MarketAxess Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Market Access Third 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, please press the star followed by the number one on your telephone keypad. My conference call is recorded for September 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 third quarter 2025 earnings conference call. For the call, Chris Concannon, Chief Executive Officer, will provide you with an update on our strategy and our trading businesses. And Eileen Feazell-Buehler, 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 10-K 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 third quarter financial results. As highlighted on slides three and four, Our third quarter results reflect a return to more challenging market conditions and historic levels of new issue in September, as well as continued revenue growth challenges in U.S. credit. Revenue was $209 million in the quarter, up slightly from the prior year. Our revenue growth outside of U.S. credit was strong at 10%. With regard to the operating environment, We are focused on providing our clients with a platform that has the right mix of protocols and workflow tools to meet their needs in all market conditions. We intend to deliver a platform that will be protocol agnostic that uses data and analytics to help clients decide the appropriate protocol for each trading situation. Our current model does exceptionally well in higher volatility. When spreads are widened out, and liquidity is in higher demand. Unfortunately, we have only seen limited periods of volatility over the last several years, and we continue to see fairly tight spreads. Revenue growth in U.S. credit has also been impacted by the growth of new protocols, like portfolio trading, the growth of the dealer-to-dealer market, and smaller-sized trades moving from RFQ to portfolio trades at lower capture rates. The good news is that we are modernizing our technology platform while at the same time delivering new protocols and workflow tools to help our clients be more efficient. Most importantly, we continue to gain significant traction with our new initiatives. In the client-initiated channel, we generated 10% growth in block trading ADV across U.S. credit, emerging markets, and Eurobonds. This strong growth continued in October, with a 21% increase in block trading ADB. In the portfolio trading channel, we generated a 20% increase in total portfolio trading ADB with record U.S. high yield ADB. In October, total portfolio trading ADB was up 25% and market share in U.S. credit portfolio trading increased 300 basis points. And last, in the dealer initiated channel, we generated an 18% increase in dealer-initiated ADV. Again, this strong growth continued into October with a 22% increase in dealer-initiated ADV, supported by strong growth in MID-X for Eurobonds and the addition of MID-X for U.S. credit. As announced earlier this week, we will also be launching a new protocol introducing the concept of closing auctions to the fixed income market. Many of you are familiar with the auction protocol used in the global equity markets. Now we are bringing it to the fixed income market. We believe a closing auction in the most liquid bonds will provide the market with an end-of-day liquidity solution while delivering a more organized market closing process. Protocol innovation, market data, and automated solutions will continue to evolve as this market becomes more and more electronic. Before moving to the next slide, I wanted to provide some context for our October volumes. As you will recall, the prior year period is a tough comparison for U.S. credit, given the heightened level of activity in advance of the U.S. presidential election. Despite this, our U.S. high-yield ADV growth in October was strong, up 9%, reflecting a strong performance of our platform with only a slight increase in volatility during the month. While we know we need to drive higher levels of share growth, we were pleased to see the improvement of market share month over month in both U.S. high grade and high yield and across all of our key initiatives. Side five highlights the underlying strength of our global credit franchise. As you can see from this slide, our credit business is a global business and increasingly diversified. While U.S. credit trading volume is growing at a 4% CAGR, in North America, our other credit products are growing double digits in North America and throughout the rest of the world. Furthermore, 36% of our global credit trading volume is now driven by clients outside of North America, up from 29% in 2020, and we continue to add international clients. This trend is supported by the over 6,000 international dealer and investor traders that are now on the platforms. Slide 6 and 7 provide you with a year-to-date view of how well we are executing with our new initiatives in the three strategic channels, as well as the strong growth we are continuing to see with automation. On slide 7, in the client initiative channel, we continue to make strong progress with block trading globally. Our targeted block solution continues to grow in emerging markets and Eurobonds, while we see consistent growth in block trading in our U.S. credit business as well. Block trading represents the next step function to the growth of electronic trading and is an opportunity for real transformation in the fixed income market. We are attacking the block market in two ways. First, we are leveraging automation by providing clients with unique tools that execute blocks in a more automated way. The second way we are attacking blocks is through our targeted RFQ workflow, which allows clients to target a short list of dealers for liquidity while increasing execution likelihood and reducing information leakage. Our total block trading ADV is approximately 5 billion year-to-date, up 23% across U.S. credit, emerging markets, and Euro bonds. Our cumulative block trading volume since the launch of our targeted block trading solution is In U.S. credit, emerging markets and euro bonds was approximately $12 billion through October 2025. Next in the portfolio trading channel, total portfolio trading ADD year-to-date is running 50% above the prior year. U.S. credit portfolio trading market share was over 18%, up 210 basis points over the prior year, including a 360 basis point increase in U.S. high yields. In the dealer-initiated channel, we are continuing to see progress. Dealer-initiated ADD was $1.7 billion year-to-date, representing an increase of 34%. Our new Mid-X solution for U.S. credit was launched in September, and while it is early days as we expand the number of sessions and bring on new dealers, over the last 10 days, we have executed over $1.3 billion in matching volumes. So we are pleased with the recent momentum. The evolution underway in the U.S. high-grade market is highlighted on slide eight. The average size of non-block trades are decreasing, while at the other end of the spectrum, the average block size trades are increasing. Blocks greater or equal to 5 million in trade size represent approximately 45% of trades volume in U.S. high-grade, and they are largely executed over chat or the phone. This is the segment of the market that we are attacking with our targeted RFQ solution. Trades less than $5 million in size make up the other 55% of the market in terms of volume, but approximately 98% of the ticket count. This is the segment of the market that we are attacking with our suite of low-touch automation tools, as well as our portfolio trading tools. In the third quarter, two-thirds of trades executed by our largest clients were done through automation. The good news is that this business comes in at a more attractive price point and becomes sticky as clients convert. Part of this evolution has been the explosion in ticket count, as shown on slide 9, driving client demand for automation underpinned by our differentiated liquidity. Trades in U.S. high-grade, less than $5 million in size, have almost tripled since 2021. This significant increase in tickets has been driven by a couple of factors, including the growth of ETFs and SMA accounts. Assets under management and SMA accounts, by some estimates, are expected to top $5 trillion. Other factors driving the explosion in tickets are the growth of portfolio trading, and the increased usage of automation tools and fixed income. So the increase in automation is becoming more important to handle the increase in tickets and smaller size trades, but increasingly also for larger size trades. We recently profiled a very large investment manager on our platform who has invested in automation by targeting block size trades for automated execution. In just two years, for trades two million and higher, They have gone from doing 14% of their volume and 54% of their tickets to 35% of their volume and 82% of their tickets today. On our platform, automation trade count and trade volumes are growing at a three-year tagger of 29% and 28% respectively. On the dealer side, with the growth of dealer algos, execution quality and dealer responsiveness have improved. with tighter bid-ask spreads and higher RFQ response rates, even for block trades. Dealer algos now contribute 88% of the responses and win up to 87% of trades in U.S. high grades, including 28% of the block trades. In summary, this year has been a tale of two very different market environments, and we believe that the protocols and workflow tools we are developing will help us grow through all market conditions. While we are pleased with the continued strong contribution from our new initiative, we know that we have to deliver technology enhancements faster to drive revenue growth. While the time it's taking to return to higher levels of growth has frustrated many of you, I assure you we are investing in the fixed income market of tomorrow while also addressing the competitive landscape of today. This is why we feel good about our positioning and our ability to return to higher levels of revenue growth in the coming quarters. Now let me turn the call over to Eileen to review our financial performance.