MarketAxess Holdings Inc.

What they do

MarketAxess runs electronic trading platforms serving approximately 2,100 institutional investor and broker-dealer clients in global fixed-income and other markets. Its core venue is Open Trading, an all-to-all anonymous marketplace that lets institutional investors send inquiries to broker-dealers on a disclosed basis while simultaneously accessing anonymous liquidity. The company also provides proprietary pre- and post-trade data and analytics, including the CP+ AI-driven pricing engine, through its X-Pro platform, plus information, post-trade and technology services. In 2025, 86.8% of revenues came from commissions on transactions executed on its platforms.

Revenue drivers

• Commissions — Transaction commissions on platform executions were the dominant revenue source at 86.8% of 2025 revenues; second quarter 2026 commission revenue was $186.9 million, down 3% year over year.
• U.S. credit — A major commission component; U.S. credit commission revenue declined 9% year over year in 2Q26, the largest drag on total commissions.
• Emerging markets — Commission revenue rose 6% year over year in 2Q26, and emerging markets block ADV grew 24% with portfolio trading ADV up 44%.
• Services revenue — Information services, post-trade and technology services revenue reached a record $31.5 million in 2Q26, up 14% year over year.

Recent performance

Second quarter 2026 total revenues were $218.4 million, roughly flat versus 2Q25, which the company said benefited from elevated event-driven market volatility. Commission revenue fell 3% to $186.9 million, driven by a 9% decline in U.S. credit and partly offset by 6% growth in emerging markets, while services revenue grew 14% to a record $31.5 million. Total expenses of $128.5 million rose 1%, and operating margin of 41.1% fell 80 basis points; diluted EPS was $1.93 ($1.95 excluding notable items) on net income of $68.3 million, versus $1.91 and $71.2 million a year earlier. For the first half of 2026, revenues were $452 million, up 6% from $428 million, though net income fell to $146 million from $171 million. Full-year 2025 revenue was $846.3 million with net income of $246.9 million and diluted EPS of $6.64.

Strategy

Management is pursuing expansion of its strategic channels: client-initiated block trading, portfolio trading, and dealer-initiated trading including Mid-X. In 2Q26, block trading ADV rose 11% to $5.9 billion, portfolio trading ADV rose 33% to a record $2.0 billion (with records in U.S. high-grade, U.S. high-yield, municipal bonds and emerging markets), and Mid-X ADV grew 151% to record levels. The company continues to invest in X-Pro, its next-generation platform, and CP+, its AI-driven pricing engine, alongside automation and algorithmic execution tools. Management highlighted continued expense discipline and capital management, citing 6% first-half revenue growth with healthy operating margins. Separately, MarketAxess and ICE have entered a definitive agreement for ICE to acquire MarketAxess.

Risks

• Trading volume dependence — Revenue is concentrated in commissions, so lower fixed-income trading volumes or reduced volatility directly pressure results, as seen in the 3% commission decline in 2Q26.
• Competition — The company faces substantial competition that could reduce trading on its platforms or its market share and harm financial performance.
• Broker-dealer and client concentration — MarketAxess depends on broker-dealer clients who are not restricted from using their own proprietary or third-party platforms, and could lose significant revenue if it loses major institutional investor clients.
• Pending ICE acquisition — The company announced a definitive agreement on July 30, 2026 for ICE to acquire MarketAxess, a transaction whose completion and integration could disrupt operations and client relationships.

Outlook

Management said the company released 2Q26 results alongside the announcement of the ICE acquisition agreement. CEO Chris Concannon cited growing client adoption of new solutions across the strategic channels, continued expansion of block trading, portfolio trading enhancements, and early Mid-X success. He pointed to first-half 2026 revenue growth of 6% and solid earnings growth year over year, supported by investments, expense discipline and capital management, while maintaining healthy operating margins.