MarketAxess Holdings Inc. Q1 2006 Earnings Conference Call Transcript

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

Question: Daniel Goldberg - Bear Stearns - Analyst : yes. Good morning.

Question: Daniel Goldberg - Bear Stearns - Analyst : How are you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Daniel Goldberg - Bear Stearns - Analyst : I guess, this is question for Jim. On the comp expense, you said 700,000 in the quarter. What should we expect from our models going forward for the rest of the year, is that a good run rate?

Question: Daniel Goldberg - Bear Stearns - Analyst : Okay. On volumes in April, have you seen any trends that will make you more excited through, I guess, we're through April already that would differ from what we saw in the first quarter?

Question: Daniel Goldberg - Bear Stearns - Analyst : Okay. And you haven't -- you didn't see specific to your business, didn't see anything different than what you -- what we see overall for TRACE?

Question: Daniel Goldberg - Bear Stearns - Analyst : Okay. Anything further on CDS, the progress that you're making there? I know you're not specifically disclosing any numbers around that. But maybe if you can help us quantify or give us a sense of any progress you've made so far in the first quarter?

Question: Daniel Goldberg - Bear Stearns - Analyst : Okay. And any sense for timing, when we might be able to see it, you know, really impacting the numbers or maybe when you might start to break out the volume specific to CDS?

Question: Daniel Goldberg - Bear Stearns - Analyst : Okay. Great. And then just lastly on consolidation, obviously, a lot going on among the exchange and you had several exchanges discussed fixed income products and new asset class for them. Any thoughts there in terms of how MarketAxess might play into that?

Question: Daniel Goldberg - Bear Stearns - Analyst : Okay. Great. Thank you, very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Patra Chakshuvej - JP Morgan - Analyst : Hi. This is actually Patra on the line. How are you guys doing?

Question: Patra Chakshuvej - JP Morgan - Analyst : Okay. Last quarter you guys had mentioned in your expense guidance that you depend on developing a new product that, which is foresee with about 2 million incremental expenses. I was wondering, if you could give us an update on where you stand on that product launching if do you indeed plan to launch it in the timing around that?

Question: Patra Chakshuvej - JP Morgan - Analyst : Okay. Great. I guess just looking at your volume growth, it looks like European volumes had much stronger growth quarter-over-quarter than US high-grade. I guess what factors do you think are playing in the market that would give you a higher level of, I guess, interaction integration in European market?

Question: Patra Chakshuvej - JP Morgan - Analyst : Okay. Great. And my last question, I have been looking at the NASD treated on a daily basis and it looks like second quarter today volumes are turning about 5% down quarter-over-quarter, which is inline with seasonality. I guess, I was just wondering what market forces do you think need to payout, in order to, kind of, elevate the overall level of trading on your high-grade corporate volumes? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Patra Chakshuvej - JP Morgan - Analyst : Okay great. Thank you, very much.

Question: Howard Chen - Credit Suisse First Boston - Analyst : Good morning, Rick. Good morning, Jim.

Question: Howard Chen - Credit Suisse First Boston - Analyst : On the other volumes being up 13% on a sequential quarter basis, I guess the lion share of that increase is probably driven by emerging markets. But how do you think about the growth in that line item versus emerging markets, CDS, high-yield, US agency -- all those cylinders of growth that you were speaking to, Rick?

Question: Howard Chen - Credit Suisse First Boston - Analyst : I guess that's another way. If you were to kind of order those four in terms of what drove the sequential quarter growth is it the emerging markets, high-yield agencies, CDS in that order or --?

Question: Howard Chen - Credit Suisse First Boston - Analyst : Understood, thanks. And then Jim on the licensing fees, I know this is lumpy quarter-to-quarter. But can you give a view of what the opportunity is in terms of new dealer sign-ups as we get into the balance of '06?

Question: Howard Chen - Credit Suisse First Boston - Analyst : Sure. So the current level still includes some benefit from broker-dealers who came on in the back half of '05?

Question: Howard Chen - Credit Suisse First Boston - Analyst : Okay.

Question: Howard Chen - Credit Suisse First Boston - Analyst : Okay. And then thinking about the marketing, advertising spend, is there anything seasonal to that, does that pick up as we accelerate through the year or is there something else that's going on in terms of really honing in on that spend? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Howard Chen - Credit Suisse First Boston - Analyst : Great. Thanks so much, guys.

Question: Aaron Cadell - Hold Capital - Analyst : Good morning. Can you hear me okay?

Question: Aaron Cadell - Hold Capital - Analyst : Just a couple of real mix. On the tax rate even -- and you said it was based at 160,000 was the reversal of the prior accrual.

Question: Aaron Cadell - Hold Capital - Analyst : Even with that tax rate you are a little less than the 40%. Was there anything else going on there? If you add that back, it's like 35 -- 34, 35%

Question: Aaron Cadell - Hold Capital - Analyst : Okay. And then, can you give any guidance for the share count for the full year or for the second quarter -- the diluted share count?

Question: Aaron Cadell - Hold Capital - Analyst : Okay. Thanks, very much.