Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference Transcript

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

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe before we dig in here, Chris, maybe you could just share some perspective on your recent hiring of a Ilene as CFO. And then Ilene, maybe just tell us a little bit about your background and what led you to join MarketAxess and what your focus will be? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : That sounds awesome.

Question: Michael Cyprys - Morgan Stanley - Analyst : That sounds exciting. Might we see any new KPIs or disclosures as a result?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Why don't we dig in here a little bit, just big picture first, just on the sort of state of electronification and credit markets. It seems it's maybe slowed a little bit in recent years after we had maybe a bit of a pull forward large acceleration back during COVID. Just maybe you could talk a little bit about what you see happening across big picture electronification of the industry. What are the major roadblocks or impediments that you see at this point?

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe just to dig in on that point, needing to replicate the phone and chat, maybe a little bit of an evolution of a viewpoint versus a couple of years ago looking to kind of open up into the block side of the marketplace. Talk about how you're thinking about overcoming these roadblocks, talk about some of the investments that you're making here to drive growth in this part of the business. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Why don't we talk a little bit about portfolio trading you've mentioned it, number of times here, it's gained significant momentum across the industry and at MarketAxess, the protocol or workflow solution, as you I think described, it enables one to trade a basket of different bonds in a single trade as has expanded to be about 7% to maybe 10% of the market, depending upon which month you're looking at, the April or May from about 5% or so a year ago. So significant growth you're breaking and you've had tremendous success in terms of your volumes there as well. Maybe just talk about your approach to portfolio trading or PT as we like to call it short here. How do you see the use cases evolving? And is there room for innovation at this point?

Question: Michael Cyprys - Morgan Stanley - Analyst : Any sense on how large PT could become as a portion of the marketplace. There's some numbers out there. Some say like 20%, 30%. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : And that's a great segue to the next question on automation. So you have an algo suite that's getting traction across your customer set with dealers and market makers that are using all that. Maybe just remind us how these algos work and then talk about where you see this headed as you look out over the next couple of years and any sort of catalysts along the way that could lead to sort of a step-function change in adoption?

Question: Michael Cyprys - Morgan Stanley - Analyst : And how does the Adaptive Auto-X workflow tool fit into this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : And maybe you could talk a little bit about the traction that you're seeing with this across your customer set in terms of the pace of adoption, how you see that trending?

Question: Michael Cyprys - Morgan Stanley - Analyst : So about that margin profile (laughter) yeah, and these are any (laughter) I'm good. All right. Great. Maybe you could talk about some of the workflow tools just broadly that you're introducing or expanding your footprint and presence with clients. What are the other types of workflow solutions that you might think about or you think about PT, what other workflow solutions come to mind? You have the auto algo suite as well. Where else might you innovate with this.

Question: Michael Cyprys - Morgan Stanley - Analyst : Now as markets electronify, we're hearing more about growing demand for these execution management systems or EMS platforms to enhance workflow efficiency. I guess how do you see the role in demand for EMS evolving across the marketplace? And what does it mean for MarketAxess?

Question: Michael Cyprys - Morgan Stanley - Analyst : Is that something you would look to build out and invest into more? And --

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe taking a bigger picture, just curious how you think about and see the competitive landscape, whether it's these EMS protocols that are connecting more broadly to others in the marketplace. There's newer platforms, there's technology solutions and also dealers are trying to establish direct connections to their own clients. So just curious how you're seeing this and how do you sort it plot a course for MarketAxess for growth and navigate around all of that for us. For us, the direction of travel is dictated by the client and clients have limited desktop. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Fair enough. Maybe shifting gears to high-yield. Overall industry volumes have been a bit softer in high yield this year. Market share as well has been a little bit softer at MarketAxess. Maybe just talk a little bit about what's driving that, what will it take to for MarketAxess to sort of reaccelerate growth and share and high yield? Do we need to wait for a market backdrop to evolve to change? And can you navigate through and grow putting aside any sort of market or macro evolutions?

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe shifting gears over to RFQ hub. You mentioned ETFs already here. Maybe just talk a bit about how your ETF volumes are evolving here. Talk about the contribution from RFQ [hub] and how much that contributes today? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe shifting gears over to emerging markets. This has been an important area of growth for MarketAxess over the years that has accelerated even quite meaningfully recently. What excites you most about the space in EM, where do you see the biggest opportunity and talk about some of the initiatives that you have that you're focused on?

Question: Michael Cyprys - Morgan Stanley - Analyst : So that's European credit as well as emerging market.

Question: Michael Cyprys - Morgan Stanley - Analyst : Which one cannot do, today. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : You enable that over the summer.

Question: Michael Cyprys - Morgan Stanley - Analyst : Could you envision rates embedded in that at some point to.

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. Maybe shifting over to data, your platform have some interesting and compelling unique datasets. Maybe just talk a bit about how you think about enhancing monetization of these datasets, whether it's data subscriptions, indices, even end-of-day pricing, where do you see some of the biggest opportunities?

Question: Michael Cyprys - Morgan Stanley - Analyst : And this is some of the data that's powering your algo suite.

Question: Michael Cyprys - Morgan Stanley - Analyst : It's just not opened up for them to --

Question: Michael Cyprys - Morgan Stanley - Analyst : And is there a meaningful opportunities here around indices. I know you've partnered --

Question: Michael Cyprys - Morgan Stanley - Analyst : Talk a little bit about that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:00PM, MKTX.OQ - Marketaxess Holdings Inc at Morgan Stanley US Financials, Payments & CRE Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. We're just about out of time. Maybe just final question on M&A and sort of capital allocation. You've done a few deals over the past five years or so. Just curious how much time you're spending on M&A these days and just how you're thinking about capital allocation.

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. I'm afraid we'll have to leave it there. Great Ilene, Thank you very much.