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DATE

Friday, February 6, 2026 at 10:00 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Christopher Concannon
  • Chief Financial Officer — Ilene Bieler
  • Head of Investor Relations — Stephen Davidson

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TAKEAWAYS

  • Total Revenue -- $846 million for the year, with product areas outside US credit growing 10%.
  • Record Free Cash Flow -- $347 million generated in 2025, cited as a new high for the company.
  • Commission Revenue -- $181 million for the quarter, up 4%, with total credit commission revenue at $165 million, a 2% increase.
  • Block Trading ADV -- Increased 29% year over year, with emerging markets at a record high and January block trading ADV up 56% year over year.
  • Portfolio Trading ADV -- Grew 48% globally to a record $1.4 billion, with US credit portfolio trading market share up 270 basis points for the year.
  • Dealer-Initiated ADV -- Increased 33% for the year, and MIDEX protocol topped $3 billion in trading volume in December, $7 billion in January (up 383%).
  • US High Yield Portfolio Trading -- Estimated market share was 28%, and US high yield block trading ADV exceeded $800 million, a 19% increase.
  • Non-GAAP Expenses -- Increased 5% year over year to $530 million–$545 million guidance for 2026, with an anticipated 8% growth at the midpoint.
  • Share Repurchases -- $360 million in 2025 for 2 million shares, and an accelerated share repurchase (ASR) program retired 1.7 million shares, leaving $25 million authorized as of January 31, 2026.
  • Diluted EPS -- $2.51 per share for the quarter, or $1.68 excluding notable items; notable items included a $31 million tax reserve release and $1 million repositioning charge.
  • Headcount -- Stood at 869, down 2% year over year and 3% sequentially from the prior period.
  • Capital Return -- $474 million returned to shareholders in 2025 via share repurchases and $114 million in dividends.
  • Cash and Investments -- Totaled $679 million as of December 31, 2025.
  • 2026 Expense and Capex Guidance -- Operating expenses (ex-notables) targeted at $530 million–$545 million, and capital expenditures expected at $65 million–$75 million, 80% for capitalized software development.
  • Effective Tax Rate Guidance -- Expected at 24%–26% for the upcoming year.
  • Adaptive Auto Ex Algo -- Exceeded $8 billion in trading volume in the fourth quarter, with several key clients adopting customized workflows.
  • Xpro Trading Volume -- Up 80% among the top 25 clients, showing wide adoption of the proprietary analytics tool.
  • Estimated US High Grade Market Share -- Declined, with management citing a 92% increase in new issue block activity as the primary factor.
  • Block Trading Share -- Block trading in US credit, emerging markets, and Eurobonds now represents about a third of total credit ADV.

SUMMARY

MarketAxess Holdings (MKTX 1.22%) delivered record annual revenue and free cash flow, supported by broad-based growth outside US credit and rapid adoption of new trading protocols. Strategic technology and product roadmap execution remains central to management's three-year growth outlook, with capital return exemplified by the completion of a $300 million ASR and a $0.78 per share dividend increase. Management highlighted significant traction in automation, block, and portfolio trading channels, including notable expansion of dealer-initiated activity and market data volume, while fee capture trends reflect persistent protocol and product mix shifts.

  • Management confirmed that the revenue guide for 2026 targets mid-single-digit percentage growth in services, with no fee-per-million accretion assumed in the three-year plan.
  • The company is pursuing client workflow enhancements and AI-driven analytics, leveraging a growing proprietary dataset that now spans over $35 trillion in annual notional prices and 91 million price points.
  • Top 25 clients drove an 85% increase in portfolio trading volume, and volume from the top 20 in automated block trading surged more than 125%.
  • Management reiterated that electronification in US credit has plateaued near 45%-50%, identifying block trades executed via phone and chat as the next major opportunity for migration to platform-based trading.
  • Emerging markets activity achieved record growth, with January ADV up over 50% year over year and block volume growth of 92% in that region for the same period.
  • Recent technology investments, particularly through the Pragma acquisition, enabled deployment of a new closing auction platform, now in broader rollout following a pilot phase and showing increased dealer and client participation.
  • Capital allocation priorities focus on debt repayment from the recent ASR, with $25 million remaining on the current repurchase authorization and emphasis on technology-driven cost efficiencies.

INDUSTRY GLOSSARY

  • ADV (Average Daily Volume): The average value of securities traded per day on MarketAxess Holdings Inc.'s platform, a core metric for electronic trading platforms.
  • ASR (Accelerated Share Repurchase): A method by which a company buys back shares from the open market in bulk, typically with the assistance of an investment bank.
  • Block Trading: Execution of large-sized trades, often exceeding standard market size, typically between institutional market participants.
  • Xpro: MarketAxess Holdings Inc.'s proprietary trading and analytics tool designed to manage requests-for-quote (RFQ) and portfolio trades using pre-trade analytics.
  • MIDEX (Dealer-Initiated Protocol): A trading protocol for US credit that facilitates dealer-to-dealer activity on the MarketAxess Holdings Inc. platform.
  • RFQ (Request-for-Quote): An electronic protocol enabling buyers to solicit pricing for bonds or other fixed-income products.
  • Portfolio Trading: Trading protocol in which baskets of bonds are transacted together, often priced at a single or composite price.

Full Conference Call Transcript

Christopher Concannon: Good morning, and thank you for joining us to review our fourth quarter and full year 2025 financial results. We are pleased with the progress we achieved in delivering new protocols and functionality in 2025, and excited about our prospects and plans for 2026. First, we enhanced the MarketAxess Holdings Inc. advantage in 2025 by expanding our global network, enhancing our differentiated liquidity, and strengthening our deep proprietary data and analytics. These key components of the MarketAxess Holdings Inc. advantage are further complemented by our investment in multi-protocol solutions for the buy side and for the sell side.

We have made significant progress in 2025 delivering and growing protocols across our three channels: portfolio trading protocols, block trading protocols, dealer matching protocols, automation protocols, and our closing auction protocol. Next, we have a clear and achievable technology and product roadmap that positions us to achieve our three-year targets that we announced in December. In 2025, we delivered critical protocols and workflow tools that will help achieve the first year's milestones. Now 2026 is about execution and building on the momentum we had as we exited 2025. Turning to our financial results on Slide three. In 2025, we generated record revenue of $846 million, including strong 10% growth in product areas outside US credit.

Record total revenue was underpinned by record total ADV, driving record commission revenue combined with record services revenue, helping to drive record annual free cash flow generation of $347 million. Momentum continued to build with our new initiatives last year. We exited 2025 with a 29% increase in block trading ADD, including record block trading ADD in emerging markets, 28% estimated market share in US high yield portfolio trading, and over $3 billion in trading volume in our new dealer initiative protocol MIDEX. We continue to be disciplined with our expense management, with 5% growth in non-GAAP expenses in 2025.

We have returned a total of $474 million to investors, through $360 million of share repurchases, and $114 million in dividends. In addition to establishing our three-year plan, we announced an enhanced capital return plan of $400 million, including a $300 million ASR. We just completed the ASR earlier this week with the final delivery of 360,000 shares. Through the completion of the ASR, we have now retired 1.7 million shares to date. In summary, I'm encouraged by the significant product deliveries that we made in 2025 and the progress we achieved across our strategic channels, portfolio trading, dealer initiated, and block trading.

The investments that we are making to help drive higher levels of revenue and market share growth in US credit are beginning to show some progress. I just wanted to provide some context for our January trading volume statistics that we released yesterday. In January, we generated record total credit ADV, driven by strong growth across all credit product areas, with record ADV in our emerging markets business up 50%. Strong market volumes, combined with the continued momentum in our new initiatives, helped drive strong growth in our total credit preliminary variable commission revenue.

Estimated market share in US high grade was lower than we would have liked, but it was negatively impacted by a 92% increase in new issue block activity. While this has a temporary impact on share, it's good for overall market volumes and turnover growth over time. US high grade turnover increased 95% in January, levels we have not seen since approximately 2011. Before moving to the next slide, I wanted to welcome two new members to our Board of Directors, Doug Sifu and Ken Skijano, who will be joining our board as of March 1.

Doug brings deep fintech market structure and regulatory expertise from a major global market maker, and Ken has three decades of experience in fintech and private equity. Both will be integral to the board and me as we continue to execute our long-term strategy. Slides four and five really drive home how well we have enhanced the MarketAxess Holdings Inc. advantage in 2025. Most of the KPIs on slide four show healthy growth rates reflecting the underlying health of our franchise. This shows that the investments we have made to enhance our products and provide clients with new workflow tools and protocols are paying off.

While we are pleased with these results, US credit market share continues to require attention and focus. The good news is we have a detailed plan to address it, which is embedded in our three-year targets. Slides six and seven highlight how well we are executing on our new initiatives across our three strategic channels, including strong growth continuing in our automation suite. On slide seven, in the client-initiated channel, we continue to make progress with block trading globally. Our block solutions continue to grow in US credit, emerging markets, and euro bonds, proving that blocks will move from phone to platform. We also recently launched a new axe trading solution for dealers to send axes directly to specific clients.

The rollout is in progress, and the client feedback has been positive. We generated 24% growth in ADV to a record $5 billion of block activity across US credit, emerging markets, and euro bonds, with record block trading ADV across all three products. Our US credit ADV record was driven by record block trading ADD in US hybrid, of over $2 billion, which represented an 18% increase. Our ADV record in US high yield of over $800 million in block trading represented an increase of 19%. The strong growth continued in January, with a 56% increase in block trading ADD last month.

Block trading in US credit, emerging markets, and Eurobonds now makes up about a third of our credit ADV and represents the next step in the growth of electronic trading. In the portfolio trading channel, we generated a 48% increase in total global portfolio trading ADV to a record $1.4 billion, with record US credit ADD and market share. US credit portfolio trading market share increased by 270 basis points in 2025. In January 2026, total portfolio trading ADD was up 126% and market share in US credit portfolio trading increased by 620 basis points.

In the dealer-initiated channel, we generated a 33% increase in dealer-initiated ADV for the year, and we exited 2025 with a strong contribution from our new US credit MIDEX protocol with over $3 billion in trading volume in December alone. Again, this strong growth continued into January, with a 13% increase in our dealer-initiated ADV. Total Midex trading volume was a record $7 billion, representing an increase of 383%. Last in the automation suite, we had another strong year as clients continue to leverage automation enabling them to do more with less. Additionally, we were very pleased to see a significant increase in Adaptive Auto Ex algo trading volume in the fourth quarter.

Several key clients adopted more customized adaptive algo workflows to increase execution performance and generated over $8 billion in trading volume in the fourth quarter. I'm also happy to report that our Pragma acquisition, which is powering our recent Algo success, is fully accretive while also adding strategic value across our matching and automation technology modernization, including driving growth in our rates complex. Slide eight shows the strong growth of our new initiatives with our top 25 clients. Our top 25 clients have been driving our growth in portfolio trading with an 85% increase in PT volume coming from the top 25.

While our top 25 clients have been leveraging our platform for portfolio trading, they've also been leveraging our automation suite for block trading. Automated block trading volume from our top 20 is up over 125%. And not surprisingly, given the benefits of Xpro in managing RFQ and portfolio trades with our rich proprietary pre-trade analytics and data, trading volume through Xpro is also up 80%. Slide nine highlights the increase in market share in US high yield portfolio trading in 2025 as a result of several enhancements we made last year. The enhancements allow clients to better evaluate the pricing they receive for their high yield portfolios.

While this chart highlights the dramatic increase in estimated US high yield PT market share, we have also seen our traditional RFQ high yield market share increase by approximately 100 basis points in 2025. Slide 10 highlights the increase in the long-term e-trading opportunity that we have seen in just the last several years. This is a point worth emphasizing that I believe many market followers have been missing, particularly with our recent growth in blocks. While total electronification percentage rates may have plateaued in US credit over the last year, the US high grade market overall has increased by approximately 52% and US high yield has grown by approximately 28%.

We believe that we are well positioned to capture this expanding e-trading opportunity as a result of the new initiatives that we have in the market right now as well as the ones we plan to deliver in 2026. This is why we feel good about our position and our ability to return to higher levels of revenue growth in the coming quarters. Now let me turn the call over to Ilene Bieler to review our financial performance.

Ilene Bieler: Thank you, Christopher Concannon. Turning to our results. On slide 12, we provide a summary of our fourth quarter financials. We delivered 3.5% revenue growth to $209 million, which includes a $2 million benefit from foreign currency translation. We reported diluted earnings per share of $2.51 or $1.68 per share excluding notable items. The net $0.83 per share impact of notable items in the quarter consisted of approximately $1 million or $0.02 per share in repositioning charges, our expenses in the employee compensation and benefits line, and $31 million or $0.85 per share for reserve release related to the tax-related reserve we established in 2025.

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, total commissions revenue increased 4% to $181 million compared to the prior year. Services revenue increased 2% to $28 million. Information services revenue of $13 million increased 2%. Post-trade services revenue of $11 million increased 1% versus the prior year. Technology services revenue of $4 million increased 2%, driven by higher license fees as well as connectivity fees from RFQ Hub.

Total other income decreased approximately $1 million, driven by lower investment income on lower rates and increased interest expense related to borrowings for the ASR, partially offset by unrealized investment gains in the quarter. The effective tax rate was a negative 15.8% or a positive 23.4%, excluding the impact of the tax-related notable I referenced earlier. On slide 13, we provide more detail on our commission revenue and our fee capture. Total credit commission revenue of $165 million increased 2% compared to the prior year.

4% growth in U.S. high yield, 6% growth in emerging markets, and 9% growth in Eurobonds total commission revenue was partially offset by a 1% decline in US high grade and a 14% decline in municipals. We are very pleased with the improvement in US high yield revenue generation at the 2025. The reduction in total credit fee capture both year over year and quarter over quarter was principally due to protocol mix, partially offset by the higher duration of bonds traded in US high grade. On slide 14, we provide a summary of our operating expenses. Excluding notable items, total expenses increased 8%, which included a headwind of $1 million due to the impact of foreign currency translation.

The increase was driven principally by higher consulting, technology and communications, and employee compensation costs as we continue to invest in our technology modernization and upgrade talent to drive future growth. We are continuing to invest while at the same time looking for cost efficiencies. Headcount was 869, down 2% from 891 in the prior year period and down 3% from 2025. On slide 15, 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 U.S. Treasury investments totaling $679 million as of December 31, 2025.

We generated a record $347 million in free cash flow in 2025, and we returned a total of $474 million to investors through share repurchase and dividends during the year. We repurchased 2 million shares for a total of $360 million in '25, including 595,000 shares in open market repurchases, $120 million approximately 1.4 million shares for $240 million with the commencement of our $300 million ASR in December. I'm pleased to report that we just completed the ASR earlier this week, with the final delivery of an additional 360,000 shares bringing the total shares repurchased through the ASR to 1.7 million. As of January 31, 2026, $25 million remain on the board's share repurchase authorization.

Stephen Davidson: On slide 16 is our full year 2026 guidance.

Ilene Bieler: Before I move to guidance for 2026, please note that for 2025, total revenue outside of US credit grew 10% and US credit revenue decreased 2%. Now in terms of guidance for 2026, total services revenue, which includes information, post-trade, and technology services, is expected to grow in the mid-single-digit percent in 2026. We expect total expenses ex-notables to be in the range of $530 million to $545 million. This would imply a growth rate of approximately 8% to the midpoint of the 2026 range. This includes the full year effect of 2025 hires, inflationary increases, as well as tech investments and higher variable costs.

A note on our full year 2026 expense guidance relative to our average annual operating margin expansion target. As I have stated previously, our three-year average annual targets of 8% to 9% revenue growth and operating margin expansion of 75 to 125 basis points are exactly that: averages over three years. Turning to taxes, we expect that the effective tax rate will be in the range of 24% to 26%. Capital expenditures are expected in the range of $65 million to $75 million, of which roughly 80% relates to capitalized software development costs for investments we are making in new protocols and trading platform enhancements. Now let me turn the call back to Christopher Concannon for his closing comments.

Christopher Concannon: Thanks, Ilene. In summary, on slide 17, we are continuing to execute our long-term strategy. We have significantly enhanced the MarketAxess Holdings Inc. advantage with our investments over the last several years. The growth profile of the company outside US credit is strong, and we are confident in our ability to return to higher levels of revenue growth in US credit with our three-year financial targets. We continue to make strong progress with our new initiatives across our three strategic channels. We are confident in our ability to execute in 2026, and we are continuing to focus on expense discipline and optimizing capital deployment to maximize long-term shareholder value.

Now we would be happy to open the line for your questions.

Operator: We will now begin the question and answer session. In order to ask a question, simply press star followed by the number one on your telephone keypad. Our first question will come from the line of Patrick Moley with Piper Sandler. Please go ahead.

Patrick Moley: Yes. Good morning. Wanted to ask about block trading. Christopher Concannon, you noted in your prepared remarks the strength you've seen there, up 24% last year and then up 56% year over year in January. So could you break down the strength that you're seeing there, where it's coming from, and the different ways that you're attacking that market? Just trying to get a better sense for what's going on behind the scenes there. Thanks.

Christopher Concannon: Sure. And thanks, Patrick, for that question. Obviously, we've been investing in our key initiatives, all our new initiatives, portfolio trading, dealer initiative, and then block. As part of the larger initiatives, we're seeing returns across all three, so it's quite exciting. The block volumes that we're seeing are quite substantial. So I'll just run through some of the stats and then get back to your question around where we're seeing blocks come through the platform. First of all, in 2025, you heard it in my prepared remarks, we've seen growth of block trading on the platform and IG of 18% and high yield of 19%.

And then key areas where we first started to deploy our block protocols, EM is up 27% and euros up a staggering 66%. So the good news is the block opportunity is there. And the tools we're deploying are increasing our share of blocks on the market. Again, Q4, as you mentioned, a 24% increase, a total of $5 billion in block volume across the platform. And then here in January, still increasing our overall block volume. I'm happy to report a third of our credit volume is now in blocks during the month of January. And you know, in January, hybrid was up 33%, high yield up 42%, and EM up 92%, with the euros up 89%.

So all sizable growth numbers across the block platform. We have a number of protocols that are seeing block volume pass through it. Obviously, the data is a key ingredient to our success in block. We are now able to price blocks based on their size and their direction, and that's a key feature that clients are asking us more and more about. Our targeted RFQ, which was launched in EM and Euros, is where we're seeing the strongest growth rates in our block growth rates. And then we are seeing traditional, RF all to all RFQ we are seeing blocks come through the platform there. It's just the liquidity levels are quite high.

The market impact of sharing your block with all participants is quite reduced. Then the other areas, other exciting areas that we're seeing block content is in our automation solution. We're seeing very large institutional investors increase their size of block activity through automation. So there's no human involved. It's just a large block going through our AutoX platform. And then we're seeing blocks in our algo suite, which is really designed for block solutions, and we're seeing a pickup in blocks there. We've also seen block size in our newly launched MIDX solution, which was just launched in the fourth quarter of last year.

And then we're seeing block sizes come through our newly launched auctions, closing auction platform there. That is designed for block size as well. So we have a number of protocols, some specifically designed to compete with IV chat and phone, and others where we're just seeing an increase in an appetite for putting blocks over the platform. The other piece of the market that we're seeing higher levels of block was around new issue. So the block market in the new issue market in January increased quite substantially.

So in order to move the overall trace volumes that we're seeing, while PT is an important protocol to put exposure on and off, we're seeing higher levels of blocked activity across the market and trying to address that activity. Thanks.

Operator: Our next question will come from the line of Jeffrey Schmitt with William Blair. Please go ahead.

Jeffrey Schmitt: The average fee rate in credit has obviously been sliding for the last few years and really just from a shift in the protocol mix. Can you maybe talk about if there's competitive pricing pressures driving that as well? And what type of decline are you assuming in the fee rate in your medium-term revenue growth outlook? Thank you.

Christopher Concannon: Yes. Great question. Again, there's a lot of parts that impact our fee per million. Just to kind of go through some of them. So the product mix, as you mentioned, can impact our fee per million. Obviously, protocol selection will definitely impact our fee per million. Maturity, average maturity impacts our fee per million. And then things like spread and volatility have an indirect impact on our fee per million. So a lot of moving parts around fee per million. We've seen some of the largest adjustments in fee per million through the protocol and product mix. A perfect example is the move to portfolio trading that comes in at a much lower fee per million.

But, again, we're all about growing our incremental revenue, and much of the new initiatives that may come in at a lower fee per million are obviously growing revenue, incremental revenue. The areas that we have seen fee per million impact, one area in particular, we just talked about the growth in block volume. In January, our growth in block volume does impact our fee per million. But it has a net benefit to our revenue. I'll just walk you through an example so you can understand the implications of doing more volumes by block.

If we trade a $50,000 order, which is quite a small size order on MarketAxess Holdings Inc., we'll incrementally make $17 on that trade, but that comes in at a $350 fee per million. A $5 million block trade will make $700 on that same transaction, but that comes in at a fee per million of a 140,000,000. So you can see that as we grow these new protocols and grow into incremental volume, it will have an impact on our fee per million calculation. And that's an important factor because we are growing all of these new initiatives, portfolio trading, block volume, and, obviously, automation and our dealer initiative is growing as well.

All of those can have an impact on our fee per million. I'll turn it over to Ilene Bieler to round out the question.

Ilene Bieler: Yeah. Let me just give a little bit of context also to support what Christopher Concannon is saying. So if you think about the month-over-month January decline to 132 from 137, for instance, in fee per million, as you noted, it's volume mix shift largely into lower fee capture product, as Christopher Concannon just discussed. But to put some more texture around it, we had a very strong month in Eurobonds with ADV up 74%. And we know Eurobonds come in at a lower capture, but we expect this, right? That's a good thing. We want to continue to see that business growing. And then also, obviously, with high-grade flux, that ADV was up 82% on a month-over-month basis.

And it really goes to what Christopher Concannon was talking about before on the question on block. Now, there was a little bit of offset. There wasn't a huge change in the weighted average years to maturity month over month. It went from about, you know, 9.47 to 9.49. So there was a little bit of offset in terms of high-grade duration there. But by and large, you can see these trends, and this is not new. This is what we've been talking about in terms of both product and protocol shift. Let me get back to you also on your medium-term target question because I understand where that's coming from.

And it's important to take a step back when you think about the medium-term targets. And you've heard me say this before. I said it in my prepared remarks, right? We know that the 8% to 9% average growth is just that: average. And there could be variability on phasing in over the course of the three years. Having said that, you may recall that we're being pretty clear that this is really about revenue growth and the way that we are expecting to achieve that. We think that in the first year, US credit will be about 20% of the total incremental revenue growth for the company.

And then by the end of our three-year plan, we think that's going to be about 35% of incremental growth expected to come from US credit. Now, we also have our services business, and you heard that guide today in terms of, you know, in the aggregate, single digits for 2026. And we haven't included assumptions for increases in velocity, for instance, in these three-year targets in our three-year plan. While I'm not going to give you specifics on fees per million, I can confirm that we have not baked in any fee per million accretion.

Our objective, really importantly, we keep talking about this, but just to bring it back, is that we really are looking at our ways, the levers we can use to drive revenue growth. And Christopher Concannon talked a lot about those initiatives, and I'm sure we're happy to go into it further. But just wanted to get back to you on that point.

Jeffrey Schmitt: Okay. Great. Thank you.

Operator: Our next question will come from the line of Alex Kramm with UBS. Please go ahead.

Alex Kramm: Yes. Hey, everyone. Can you give us a quick update on emerging markets? Seems like that's one of the biggest standout success stories for you here over the last few years. I know it's still a very underpenetrated market, so maybe define really what the roadmap is, what you're excited about maybe in 2026. Then, you know, look, obviously, others are watching you. So just wondering if you see any sort of shift in competitive dynamics, if you're running into other people a little bit more. Or if this is still kind of a large market for you to capture?

Christopher Concannon: Thanks, Alex. And, obviously, emerging markets is an exciting area for us. We're obviously, just to size the market, it's similar in size to US credit when you talk about the global emerging market. And you have two types of markets, both sovereign as well as corporate local, as well as hard currency. So it's quite a diverse market. The nice thing about that market, it is a diverse dealer market as well. It's not what I would call top-heavy. So having a diversity of dealer communities both in the local markets and the global dealer community is a key ingredient to the liquidity that we see over the platform.

And as you mentioned, our EM, our emerging market growth has been quite attractive over the last couple of years. It continues into January where we saw our EM growth continue into January. Our market ADD and EM just for January was over $5 billion, which was a record and up 50% year over year. Up 56% month over month. So you just can see that trend line is quite positive. In terms of the competitive landscape, we're not seeing, you know, we're competing dramatically with chat and phone in the EM market. It's not a well-penetrated electronic market. I think, you know, we try to estimate the electronic penetration in EM as somewhere under 10% and growing.

So we see that as a huge market opportunity for us. You do need people on the ground in the local markets. So it is an investment in sales, investment in regional offices, and those investments we have made for quite some time with folks in Latin America, teams in APAC, and across other areas of the globe. So exciting, a great deal of, and we mentioned earlier the block volume growth. We're seeing block volume in EM as well, helping us drive that growth. As we mentioned earlier, that was up 92% in January and up 70% month over month as well, setting a new record in block.

So a lot of exciting things to come, and we're obviously very focused on protocol solutions in EM. That's one area where not only do we have an all-to-all RFQ, but we have an RFM as well, which is helping to drive some of our block volume growth both in the local market as well as in the hard currency market.

Alex Kramm: Very good. Thanks.

Operator: Our next question will come from the line of Alex Blostein with Goldman Sachs. Please go ahead.

Alex Blostein: I wanted to go back to your comment around revenues outside of U.S. Credit. Growing, I think you said 10%, in 2025. When you zoom out, and I know there's a lot of things that go in there. Obviously, there's some trading business like non-US, but also there's recurring revenues within there as well. I think at the slide, at the slide deck at our conference, in December, you talked about that being, I think, like, a mid-teen percent grower over time.

So maybe talk a little bit about what has driven sort of the slower growth last year and how do you think about the growth in that non-US trading part of the business on a multiyear basis as part of your overall revenue growth, Algo?

Ilene Bieler: Thanks for the question, Alex. Yeah, of course, I know the slide you're talking about and keeping in mind that was a CAGR over five years, right? And so if you think about, let's just take your service point to start and look at the full year 2025, right? Our services revenue there was about 6% this year, and we are guiding to, for 2026, mid-single-digit growth there as well. And so I think that all fits. And then you would expect to see higher revenue growth in our trading businesses outside of US credit. So this algorithm still fits, and it still is exactly as we said.

If you think about the 8% to 9% average annual overtime with the phase-in and variability. And I would just say that there are different levers. Right? If you think about this plan, there's obviously the volume levers, and while we don't control volume, needless to say, in the marketplace, we know that the electronification has definitely velocity, and Christopher Concannon has certainly talked about it in the past. And if you even look at turnover in January, Alex, that was 95%. And we also, again, while we don't control volume, we went back and we did an analysis over time and we looked at volumes.

And the only time in the last since 2014, for instance, since volumes have contracted in this market really was in that one post-COVID year, and we all know what 2020 was like. So we're continuing. The important thing for us, though, in terms of driving more velocity and driving turnover is making sure we have the protocols in place, the initiatives in place that's really going to enhance for our clients what they need. We want to be there to have the solutions there. And that goes to the market share component of the algorithm. Right?

When we really are looking at market share, we're looking at it as what can we do to make sure that we are protocol agnostic. And Christopher Concannon has talked a lot about that. And so if you think about all of these things together, that is really what's driving the three-year plan. A lot of it is really based on just sort of how do you maximize for when you're seeing volumes in the marketplace, what we're doing on the initiatives, then, obviously, the last part of that is the pay per million, which we talked about. I don't know if Christopher Concannon if you wanted to add to that?

Christopher Concannon: Yes. No, Alex, it's the right question. Look, our international business has been growing double digits for some time. That's really powered by EM and euros, where we see exciting growth. And, again, in EM, still early penetration for electronic trading. So the market opportunity is quite sizable. Around the services, particularly the data business, we have historically, I've on these calls have many times said, we will not sell some of our data. That is proving strategically correct at this point as we see what's happening around the AI space. Keeping our data, which is proprietary, in-house to then leverage through our own use of AI is going to be a critical ingredient going forward.

So I think it comes to services and particularly market data revenue, we've strategically decided to keep that at a single-digit number because we want to actually hold our data for our own AI uses, which will actually help our transaction business. So it was a strategic decision we made quite a number of years ago, but now it's proving to be quite valuable. As we start to look at the use of AI within our data set. Just to give you a sense of how much that data asset is growing, in 2025, we saw $5.3 trillion in inquiry volume. That's up about 13% from the prior year. That inquiry volume triggered close to 91 million in prices.

So it's an increase in prices coming back. That is all unique data that is across the globe. Across all the assets that we trade, and we're seeing over $35 trillion in notional prices on our platform each year. So it's quite a powerful data set. Our choice is not to sell it all in raw form. Our choice is to leverage that data for AI purposes to create higher volumes, more sticky services around our trading businesses. So that's part of what factors into our thought process around data and data growth.

Operator: Our next question will come from the line of Benjamin Budish with Barclays. Please go ahead.

Chris O'Brien: This is Chris O'Brien on for Benjamin Budish. I just had a question about capital return. So it's been quite a strong start to the year for volumes across the industry and on platform at MarketAxess Holdings Inc. So just curious if we saw continued momentum through the rest of the year, how are you guys thinking about share repurchases as we go through 2026? Thanks.

Ilene Bieler: Sure. Thanks for the question. I think, as you just noted, you know, we, in particular, obviously have significant capital return with our ASR and just closing it out. And I would remind everybody that we did take out about $220 million on our revolver in order with the cash outlay in order to put a little bit of leverage on it to do that ASR. So our first order of business is going to be to pay that down over time. And so we do know that we have $25 million left in authorizations, and so we're just going to see how that goes. There's no end date on that authorization.

So that's really how we're thinking about capital right now. And you probably also saw today that we did increase our dividend to $0.78 per share. So that's another thing that we're thinking about in terms of increasing capital return, at least on the dividend side in the short term.

Chris O'Brien: Great. Thank you.

Operator: Our next question will come from the line of Daniel Fannon with Jefferies. Please go ahead.

Daniel Fannon: So wanted to follow-up, Christopher Concannon, on your comments around Slide 10 and just the addressable market. I think you mentioned that 2025, some of the e, or the electronification slowed. Just wanted to get a sense of what gives you confidence about that reaccelerating here in '26 more broadly as we just think about, obviously, the protocols you've been doing, but if there are other things idiosyncratic in the market, competition-wise that maybe slowed that down.

Christopher Concannon: Sure. Great question. Something we obviously focus on is converting this market from phone to platform. And the market opportunity is larger than what has been converted today. So when you think about that, the opportunity is enormous, and we're still early in the journey of electronification of the global fixed income market. With regard to our slides, really, if you look at US credit, that's really where the growth of electronification across the entire market has plateaued. Kind of flatlined. Somewhere, it's hard to estimate, but somewhere in the 45 to 50% range. What's holding it back from further conversion when you analyze what is not on platform, it's really phone and chat block market.

So that block market makes up the next 50% roughly, and that's the market opportunity that we are chasing. And very focused on. If you look at portfolio trading, the growth of portfolio trading because it's all electronic, should have increased the overall electronic footprint in the market. Ironically, it did not. It converted what was already largely electronic RFQ into just larger baskets traded as a single price basket. So it was really the growth of portfolio trading that did a really a conversion of e RFQ to e portfolio trading. Now and look. The market was quite focused on portfolio trading, both platforms, dealers, and clients were making huge investments to convert their RFQs to portfolio trading.

I will tell you the focus of clients, dealers, and platforms today has shifted to that 50% of US credit. It's all targeting block market. That's the exciting piece, and our earlier discussion on our block growth is really reflective of the investment we're making in that block market. When you jump from US credit into other product areas, EM in particular, we're still early days electronic penetration. So we're seeing our portfolio trading in EM grow dramatically. We're seeing electronic RFQ, all-to-all. We're seeing block growth in EM as well. And then finally, our automation suite of products is growing quite handsomely in EM as well. Again, a very low automation penetration in that EM bucket.

So overall, I just love the fact that our market opportunity is greater than what has been converted today. Around the globe, and that just is an exciting opportunity for us as we deploy more and more products targeting that specific block market, which is left to convert.

Daniel Fannon: Great. Thank you.

Operator: Our next question comes from the line of Elias Abboud with Bank of America. Please go ahead.

Elias Abboud: I wanted to follow-up on the last one about the overall kind of slowdown in electronification and U.S. Credit this past year. I wonder if that has changed how you think about capital allocation. Does it still make sense to allocate the incremental dollar to US credit versus other areas like emerging markets or munis that are growing faster? Then if I could just squeeze in, like, a follow-up here. I was hoping we could get an update too on the opening and closing auction initiative and what the early returns have been there. Thanks.

Christopher Concannon: Sure. Yeah. First, what's great about the opportunity and we really, we were just talking about blocks where we had substantial growth. Our investment in the block opportunity is actually very similar across product set. So whether we're investing in EM blocks or we're investing in US credit blocks, the way we have built our technology, our new technology on X Pro, it scales across both product sets. So the incremental investment has very high returns because we have shifted to investing our protocols into global protocols as opposed to individual product protocols. So that's the exciting part. So any investment in a block solution is an investment in a block solution across a protocol.

So the high return on that investment is quite attractive. And we'll continue to roll out our X Pro solution, which is really delivering multiple protocols from portfolio trading, to blocks to our automation delivery as well as traditional list RFQ. All delivered on the same technology stack and the same platform as we roll that out across the globe. So investments high return because we're attacking the same unpenetrated market of EM or US credit with very similar techniques and protocol. Turning to our matching solutions, things like MIDX, and auctions, these are all new investments, quite an exciting incremental revenue investment.

So we're seeing sizable growth across our matching solution MIDEX, I know, Elias Abboud, you did a nice report on that in January. I appreciate all the kind remarks around our dataset and the feedback from our clients. We promise we will use it as a marketing tool to talk to the dealer community. But Midex has been growing since we launched it in the fall of last year. It's quite exciting to be a part of that match, match business, in the dealer-to-dealer market. Again, we only have one match a day. We plan to increase that to multiple matches per day. So a lot of exciting growth there.

Your question on closing auctions again, a newly launched auction solution. Right now, we're just focused on a closing auction, not an opening auction. And that was launched on an entirely new tech stack brought to us by our Pragma acquisition. So very exciting new tech stack with a new front end used by both clients and dealers. The closing auction was launched really sometime in the fourth quarter. It was in a pilot phase, and we just rolled out the auction to a broader set of clients. So we're as of two weeks ago, we opened it up to a broader set. But we are seeing pretty exciting participation. We've got three dealers now supporting liquidity in the auction.

We have about 11 buy-side clients that are active in the auction, and we have some just some very key at what I call anchor dealers that are now posting block size liquidity into the auctions. Some of the stats that we're seeing again, this was pilot about $2 billion in notional orders. Staged in the auction. Over $900 million of orders submitted into the auction, and so we're seeing a great deal of participation. It's interesting. We had a really great call with our clients. We did a call on this, a webinar just on the closing auction. We had over 600 participants join. It was kind of one of our record webinars that we've ever seen.

But the feedback has been exciting. We've had clients looking for additional bonds to be listed in the auction. And looking to understand. It is a new protocol that clients have to get used to because it is a time protocol in the late afternoon of the day, which is new to the buy side. So again, we don't expect that to ramp up dramatically in the coming quarters. We think that will grow over time and be a key ingredient for larger block size trades near the end of the day.

Elias Abboud: Perfect. Thanks, Christopher Concannon.

Operator: Our final question will come from the line of Michael Cyprys with Morgan Stanley. Please go ahead.

Michael Cyprys: Just a question around artificial intelligence. I was hoping you could speak to some of your ambitions and visions around embedding AI more broadly across the business. Curious what portion of client flows do you think is ultimately automatable? And how do you think about execution outcome feedback in your AI models? And does that create any sort of flywheel that others cannot catch?

Christopher Concannon: Sure. Exciting area for us, an area that we've been investing in for some time. Obviously, a number of our data products are AI-based. So we are along that journey in creating commercial products through AI. I'll take a step back and just mention the AI boom itself is very helpful to the bond market. If you look at the size of the bond market more recently, it is growing as a result of the funding that AI needs. Both in terms of the equipment and chips that people are buying through funding using the bond market, but also the data center build-outs are all through bonds.

And then you'll finally need the utilities and the infrastructure to support those data centers will likely also come through bond funding. So it's just going to grow the bond market quite dramatically, and we feel we'll feel the benefits of that over the years to come. With regard to our use of AI, we're pretty excited about where AI can obviously help us. There's the, I refer to as the corporate AI use where it will make us more productive. Whether it's someone in finance using AI or one of our developers deploying code through AI.

We're already seeing the benefits of that development, so we're excited about what's to come, and I think we're still in the early stages of leveraging AI to increase our productivity both in terms of product design as well as product and code writing. When it comes to commercialization of AI within our trading platform, the dataset is probably the most powerful leverage that we have. And I'm happy to report, as I mentioned earlier, our dataset or our data footprint that we can leverage through AI continues to grow. So things like EM, most local markets are not transparent markets, and so we are leveraging AI to produce transparency in those local markets.

The other areas that we're seeing pretty interesting exploration using AI. A portfolio construction is a powerful area where we can see clients giving us what I'd call market exposures and not specific bonds, and then we would use AI to produce an outcome or a suggested basket that they could buy either through a PT or something that's available in the market. So the other area that we're exploring is trading signals. We have quite a sizable portion of the world's bond market activity. Across EM, US credit, eurobonds, and now treasuries. We are seeing that activity before we wake up here in the morning in New York.

And so the signals that are born using AI across the patterns of behavior on a marketplace are quite powerful. And we have a number of clients asking us about, you know, indicators or heat maps across sectors across the globe. There's a number of areas that we see ourselves deploying AI using our proprietary data. Another area is depth of liquidity in the market. Most people can't see the depth of the bond market. It's individually priced inquiries or over chat. We have the full depth of the market because of all the prices that we collect on the platform. So these are all areas. Another area is spread prediction.

Where we are able to predict movement in spread using AI. Again, that's a very powerful piece of information if you're a bond trader, whether you're a dealer or a client. So there's lots of uses that we're exploring right now. The last use is just basic chat functionality using AI questions, basic language models. For our clients to understand the market. Or make requests of our data using chat. So there's a number of places that we're exploring. The opportunities are huge, and like I mentioned earlier, we made a strategic decision not to sell all of our data and to use it for things like trading solutions that I just described.

So an exciting new area for us, an exciting new area that we're going to clearly leverage here in 2026.

Michael Cyprys: Great. Thank you.

Operator: And that will conclude our question and answer session. I'll hand the call back over to Christopher Concannon for any closing remarks.

Christopher Concannon: Thank you all for joining us. We look forward to talking to you on our next quarterly call. Again, and have a great weekend.

Operator: This concludes our call today. Thank you all for joining. You may now disconnect.