Marketaxess Holdings Inc Q4 2024 Earnings Call Transcript

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

Question: Chris Allen - Citigroup Inc - Analyst : Yeah, good morning everyone. Thanks for taking the question. I wanted to talk about the block trading launch in the US. I'm kind of curious why you led with emerging markets [your bonds] first. When we think about the block trading launch, which we've been anticipated in the US, just how integral is having the deals on board for success on block penetration moving forward? And what steps you're taking to ensure that success. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 3:30PM, MKTX.OQ - Q4 2024 Marketaxess Holdings Inc Earnings Call

Question: Dan Fannon - Jefferies - Analyst : Thanks. I wanted to just follow up on a lot of your prepared remarks around kind of goals this year and improving market share. And I assume your first answer hit some of this, but what gives you confidence in terms of the ability to grow share in high grade and you are rolling out products, but curious if you think the protocols you have today are what is going to drive that? Or what is still on the come? Do you think that is going to be the driver of that increased market share?

Question: Benjamin Budish - Barclays - Analyst : Hey, good morning and thanks for taking the question. Chris, you kind of touched on what I wanted to ask you about, which was sort of a higher-level look at the market in terms of where there's room left to electronify. But I'll kind of ask it anyway. You've always said historically that the key competitors, the phone. I guess as you think about the block market, I think that's largely unelectronified side, but I'm curious where else do you think there is low-hanging fruit parts of the market that are electronified but maybe not all the way? And how important -- or how would you describe sort of what's necessary in terms of either -- is it either a matter of competition? Is it a matter of increasing electronification. How do you think about like which of those two is sort of more important as you think about growing your share over the next few years? Thank you.

Question: Kyle Boyd - KBW - Analyst : Hi, good morning, everyone. Maybe if I could just ask a bigger picture question on the high-yield business. January market share near 12%. I think 2 years ago, you were in the kind of 17% to 18% range. I know there's been a number of changes with the market. There's been cyclical headwinds, maybe some structural headwinds as well. But if you look at market share by client type and high yield, I'm just trying to understand where you're seeing good progress over the past 2 years. which client segments are still seeing some good growth? And then where are you seeing the most pullback or share migrate away or clients just pull back from the marketplace as we're trying to think about the growth trajectory and share from here?

Question: Alex Blostein - Goldman Sachs Group, Inc - Analyst : Hey, good morning, everybody. Thank you for taking the question as well. Lots of great color. I really appreciate the TAM analysis as well. I know it's going to be a hard question to answer, but I guess we'll try anyway. So big build-out year '25, you expect to see the benefits of that. How would you define success in terms of market share accomplishments in 2025 when it comes to high grade and high yield within the US. And I guess what are the kind of top one or two protocols that you're pushing forward? You named a lot of things that you think will help you recoup some of that market share and then ultimately, the implications and fee per million all else constant. And I know that the mix and macro could impact that was just kind of trying to get a sense of what the revenue implication from these efforts could ultimately be given that things like portfolio trading, et cetera, come with a much lower fee per million? Thanks.

Question: Jeff Schmitt - William Blair & Company LLC - Analyst : Hi, good morning. Portfolio trading as a percent of industry high-grade and high-yield activity, it's been around 10% for the last probably 6 months at least. What do you think is driving that pause? And can you continue to drive share gains there even if it stays at these levels?

Question: Elias Abboud - Bank of America Securities, Inc - Analyst : Good morning. Thanks for taking the question. Can you speak to your motivation behind acquiring the rest of RFQ hub and walk us through the materiality of the financial impact there? And then bigger picture, to what extent is it a priority for you to become more cross asset? Is that something you feel like clients are demanding?

Question: Michael Cyprys - Morgan Stanley - Analyst : Hey, good morning. Thanks for taking the question. Just hoping to touch on the rates platform for a moment. The volumes are up very nicely there on a year-on-year basis, but still a smaller contributor to revenues today. So can you just talk about some of the initiatives across your rates platform that you have in mind to further scale this part of the business. Talk about some of your ambitions here, how you see this contributing over time? And maybe you could also update us on the net spotting tool? What's been sort of the uptake from customers? I know you've had this for a bit. Just how do you see that contributing as well to the broader platform?

Question: Simon Clinch - Redburn Atlantic - Analyst : Hi, thanks for taking my question. I think most of my questions have been at and Chris, thanks so much for the detail and color a lot of really useful stuff I heard today. I just wanted to refer to Slide 19 in the bottom left, the relationship between (inaudible) and duration, which those obviously very sensitive. And I was just wondering if you could just talk about what kind of scenarios or what kind of macro conditions we would need to see for the people million to go or at least the duration to go below the lows that we saw in September '23 and thus take [million] below where we are today. Just kind of curious as to what -- I guess, how you're thinking about are we -- was the January number just like a bottom? Or is there still plenty of room for that to drop if conditions continue down as --