contribution from our international businesses, and record levels of volume from newer client segments, new initiatives, and record levels of automation. In summary, we had a very strong quarter with records across key products and protocols. The impact of the rapid rate rise in 2022 has now filtered into the broader market, resulting in the banking sector market dislocation in March. While we have seen a retracement in industry volumes over the last several weeks, we believe this is a temporary pause as the markets digest the events of March and their impact on the trajectory of rate hikes for the Federal Reserve. Lastly, I could not be more pleased to have Nancy Altibello as our new lead independent director of the board, which was announced earlier this week. Nancy brings a wealth of audit, talent management, diversity, and corporate culture experience to the role, and I'm looking forward to our continued collaboration and partnership. Slide four highlights the strength of our unique all-to-all solution, Open Trading. We were very pleased with the performance of Open Trading in March. As liquidity became more challenging in March, we saw daily highs of Open Trading share grow to 57% in high grade, and 61% in high yield. For the quarter, we registered record open trading average daily volume of 4.5 billion, up 21%, with record US high grade share of 34%. We are executing approximately 13,000 trades per day in open trading, and approximately 32,000 trades per day across total credit. Open trading also delivered total price improvement of $252 million, well in excess of our quarterly revenue. Slide 5 highlights our multidimensional growth across new products, new initiatives, new client segments, and geographies. First, in new products, we grew estimated municipal market share to a record 6.4% in the quarter with 376 active client firms trading. We have also recently integrated the muni broker system with the market access pool of liquidity to provide clients with more trading options. In US treasuries, we continue to see client growth in our treasury offering with 250 active participants on the platform up from 145 in the prior year. We have established a very strong pipeline of future growth cylinders with record volume across dealer RFQ, portfolio trading, our diversity dealer initiative, and Access IQ, our front end for private banks in Europe. We are also seeing strong contributions to our growth from newer client segments, including hedge funds, systematic funds, dealer-initiated flow, and private banks. We generated a record $216 billion in trading volume from these important client segments, which now represent 25% of our total credit trading volume. Our estimated share of U.S. high-grade can fluctuate given various market factors, including the banking crisis, block trading activity, new issuance, and growth in client segments outside of our focus on institutional client flow. For example, we estimate that the dealer-to-dealer retail segments of trace grew 31% year-over-year and now represent a combined 28% of high-grade trace, up from 25% in the prior year. Lastly, in emerging markets, we had record ADV this quarter with local market volume growing 10% year-over-year to a record $71 billion in the quarter. Slide 6 shows the continued strong adoption of automation tools by our clients, powered by CP+. Automated trading increased to a record $69 billion in volume and a record 398,000 trades. Importantly, our automation tools have continued to grow through periods of significant market dislocation, which is a testament to the quality and accuracy of our CP Plus data. Today, AutoX represents 20% of total credit trade count and 8% of our total credit trading volume. At the core of our automation tools and workflow is CP Plus, our world-class algorithmic pricing engine, which was a key driver of our record data revenue in the quarter. With the recent launch of Adaptive Auto X, which is currently in pilot, we are delivering an algo trading solution that automates trading across protocol and liquidity pool while seeking to greatly improve their execution quality. Before I turn the call over to Chris DeRosa, I wanted to provide an update on market trends. With three important trading days remaining in the month, market volumes are weaker in April, but US high-grade estimated market share has improved from March and is running above first quarter levels. Now let me turn the call over to Chris for a review of our strong financial results.