MarketAxess Holdings, the operator of a leading electronic trading platform for fixed-income securities, today announced that Founder and Executive Chairman Rick McVey will retire at the end of the year. Carlos Hernandez will succeed Mr. McVey as Chairman of the Board of Directors, effective January 1, 2025. Mr. McVey has agreed to remain as the Chairman of the Board of Directors of MarketAxess Limited, the Company’s international holding company.

Mr. McVey founded MarketAxess in 2000 and is a visionary in the evolution of fixed income market structure. Under his leadership, the company grew to become a global, S&P 500 company that has transformed the way the world’s largest capital market operates worldwide. Mr. McVey stepped down as CEO of MarketAxess in April 2023 after 23 years in that role, and has since been serving as Executive Chairman of the Board.

“Rick’s bold vision for the company nearly 25 years ago not only revolutionized trading forever, but also created an outstanding organization in the process,” said Chris Concannon, CEO of MarketAxess. “I’d like to congratulate Rick on an incredible accomplishment and thank him for the opportunity to lead the company as we continue to transform global markets.”

“The last quarter century has been an incredible journey, and it was an honor to lead this organization from a startup to a position of global leadership. None of this could have been possible without the skill and dedication of our management team, employees, and board of directors,” said Mr. McVey. “Most importantly, I am grateful for the tremendous support we enjoy from our dealer and investor clients around the world. The future of MarketAxess is bright and I am confident under Chris’ leadership we will continue our track record of innovation and growth to create lasting improvements for global fixed income markets. I look forward to my continued involvement on the Board of MarketAxess Limited as we continue to expand our reach in international financial markets.”

Mr. Hernandez previously served as a Director from 2006 to 2019 and rejoined the MarketAxess Board in September 2023. Mr. Hernandez, who is designated as an independent Director, currently serves as the Chair of the Board’s Compensation and Talent Committee. Mr. Hernandez retired from JPMorgan in April 2023 after 37 years of service. Prior to his retirement, Mr. Hernandez was Executive Chair of Investment and Corporate Banking at JPMorgan and served as a Member of the Operating Committee and a Member of the Corporate & Investment Bank Management Team.

“Having watched firsthand this incredible company that Rick McVey built, consistently challenge norms, break records and set new standards for fixed-income electronification for over two decades—I am incredibly honored to succeed him as Chairman,” said Mr. Hernandez. “I look forward to working closely with Chris Concannon and our seasoned management team during this next phase of MarketAxess as we find new ways to make one of the world’s leading fixed income marketplaces even better.”

MarketAxess Reports Third Quarter 2024 Financial Results

Revenue Growth of 20% Driven by Strong Growth in Total Credit ADV on Higher Market Volumes

Record Portfolio Trading ADV; Record Municipal Bonds ADV and Estimated Market Share

MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, today announced financial results for the third quarter ended September 30, 2024.

3Q24 select financial and operational highlights*

• 20% increase in total revenues to $206.7 million , including Pragma revenue of $7.7 million and an increase of approximately $0.9 million from the impact of foreign currency fluctuations.
  • 24% growth in U.S. high-grade commission revenue on strong growth in market volumes.
  • 20% growth in emerging markets and Eurobonds commission revenue reflecting strong geographic diversification.
  • Record portfolio trading ADV of $1.1 billion .
  • Record rates commission revenue, up 35% .
  • 21% increase in services revenue (combined information, post-trade and technology services revenue) to $26.3 million , including Pragma revenue of $2.8 million .
• Total expenses of $119.7 million , up 14% , including Pragma operating expenses of $8.2 million and an increase of approximately $0.7 million from the impact of foreign currency fluctuations.
• 30% increase in diluted earnings per share (“EPS”) to $1.90 on net income of $71.5 million .
• Record 2,125 (+2%) active client firms and 1,079 (+2%) international active client firms on the platform.
• Record automation suite trading volume (+28%) , trade count (+37%) and active client firms (+49%) ; dealer algorithmic responses up 24% .

*All comparisons versus 3Q23.

Chris Concannon, CEO of MarketAxess, commented:

“We delivered significantly improved financial results in the third quarter, as we continued to make progress in executing our strategy.

The initial roll-out of X-Pro to our international client base is underway. In the third quarter, we delivered several hundred basis points in market share gains in U.S. credit portfolio trading compared to second quarter 2024 levels. Additionally, a record 74% of our portfolio trading volume was executed on X-Pro in September. We are looking to build on these gains in the coming quarters with the initial launch of our targeted block trading solutions last month, designed to minimize market impact and optimize trading success. Additionally, we are enhancing our dealer liquidity solutions by extending our suite of automation services to our dealer clients.

In summary, we exited the quarter in September with a constructive market backdrop, characterized by strong market volumes, a robust new issue calendar and an increase in the velocity of trading in U.S. high-grade. We believe we are well positioned to deliver continued growth in the coming quarters.”

3Q24 overview of results

Commission revenue and trading volume

Credit

Credit Commission Revenue

• Total credit commission revenue of $168.4 million (including $33.6 million in fixed-distribution fees) increased $23.2 million , or 16% , compared to $145.2 million (including $36.2 million in fixed-distribution fees) in the prior year. The increase in total credit commission revenue was driven principally by 24% growth in U.S. high-grade commission revenue on a 39% increase in U.S. high-grade TRACE market ADV. The decline in variable transaction fees per million (“FPM”) to $148.97 from $154.85 in the prior year was mainly due to product and protocol mix-shift, principally lower levels of U.S. high-yield activity and increased portfolio trading, partially offset by the higher duration of bonds traded in U.S. high-grade, principally driven by an increase in the weighted average years to maturity. The decrease in fixed-distribution fees was principally driven by the consolidation of two global dealers and migrations to variable fee plans, partially offset by the addition of new dealer fixed fee plans.

Credit Trading Volumes

• Total credit ADV of $14.1 billion increased 27% compared to the prior year, and increased 3% compared to 2Q24 levels.
• Record $1.1 billion in total portfolio trading ADV, up 163% compared to the prior year, and up 31% compared to 2Q24.
• 35% Open Trading share ⁴ of total credit trading volume, up from 34% in each of the prior year and 2Q24. The Company delivered estimated price improvement ⁵ for clients via Open Trading of approximately $119 million in the quarter.

U.S. Credit ⁶

• U.S. high-grade ADV of $7.0 billion increased 36% compared to the prior year, and increased 9% compared to 2Q24. Estimated market ADV increased 39% compared to the prior year, and increased 5% compared to 2Q24. Estimated market share was 19.5% , down from 20.0% in the prior year, but up from 18.7% in 2Q24. Including the impact of single-dealer portfolio trades , estimated market share was 20.0% , in line with 20.1% in the prior year, but up from 19.2% in 2Q24.
• U.S. high-yield ADV of $1.3 billion decreased 1% compared to the prior year, and decreased 4% compared to 2Q24. Estimated market ADV increased 23% compared to the prior year, but was in line with 2Q24. Estimated market share was 13.0% ( 13.4% including single-dealer portfolio trades), down from 16.1% in the prior year, and down from 13.5% ( 13.8% including single-dealer portfolio trades) in 2Q24.

Other Credit

• Emerging markets ADV of $3.3 billion increased 19% compared to the prior year, but was in line with 2Q24. The year-over-year increase was driven by a 20% increase in hard currency ADV, and an 18% increase in local currency ADV.
• Eurobonds ADV of $1.9 bi llion increased 27% compared to the prior year, but decreased 10% compared to 2Q24.
• Record Municipal bond ADV of $577 million increased 49% compared to the prior year, and increased 11% compared to 2Q24. Estimated market ADV was down 5% compared to the prior year, and down 6% compared to 2Q24. Record estimated market share of 8.7% , up from 5.5% in the prior year, and up from 7.4% in 2Q24. ³

Strategic Priority Related Protocols & Workflow Tools

• Our estimated market share of U.S. high grade and U.S. high-yield TRACE portfolio trading was 20.0% in 3Q24. Portfolio trading represented an estimated 10.7% of U.S. high-grade and U.S. high-yield TRACE in 3Q24.
• A record 59% of our portfolio trading volume was executed on X-Pro in 3Q24.
• Dealer RFQ ADV of $1.2 billion across all credit products increased 26% compared to the prior year, and was in line with 2Q24 levels.
• AxessIQ, the order and execution workflow solution designed for wealth management and private banking clients, achieved ADV of $131 million , up 32% compared to the prior year, but down 3% compared to 2Q24.

Rates

• Record total rates commission revenue of $7.1 million increased $1.8 million , or 35% . Record total rates ADV of $26.4 billion increased 46% compared to the prior year, and increased 29% compared to 2Q24.

The full results can be read here 

MarketAxess Reports Second Straight Month of Record ADV

MarketAxess Holdings, the operator of a leading electronic trading platform for fixed-income securities, today announced trading volume and preliminary variable transaction fees per million (“FPM”) for October 2024.

Chris Concannon, CEO of MarketAxess, commented:

“We delivered the second straight month of record total trading ADV in October , driven by continued robust market volumes and strength in our international businesses. Our rates business also generated record ADV in October, surpassing the previous monthly record set during a period of extreme market volatility in March 2020.

While we are disappointed with the absolute level of market share in U.S. high-grade in October, we were pleased to see record trading volumes, an increase in U.S. high-yield estimated market share compared to September and an increase in our preliminary total credit fee capture during the month. Most importantly, our preliminary total credit variable commission revenue in October was slightly above September levels. We believe the decline in our high-grade market share was driven by lower portfolio trading and a client shift to large block trading in the market. Large portfolio trades in the market and the mix of activity across U.S. high-grade TRACE can generate significant swings in market share without materially impacting revenue generation.

We are continuing the roll-out of X-Pro to our global client base and we now have our block solution in the market, which we believe will be integral to the success of our “high-touch” strategy.”

Select October 2024 Highlights

• Record total average daily volume (“ADV”) of $46.2 billion increased 40% compared to the prior year, and increased 2% compared to September 2024. These strong results were driven by total credit ADV of $15.0 billion , representing an increase of 19% compared to the prior year, and a decrease of 9% compared to September 2024. Record total rates ADV of $31.2 billion , which increased 54% compared to the prior year, and increased 9% compared to September 2024 levels, also contributed to the strong performance in October 2024.
• Record total trading volume of $1.0 trillion on the platform increased 47% compared to the prior year, and increased 12% compared to September 2024.

U.S. Credit 2

• U.S. high-grade ADV of $6.9 billion increased 15% compared to the prior year, but decreased 18% compared to September 2024. Estimated market ADV increased 30% compared to the prior year, but decreased 10% compared to September 2024. Estimated market share was 18.0% , down from 20.3% in the prior year, and down from 19.9% in September 2024. Including the impact of single-dealer portfolio trades , estimated market share was 18.7% , down from 20.6% in the prior year, and down from 20.3% in September 2024.
• U.S. high-yield ADV of $1.5 billion decreased 8% compared to the prior year, but increased 4% compared to September 2024. Estimated market ADV increased 15% compared to the prior year, but decreased 5% compared to September 2024. Estimated market share was 13.3% , down from 16.7% in the prior year, but up from 12.1% in September 2024. Including the impact of single-dealer portfolio trades , estimated market share was 13.9% , down from 16.9% in the prior year, but up from 12.5% in September 2024.

Other Credit

• Emerging markets ADV of $3.7 billion increased 33% compared to the prior year, and increased 1% compared to September 2024. The year-over-year increase was driven by a 42% increase in hard currency ADV, and a 22% increase in local currency ADV.
• Eurobonds ADV of $2.3 billion increased 37% compared to the prior year, but slightly decreased 1% compared to September 2024.
• Municipal bond ADV of $578 million increased 9% compared to the prior year, but was in line with September 2024. Estimated market ADV decreased 33% compared to the prior year, but increased 12% compared to September 2024. Estimated market share of 7.9% , up from 4.9% in the prior year, but down from a record 8.8% in September 2024.

Strategic Priority Related Protocols & Workflow Tools

• $1.2 billion in total portfolio trading ADV increased 72% compared to the prior year, but decreased 19% compared to September 2024.

— Estimated U.S. high-grade and U.S. high-yield TRACE portfolio trading market ADV decreased 22% compared to September 2024.

• Our estimated market share of U.S. high-grade and U.S. high-yield TRACE portfolio trading was 17.9% in October 2024, down from 20.8% in September 2024.

— Portfolio trading represented 10% of U.S. high-grade and U.S. high-yield TRACE in October 2024, compared to 12% in September 2024.

• Open Trading ADV of $4.5 billion , increased 17% compared to the prior year, but decreased 8% compared to September 2024. Open Trading share 4 of total credit trading volume was 35% , in line with the prior year and September 2024 levels.
• Dealer RFQ ADV of $1.3 billion across all credit products increased 26% compared to the prior year, but decreased 8% compared to September 2024.
• AxessIQ , the order and execution workflow solution designed for wealth management and private banking clients, achieved ADV of $161 million , up 39% compared to the prior year, but down 3% compared to September 2024.

Rates

• Record total rates ADV of $31.2 billion , up 54% compared to the prior year, and up 9% compared to September 2024.

Variable Transaction Fees Per Million (FPM) 1

• The preliminary FPM for total credit for October 2024 was approximately $154 , up from $153 in the prior year, and up from $150 in September 2024. The preliminary FPM for total rates was approximately $4.40 , up from $4.30 in the prior year, and up from $4.18 in September 2024.

Source: MarketAxess