MarketAxess: New Initiatives and AI Power a Record Quarter

Record revenue, 20% growth outside U.S. credit, and a strategic push into the new-issue market define Q1 2026.

MKTX · Earnings Call · 2026-05-07

Record revenue, new engines firing

MarketAxess began 2026 with a record quarter that underscored the payoff from its multi-year investment in new protocols and international expansion. Total revenue rose 12% to a record $233 million, with product areas outside U.S. credit growing 20%. “We grew total revenue by 12% to a record $233 million including very strong 20% growth in product areas outside U.S. credit.” — Christopher Concannon, Chief Executive Officer · 2026-05-07 Underneath those headline numbers, the key initiatives that management has been touting for two years are finally showing up with scale. Block trading ADV hit a record $7 billion (up 35% year-over-year), global portfolio trading rose 51% to $1.9 billion, and the dealer-initiated channel set records in both volume and Mid-X activity. “Momentum continued to build with our new initiatives and generated approximately 50% of total incremental revenue in the quarter.” — Christopher Concannon, Chief Executive Officer · 2026-05-07 The growth is not confined to one product: emerging markets delivered record ADV and revenue, with total EM revenue up 24% and hard-currency revenue growing 15%, even as local-market revenue with lower fee per million surged 56%. The success in international markets is notable; “In 2025, we've seen growth of block trading on the platform and IG of 18% and high yield of 19%.” — Christopher Concannon, Chief Executive Officer · 2026-02-06 Now those same protocols are being rolled out to the U.S., and the early numbers are encouraging.

AI: the data moat

Management has been steadily shifting the narrative from pure trading share to the data and analytics layer that sits on top of its network. The company’s proprietary pool of inquiry and response data is being used to fuel AI-driven products like CP+, block pricing, dealer selection, and liquidity prediction. “AI solutions are only as good as the data they are trained on. We have a unique advantage given our global proprietary data set.” — Christopher Concannon, Chief Executive Officer · 2026-05-07 This proprietary data is deliberately not being sold; instead, it is being reinvested into execution tools and the broader tech modernization effort, including the legacy-code refactoring and faster feature delivery through the new X-Pro front end. In Q&A, Concannon argued that AI is even reshaping M&A economics, noting that “AI is effectively reducing the value of tech synergies when it comes to M&A.” — Christopher Concannon, Chief Executive Officer · 2026-05-07 That logic reinforces why MarketAxess believes its network and data are the durable moat — not the technology itself.

April noise and the new issue push

The strong Q1 was followed by a softer April, driven by a rapid decline in volatility after the March geopolitical shock, a holiday-heavy calendar, and an exceptionally active new-issue calendar. Management was quick to contextualize the April estimated share decline, pointing to both real market dynamics and a technical distortion from duplicate TRACE reports. “In summary, while there was considerable noise in the denominator used to calculate our estimated market share in April, we are now addressing the challenges of the new issue calendar with our new issue trading solution.” — Christopher Concannon, Chief Executive Officer · 2026-05-07 The company is tackling the new-issue market head-on with a DirectBooks partnership that will let clients submit indications of interest and receive allocations inside the MarketAxess workflow, with single-click post-pricing trading coming later in 2026. This is a direct attempt to recapture share in the new-issue market, a segment where MarketAxess historically lost ground. As Concannon put it on the call:

So when we look at April, not at all surprised or concerned with that 1-month slowdown. We've always said 1 month does not make the year, but we were also faced with what we call fairly robust new issue market.
Christopher Concannon, Chief Executive Officer · 2026-05-07

The market-share issue is not new; in the prior quarter’s call, management admitted: “The two areas, obviously, top line revenue in U.S. credit and our just overall growth of market share in U.S. credit really have been largely slower growth than we would like.” — Christopher Concannon, Chief Executive Officer · 2025-11-07

Financials and outlook

The financials support the execution narrative. Total revenue accelerated sequentially and year-over-year, while operating margin improved almost 200bps to 44.5% despite an 8% increase in non-GAAP expenses, reflecting the inherent operating leverage. Services revenue grew 10% to a record $30 million, with information services up 12%. On the capital front, the company completed its $300 million ASR in early February, paid down $63 million of related debt, and still holds $205 million of repurchase authorization. Free cash flow on a trailing 12-month basis reached $316 million, though the quarter itself was cash-negative due to the ASR payout. Looking ahead, management remains confident that the electronification of emerging markets and Eurobonds is still in its early innings, block trading is becoming a meaningful proportion of volumes, and the new-issue solution could be a structural growth driver. With the stock still 72% below its 2020 peak, the market is looking for sustained evidence that these initiatives can compound into durable top-line growth.