MKTX 10-K & 10-Q changes, risk factors and insider trading

We face substantial competition that could reduce trading on our platforms or our market share and harm our financial performance.

Risks Related to our CustomerOperation Concentrationand Performance of our Business

Technology, IT SystemsCybersecurity and CybersecurityIntellectual Property Risks

The global financial services business is, by its nature, risky and volatile and is directly affected by many national and international factors that are beyond our control. Recently, for example, thecentral 2023bank regionalinterest bankingrate crisis,changes, rising interest ratesinflation and inflation,governmental theaction COVID-19related pandemicto and the Russia-Ukraine war,tariffs each created significant volatility in the markets we serve and increased uncertainty and economic disruption. Certain of the factors below have caused, and may in the future cause, a substantial decline in the U.S. and/or global financial services markets, resulting in reduced trading volume, and could have a material adverse effect on our business, financial condition and results of operations. These factors include:

There have been significant declines in trading volumes in the financial markets generally in the past and there may be similar declines in trading volumes generally or across our platforms in particular in the future. Any one or more of the above factors may contribute to reduced trading volumes. Our revenues and profitability are likely to decline significantly during periods of stagnant economic conditions, low volatility or low trading volumevolumes in the U.S. and global financial markets.

There has been increased demand for portfolio trading workflows over the last few years, which has resulted in heightened competition among trading platforms to enhance their portfolio trading offerings and expand them across different geographies and products. During periods of relatively lower credit spread volatility, clients have been using portfolio trading workflows in lieu of more established trading protocols designed to generate price competition on individual bonds. Our dealer clients have also increased their usage of matching sessions offered by competing platforms in recent periods. To the extent that our clients increase their use of portfolio trading and matching session protocols offered by other platforms, our market share in those products could decrease. Due to the large size of the trades and the concentration of activity at the end of the month, portfolio trading can drive significant swings in trading volumes and estimated market share. Furthermore, portfolio trading is generally provided under a lower-fee structure than other protocols and the growth of portfolio trading on our platform will likely have a negative impact on our average credit variable transaction fee per million.

A decline in overall market volumes, trading volumes on our platforms,platforms or our platforms’ market share for any reason or the increased usage of portfolio trading in lieu of other trading protocols on our platforms would negatively affect our commission revenue and may have a material adverse effect on our business, financial condition and results of operations.

We face substantial competition that could reduce trading on our platforms or our market share and harm our financial performance.

Competition in the markets in which we operate has intensified due to consolidation, which has resulted in increasingly large and sophisticated competitors. In recent years, our competitors have made acquisitions and/or entered joint ventures and consortia to improve the competitiveness of their electronic trading offerings. If, because of industry consolidation, our competitors are able to offer lower cost and/or a wider range of trading venues and solutions, obtain more favorable terms from third-party providers or otherwise take actions that could attract trading volume away from our platforms or increase their market share, our competitive position and therefore our business, financial condition and results of operations may be materially adversely affected.

Our operations also include the sale of pre- and post-trade services, analytics, and market data services. There is a high degree of competition among market data and information vendors in solutions for pre- and post-trade data, analytics and reporting, and such businesses may become more competitive in the future as new competitors emerge. Some of these companies are already in or may enter the electronic trading business. Accordingly, some of our competitors may be able to combine use of their electronic trading platforms with complementary access to market data and analytical tools and/or leverage relationships with existing clients to obtain additional business from such clients, which could preempt use of our platforms or solutions. For example, Bloomberg, Refinitivthe London Stock Exchange and Intercontinental Exchange own trading platforms that compete with ours and also have a data and analytics relationships with the vast majority of institutional, wholesale and retail market participants. If we are not able to compete successfully in this area in the future, our revenues could be adversely impacted and, as a result, our business, financial condition and results of operations would be materially adversely affected.

In addition, under certain of our U.S. high grade fee plans, our fees are designated in basis points in yield (and, as a result, are subject to fluctuation depending on the duration of the bond traded) or our fees vary based on trade size or maturity. For example, during recent periods, a significant rise in corporate bond yields contributed to a decrease in the duration of the U.S. high grade bonds traded on our platforms, which had a negative effect on our average credit variable transaction fee per million. We anticipate that our average feescredit variable transaction fee per million may continue to vary in the future due to changes in yield, years-to-maturity and nominal size of bonds traded on our platforms. Consequently, past trends in commissions are not necessarily indicative of future commissions.

Our strategy includes leveraging our electronic trading platforms to enter new markets, including new asset classes, products and geographies, including markets where we have little or no operating experience. For example, with the acquisition of Pragma in 2023, we began providing algorithmic trading and quantitative execution solutions in the equities and foreign exchange markets, and in 2024,2025, we agreedcompleted toour acquireacquisition of a majority stake in RFQ-hub, a platform specializing in ETFs and derivatives. We may have difficulties identifying and entering into new markets due to established competitors, lack of recognition of our brand and lack of acceptance of our platforms and solutions, as has occurred with certain of our initiatives in the past.

difficulties in staffing and managing foreign operations, including, as a result of Brexit,including our access to,to and our ability to compete for and hire, skilled employees in both the U.K. and the E.U.;

Risks Related to our CustomerOperation Concentrationand Performance of our Business

We rely on our broker-dealer clients to provide liquidity on our electronic trading platforms by posting prices for bonds in their inventory and responding to institutional investor client inquiries. The contractual obligations of our broker-dealer clients to us are minimal, non-exclusive and terminable by such clients. Our broker-dealer clients buy and sell fixed-income securities through traditional methods, including by telephone, e-mailtelephone and instant messaging, and through other electronic trading platforms. Some of our broker-dealer clients have developed electronic trading networks that compete with us or have announced their intention to explore the development of such electronic trading networks, and many of our broker-dealer and institutional investor clients are involved in other ventures, including other electronic trading platforms or other distribution channels, as trading participants and/or as investors. These competing trading platforms may offer some features that we do not currently offer. Accordingly, there can be no assurance that such broker-dealers’ primary commitments will not be to one of our competitors.

We rely on our institutional investor clients to launch inquiries over our trading platforms and, increasingly, to provide liquidity through our Open Trading protocols. A limited number of such clients can account for a significant portion of our trading volume. The obligations of our institutional investor clients to us under our standard contractual agreements are minimal, non-exclusive and terminable by such clients. Our institutional investor clients also buy and sell fixed-income securities through traditional methods, including by telephone, e-mailtelephone and instant messaging, and through other electronic trading platforms.

Sanctions imposed by the United States or other countries in response to conflicts or other geopolitical events could adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. For example, in February 2022, following the onset of the Russia-Ukraine war, the U.S., the U.K., and the E.U., among others, adopted sanctions that, in various ways, prohibited transactions with numerous Russian entities, including major Russian banks, and individuals; limited transactions in Russian sovereign debt; and constrained investment, trade and financing to, from or in certain regions of Ukraine. Our financial position and results of operations may be adversely affected if these sanctions are further expanded or the ongoing war or geopolitical tensions have further adverse effects on the global economy or the participants on our platforms. In addition, any such sanctions may limit our ability to effect transactions in certain instruments on our platforms.

Technology, IT SystemsCybersecurity and CybersecurityIntellectual Property Risks

We must continue to enhance and improve our electronic trading platforms. The electronic financial services industry is characterized by significant structural changes, increasingly complex systems and infrastructures, changes in clients’ needs and preferences, constant competition and new business models. If new industry standards and practices emerge and our competitors release new technology before us, our existing technology, systems and electronic trading platforms may become obsolete orand our existing business may be harmed. Our future success will depend on our ability to:

develop and/or license new products and technologies that address the increasingly sophisticated and varied needs of our broker-dealer and institutional investor clients and prospective clients;

We use AI technologies in our business, including in certain of our product offerings, and we are making investments in expanding AI capabilities in our products and tools. AI technologies are complex, and generative and agentic AI technologies, in particular, are rapidly evolving. The introduction of AI technologies, including generative and agentic AI, into new or existing products or our internal business processes may result in new or enhanced governmental or regulatory scrutiny, additional compliance costs, confidentiality or security risks, privacy concerns, ethical challenges, or other complications that could adversely affect our business, reputation, or financial results.

In addition, the intellectual property ownership and license rights surrounding AI technologies are currently not fully addressed by courts or regulators. The use or adoption of AI technologies in our products or internal business services may result in exposure to claims by third parties of copyright infringement or other intellectual property misappropriation. Such use or adoption could also lead to the loss of our intellectual property rights. The evolving legal, regulatory, and compliance framework for AI technologies may also impact our ability to protect our own data and intellectual property against infringing use.use, and we may need to develop or deploy additional protections and safeguards for handling the use of customer and proprietary data with such technologies.

If our AI development, deployment, content labelingdeployment or governance is ineffective or inadequate, it may result in competitive disadvantage, reputational harm, liability, or other adverse consequences to our business operations.

While we generally have disaster recovery and business continuity plans in place for much of our business, including redundant systems, networks, computer software and hardware and data centers to address interruption to our normal course of business, our systems, networks and infrastructure may not always be fully redundant and our disaster recovery and business continuity plans may not always be sufficient or effective. Similarly, although some contracts with our third-party providers as well as relevant law require adequate disaster recovery or business continuity capabilities, we cannot be certain that these will be adequate or implemented properly. Our disaster recovery and business continuity plans are heavily reliant on the availability of cloud service providers, internet and mobile phone technology, so any disruption of those systems may affect our ability to recover promptly from a crisis situation. If we are unable to execute our disaster recovery and business continuity plans, or if our plans prove insufficient for a particular situation or take longer than expected to implement in a crisis situation, it could have a material adverse effect on our business, financial condition and results of operations, and our business interruption insurance may not adequately compensate us for losses that may occur.

The operation of our electronic trading platforms relies on the secure processing, storage and transmission of a large amount of transactional data and other confidential sensitive data (including confidential client and personal information). Our computer systems, software and networks (or those of our third-party vendors, including cloud service providers) may be vulnerable to unauthorized access, loss or destruction of data (including confidential and personal customer information), ransomware, unavailability or disruption of service, computer viruses, acts of vandalism, or other malicious code, cyber-attack and other harmful events that could have an adverse security impact. Further, as AI technologies, including generative and agentic AI models develop rapidly, bad actors may use these technologies to create new sophisticated attack methods that are increasingly automated, targeted and coordinated and more difficult to defend against.

Our business also depends on the efficient and uninterrupted operation of our platforms, systems, networks and infrastructure. Any failure of, or significant interruption, delay or disruption to, our systems, networks or infrastructure due to a ransomware attack or other cyber-attack could result in: disruption to our operations, including disruptions in service to our clients; slower response times; distribution of untimely or inaccurate market data to clients who rely on this data for their trades; delays in trade execution; incomplete or inaccurate accounting, recording or processing of trades; significant expense to repair, replace or remediate systems, networks or infrastructure; financial losses and liabilities to clients; loss of clients; and legal or regulatory claims, proceedings, penalties or fines. We also face thethese riskrisks of operational disruption, failure or capacity constraints of any of the third-party service providers that facilitate our business activities, including clients, clearing and settlement agents and trading system software, network or data providers. Such parties could also be the source of a cyber-attack on or breach of our operational systems, data or infrastructure. Increased flexibility for our employees to work remotely has amplified certain risks related to, among other things, the increased demand on our information technology resources and systems, the increased risk of phishing and other cybersecurity attacks, and the increased number of points of possible attack, such as laptops and mobile devices (both of which are now being used in increased numbers), to be secured. Any system failure or significant interruption, delay or disruption in our operations, or decreases in the responsiveness of our platforms, could materially harm our reputation and business and lead our clients to decrease or cease their use of our trading platform.

As the privacy and data protection landscapes continue to trend in favor of increasing regulation and compliance our efforts to comply have and could in the future entail substantial expense and may divert resources from other initiatives. Additionally, our own compliance with applicable law and regulation depends, in certain circumstances, on the continued compliance of our third-party providers. As a result, we are required to monitor the performance of our third-party providers as violations by such providers may also put our operations at risk. Any failure or perceived failure by us to comply with any of our obligations relating to privacy and data protection may result in governmental investigations or enforcement actions, litigation, claims or reputational damage.

MarketAxess operates leading electronic trading platforms delivering greater trading efficiency, a diversified pool of liquidity and significant cost savings to ourapproximately 2,100 institutional investor and broker-dealer clients across the global fixed-income markets. Approximately 2,100 institutional investor and broker-dealer firms use our patented trading technology to efficiently trade U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, Eurobonds, municipal bonds, U.S. government bonds and other fixed-income securities.markets. We leveragehave built a differentiated market position through our integrated approach to electronic trading, combining diverse set of trading protocols, automated and algorithmic tradingexecution solutions, intelligent data and index products and aanalytics rangeand ofcomprehensive post-trade servicesand totechnology provideservices. anThe end-to-endfixed-income tradingmarkets solutionwe tofocus ouron robustremain networksignificantly ofless platformelectronified participants.than Ourother award-winningasset Open Trading marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets,classes, creating asignificant unique liquidity poolopportunities for acontinued broad range of credit market participants.growth.

Our objective is to providecreate the leading global network for the trading of fixed-income securities for our broker-dealer and institutional investor clients to help them connect, be more efficient and achieve better trading outcomes. We seek to achieve this goal by offering our clients full end-to-end electronic trading solutions and workflow tools, powered by a broad array of proprietary data and analytical tools. The key elements of our strategy are discussed in Part I, Item 1. “Business – Our Strategy.”

The global fixed-income securities industry is risky and volatile and is directly affected by a number of economic, political and market factors that may impact trading volume. These factors could have a material adverse or positive effect on our business, financial condition and results of operations. These factors include, among others, fixed-income market conditions, the current interest rate environment, including the volatility of interest rates and investors’ forecasts of future interest rates, the duration of U.S. high grade bonds traded, economic and political conditions in the United States, Europe and elsewhere, including recent and potential future changes in tariffs, international trade agreements or trade policies, and the consolidation or contraction of our broker-dealer and institutional investor clients.

Because the majority of our assets are short-term in nature, they are not significantly affected by inflation. However, the rate of inflation impacts our expenses, such as employee compensation, technology and communications expenses, which may not be readily recoverable in the prices of our services. Interest rates are currently higher than recent periods due to a period of increased inflation. To the extent interest rates remain high or inflation has other adverse effects on the securities markets or the economy, our financial position and results of operations may be adversely affected.

We expect that current cash and investment balances, in combination with cash flows that are generated from operations and the ability to borrow under our 2026 Amended Credit Agreement (as defined below), will be sufficient to meet our liquidity needs and planned capital expenditure requirements for at least the next twelve months. We ended the year with $749.9$529.9 million in available borrowing capacity under theour 2023 Credit Agreement (as defined below) and capital significantly in excess of our regulatory requirements.

There has been increased demand for portfolio trading workflows over the last few years, which has resulted in heightened competition among trading platforms to enhance their portfolio trading offerings and expand them across different geographies and products. During periods of relatively lower credit spread volatility, clientsClients have been using portfolio trading workflows in lieu of more established trading protocols designed to generate price competition on individual bonds. Our dealer clients have also increased their usage of matching sessions offered by competing platforms in recent periods. To the extent that our clients increase their use of portfolio trading and matching session protocols offered by other platforms, our market share in those products could decrease. Due to the large size of the trades and the concentration of activity at the end of the month, portfolio trading can drive significant swings in trading volumes and estimated market share. Furthermore, portfolio trading is generally provided under a lower-fee structure than other protocols and the growth of portfolio trading on our platform will likely have a negative impact on our average credit variable transaction fee per million.

Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant regulatory risk and cause additional legal costsus to ensureincur compliance.additional expense. The existing legal framework that governs the financial markets is periodically reviewed and amended, resulting in the enactment and enforcement of new laws and regulations that apply to our business. In January 2022, the SEC proposed rules that will expand Regulation ATS and Regulation SCI to alternative trading systems (ATS) that trade government securities and amend the SEC rule regarding the definition of an “exchange” to include Communication Protocol Systems, such as our request-for-quote protocols. Based on these proposed rules, we expect that we will have to operate additional trading protocols in compliance with Regulation ATS and we could become subject to Regulation SCI for certain parts of our business in the future. The SEC also recently adopted final rules regarding the central clearing of certain secondary market transactions involving U.S. Treasury securities, which are currently set to become effective for certain cash market transactions on December 31, 2025 and repurchase and reverse repurchase transactions on June 30, 2026. Once effective, this central clearing mandate will impact certain of our participants who do not centrally clear such trades today,today. These reforms may also change how our clients trade and somewhere ofthey ourclear investor clients have expressed concerns aboutwhen using platforms that will require the clearing of any resultant trades executed on suchour platforms. While we expect this change will increase our own platform efficiency, it could also negatively affect trading activity and liquidity in the markets in which we operate, and it is still unknown at this time the full impact of this change, and what effect it will have, whether positive or negative, on our industry, our clients or us. In addition, followingthe SEC withdrew multiple rule proposals in 2025, including those relating to the changeexpansion inof U.S.Regulation presidentialATS administrations,and itRegulation isSCI. It remains unknown to what extent new legislation will be passed into law or whether other pending or new regulatory proposals will be adopted, abandoned or modified, or what effect such passage, adoption, abandonment or modification will have, whether positive or negative, on our industry, our clients or us.

We provide regulated services to our clients within the E.U. in reliance upon the authorizations our subsidiaries have received from the AFM in the Netherlands. Brexit has led to an ongoing divergence between the U.K. and E.U. financial regulations, which has made it more difficult and costly to comply with the extensive government regulation to which we are subject. The cost and complexity of operating across increasingly divergent regulatory regimes hashave increased and isare likely to continue to increase in the future.

Compliance with new regulations may require us to dedicate additional financial and operational resources, which may adversely affect our profitability. For example, DORA,the E.U.’s Digital Operational Resilience Act (“DORA”), which focuses on the security of network and information systems of financial services entities, as well as third parties which provide certain information communication technology services (“ICTs”) to them, became applicable to portions of our business in January 2025. DORA has, among other things, introduced significant additional ICT-related governance, risk management, resilience testing and sub-contracting and notification requirements. However, we also believe new regulations may increase demand for our platforms and we believe we are well positioned to benefit from those regulatory changes that cause market participants to seek electronic trading platforms that meet the various regulatory requirements.

We must continue to enhance and improve our electronic trading platforms. The markets in which we compete are characterized by increasingly complex protocols, systems, technology and infrastructure requirements that require us to devote substantial resources to modify and adapt our services. Our future success will depend on our ability to enhance our existing products and services, develop and/or license new products and technologies that address the increasingly sophisticated and varied needs of our existing and prospective broker-dealer and institutional investor clients and respond to technological advances and emerging industry and regulatory standards and practices, including cloud and AI technologies, on a cost-effective and timely basis. For example, in 2023,2025, we introduced MarketAxess X-Pro,continued our newroll-out tradingof platform,Targeted RFQ, which provideshighlights tradersour withAI-driven dealer selection tool, a flexiblemachine userlearning experience,model intuitivethat workflowspredicts andwhich accesscounterparties are most likely to provide competitive pricing for high-touch workflows. We have also recently expanded our proprietaryglobal dataMid-X andoffering, pre-tradea analytics.sessions-based mid-point matching tool for broker-dealers, to emerging market bonds. In addition, as the overall share of electronic trading grows in global credit products, we are experiencing continued demand for, and growth in, our automated and algorithmic trading solutions. We also support a large and growing base of dealer market making algorithms. We plan to continue to focus on technology infrastructure and automation initiatives to support more efficient trade execution by our clients.

The majority of our revenue is derived from commissions for transactions executed on our platforms between and among our institutional investor and broker-dealer clients. We believe that the following are the key variables that impact the notional value of such transactions on our platforms, the amount of commissions earned by usplatforms and our variable transaction fees per millionrevenues:

the particular trading protocol that our participants use to trade bondssecurities on our platforms;

the duration of the U.S. high grade bonds trading on our platforms, which may be affected by inflation, among other macroeconomic factors; and the particular fee plan under which we earn commissions.

Commissions for high-yield bonds, emerging markets bonds, Eurobonds,eurobonds, municipal bonds and leveraged loans generally vary based on the type of the instrument traded using standard fee schedules. Our high-yield fee plan structure is similar to our U.S. high-grade fee plans. Certain dealers participate in a high-yield fee plan that incorporates a variable transaction fee and a fixed distribution fee, while other dealers participate in a plan that does not contain monthly distribution fees and instead incorporates additional per transaction execution fees and minimum monthly fee commitments.

Other Commissions. Other commissions include equities and foreign exchange commissions for Pragma’s algorithmic trading services.services and derivative and ETF commissions earned by RFQ-hub. Commissions for equitiesequities, foreign exchange, derivatives and foreign exchangeETFs are volume-tiered and consist of variable transaction fees that are billed monthly.

We generate proprietary data from the trading activity and order flow on our platforms. We have prioritized the use of this data to power our AI-driven trading solutions and analytical products. We believe this approach has positioned us to capture higher long-term value by leveraging our proprietary data to enhance our trading solutions and strengthen the integrated value proposition of our platform. We generate revenue from data licensed to our broker-dealer clients, institutional investor clients and data-only subscribers; professional and consulting services; technology software licenses; and maintenance and support services. These revenues are either for subscription-based services transferred over time, and may be net of volume-based discounts, or one-time services. Revenues for services transferred over time are recognized ratably over the contract period while revenues for services transferred at a point in time are recognized in the period the services are provided. Customers are generally billed monthly, quarterly, or annually; revenues billed in advance are deferred and recognized ratably over the contract period.

Technology services include technologytechnology-related serviceslicense revenueand generatedconnectivity by Pragmafees and revenue generated from telecommunications line charges to broker-dealer clients.

Depreciation and Amortization. We depreciate our computer hardware and related software, office hardware and furniture and fixtures and amortize our capitalized software development costs on a straight-line basis over three to five years. We amortize leasehold improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease. Intangible assets with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized over their estimated useful lives, which range from one to 15 years, using either a straight-line or accelerated amortization method based on the pattern of economic benefit that we expect to realize from such assets. Intangible assets are assessed for impairment annually, or sooner when events or circumstances indicate a possible impairment.

Interest Expense. Interest expense consists of financing charges incurred on short-term borrowings.

In 2022,2023, 20232024 and 2024,2025, the PSUs were granted to the executive officers and certain senior managers. Each PSU is earned or forfeited based on our level of achievement of certain predetermined metrics, including pre-tax adjusted operating margin, U.S. credit market share and revenue growth excluding U.S. credit. The vested share payout ranges from zero to 200%200.0% of the PSU target. The number of PSUs that vest, if any, is determined by the level of achievement of the performance metrics during the three-year performance periods, as certified by the Compensation and Talent Committee following the conclusion of the performance period. In addition, participants must provide continued service through the vesting date, subject to death, disability and qualified retirement exceptions, as applicable. Compensation expense for the PSUs is measured using the fair value of our stock at the grant date and estimates of future performance and actual share payouts. Each period, we make estimates of the current expected share payouts and adjust the life-to-date compensation expense recognized since the grant date. As of December 31, 2024,2025, a 10.0% change in the expected final share payouts would increase or decrease the life-to-datetotal compensationvalue expenseof the awards by $1.5$1.3 million. The estimated final share payouts for the 20222023 and 20232024 awards as of December 31, 20242025 decreased 26.6%27.6% compared to December 31, 2023.2024.

Credit variable transaction fees increased by $37.3$8.6 million, driven by a 13.5%10.0% increase in trading volume, partially offset by a 5.3%7.6% decrease in total credit average variable transaction fee per million. Open Trading credit volume totaled $1.0 trillion during the year ended December 31, 2024, up 8.7% from the year ended December 31, 2023, and Open Trading credit variable transaction fees represented 33.0% and 35.6% of total credit variable transaction fees for the years ended December 31, 2024 and 2023, respectively. Rates variable transaction fees increased by $4.4$3.0 million, driven principally by a 23.3%14.9% increase in trading volumes, partially offset by a 1.6%2.5% decrease in average variable transaction fee per million. Other variable transaction fees include equities and foreign exchange commissions and, beginning in May 2025, derivative and ETF commissions earned by Pragma.RFQ-hub.

The 17.4%4.4% increase in our U.S. high-grade volume was principally due to an increase in estimated market volumes, partially offset by a decrease in our estimated market share. Estimated U.S. high-grade market volume as reported by TRACE increased by 25.9%8.0% to $9.0$9.7 trillion for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 18.4% for the year ended December 31, 2025 from 19.0% for the year ended December 31, 2024 from 20.4% for the year ended December 31, 2023.2024. U.S. high-yield volume decreasedincreased by 15.9%12.5% primarily due to an increase in estimated market volumes, partially offset by a decrease in our estimated market share. Our estimated market share of total U.S. high-yield corporate bond volume decreased to 12.5% for the year ended December 31, 2025 from 13.2% for the year ended December 31, 2024 from 17.1% for the year ended December 31, 2023.2024.

Emerging markets and Eurobondeurobond volumes increased by 19.7%14.0% and 15.2%,19.2%, respectively, driven by an increase in block trading. Other credit volumes increased 13.2%, mainly due to an increase in estimated market volumes. Other credit volumes increased 20.9%, mainly due to an increase in our estimated municipal bond market share.volumes. Rates trading volume increased 23.3%,14.9%, primarily due to an increase in estimated market volumes.

Credit average variable transaction fee per million decreased by 5.3%7.6% to $150.26$138.87 per million for the year ended December 31, 2024,2025, mainly due to product and protocol mix-shift reflecting lower levels of U.S. high-yield activity and increased portfolio trading, which was partially offset by an increase in the duration of U.S. high-grade bonds traded on our platforms.trading.

Post-Trade Services. Post-trade services revenue increased by $2.3$2.0 million for the year ended December 31, 2024,2025, principally due to net new contract revenue of $1.6 million and the positive impact of foreign currency fluctuations of $0.7$1.4 million and net new contract revenue of $0.6 million.

Technology Services. Technology services revenue increased by $9.3$1.6 million for the year ended December 31, 20242025 due to thehigher inclusionlicense ofand aconnectivity full-year of technology services revenue generated by Pragma.fees.

Depreciation and amortization increased by $3.3$2.9 million primarily due to higher amortization of software development costs of $2.6 million and higher amortization of intangibles of $1.2 million,costs, offset by lower depreciation of officeproduction hardware of $0.8 million.software.

Technology and communications expenses increased by $9.4$6.1 million, primarily due to higher software subscriptionas a service costs of $3.1 million, higher integration and connectivity costs of $3.2 million, higher market data costs of $1.0 million, higher data center and cloud hosting costs of $1.2 million and higher U.S. Treasury platform licensing fees of $0.8 million.fees.

Professional and consulting fees decreasedincreased by $4.6$4.1 million primarily due to lowerhigher IT consulting costscosts, of $2.6 million, lower acquisition-related legal expenses of $1.4 million and lowerhigher other consulting expenses ofand $1.3higher million,non-IT consulting costs, partially offset by higherlower auditacquisition-related consulting and taxlegal costs of $0.9 million.costs.

Interest expenseincome decreased by $0.3$1.6 million primarily due to lower financinginterest charges incurred on our short-term borrowing arrangements.rates.

Equity in earnings of unconsolidated affiliate represents the proportionate share of net income of our equity method investee.investee through May 9, 2025, the date of the 2025 RFQ-hub Acquisition (as defined below).

Other, net decreasedincreased by $2.7$8.0 million principally driven by unrealizedforeign exchange gains in the current year compared to losses ofin $1.0the millionprior year and unrealized gains on our U.S. Treasury investments in the current period compared to unrealized gains of $0.5 millionlosses in the prior period and higher credit facility fees of $0.9 million.period.

In August 2023, we entered into a three-year revolving credit facility (the “2023 Credit Agreement,Agreement”), which provides aggregate commitments totaling $750.0 million, includingconsisting of a revolving credit facility, a $5.0 million letter of credit sub-limit for standby letters of credit and a $380.0 million sub-limit for swingline loans. The 2023 Credit Agreement was amended and restated on February 4, 2026 (the “2026 Amended Credit Agreement”). The 2026 Amended Credit Agreement will mature on AugustFebruary 9,2, 2026,2029, with our option to request up to two additional 364-day extensions at the discretion of each lender and subject to customary conditions. As of December 31, 2024,2025, we had $220.0 million of borrowings and $0.1 million in letters of credit outstandingoutstanding, and $749.9$529.9 million in available borrowing capacity under the 2023 Credit Agreement. Borrowings under the 2026 Amended Credit Agreement will bear interest at a rate per annum equal to an alternate base rate or the adjusted term Secured Overnight Financing Rate (“SOFR”) rate, plus an applicable margin that varies with our consolidated total leverage ratio. The 2026 Amended Credit Agreement requires that we satisfy certain covenants, including a requirement to not exceed a maximum consolidated total leverage ratio. We were in compliance with all applicable covenants at December 31, 2024.2025. See Note 13 to the Consolidated Financial Statements for a discussion of the 2023 Credit Agreement. See Note 20 to the Consolidated Financial Statements for a discussion of the 2026 Amended Credit Agreement.

In connection with their self-clearing operations, certain of our operating subsidiaries maintain agreements with a settlement bank to allow the subsidiaries to borrow an aggregate of up to $500.0 million on an uncommitted basis, collateralized by eligible securities pledged by the subsidiaries to the settlement bank, subject to certain haircuts. Borrowings under these agreements will bear interest at a base rate per annum equal to 1.00% plus the higher of (i) the upper range of the Federal Funds Rate, 0.25%(ii) one-month SOFR plus an applicable margin or one-month(iii) SOFR, plus 1.00%.0.25%. As of December 31, 2024,2025, the subsidiaries had no borrowings outstanding and up to $500.0 million in available uncommitted borrowing capacity under such agreements. See Note 13 to the Consolidated Financial Statements for a discussion of these agreements.

Cash flows from operating activities consist primarily of net income adjusted for non-cash items that primarily include depreciation and amortization, stock-based compensation expense, deferred tax expense and changes in receivables and payables on the consolidated statement of financial condition. The $51.5$3.1 million increasedecrease in net cash provided by operating activities was primarily due to higherlower net income and favorableunfavorable changes in accounts receivable, prepaid and other assets, trading investments, accrued employee compensation and accounts payable accrued expenses and other liabilities, offset by higher net receivables from broker-dealers, clearing organizations and customerscustomers, associatedand withaccrued ouremployee clearingcompensation, activities.partially offset by favorable changes in income and other tax liabilities, accounts receivable, trading investments and accounts payable, accrued expenses and other liabilities.

ThereExcept as discussed below, there have been no material changes in our risk factors from those disclosed in our most recent Form 10-K for the year ended December 31, 2025. For a discussion of the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our 2025 Form 10-K.

The global fixed-income securities industry is risky and volatile and is directly affected by a number of economic, political and market factors that may impact trading volume. These factors could have a material adverse or positive effect on our business, financial condition and results of operations. These factors include, among others, fixed-income market conditions, the current interest rate environment, including the volatility of interest rates and investors’ forecasts of future interest rates, the duration of U.S high grade bonds traded, economic and political conditions in the United States, Europe and elsewhere, including recent and potential future changes in tariffs, international trade agreements or trade policies, and the consolidation or contraction of our broker-dealer and institutional investor clients. In the first threesix months of 2026, the market backdrop for the Company reflected increases in estimated market volumes in most of the Company’s key markets compared to the prior year, due, in part, to increased levelsperiods of event-driven volatility.volatility and elevated primary issuance.

There has been increased demand for portfolio trading workflows over the last few years, which has resulted in heightened competition among trading platforms to enhance their portfolio trading offerings and expand them across different geographies and products. Certain clients have been increasingly using portfolio trading workflows in lieu of more established trading protocols designed to generate price competition on individual bonds. Our dealer clients have also increased their usage of matching sessions offered by competing platforms in recent periods. To the extent that our clients increase their use of portfolio trading and matching session protocols offered by other platforms, our market share could decrease. Due to the large size of the trades and the concentration of activity at the end of the month, portfolio trading can drive significant swings in trading volumes and estimated market share. Furthermore, portfolio trading is generally provided under a lower-fee structure than other protocolsprotocols, and the growth of portfolio trading on our platform will likely have a negative impact on our average credit variable transaction fee per million. In addition, block trading may generate lower fees per million than other activity, and could have a negative impact on our average credit variable transaction fee per million.

Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant regulatory risk and cause us to incur additional expense. The existing legal framework that governs the financial markets is periodically reviewed and amended, resulting in the enactment and enforcement of new laws and regulations that apply to our business. The SEC adopted final rules regarding the central clearing of certain secondary market transactions involving U.S. Treasury securities, which are currently set to become effective for certain cash market transactions on December 31, 2026. Once effective, this central clearing mandate will impact certain of our participants who do not centrally clear such trades today. These reforms may also change how our clients trade and where they clear when using our platforms to trade U.S. Treasury securities. While we expect this change will increase our own platform efficiency, it could also negatively affect trading activity and liquidity in the markets in which we operate and the full impact of this change is still unknown at this time. In AprilJuly 2026, FINRAthe filedSEC approved a proposed rule changesubmitted by FINRA that wouldwill require member firms to identify and flag certain affiliate back-to-back trade reports in TRACE (as defined below). IfFINRA adopted,has stated that it will not implement these requirements without providing firms with at least 12 months prior notice of the implementation date, but that it will permit firms to comply with these requirements on a voluntary basis prior to the mandatory implementation date. When fully implemented, the rule wouldwill suppress qualifying affiliate principal transactions from reported monthly TRACE volumes and could affect the Company’s estimated market share for U.S. high-grade, U.S. high-yield and U.S. Treasury products. The proposed rule change is subject to SEC review and public comment, and FINRA will announce the effective date if the rule is approved. It remains unknown to what extent new legislation will be passed into law or whether other pending or new regulatory proposals will be adopted, abandoned or modified, or what effect such passage, adoption, abandonment or modification will have, whether positive or negative, on our industry, our clients or us.

As further described under “— Critical Factors Affecting our Industry and our Company — Economic, Political and Market Factors,” and “— Results of Operations — Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025,” and “— Results of Operations — Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025,” our credit trading volumes increased and our average credit variable transaction fee per million decreased.decreased compared to the three and six months ended June 30, 2025.

In 2024, 2025 and 2026, the PSUs were granted to the executive officers and certain senior managers. Each PSU is earned or forfeited based on our level of achievement of certain predetermined metrics, including pre-tax adjusted operating margin, U.S. credit market share and revenue growth excluding U.S. credit. The vested share payout ranges from zero to 200% of the PSU target. The number of PSUs that vest, if any, is determined by the level of achievement of the performance metrics during the three-year performance periods, as certified by the Compensation and Talent Committee following the conclusion of the performance period. In addition, participants must provide continued service through the vesting date, subject to death, disability and qualified retirement exceptions, as applicable. Compensation expense for the PSUs is measured using the fair value of our stock at the grant date and estimates of future performance and actual share payouts. Each period, we make estimates of the current expected share payouts and adjust the life-to-date compensation expense recognized since the grant date. As of MarchJune 31,30, 2026, a 10.0% change in the expected final share payouts would increase or decrease the total value of the awards by $1.7 million. The estimated final share payouts for the 2024 and 2025 awards as of MarchJune 31,30, 2026 decreased 12.3%15.2% compared to December 31, 2025. See Note 9 for a discussion of the Company’s stock-based compensation expense.

Identifiable intangible assets are tested for impairment annually, or sooner when events or changes in circumstances suggest that an asset’s or asset group’s carrying value may not be fully recoverable. Judgment is required to evaluate whether indications of potential impairment have occurred, and to test identifiable intangible assets for impairment, if required. An impairment is recognized if the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value. During the threesix months ended MarchJune 31,30, 2026, there were no events or changes in circumstances that suggested our intangible assets’ carrying values exceeded their fair values, and as such, no impairment charges were recorded.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The following table summarizes our financial results for the three months ended MarchJune 31,30, 2026 and 2025:

Changes in average foreign currency exchange rates compared to the U.S. dollar had theno effectsignificant ofimpact increasingon revenues and expenses by $3.4 million and $2.2 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.

Our revenues for the three months ended MarchJune 31,30, 2026 and 2025, and the resulting dollar and percentage changes, were as follows:

Commissions. Our commission revenues for the three months ended MarchJune 31,30, 2026 and 2025, and the resulting dollar and percentage changes, were as follows:

Credit variable transaction fees increaseddecreased by $14.5$8.6 million, primarily driven by a 17.0% increase in trading volume, partially offset by a 5.0%6.5% decrease in total credit average variable transaction fee per million.million, partially offset by a 0.6% increase in trading volume. Rates variable transaction fees increasedremained byflat, $2.0 million,mainly driven by a 15.6% increase in trading volume and an 11.4%23.1% increase in total rates average variable transaction fee per million.million, offset by an 18.6% decrease in trading volume. Other variable transaction fees include equities and foreign exchange commissions and, beginning in May 2025, derivative and ETF commissions earned by RFQ-hub.

Our trading volumes for the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

The 10.9%4.2% increasedecrease in our U.S. high-grade volume was principally due to an increase in estimated market volumes partially offset by a decrease in our estimated market share. Estimated U.S. high-grade market volume as reported by the FINRA Trade Reporting and Compliance Engine (“TRACE”) increased by 17.1%13.2% to $3.0$2.8 trillion for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Our estimated market share of total U.S. high-grade corporate bond volume decreased to 17.1%17.5% including single-dealer portfolio trades (“SD PT”) for the three months ended MarchJune 31,30, 2026 from 18.0%19.8% for the three months ended MarchJune 31,30, 2025. Our U.S. high-yield volume increaseddecreased by 11.6%7.8% primarily due to ana increasedecrease in estimated market volumes andpartially offset by an increase in our estimated market share. Our estimated market share of total U.S. high-yield corporate bond volume increased to 12.2%14.1%, including SD PT, for the three months ended MarchJune 31,30, 2026 from 11.9%13.2% for the three months ended MarchJune 31,30, 2025. Market share estimates are presented including single-dealer portfolio trading activity to align with our monthly volume press releases. Excluding SD PT, our estimated market share of total U.S. high-grade corporate bond volume decreased to 16.4% for the three months ended June 30, 2026 from 19.4% three months ended June 30, 2025. Excluding SD PT, our estimated market share of total U.S. high-yield corporate bond volume decreased to 12.1% for the three months ended June 30, 2026 from 12.7% for the three months ended June 30, 2025.

Emerging markets and eurobond volumes increased by 29.8%12.0% and 20.4%,2.3%, respectively. Other credit volumes increased 10.2%,1.9%, mainly due to an increase in estimated municipal bond market volumes.share. Rates trading volume increaseddecreased 15.6%,18.6%, primarily due to ana increasedecrease in estimated market volumes.share.

Our average variable transaction fee per million for the three months ended MarchJune 31,30, 2026 and 2025 was as follows:

Credit average variable transaction fee per million decreased by 5.0%6.5% to $132$129 per million for the three months ended MarchJune 31,30, 2026, mainly due to protocol and product mix, partiallyas offsetwell byas higherlower duration of bonds traded in U.S. high grade.

Information Services. Information services revenue increased by $1.5$3.0 million for the three months ended MarchJune 31,30, 2026 primarily due to net new contract revenue and the positive impact of foreign currency fluctuations.revenue.

Post-Trade Services. Post-trade services revenue increased by $0.5 million for the three months ended MarchJune 31,30, 2026 mainly due to thenet positivenew impactcontract of foreign currency fluctuations.revenue.

Technology Services. Technology services revenue increased by $0.6$0.3 million for the three months ended MarchJune 31,30, 2026 duelargely todriven by higher license and connectivity fees.fees reflecting the inclusion of RFQ-hub.

The following table summarizes our expenses for the three months ended MarchJune 31,30, 2026 and 2025:

Employee compensation and benefits increaseddecreased by $8.3$3.1 millionmillion, primarily due to higherlower salaryseverance costs and benefitbonus cost and higher severance costs, including repositioning charges related to changes in the Company’s management structure.accruals.

Depreciation and amortization increased by $1.0$0.1 million, primarily due to higher amortization of internally-developed software development costs and higher amortization of intangibles.

Technology and communications expenses increased by $2.3$2.1 millionmillion, primarily due to higherinvestments in software and cloud hosting and software service costs.

ClearingProfessional costsand consulting fees increased by $0.2$0.8 millionmillion, primarily due to higher tradinglegal volumes.expenses, partially offset by cost-savings initiatives.

Our other income (expense) for the three months ended MarchJune 31,30, 2026 and 2025, and the resulting dollar and percentage changes, were as follows:

Interest income decreased by $2.9$1.2 million, mainly driven by lower interest rates on ouraverage cash balances.balances and lower yields due to central bank rate cuts.

Interest expense increased by $2.7$1.7 millionmillion, primarily due to borrowings on the Company’s credit facility that were used,facility, along with cash on hand, to fund the ASR.

Other, net increaseddecreased by $1.0$2.5 millionmillion, primarily driven by receiptforeign ofcurrency tax credits in the current period partially offset by unrealizedtransaction losses on investments in the current period compared to unrealizedforeign currency transaction gains in the prior period.

The provision for income taxes and effective tax rate for the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

Our consolidated effective tax rate can vary from period to period depending on the geographic mix of our earnings, provisions for unrecognized tax benefits, changes in tax legislation and tax rates and the amount and timing of excess tax benefits or detriments related to share-based payments, among other factors. The decrease in the effective tax rate for the three months ended MarchJune 31,30, 2026 is mainlyprimarily due to a benefit recognized from the reserveremeasurement of reserves for uncertain tax positions related to prior periods, compared with accruals for unrecognized tax benefits establishedrecognized induring the firstthree quartermonths ofended June 30, 2025.