MarketAxess Announces Trading Volume Statistics for December and Fourth Quarter 2024

Record 4Q24 Total Trading ADV, Up 38% With Record Municipal Bond ADV and Record Total Rates ADV

MarketAxess Holdings Inc. (NASDAQ:MKTX), 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 December 2024 and the fourth quarter ended December 31, 2024.¹

Chris Concannon, CEO of MarketAxess, commented:

"In the fourth quarter, we delivered record total trading ADV, driven by strong growth across most product areas, including 16% growth year-over-year in our international products, record ADV in municipal bonds and record total rates ADV. Emerging markets ADV increased 18% compared to the prior year to the second highest level of quarterly trading ADV ever. We delivered these strong results to finish the year as we continue to execute our high-touch strategy, focused on portfolio trading and block trading. A record 77% of portfolio trades were executed on X-Pro in December and we are continuing to gain traction with our block trading solution, which was launched in the fourth quarter in emerging markets and Eurobonds. Block trades in emerging markets on our platform increased 17% in 4Q24 compared to the prior year, with the average block trade size increasing to $13 million. We have additional enhancements coming in the first quarter, which we believe will enhance our market share in the coming quarters."

Select December 2024 Highlights

• Total average daily volume ("ADV") of $32.0 billion increased 19% compared to the prior year, but decreased 29% compared to November 2024 levels. The decline in total trading ADV in December compared to November 2024 includes the impact of the normal seasonal slowdown we experience across most product areas in the month. These results were driven by total rates ADV of $19.8 billion, which increased 34% compared to the prior year, but decreased 36% compared to November 2024. Total credit ADV of $12.3 billion was in line with the prior year, but decreased 14% compared to November 2024.

U.S. Credit²

• U.S. high-grade ADV of $5.9 billion decreased 3% compared to the prior year, and decreased 9% compared to November 2024. Estimated market ADV increased 9% compared to the prior year, but decreased 16% compared to November 2024. Estimated market share was 19.5%, down from 22.1% in the prior year, but up from 18.0% in November 2024. Including the impact of single-dealer portfolio trades, estimated market share was 19.6%, down from 22.1% in the prior year, but up from 18.1% in November 2024.
• U.S. high-yield ADV of $1.2 billion decreased 14% compared to the prior year, and decreased 7% compared to November 2024. Estimated market ADV increased 7% compared to the prior year, but decreased 22% compared to November 2024. Estimated market share was 14.7%, down from 18.2% in the prior year, but up from 12.3% in November 2024. Including the impact of single-dealer portfolio trades, estimated market share was 14.7%, down from 18.3% in the prior year, but up from 12.6% in November 2024.

Other Credit

• Emerging markets ADV of $2.9 billion increased 8% compared to the prior year, but decreased 25% compared to November 2024. The year-over-year increase was driven by a 14% increase in hard currency ADV, and a 2% increase in local currency ADV.
• Eurobonds ADV of $1.6 billion increased 2% compared to the prior year, but decreased 19% compared to November 2024.
• Record municipal bond ADV of $656 million increased 37% compared to the prior year, and increased 4% compared to November 2024. Estimated market ADV increased 26% compared to the prior year, and increased 2% compared to November 2024. Estimated market share was 6.8%, up from 6.3% in the prior year, and up slightly from 6.7% in November 2024.³

Strategic Priority Related Protocols & Workflow Tools

• $1.0 billion in total portfolio trading ADV increased 48% compared to the prior year, and increased 8% compared to November 2024. A record 77% of portfolio trading volume was executed over X-Pro.
  
  — Estimated U.S. high-grade and U.S. high-yield TRACE portfolio trading market ADV increased 3% compared to November 2024.
• Our estimated market share of U.S. high-grade and U.S. high-yield TRACE portfolio trading was 16.7% in December 2024, up from 13.6% in November 2024.
  
  — Portfolio trading represented approximately 13% of U.S. high-grade and U.S. high-yield TRACE in December 2024, up from 10% in November 2024.
• Open Trading ADV of $3.6 billion decreased 7% compared to the prior year, and decreased 15% compared to November 2024. Open Trading share⁴ of total credit trading volume was 36%, down from 37% in the prior year, but up from 35% in November 2024.
• Dealer RFQ ADV of $1.0 billion across all credit products decreased 5% compared to the prior year, and decreased 23% compared to November 2024.
• AxessIQ, the order and execution workflow solution designed for wealth management and private banking clients, achieved ADV of $135 million, down 9% compared to the prior year, and down 8% compared to November 2024.

Rates

• Total rates ADV of $19.8 billion increased 34% compared to the prior year, but decreased 36% compared to November 2024.

Variable Transaction Fees Per Million (FPM)¹

• The preliminary FPM for total credit for December 2024 was approximately $148, down from $159 in the prior year, but up from $146 in November 2024. The decline in total credit FPM year-over-year was due to protocol and product mix, principally by the lower Open Trading share of U.S. high-grade, an increase in portfolio trading activity and lower levels of U.S. high-yield activity. The increase in total credit FPM month-over-month was due to product mix, principally U.S. high-yield. The preliminary FPM for total rates for December 2024 was approximately $4.14, down from $4.61 in the prior year, but up from $4.07 in November 2024.

Select 4Q24 Highlights

• Record total ADV of $41.0 billion increased 38% compared to the prior year, and increased 1% compared to 3Q24 levels. These results were driven by record total rates ADV of $27.1 billion, which increased 64% compared to the prior year, and increased 3% compared to 3Q24 levels. U.S. Treasury ADV on the platform in 4Q23 was negatively impacted by an outage at ICBC, the third-party the Company was then using for U.S. Treasury settlement services. Total credit ADV of $13.9 billion increased 6% compared to the prior year, but decreased 2% compared to 3Q24.

U.S. Credit²

• U.S. high-grade ADV of $6.5 billion increased 4% compared to the prior year, but decreased 8% compared to 3Q24. Estimated market ADV increased 18% compared to the prior year, but decreased 3% compared to 3Q24. Estimated market share was 18.4%, down from 20.9% in the prior year, and down from 19.5% in 3Q24. Including the impact of single-dealer portfolio trades, estimated market share was 18.8%, down from 21.0% in the prior year, and down from 20.0% in 3Q24.
• U.S. high-yield ADV of $1.3 billion decreased 19% compared to the prior year, but increased 5% compared to 3Q24. Estimated market ADV increased 5% compared to the prior year, and increased 2% compared to 3Q24. Estimated market share was 13.4%, down from 17.2% in the prior year, but up from 13.0% in 3Q24. Including the impact of single-dealer portfolio trades, estimated market share was 13.7%, down from 17.3% in the prior year, but up from 13.4% in 3Q24.

Other Credit

• Emerging markets ADV of $3.5 billion increased 18% compared to the prior year, and increased 4% compared to 3Q24. The year-over-year increase was driven by a 26% increase in hard currency ADV, and a 7% increase in local currency ADV.
• Eurobonds ADV of $2.0 billion increased 13% compared to the prior year, and increased 6% compared to 3Q24.
• Record municipal bond ADV of $620 million increased 15% compared to the prior year, and increased 7% compared to 3Q24. Estimated market ADV decreased 9% compared to the prior year, but increased 32% compared to 3Q24. Estimated market share was 7.1%, up from 5.6% in the prior year, but down from a record 8.7% in 3Q24.³

Strategic Priority Related Protocols & Workflow Tools

• $1.1 billion in total portfolio trading ADV increased 57% compared to the prior year, but decreased 8% compared to 3Q24. A record 71% of portfolio trading volume was executed over X-Pro.
  
  — Estimated U.S. high-grade and U.S. high-yield TRACE portfolio trading market ADV was flat compared to 3Q24.
• Our estimated market share of U.S. high-grade and U.S. high-yield TRACE portfolio trading was 16.2%, down from 20.0% in 3Q24.
  
  — Portfolio trading represented approximately 11% of U.S. high-grade and U.S. high-yield TRACE in 4Q24, in line with 3Q24.
• Open Trading ADV of $4.1 billion increased 2% compared to the prior year, and was in line with 3Q24. Open Trading share⁴ of total credit trading volume was 35%, down from 36% in the prior year, but in line with 3Q24 levels.
• Dealer RFQ ADV of $1.2 billion across all credit products increased 8% compared to the prior year, and increased 5% compared to 3Q24.
• AxessIQ achieved record ADV of $147 million, up 6% compared to the prior year, and up 14% compared to 3Q24.

Rates

• Record total rates ADV of $27.1 billion increased 64% compared to the prior year, and increased 3% compared to 3Q24. U.S. Treasury ADV on the platform in November 2023 was negatively impacted by an outage at ICBC, the third-party the Company was then using for U.S. Treasury settlement services.

Variable Transaction Fees Per Million (FPM)¹

• The preliminary FPM for total credit for 4Q24 was approximately $150, down from $156 in the prior year, but up slightly from $149 in 3Q24. The decline in total credit FPM year-over-year was due to product mix, principally lower levels of U.S. high-yield activity. The increase in total credit FPM quarter-over-quarter was due to product mix, principally U.S. high-yield. The preliminary FPM for total rates for 4Q24 was approximately $4.30, down from $4.62 in the prior year, but up from $4.15 in 3Q24.

Table 1: December 2024 ADV

Table 1A: December 2024 estimated market share

Table 1B: 4Q24 ADV

Table 1C: 4Q24 estimated market share

General Notes Regarding the Data Presented

Reported MarketAxess volume in all product categories includes only fully electronic trading volume. MarketAxess trading volumes and the Financial Industry Regulatory Authority ("FINRA") Trade Reporting and Compliance Engine ("TRACE") reported volumes are available on the Company's website at investor.marketaxess.com/volume.

For periods beginning with January 2024, the Company has made changes to the market volume data used to calculate estimated market share for Municipal and U.S. Government Bonds. For Municipal Bonds, the Company previously used estimates, derived from data issued by the Municipal Securities Rule Making Board ("MSRB"), including estimates for new issuance, commercial paper and variable-rate trading activity, and excluded these volumes from the estimated market volume data. While the Company still uses estimates, the new methodology for identifying and excluding these volumes from the market volume data is now based on MSRB "flags" to identify new issuance, commercial paper, and variable-rate volumes. For U.S. Government Bonds, the previous data source for estimated market volumes was the Federal Reserve Bank's Reported Primary Dealer U.S. Treasury Bond Trading Volumes, which was reported on a one-week lag. The new source for U.S. Government Bond trading volumes is FINRA's U.S. Treasury TRACE data. The Company believes that the refined methodology used for Municipal Bonds, and the new data source for U.S. Government Bonds, provides more accurate measures of estimated market volumes and estimated market share. Prior comparable periods have been recast retrospectively for both Municipal and U.S. Government Bonds to conform to the updated presentation of the data. The new estimated market volume data is also available on the Company's website at investor.marketaxess.com/volume.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for the Company, market conditions and industry growth, as well as statements about the Company's future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess' current expectations. The Company's actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: global economic, political and market factors; the level of trading volume transacted on the MarketAxess platform; the rapidly evolving nature of the electronic financial services industry; the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; the variability of our growth rate; our ability to introduce new fee plans and our clients' response; our ability to attract clients or adapt our technology and marketing strategy to new markets; risks related to our growing international operations; our dependence on our broker-dealer clients; the loss of any of our significant institutional investor clients; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matched principal trades; risks related to self-clearing; risks related to sanctions levied against states or individuals that could expose us to operational or regulatory risks; the effect of rapid market or technological changes on us and the users of our technology; our dependence on third-party suppliers for key products and services; our ability to successfully maintain the integrity of our trading platform and our response to system failures, capacity constraints and business interruptions; the occurrence of design defects, errors, failures or delays with our platforms, products or services; our vulnerability to malicious cyber-attacks and attempted cybersecurity breaches; our actual or perceived failure to comply with privacy and data protection laws; our ability to protect our intellectual property rights or technology and defend against intellectual property infringement or other claims; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our dependence on our management team and our ability to attract and retain talent; limitations on our flexibility because we operate in a highly regulated industry; the increasing government regulation of us and our clients; risks related to the divergence of U.K. and European Union legal and regulatory requirements following the U.K.'s exit from the European Union; our exposure to costs and penalties related to our extensive regulation; our risks of litigation and securities laws liability; adverse effects as a result of climate change or other ESG risks that could affect our reputation; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; our exposure to financial institutions by holding cash in excess of federally insured limits; and other factors. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess' business and prospects is contained in MarketAxess' periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

About MarketAxess

MarketAxess (NASDAQ:MKTX) operates a leading electronic trading platform that delivers greater trading efficiency, a diversified pool of liquidity and significant cost savings to institutional investors and broker-dealers across the global fixed-income markets. Over 2,000 firms leverage MarketAxess' patented technology to efficiently trade fixed-income securities. Our automated and algorithmic trading solutions, combined with our integrated and actionable data offerings, help our clients make faster, better-informed decisions on when and how to trade on our platform. MarketAxess' award-winning Open Trading® marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets. Founded in 2000, MarketAxess connects a robust network of market participants through an advanced full trading lifecycle solution that includes automated trading solutions, intelligent data and index products and a range of post-trade services. Learn more at www.marketaxess.com and on X @MarketAxess.

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