Marketaxess Holdings Inc at Morgan Stanley Financials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Cyprys - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>Great. So why don't we start with a little bit of a quick intro, Ilene, it's been a year since you joined MarketAxess and also a year since your first appearance at our conference. I think at the time, you were just a couple of days new on the job.

Question: Michael Cyprys - Morgan Stanley - Analyst : I thought that was Chris' decision. It was a game day moment when you decided to join us on stage. I think everyone was a little surprised. But now it's you. It's been a year. Maybe talk a little bit about your transition to MarketAxess and where you're spending most of your time and focusing now. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Why don't we shift and talk about volumes, market share. On the first-quarter conference call back in May, you noted the macro environment remains supportive for volumes and market share into early May. Can you talk about what we saw in April in a period of heightened uncertainty, how that fared into the month of May as the environment normalized? And what are you seeing so far here in June? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Your comment on velocity and turnover being a bit more elevated and sort of sustaining into May is an interesting one because people have been talking about prospects for a pickup in velocity for many years now. I guess how do you think about the prospects for that to sustain as we move forward? And were you surprised that it sustained in May?

Question: Michael Cyprys - Morgan Stanley - Analyst : Particularly on a year-on-year basis -- LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Why don't we shift and talk about market share, the implications we talked about volumes now market share. I guess what are the biggest needle movers here for accelerating your investment-grade market share? Again, it was pretty robust in April. I think it was flat sequentially into May.

Question: Michael Cyprys - Morgan Stanley - Analyst : Up on a year-on-year basis. Yes, but flat sequentially month on month. And then rebounding in high yield, how do you think about the prospects for that as well in terms of the timeframe there to see even continued strength in investment grade. What sort of backdrop would you need for that?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. And we're going to dive into each of those. But maybe just first on automation. In the first quarter, we saw record automation volume, nearly 250 companies -- clients, excuse me, have onboarded so far. So maybe just remind us how these algos work and how this is changing trader behavior and your outlook for further adoption?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Why don't we shift and talk about blocks. You referenced that earlier. Your high-touch block trading solution has shown some early success in EM and also on eurobonds, which you had launched late last year and earlier this year. What specific features or elements there would you say have resonated in the marketplace with your clients? And can you talk about the further rollout ahead for other geographies and products, including your recent launch here in the US for a high-touch block solution in US credit? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : And curious why start in EM and Europe versus the US?

Question: Michael Cyprys - Morgan Stanley - Analyst : And maybe CP+ being a big part of the EM business, too, to your point. Okay. Why don't we talk about portfolio trading. You alluded to that earlier in terms of area of focus, and it sounds like you've completed the build there, which is great to see. Your market share, I think, has grown to over 20%, but it can be a little volatile, I think, on a month-to-month basis. What's driven the success there? And how does your portfolio trading protocol today stack up versus the competition? Where is there room for further innovation that could help expand market share from here and also further adoption?

Question: Michael Cyprys - Morgan Stanley - Analyst : Anything from a feature standpoint? I know you're feature complete, but further enhancements you alluded to, anything sort of comes to mind on that front over the next couple of years? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : And is there more to go in terms of key hires?

Question: Michael Cyprys - Morgan Stanley - Analyst : He is from a very large London-based --

Question: Michael Cyprys - Morgan Stanley - Analyst : Right. Maybe just final thing on PT. You mentioned net hedging. That was something I think you guys rolled out within the PT suite earlier this year. Just anything to speak of in terms of notable traction, uptake on that? I know it's probably a little early -- LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. Another offering or sort of new offering from you guys is the Mid-X platform is expected to relaunch in the US in the second quarter using the Pragma technology. So I guess the question here is, how is the revamped version going to compare to what you've had in the market previously? What's different with this? And what differences might we see in terms of reception uptake in the US versus the Mid-X solution that we've seen from you guys in Europe for many years that has been successful over there. And Mid-X, just to clarify for everyone is the sessions-based. It's mid-market matching amongst dealers, dealer solutions.

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Maybe shifting gears to emerging markets, which has become a larger part of the business today. I think probably your second.

Question: Michael Cyprys - Morgan Stanley - Analyst : Largest business now. Which countries are the biggest contributors, would you say to that? How does the business portfolio look sort of when you peel under the hood there? And as you look out over the next couple of years, which countries could see a meaningfully larger contribution and talk to some of the steps you're taking? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley Financials Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Malaysia?

Question: Michael Cyprys - Morgan Stanley - Analyst : Just curious on the topic of EM, when you sort of peel under the hood in terms of the volumes, is it emerging market clients trading with each other, or is it a lot of the volume coming out of like Europe and the US that's trading amongst each other for emerging market? Or like who's on the other side --

Question: Michael Cyprys - Morgan Stanley - Analyst : Mystery there.

Question: Michael Cyprys - Morgan Stanley - Analyst : Got it. I know we have just a few minutes left. Just wanted to see if there's any questions in the room from anyone. If not, we can keep going and talk about competition and pricing, big topic.

Question: Michael Cyprys - Morgan Stanley - Analyst : People's mind. Just curious how you see the competitive landscape evolving as you look out over the next three to five years, whether it's newer players, new technology solutions, dealers trying to establish direct connections. And maybe we could tie in there how you're seeing pricing evolve. I know one of the competitors out there recently made some changes to dealer pricing in credit. I guess, in what scenario might MarketAxess sort of reassess and adjust?