MarketAxess Announces Trading Volume Statistics for September and Third Quarter 2024

Strong Growth in Market Volume Drove Record Levels of Trading Activity Across the Platform in September

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 September 2024 and the third quarter ended September 30, 2024.¹

Chris Concannon, CEO of MarketAxess, commented:

"Strong market volumes and a robust new issue calendar helped drive an increase in the velocity of electronic trading and record levels of trading activity in September across our platform. Against this improving market backdrop, in 3Q24 we delivered 27% growth in total credit ADV compared to the prior year, driven by strength in U.S. high-grade (+36%), emerging markets (+19%), Eurobonds (+27%) and municipals (+49%), with record Municipal bond estimated market share. We also generated record portfolio trading ADV of $1.1 billion, which helped drive our portfolio trading quarterly estimated market share of U.S. high-grade and U.S. high-yield TRACE to 20%, its highest quarterly level in 2024. We are continuing the roll-out of X-Pro to our global client base which, we believe, is important to the success of our "high-touch" strategy."

Select September 2024 Highlights

• Record total average daily volume ("ADV") of $45.2 billion increased 52.5% compared to the prior year, and increased 8.6% compared to August 2024. These strong results were driven by record total credit ADV of $16.5 billion, representing an increase of 40.1% compared to the prior year, and an increase of 24.4% compared to August 2024. Total rates ADV of $28.7 billion, which increased 60.7% compared to the prior year, and increased 1.2% compared to August 2024 levels, also contributed to the strong performance in September 2024.

U.S. Credit²

• Record U.S. high-grade ADV of $8.4 billion increased 56.2% compared to the prior year, and increased 25.5% compared to August 2024. Estimated market ADV increased 53.3% compared to the prior year, and increased 26.1% compared to August 2024. Estimated market share was 19.9%, up from 19.5% in the prior year, and in line with 19.9% in August 2024. Including the impact of single-dealer portfolio trades, estimated market share was 20.3%, up from 19.5% in the prior year, but down from 20.9% in August 2024.
  
  — The U.S. high-grade new issue calendar was $171.0 billion in September, up 36.7% compared to the prior year, and up 58.5% compared to August 2024.

• U.S. high-yield ADV of $1.4 billion increased 8.1% compared to the prior year, and increased 11.5% compared to August 2024. Estimated market ADV increased 37.3% compared to the prior year, and increased 32.4% compared to August 2024. Estimated market share was 12.1% (12.5% including single-dealer portfolio trades), down from 15.4% in the prior year, and down from 14.4% (14.6% including single-dealer portfolio trades) in August 2024.
  
  — The U.S. high-yield new issue calendar was $36.7 billion in September, the highest level of monthly new issue since September 2021, representing an increase of 56.1% compared to the prior year, and an increase of 102.8% compared to August 2024.

Other Credit

• Emerging markets ADV of $3.7 billion increased 25.1% compared to the prior year, and increased 15.8% compared to August 2024. The year-over-year increase was driven by a 40.4% increase in hard currency ADV, and an 8.7% increase in local currency ADV.
• Record Eurobonds ADV of $2.4 billion increased 42.3% compared to the prior year, and increased 58.5% compared to August 2024.
• Municipal bond ADV of $577 million increased 35.1% compared to the prior year, but declined 0.5% compared to August 2024. Estimated market ADV decreased 16.6% compared to the prior year, and decreased 3.4% compared to August 2024. Record estimated market share of 8.8%, up from 5.5% in the prior year, and up from 8.6% in August 2024.³

Strategic Priority Related Protocols & Workflow Tools

• Record $1.5 billion in total portfolio trading ADV increased 191.8% compared to the prior year, and increased 52.3% compared to August 2024. Our estimated market share of U.S. high-grade and U.S. high-yield TRACE portfolio trading was 20.8% in September 2024, down from 21.8% in August 2024, but up from 17.2% in July 2024. Portfolio trading represented 11.8% of U.S. high-grade and U.S. high-yield TRACE in September 2024, compared to 9.5% in August 2024.
• Record Open Trading ADV of $4.8 billion, increased 46.8% compared to the prior year, and increased 21.6% compared to August 2024. Open Trading share⁴ of total credit trading volume was 35%, up from 33% in the prior year, but down from 36% in August 2024.
• Record Dealer RFQ ADV of $1.5 billion across all credit products increased 55.4% compared to the prior year, and increased 36.8% compared to August 2024.
• AxessIQ, the order and execution workflow solution designed for wealth management and private banking clients, achieved record ADV of $166 million, up 51.8% compared to the prior year, and up 47.7% compared to August 2024.

Rates

• Total rates ADV of $28.7 billion, up 60.7% compared to the prior year, and up 1.2% compared to August 2024.

Variable Transaction Fees Per Million (FPM)¹

• The preliminary FPM for total credit for September 2024 was approximately $150, down slightly from $151 in the prior year, and down from $153 in August 2024. The preliminary FPM for total rates was approximately $4.18, down from $4.75 in the prior year, but up from $4.04 in August 2024.

Select 3Q24 Highlights

• Record total ADV of $40.5 billion increased 38.4% compared to the prior year, and increased 18.6% compared to 2Q24. These strong results were driven by total credit ADV of $14.1 billion, representing an increase of 26.5% compared to the prior year, and an increase of 2.7% compared to 2Q24 levels. Strong growth in total rates ADV, which increased 45.6% compared to the prior year, and increased 29.2% compared to 2Q24, also contributed to the strong performance in 3Q24.

U.S. Credit²

• U.S. high-grade ADV of $7.0 billion increased 35.7% compared to the prior year, and increased 9.2% compared to 2Q24. Estimated market ADV increased 39.4% compared to the prior year, and increased 5.1% 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 1.2% compared to the prior year, and decreased 4.4% compared to 2Q24. Estimated market ADV increased 22.6% compared to the prior year, but decreased 0.5% compared to 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 19.1% compared to the prior year, but decreased 0.1% compared to 2Q24. The year-over-year increase was driven by a 19.8% increase in hard currency ADV, and an 18.0% increase in local currency ADV.
• Eurobonds ADV of $1.9 billion, increased 27.4% compared to the prior year, but decreased 10.1% compared to 2Q24.
• Record Municipal bond ADV of $577 million increased 48.7% compared to the prior year, and increased 10.5% compared to 2Q24. Estimated market ADV was down 5.4% compared to the prior year, and down 5.7% 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

• Record $1.1 billion in total portfolio trading ADV, up 162.8% compared to the prior year, and up 30.8% compared to 2Q24. 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.
• 35% Open Trading share⁴ of total credit trading volume, up from 34% in the prior year, and up from 34% in 2Q24.
• Dealer RFQ ADV of $1.2 billion across all credit products increased 25.9% compared to the prior year, and was in line with 2Q24 levels.
• AxessIQ achieved ADV of $131 million, up 32.2% compared to the prior year, but down 2.8% compared to 2Q24.

Rates

• Record total rates ADV of $26.4 billion, up 45.6% compared to the prior year, and up 29.2% compared to the 2Q24.

Variable Transaction Fees Per Million (FPM)¹

• The preliminary FPM for total credit for 3Q24 was approximately $149, down from $155 in the prior year, but up slightly from $148 in 2Q24. The decline in total credit FPM year-over-year was due to product and protocol mix shift, principally lower levels of U.S. high-yield activity and increased portfolio trading. The preliminary FPM for total rates was approximately $4.15, down from $4.56 in the prior year, and down from $4.45 in 2Q24.

Table 1: Trading records

Table 1A: September 2024 ADV

Table 1B: September 2024 estimated market share

Table 1C: 3Q24 ADV

Table 1D: 3Q24 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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