Q1 2024 MarketAxess Holdings Inc Earnings Call

Unknown Executive: Ladies and gentlemen, thank you for standing by. Welcome to the MarketAxess first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. As a reminder, this conference call is being recorded on May 7, 2024. I would now like to turn the call over to Steve Davidson, Head of Investor Relations at MarketAxess. Please go ahead,

Ladies and gentlemen, thank you for standing by welcome to the market access first quarter 2003 out of four earnings call French call. At this time all participants are in listen only mode. Later, we will conduct a question and answer session. As a reminder, this conference call is being recorded on May seven 2000.

Unknown Executive: 24, I would now like to turn the call over to Steve Davidson head of Investor Relations at market access. Please go ahead Sir.

Stephen C. Davidson: Good morning, and welcome to the MarketAxess first quarter 2024 earnings conference call. During the call, Chris Concannon, Chief Executive Officer, will provide you with a strategic update on the company. Rich Schiffman, Global Head of Trading Solutions, will update you on the performance of our markets this quarter, and then I will review the financial results.

Stephen C. Davidson: Good morning, and welcome to the market access first quarter 2024 earnings conference call.

Stephen C. Davidson: For the call, Chris Concannon, Chief Executive Officer, who will provide you with a strategic update on the company.

Stephen C. Davidson: Rich Schiffman global head of trading solutions will update you on the performance of our markets. This quarter and then I will review the financial results.

Stephen C. Davidson: 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 beliefs regarding future events, which by their nature are uncertain. The company's actual results and financial conditions 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 31st, 2023.

Stephen C. Davidson: Before I turn the call over to Chris Let me remind you that today's call may include forward looking statements.

Stephen C. Davidson: These statements represent the company's belief regarding future events that by their nature are uncertain.

Stephen C. Davidson: The company's actual results and financial condition may differ materially from what is indicated in those forward looking statements.

Chris: 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 2023.

Stephen C. Davidson: 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.

Chris: 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.

Stephen C. Davidson: Now, let me turn the call over to Chris.

Chris Concannon: Good morning, and thank you for joining us to review our first quarter results. Turning to slide three of my strategic update, we delivered 4% total revenue growth, including the benefit of our Pragma acquisition, and earnings per share were $1.92. While we are not happy with recent trends in our estimated market share in U.S. credit, we recognize the importance of being equally strong in the faster-growing areas of the market, and we have a clear strategy to return to higher levels of share growth.

Chris: Good morning, and thank you for joining us to review our first quarter results turning to slide three of my strategic update we delivered 4% total revenue growth, including the benefit of our pragma acquisition and earnings per share was $1 92.

Chris Concannon: While we are not happy with recent trends and our estimated market share in U S credit we recognize the importance of being equally strong in the faster growing areas of the market and we have a clear strategy to return to higher levels of share growth.

Chris Concannon: We are attacking these faster growing areas of the market while maintaining and building on our leadership in the institutional investor RFQ market. Our strength in this segment of the market is underpinned by our leading global client franchise and the largest single source of liquidity in the credit markets, open trading. First, in the quarter, our global client franchise continued to expand. We had a record 2,100 active client firms.

Chris Concannon: We are attacking these faster growing areas of the market, while maintaining and building on our leadership in the institutional investor <unk> market.

Chris Concannon: Our strength in this segment of the market is underpinned by our leading global client franchise.

Chris Concannon: The largest single source of liquidity in the credit markets open trading.

Chris Concannon: First in the quarter, our global client franchise continued to expand.

Chris Concannon: You had a record 2100 active client firms next we delivered record commission revenues across several credit product areas.

Chris Concannon: Next, we delivered record commission revenues across several credit product areas. U.S. high-grade commission revenue grew 8%, and we delivered record levels of commission revenue in emerging markets, euro bonds, and municipal bonds, helping to offset the impact of lower U.S. high-yield activity. The benefits of our geographic and product diversification continue to pay dividends. Non-U.S. credit revenue was a record $92 million in the quarter, representing a record 44% of total revenue.

Chris Concannon: U S High Grade Commission revenue grew 8% and we delivered record levels of commission revenue in emerging markets Euro bonds and municipal bonds, helping to offset the impact of lower U S high yield activity.

Chris Concannon: The benefits of our geographic and product diversification continued to pay dividends non U S. Credit revenue was a record $92 million in the quarter, representing a record 44% of total revenue last we continue to be disciplined around our expense management with total operating.

Chris Concannon: Last, we continue to be disciplined around our expense management, with total operating expenses increasing only 9%, including the impact of pragmatism. We delivered these results against a market backdrop of historically low levels of credit spread volatility, which has created the ideal conditions for growth of portfolio trading and dealer-centric protocols. These low levels of volatility have also impacted ETF market participants and hedge funds, decreasing activity in our U.S. high-yield business. We believe, however, that our estimated share will recover with more normal levels of spread volatility due to the diversified liquidity on our platform.

Chris Concannon: <unk>, increasing only 9%, including the impact of practice we.

Chris Concannon: We delivered these results against a market backdrop of historically low levels of credit spread volatility, which has created the ideal conditions for growth of portfolio trading and dealer centric protocols.

Chris Concannon: These low levels of volatility have also impacted ETF market participants and hedge funds decreasing activity in our U S high yield business we.

Chris Concannon: We believe however that our estimated share will recover with more normal levels of spread volatility due to the diversified liquidity on our platform.

Chris Concannon: We were pleased to see an improvement in estimated high yield share in the back half of April. We are encouraged by the strong new issuance calendar for the start of the year, as well as the increase in trading velocity. Strong new issuance is an indicator of healthy growth in our market, and increased trading velocity means that dealers are trading more with much smaller balance sheets. This trend should only continue with significantly higher bond yields, making fixed income a very attractive asset class.

Chris Concannon: We're pleased to see an improvement in estimated high yield share in the back half of April.

Chris Concannon: We are encouraged by the strong merchant calendar to the start of the year as well as the increase in trading velocity strong new issuance as an indicator of healthy growth in our market and increased trading velocity means that dealers are trading more with much smaller balance sheet.

Chris Concannon: This trend should only continue with significantly higher bond yields, making fixed income a very attractive asset class. This.

Chris Concannon: This is a key attribute of our market today; all our clients need to do more with less, and we are very well positioned to address this need. Slide four illustrates how portfolio trading and dealer-initiated trading significantly expanded the overall market in April. Since 2019, portfolio trading and dealer-initiated flow have grown at four-year CAGRs of 38% and 10%, respectively, compared to 2% for client-initiated flow. The growth of these segments is closely linked because dealers typically recycle the risk from a portfolio trade in the interdealer market.

Chris Concannon: This is a key attribute of our market today or our clients need to do more with less and we are very well positioned to address this need.

Chris Concannon: Slide four illustrates how portfolio trading and dealer initiated trading significantly expanded the overall market in April.

Chris Concannon: Since 2019 portfolio trading and dealer initiated flow have grown at four year, CAGR of 38% and 10% respectively compared to 2% for client initiated slow the growth of these segments is closely linked because dealers typically recycled the risk from a portfolio of trade in the.

Chris Concannon: Interdealer market.

Chris Concannon: For portfolio trading, we have made substantial investments in our PT solution, and the share gains we saw at the end of April indicate that we have designed a very competitive trading solution for our clients. We will continue to rapidly deploy enhancements to our platform as we are still in the early stages of PT innovation.

Chris Concannon: Our portfolio trading we have made substantial investments in our <unk> solution and the share gains we saw at the end of April indicate that we have designed a very competitive trading solution for our clients. We will continue to rapidly deploy enhancements to our platform as we are still in the early stages of <unk> innovation for.

Chris Concannon: For dealer initiated flow, we are now delivering the same trading automation tools to dealers seeking liquidity that have been rapidly growing with investor clients. These tools improve dealers' trading efficiency and help solve their need to rapidly exit inventory risk. Approximately 30% of the liquidity we provide to dealers comes from our investor-client firm. Accompanying the electronification of larger-sized portfolio trades is an explosion in ticket count, as shown on the right-hand side of this slide. XPro, our new platform designed to make trading more efficient, is now handling 55% of U.S. credit trade volume for our 22 largest clients.

Chris Concannon: <unk> initiated flow we are now delivering the same trading automation tools to dealers seeking liquidity that have been rapidly growing with investor clients.

Chris Concannon: Tools improve dealers trading efficiency and help solve their need to rapidly exit inventory risk approximately 30% of the liquidity, we provide to dealers comes from our investor client firms okay.

Chris Concannon: Accompanying the electronic vacation of larger sized portfolio trades.

Chris Concannon: Explosion in ticket count as shown on the right hand side of this slide X pro our new platform designed to make trading more efficient is now handling 55% of U S credit trade count for R 22 largest clients.

Chris Concannon: Slide five illustrates key trends in portfolio trade. The growth of PT is a very important step in the evolution of the market. Portfolio trading is a protocol of immediacy, which has helped accelerate the electronification of larger-size trades, representing approximately 10% of the high-grade and high-yield trace market in April. Portfolio trading has also allowed traders to do more, more efficiently, and with a streamlined workflow. The impressive growth of portfolio trading shows us the sizable demand our clients have for immediacy and efficiency, with the average notional per line item of a PT trending lower.

Chris Concannon: Slide five illustrates key trends and portfolio trading.

Chris Concannon: The growth of PTA is a very important step in the evolution of the market portfolio trading is a protocol of the immediacy, which has helped to accelerate the electronic vacation of larger size trades, representing approximately 10% of the high grade and high yield trace market in April.

Chris Concannon: Solid trading has also allowed traders to do more and more efficiently and with a streamlined workflow the impressive growth of portfolio trading shows us the sizable demand our clients have for immediacy and efficiency with the average notional per line item of our PT trending lower we believe we must address that.

Chris Concannon: We believe we must address that demand for immediacy and efficiency in all products and across all types of market environments. This is a great trend for the market overall, and it is a strong indicator of future e-trading demand for trades of all sizes, but we do believe that historically low credit spread volatility has created very supportive market conditions for the recent growth in portfolio trade. Slide six frames the U.S. high-grade market opportunity.

Chris Concannon: Demand for immediacy and efficiency in all products and across all types of market environments. This.

Chris Concannon: This is a great trend for the market overall and then there is a strong indicator of future E trading demand for trades of all sizes, but.

Chris Concannon: But we do believe that historically low credit spread volatility has created very supportive market conditions for the recent growth in portfolio trading.

Chris Concannon: Slide six France, the U S high grade market opportunity, while portfolio trading and dealer initiated trading have been growing faster. We are also continuing our investments in higher margin high quality areas of the market our launch of credit algorithms and block trading solutions are less pro are targeting the more challenging.

Chris Concannon: While portfolio trading and dealer-initiated trading have been growing faster, we are also continuing our investments in higher-margin, high-quality areas of the market. Our launch of credit algorithms and block trading solutions on XPro targets the more challenging parts of the market that have not migrated to electronic trading solutions. The client-initiated segment of the market, excluding PT, is an estimated $620 million revenue opportunity, representing approximately 58% of the total estimated e-trading opportunity in U.S. high-grade. And as trade sizes greater than $5 million are broken down into smaller trades, we believe that the higher fee per million, combined with an increase in velocity, can drive this revenue opportunity significantly higher.

Chris Concannon: <unk> parts of the market that have not migrated to electronic trading solution.

Chris Concannon: The client initiated segment of the market. Excluding PTA is an estimated $620 million revenue opportunity representing approximately 58% of the total estimated E trading opportunity in U S high grade.

Chris Concannon: And thats trade sizes greater than $5 million of broken down into smaller trade, we believe that the higher fee per million combined with an increase in velocity can drive this revenue opportunity significantly higher we believe that the market opportunity over the long term is actually moving into our sweet spot not away from it.

Chris Concannon: We believe that the market opportunity over the long term is actually moving into our sweet spot, not away from it. In summary, we are attacking higher growth areas like portfolio trading and dealer-initiated execution, while we are keeping our focus on building solutions for the largest, most attractive parts of the credit market. 5-7, we highlight the client toolkit we are building for the future. Marketaxess is a global network with a privileged position in the credit markets.

Chris Concannon: In summary, we are attacking the higher growth areas like portfolio trading and dealer initiated execution. While we are keeping our focus on building solutions for the largest most attractive parts of the credit markets.

Chris Concannon: Slide seven we highlight the client toolkit, we are building for the future.

Chris Concannon: Market access is a global network with a privileged position in the credit markets. The unique tools that we're building for traders are being delivered by X pro getting traders a portal to access our powerful data and analytics, our automation and algorithmic trading tools and the single largest source of liquidity and the credit Mark.

Chris Concannon: The unique tools that we are building for traders are being delivered by XPRO, giving traders a portal to access our powerful data and analytics, our automation and algorithmic trading tools, and the single largest source of liquidity in the credit market. We are an increasingly integrated ecosystem focused on making life easier for traders while solving for our clients' need to do more with less. Now, I will turn the call over to Rich to provide you with an update on our market.

Rich: We are an increasingly integrated ecosystem focused on making life easier for traders, while solving for our clients need to do more with less.

Richard J. Schiffman: Slide 9 highlights the continued strong expansion of our client network. We had a record 2,118 active client firms trading on our platforms in the first quarter, which included 1,619 client firms active in U.S. credit and a record 1,066 active international firms. Trading volume from hedge fund and private bank clients increased 23% year-over-year and represented 18% of total credit volume, up from 16% in the prior year. Adoption of our automation suite of products continues to grow, as shown on slide 10.

Chris Concannon: Now, let me turn the call over to rich to provide you with an update on our markets.

Richard J. Schiffman: Thanks, Chris Slide nine highlights the continued strong expansion of our client network.

Richard J. Schiffman: We had a record 2118 active client firms trading on our platforms in the first quarter, which included 1619 client firms active in U S credit and a record 1066 active international firms.

Richard J. Schiffman: Trading volume from hedge fund and private bank clients increased 23% year over year and represented 18% of total credit volume up from 16% in the prior year.

Richard J. Schiffman: Adoption of our automation suite of products continues to grow as shown on slide 10.

Richard J. Schiffman: We experienced another quarter of record automation trade volume and count, with three-year CAGRs of 34% and 40%, respectively, and a record 231 active automation client firms. Automation trade volume now represents 10% of our total credit volume and a record 25% of our total credit trade volume. There were a record 11 million algo responses from dealers, an increase of 50% year over year.

Richard J. Schiffman: We experienced another quarter of record automation trade volume in count with three year, CAGR of 34% and 40%, respectively and a record 231 active automation client firms.

Richard J. Schiffman: Automation trade volume now represents 10% of our total credit volume and a record 25% of our total credit trades.

Richard J. Schiffman: There were a record 11 million algo responses from dealers and increase of 50% year over year.

Richard J. Schiffman: On slide 11, we highlight the expansion of our trading business across geographies and products. Continuing the theme of strength in our international businesses, we generated record international client trade volume and trade count in the first quarter. Trade volume was up 13% versus last year, with a three-year CAGR of 10%. Trade count was up 10% versus last year, with a three-year CAGR of 19%. A key driver of this strength was record total emerging markets trading volume, up 15% year over year, driven by a 28% increase in local currency trading volume.

Richard J. Schiffman: On slide 11, we highlight the expansion of our trading business across geographies and products.

Richard J. Schiffman: Continuing the theme of strength in our international businesses, we generated record international client trade volume and trade count in the first quarter.

Richard J. Schiffman: Trade volume was up 13% versus last year with a three year CAGR of 10%.

Richard J. Schiffman: Rate count was up 10% versus last year with a three year CAGR of 19%.

Richard J. Schiffman: A key driver of this strength was record total emerging markets trading volume up 15% year over year, driven by a 28% increase in local currency trading volumes.

Richard J. Schiffman: Our LATAM and APAC clients generated record levels of emerging markets ADV in the quarter, up 11% and 55%, respectively. We were pleased to see a strong increase in EM volumes in the first quarter, and that strength has continued into April. Emerging markets continue to be a very attractive growth opportunity for the company. Last week, we announced that Dan Burke has joined the company as Global Head of Emerging Markets. We're excited to have Dan's experienced leadership in this important and growing business.

Richard J. Schiffman: Our Latam and APAC clients generated record levels of emerging markets Adv in the quarter up 11% and 55% respectively.

Richard J. Schiffman: We were pleased to see a strong increase in <unk> volumes in the first quarter and that strength has continued into April emerging markets continues to be a very attractive growth opportunity for the company.

Richard J. Schiffman: Last week, we announced that Dan Burke has joined the company as global head of emerging markets. We're excited to have Dan experienced leadership in this important and growing business.

Stephen C. Davidson: AccessIQ, our front end for private banking clients, generated ADV of $140 million, an increase of 22%, and record trade count of 62,000, up 54% compared to the prior year. We are also seeing strong product diversification in municipal bonds with a record estimated market share of 6.5%, up from 5.7% in the prior year. Slide 12 provides an update on Open Trading, our market-leading all-to-all liquidity pool. Open Trading ADV was $4.4 billion, and its share of total credit volume was 34%, down from 37% in the prior year.

Richard J. Schiffman: Access IQ our front end for private banking clients generated adv of $140 million, an increase of 22% and record trade count of 62000 up 54% compared to the prior year.

Stephen C. Davidson: We are also seeing strong product diversification in municipal bonds with record estimated market share of six 5% up from five 7% in the prior year.

Stephen C. Davidson: Slide 12 provides an update on open trading and our market, leading all to all liquidity pool.

Stephen C. Davidson: Open trading Adv was $4 4 billion and share of total credit volume was 34% down from 37% in the prior year.

Stephen C. Davidson: Hedge fund trade activity has continued to expand on our platform with a record ADV of $1.9 billion in the quarter, up 30% from the prior year. Additionally, 202 hedge funds provided liquidity through open trading in the quarter, a 6% increase from the prior year. Lower volatility and lower price dispersion in the market reduce the price improvement opportunity for OT, as shown on the lower left of this slide. And it has also impacted our high-yield product area, as shown in the chart on the lower right, as ETF market maker activity has declined. Open trading continues to be the largest single source of secondary liquidity in the U.S. credit markets, driven by our diverse liquidity pool. Now, I will turn the call over to Steve to review our financial performance.

Stephen C. Davidson: Hedge fund trade activity has continued to expand on our platform with record Adv of one 9 billion in the quarter up 30% from the prior year.

Steve: The total of 202 hedge funds provided liquidity through open trading in the quarter, a 6% increase from the prior year.

Steve: Lower volatility and lower price dispersion in the market reduces the price improvement opportunity in OTT as shown on the lower left of this slide.

Steve: And it has also impacted our high yield product area as shown in the chart on the lower right is ETF market maker activity has declined.

Steve: <unk> trading continues to be the largest single source of secondary liquidity in the U S credit markets driven by our diverse liquidity pool.

Stephen C. Davidson: Now, let me turn the call over to Steve to review our financial performance.

Stephen C. Davidson: Thank you, Rich. On slide 14, we provide a summary of our first quarter financials. We delivered revenue of $210 million, up 4% from the prior year. These results include $8 million from the Pragma acquisition. Foreign currency was a $1 million benefit in the quarter.

Steve: Thank you rich on slide 14, we provide a summary of our first quarter financials.

Steve: We delivered revenue of $210 million up 4% from the prior year.

Steve: These results include $8 million from the Pragma acquisition.

Steve: Foreign currency was a $1 million benefit in the quarter.

Stephen C. Davidson: Information Services revenue of $12 million was up 8%, including a $200,000 benefit from currency fluctuation. The increase was driven by new contracts as we continue to experience strong adoption across our data product suite, especially CP+. Post Trade Services revenue of $11 million was up 8%, including a $200,000 benefit from currency fluctuation. The favorable interest rate environment contributed $6 million of interest income, up from $4 million. The effective tax rate was 24.9%, and we reported diluted EPS of $1.92 per share.

Steve: Information services revenue of $12 million was up 8%, including a $200000 benefit from currency fluctuations.

Stephen C. Davidson: The increase was driven by new contracts as we continue to experience strong adoption across our data product suite, especially CP plus.

Stephen C. Davidson: Post trade services revenue of $11 million was up 8%, including a $200000 benefit from currency fluctuations.

Stephen C. Davidson: The favorable interest rate environment contributed $6 million of interest income up from $4 million.

Stephen C. Davidson: The effective tax rate was 24, 9% and we reported diluted EPS of $1 92 per share.

Stephen C. Davidson: On slide 15, we provide more detail on our commission revenue and our fee capture. Total commission revenue increased $3 million, or 2%, in the quarter. The increase in credit commission revenue was due to stronger estimated market volume across several product areas, mostly offset by lower estimated market share and high yield on lower credit spread volatility. The reduction in total credit fee capture from the prior year was driven principally by product mix, specifically lower high yield activity. The decline in fixed distribution fees was driven principally by the consolidation of two global bank trading desk operations.

Stephen C. Davidson: On slide 15, we provide more detail on our commission revenue in our fee capture.

Stephen C. Davidson: Total commission revenue increased $3 million or 2% in the quarter.

Stephen C. Davidson: The increase in credit Commission revenue was due to stronger estimated market volume across several product areas.

Stephen C. Davidson: <unk> offset by lower estimated market share in high yield on lower credit spread volatility.

Stephen C. Davidson: The reduction in total credit fee capture from the prior year was driven principally by product mix.

Stephen C. Davidson: Typically lower high yield activity.

Stephen C. Davidson: The decline in fixed distribution fees was driven principally by the consolidation of two global bank trading desk operations.

Stephen C. Davidson: On slide 16, we provide a summary of our operating expenses. First quarter operating expenses of $118 million included $8 million from Pragma and a $600,000 negative impact from foreign currency fluctuation. Based on the progression of expenses in the first quarter, operating expenses for full year 2024 are tracking to the low end of the previously stated guidance range of $480 million to $500 million. On slide 17, we provide an update on our balance sheet, cash flow, and capital management.

Stephen C. Davidson: On slide 16, we provide a summary of our operating expenses.

Stephen C. Davidson: First quarter operating expenses of $118 million included $8 million from pragma, and a $600000 negative impact from foreign currency fluctuations.

Stephen C. Davidson: Based on the progression of expenses in the first quarter operating expenses for full year 2024 are tracking to the low end of the previously stated guidance range of 480 million to $500 million.

Stephen C. Davidson: On slide 17, we provide an update on our balance sheet cash flow and capital management.

Stephen C. Davidson: Our balance sheet continues to be solid, with cash and investments totaling $513 million as of March 31st, and we had no outstanding borrowings under the credit facility. We repurchased 47,000 shares in the quarter for a total of $10 million, and a total of 90 million remains on the current board authorization. During the trailing 12 months, we paid out approximately $110 million in quarterly dividends to our shareholders. Our board of directors declared a regular quarterly cash dividend of 74 cents per share based on the financial performance of the company. Now, let me turn the call back to Chris for his closing comments. Thanks, Steve.

Stephen C. Davidson: Our balance sheet continues to be solid with cash and investments totaling $513 million as of March 31.

Stephen C. Davidson: And we had no outstanding borrowings under the credit facilities.

Stephen C. Davidson: We repurchased 47000 shares in the quarter for a total of $10 million and a total of $90 million remains on our current board authorization.

Stephen C. Davidson: During the trailing 12 months, we paid out approximately $110 million in quarterly dividends to our shareholders.

Stephen C. Davidson: Our board of directors declared a regular quarterly cash dividend of <unk> 74 per share based on the financial performance of the company now.

Stephen C. Davidson: Now, let me turn the call back to Chris for his closing comments. Thanks, Steve in summary on Slide 18, we continued to execute very well against our growth strategy in the first quarter the increase in new issuance higher rates and an increase in velocity of trading all point to a healthy and growing fixed income market.

Chris Concannon: Thanks, Steve. In summary, on slide 18, we continue to execute very well against our growth strategy in the first quarter. The increase in new issuance, higher rates, and an increase in velocity of trading all point to a healthy and growing fixed income market. We are disappointed with our market share in U.S. credit, and we recognize the importance of being equally strong in the faster-growing segments of the market. We have a clear strategy to attack these areas, leveraging XPRO as our delivery mechanism for the retooling of our trading offering.

Chris Concannon: We are disappointed with our market share in U S credit and we've recognized the importance of being equally strong in the faster growing segments of the market. We have a clear strategy to attack these areas leveraging X pro as our delivery mechanism for the retooling of our trading offering while.

Chris Concannon: While we continue to drive adoption of XPRO with clients, we are maintaining our leadership position in the investor-client e-trading space, and our focus continues to be on the largest, most attractive order flow in the credit markets and building the client toolkit of the future to help our clients do more with less. Now, we would be happy to open the line for your questions.

Chris Concannon: We continue to drive adoption of X pro with clients, we are maintaining our leadership position in the investor client E trading space.

Chris Concannon: Our focus continues to be on the largest most attractive order flow and the credit markets and building the client toolkit of the future and to help our clients do more with less now we would be happy to open the line for your questions.

Unknown Executive: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask questions while listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking questions.

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Unknown Executive: We do request for today's session that you please limit to one question and one follow-up. Again, press star 1 to join the queue. And our first question comes from the line of Chris Allen from Citi. Please go ahead.

Unknown Executive: Asking question, we do request for today's session that you. Please limit to one question with one follow up again bressler wanted to join the queue.

Unknown Executive: Question comes from the line of Chris Allen from Citi. Please go ahead.

Christopher John Allen: Yeah, morning, everyone. Thanks for taking my question. I want to follow up on portfolio trading. You talked in the past about making inroads into the traders who control portfolio trading, who are also the key market participants for block trading. So I wonder if you could give us an update on what kind of progress you have made there, adding any new clients, and also the 40% share noted on the last day of April. Was that due to one large trade, new clients turning up, or some other factors?

Christopher John Allen: Yes, good morning, everyone. Thanks for taken taking my question.

Christopher John Allen: I wanted to follow up on portfolio trading trading you talked in the past about making inroads into the traders who control portfolio trading were also the key market participants for block trading. So I wonder if you could give us an update on what kind of progress you have made there, adding any new clients and also the 40% share noted the last day of April was that due to one large tree.

Christopher John Allen: <unk>, new clients, turning on or some other factors.

Chris Concannon: Sure, Chris, thanks for the question. Obviously, we've had a great deal of focus on portfolio trading more recently. As you know, we recently launched our new platform, XPRO, just last year, and obviously, we launched XPRO specifically for portfolio trading with an embedded portfolio trading solution just nine months ago. We've been ramping up features and functionality on that platform as well, and we've seen some of the benefits of that. More importantly, we do see that pre-trade analytics, particularly with our proprietary data, is a critical part of that strategy. Providing traders with those pre-trade analytics helps them with not only how to trade the portfolio but also how to construct the portfolio and optimize that portfolio.

Speaker Change: Sure Chris Thanks for the question.

Chris Concannon: Honestly, we've had a great deal of focus on portfolio trading more recently as you know we've.

Chris Concannon: So that's been an area of positive feedback that we've been getting from the portfolio traders in the space. Again, remember, portfolio trading is quite concentrated; somewhere between 30 to 40 traders in the U.S. really drive the largest market share of PT trading, with the largest clients driving the largest share of PT trading. So more recently, particularly in April, we saw benefits of the rollout of XPRO for portfolio trading. In April, XPRO made up about 60% of the volume, PT volume, that we see on the platform.

Chris Concannon: We recently launched our new platform X pro.

Chris Concannon: Just last year, and obviously, we launched X pro for specifically for portfolio trading.

Chris Concannon: And then with regard to your question around that end-of-month statistic, end-of-month is a unique time for us, and the market is quite high volume where people are repositioning their portfolios. So you do tend to see a higher number of portfolios. It was not one or two portfolios; it was a series of portfolios that we saw that day. Rich, anything to add on portfolio trading? Just the

Chris Concannon: With an embedded portfolio trading solution, just nine months ago.

Rich: We've been ramping up features functionality.

Rich: On that platform as well and we've seen some of the benefits of that more importantly, we do see that pre trade analytics, particularly with our proprietary data is a critical part of that strategy, providing traders with those pre trade analytics helps them with not only how to trade.

Chris Concannon: The portfolio, but also how to construct the portfolio and optimize our portfolio.

Rich: Thats been an area.

Rich: Positive feedback that we've been getting from the portfolio traders in this space again remember portfolio trading is quite concentrated on somewhere between 30 to 40 traders in the U S.

Rich: Really drive the largest market share of PT trading in with the largest clients driving the largest share of PT trading.

Rich: So more recently, particularly in April we saw the benefits of the rollout of X pro.

Chris Concannon: Our portfolio of trading.

Chris Concannon: In April now makes up X pro makes up about 60% of the volume.

Chris Concannon: PT volume that we see on the platform.

Chris Concannon: And then with regard to your question around that debt.

Chris Concannon: And of months still.

Chris Concannon: Statistics.

Chris Concannon: And a month is a unique time for us in the market is quite high volumes, where people are repositioning their portfolio. So you do tend to see a higher number of portfolios. It was not one or two portfolios. There is a series of portfolios that we saw that day rich anything to add on portfolio trading.

Richard J. Schiffman: Just the chunky nature of it, and you can have a lot of spikes up and down with adoption on any given day. As Chris pointed out, it's a targeted group. It's a relatively small number of PTs that we're all after. We estimate about 20 to 40 per day of substantial size, call it 50 million and above, and we're all going after those. So on the days where we can capture it, and we had a great day at month end, you see a number like that 40%.

Rich: The the chunky nature of it and you can have a lot of spikes up and down Chris I mean with.

Richard J. Schiffman: <unk> adoption on any given day it as Chris pointed out it's a targeted group. It's a relatively small number of <unk> that we're all after we estimate about 20% to 40 per day of substantial.

Richard J. Schiffman: <unk> call it $50 million and above and we're all going after those so on the days, where we can capture it and we had a we had a great day odd months and you'll see it you'll see a number like that 40% that gives us a lot of confidence that we can carry that onto throughout the.

Richard J. Schiffman: That gives us a lot of confidence that we can carry that on throughout the entire month. So clients are open to using different platforms, and with the liquidity being the same, it's a matter of coming up with the best workflows and unique features that are going to attract traders to our solution.

Richard J. Schiffman: Entire months, so clients are open to using different different platforms.

Richard J. Schiffman: With the liquidity.

Richard J. Schiffman: <unk> the same across its a matter of coming up with the best workflows and unique features that are going to attract the.

Richard J. Schiffman: The traders to our solution.

Chris Concannon: Thanks. And just on my follow-up question, XPRO gave us the metric around the top 20 clients, but I'm wondering where you guys stand in rolling it out to your overall client base? And then specifically, where are you in the process of signing up with dealers for dealer access to XPRO? Sure, again, just to remind you.

Speaker Change: Thanks, and just a follow up I just wanted to ask about X pro.

Chris Concannon: Gave us the metric around the top 20 clients, but I'm wondering where you guys stand in rolling it out to your overall client base and then specifically where you are in the process from signing up dealers for dealer absence of test prep.

Chris Concannon: Sure, again, just to remind everyone, Xpro is our new platform. It comes with new features and offerings. It really allows clients to trade bonds of any size or complexity, like things like portfolio trading. It also is a cockpit for traders to start their day.

Speaker Change: Sure again, just to remind everyone ex pro is our new platform.

Chris Concannon: It comes with new features and offerings. It really allows clients to trade bonds of any size or complexity.

Chris Concannon: Like things like portfolio trading.

Chris Concannon: It also has a cockpit for traders to start their day so.

Chris Concannon: So it is a unique offering from Marketaxess. We rolled out Xpro for RFQ, traditional RFQ, last year. We were targeting our largest clients, and within our largest clients, what we call our power users.

Chris Concannon: It is.

Chris Concannon: <unk> offering from market access.

Chris Concannon: Rollout X pro for RF Q traditional RF Q last year, we were targeting our largest clients and within our largest clients what we call. Our power users. These are traders that trade higher volumes in ticket count.

Chris Concannon: These are traders that trade higher volumes in ticket count. We've seen, since that rollout, very positive trends as a result of Xpro usage. At the trader level, anecdotally, we've seen, you know, somewhere around a 20% increase in ticket handling, so there is great efficiency embedded in Xpro. Currently, with regard to the rollout, Chris, only about 16% of our total US credit volume is going through Xpro at this point. So we still have a long way to go to accelerate the rollout of Xpro.

Chris Concannon: We've seen since that rollout very positive trends as a result of X pro use.

Chris Concannon: After trader level anecdotally, we've seen somewhere around 20% increase in ticket handling. So there is great efficiency embedded in X Pro currently with regard to the rollout Chris only about 16% of our total U S credit volume is.

Chris Concannon: Going through X pro at this point, so we still have a long way to go to.

Chris Concannon: <unk> the rollout of X pro.

Chris Concannon: And again, as I mentioned earlier, we only launched the PT solution on Xpro just nine months ago and continue to add additional features, functionality, and, obviously, pre-trade analytics. We do have an important phase of XPRO coming this summer.

Chris Concannon: And again as I mentioned earlier, we only launched the PT solution on X Pro just nine months ago and continue to add additional features functionality and obviously pre trade analytics.

Chris Concannon: We do have an important phase of Expro coming this summer so our first phase of X pro for what we call high touch or block trading and that's regarding your question around dealer content. We are onboarding dealer content as we speak we're quite encouraged by the dealer.

Chris Concannon: It's our first phase of XPRO for what we call high-touch or block trading, and that's regarding your question around dealer content. We are onboarding dealer content as we speak. We're quite encouraged by the dealer feedback around providing content to our platform. Remember, our high-touch solution, our block trading solution, is very dealer-friendly. It allows dealers to be in comp without an all-to-all, so it allows them to price clients based on a smaller universe of competition.

Chris Concannon: Feedback around providing content to our platform remember our high touch solution of our block trading solution is very dealer friendly the allowance dealers to be in comp without all to all so it allows them to price clients.

Chris Concannon: On a smaller universe of competition.

Chris Concannon: We are also adding to XPRO what we call unique proprietary data, AI Dealer Select, which helps clients select the preferred dealer in a given CUSIP or a given bond. These are all proprietary solutions that we're seeing should be rolled out. Starting in late summer, we'll start seeing additional phases of our XPRO rollout for what we're calling a high-touch or block trading solution.

Chris Concannon: We are also adding tax pro what we call a unique proprietary data AI dealers select which helps.

Chris Concannon: Clients are select the preferred dealer in given Q Super given bond. So these are all proprietary solutions.

Chris Concannon: We're seeing should be rolled out starting in.

Chris Concannon: In late summer, we will start seeing.

Chris Concannon: Additional phases of our extra rollout for what we're calling high touch or block trading solutions.

Speaker Change: Thanks, a lot guys.

Alexander Kramm: Our next question comes from the line of Alex Kramm from UBS. Please go ahead.

Chris Concannon: Our next question comes from the line of Alex Kramm from UBS. Please go ahead.

Alexander Kramm: Yes. Hey, good morning, everyone.

Alexander Kramm: Yes, Hey, good morning, everyone.

Alexander Kramm: I know theres a lot of focus on portfolio trading, but if I look at your Tam charge, you clearly think that dealer initiated opportunities is bigger. So maybe you can give us an update there. It's a very crowded space and you. Obviously have admitted that you kind of laid to it. So just seeing where you stand today any insurance you have made any feedback you have.

Alexander Kramm: I know there's a lot of focus on portfolio trading, but if I look at your TAM chart, you clearly think that dealer-initiated opportunities are bigger. So maybe you can give us an update there. It's a very crowded space, and you obviously have admitted that you're kind of late to it. So just seeing where you stand today, any inroads you've made, any feedback you've gotten, and how pricing may be differentiated out there in particular.

Alexander Kramm: And how pricing may be a differentiator there in particular.

Richard J. Schiffman: Yeah. Hi Alex.

Alexander Kramm: Yeah, Hi, Alex it's rich and.

Richard J. Schiffman: We feel really good about our dealer business, it's something that we've been in for a number of years and we lead there with our flagship protocol, which is RF SKU and we've offered that to dealers for over a dozen years now and.

Richard J. Schiffman: It's Rich, and we feel really good about our dealer business. It's something that we've been in for a number of years, and we lead the way with our flagship protocol, which is RFQ. And we've offered that to dealers for over a dozen years now, and its adoption rate is pretty wide. Where we have work to do is on single-price auctions or matching protocols, which have become pretty attractive in the market now. That is a protocol where network effects really matter, and you need critical mass.

Richard J. Schiffman: Its adoption rate is pretty wide, where we have work to do is on a single price auctions or matching protocols, which have become pretty attractive over the past several years in the market now.

Richard J. Schiffman: That is a protocol where network effects really matter and you need critical mass.

Richard J. Schiffman: And we have a solution in the market, and now we're actively working on building up the adoption for it. We're doing that in London for the Eurobond market, and we're doing it here for investment grade and high yield markets. And it's an onboarding process and getting the adoption built up. And we're confident we'll be competitive in that space as well.

Richard J. Schiffman: We have a solution in the market and now we're actively working on building up the adoption for it we're doing that in both London for the eurobond market and we're doing it here for investment grade and high yield markets and it's an onboarding process and getting the adoption built.

Richard J. Schiffman: Built up and we're confident we'll be competitive in that space as well.

Richard J. Schiffman: We are working on delivering new tools for dealers, similar to the way that we're rolling out XPRO for buy-side traders. We're going to be doing something similar for sell-side traders so that they can more productively access these protocols. So it's a combination of traders who use it from a front-end tool and also via APIs for firms that have their own internal trading systems, and they want to connect, you know, through there in a more efficient manner.

Richard J. Schiffman: We are working on delivering new tools.

Richard J. Schiffman: For dealers similar to the way that we're rolling out X pro for buy side traders.

Richard J. Schiffman: We're going to be doing similar for the sell side traders. So that they can more productively access. These protocols. So it's a combination of traders who use it from a front end tool and also via API for the firms that have their own internal trading systems and they want to connect.

Richard J. Schiffman: Through there in a more efficient manner, so investments in interfaces investments and protocols and then also tying those protocols together is something we're focused on so that someone can try I'm going to I'm going to be matching at amid.

Richard J. Schiffman: So investments in interfaces, investments in protocols, and then also tying those protocols together is something we're focused on so that someone can try, I'm going to be, you know, matching at a mid. If I don't get that available, maybe I want to leave a resting order in an order book, or then I ultimately want to tap in. I have to sell, or I have to buy; I'm going to hit the bid or lift the offer using RFQ. So it's combining these pieces that we have right now, which are, you know, kind of operating independently. We believe that it's going to be really attractive to the sell-side traders.

Richard J. Schiffman: Don't get that available maybe I want to leave arresting order and an order book or then ultimately want to tap in I have to sell or have to buy I'm going to hit the bid or lift the offer using RF Q. So it's combining these pieces that we have right now which are.

Richard J. Schiffman: Kind of operating independently, we believe thats going to be really attractive to the sell side traders.

Chris Concannon: And Alex, I'd just add, as Rich was mentioning, some of the new protocols and offerings that we're providing to the dealers. One important one, which only rolled out in December of last year, is our automation suite. It's quite a popular suite of solutions for our clients. We have now provided that automation suite to dealers. It is now about between 17 to 20 percent of our dealer RFQ. It allows dealers to price quite effectively across the spread using an automated RFQ tool. So that's well-received among the dealers and continues to ramp up, and we're seeing positive benefits in our dealer RFQ volumes as a result.

Speaker Change: And Alex I would just add.

Chris Concannon: As Richard was mentioning some of the new protocols and offerings that we're providing the dealers one important one which only rolled out in December of last year as our automation suite.

Chris Concannon: It's quite a popular suite of.

Chris Concannon: Solutions for our clients, we now provided that automation suite to dealers. It is now about between 17% to 20% of our dealer RF Q that allows dealers to.

Chris Concannon: <unk> quite effectively across the spread using an automated RF Q tool. So that's well received among the dealers and continues to ramp up and we're seeing positive benefits in our <unk> Q volumes as a result.

Stephen C. Davidson: All right, very good. And then maybe just a super quick housekeeping question. On FPM, maybe for the first quarter or April, can you give us a little bit of a breakdown where we stand on the different product types, high yield versus high grades, euro bonds, etc.? Thanks.

Speaker Change: Alright, very good and then just maybe just Super quick housekeeping question on SPM, maybe for the first quarter or April can you give us a little bit of a breakdown, where we stand on the defense.

Stephen C. Davidson: Our product types high yields versus high.

Stephen C. Davidson: Versus high grades euro bonds et cetera. Thanks.

Alexander Kramm: Yeah, hi Alex, it's Steve here. In terms of the fee per million, you know, in April, we mostly saw pretty, pretty stable pricing across the products. You know, what you saw in April was the impact of higher PT, which definitely dampened it a bit. We were down overall by about $2 per million. So, you know, a lot of that was PT. But I think that the Eurobonds piece was a little bit better if you think about it year over year.

Stephen C. Davidson: Yeah, Hi, Alex it's Steve here in terms of the fee per million.

Alexander Kramm: April we've mostly seen pretty pretty stable pricing across the products.

Alexander Kramm: What you've seen in April was the impact of higher pte, which definitely dampened it a bit we were down overall about $2 per million. So.

Alexander Kramm: Lot of that was <unk>.

Alexander Kramm: Bliss PT.

Alexander Kramm: Last year, remember, we had those crossing trades, which depressed the fee per million, and it came back this year in April to more normal levels of around $120. So, overall, I think pricing is pretty stable. It's just that that PT increase in April was outsized. Fair enough. I'll follow up. Thanks.

Alexander Kramm: <unk>.

Alexander Kramm: But I think that the euro bonds piece was a little bit better. If you think about it year over year last year remember, we had those crossing trades, which depressed the fee per million and it came back this year in April back to more normal levels around 120. So overall I think pricing is pretty stable, it's just that.

Alexander Kramm: <unk> increase in April was.

Alexander Kramm: Outsized.

Speaker Change: Fair enough I'll follow up thanks.

Alexander Kramm: Okay.

Patrick Malcolm Moley: Our next question comes from the line of Patrick Moley from Piper Sandler. Please go ahead.

Alexander Kramm: Our next question comes from the line of Patrick Morley from Piper Sandler. Please go ahead.

Patrick Malcolm Moley: Yeah, good morning. Thanks for taking the time to ask the question. I just, you know, not to hammer on portfolio trading, but I appreciate the disclosure around market share on the last day of April being 40%. I was hoping, you know, you could maybe help us frame that, like, how does that compare to the rest of the month and maybe where you've been year to date? And then, given that this is going to be a big focus area moving forward, is there anything you can give us in terms of, you know, guideposts for kind of measuring how you guys are performing from a market share standpoint in portfolio trading? Thanks.

Patrick Malcolm Moley: Yes. Good morning, Thanks for taking the question.

Patrick Malcolm Moley: Just not to hammer on portfolio trading but.

Patrick Malcolm Moley: Appreciate the disclosure around market share on the last day of April being 40% I was hoping.

Patrick Malcolm Moley: You can just maybe frame help us frame that like how does that compare to the rest of the month and maybe where you have been year to date and then given that this is going to be a big focus area. Moving forward is there anything you can give us in terms of.

Patrick Malcolm Moley: Guidepost for kind of measuring how you guys are performing.

Patrick Malcolm Moley: From a market share standpoint and portfolio trading thanks.

Chris Concannon: Yeah, thanks, Patrick. And obviously, we expected to focus on portfolio trading today. And we've obviously been focused on portfolio trading for some time, particularly with the rollout of new solutions to address the portfolio trading market. We do think that portfolio trading is an important tool for our largest clients. Obviously, it's a tool for immediacy and efficiency of trading.

Speaker Change: Yes, Thanks Patrick.

Patrick Malcolm Moley: Obviously.

Chris Concannon: We expected our focus on portfolio trading today, and we've obviously been focused on portfolio trading for some time, particularly with rollout of new solutions.

Chris Concannon: The portfolio trading market.

Chris Concannon: We do think the portfolio trade is an important tool for our largest clients obviously.

Chris Concannon: It's a tool for immediacy and.

Chris Concannon: And efficiency of trading.

Chris Concannon: In this credit environment, where we're seeing high levels of demand for fixed income product set that's a benefit to our.

Chris Concannon: In this credit environment where we're seeing high levels of demand for fixed income products, that's a benefit to our client franchise, and we're seeing them convert that demand for fixed income into large portfolio trades. I think the month of April was what I'd call an unusual month for portfolio trading.

Chris Concannon: Our client franchise and we're seeing that.

Chris Concannon: Convert those that demand for fixed income into large portfolio trades I think the month of April was.

Chris Concannon: We saw a number of very large portfolio trades during the month, somewhere around $10 billion and $7 billion in size. So those are quite sizable portfolio trades that we haven't seen, almost record size. We expect portfolio trading to continue to be a vibrant part of the credit market, and that's why we're so focused on delivering a solution. As we mentioned, just a number of trades, a handful of trades, can swing market share in the PT market.

Chris Concannon: What I would call an unusual month for portfolio trading we saw a number of very large portfolio trades during the month.

Chris Concannon: We're around $10 billion 7 billion in size. So these are those are quite sizable portfolio trades that we havent seen almost record size.

Chris Concannon: We expect portfolio trading to continue to be a vibrant part of the the credit market and that's why we're so focused on delivering a solution.

Chris Concannon: As we mentioned.

Chris Concannon: A number of trades, a handful of trades can swing market share in the PT market.

Chris Concannon: But it's such an important part of our of our clients' demand for immediacy that we're trying to deliver.

Chris Concannon: But it's such an important part of our client's demand for immediacy that we're trying to deliver an enhanced solution through XPRO to solve the PT. We do think that those pre-trade analytics are a critical part of our traders, and we get positive feedback. We've added things like tradeability that help you really analyze your portfolio and make decisions around what should and shouldn't be in the portfolio. We've added other portfolio construction tools as well.

Chris Concannon: And enhanced solution through X pro to solve the PT we.

Chris Concannon: We do think that those pre trade analytics are a critical part of our traders and we get positive feedback we've added things like trade ability that help you really analyze our portfolio and make decisions around what should and shouldn't be in the portfolio. We've added other defer other portfolio construction.

Chris Concannon: And we've also increased the line item capacity so our clients can trade very large line items; over 2,000 line items is part of the demand we're seeing from the largest clients. So we do see it as a critical tool in our clients' toolkits, and we will continue to report. Obviously, we have our monthly reports where we share our PT volume regularly and the overall traceable PT volume in the market. So hopefully, you can just look out for our monthly reports, and you'll see greater progress throughout the course of the year in our PT volume.

Chris Concannon: Tools as well and we've also increased the line item capacity. So our clients can trade very large line items over 2000 line items.

Chris Concannon: Part of the demand we're seeing from the largest clients. So we do see it as a critical tool kit.

Chris Concannon: And our clients toolkit and we will continue to report obviously, we have our monthly reports, where we share on RPT volume regularly and the overall Tres <unk> volume in the market. So hopefully you can just look out for our monthly reports and Youll see.

Chris Concannon: Greater progress throughout the course of the year and RPT volume.

Patrick Malcolm Moley: Okay, thanks for that. And then you repurchased $10.1 million worth of shares this quarter. I think that was the first or the most significant repurchase you have made since the middle of 2022. So can you talk about that decision and maybe what we should expect in terms of the size and pace of buybacks from here? Thanks.

Speaker Change: Okay. Thanks for that and then you repurchased $10 1 million worth of shares this quarter I think that was it.

Patrick Malcolm Moley: Okay.

Patrick Malcolm Moley: The most significant repurchases you did since the middle of 2022 can you. So can you talk about that decision and maybe what we should expect in terms of the size and pace of buybacks from here. Thanks.

Stephen C. Davidson: Yeah, hi Patrick, it's Steve here. So, you know, there's really been no change to our approach with capital. I think we're, we're still focused on the dividend. And our buyback activity is really still focused on just offsetting dilution. And, you know, I think that we basically frontloaded some repurchases about two years ago, so we almost put in like two years of repurchases a couple of years ago. So I think we'll be opportunistic, you know, going forward in terms of repurchases, but there will be no change overall in terms of the philosophy for capital.

Patrick Malcolm Moley: Yes, Hi, Patrick its Steve here, So there's really been no change to our approach with capital I think we're still focused on the dividend and our buyback activity is really still focused on just offsetting dilution and I think that we we basic.

Stephen C. Davidson: <unk> front loaded.

Stephen C. Davidson: Some repurchases about two years ago. So we almost look like two years is of repurchases.

Stephen C. Davidson: A couple of years ago, So I think we'll be opportunistic going forward.

Stephen C. Davidson: Terms of repurchases and but no change overall in terms of the philosophy for capital.

Patrick Malcolm Moley: All right, great. Thank you.

Speaker Change: Alright, great. Thanks, guys.

Kyle Kenneth Voigt: Our next question comes from the line of Kyle Voigt from KBW. Please go ahead.

Patrick Malcolm Moley: Our next question comes from the line of Kyle Voigt from K B W. Please go ahead.

Kyle Kenneth Voigt: Hi, good morning. Maybe just first on the high yield side, you know, the share's been a bit volatile month to month this year. I guess the question for April with the uptick in shares, was that primarily from higher pure ETF market maker flow, given some of the elevated high yield ETF volumes we saw in the month? But have the systematic traders remained disengaged, or are you really starting to see in April some of those systematic traders or hedge funds re-engage in that market yet that you had called out earlier this year that had kind of pulled back?

Kyle Kenneth Voigt: Hi, good morning.

Kyle Kenneth Voigt: Maybe just first on the high yield side and the other.

Kyle Kenneth Voigt: Sure it's been a bit volatile month to month. This year I guess a question on April with the uptick in chair was that primarily from higher peer ETF market maker flow given some of the elevated high yield ETF volumes, we saw in the month, but the systematic traders have remained disengaged or are you really starting to see in April some of those systematic traders or hedge.

Kyle Kenneth Voigt: <unk> re engage in that in that market yet that you had called out earlier. This year that had had kind of pulled back.

Richard J. Schiffman: Yeah, hi Kyle. It's Rich. It's a combination. I mean, we were happy to see a little bit of a, you know, pickup back from March 13.3 versus 12.7 from March. We've still got a way to come back, but, you know, we're seeing signs that market conditions are becoming more favorable. It's a combination of activity from both real money and from the ETF community. So it's definitely, you know, trending in the right way here.

Rich: Yes, Heiko, it's a rich its a combination I mean, we were we were happy to see a little bit of a.

Richard J. Schiffman: Pick up back from March $13 nine versus $12 seven from from March.

Richard J. Schiffman: Still got a way to come back, but we're seeing.

Richard J. Schiffman: The signs that the market conditions are becoming more favorable.

Richard J. Schiffman: It's a combination of activity from both real money and from the from the ETF community. So it's definitely.

Richard J. Schiffman: Trending in the right way here so.

Kyle Kenneth Voigt: Okay. And then, just maybe, one more follow-up on PT. You noted some of the added functionality there, but can you remind us of the differences in fee structures in your PT offering versus your competitors? I recall there was maybe something you were evaluating in terms of changing the fee structure, or the billing for the product. I suppose, have any final decisions been made on that? And do you think that could make a difference in positioning the offering competitively in addition to what you're doing in terms of adding functionality to the product?

Richard J. Schiffman: Okay.

Speaker Change: Then just maybe one more follow up on PT you noted some of the added functionality there, but can you remind us of differences and fee structures in your in your PT offering versus your competitors I recall. There is maybe something you were evaluating in terms of changing the fee structure of the billing for the product I guess have any final decision has been made on that.

Kyle Kenneth Voigt: And do you think that could make a difference in positioning the offering competitively. In addition to what youre doing in terms of adding functionality to the product.

Richard J. Schiffman: Yeah, yeah, thanks, Kyle. It's, you know, it's definitely a competitive space on PTs. And, you know, we've talked about in the past that the PT fee capture is at a lower rate than in-comp business and substantially lower than, say, all-to-all open trading business. And, you know, there are different ways to levy the fees. We know there are competitors out there that are trying to make a, you know, a name for themselves and break into this market, sometimes going without any fees on it.

Speaker Change: Yes, yes, thanks Carla.

Richard J. Schiffman: It's definitely a competitive space on Pts.

Richard J. Schiffman: We've talked about in the past that the PT fee capture is at a lower rate than income business and substantially lower than say all to all open trading.

Richard J. Schiffman: Business and.

Richard J. Schiffman: There are there are different ways to levy the fees. We know there are competitors out there that are that are trying to make a.

Richard J. Schiffman: A name for themselves and break into this market, even going sometimes without any fees on it.

Richard J. Schiffman: We are shifting to a model.

Richard J. Schiffman: We are shifting to a model where it's a, you know, levying of a fee on the dealer. It's, it's consistent with the way others in the market are charging. And we didn't want to have a fee model that was standing out, you know, and putting us in an adverse position. So I'd say competitive on fees and consistent in the manner of charging fees with others who are levying fees on these trades.

Richard J. Schiffman: Where it's a.

Richard J. Schiffman: <unk> of the fee on the dealer.

Richard J. Schiffman: It's consistent with the way others in the market or charging and we didn't want to have a fee model that was standing out.

Richard J. Schiffman: Putting us into an adverse position, so I'd say competitive on the fees and consistent in the manner of charging fees with others, who are levying fees on these trades.

Richard J. Schiffman: I'm sorry is that is that already in place? You said the move to build the dealers or that's going to come in place with our with

Speaker Change: And sorry is that is that already in place you said that the move to build the dealers or that is going to come in place with our with our next major release, which is coming in the next few weeks.

Richard J. Schiffman: That's going to come in place with our next major release, which is coming in the next few weeks.

Speaker Change: Understood. Thank you.

Daniel Thomas Fannon: Our next question comes from the line of Dan Fannon from Cyprys. Please go ahead.

Richard J. Schiffman: Our next question comes from the line of Dan Fannon from Jefferies. Please go ahead.

Daniel Thomas Fannon: Thanks. Good morning.

Daniel Thomas Fannon: Thanks, Good morning, sticking with the topic of PT was hoping you could just talk about what you think the normal steady state of this protocol is as a percentage of volume or where it could get to I think you've put out some numbers previously but the market has continued to evolve so was hoping to get your updated thoughts on kind of what you think that protocol can ultimately be is on a.

Chris Concannon: Sticking with the topic of PT, I was hoping you could just talk about what you think the normal steady state of this protocol is as a percentage of volume or where it could get to. I think you put out some numbers previously, but the market has continued to evolve. So I was hoping to get your updated thoughts on kind of what you think that protocol can ultimately be on a consistent basis.

Chris Concannon: Consistent basis.

Speaker Change: Sure I'll take that.

Chris Concannon: Sure, I'll take that. And look, we certainly are at fairly historically low levels of credit spreads and credit spread volatility. That certainly creates a ripe environment for not only portfolio trading but also the dealer-to-dealer mid-market matching solutions. So we certainly see at these levels of volatility that we've witnessed here in 2024 and certainly at times during 2023, higher levels of PT and higher levels of mid-market matching solutions. So as credit spread volatility can increase, we do see it impacting levels of PT.

Chris Concannon: Look we certainly are at.

Chris Concannon: Fairly.

Chris Concannon: Historically low levels of credit spreads and credit spread volatility.

Chris Concannon: That certainly creates.

Chris Concannon: Ripe environment for not only in portfolio trading, but also the dealer to dealer mid market match solutions.

Chris Concannon: We certainly see at these levels of volatility.

Chris Concannon: That we've witnessed here in 2024 and certainly.

Chris Concannon: Times during 2023 higher levels of <unk> and higher levels of mid market matching solutions.

Chris Concannon: Certainly, in April, we had some spikes of volatility. During those periods, we saw slight decreases in PT during the trade day, but we continued to see a high level of PT throughout the month of April as volatility declined. So we are certainly not predicting that these levels, historically low levels of credit spread volatility, will remain for a continued period of time. They typically go through cycles.

Chris Concannon: So.

Chris Concannon: As credit spread volatility can increase we.

Chris Concannon: We do see it impacting.

Chris Concannon: Level of PTA certainly in April we had some spikes of volatility.

Chris Concannon: During those periods, we saw slight decreases in PT during the trade day.

Chris Concannon: But we continue to see a high level of <unk> throughout the month of April volatility declined so.

Chris Concannon: We are not <unk>.

Chris Concannon: Certainly not predicting that these levels historically low levels of credit spread volatility will remain.

Chris Concannon: The continued.

Chris Concannon: Period of time.

Chris Concannon: <unk> co.

Chris Concannon: Go through cycles.

Chris Concannon: We do think portfolio trading that said portfolio trading will be an important tool for our clients and they will continue to remain at levels that we're seeing today and we don't expect.

Chris Concannon: We do think portfolio trading, that said, portfolio trading will be an important tool for our clients, and they will continue to remain at levels that we're seeing today. And we don't expect massive growth of the PT market over time. We do think it'll probably stabilize at a certain level and be just another important part of the market ecosystem.

Chris Concannon: <unk> growth of the PT market over time, we do think it will probably stabilize at a certain level and beyond.

Chris Concannon: Another important part of the market ecosystem.

Richard J. Schiffman: Yeah, Ben, I'll just add to that. I mean, it's definitely here to stay. It provides a lot of benefits to clients in terms of the workflow. You know, it's going to be interesting to see what happens when the market environment changes and volatility increases and the PT becomes a relatively more expensive trade, whether it's still going to maintain the kind of, you know, percent of the market right now we're seeing, roughly around whether that number goes down or stays the same. I would not think that that's a number that' So it is something to consider.

Speaker Change: Yes, Ben I'll, just add to that.

Richard J. Schiffman: It's definitely here to stay as it provides a lot of benefits to clients in terms of the workflow.

Richard J. Schiffman: Is going to be interesting to see what happens when the market environment changes in volatility increases and the PT becomes a relatively more expensive trade, whether it's still going to maintain the kind of percent of the market right now we're seeing roughly around 10%.

Richard J. Schiffman: Whether that number goes down stays the same.

Richard J. Schiffman: I would not think that that's a number that's going to rise and our high vol environment when it becomes relatively more expensive.

Richard J. Schiffman: Versus doing trades and cop, so something to consider.

Daniel Thomas Fannon: Great, thank you. And then just as a follow-up on expenses, I know it's early in the year, early in the year, but you're already tracking towards the low end of the guidance for this year. So, I guess, first, kind of what has changed since the initial guidance a couple of months ago, and then as we think about the rest of the year, and the factors that are going to take you to the below, lower than the low end, or back towards the midpoint or higher, what are those? Is that just volumes? Is it market share? Or are there other factors?

Speaker Change: Great. Thank you and then just as a follow up on expenses I know it's earlier in the year early in the year, but you're already tracking towards the low end of the guidance for this year. So I guess first kind of what has changed since the initial guidance a couple of months ago, and then as we think about the rest of the year and the factories are going to take you to the below lower than that.

Daniel Thomas Fannon: Low end or back towards the midpoint or higher.

Daniel Thomas Fannon: Are those is that just volumes is it market share or what are the other factors.

Stephen C. Davidson: Yeah, hi Dan. It's Steve here.

Speaker Change: Yes, Hi, Dan.

Daniel Thomas Fannon: It's Steve here I think if you step back I think where we're exiting a period of some pretty substantial investments that we've made with.

Steve: With X pro our proprietary data.

Stephen C. Davidson: I think if you step back, I think we're exiting a period of some pretty substantial investments that we've made with XPRO, our proprietary data, ADX. So I think we've come out of that period in the fourth quarter, and we achieved some significant efficiencies coming out of the year. And I think, you know, what's going on in the organization is that we're more disciplined as we look at the expense base coming out of that spending.

Steve: So I think.

Steve: We've come out of that period in the fourth quarter, we achieved some significant.

Stephen C. Davidson: Efficiencies coming out of the year and I think.

Stephen C. Davidson: What what's going on in the organization is that we're more disciplined as we look at the expense base coming out of that spending.

Stephen C. Davidson: And we're looking for opportunities to really be more efficient, you know, across the board but, at the same time, ensure that we're really maximizing our investments for the future, because we do have that, you know, huge runway. So I think that as we went through the first quarter, we saw some opportunities to achieve, you know, incremental efficiencies. You know, I think that, as we move through the year, you'll probably see a bit of a bump up in terms of incremental new hires, given the normal seasonality.

Stephen C. Davidson: And we're looking for opportunities to really be more efficient across the board, but at the same time ensure that we're really maximizing our investments for the future because we do have that huge run rate runway. So I think that as we as we went through the first quarter I think we saw some opportunities to achieve.

Stephen C. Davidson: Incremental efficiencies.

Stephen C. Davidson: I think that as we move through the year Youll.

Stephen C. Davidson: Youll, probably see a bit of a bump up in terms of incremental new hires given the normal seasonality, but I think that the first quarter run rate in terms of comp is probably a pretty good place to be 61 or $62 million and that reflects the incremental hires that we should.

Stephen C. Davidson: But I think that, you know, the first quarter run rate in terms of comp is probably a pretty good place to be, 61 or 62 million. And that reflects the incremental hires that we should be making throughout the remainder of the year. But just remember that there is that seasonality in terms of our hiring through the year. So I think we feel pretty good coming in at the end, at the bottom of the range right now. And obviously, we'll continue to monitor that and update you as we progress through the year.

Stephen C. Davidson: Be making throughout the night.

Stephen C. Davidson: During the year, but just remember that there is that seasonality in terms of our hiring through the year. So so I think we feel pretty good coming in at the end.

Stephen C. Davidson: Bottom of the range right now and obviously, we will continue to shift to monitor that and update you as we progress through the year.

Stephen C. Davidson: And I would just remind you that 18% of our expenses are variable. So that's the piece that can move up or down with volumes. So that's an important component to how we think about our guidance. And as we mentioned earlier in the call, we're tracking to the lower end of our guidance, and it's just too early to update where we think we'll end up being in the year. Great, thank you. Our next question comes from the line of Jeff Smith from.

Stephen C. Davidson: I would just remind you that 18% of our expenses are variable. So that's the piece that can move.

Jeffrey Paul Schmitt: Up or down with volumes.

Stephen C. Davidson: That's an important component to how we think about our guidance and as we mentioned earlier in the call. We're tracking to the lower end of our guidance and it system too early to update where we think we'll end up being in the year.

Jeffrey Paul Schmitt: Great. Thank you.

Stephen C. Davidson: Our next question comes from the line of Jeff Smith from William Blair. Please go ahead.

Stephen C. Davidson: Our next question comes from the line of Jeff Smith.

Jeffrey Paul Schmitt: William Blair. Please go ahead.

Jeffrey Paul Schmitt: Good morning.

Jeffrey Paul Schmitt: And on X pro.

Jeffrey Paul Schmitt: Thinking how does it execute portfolio trade differently than what you were doing sort of prior to its rollout and I guess importantly, though like how does it compare to competitors now do you have any.

Jeffrey Paul Schmitt: Edge there.

Jeffrey Paul Schmitt: Yeah, hi Jeff. It's Rich. So from an execution perspective, it's consistent. And we have, you know, the back end of the trading system that's managing this. But the real productivity gain and the difference maker is on the front end and how traders interact with our capabilities. Okay, so think of X Pro.

Jeffrey Paul Schmitt: Yeah, Hi, Jeff it's rich initiatives, so from an execution perspective, it's consistent and we have the back end of the trading system. That's managing this the real productivity gain and the difference maker is on the front end and how traders interact.

Richard J. Schiffman: It's a modern interface. It's designed to better handle large lists and be able to manipulate them more readily, which is something that was more challenging, let's say, to do in our legacy application. So the backend is leveraging all of the capabilities that we have in terms of how we process trades and how we send them through post-trade and downstream to the parties. But it's that interaction at the front level, at the user interface.

Jeffrey Paul Schmitt: With our with our capabilities. Okay. So think of Expro. It's a modern interface, it's designed to better handle large lists and be able to manipulate them more readily.

Richard J. Schiffman: Which is something that was more challenging let's say to do in our legacy application. So the back end, it's leveraging all of the capabilities that we have in terms of how we process trades and how we send them through post trade and <unk>.

Richard J. Schiffman: Downstream to the.

Richard J. Schiffman: The parties, but it's that interaction at the at the front level at the at the user interface.

Richard J. Schiffman: That is really making a difference, and that is where we're going to be doing all of our new front end development in this new tool. As we were saying earlier, it's not just isolated to PTs, although that's where our major focus is at the moment, but it's also going to be the front end that traders use for the HITOUCH initiative. And it's already actively used today by traders who need to manage large lists, for example.

Richard J. Schiffman: That is really making a difference and that is where we're going to be doing all of our new front end development is in this new tool. So we were saying earlier, it's not it's not just isolated to Pts, although thats, where our major focus is at the moment, but it's also going to be the front end that traders used for the high touch initiative.

Richard J. Schiffman: And it's already actively used today by.

Richard J. Schiffman: By traders who need to manage large lists for example, so we can do several hundred.

Richard J. Schiffman: So we can do several hundred line items in comp, RFQ in comp, much more easily than we can do in the old interface. So that's going to be the area of significant investment for us, and we believe that's going to be, you know, well received by the traders and will lead to... And Jeff, I just add that XPro, both the portfolio trading tool and XPro for RFQ, are all...

Richard J. Schiffman: Line items in comp RF SKU in comp.

Richard J. Schiffman: Much more easily than we can do in the old interface, so thats going to be the area of significant investment for us and we believe that's going to be.

Richard J. Schiffman: Well received by the traders and will lead to more business and Jeff I'd, just add that X pro both the portfolio trading to on X pro for our Q or all.

Chris Concannon: And Jeff, I'd just add that X-Pro, both the portfolio trading tool and X-Pro for RFQ are all built on cloud-based technology, so it's all new tech that we've rolled out here. It also allows us to make changes and introduce new features and functionality in a more rapid development environment. So we've seen changes rolled out really from trader feedback back out into production within weeks rather than within quarters and months. So it's a very powerful tool, not just because of the proprietary data that we can embed in it and all the pre-trade functionality that we can offer a trader, but it also speeds up our delivery to market of any new features, functionality, or data that we're providing. So that makes it highly competitive for us in an already competitive environment.

Chris Concannon: Built in cloud based technology. So it's all new tack that we've rolled out here.

Chris Concannon: It also allows us to make changes and introduce new features and functionality in a more rapid development environment. So we've seen changes rolled out from really from trader feedback back out into production within weeks.

Chris Concannon: Either then within quarters and months.

Chris Concannon: It's a very powerful tool not just from.

Chris Concannon: The proprietary data that we can embed in it and all the pre trade functionality that we can offer our trader, but it's also it's.

Chris Concannon: Speeds up our.

Chris Concannon: Delivery to market any new features functionality or data that we're providing so that makes it highly competitive for us and in an already competitive environment.

Chris Concannon: Great.

Chris Concannon: Then a question on your high grade market share could you discuss how institutional RF Q share is trending I mean is that a part of the drop at all thank you.

Richard J. Schiffman: Yeah, on the share, I mean, we did see a bit of a decline, but upon analyzing that it's definitely due to the pickup in portfolio trading that occurred and, and also in the dealer business. We attributed it, you know, mostly to those two factors and, you know, hence the extra effort that we're making in both of those areas. Those are the two, you know, significant investment areas for us to regain share.

Chris Concannon: Yes.

Speaker Change: Sure I mean, we did see a bit of a decline we are.

Richard J. Schiffman: Upon analyzing that is definitely due to the pickup in portfolio trading that occurred and also on the dealer business.

Richard J. Schiffman: We attributed mostly to those two factors and.

Richard J. Schiffman: Hence the the extra effort that we're making in both of those areas those are the two.

Richard J. Schiffman: Significant investment areas for us to to regain share.

Richard J. Schiffman: You know, we think in terms of our in-comp client-to-dealer RFQ business on very solid ground with that and, you know, open trading being the difference maker in terms of the liquidity pool and, you know, our ability to do all the in-comp activity very efficiently for clients. So it is largely due to the challenges in PT right now and dealer business, dealer-initiated business.

Richard J. Schiffman: Think in terms of our in comp clients dealer RF SKU business.

Richard J. Schiffman: On very solid grounds with that and open trading being the difference maker in terms of the liquidity pool and.

Richard J. Schiffman: Our ability to do all of the in comp activity very efficiently for clients. So it is largely due to the.

Richard J. Schiffman: The challenges in PT, right, now and dealer business dealer initiated business.

Chris Concannon: I would just add that our high-grade market volumes did increase in Q1 by 18%, and our block trading ADV increased as well.

Speaker Change: I would just add that our high grade.

Chris Concannon: Market volumes did increase in Q1 by 18%.

Chris Concannon: Our block trading Adv increased as well.

Chris Concannon: And more importantly, our automation continues to grow within the high-grade market. That's one area where we're highly penetrated throughout that area, and we continue to see more automation ramping up. In Q1, automation was up 40%, and that automation volume is quite sticky. We see people moving into automation and remaining at those levels. So across the high-grade market, we've seen growth, we've seen records, and, more importantly, we've seen sizable penetration with our automation solution.

Chris Concannon: <unk>.

Chris Concannon: More importantly, our automation continues to grow within the high grade market. That's one area, where we are highly penetrated.

Chris Concannon: Throughout that area and we continue to see more.

Chris Concannon: More automation ramping up in Q1 automation was up 40% and that automation volume is quite sticky, we see people moving into automation and remaining at those levels. So across the high grade market. We've seen we've seen growth we've seen records.

Chris Concannon: And more importantly, we've seen.

Chris Concannon: Sizable penetration with our automation solution.

Chris Concannon: Okay.

Speaker Change: Great. Thank you.

Brian Bertram Bedell: Our next question comes from the line of Brian Bedell from Deutsche Bank. Please ask your question.

Chris Concannon: Our next question comes from the line of Brian Bedell from Deutsche Bank. Please ask your question Alright.

Brian Bertram Bedell: Thanks. Good morning, guys. Maybe just sticking with XPRO, I think you said about 16% of your volume now is running through XPRO, and it's accounting for 60% or nearly 60% of your portfolio trades. Just maybe if you could just comment on where you ultimately want to get that to or where you think you can get XPRO to in terms of your overall volume, and then to what extent is portfolio trading a big part of that process, or if the market does shift back away from portfolio trading over time because of higher credit spreads or volatility, how do you see that algorithm working within XPRO of getting more of your volume on and having that expand your overall volume?

Brian Bertram Bedell: Alright, great. Thanks, Good morning, guys.

Brian Bertram Bedell: Maybe just sticking with <unk>.

Brian Bertram Bedell: You quoted about 16% of your volume now is running through X pro and <unk>.

Brian Bertram Bedell: Accounting for 60% or nearly 60% of your portfolio trades.

Brian Bertram Bedell: Maybe if you can just comment on where.

Brian Bertram Bedell: You ultimately want to get that to where you think you can get X pro two in terms of your overall volume and then.

Brian Bertram Bedell: To what extent is portfolio trading.

Brian Bertram Bedell: A big part of that process or.

Brian Bertram Bedell: If the market does shift back.

Brian Bertram Bedell: Away from portfolio trading over time, because of higher credit spread volatility.

Brian Bertram Bedell: How do you see that algorithm working within X proud of getting more of your volume.

Brian Bertram Bedell: And having that expand your overall market share.

Chris Concannon: Great question. And obviously, Xpro is designed to replace our legacy user interface for our clients. So we intend to put Xpro in front of all traders and all clients globally. Xpro, you'll see Xpro rolling out in Europe and throughout the international client base this summer. So we're excited to continue the rollout of Xpro not just for traditional RFQ but, more importantly, for portfolio trading. As I mentioned, we started that rollout for what we call power users. That's where we see the biggest benefit.

Speaker Change: Great question, and obviously X pro is designed to.

Chris Concannon: Replace our legacy user interface for our clients. So we intend to.

Chris Concannon: <unk> X pro in front of all traders and all clients globally ex pro.

Chris Concannon: Youll see X pro rolling out in Europe.

Chris Concannon: And throughout the international client base.

Chris Concannon: This summer. So we're excited to continue the rollout of Expro adjust for traditional <unk>, but more importantly for portfolio trading.

Chris Concannon: As I mentioned.

Chris Concannon: We started that rollout for what we call power users, that's where we see the biggest benefit.

Chris Concannon: The workflow efficiency designed in Xpro does help those users, and we do think that the portfolio trading tool is also a benefit. Rich mentioned some of the features and benefits of a larger line item capacity on Xpro. We do see the biggest opportunity for Xpro this summer and the quarters ahead around the block trading solution. One of the biggest feedbacks that we hear from our clients and traders is information leakage with regard to all-to-all.

Chris Concannon: The workflow efficiency.

Chris Concannon: Designed and X Pro does help those those users and we do think that the portfolio trading tool is also a benefit rich mentioned some of the features and the benefits of longer larger line item capacity on X pro.

Chris Concannon: We do see the biggest opportunity for <unk> is really this summer in the quarters ahead around the block trading solution.

Chris Concannon: One one of the biggest feedback that we hear from our clients and traders are information leakage with regard to all to all and X pro allows our clients to easily engage dealers directly either one on one or multi dealers and in our Q.

Chris Concannon: And Xpro allows our clients to easily engage dealers directly, either one-on-one or multiple dealers in an RFQ. That's being rolled out, and we're targeting the $3 million to $10 million size bucket, which is a very large part of the trace market here in the U.S. So really, Xpro is designed to touch every trader, every client, and across all our products when we're done with the overall rollout. And more importantly, as I mentioned, Xpro does allow us to move at a quicker pace from a development and delivery standpoint. And that's the most exciting part about this new technology and as we roll it out across the client base.

Chris Concannon: That's being rolled out and should really we're targeting the call. It the $3 million to $10 million size bucket, which is a very large part of the trace market here in the U S and so really Expo is designed to touch every trader every client and across all of our products when we're done.

Chris Concannon: With the overall rollout more importantly, as I mentioned next pro does allow us to move at a quicker pace from a development and delivery standpoint.

Chris Concannon: It's the most exciting part about this new technology and as we rollout across the client base.

Chris Concannon: Okay.

Chris Concannon: Yes.

Brian Bertram Bedell: That's great. Actually, that leads into a second follow-up question on that, and that's the large block sizes. I think you quoted that last time, like 30% of the market is trade sizes over 5 million. That's obviously been the area where more has been done with Voigt over time, and it's been tougher to crack. So, I guess, what is your view on that part of the market electronifying over, say, the next, call it three years or so, as sort of the next leg of the electronification of the market?

Speaker Change: That's great and actually that leads into your second follow up question on that and that sort of large block sizes. So I think.

Brian Bertram Bedell: I'd be quarters that last time, I'd like 36% of the market is trade sizes over $5 million and Thats, obviously been the area where.

Brian Bertram Bedell: More has been done with voice over time, it's been tougher to crack. So I guess what is your view on that part of the market electronic flying over say the next you know.

Brian Bertram Bedell: Call it three years or so.

Brian Bertram Bedell: The next leg of electronic or quantification of the market.

Richard J. Schiffman: Yeah, Brian, it's great. I mean, we think it's going to increase. And, you know, I've said before, we're going to see a high penetration rate across all sizes. Some of that might just be trade processing and, you know, more efficient ways to do a bilateral trade with a known dealer. And that's fine.

Rich: Yes, Brian it's rich I mean, we think it's going to increase and I've said before we're going to see a high penetration.

Richard J. Schiffman: Right across all sizes some of that might just be trade processing.

Richard J. Schiffman: More efficient ways to do a bilateral trade with a known dealer and that's fine that's part of what.

Richard J. Schiffman: That's part of what, you know, this portion of X Pro is designed to do very efficiently. But we want to make sure that we've got a way to when a when a trader puts their orders into our system, that they have a variety of ways that they can trade that, whether it's going to be recommending to them who the likely dealers are to engage, whether it's just processing a trade bilaterally with, you know, a trade that's been executed, you know, maybe on the phone, let's say, or it might be engaging, you know, in open trading in some way with with clients that we're able to identify who are likely to engage with that party on the trade.

Richard J. Schiffman: This portion of <unk> is designed to do very efficiently, but we want to make sure that we've got.

Richard J. Schiffman: A way to win.

Richard J. Schiffman: When a trader puts their orders into our system that they have a variety of ways that they can trade that.

Richard J. Schiffman: Either it's going to be recommending to them, who the likely dealers are to engage.

Richard J. Schiffman: Whether it is just processing a trade bilaterally with.

Richard J. Schiffman: A trade that's been executed maybe on the phone, let's say or it might be engaging.

Richard J. Schiffman: In open trading in some way with with clients that we're able to identify.

Richard J. Schiffman: Who are likely to engage with that party on the trade so.

Richard J. Schiffman: So, think of it as a central point where that trader can access all of the tools that Marketaxess has available, the different ways of trading across our variety of protocols, all from one place where they manage their orders. And that's the key part of it, is once their order is in XPRO, they can kind of launch off in these different directions, depending upon what's available, what's best recommended for that, how they want to operate, all from one point, which is a little bit different than the way our legacy system works, which is a bit more siloed in the capability. You know, making the trader work a little harder to tap into their capabilities. With X-Pro, it's all central and available right from their order.

Richard J. Schiffman: Think of it as a central point.

Richard J. Schiffman: Where that trader can access all of the tools that market access has available to different ways of trading.

Richard J. Schiffman: Cross hour.

Richard J. Schiffman: Variety of protocols, all from one place where they manage their order and Thats. The key part of it is once their order is in X pro they can they can kind of launch off in these different directions, depending upon whats available whats best recommended for that how they want to operate all from one.

Richard J. Schiffman: Which is a little bit different than the way our legacy system works, which is a bit more siloed and the capabilities.

Richard J. Schiffman: No.

Richard J. Schiffman: Making the trader work, a little harder to tap into the capabilities with <unk>, It's all central and available right from their order Brian.

Chris Concannon: Brian, I would just add that, you know, we hear regularly from our clients that they obviously want to do more with less. They're not hiring traders on their desks. That's a trend that we've seen.

Speaker Change: Brian I would just add that we hear regularly from our clients.

Speaker Change: We obviously want to do more with less they're not hiring traders on their desks.

Speaker Change: A trend that we've seen.

Chris Concannon: And this area of the market is a fairly inefficient area from just a workflow perspective. You can imagine using phones and chat as not being the end result of this market evolution. What we're trying to do is replicate their experience on the phone and chat, minimizing information leakage to just the right important dealers in that QCIP. And both the data and the pre-trade analytics and the content we're collecting and pumping through Expro will help those traders, one, identify the size of their order that the market can consume, and two, the best dealers to interact with for that specific order.

Chris Concannon: And this area of the market as a fairly inefficient area from a workflow perspective, you can imagine using phones and chat as not being the.

Chris Concannon: And the end result of this market evolution.

Chris Concannon: What we're trying to do is replicate their experience on phone and chat minimizing information leakage to just the right important dealers in that CUSIP and that both the data and.

Chris Concannon: The pre trade analytics, and the content, where we're collecting and pumping through X pro will help those traders one identifying the size of their order that the market can consume and to the best dealers to interact with.

Chris Concannon: For that specific order. So we're pretty excited about the opportunity to convert a sizable portion of what is today phone and chat market onto the electronic platform and it's definitely one thing we see from portfolio trading and the demand for portfolio trading is.

Chris Concannon: So we're pretty excited about the opportunity to convert a sizable portion of what is today's phone and chat market onto the electronic platform. And it's definitely one thing we see from portfolio trading, and the demand for portfolio trading, is that the need for immediacy, certainty, and efficiency of workflow is high, at an all-time high among our clients. As they see more capital flowing into their own platforms, they are not hiring traders to manage that influx of capital.

Chris Concannon: The need for immediacy certainty and efficiency of workflow is high at an all time high among our clients as they see more more capital flowing into their into their own platforms. They are not.

Chris Concannon: They are not hiring traders to solve that influx of capital.

Brian Bertram Bedell: That's great! That's a great color.

Speaker Change: That's great that's great color. Thank you.

Michael J. Cyprys: Our next question comes from the line of Michael Cyprys from Morgan Stanley. Please go ahead. Great, thank you. I have a question on Pragma, maybe changing topics away from PTOs. I was hoping to get updates on the progress there with Pragma, maybe you can elaborate on the contribution in the

Michael J. Cyprys: Our next question comes from the line of Michael Cyprys from Morgan Stanley. Please go ahead. Great, thank you.

Speaker Change: Our next question comes from the line of Mike LC price from Morgan Stanley. Please go ahead.

Speaker Change: Great. Thank you I have a question on <unk>.

Michael J. Cyprys: Maybe changing topics away from <unk> I was hoping you could update us on the progress there with pragma, maybe you can elaborate on the contribution in the business. How you see the growth path ahead, and strategically maybe you could update us on how you see this being strategically additive to the firm.

Michael J. Cyprys: Sure.

Chris Concannon: Sure. Obviously, we closed on the Pragma transaction in the fourth quarter, and we're quickly integrating Pragma into the broader market access technology framework. We're excited about some of the technology synergies that we're seeing. Obviously, Pragma has been a key ingredient to the launch of the first credit algo in the credit space, so we're excited to see that algo and the demand for and the feedback that we're getting from clients on the algo.

Michael J. Cyprys: Obviously, we closed on the pragmatic transaction in the fourth quarter and we're quickly.

Chris Concannon: Integrating pragma into the broader market access technology framework, we're excited about some of the technology synergies that we're seeing obviously.

Chris Concannon: <unk> has been a key ingredient to the launch of <unk>.

Chris Concannon: The first credit algo in the credit space. So we're excited to see.

Chris Concannon: That algo and the demand that.

Chris Concannon: The feedback that we're getting from from clients on the algo more importantly, pragma.

Chris Concannon: More importantly, Pragma, we're seeing opportunities to use Pragma technology throughout our technology footprint. Right now, Pragma is consuming some of our automation suite, so what we want to do, the goal of the current integration is to have both algos and automation all be part of one suite of offerings, so you can get basic auto RFQ, basic autoresponder, and a suite of algos all within the same API or the same suite of selection of products.

Chris Concannon: We're seeing opportunities to.

Chris Concannon: Use pragma technology.

Chris Concannon: Throughout our technology footprint.

Chris Concannon: Right now pragma is consuming some of our automation suite. So what we want to do the goal of the current integration is to have both al goes in automation all be part of one suite of offering. So you can get basic auto RF SKU.

Chris Concannon: Basic auto responder.

Chris Concannon: And our suite of Al goes all within the same API or the same suite of selection of products. So pretty excited about the integration of pragma in automation. The next piece of the integration that we see playing out as the pragma Ams solution.

Chris Concannon: So, pretty excited about the integration of Pragma into automation. The next piece of integration that we see playing out is the Pragma EMS solution. It is able to maintain order state and control orders and connect multiple destinations.

Chris Concannon: It is able to.

Chris Concannon: We maintain order stayed in control orders and connect multiple destinations obviously, we're using the various protocols within market access, but we do see an opportunity for that EMS technology to be deployed further in the market. So we see further integration of pragma.

Chris Concannon: Obviously, we're using the various protocols within market access, but we do see an opportunity for that EMS technology to be deployed further in the market. So, we see further integration of Pragma. It's an important technology acquisition for us, and we're actually seeing higher benefits of the synergy of that technology. We also plan on using Pragma in our dealer-to-dealer business.

Chris Concannon: An important technology acquisition for us.

Chris Concannon: We're actually seeing higher benefits of the synergy of that technology.

Chris Concannon: We also plan on using pragma in our dealer to dealer business. We think there's interesting solutions not only automation that we're rolling out for dealers, but new protocols in that dealer suite of products as well, particularly around the mid matching solutions that we see in that in that market. So.

Chris Concannon: We think there are interesting solutions, not only automation that we're rolling out for dealers, but new protocols in that dealer suite of products as well, particularly around the mid-matching solutions that we see in that market. So, it's still early days for our excitement around the Pragma acquisition, but we definitely see it becoming a more important footprint in the overall technology footprint of market access.

Chris Concannon: It's still early days for our excitement around the pragmatic acquisition, but we.

Chris Concannon: We definitely see it being coming more important footprint in the and the overall technology footprint of market access.

Michael J. Cyprys: And just a follow-up question, if I could, on emerging markets. Great to see the renewed strength, particularly in the local markets, EM, particularly in April. Just curious what you're seeing there. Maybe you can elaborate a bit more broadly on the EM initiatives that you have in any particular regions that you're particularly more focused on, and where do you see scope for more innovation ahead in EM?

Speaker Change: Great and just a follow up question, if I could on emerging markets, great to see the renewed strength, particularly in local markets.

Michael J. Cyprys: Particularly in April just curious what youre seeing there maybe you can elaborate a bit.

Michael J. Cyprys: More broadly on the initiatives that you have in any particular regions that you're particularly more focused on and where do you see scope for more innovation ahead in EM.

Chris Concannon: On the EM front, I'm pretty excited about the growth that we've seen in EM and in Q1. Obviously, we were seeing lower volumes in 2023, and we weren't expecting that to change, but it did change and obviously saw record volumes, record ADV, and obviously record commission revenue up almost 11% in Q1. One interesting area that we've seen growth in, and it's really as a result of the growth of protocol, and that is our block trading ADV is up almost 34% year over year in the first quarter.

Speaker Change: Sure on the <unk> front pretty excited about the growth that we've seen.

Chris Concannon: In Q1, obviously, we were seeing lower volumes in 2023.

Chris Concannon: And we weren't expecting that to change, but it did change and obviously saw <unk>.

Chris Concannon: Record volumes record Adv, and obviously record commission revenue up almost 11% in Q1.

Chris Concannon: One interesting area that we've seen growth and it's really as a result of growth of protocol and that is our block trading Adv is up almost 34% year over year in the first quarter. So we're excited about.

Chris Concannon: So we're excited about that block trading growth, certainly a predictor of hopefully further block trading growth across all our products. The other area of sizable growth was our local markets. Obviously, they were up 30% in Q1 year over year. The local markets are obviously the bigger market opportunity in the EM market; close to 80% of the overall volume is estimated to be within the local markets.

Chris Concannon: That block trading growth.

Chris Concannon: Certainly a predictor of hopefully further block trading growth across all of our products.

Chris Concannon: The other area of sizeable growth was our local markets. Obviously, they are up 30% in Q1 year over year, the local markets, obviously, the bigger market opportunity in the market on close to 80% of the overall volume is estimated to be within the local markets and then areas of.

Michael J. Cyprys: And then areas of excitement, obviously, we've seen our APAC volumes grow year over year. APAC was up 33% in Q1, and it was up even further in April, almost up about 40%. Out of APAC, we're seeing APAC as a key driver of our EM volume. Our local market volume, in particular, was up from APAC by almost 60%. So international growth and our international expansion are reaping benefits across our EM market, particularly the APAC growth rates that we were seeing in Q1, and then that continued into April.

Chris Concannon: The excitement obviously, we've seen our APAC volumes grow year over year APAC was up 33% in Q1.

Michael J. Cyprys: And in APAC was up even further in April almost up about 40%.

Michael J. Cyprys: Out of APAC, we are seeing APAC.

Michael J. Cyprys: A key driver of our EM volume.

Michael J. Cyprys: Our local.

Michael J. Cyprys: Local market volume in particular was up.

Michael J. Cyprys: From APAC, almost 60% so that international growth in our international expansion is reaping benefits across our EM market.

Michael J. Cyprys: Particularly the APAC growth rates that we were seeing.

Michael J. Cyprys: In Q1, and then that continued into April.

Speaker Change: Great. Thank you.

Alex Lawson: Our next question comes from the line of Alex Lawson from Goldman Sachs. Please go ahead. Hey, good morning, guys. Thanks for taking the question.

Michael J. Cyprys: Great, thank you. Our next question comes from the line of Alex Lawson from Goldman Sachs. Please go ahead. Hey, good morning, guys. Thanks for taking the questions. Just one for me. You spoke extensively today and just over the last couple of

Michael J. Cyprys: Our next question comes from the line of Alex <unk> from Goldman Sachs. Please go ahead.

Alex Lawson: Hey, good morning, guys. Thanks for taking the question just one for me.

Alex Lawson: You spoke extensively today and just over the last couple of quarters that the path towards more of a set of bridging the gap in AG with some of the market share is likely going to come from btn dealer initiated our SKU can you talk a little bit about the pricing in the fee per million in both of those I think you kind of hit on the PT, a little bit, but just how does that comp.

Alex Lawson: Bear to the kind of $1 50, 160 that you are running at a credit right now and do you expect that your initiative there to put more pricing pressure on that part of the market as a whole for other competitors as well. Thanks.

Alex Lawson: Yeah, sure, Alex. Hi, it's, it's Rich. And yeah, I did mention about the fee capture in PT being lower, but with dealer business, which tends to be an open trading, it's an all-to-all type of business, where we're delivering more value, our fee capture is relatively higher there. And, you know, one of the things I should note is that when we deliver liquidity to dealers, About 30% of the time, that comes from the buy side first, not just other dealers.

Speaker Change: Yes, sure Alex Hi.

Rich: It's rich and yes, I did mentioned about the.

Alex Lawson: The fee capture in PT being lower.

Alex Lawson: With with dealer business, which tends to be it's an open trading it's an all to all type of business.

Alex Lawson: Where we're delivering more value our fee capture is relatively higher there and one of the things I should note is when we deliver liquidity to dealers.

Alex Lawson: 30% of the time that comes from buy side firms not just other dealers and thats some of the most valuable.

Alex Lawson: And that's some of the most valuable connections that we can make and allows us to charge a relatively higher fee for that. So I think the prospects for fee capture in the dealer-initiated side of the business are quite promising. We should note, and it was pointed out during the prepared remarks, that we see plenty of opportunity for growth in the traditional client-to-dealer comp business, leveraging open trading and being able to make those connections between clients directly with each other and to other dealers and things like that, and that remains attractive from a fee capture perspective. So the most challenging area, and the lowest fee capture is definitely on the PTs.

Alex Lawson: Connections that we can make it allows us to charge a relatively higher fee for that so I think the prospects for fee capture in the in the dealer initiated side of the business is quite.

Alex Lawson: It is quite promising.

Alex Lawson: We should note and as pointed out during the prepared remarks that we.

Alex Lawson: We see plenty of opportunity for growth in the traditional client to dealer in comp business.

Alex Lawson: Leveraging open trading and being able to make those connections between.

Alex Lawson: Clients directly with each other as other dealers and things.

Alex Lawson: That remains also attractive from a fee capture perspective, so the most the most challenging area. The lowest fee capture is definitely on the Pts it is very much a workflow solution and less about the benefits that we can deliver as a marketplace and its when were operating as a marketplace and connecting.

Alex Lawson: It is very much a workflow solution and less about the benefits that we can deliver as a market. And it's when we're operating as a marketplace and connecting, you know, the thousands of participants in it that gives us the opportunity to raise richer fees capital. I gotcha. Thanks. Our next question comes from Marjolein Budish from Barclays. Please go ahead.

Alex Lawson: <unk>.

Benjamin Elliot Budish: The thousands of participants in it that gives us the opportunity to for for Richard fee capture.

Benjamin Elliot Budish: I gotcha.

Benjamin Elliot Budish: Thank you.

Benjamin Elliot Budish: Dan Barclay.

Benjamin Elliot Budish: Barclays. Please go ahead.

Richard J. Schiffman: [inaudible] I thank you for taking the question; I just

Benjamin Elliot Budish: Hi, Thanks for taking the question I just wanted to double check on the dealer initiated segments. I don't think you talked about how much of that of your business that comprises today. So can you maybe talk about that and where it's been in the past and then looking forward. If you think about how much of that piece can elektron or five versus the broader market in IAG. How do you think about the potential there versus.

Benjamin Elliot Budish: Client to dealer and some of the other trade types. Thank you.

Benjamin Elliot Budish: Yeah, hi, Ben, it's Rich again. And no, we definitely feel strongly about our opportunities there. And you could say, roughly speaking, it's about About 30% of our RFQ activity is coming from dealers initiating on the RFQ side. So that has room to grow and again, as I was just saying, it's a promising area of fee capture. That's right now using our RFQ protocols as we introduce our matching solutions in the market, which we know has been very attractive to firms. And also, our order book, Live Markets, is another area that we think is going to be attractive to that user base.

Benjamin Elliot Budish: Yeah, Hi, Ben it's rich again.

Benjamin Elliot Budish: No we definitely feel strongly about our opportunities there and.

Benjamin Elliot Budish: You can say roughly speaking it's about.

Benjamin Elliot Budish: Yes.

Benjamin Elliot Budish: That 30% of our of our RFP activity is coming from.

Benjamin Elliot Budish: Dealers initiating on the RF side so.

Benjamin Elliot Budish: That has room to grow in.

Benjamin Elliot Budish: Again as I was just saying, it's a promising areas of fee capture.

Benjamin Elliot Budish: Right now using our RF <unk> protocols as we introduce.

Benjamin Elliot Budish: Our matching solutions in the market, which we know has been very attractive.

Benjamin Elliot Budish: To firms.

Benjamin Elliot Budish: And also our order book live markets.

Benjamin Elliot Budish: Another area that we think is going to be attractive to that to that user base.

Richard J. Schiffman: It's pretty significant. Got it. That was all for me. Thank you. Onyx.

Benjamin Elliot Budish: It's pretty significant.

Richard J. Schiffman: Yes.

Onyx: Got it that was all for me. Thank you.

Eli Abbott: Our next question comes from the line of Eli Abbott from Bank of America. Please go ahead. Hi, good morning. Thanks for taking the question. Can we have a little bit more of an update on Adaptive Auto X? I think last quarter you mentioned it.

Richard J. Schiffman: Our next question comes from the line of Eli Lilly from Bank of America. Please go ahead.

Elias Noah Abboud: Hi, good morning, Thanks for taking the question can we have a little bit more of an update on adaptive auto X I think last quarter, you mentioned that 13 clients using it how is penetration progressed and what can you share about the early feedback. Thanks.

Onyx: Sure. Thanks, Eli yes.

Chris Concannon: Sure. Thanks, Eli.

Elias Noah Abboud: Yes, we're pretty excited about the innovation of adaptive auto acts as I mentioned earlier.

Chris Concannon: Yeah, we're pretty excited about the innovation of Adaptive AutoX. As I mentioned earlier, it's the first client algorithm launched in the credit space. Right now, we have 25 clients live on Adaptive AutoX. There are about 30 clients approved and still waiting to be onboarded, and then there's more, obviously, in the pipeline. We also are excited about the new launch of Enalgo this summer, really a dynamic liquidity-taking solution. The feedback from clients has been quite positive. We have some very large clients waiting in the queue in the pipeline. We've obviously been showing demos of the product to all our clients, and the feedback has been quite positive.

Elias Noah Abboud: First client algorithm launched in the credit space.

Chris Concannon: Right now we have 25 clients live on adaptive auto ex.

Chris Concannon: There was about 30 clients approved still waiting to be on boarded.

Chris Concannon: And then there is more more obviously in the pipeline.

Chris Concannon: We also are excited about our new launch of an algo. This summer really a dynamic liquidity taking solution.

Chris Concannon: The feedback has been quite positive feedback.

Chris Concannon: Feedback from clients, we have some very large clients.

Chris Concannon: Waiting in the queue in the pipeline.

Chris Concannon: We've obviously been showing demos of the other product to all our clients and the feedback has been quite positive again, it's still early days with this product rollout, but we.

Chris Concannon: Again, it's still early days with this product rollout, but we're just seeing a healthy outcome in terms of execution quality, both in terms of avoiding spread as well as with some of the larger blocks being sliced into smaller sizes. We're also seeing better trade execution quality as a result of limiting market impact from executing larger block sizes. Again, early days with the product, but pretty exciting feedback, and obviously, the demand is quite high, given the size of the client onboarding that we're dealing with right now.

Chris Concannon: We're just seeing a healthy healthy.

Chris Concannon: Outcome in terms of execution quality, both in terms of avoiding of spread as well as <unk>.

Chris Concannon: With some of the larger blocks being sliced into smaller sizes. We're also seeing better trade execution quality as a result of eliminating limiting market impact from from executing larger block sizes. So again early days with the product but pretty.

Chris Concannon: Exciting feedback and obviously the demand is quite quite high given the size of the client onboarding that we're dealing with right now.

Chris Concannon: And you mentioned that block trading had a particularly strong quarter earlier. How much of this is attributable to this early progress on adaptive auto trading? Or is it other technologies and protocols that are driving the block trading that we're seeing the success in, particularly in EM, we offer a request for market that has been an offering, a protocol that we launched quite some time ago? And that's really been driving some of our block trading experience here.

Speaker Change: Got it and you mentioned the block trading had a particularly strong quarter earlier, how much of this is attributable to this early progress on adaptive auto acts or is it other technologies and protocols that are driving that progress so far.

Chris Concannon: And as I mentioned, in EM, block trading was up 34%. The other areas, obviously, in EM are local markets. We're seeing larger block sizes in local markets, as well. And then I also mentioned in investment grade, block size running through our current platform is where we're seeing an increase in block trading. We also mentioned that our intent is to roll out XPRO for a high-touch, again, that's targeting the block size

Chris Concannon: Really the block trading that we're seeing the success in particularly in EM.

Chris Concannon: And that's still to come in the coming quarters. So, there is a lot of opportunity around the block size solution, both from algorithms breaking down blocks, as well as solving blocks for electronic trading by just reducing information leakage for those size trades.

Chris Concannon: For a.

Chris Concannon: Our request for market.

Chris Concannon: That has been in offering a protocol that we launched quite some time ago and thats really been driving some of our block trading.

Chris Concannon: Experience here as I mentioned in the block trading was up 34%. The other areas obviously as local markets, we're seeing larger block size in local markets as well.

Chris Concannon: And then I also mentioned in investment grade block size running through our current platform is where we're seeing an increase in block trading.

Chris Concannon: You also mentioned that our intent is to rollout X pro for a high touch again, thats targeting the block size market and.

Chris Concannon: Thats still still to come in the coming quarters. So a lot of opportunity around the block size a solution both from algorithms.

Chris Concannon: Breaking down blocks as well as Ah solving blocks for electronic trading by just reducing information leakage for those those size trades.

Speaker Change: Awesome. Thank you.

Unknown Executive: That concludes our Q&A session. I will now turn the conference back over to Chris Concannon for closing remarks.

Chris Concannon: This concludes our Q&A session I will now turn the conference back over to Chris Concannon for closing remarks.

Chris Concannon: Great, well, thank you for joining us today. We're exceptionally excited about the things that we're building and rolling out this summer, and we look forward to updating you on our progress at our next quarterly call. Thank you, everyone, for joining us.

Chris Concannon: Great well. Thank you for joining us today, we're exceptionally excited about the things that we're building and rolling out this summer and we look forward to updating you on our progress at.

Chris Concannon: At our next quarter call thanks, everyone for joining.

Unknown Executive: Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Speaker Change: Ladies and gentlemen, this concludes today's call. Thank you all for joining you may now disconnect.

Unknown Executive: Yes.

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Unknown Executive: [music].

Unknown Executive: Okay.