MarketAxess Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Market Access first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. As a reminder, this conference call is being recorded on May 7th, 2026. 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 First Quarter 2026 Earnings Conference Call. For the call, Chris Kincannon, Chief Executive Officer, will provide you with an update on our strategy and our business. And Eileen Feazell-Buehler, Chief Financial Officer, will review our 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 31, 2025. 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 very strong financial results for the first quarter of 2026. 2026 is all about the execution of our long-term strategy, and that is exactly what we did in the quarter. Turning to slide three. we grew total revenue by 12% to a record $233 million, including very strong 20% growth in product areas outside U.S. credit. Record total revenue was underpinned by record total trading ADV, driving record commission revenue. Momentum continued to build with our new initiatives and generated approximately 50% of total incremental revenue in the quarter. Strength on the trading side was complemented by 10% growth in services revenue, helping to drive trailing 12-month free cash flow generation of $316 million. We continue to be disciplined with our expenses, with 8% growth in non-GAAP expenses. And underlying these strong results was the strong progress we made in innovating and growing our franchise. First, we significantly enhanced the market access advantage by expanding our global network, enhancing our differentiated liquidity, and fortifying our high-value proprietary data and analytics by expanding the use of AI. Next, we continued the rollout of our new enhanced X-Pro front end that is changing the client experience. And last, we are continuing to invest in our technology modernization, which includes our recent strategic hire, Will Kwan, who joined us as our Chief Technology Officer. So I for highlights the market access advantage, where we are increasingly using Ai to leverage our sizable proprietary data set to deliver unique data and analytics to clients to enhance their trading outcomes. Our global network of the largest fixed income investors and the most active fixed income liquidity providers. generates deep vertical IP that gives us a significant competitive advantage in generating critical analytics and insights for our clients. In 2025, our global network generated over $5 trillion in notional inquiry information and over $34 trillion in notional response information, all of which is proprietary to market access. This unique data set across US credit, emerging markets, and Europe gives us a special AI opportunity to interpret the markets in real time, to assist in clients' portfolio construction, and to deliver a unique and enhanced execution experience. We have already delivered AI-driven data solutions like the award-winning CP+, CP Plus for Blocks, Depth of Book, Sense AI, and AI Dealer Select. We are now exploring the next level of AI-enhanced data products. What is critical to remember is that AI solutions are only as good as the data they are trained on. We have a unique advantage given our global proprietary data set. Slide five provides an update on the macro backdrop of the first quarter end April. Recent geopolitical events drove higher levels of volatility and wider credit spreads in the quarter. The initial jump in volatility and widening of credit spreads was short-lived and credit spreads moved back to historically low levels in April. Open trading penetration and U.S. high yield increased to 47% in the quarter, the highest level since 2023, reflecting increased demand for differentiated liquidity. Despite these shocks, the market has remained very healthy, with historic levels of new issuance in the first quarter continuing into April. New issue pricing concessions are up modestly from lows, and deals continue to be approximately four times oversubscribed, reflecting the very strong focus on new issues. All of these factors generated record results in the quarter, but the return to lower volatility, tighter credit spreads, and strong new issuance in April, combined with tougher year-over-year comparisons, were key drivers of the decline in trading volumes in April. Slide 6 highlights the shift in segmentation of US high-grade trace market ADD in April, including the strong focus on the new issue calendar, which reduced our estimated market share. We believe there were several factors that reduced our estimated market share in April. First, duplicate reports in trace have been increasing over the past several quarters, and we estimate that they inflated US high-grade trace volumes by up to 8% in April. Adjusting for these duplicates, consistent with FINRA's recent proposal to suppress duplicate reporting, we believe our estimated U.S. high-grade market share would have been approximately 160 basis points higher in April. Next, April's historically high new issuance further reduced our estimated U.S. high-grade market share in April. We generally have lower levels of market share in new issues during the first two weeks of trading. When our clients are very focused on new issues, we believe it can crowd out some of their secondary trading activity on our platform. In summary, while there was considerable noise in the denominator used to calculate our estimated market share in April, we are now addressing the challenges of the new issue calendar with our new issue trading solution. Slide seven summarizes the record levels of trading volume across our credit products, and the strong growth in U.S. Treasuries. We delivered double-digit growth in ADD across most credit products and U.S. Treasuries and double-digit growth in variable transaction revenue. U.S. high-yield liquidity provision by our long-only clients increased almost 80% compared to last year. This increase in unique liquidity is delivering a greatly improved execution experience for our high-yield clients. Slide 8 highlights the record levels of trading volume and revenue we generated in our emerging markets franchise. Over the trailing 12 months, our EM franchise has generated $20 million in incremental revenue, representing 68% of total credit incremental variable commission revenue. This reflects the success we have had with our investments in the EM business. In the quarter, we expanded our EM global client network to a record 1,547 active client firms and 3,410 international active client traders. Total trading volumes were up 30% in the first quarter to record levels, with record levels across both hard currency and local currency markets and across all regions. We grew our hard currency revenue with high fee per million by 15%, and we grew our local markets revenue with lower fee per million by 56%. Total EM fee per million is down only 4%, in part because of the mixed impact of the local markets fee per million, which is over 40% lower than the hard currency business. Fee per million is simply an output that reflects the mix of business being executed while we are still focused on maximizing revenue. Slide 9 and 10 highlight how well we are executing our new initiatives across our three strategic channels, including record levels of credit automation trading volume. On slide 10, in the client-initiated channel, we continue to make strong progress with block trading globally. We generated 35% growth in ADV to a record $7 billion of block activity across U.S. credit emerging markets, and euro bonds, with record block trading ADVs across all three products. Importantly, in U.S. high grade in March, dealer algos won 30% of block trades on the platform. In the portfolio trading channel, we generated a 51% increase in total global portfolio trading ADV to a record $1.9 billion. U.S. credit portfolio trading market share increased by 100 basis points year over year. In the dealer-initiated channel, we generated record levels of ADD with record Mid-X ADD as well. And in April, we delivered Mid-X volumes of $6.7 billion, the second highest level of monthly activity. Last in our automation suite, We had another record quarter as clients continued to leverage automation, even in more volatile periods. We saw $144 billion in automation volume, helped with a sizable increase in adoption of our adaptive algo solution. Slide 11 shows the strong growth we have generated in U.S. credit blocks, as well as the new protocols and workflow tools we are developing to attack this important segment of the market. We are starting to crack the block market, and now we have expanded the toolkit for clients to trade blocks. We are continuing to invest in block automation and targeted RFQ solutions, but we also recently launched targeted access, and we expect to launch our new issue block trading solution in the second half of 2026. Now let me turn the call over to Eileen to review our financial performance.

Thank you, Chris. Turning to our results, On slide 13, we provide a summary of our first quarter financials. We delivered 12% revenue growth to a record $233 million, which included $5 million from our RFQ Hub acquisition and a $3 million benefit from foreign currency translation. Growth in revenue outside U.S. credit was 20% in the quarter, reflecting strong contributions from our international product areas. We reported diluted earnings per share of $2.20, or $2.25 per share, excluding notable items, representing an increase of 20%. The benefit of our enhanced capital return program, with the completed $300 million ASR, flowed through in the quarter and was the key driver of the $0.12 benefit to EPS on a 6% reduction in share count. The $0.05 per share impact of notable items in the quarter consisted of approximately $1.5 million or $0.03 per share in repositioning charges in our expenses in the employee compensation and benefits line and approximately $700,000 or $0.02 per share in other legal-related notable items in the professional and consulting line. My comments on our results from this point forward will largely exclude the impact of notable items only on a non-GAAP basis where applicable. Looking at each of our revenue lines in turn, record total commissions revenue increased $22 million or 12% to $203 million compared to the prior year. 50% or $11 million of the incremental commission revenue in the quarter was driven by emerging markets and Euro bonds on record trading volumes in each area. Other commissions, which include FX, equities, derivatives, and ETF activity, increased $5 million, or 104%, driven by the inclusion of RFQ hub commission revenue and higher trading volumes. Services revenue increased 10% to a record $30 million. Information services revenue of a record $14 million increased 12%. Post-trade services revenue of $12 million increased 5% versus the prior year. Technology services revenue of a record $4 million increased 19% driven by higher connectivity fees from RFQ hub. Total other income decreased approximately $5 million driven by lower interest income on lower rates and increased interest expense related to borrowings for the ASR. For modeling purposes, please note that we received a one time $3 million tax credit in the other net line, which is not recurring. The effective tax rate decreased to 25% from 27%, primarily due to higher tax credits, lower state tax accruals, and reduced stock-based compensation shortfalls. Slide 14 highlights our key performance indicators. As you can see from all the green on this slide, it was a very good quarter for us, and these strong KPIs underscore the strong revenue generation in the quarter. The investments that we have made to enhance our products and provide clients with new workflow tools and protocols gain traction and help drive tangible outcomes in the quarter. While we are pleased with these results, U.S. Credit Market Share continues to require attention and focus. On slide 15, we provide more detail on our commission revenue and our fee capture. Record total credit commission revenue of $184 million increased 9% compared to the prior year. These record results were driven by 4% growth in both U.S. high yield and U.S. high grade, 24% growth in emerging markets, and 14% growth in Eurobonds total commission revenue. We are very pleased with the improvements in U.S. credit revenue generation in the quarter relative to recent historical trends. Reduction in total credit fee capture year over year was due to protocol and product mix shifts, partially offset by the higher duration of bonds traded in U.S. high grades. The quarter-over-quarter reduction was due principally to product mix. On slide 16, we provided a summary of our operating expenses. Excluding knowable items, total expenses increased 8%, which included a headwind of $2 million due to the impact of foreign currency translation. The increase was driven principally by higher employee compensation costs and higher technology and communication costs. as we continue to upgrade talent and invest in our technology modernization to drive future growth. We are continuing to invest while maintaining focus on cost discipline and operating efficiency. With our strong revenue generation combined with our continued cost discipline, operating margin of 44% in the quarter increased almost 200 basis points, reflecting the inherent operating leverage in our model. Headcount was 859, down 1% from both 870 in the prior year period and 869 in the fourth quarter of 2025. On slide 17, we provide an update on our capital management and cash flow. Our balance sheet and cash generation continues to be strong, with cash, cash equivalents, and corporate bond and U.S. Treasury investments totaling $537 million as of March 31, 2026, compared to $679 million at the end of 2025. In the quarter, we paid out $52 million in annual incentive compensation. We paid down $63 million in borrowings on the credit facility related to the ASR, and we paid out $27 million in dividends. After the quarter, we paid down an additional $20 million on the credit facility, so the drawn balance was $137 million at the end of April. And while it is not reflected in our cash flow in the quarter, we returned $60 million to investors through share repurchases with the completion of our $300 million ASR in early February. We generated $316 million in free cash flow in the first quarter on a trailing 12-month basis. As of April 30th, 2026, $205 million remains on the board's share repurchase authorization. Now, let me turn the call back to Chris for his closing remarks.

Thanks, Eileen. In summary, on slide 18, we are continuing to execute our long-term strategy. We significantly enhanced the market access advantage in the quarter. The growth profile of the company outside U.S. credit is strong. We are pleased that we delivered higher levels of revenue growth in U.S. credit in the quarter. We continue to make strong progress with our new initiatives across our three strategic channels, including our new issue trading solution. We are increasingly leveraging AI to unlock more value from our proprietary data and analytics for our clients. And we are continuing to focus on expense discipline and optimizing capital deployment to maximize long-term shareholder value creation. Now we'd be happy to open the line for your questions.

Ladies and gentlemen, we will now begin the question and answer session. We ask that you please limit your input to one question. You may return to the queue for any additional questions. As a reminder, to ask a question, please press the star button followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment, please, for your first question. Your first question comes from the line of Chris Allen of KBW. Please go ahead. Your next question comes from the line of Dan Fannin of Jefferies. Please go ahead.

Thanks. Another really strong quarter out of your non-U.S. business. I wanted to talk about competition there and what you're doing to kind of maintain your moats or defend that as competition picks up and kind of and also just talk more broadly about the momentum in that business as you think about your bonds as well as EM. Thank you.

Great. Thanks, Dan. And obviously, we're quite excited about the progress in our international business. And just to clarify, our international business really are driven through our emerging market business as well as our Euro bond business. And so that's quite a strong quarter, not just in our U.S. credit business, but obviously in our international business. Emerging markets had Record ADD, record volume in Q1 up 30%, and really records across our key initiatives. The block initiative is where we've seen a lot of progress across EM and Eurobond business. Our block business, block volume in the Euro markets, in the EM markets was up 46%. And we also saw block volume up in the Eurobond business as well, a record up 45%. So we're really driving those two international businesses, both with traditional RFQ, where we're seeing a record volume in Q1, but also our key initiatives. Portfolio trading, we saw in the Eurobond market up 90%. And the dealer business as well, We had a record dealer business in the Eurobond business up 73%. So when you think about our key initiatives, block trading, the dealer initiative and our PT or portfolio trading initiative, they all experienced growth across our international businesses. And really that's been the strategy for just over a year and attacking the key, what I call flank of the key RFQ businesses. using the new products and new protocols that give us extended growth. With regard to the EM business, we obviously have very little competition on the electronic trading side other than we see Bloomberg. Bloomberg's probably the only one in that space that we see as a competitor. In Eurobond business, it's obviously Bloomberg. and TradeWeb that we see as competition in the space, but largely in the dealer-to-client business, our key franchise, we only see Bloomberg in that space really making a difference at all. So altogether, the international business saw a record quarter, record volumes, and it was really driven by the growth of our key initiatives. Block trading, we've launched all the block trading tools across EM and Euro bonds. Our portfolio trading tools have been rolled out across EM and Euro bonds. And then our dealer-initiated, that's where we've seen the biggest pickup using our Mid-X trading solution across Europe and recently launched in emerging markets as well.

Great. Thank you.

Your next question comes from the line of Chris Allen of KBW. Please go ahead.

Thanks for the question. Sorry about the tech issues. Wanted to dig a little bit deeper on the April commentary. Recognize the year-over-year headwinds were pretty material. But when you look at April relative to the first quarter months, we saw lower issuance and block activity that we can kind of track. So I'd say expectations, specifically in U.S. investment grade, were for stable to up share. TAB, Mark McIntyre, Anything you can point to we competent versus one the one key months besides tighter spreads or volatility that impacted share and, more importantly, anything any catalyst ahead that could allow you to outperform the environment over the next few months or quarters.

TAB, Mark McIntyre, Great i'm glad we have you back for us first, let me start to put April in perspective, I really want to. The setup is Q1, just as we step into April. I think it's important to take a quick look at Q1 because Q1 was really indicative of the progress we were making as we rounded out the end of 2025. Again, our key initiatives, the trends are quite consistent going through Q1. We grew block trading, as I mentioned, on the international business, but really in U.S., we saw block trading growing. We saw growing portfolio trading as well, and then growing our dealer business as well. So those key initiatives across the quarter continued on trends that we were seeing as we ended 2025. We also obviously not only had a record quarter, but we closed out the month of March with smashing records. We broke records across all products from US credit to the international products, even to equities and FX. Then at the end of March, we smashed our single day trading record on the last day of March as we went into April. all signs of phenomenal activity on the platform across all of our key channels and all of our key protocols throughout the quarter and as well as the month of March. As April started, we walked in right into a holiday week, if you recall, both religious holidays and the European holiday fell in that first week. And then right around April 8th was when we saw the ceasefire announced given the geopolitical activity that we were experiencing in the month of March. We saw the VIX drop from plus 25 down to around 17 quite rapidly. So obviously a quick slowdown in volatility. Now, it's not unusual to see a month following what I'll call excessive volatility, high turnover to have a material slowdown. And that's really what we saw in April. somewhat influenced by holidays, but really the slowdown that we saw in April was largely across all products. So it wasn't just U.S. credit that we saw the slowdown. Markets saw a slowdown across international products as well as treasuries or rates globally. So it was a consistent theme across the market. The other thing we noticed in April was a return to near historic spread tightening. Again, we saw this certainly in January and February. Some of that was broken in March with the volatility. The other thing we saw was near record-breaking new issuance return. While March was record-breaking, April was the new issuance market, and April was the second highest new issuance market for any April. If you had April in 2025, it would have been the second highest new issue in all of 2025. So quite a robust new issue market. And really that's what we really tried to show on the slides in our opening remarks was the market was largely turned its attention to that new issue market. Our clients, the client to dealer side of the business, certainly moved its attention to new issue Particularly new issue blocks, we saw the new issue block market grow by 34% year over year in quite a heightened April market environment. It grew as high as 13% of the total block market. So it was a sizable percentage of the overall block market in April. And really what we saw was clients moving all of their trading attention coming off of the high volatility and high turnover of March. they moved all their attention to that new issue market. We saw a lot of what we call switches or swaps where clients were trading the seasoned, exchanging seasoned bonds of the same issuer for that new issue bond. You typically would do that in block form directly with the dealer. So when we look at April, really not at all surprised or concerned with that one month slowdown. We've always said one month does not make the year. But we were also faced with what we call fairly robust new issue market. Now, here's some good news and some of the trends that you were asking about. We did see on month end, April 30th, it was our fourth largest single day trading record in history. So we did see a return of high activity at the month end. We also broke some high yield PTs during the month of April. So we saw it was a high yield PT record month for us. And then, as you mentioned, it was obviously a very difficult comparison to April 2025, where we were dealing with the tariff tantrum and volatility and quite high turnover during April of 2025. The good news is also in May, while we're certainly early in May, we have seen a return to higher levels of activity, which is quite exciting across all channels. And then my most exciting piece, and we put it in the opening remarks, is that we are addressing that new issue market. We have historically saw challenges during around new issue. We are addressing that new issue market with the launch of our direct books partnership, which we announced recently. And we are excitingly launching our new issue solution as a pilot form in the month of May, near the end of May. So we're excited that we are finally addressing the new issue market head on. And we have a new product coming to market that we're quite excited about.

Your next question comes from the line of Michael Cypress, Morgan Stanley. Please go ahead.

Hey, good morning. Thanks for taking the question. I was hoping to dig in on the new issue trading solution that you're going to be bringing to the marketplace. I was hoping you could elaborate on how that is going to work, key milestones that you're looking for, how you anticipate that contributing, and then maybe you could also touch upon the closing auction, just an update there in terms of traction, milestones as you look ahead, how you see that progressing and contributing. Thank you.

Great, thanks. Well, we're quite excited about our partnership with Directbooks and what that brings to the market. If you look at the new issue market in 2026, it's over $800 billion has been run through the new issue market year to date. Current forecasts are close to $2 trillion of new issue in 2026, so we're expecting a pretty vibrant new issue market in 2026. For quite a long time, clients have been asking us to assist in the new issue market, particularly streamlining an integrated solution in that new issue market. What we've really partnered with DirectBooks on is What's a great new issue solution? It's a brand new offering that will be rolling out again in pilot form at the end of May. We've ring fenced the solution, so it's a separate solution to traditional market access, all new UI, new technology. What's clear is that we're not part of the offering, just to be clear. We are really just providing clients with a streamlined access to direct book services. All clients have access to this seamless kind of access to this integrated offering and clients have to opt into the offering. So it's not just available to anyone. Clients actually have to opt in and dealers have to approve each client for each offering. So it's well integrated into how the new issue market operates today. It does provide first part of the partnership with DirectBooks is largely around data sharing. So we are able to present to our clients, have real time access to the DirectBooks new issue calendar, status updates on new issue, pricing information around that new issue, and then ultimately final pricing and final allocations. Our clients, what's exciting for clients is within their current credit application market access UI, clients can submit indications of interest to each deal being operated by the syndicate banks. Those indications of interest go direct to direct books and really made available for the syndicate banks to run their normal deal process. We are able to receive confirmations of final allocations and coming in August, those allocations will be subject to really a seamless booking and straight through processing to the client's back office, something clients have long complained about and asked for assistance in. So we can really be involved in the new issue process from start to finish. It also allows us to present a great deal of information around of the new issue market prior to the new issue pricing, but more importantly, at pricing and after pricing. What's really exciting is what comes later in August and the second half of 2026, where we will be presenting clients with really after the break of a new issue, a streamlined single two-way pricing a single click-to-trade solution for new issue trading. And this is an area that we have spent a lot of time on looking at what is the right protocol to attack the new issue market, but that where we see challenges around market share, it's right after the break of a new issue, and now we'll be able to have an offering in the second half rolled out. That allows us to trade directly on the break using access from dealers, streaming price, and a click-to-trade solution. So super focused on that new issue trading. And again, it's piloting the partnership with DirectBooks pilots. It starts to pilot with one or two clients at the end of May and will roll out during the month of May, June, and the rest of the summer. The demand and the feedback from clients that have seen the solution and have looked through the steps of the solution have been overwhelmingly positive. And obviously the dealer community was quite supportive given their partnership and direct ownership of direct books. So a very important partnership, a very exciting partnership, and obviously a very big step for market access to crack that new issue market, but also presenting clients with a solution that is quite seamless and quite simple for them to use in an aggregated way.

Thanks. And on the closing option, any update there?

Right. Sorry about that. On closing option, again, we launched this late in the quarter, about fourth quarter of 2025, really around December. Quite a great deal of excitement from some very large investor clients. around bringing to market a new protocol where we can organize and aggravate liquidity at a single moment in time. As you look at the fixed income market, it's unlike most markets. Liquidity in most markets, equities, futures, options, is what we call U-shaped. Liquidity start of day is quite strong. and you get increased liquidity at the end of day as well, a natural U-shaped curve of liquidity. Fixed income, we tend to see high levels of liquidity in the morning, and as the day progresses, levels of liquidity start to decrease near and around the end of the day, just given the risk of holding positions. This is designed to allow both clients and dealers to participate in a single auction, where dealers can provide a sizable liquidity at different price points and clients can find liquidity in and around the close of the trading day. While we launched it at the end of the year, unfortunately, during that quarter with all the volatility, we made progress with clients in how to use the close, how to use the auction. We rolled out new order types. We've seen staged in our platform over $11 billion in auction orders, and then we saw submitted over $7 billion in notional orders into the auction. While the trading volume is still light, we continue to see about 12 active, very large buy-side clients, and then four active dealers participating in the auction as well. So more to come on the auction is a novel protocol that we've delivered into the market, but there's a huge and overwhelming application for an end-of-day liquidity solution, and that's really from the client feedback that we've heard that have engaged in the auction.

Great. Thanks so much.

Our next question comes from the line of Simon Clinch of Rothschild and Co. Redburn. Please go ahead.

Hi, Chris. Thanks for taking my question. I was wondering if you could expand on the success of your new initiatives in European and international markets and just how to think about, I guess, the application of those in U.S. markets and what the differences are. It looks like the speed of the uptake there has been hugely positive in international markets, but we just don't see the same level of penetration, at least initially, in the U.S. I was wondering if you could talk to that, Chris.

Sure. Number one, I think you have to look at where those markets, the international markets, sit with regard to electronification. EM in particular, still we see, again, the notional volume of the total market is not clear. It's hard to estimate, but we do estimate we're still in early innings of electronification of the EM market. So much of our penetration in the market is organic growth of penetrating new clients, adopting electronic trading. The good news is we're using multiple protocols to engage those clients because each market, each local market in particular, is quite different in terms of the protocols that they gravitate to. But overall, The international market still has a great deal of growth given low levels of penetration. The good news about the different protocols that we're seeing expand, one, portfolio trading in EM is still early days relative to what we see in U.S. credit. So we think there's a lot more runway in portfolio trading. And we would expect to see more and more what we call global portfolio trades. coming to market where you are trading not just the EM bond, but across US and European bonds as well. And we're set up and designed to allow for global portfolio trading. Where we're most excited and we've seen a great deal of growth is our block trading solutions. We first launched our targeted RFQ into the EM markets. We thought it had great application. given some of the local markets are truly rates markets. Our block trading in Q1 in EM smashed records. It was up 46% year over year. It was up 11% quarter over quarter. So we're seeing organic, a true organic growth of the block market really starting in the EM market. And that's, again, where we launched it first. The dealer business as well. Remember, there's quite a sizable inner dealer business or dealer to dealer business in not only the euro bond market and the U.S. credit market, but also in the inner dealer market for emerging markets. That market for us was up 15%, largely driven by our dealer RFQ offering. So again, early innings on electronification of the EM market. We're using, as I mentioned, the different key protocols that we've launched across all our markets. I think the block market is most reflective of the success we're having in that EM market. And then there's one other protocol that we've had great deal of success, and it's been driving some of that block market share, and that's instead of request for quote, request for market, where you're really able to show more size from the client. You don't reveal your direction. So clients are much more comfortable trading blocks in a request for market. And that that that protocol has been growing consistently year over year and quarter over quarter. So a number of different protocols, but really we're just seeing some of the early launch protocols like our block solution growing

uh really outpacing some of the growth in em uh than we see in in other products thanks and just when i think about the us application of these initiatives then i mean if i look at the share gains you had sort of uh last year on a trading four quarter basis it's really sort of accelerated across all the initiatives and then it's really started to stagnate and come down i just wanted you what's the color around that i mean is this Do we just need to wait for these new new products to be launched to gain more traction again? Or is it something else at play?

Sure. Well, one, I think if you look at the first quarter and our record volume across U.S. credit, it was driven by some of these new initiatives. So our block trading activity in high grade, we saw a record up 31%. And then our PT volume was also up 35%. So some of the protocols that we've seen success in our international markets and we've launched here in the U.S., while it's still early days in that protocol and the breadth of that protocol being adopted by clients, we're still seeing heightened growth across those protocols. I think the one protocol that was newly launched in the US is Mid-X. Mid-X is our dealer solution. It was launched earlier in Europe and EM, but we have been seeing growth in Mid-X in US credit. Year to date, it's traded over 16 billion in volume, and we're seeing high participations from dealers. We have over 48 unique dealers participating on a regular basis. and a number of traders as well. And certainly, that's the one protocol that's still, I'd say, early days in U.S. credit.

Just one other thing I would add is you'll recall that in the fourth quarter, we talked about the significant amount of activity we were seeing in portfolio trading and high yield. And the first quarter, that also continued with our PT high yield ADB up about 78%. So we are seeing, as Chris said, some of these same protocols that are doing quite well in the international markets taking hold here as well. And there's, you know, obviously we're looking to see more to come.

Okay, thanks very much.

Your next question comes from the line of Alex Plosine of Goldman Sachs. Please go ahead.

Hey, everyone. Good morning. This is actually Aditya filling in for Alex this morning. Thank you for taking our question. So, Chris, we heard you in the prepared remarks on how you look to leverage AI to deliver unique data and analytics. Could you just help expand that a bit more, the opportunities that you see, what's reachable, the next steps from your, and I guess importantly, how would this create a structural advantage for market access that competitors cannot replicate? Thanks.

Great, great question and obviously an area that we've been spending a lot of time on. I think everybody has been spending a lot of time on. This is one, you know, I'm super excited really for our position in the market when it comes to data. And there's really three reasons why I'm so excited about the data opportunity. One, we have the best source data in fixed income. When you think about the breadth of our product, the the protocols that we use rfq is a phenomenal source of data because you have both the inquiry from clients around the planet as well as the response from both dealers alternative dealers hedge funds and clients now so the data source that we have is the raw data and and very important The other key ingredient is we have not sold what I call the good data. We have sold things like CP Plus. We have sold Access All. There's really good data underlying the platform, and we've been for now several years on these calls saying we will not sell all our data. It's too important to the execution solutions that we are building. The other reason why I'm excited is because we also protect the data that we sold. We have very tight restrictions, derived right restrictions, as well as AI use restrictions on the data sources that we are selling. So we feel like we're in a very good position to take advantage of the footprint of data we have. So also, the other opportunity that we have is we've been investing heavily in AI when it comes to our data for a number of years. It's not a new topic for us when it comes to data and data products. So within the use of AI to produce data or produce product, I'll be more clear, we have AI-derived real-time data called CP+. We've had it for quite a number of years. It is now across all products and certainly well regarded in the market, certainly viewed as real-time benchmark for trading U.S. credit, and we've been getting awards for that product as well. We are now able to predict using AI real-time block pricing based on your direction, sell or buy. We are predicting using AI liquidity levels in the market. We are also using AI, leveraging AI to predict what we call counterparty selection or dealer selection. as well. And then obviously, you know, one of my favorite use of AI is being able to predict when it is advantageous to provide liquidity. This is a very important component. It's one of the drivers behind our ALGO solution, which is the theory that clients who have historically crossed spread for most of their fixed income experience, are presented with the opportunity to avoid crossing spread. And we are now leveraging AI to actually help with predicting when is that beneficial for you to have patience and wait. So again, AI from a product and execution solution is really what's the most exciting part of our day. We are also, just to be clear, piloting a new AI solution with some of our clients. And the areas of exploration that's super exciting for us is, first, AI-derived real-time market intelligence. As I mentioned, our market footprint is quite broad, so we see the markets from the start of APAC through the trading hours of Europe into the U.S. hours, and we are able to leverage AI to look at the market intelligence, know what kind of direction certain sectors are experiencing, volumes, volatility, spread volatility, all of the market intelligence can be derived leveraging AI sitting on top of our quite broad source data. The second area of exploration where we have dabbled already is what we call portfolio optimization. Given the market intelligence that we have, given the levels of liquidity that we see in the market, AI is a wonderful tool in interpreting selection of underlying bonds when building a portfolio. And then the last area of exploration is really, and one that we hear from our clients the most, is leveraging AI to help suggest protocols. There are times when a portfolio trade is an optimal way to trade a list of bonds. There's times when going direct to a single dealer for a large block is the right protocol for that bond. So using AI to actually suggest protocol selection is a key ingredient to some of the areas of exploration. Now, the other area of AI, I think, which is super exciting for us, is certainly in the way we're leveraging AI in our technology footprint. If you look at market access for the first 20 years of our history, there's probably a large underinvestment in modern tech. We have been, over the last number of years, making sizable tech modernization investment. We've been doing that both organically and inorganically. If you recall, our acquisition of Pragma was really a tech modernization acquisition. We are now leveraging that technology and things like auctions and our automation suite. What AI is doing for us today is what's most exciting. We're now accelerating that tech monetization, including our core trading stack. We're currently actively engaged in AI solutions that can look at refactoring our legacy code. This is an exciting component that a number of people have deployed in the market space that we're in, where they can refactor legacy code. We're also seeing AI can increase our time to market on new capabilities and new functionality. So we're expanding our use of AI across our engineering footprint, all our developed developers have access to all the latest and top models, and that is slowly having an impact on how fast we move. As I mentioned in my open remarks, we brought in our CTO, Will Kwan. He has both cloud and AI experience, so that alone has accelerated our deployment of AI, and it's quite exciting. UI design is another area where we see AI development accelerating what clients can have in front of their desktop and how quickly we can turn around those UI designs. The last point on AI I'll make, and it's really around the M&A space that I foresee, I think AI is going to change the M&A landscape most rapidly. of my career was I was involved in M&A that was, you typically would see sizable tech synergies in M&A, and some M&A was really designed either, I either had acquisitions that we were doing that were tech accretive, where the technology synergies were one of the drivers of the M&A, or I had companies that were acquired because of tech synergies, where again, technology synergies were a big component in the synergy analysis of the acquisition. AI is effectively reducing the value of tech synergies when it comes to M&A. AI has the ability to, in a faster way, refactor older technology. So it's really changing the math of deals when you actually look at what AI is capable of making some deals less attractive because they're less synergy accretive. And that's an important thing. The other important thing is really to recognize and think about the market access over 25 years of sales effort and network effect. AI does not sell and distribute services. AI, it can't build client networks. It can't do KYC onboarding. It can do KYC work, but it does not onboard thousands of clients. It doesn't take clients to dinner, and it doesn't make source data. So what really becomes valuable in this world of AI when it comes to M&A is companies that have golden source data and companies that have broad networks and i do think ai not only is it changing our product set but it's also changing how fast we can deliver product and ultimately it changes the value of the data that we sit on and are mining today so sorry for the long-winded answer but it's really reflective of the excitement that we have and the advantages that ai give us

There are no further questions at this time. With that, I will now turn the call back over to Chris Concannon for final closing remarks. Please go ahead.

Great. Thanks, Ott. Thanks for joining us today, and thanks for listening to my long-winded answer on AI. We're excited to talk to you in the next quarter to give you an update on the progress we're making. Thank you.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.