MarketAxess (NASDAQ:MKTX) executives used the company’s fourth-quarter and full-year 2025 earnings call to highlight record annual results, accelerating adoption of newer trading protocols, and a 2026 plan centered on execution, product delivery, and continued investment in technology modernization.
Record 2025 results driven by ADV and services
CEO Chris Concannon said 2025 marked “record revenue” of $846 million, supported by record total average daily volume (ADV) and resulting record commission revenue and record services revenue. The company also generated record annual free cash flow of $347 million.
Fourth-quarter revenue up 3.5%; notable items drove GAAP/non-GAAP gap
Fiszel Bieler reported fourth-quarter revenue of $209 million, up 3.5% year-over-year and including a $2 million foreign-currency translation benefit. The company reported diluted EPS of $2.51, or $1.68 excluding notable items.
The quarter’s net $0.83 per share impact from notable items included:
- $1 million (about $0.02 per share) in repositioning charges within employee compensation and benefits
- $31 million (about $0.85 per share) related to a reserve release tied to a tax-related reserve established in the first quarter of 2025
On a revenue-line basis, fourth-quarter commissions rose 4% to $181 million, while services revenue increased 2% to $28 million. Within services, information services revenue was $13 million (up 2%), post-trade services was $11 million (up 1%), and technology services was $4 million (up 2%), which management attributed to higher license fees and connectivity fees from RFQ-Hub.
Protocol mix and blocks influence fee capture, but management focused on revenue growth
In discussing commission performance, MarketAxess reported total credit commission revenue of $165 million, up 2% year-over-year, driven by 4% growth in U.S. high-yield, 6% growth in emerging markets, and 9% growth in Eurobonds. These gains were partially offset by a 1% decline in U.S. high-grade and a 14% decline in municipals.
Fiszel Bieler said total credit fee capture declined year-over-year and quarter-over-quarter, “principally due to protocol mix,” partially offset by higher duration of bonds traded in U.S. high-grade. Concannon also addressed investor questions about fee-per-million trends, saying the company’s fee metrics are influenced by product mix, protocol mix, maturity, and market factors such as spread and volatility.
To illustrate protocol-driven shifts, Concannon compared a small trade versus a block trade, noting a $50,000 order could yield about $17 of incremental revenue (but a higher fee per million), while a $5 million block could generate about $700 of incremental revenue (at a lower fee per million). Management emphasized that while some newer protocols carry lower fee capture, they are intended to expand volumes and drive incremental revenue.
Fiszel Bieler added that January fee-per-million changes reflected volume mix shifts into lower-capture areas, citing strong Eurobonds activity and increased high-grade block volumes as examples. She also said the company’s three-year targets do not assume fee-per-million accretion.
New initiatives: blocks, portfolio trading, dealer-initiated protocols, automation, and auctions
Concannon said MarketAxess made “significant progress” delivering and expanding protocols across multiple channels, including portfolio trading, block trading, dealer matching, automation, and its closing auction protocol. He said the company exited 2025 with a 29% increase in block trading ADV and an estimated 28% market share in U.S. high-yield portfolio trading. He also cited more than $3 billion in trading volume in December for the company’s dealer-initiated protocol Mid-X.
Management provided additional detail on the call:
- Block trading: MarketAxess reported 24% ADV growth to a record $5 billion across U.S. credit, emerging markets, and Eurobonds, with record block ADV in all three. In January, block ADV was up 56% year-over-year, and Concannon said blocks accounted for about one-third of credit volume that month. He also attributed growth to targeted RFQ in emerging markets and Eurobonds, traditional RFQ, and increasing use of automation and algos for block execution.
- Portfolio trading: The company posted a 48% increase in total global portfolio trading ADV to a record $1.4 billion, and said U.S. credit portfolio trading market share increased 270 basis points in 2025. For January 2026, MarketAxess reported portfolio trading ADV up 126% and U.S. credit portfolio trading market share up 620 basis points.
- Dealer-initiated: Dealer-initiated ADV increased 33% in 2025, with management highlighting Mid-X volume and noting a record $7 billion in total Mid-X trading volume in January, up 383%. Management also said it plans to increase Mid-X from one match per day to multiple matches per day.
- Automation and algos: Concannon said several clients adopted more customized adaptive Auto-X algo workflows in the fourth quarter, generating over $8 billion in trading volume. He also said the Pragma acquisition is “fully accretive,” contributing to algorithmic success and supporting technology modernization.
- Closing auction: Management said the closing auction launched in the fourth quarter in a pilot phase and was broadened to more clients about two weeks before the call. Concannon cited early participation metrics including 3 dealers providing liquidity, about 11 buy-side clients active, roughly $2 billion in notional orders staged, and over $900 million of orders submitted. He said the company is currently focused on a closing auction rather than an opening auction and expects the protocol to grow over time.
Expenses, capital return, and 2026 guidance
Fiszel Bieler said fourth-quarter expenses (excluding notable items) rose 8%, including a $1 million foreign-currency headwind, driven by higher consulting, technology and communications, and employee compensation as MarketAxess invests in technology modernization and talent. Headcount was 869, down from 891 a year earlier and down from the third quarter.
On capital management, MarketAxess ended 2025 with $679 million in cash, cash equivalents, and corporate bond and U.S. Treasury investments. The company returned $474 million to shareholders in 2025, including $360 million of share repurchases and $114 million in dividends. Management said it completed its accelerated share repurchase program earlier in the week, with final delivery of 360,000 shares, bringing total ASR repurchases to 1.7 million shares. As of January 31, 2026, $205 million remained on the repurchase authorization. Fiszel Bieler also said the dividend was increased to $0.78 per share.
For 2026, the company guided to:
- Services revenue growth: mid-single-digit percentage growth
- Total expenses (ex notable items): $530 million to $545 million
- Effective tax rate: 24% to 26%
- Capital expenditures: $65 million to $75 million, with roughly 80% tied to capitalized software development for new protocols and platform enhancements
Concannon also announced two new directors, Doug Cifu and Ken Schiciano, joining the board as of March 1.
Looking ahead, management reiterated confidence in executing its product roadmap and three-year targets, while acknowledging continued focus is needed on U.S. credit market share. Concannon said the company views the remaining opportunity in U.S. credit electronification as largely tied to block trading that is still executed via phone and chat, and he described emerging markets as underpenetrated electronically, estimating electronic penetration there at under 10%.
About MarketAxess (NASDAQ:MKTX)
MarketAxess Holdings Inc operates a leading global electronic trading platform specializing in fixed-income securities and related products. The company’s network enables institutional investors and broker-dealers to trade corporate bonds, municipal securities, emerging markets debt, U.S. Treasuries and credit default swaps in an automated, multi-dealer environment. MarketAxess also offers portfolio trading, data analytics, best-execution tools and post-trade services to streamline workflows and enhance price discovery across its marketplace.
In addition to core voice-like trading protocols, MarketAxess provides Open Trading®, an anonymous, all-to-all trading protocol designed to improve liquidity and transaction efficiency.
