Q2 2025 MarketAxess Holdings Inc Earnings Call

Ladies and gentlemen, thank you for standing by, welcome to the market access second quarter, 2025 earnings conference call.

At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session.

If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

If you would like to withdraw your question, press star 1 again.

As a reminder, this conference call is being recorded on August 6th, 2025.

I would now like to turn the call over to Steve Davidson, Head of Investor Relations at MarketAxess. Please go ahead, sir.

Good morning and welcome to the market access second quarter 2025 earnings conference call.

For the call Chris concannon, chief executive officer will provide you with an update on our strategy and our trading businesses and Eileen fazel dealer Chief Financial Officer will review the financial results.

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 belief regarding future events that by their nature are uncertain.

The company's actual results and financial condition May differ materially from what is indicated in those 4 looking statements.

For our 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. 10K for the year-end December, 31st 2024.

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, and thank you for joining us to review our record second quarter 2025 financial results.

These strong results as shown on slide. 3 of my strategic update. Reflect a very strong operating environment and the progress we have made to transform our model to be more protocol. Agnostic expand, our addressable markets and drive growth

We are delivering multiple protocols to solve our clients. Different execution needs and we are giving them the automation workflow tools that they need to do more with less. We delivered record automation volume and trade count with a record number of active clients during a period of increased volatility.

The integral to driving growth.

now, turning to our results, in terms of Revenue generation, we are very pleased with our execution, in the quarter delivering 10% Revenue growth, excluding the impact of FX

We generated these strong results on record, trading volume across, most product areas, surpassing 1 trillion in total, credit trading volume for the first time and delivering a record 2 trillion in total rates trading volume, which drove a 12% increase in commission Revenue to a record 192 million.

We continue to deliver strong performance in our US Government Bond business over the last several months. We saw a benefit from the spike in volatility around tariffs, but we are also seeing strength driven by our new hedging Services. New customers driving in incremental, revenue and institutional client adoption of our rates, algo which now represents over 10% of our trading volume.

We are in the process of expanding our RFQ business, and we are looking to continue to enhance our rates and algo solution, as large asset managers continue to request enhancements.

Underpinning these results with strong progress in our new initiatives across our three strategic channels, in the client-initiated channel, we generated 38% growth in block trading across US credit, emerging markets, and euro bonds.

In the portfolio trading Channel, we generated 69% increase in total portfolio, trading ADB.

And last in the dealer initiated Channel, we generated a 40% increase in dealer, initiated add days.

In terms of expenses, we continue to show cost discipline with expenses up, only 5%, excluding notables and FX as we continue to invest in the platform with a Full Slate of product deliveries coming in the next couple of quarters.

Last on the Capitol Front, we have been more opportunistic with our share repurchases as we move Beyond just offsetting dilution from stock-based compensation.

Before I get into our results, I would like to address our July US, high-grade market, share.

While we are disappointed with the headline share, there have been significant swings in Block, volume moving between phone and electronic over the last several quarters.

This is both helped and hurt us. We believe that this has been driven in part by the macro environment, in July investment grade, spreads Titan significantly and the combination of tighter spreads and low volatility. Generally translates into more large trades, getting done over the phone and an uptick in portfolio Trading.

Block trades equal to or larger than 5 million in size, increased dramatically and represented. 47% of the entire Market in July up from 42%, in June, additionally, our share of this Market dropped to 10% down from 12%, in June. And so, the bad news is that those large blocks move to the phone and to chat, the good news is that this is the very Market that we're attacking with the recent launch of our high-touch strategy in Us credit on xpro. It's still early days but it's the part of the market that we've been talking about targeting for some time and we believe we will be successful in electronic of the market.

Slide 4 5 and 6 update. You on how we are executing across the 3 strategic channels, we are focused on to grow our market share

At slide 5, clearly shows the key performance indicators across our platform are all green. This quarter reflecting the underlying fundamental strength of our business, as well as the strong progress, we are making with our new initiatives.

Turning to slide 6 in the client initiated Channel, we made strong progress with block trading with our targeted block solution. Now, rolled out in emerging markets and Euro bonds and recently launched in Us credit.

This is 1 of the most exciting areas of growth for us because we are delivering a click to trade solution where the trade is against a dealer axe or an indication of interest and the trade goes direct to the dealer without information leakage.

Our share of blocks in the U.S. high grade was a record 12.5%, representing an increase of almost 200 basis points, and was a key driver of the year-over-year increase in our estimated market share in U.S. high grade.

Our cumulative, block trading volume, since the launch of our targeted block trading solution in Us credit. Emerging markets, in Euro bonds was approximately 8 billion through July 2025.

Next in the portfolio trading Channel, which is a very important part of the market. We generated record levels of total portfolio trading, add with a strong increase in US, high-grade estimated market share, on record 80 day as well as record, add in US, high yield and Euro bonds.

US high-grade portfolio trading market share was over 19% in the quarter, up 370 basis points over the prior year.

Last in the dealer initiated Channel, we are beginning to see progress as we prepare to launch a new midc solution in. September, in Us credit.

Dealer, RFQ ADB was 1.6 billion with record 80d in municipal bonds.

Midex total volume hit a new quarterly record of over 9 billion with record volume and emerging markets and Euro bonds.

We are very excited about the launch of our new midc solution. In a few weeks, it's a very streamlined, midpoint matching solution for dealers using our award-winning CP Plus, for pricing.

Slide 7 highlights. The strong growth in our International product areas where we are. Executing a cross. All 3 strategic channels, the strong growth that we generated across emerging markets. In Euro bonds, was driven by multiple levers at different stages of growth with different fee profiles.

Growth across block trading portfolio, trading and dealer initiated activity. Drove, our total volume growth to over 20%.

And this strong increase in trading volumes on robust market volumes and share gains was accompanied by a small 3% decline in fee capture, principally driven by protocol mix, delivering commission revenue growth of 17%.

we believe that our Global presence in EM, local markets, as shown on slide, 8 will be a key driver of our future growth

The opportunity with local em markets is enormous as indicated, on the right side of the slide with 85% of the EM Market made up of local currency, corporates, and sovereigns compared to just 15% hard, currency, corporate and sovereigns.

And the estimated ADV for both hard currency and local markets combined are greater than the ADV for U.S. credit markets.

Our estimate is that most local market trades take place with onshore clients, while only a small percentage of our trades are taking place with onshore clients. We believe that this is a large growth opportunity for us. We are also focused on facilitating global investing in local markets, as you saw with our press release last week; we just recently executed the first Indian government bond trade electronically.

Market access is the first fully electronic trading solution for foreign portfolio investors and this launched further deepens our Global em franchise.

I would like to thank our clients BlackRock and Standard Charter for their support in executing the first trade in summary. We are pleased with our execution in the second quarter where we benefited from a very supportive Market, backdrop and delivered, strong growth across our new initiatives, the July share numbers in US. High grade were disappointing, but we believe that the solution we are bringing to the market will be successful.

And we now have the right team in place to help us accelerate growth in the coming quarters. Now, let me turn the call over to Eileen to review our financials.

Thank you, Chris.

Turning to our results on slide 10. We provide a summary of our second quarter financials

We delivered 11% revenue growth to a record $219 million, which includes a $2,000 benefit from foreign currency fluctuations.

Including the impact of FX Revenue, growth was 10%.

We reported in the 11% increase in diluted earnings per share to 1.91 for $2 per share excluding notable items representing an increase of 16%.

notable items in the quarter included, 4 million or 8 cents per share and repositioning charges and our expenses in the employee compensation and benefits line

Or 1 cent per share acquisition related charge included in other income.

My comments on our results from this point forward will largely exclude the impact of notable items and will be on a non-GAAP basis. Where applicable,

Looking at each of our Revenue lines in turn.

commission, Revenue increased 12% to a record 192 million driven by strong Market volumes on an increase in volatility in the quarter as well as the strong progress, we have made with our new initiatives, in 2025, across our 3, strategic channels,

Just over 50% of the incremental 20 million in revenue generated in the second quarter of 25. Versus the second quarter of 24 was from block, trading, portfolio, trading and dealer initiated activity.

Services revenue increased 7% to a record $28 million.

The information Services revenue of 13 million increased 4%.

Info Services growth was 1%, excluding the impact of FX.

Growth in the quarter was lower due to data deals, that were pushed to the second half of 2025.

With pipeline remains strong with demand, increasing from systemic, funds and dealers.

House, Trade Services, revenue of 11 million, increased 7% versus the prior year or 1% excluding the impact of that tax.

Here 2, we see a healthy pipeline of new contracts and expect pricing increases in the second half of the year.

Technology Services, revenue of dollars. Increased 16% driven by higher licensed and connectivity fees, and the addition of RFQ hub,

Total other income increased approximately 1 million driven by an increase in ethics gains of approximately 2 million in the current quarter partially upset by lower. Interesting income.

For modeling purposes with the closing of RSQ Hub in mid-may and consolidation of their revenues and expenses, the earnings of the unconsolidated affiliate line will go away in 3 Q.

But there is a performance incentive plan underway with our non-controlling shareholders, which had a non-cash impact of approximately 900,000 dollars in the current quarter in other net.

The effective tax rate was 26.9% up from 24.8% in the prior year, reflecting the increased AC for the uncertain tax position, reserved we established in the first quarter of 25.

On slide 11, we provide more detail on our commission revenue and our fee capture.

Totale commission, Revenue increased 12% to a record 192 million.

We experienced 12% growth in credit variable commission, Revenue with us, credit of 10% record Emerging Markets of 17% and record Euro bonds of 19%.

These strong results were driven by market buying strength and progress with our new initiatives partially upset by lower fee per million.

The reduction in total credit fee, capture year-over-year was principally due to protocol, mix.

On slide 12, we provide a summary of our operating expenses. Excluding notable items second quarter. Operating expenses of 124 million increased 6%, compared to the prior year, 5% excluding FX

The increase in expenses was during principally by higher employee compensation, and technology and communication costs.

As we continue to strike the right balance between investing to drive future growth, and continuing to drive increased efficiency.

Higher employee comp and benefits was driven by the Strategic hires. We have made over the last several months, that we expect to help Drive our growth as well as higher variable incentive compensation driven by the strong increase in Revenue in the quarter.

Headcount was 881 up only 2% from 864 in the prior and up 1% from 870 at the end of the first quarter of 25.

We are reconfirming our full year 2025 expense guidance, and expect to be at the low end of the previously stated expense range of 501 million to 521 million on an ex notable non-gaap basis, or on a gap basis, 505 million to 500 and 525 million.

On slide 13. We provide an update on our Capital Management and cash flow.

Our balance sheet continues to be strong with cash, cash, equivalents and corporate bond, and US. Treasury Investments to link 621 million as of June 30th down from 699 million. At the end of 2024, we generated 360 million in free cash flow over the trailing. 12 months an increase of 5% over last quarter.

we repurchased 380,000 shares year to date through July 2025 for a total of 80 million, including 168,000, shares, we purchased during the second quarter, at a cost of 37 million,

As of July 31, 2025, $145 million remains on the board for share repurchase authorization.

We believe, we are striking the right balance of investing to drive future growth while at the same time, being disciplined stewards of capital. Now, let me turn the call back to Chris for his closing comments.

Thanks Eileen in summary on slide 14. We made Solid progress with the key new initiatives that will drive improved market share in Us credit in the remaining quarters of 2025.

We are continuing to increase the pace of innovation and execution, and we will continue to enhance our delivery of new product enhancements in the coming months.

We are pleased with the performance of the platform in the quarter, which benefits from a more favorable macro environment. And our new initiatives, which provided over half of our incremental Revenue in the quarter.

The launch of our targeted block training solution, drove record levels of block trading across us, high-grade, emerging markets and Euro bonds. We delivered record portfolio, trading ADB, and our market share in Us credit portfolio, trading increased 240 basis points.

40% growth in dealer, initiated ADV reflects our increasing focus on this important Channel. We generated record at Mid X volumes in emerging markets and Euro bonds, and we look forward to the launch of naidex for us. Credit in September, we have made several very important strategic hires over the last several months, including Dean, Barry and Spencer Lee, that will be integral to driving future growth. In summary, we expect to drive growth mainly in Us credit. In the coming quarters through continued progress across the client initiated portfolio trading and dealer initiated channels, combined with our expanded leadership team. Now we would be happy to open the line for questions.

I would like to remind everyone in

Order to ask a question. Press star, then the number 1 on your telephone keypad,

Please limit to just 1 question per caller and then rejoin the queue by pressing star. Then the number 1 for any follow-up questions.

Our first question comes from the line of Chris Allen with City. Please go ahead.

Yeah morning everyone, thanks for taking the question um want to see if you give some more details on the progress of data of the new initiatives, maybe some car, just in terms of where our client penetration and adoption perspective, and then the alloy just mentioned for the rest of the year. And then, if you could help us reconcile, uh, the progress. You, you've made that the momentum. We saw in 2 Cube versus the July volumes specifically in market share in the US, high grade. Um, that'd be helpful as well. Thank you.

Sure. Thanks Chris. Um, yeah. First of all, um, we uh, you know, at the beginning of the year, um, we promised the market that we were going to focus on really 3 key areas. Um, the client initiated area, particularly portfolio trading the dealer uh, to dealer business and block trades. Um, so as of uh, July year to date, um, our idpt business is up. 47%, our market share in portfolio, trading is up 340 basis points. Um our year to date um investment grade dealer business is up 42% and our market share in the dealer to dealer. Business is up a 100 basis points.

Um, and that's um, our promise is also we're launching, uh, mid X in September. So that's without a mid-market matching solution in the uh, dealer to dealer business.

Also excited about this mid X launch for us credit. We do think that will have an impact on our dealer to dealer, uh, growth rates as a result and that's a due to go live in September. Um, I'm also excited about, uh, our block trading solution in investment grade, uh, and in high yield. Uh, it's really just been, uh, recently launched, um, to a number of users and we're expanding that user base, um, uh, in the coming weeks as we onboard more dealer content. And then, um, we're also rolling out, um, you know, all of this initiative was also while we were um, upgrading our technology. Uh, so we're seeing further roll out of that new tech into Europe with xpro going live in Europe, just this month. Uh, and then we have a some exciting new features rolling out in the coming months in our portfolio, trading platform, as well. So, um, certainly a year to date.

Progress um, that we're excited about those 3 initiatives.

With regard to July. Uh, I certainly um, would like to, You Know, cover the July uh market share numbers, particularly in IG, you know, uh, July was, um, a very similar Mark Market Dynamic that we saw in February of this year with exceptionally, narrow spreads and, and quite low volatility. Um, when we see that kind of Market Dynamic, we typically see a pair,

Pick up in portfolio trading and um, and mid-market matching Solutions, um, in the market and and certainly portfolio trading volumes, uh, did go up in July and, and, uh, Rose to 13% of the overall Market. Um, what's interesting is we tend to see a a pickup in the mid-market, uh, matching Solutions as dealers kind of recycle that higher PT volume into those mid matching, uh, midpoint matching Solutions. So they tend to exit that, um, that risk, uh, using those, uh, mid midpoint matching Solutions. Um, and in in, um, you know, we, we did see some progress, uh, in in the overall Market, um, in blocks, uh, but really the overall, the number 1 competitor in July, that we saw was really phone and chat. Um, we saw the phone in chat block market growth,

as we mentioned on the opening remarks of 400 basis points to 47% market share. Um, so that's a sizeable increase that we saw in that block Market that typically tends to be on, uh, phone and chat. Uh, and as, as you've seen in our numbers, we are addressing that very market share, uh, that block Market in particular and showing some promise, uh, with the, the, uh, roll out of our block solution in both, Euro bonds, uh, any

Um, and obviously finishing that here in, in US high grade. So, uh, not a great month for us but 1 month, doesn't, um, really make a quarter or a year. And obviously, we saw a certain Market dynamic in in July. Um, that is much more favorable to uh, large pts or sizable portfolio trades in July. And um, and really that mid-market matching Solutions tend to do quite well in a um, a stable low voltage.

All right, the next question comes from, Patrick moly with Piper Sandler. Please go ahead.

Yes, good morning.

Uh, Chris, I was hoping you could just update us, um, or maybe just elaborate on some of the drivers of the fee per million decline in the quarter. Uh it didn't, you know, fall too much sequentially but it was the lowest it's been in a few years. So just wondering kind of what the drivers were there and then what your expectations are um going forward. It looks like it popped up a little bit in the month of July. So uh, any color around fever million would be great. Thanks.

Right. So it was sort of think of that as like 4 dollars, you know, sort of in the positive column and then 2 dollars offset because we saw additional PT volumes and when you think about it from the year-over-year perspective from the quarter that you asked about and this is also true but on a smaller level in terms of the quarter over quarter for the quarter um it's really more than about you know again it's new protocols, right? And so when we see that we have more PT coming through in particular, you're going to see that that puts some pressure on the per million. Now we know. And as we just saw in July that when high-grade moves out, when duration moves out, that's a good guy and that can help us. So the moves you saw really were based on sort of protocol, you know, and product mix within what we were seeing have happening.

All right, the next question comes from Alex CRA with UBS. Please go ahead.

Yes. Hi, good morning everyone. Um, Chris you gave a pretty big laundry list of the initiatives earlier to to uh, Chris Allen's question would love for you to give a little bit more detail on the US blocks? Um, I know it's early, but I know it's also your biggest Initiative for the year and I think you said some pretty

Talk.

Timelines and and how quickly you want to see, uh, really traction. So maybe

From from em and Euro bonds, that that are translating into that perhaps. And and yeah, how how, how should we be thinking about the timelines to really make it? Make a make an impact on your market share here?

Sure, and and unfortunately, you're part of your question, broke up a little bit but I'm excited to talk about block activity. I think that was um certainly at the heart of the question. Um, first, um, we've we're very excited with um, the success we're seeing in both uh, merging markets as well as Euro bonds, um, from a block perspective. As I mentioned our block volume, uh, year to date is up, uh, over 20%, uh, more importantly in Q2, we saw, um, sizable performance in Block, trading and increased. Um, uh just in in IG, uh 40%. Um, and we actually picked up block market share uh hit as high as 12.5% in the quarter. So um, certainly exciting to see that in our us uh, investment grade, um, offering, uh, certainly in in the, um, offering in em and Euro bonds, we've, we continue

To see. Um, success when blocks are em, block volume was up a 20% 27% in Q2, and, uh, we saw 1.6 billion in EM block trades, in, in Q2. So, certainly it's having an impact. Uh, we're seeing Trader Behavior changes and, and that's, um, exciting when you roll out a, uh, a block solution because again, um, we always point out the other 50% of the market, uh, is largely blocked, uh, across the, the credit market. And so being able to, uh, show that we have launched a, a, a, a, a, an offering and are finally cracking into that, um, phone and chat Market, uh, is is truly exciting. Uh, we also are seeing of further progress. I think our some of, our best progresses in Euro Bonds in blocks, uh, where we, uh, continue to grow, um, uh, market share as a result of blocks, our block volume.

Uh, just in July alone, was up, uh, 54% in Euro bonds. Uh, so we're having a, a really, um, positive reaction from the market in, in that block volume, uh, across both em and eurobonds in the US, moving to your question around, uh, investment grade in high yield. Um, we are seeing, uh, clients, um, enjoying the benefits of, uh, having that block tool but it's still early days in

Terms of what we rolled out, um, in the US.

Um, I expect, uh, similar, um, outcomes from our client, uh, traders when they see the content become more robust, uh, in U.S. credit. So, um, exceptional performance where we have that content, uh, and very excited about, um, overall progress in the U.S.

The next question comes from Michael Cyprus with Morgan Stanley. Please go ahead.

Hey, good morning. Thanks for the question. Maybe. Just, uh, digging a little more on the blocks if I...

To start sounds like great success there. You were just talking about what the growth just curious. How much of that you attribute to the new block solution. If you could, maybe elaborate on what adoption looks like there. And in the US, it sounds like it's early days. You mentioned, you're rolling out. You're continuing to roll it out. Can you just elaborate on your sort of expectations around the pace of the roll out in the coming months? And quarters? The steps you're taking to broaden, adoption how you're looking to gauge early traction. And, and, and what might success look like in the US with this new high-touch solution into your end and in 26,

Sure, um, again, um, on the Block size, um, you know, our progress in in eurobonds, in particular was, um, certainly heavily driven by, uh, our block trading pickup as I mentioned, uh, in in the quarter block, trading grew, um 31%. Uh, so we're seeing that and and here in, in July, um, in eurobonds, our block trading grew an additional 34%. So, we're we're certainly seeing that impact. Um, and it's really, um, partly because of the, the content that we have on the platform in eurobonds where we probably have, um, most of the enriched dealer content on the platform, uh, when it comes to, uh, em. We also are seeing that same growth rate, uh, in EM. Again, the EM blocks have been driven, uh, partially by our new targeted solution, but also by the willingness of clients to use,

um, our all to all open trading for Block size liquidity. So, part of the growth has been a client's change in Behavior to put large-sized orders, particularly in EM, local markets, uh, into our platform to, um, access that unique liquidity and be all to all solutions with regard to the role out here in the US. It's only been um, a handful of traders that we've rolled the solution out. We plan to increase.

Increase that number, uh, in the coming weeks as we continue to onboard, uh, a dealer content. You know, it's an important part of the market, you know, as I think about, um, how we've addressed the market. Uh, historically, we've really addressed, the market clients needs when they have an identified set of bonds, and they come to Market and request price. And that's been the traditional means of, uh, adoption of electronic trading. What's exciting about this, uh, new part of the market, it's where dealers are really pushing their content or their inventory, uh, into clients and clients. Make decisions about selection of bonds as a result of that inventory being pushed to them. So, this is a part of the market that we have, historically not engaged in, um, and it's really opening up, uh, 2 things 1. A much better relationship with our dealer Community. But 2, um, it's really getting into

Areas for investors to see content in a more efficient way than over chat, or phone and really, um, ingest that content to impact their portfolio selection. Um, that's something new for us. Uh, something that's been rolled out here, uh, but it's an exciting part of the market because largely the block Market particularly in US investment. Grade is driven by this inventory, push out to clients and um it's exciting to finally being tapped into that.

Part of the market, um, and pushing, uh, dealer inventory or dealer axes into the hands of investors.

The next question comes from. Simon clinch with Redbarn. Please. Go ahead.

Just continually rising this year, even through some pretty ropey, uh, periods in the market. So, I was wondering if you could talk about how you're seeing your clients use PT differently. Is this, you know, could this be a much bigger part of the market than we initially perceived maybe a year or two ago? A lot of your thoughts on that, please. Thanks.

Sure. Um,

Definitely a pattern that we've seen, uh, the majority of the pattern is during times of low vault, uh, even intraday low vault or or or weekly low vault, um, higher use of PT. It's easier for dealers to price a PT. It's certainly easier for clients to evaluate PT pricing. Um, so there's definitely a trend um, you do point out correctly and some of the high volatility months of the second quarter. Um we did see clients make use of portfolio trades, particularly in high yield where they were, um, obviously, uh, attracted by the liquidity and the ability to move, um, you know, large no notional sums of of bonds. Uh, so we did see, um, ironically the pickup in PT and high yield. During some volatile times, I think that was largely driven by, um, you know, demand for cash, uh, by a number of the clients. Um, but the the

Continued. Use of PT is obviously an important part of the market. It's certainly, we've been growing our PT market share as a result of rolling out new portfolio trading Solutions and we'll continue to uh address that part of the market uh because it's such an important market share driver. Um there has been a number of very large sized portfolio trades in the month of July, um, large being over 1 billion. Uh, we've seen those, those portfolio trades, the on platform, but also be off platform. So there's still a number of, um, in these Market environments, higher levels of clients coming to Market with TT. Um, and then there's obviously some very, um, outsized, uh, PT trades that we've seen in the market from month to month happen. You know, somewhere in the size of, uh, 4 to 5 billion in in PT sizes. Again, we remind everyone the the

Market opportunity in PT is quite small relative to the bigger part of the market. Um, we think it's, you know, in the the zone of 50 million in usig in terms of Revenue and, you know, you know these are are priced at very low rates and they're really facilitation trading solutions for clients. So um exciting about market share movement in PT, but again, very low Revenue, um, opportunities in the

Overall, PT Market.

Thanks.

Your next question comes from Benjamin Bish with Barclays. Please go ahead.

Uh hi, good morning and thank you for taking my question. Um, Chris and you prepared remarks, you talked about a number of new strategic hires. I don't know if you could expand on that a little bit. You know what are these individuals tasked with doing what are their you know, primary kpis? Are you going to be measuring? Um, you know, how do you think they'll be kind of moving the needle and if if there's if you're successful in these hires, you know, when do you think that might, you know, translate into into results? Thank you.

Sure again, um, very excited about our new hires, um, some that have started and some are due to start in the coming, uh, months. Um, so Spencer Lee is really, um, overseeing, um, all of our product, uh, in the US credit market. So, it's exciting to see, uh, the impact. He's already had on our products and our product priorities, uh, and organizing our efforts around portfolio trading Solutions. Um, he's certainly has, uh, a known brand among our clients, uh, and a known brand among, uh, the dealer Community. Uh, he has been building out, um, solutions for really a larger trade sizes, um, in his prior role. So we are excited about his input and his knowledge around our block trading solution and the expect him to obviously focus on portfolio Trading.

Block trading and our uh, dealer Solutions, uh, in the coming months. Uh, Dean Barry will be joining uh in late September. So we're excited about his entry uh to Market access. He has a breadth of knowledge across a markets data and analytics and um certainly um skilled in in m&a as well. So we're excited about um Dean joining us uh in the coming month.

Okay, great. Thank you very much.

In the line of Kyle Voight with KBW, please go ahead.

Um, maybe I could just ask a question on the muni business.

I still know, it's still small obviously, but, um, but can you just kind of update us on market? Share progress. Where, what else do you need to do in terms of, uh, capability or new product roll out to kind of find the next leg of market share growth there. Um, and then anything, you can also share just regarding some of the, you know, the movement on uh on kind of implied fee capture with within that um with that within that bucket, and how you expect that to progress, moving forward.

Sure. Um, look, we're very excited about our Munn business. Um, the year-over-year growth in munis has been exciting, uh, certainly, um, the Q2 activity, um, that we just published, um, uh, has been up, um, quite dramatically. Um, our overall 80d we hit, um, records in Q2, uh, our Market volume was up, um, 23%. Um, and, and what's exciting about, um, 2q, uh, and current performance is a lot of that growth has been driven by our tax exempt business, uh, which is a, a very unique part of the business, um, within the tax exempt business, uh, we were up 34%, uh, in in terms of

The record volume, uh, and here in July, which was a much lighter month for the muni Market. Um, we were up, um, 12% in our tax exempt business. So, we continue to see, um, excitement around electronic of the muni Market. Um, we've rolled out portfolio, trading, uh, to our, uh, Munn Market investors, which is an important tool for them and, uh, a key component to that Muni Market is also our all to all solutions where, uh, clients are able to access, uh, unique liquidity across that Muni Market. Um, so we continue to make investments in the muni Market. Our most recent investment was our, um, CP plus from munis. Uh, the feedback on that data feed is quite exciting. Um, certainly in the second quarter clients, uh, noted that our, uh, CP plus from mun's outperformed, uh, the other, uh, real time.

Market Data Solutions in the muni market. So um certainly we see further adoption as a result of that data and its performance in the market. Um, so overall pretty excited about, um our our Munn business, our fee per million actually in July uh was up um as a result of uh the activities across that market. So we are, you know, certainly happy about um the direct direction of travel of of fee per million.

Um, overall, we also have, um, a sizable, uh, dealer business in the muni Market as well. And, uh, seeing that grow, um, not only in the second quarter, but also here in July, it grew about 38%. So overall, um, please with the, uh, Munn progress, we've made year to date and year over year, um, July was obviously, uh, uh, uh, a slow month, uh, from uh, an overall secondary Market turnover for us. But, uh, certainly an exciting, uh, progress across those initiatives, that we continue to talk about.

The next question comes from Alexander Blowin. With Goldman Sachs. Please go ahead.

Hey everyone, good morning. This is actually a data filling in for Alex. Thanks for taking our questions. I appreciate all the updates on block trading and PT.

Hoping to just uh talk about the firm's Capital return priorities and importantly where m&a Stacks up in the mix.

Sure, um, happy to discuss that. I think, as you know, market access over time has always really been driven by and focused a lot on the organic opportunity ahead of us, which we know we still think is really quite significant. Um, so if you think about the priorities in our capital.

Lqa rates acquisition and then obviously, most recently, RFQ Hub. So you've seen us do, um, a number of both Acquisitions. And I would actually talk about our Capital priorities, exactly in the way that I just described them to you, which is first investing organically to really capture that market opportunity. We have in the global fixed income Market, continuing to return, Capital to investors, through dividends and more opportunistic, share repurchases as you've seen us do. And then I would say both on Acquisitions. Like, I just discussed

And I would just add, um, obviously it's, I, Ilene mentioned. Our organic opportunities are quite large and quite attractive and, um, certainly high accretion as a result. Um, we are, um, our balance sheet is positioned, um, certainly, uh, attractively to engage in M&A. And, um, with the more recent executive changes here at MarketAxess, we also have, um, executive level capacity to engage in M&A. So, I'm excited about, um, our opportunity to look at the market, uh, with a fresh balance sheet and a fresh set of eyes, um, looking for our opportunities in the M&A market.

The next question comes from the line of Eli Abbott with Bank of America. Please go ahead.

Morning. Thanks.

For taking the question.

Can you dig more into your performance in Europe? It looks like volumes are up 21% year to date. I know part of that is from a larger pie, but it also seems like there's been some pretty good share gains lately. What's driving those share gains, who's it coming from? And are there any particular protocols or customer channels that have been particularly strong?

Sure. Um,

thanks for that question. The Euro bond market is, um, has been a very exciting Market in in 2025 overall Market activity is continued to grow, um, our investor, uh, based, um, is quite exciting and certainly adopting, uh, a number of our new initiatives. Um, our block trading, um, in the second quarter was up, uh sizing. Um, our portfolio trading was also up um uh dramatically in the second quarter uh and just in July Alone, um, our PT of volume was up uh, 64%. So we're we're delivering uh, on all of those initiatives um blocks portfolio trading and the dealer initiative. And uh and and client adoption is high. Uh we're seeing um outside growth rates in those markets and and market share increases so.

So, um, your bonds happens to be a place where, uh, we have a, a robust block solution with all the dealer content. Uh, we have a number of, uh, key investors using that solution. Um, we have a, a robust portfolio trading tool with lots of analytics, uh, and pre-trade Analysis for Traders to use our portfolio trading tool. And then our dealer, um, business with, uh, the full roll out of Minx across the Euro Bond business. Um, we're seeing growth rates, um, there in the dealer business as well. So, it's, it's really where we're firing on all 3 initiatives that we're seeing that, um, very attractive growth rate across the Euro Bond, uh, uh, business.

All right, your next question comes from Dan Fannon with Jeffrey's please. Go ahead.

Uh, thanks, good morning. Just wanted to follow up on, uh, the previous question around the me, The Hires and management changes, just curious. If you've you're done with that process, if there are more to go and the team that you have together is the 1 that you think can execute upon the goals you've outlined for this year and Beyond.

Thanks for the question. Um, super excited about the team. Uh, the team we have. Uh, and, and with, uh, with Dean's arrival, uh, the team will have, uh, as early as, um, late September. So excited about what that capacity brings, um, certainly to our product knowledge. And, um, the Practical knowledge, uh, of the product team. Uh, Spencer Lee, um, came from an EMS. And, and as I've mentioned on these calls before, as we expand our protocols, and, and become more protocol, agnostic, we look and feel more like an EMS, uh, to our clients. So that's a key ingredient. Uh, and a key skill set that he brings. He also sat in the, in the desk of a Trader. So he has that buy side Trader knowledge that he brings to to Market access. And, um, those 2 components are very exciting for, uh, our product knowledge and what we're able to put out in terms of.

Uh, to our investor clients, uh, and Dean obviously has a breadth of international experience, um, a breadth of, uh, a large, uh, p&l management experience, uh, m&a experience, and obviously a product and data analytics experience. Uh, so again, um, really, uh, helpful entries to Market access. So we, as we kind of move on to our kind of next journey in this market and attack. What? I I'm most excited about is really that um large dealer to client block trade market. Um and uh having you know, the additional help uh across the globe is going to be quite exciting here in the coming months.

All right, the final question.

On the line of Michael Cyprus with Morgan Stanley. Please go ahead.

Thanks for taking the follow-up question here. I just wanted to ask about portfolio trading in the month of July. I know it's just a month, but I am curious what was driving the decline year on year in U.S. credit portfolio trading, as I believe that was down about 160 basis points to around 15.6% U.S. credit PT share. I'm just curious what macro environment might we see your PT share expand in. Maybe talk about some of the initiatives and steps you can take to drive that meaningfully higher. Over time, what might success look like for you in portfolio trading in the U.S.?

Credit.

Sure, great question, obviously, we've been investing in our portfolio trading tool from for some time. And as I mentioned, we um, are very excited about the progress. We've made a year to date in portfolio, trading. Certainly, um, portfolio trading, swings can be very client-specific. Uh, we've seen clients come to Market with very large portfolio trades. Um, not regularly but, um, you know, once a quarter, uh, so it really is client specific and that can have a meaningful impact on your market share. And obviously, um, you know, the client mix of portfolio trading, uh, in a month, like, July can certainly have an impact, um, in high yield in particular, we did actually grow our portfolio market share in July. So we did see a pickup of 70 basis points, uh, in market share and portfolio trading market share in July. So, um, certainly we're seeing, um,

That client demand continued to come to, uh, use our, uh, portfolio trading solution. I think going forward. Um, clients are really asking for additional, uh, pre-trade analytics. They want to analyze portfolios, um, before they submit them, they really want to optimize those portfolios. So having things, um, some of our proprietary Market data embedded, in our portfolio, trading tool will help clients determine

Um, what they should put in a portfolio before they go to the market. So those are exciting items. And certainly, um, there's additional items that we're working with some of the dealers on when they want to show portfolios, uh, to clients. Uh, so again, that that, uh, Market where dealers are looking to move, um, large baskets of bonds and show them to clients. Um, we are now engaged in that as well, and that's an exciting new area of the portfolio, um, Market. That's, uh, been developing. And so, having a platform deliver a solution to both the dealer. And the client is an exciting enhancement in that, uh, portfolio trading space.

Great. Thank you.

All right, I will now turn the call back over to Chris Concannon for closing remarks.

Thanks everyone for, um, dialing in today. We're excited about, um, what's to come in the following months, and we'll talk to you, uh, again on our following quarterly call. Thank you.

Thank you, everyone. You may now disconnect.