MarketAxess Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Market Access Second Quarter 2025 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. As a reminder, this conference call is being recorded on August 6th, 2025. I would now like to turn the call over to Steve Davidson, Head of Investor Relations at Market Access. Please go ahead, sir.

Good morning and welcome to the Market Access Second Quarter 2025 earnings conference call. For the call, Chris Kencanon, Chief Executive Officer, will provide you with an update on our strategy and our trading businesses. And Eileen Fisselbieler, Chief Financial Officer, will review the financial results. Before I turn the call over to Chris, 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 10K for the year ended December 31st, 2024. 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 Chris.

Good morning and thank you for joining us to review our record second quarter 2025 financial results. These strong results as shown on slide three of my strategic update reflect a very strong operating environment and the progress we have made to transform our model to be more protocol agnostic, expand our addressable market and drive growth. We are delivering multiple protocols to solve our clients' different execution needs and we are giving them the automation workflow tools that they need to do more with less. We delivered record automation volume and trade count with a record number of active clients during a period of increased volatility. And to accelerate our delivery of product enhancements and automation tools, we have made several important strategic hires over the last several months, including Dean Barry and Spencer Lee, both of whom will be integral to driving growth. Now turning to our results in terms of revenue generation, we are very pleased with our execution in the quarter, delivering 10% revenue growth, excluding the impact of that tax. We generated these strong results on record trading volume across most product areas, surpassing one trillion in total credit trading volume for the first time and delivering a record two trillion in total rates trading volume, which drove a 12% increase in commission revenue to a record 192 million. We continue to deliver strong performance in our US government bond business over the last several months. We saw a benefit from the spike in volatility around tariffs, but we are also seeing stress driven by our new hedging services, new customers driving incremental revenue, and institutional client adoption of our rates algo, which now represents over 10% of our trading volume. We are in the process of expanding our RFQ business, and we are looking to continue to enhance our rates algo solution as large asset managers continue to request enhancements. Underpinning these results was strong progress with our new initiatives across our three strategic channels. In the client initiated channel, we generated 38% growth in block trading ADD across US credit, emerging markets, and Euro bonds. In the portfolio trading channel, we generated 69% increase in total portfolio trading ADD. And last in the dealer initiated channel, we generated a 40% increase in dealer initiated ADD. In terms of expenses, we continue to show cost discipline with expenses up only 5%, excluding notables and FX, as we continue to invest in the platform with a full slate of product deliveries coming in the next couple of quarters. Last on the capital front, we have been more opportunistic with our share repurchases as we move beyond just offsetting dilution from stock based compensation. Before I get into our results, I would like to address our July US high grade market share. While we are disappointed with the headline share, there have been significant swings in block volume moving between phone and electronic over the last several quarters. This has both helped and hurt us. We believe that this has been driven in part by the macro environment. In July, investment grade spreads tighten significantly and the combination of tighter spreads and low volatility generally translates into more large trades getting done over the phone and an uptick in portfolio trading. Block trades equal to or larger than 5 million in size increased dramatically and represented 47% of the entire market in July, up from 42% in June. Additionally, our share of this market dropped to 10% down from 12% in June. And so the bad news is that those large blocks move to the phone and to chat. The good news is that this is the very market that we're attacking with the recent launch of our high touch strategy in US credit on X-Pro. It's still early days, but it's the part of the market that we've been talking about targeting for some time and we believe we will be successful in electronifying this segment of the market. Slide four, five and six update you on how we are executing across the three strategic channels we are focused on to grow our market share. As slide five clearly shows, the key performance indicators across our platform are all green this quarter, reflecting the underlying fundamental strength of our business as well as the strong progress we are making with our new initiatives. Turning to slide six in the client initiated channel, we've made strong progress with block trading with our targeted block solution now rolled out in emerging markets and Eurobonds and recently launched in US credit. This is one of the most exciting areas of growth for us because we are delivering a click to trade solution where the trade is against a dealer acts or an indication of interest and the trade goes direct to the dealer without information leakage. This is also the largest segment of the market that remains largely phone based. We've registered record total block trading ADD of over 5 billion across US credit, emerging markets and Eurobonds. Our share of blocks in US high grade was a record .5% representing an increase of almost 200 basis points and was a key driver of the year over year increase in our estimated market share in US high grade. Our cumulative block trading volume since the launch of our targeted block trading solution in US credit emerging markets and Eurobonds was approximately 8 billion through July, 2025. Next in the portfolio trading channel, which is a very important part of the market, we generated record levels of total portfolio trading ADD with a strong increase in US high grade estimated market share on record ADD as well as record ADD in US high yield and Eurobonds. US high grade portfolio trading market share was over 19% in the quarter, up 370 basis points over the prior year. Last in the dealer initiated channel, we are beginning to see progress as we prepare to launch a new mid-ex solution in September in US credit. Dealer RFQ ADD was 1.6 billion with record ADD in municipal bonds. Mid-ex total volume hit a new quarterly record of over 9 billion with record volume in emerging markets and Eurobonds. We are very excited about the launch of our new mid-ex solution in a few weeks. It's a very streamlined midpoint matching solution for dealers using our award-winning CP plus for pricing. Slide seven highlights the strong growth in our international product areas where we are executing across all three strategic channels. The strong growth that we generated across emerging markets in Eurobonds was driven by multiple levers at different stages of growth with different fee profile. Growth across block trading, portfolio trading and dealer initiated activity drove our total volume growth to over 20%. And this strong increase in trading volumes on robust market violence and share gains was accompanied by a small 3% decline in fee capture principally driven by protocol mix, delivering commission revenue growth of 17%. We believe that our global presence in EM local markets as shown on slide eight will be a key driver of our future growth. The opportunity with local EM markets is enormous as indicated on the right side of the slide. With 85% of the EM market made up of local currency, corporates and sovereigns compared to just 15% hard currency corporates and sovereigns. And the estimated ADVs for both hard currency and local markets combined are greater than the ADVs for US credit markets. Our estimate is that most local market trades take place with onshore clients. While only a small percentage of our trades are taking place with onshore clients. We believe that this is a large growth opportunity for us. We are also focused on facilitating global investing in local markets. As you saw with our press release last week, we just recently executed the first Indian government bond trade electronically. Market access is the first fully electronic trading solution for foreign portfolio investors. And this launch further deepens our global EM franchise. I would like to thank our clients, BlackRock and Standard Charter for their support in executing the first trade. In summary, we are pleased with our execution in the second quarter, where we benefited from a very supportive market backdrop and delivered strong growth across our new initiatives. The July share numbers in US high grade were disappointing, but we believe that the solution we are bringing to the market will be successful. And we now have the right team in place to help us accelerate growth in the coming quarters. Now let me turn the call over to Eileen to review our financials.