Inquired about the April slowdown relative to Q1, specifically in U.S. investment grade, and potential catalysts for outperformance.

Concannon explained April's slowdown was due to holidays, rapid drop in volatility post-geopolitical events, and a robust new issue market (second highest April ever), which diverted client attention. He noted duplicate TRACE reports inflated market volumes. Positive signs included month-end activity and a high-yield PT record. He highlighted the upcoming new issue solution as a catalyst. “As April started, we walked in right into a holiday week... And then right around April 8 was when we saw the seats fire announced given the geopolitical activity that we were experiencing in the month of March. We saw the VIX drop from plus 25 down to around 17 quite rapidly. So obviously, a quick slowdown in volatility.”

Asked for details on the new issue trading solution, its anticipated contribution, and an update on the closing auction's traction.

Concannon detailed the DirectBooks partnership for new issues, explaining it streamlines access to the new issue calendar, pricing, and allocations, with a pilot starting in May. A click-to-trade solution for post-break new issue trading is planned for H2 2026. For the closing auction, he noted $11 billion in staged orders and $7 billion in notional orders, with 12 buy-side clients and 4 dealers participating, despite light trading volume. “We are excited that we are finally addressing the new issue market head on. And we have a new product coming to market that we're quite excited about.”

Asked to expand on the success of new initiatives in European/international markets and why the uptake speed differs from the U.S.

Concannon attributed international success to lower electronification levels, allowing for organic growth and penetration using multiple protocols. He cited block trading (up 46% in EM) and dealer RFQ (up 15% in EM) as key drivers. He noted that U.S. initiatives like block trading (up 31% in high grade) and PT volume (up 35%) are also growing, but Mid-X is still early days in the U.S. “overall, the international market still has a great deal of growth given low levels of penetration.”

MKTX

MarketAxess (MKTX) Q1 FY26 earnings call: the analyst Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 7, 2026

Source: earnings call transcript

Executive summary

MarketAxess Q1 FY26 — Record Revenue and Strong International Growth

MarketAxess delivered record Q1 FY26 results, driven by strong growth in international markets and new initiatives, particularly in block and portfolio trading. The company is leveraging AI to enhance data analytics and accelerate technology modernization, while also addressing challenges in the U.S. new issue market through a strategic partnership. Despite April's temporary slowdown due to macro factors and new issuance focus, management remains confident in its long-term strategy and product pipeline.

Highlights

Total revenue grew 12% to a record $233 million.
Product areas outside U.S. credit achieved very strong 20% growth, contributing 50% of total incremental revenue.
Diluted EPS, excluding notable items, increased 20% to $2.25 per share.
Operating margin expanded by almost 200 basis points to 44%.
Block trading ADV grew 35% to a record $7 billion across U.S. credit, EM, and Eurobonds.

Concerns

Estimated U.S. high-grade TRACE market share was impacted by up to 8% due to duplicate reports and historically high new issuance in April.
Total other income decreased approximately $5 million due to lower interest income and increased interest expense.
Total credit fee capture reduced year-over-year due to protocol and product mix shifts.

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Total Company Record total revenue underpinned by record total trading ADV, driving record commission revenue.	$233 million	12%	—	—
Product areas outside U.S. credit Generated approximately 50% of total incremental revenue in the quarter.	—	20%	—	—
Services revenue Helping to drive trailing 12-month free cash flow generation of $316 million.	$30 million	10%	—	—
Information Services Record Information Services revenue.	$14 million	12%	—	—
Post-trade services Versus the prior year.	$12 million	5%	—	—
Technology Services Driven by higher connectivity fees from RFQ Hub.	$4 million	19%	—	—
Emerging Markets (EM) Record levels across both hard currency and local currency markets and across all regions. Generated $20 million in incremental revenue over the trailing 12 months, representing 68% of total credit incremental variable commission revenue. Active client firms: 1,547International active client traders: 3,410	—	30%	—	—
EM Hard Currency With high fee per million.	—	15%	—	—
EM Local Markets With lower fee per million (over 40% lower than hard currency business).	—	56%	—	—
Eurobonds Record total commission revenue.	—	14%	—	—

Product announcements

Product	Type	Timeline	Details
New Issue Trading Solution (via DirectBooks partnership)	launch	pilot form in the month of May, near the end of May (initial partnership features); second half of 2026 (click-to-trade solution)
Closing Auction	update	launched this late in the quarter -- about fourth quarter of 2025, really around December

Deals & partnerships

DirectBooks Strategic partnership to address the new issue market.

Partnership to launch a new issue trading solution, starting with a pilot in May 2026. Focus on streamlining access to new issue calendar, pricing, and allocations, with a future click-to-trade solution for post-break trading.

Risks & headwinds

Geopolitical events and market volatility Q1 FY26, specifically March and early April.

higher levels of volatility and wider credit spreads in the quarter.

Mitigation:The initial jump in volatility and widening of credit spreads was short-lived and credit spreads moved back to historically low levels in April.

Impact of duplicate TRACE reports on market share calculation April FY26

inflated U.S. high-grade TRACE volumes by up to 8% in April.

Mitigation:Adjusting for these duplicates, consistent with FINRA's recent proposal to suppress duplicate reporting, we believe our estimated U.S. high-grade market share would have been approximately 160 basis points higher in April.

High new issuance impacting secondary trading volumes April FY26

historically high new issuance further reduced our estimated U.S. high-grade market share in April.

Mitigation:We are now addressing the challenges of the new issue calendar with our new issue trading solution.

Lower interest income and higher interest expense Q1 FY26

Total other income decreased approximately $5 million, driven by lower interest income on lower rates and increased interest expense related to borrowings for the ASR.

Reduction in total credit fee capture Q1 FY26

The reduction in total credit fee capture year-over-year was due to protocol and product mix shifts.

Mitigation:Partially offset by the higher duration of bonds traded in U.S. high grade.

What to watch in Q2 FY26

New Issue Trading Solution Pilot Rollout

Q2 FY26

Current Pilot form in May

Target Successful expansion of pilot, positive client/dealer feedback.

Why it matters

This solution aims to address a long-standing challenge in the new issue market, which significantly impacted April's market share, and could be a key growth driver.

we are excited that we are finally addressing the new issue market head on. And we have a new product coming to market that we're quite excited about.

Find out whether MKTX delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked about competition in international markets and how MarketAxess maintains its moat, as well as momentum in EM and Eurobond businesses.

Chris Concannon highlighted record ADV and volume in EM (up 30%) and Eurobonds, driven by key initiatives like block trading (up 46% in EM, 45% in Eurobonds), portfolio trading (up 90% in Eurobonds), and dealer-initiated trading. He noted limited competition in EM (Bloomberg) and Eurobonds (Bloomberg, Tradeweb) in the dealer-to-client space.

“largely, in the dealer-to-client business, our key franchise, we only see Bloomberg in that space really making a difference at all.”

asked by Dan Fannon · answered by Christopher Concannon

2 min read 6 chapters

Detailed narrative

Strategic Execution and AI Leverage

MarketAxess is focused on executing its long-term strategy, which includes enhancing its global network, differentiated liquidity, and proprietary data and analytics. The company is increasingly using AI to leverage its $5 trillion in notional inquiry information and $34 trillion in notional response information from 2025 to deliver unique data solutions like CP+, Depth of Book, Sense AI, and AI Dealer Select.

Management is exploring AI-driven real-time market intelligence, portfolio optimization, and protocol suggestion to further enhance client outcomes and product offerings.

Technology Modernization and Leadership

The company is investing in technology modernization, including the rollout of its enhanced X-Pro front end and the strategic hire of Will Quan as Chief Technology Officer. AI is being leveraged to accelerate this modernization, including refactoring legacy code and increasing time-to-market for new capabilities.

All developers have access to the latest AI models, which is impacting the speed of development and UI design, reflecting a significant shift in the company's technological approach.

April Market Dynamics and New Issue Focus

April experienced a slowdown in trading volumes across all products due to a rapid drop in volatility, holidays, and a robust new issue market. The company estimates duplicate reports inflated U.S. high-grade TRACE volumes by up to 8% in April, and historically high new issuance shifted client focus away from secondary trading.

This diversion of attention impacted MarketAxess's estimated market share, particularly in U.S. high-grade, as clients prioritized the new issue calendar.

New Issue Trading Solution

MarketAxess is addressing the new issue market challenges through a partnership with DirectBooks, launching a pilot for a new issue solution in May. This solution aims to streamline access to DirectBooks services, allowing clients to submit indications of interest and providing seamless booking and straight-through processing for allocations.

A click-to-trade solution for new issue trading post-break is expected to be rolled out in the second half of 2026, directly targeting an area where the company has historically faced challenges.

Closing Auction Development

The closing auction, launched in late Q4 2025, aims to aggregate liquidity at the end of the trading day, addressing the typical U-shaped liquidity curve in fixed income. While trading volume is still light, the platform has seen over $11 billion in staged auction orders and $7 billion in notional orders submitted.

Currently, 12 active buy-side clients and four active dealers are participating, indicating early adoption for this novel protocol designed to organize liquidity at a single moment in time.

International Market Penetration

The international business, particularly Emerging Markets and Eurobonds, showed strong growth, with EM volumes up 30% in Q1. This growth is attributed to early stages of electronification in these markets and the successful application of new protocols like block trading (up 46% in EM) and portfolio trading (up 90% in Eurobonds).

The company sees significant runway for further penetration in these less electronified markets, leveraging its diverse protocol offerings to engage a broader client base.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.