Good afternoon, everyone. Thanks for staying with us here on day one of Morgan Stanley's Financials Conference. I'm Mike Cypress, equity analyst covering brokers, asset managers, and exchanges for Morgan Stanley Research. And I'm excited to welcome here for our next session, Chris Kincanian, the CEO of Market Access, and Eileen Fizzle-Buehler, the Chief Financial Officer of Market Access. As many of you know, Market Access is a leading electronic fixed income trading venue that started with a primary emphasis on credit markets and has since expanded into new geographies and asset classes. Chris, Eileen, thanks so much for joining us here today. Thanks for having us. I thought we could start with the current market backdrop. First quarter highlighted just how quickly fixed income markets can reprice around volatility, new issuance, spread movements. I guess what has surprised you most so far this year as you look at client behavior through some of the earlier volatility, and what did it reveal about how market structure just continues to evolve here?

Sure. And first of all, the first quarter was one of those quarters where everything worked. It was quite an interesting quarter, record volumes in spite of a changing dynamic throughout the first quarter. So how we started January was very different than what March ended up with the geopolitical crisis unfolding in the world. Some of the things that surprised us was, one, we've been investing heavily in portfolio trading and some of the portfolio trading tools in U.S. credit. That's despite the volatility. We saw portfolio trading on the platform and in the market still at a robust number. So we saw record portfolio trading across the platform globally, not just in U.S. credit but elsewhere. And then another area that has been a sizable investment for us has been automation. Clients want to automate their trading. This isn't a novel thing. This exists in every other asset class except for credit and fixed income generally. So we're seeing that unfold, and we see it unfold in a market where you had record volumes.

So the demand for that automation played a critical role in delivering those overall turnovers.

The last piece of the puzzle in the first quarter was record new issuance despite the volatility. So on the demand side, we saw clients coming in demanding that new issue. We saw a lot of those new issues were oversubscribed by several times. So, huge demand despite the geopolitical activity. What you learn when you look at just 2026, we are in record territory of new issue. And why is that the case? It's because there's so much demand to build data centers. All the hyperscalers are coming to market. All large firms are coming in, funding that AI build that we've all committed to. And we're still in the early innings of the AI build. if you add up all the commitments. So we're expecting a huge new issue in 2026 record level. So all of that played out despite a lot of volatility in the quarter.

Now, a few months ago, you laid out a three-year framework calling for 8% to 9% annual revenue growth and operating margin expansion along the way. As you sit here today, which components of the plan have given you the most confidence, and where do you think investors remain the most skeptical?

First of all, we're five months into a three-year plan, so we're still in early territory. And, you know, the first quarter was a record quarter in top-line growth, double-digit growth, so we're excited about that. If you break down our plan, what's exciting is 50% of our top-line revenue is growing double-digit and consistently growing, and we see that playing out into the second quarter as well. EM is our international business is a very big portion of that 50%, and we're still seeing it perform at higher levels. U.S. credit is where all the areas of investment is currently playing out. Things that we have delivered and we're seeing play out, portfolio trading, as I mentioned, We continue to see that grow. If you look at May activity, we saw portfolio trading pickup. That was an area of investment, sizable investment, last year, and that's been playing out. Quarter over quarter, we are growing our portfolio trading share of the full wallet of portfolio trading. Another area of investment that plays out in our three-year plan is block trading. If you look at the market today, just U.S. investment grade, 50% of the market not electronically traded is blocks. And so we're investing heavily to attack that block market. And so what we're seeing both in the first quarter and into May is block volume picking up on our platform. We've seen it in EM grow, and we've seen it in euro bonds, and now it's growing in U.S. credit as well. But that's the three-year plan. And do you want to add anything to the plan?

I would just say as a reminder to your point that 8% to 9% of revenue growth is average annual growth over time over the three-year time horizon. And then the margin expansion, you talked about the operating margin expansion, is also average annual growth over time over the three-year plan of 75 to 125 basis points. I think if you think about what Chris was just talking about, and particularly if you focus on the U.S. credit piece, which is a place where we've really been putting the investment dollars and where I'm sure you'll be hearing through our conversation today more of what we've been doing there. You may recall that we're saying that of our incremental growth in year one, we would expect about 20% of incremental growth. And again, nonlinear, but if I'm talking about U.S. credit, about 20% would come from U.S. credit. And then in year three, that growth would be about 35% for U.S. credit. So we would see that kind of a ramping of where we expect to see growth on the top line from U.S. credit, just to give a sense, a little bit of a sense of how we think about the plans over time.

So 35% of the growth.

Of the growth coming from U.S. credit. Exactly, in year three. Yes, exactly right, exactly right.

Very specific.

I mean, approximately. That's a very good point, approximately. Like, you know, that's the basic, if I'm going to give you a way to think about it. Think of that as a rubric.

Now, investors often focus on market share, but you've increasingly emphasized revenue growth and protocol adoption. As you think about the next several years, which initiatives do you believe will contribute most meaningfully to revenue growth and market share gains?

First, when we were building out the three-year plan, you'll notice that we only talked revenue. We didn't talk market share. Market share is an interesting dynamic, But for us as managers of the company, growing revenue is ultimately what investors want us to do. What's exciting about the revenue growth that we have planned for the next three years, it does come at a higher margin, meaning we plan to grow in areas where the variable costs are lower. So things like block trading, portfolio trading, EM trading, those are all exciting revenue opportunities for us. but they're delivered through the same plant that we have existing today. So that's why we felt comfortable about the margin expansion in the three-year plan as well. Areas in just, I'll focus on U.S. credit first and then move to international. In U.S. credit, again, large focus on growing our analytics and trading solutions in both automation, which we've invested heavily on and now it's more client adoption and then as I mentioned the blocked trading protocol which is early in the market but we plan significant enhancements to that blocked trading protocol come this summer and that was all part of the original three-year plan. We knew we had a big delivery this year of technology and front-end UI work and that's started in Europe and is now coming to the U.S. here this summer. On the international landscape, that's just an exciting area for us because much of that growth rate is coming from just electronic penetration. Penetration at the current client, so I think same-store sales, we're increasing the penetration of our current clients in EM, and then we're adding existing clients that really haven't fully electronified. and there it's firing on all our different protocols so traditional RFQ out to all to all it's a sizable portion of our EM business block trading we're seeing block trading be a key component of our growth in EM particularly in the local markets where you have very liquid products in local markets and then finally portfolio trading is adding a different capacity to our growth rate in EM. And then think geographic expansion. We just added India, which is one of the biggest markets in the EM market and forecast to grow for years to come. Obviously, they are going to be building data centers and need access to the bond market as well. So exciting growth across multi-dimensional parts of the international business.

And if you think about just to sort of put a bit of a point in some numbers around what Chris just said, even in just recently in May, if you look at our block trading in EM, those volumes were up about 35%. So those are the types of KPIs and indicators that we are constantly looking at and tracking to see the traction for the investments that we're putting in.

Okay. Automation continues to be a major focus across fixed income markets. Looking out, what percentage of fixed income trading do you think could ultimately be automatable? And where do you think the next leg of adoption comes from?

Great question, because when we look at the other asset classes, some of which you cover, think equities, futures, and things like FX. When we look at our buy side clients' trading desk, and we know them intimately, they have automated really most of their trading activity in those asset classes. And then you turn to fixed income and you see traders, a lot more numbers of them, clicking on a screen or chatting on a Bloomberg chat. Now, that will eventually change. And when you talk to the heads of these desks, they want their fixed income desks to look like their equities and FX desks. That's the corollary. So we think there's a huge growth area in automation. And we're starting to see that demand for automation. One of our goals of our automation is to not only automate currently electronic flow, so think small RFQ and IG and high yield, but also to automate those larger block sizes. And that's a trend that we're seeing among our biggest clients. They have come in, particularly in 2026, and started adding much larger size into our automation suite of products. They're seeing the outcome, the execution quality coming back. The other nice dynamic that we're seeing is dealers in the market have increased their size of their algo pricing tools. So they are quoting much larger size in a fully automated way, which is allowing clients to add to their size in automation. So it's playing out on both sides of the trading activity. Both dealer and client are increasing their size that they're willing to put into the machine and hit that. And that's exciting because that's the use case that they have everywhere else in asset classes other than fixed income.

Let's talk about AI, which you've described, which you've increasingly talked about, not simply as a productivity tool at Market Access, but as a way to unlock more value from proprietary data that's generated across the entirety of your network. So what do you think AI creates the greatest competitive advantage from here as you look out?

Well, certainly as a global platform with a small 900-person company, AI is very compelling for our productivity expansion. So when it comes to development, when it comes to testing for development, AI is already proving to be very helpful to our whole product lifecycle. From creating the idea from the client engagement to delivering the product, we see it accelerating just our basic product delivery, and we're seeing some benefits of AI in our current delivery schedule. We have a new issue platform coming. We have a portfolio trading enhancement coming this summer, and then we have a large delivery, as I mentioned, on our full UI suite come August. So AI has helped us along that path. So from productivity standpoint, we benefit immensely because, as you can see in this market, first mover is a true advantage when you're on the desktop of the largest buy-site clients. The other areas that we're seeing AI play out is really in the data and analytics space. If you think about the bond market, our clients are consistently trying to invest in a theme or a target, not a specific bond. And so many times we can actually help them choose that bond that successfully fills their goal of investment in the bond market with products that are more liquid, easier to trade. And AI is proving to be super helpful in that area, where AI can tell us, you know, if you ask AI to solve an investment exposure as opposed to pick a bond, AI can come back and look at the market and produce a better portfolio for our clients. So we're very excited about what we're seeing AI do when it comes to data and analytics on our platform. Remember, all of our data is proprietary to market access. And so when someone launches an RFQ in Asia, we know about it and we can consume it in our AI products instantaneously. The other exciting area, if you think about all the protocols we just talked about, automation, portfolio trading, block trading, and traditional all-to-all RFQ, our clients are becoming confused around when to use those protocols. At what time do I trade a portfolio trade, or do I go direct to a dealer, or do I launch a long list of RFQ? AI is very helpful in making recommendations around how should I trade these bonds? How should I implement my portfolio? So we can help you select your portfolio, and now we can help you execute that portfolio. The other piece where we're seeing AI being helpful is who should I trade with? on this given day and at this given hour because all dealers provide different levels of liquidity depending on client flows that they have depending on expertise that they might have in a sector or balance sheet willingness and so ai will uncover who is the best counterparty as well as so we're solving for what should i trade how should i trade it and who should i trade with. And that's super exciting. Beyond that, we've already invested heavily in AI to produce, well, what price should I trade? So our CP plus derived data has become a benchmark in U.S. credit. It's now really the only real-time pricing in EM because there's really no relevant pricing in that market. And it's also deployed in munis as well, which desperately needs better pricing. And so we're excited that AI is already delivering a real-time price that solves at what price should I trade.

So a number of different applications, use cases. If we're sitting here three years from now, where do you think AI's impact is going to be most visible when we look at market accesses platform?

I'll just personalize AI about market access. I think market access will have better tech, faster delivery. I think we'll be in a world where our cadence of delivery is nightly, with big releases happening on the weekend. That's an optimal place for us. From a market structure perspective, I think the biggest impact of AI will be how well the automation suite of products work. We currently today run algos that are based on machine learning. They will be deployed with AI tooling. And so the AI bots that are running trading algorithms will be outperforming most humans and most human traders. But for very complicated trades where you need capital commitment and really sophisticated trading skills, AI will be doing the largest share of trading. We have AI driving cars in the U.S. We can have AI driving bond execution in the U.S.

And what does that path look like if it's driven off of machine learning today? You know, what's that path to generative and agentic?

It's seamless, actually. It's quite iterative to the next level of algos that we're providing. And we're already exploring algos that will be listening to AI data. That's very powerful. The data of an algorithm is more important sometimes than the trade decision. So collecting that data about what's happening in the market, what direction is the market trading a specific sector, that can be very helpful in how to trade that sector.

Great. You mentioned data. Maybe we can just spend a moment there. I think historically you've only monetized data or a fraction of the data that's generated on the platform, but AI can expand the use cases of your proprietary data sets. I guess, how do you think about balancing direct data monetization versus using it to drive higher trading volumes and better execution outcomes?

This is always a strategic question for us and one that has been quite challenged because in the traditional exchange world that I grew up in, data revenue is a much bigger percentage of the overall pie. and selling data, every ounce of data that you have is an important component of growing that revenue. When I look at market access, we are not just a market, but an execution solution to the buy side. And many times that data, because it's very proprietary to market access, can help power the next execution and generate more revenue on the follow-on execution than selling it raw. Now what we've done is a balancing act. What we've done is we've crafted data products that are broad in use cases and not specific. They're all aggregated data products. CP plus, things like a tradability that predicts the level of liquidity. These are all unique products but aggregated that are free to sell to the broader populations. The proprietary data that we see in our platform is the data that we want to keep and curate and use AI to make trade decisions or enhance the trade decisions that traders are making. And that's an area that we're constantly balancing. Many times what we find is traders like data, we produce it for them, and then we go ahead and aggregate it and productionize it for the public sale. And so there's going to be a constant stream of new products coming to market that we can sell for hard dollars, that data revenue bucket, but will likely feed our execution solutions for years to come.

Great. I want to shift and talk about some of the different protocols, maybe starting off with portfolio trading where adoption appears to have matured relative to at least a couple of years ago, at least in that rate of change. So I guess, how do you think about the next phase of growth from here for PT and what opportunities remain to improve workflow, market share, and broader adoption?

So the portfolio trading tool, obviously it's been in our market now for at least six years, depending on how you count the start. We've made sizable investments in portfolio trading, and the gains are proving out. We see those we've executed, made investments even last year, and continue to invest into the fourth quarter, and we're starting to see that growth rate continue even here into May where our portfolio market share went up again. I do think I view it as an investment grade, quite a mature product because we have a number of years of portfolio trading. It has kind of stabilized. It's kind of in that zone of 10% to 14% in investment grade as a percent of the overall market. And we see clients being regular users of portfolio trading. It used to be some clients were new to portfolio trading. That's rare now. So I would say it's in a mature state of the market. In high yield is an exciting area for us because we are, we think, one of the leading providers of portfolio trading in the high yield market. That's a newer area that was forever down in that 7% of the total market has grown to 14% of the market and has really stopped at that 14%. We even saw that in May. We saw, you know, somewhere in that double-digit percent of market. And we continue to deliver high-yield as a much harder product to trade, even in a portfolio. So really, data and analytics is what is powering our portfolio trading tools. We have a big enhancement coming at the end of this week and this weekend that should provide further enhancements to our investment-grade portfolio trading tool that we're excited about. So we expect to see even additional growth in our market share of the PT market. The biggest challenge for our clients right now is when to do a portfolio trade. There's times in the market where it's very helpful and you get high-quality execution, and there's times where that can be degraded in the market. We also look at what is the optimal sizing of a portfolio. Somewhere over $500 million, you start to degrade on your execution quality. And then the other component to the portfolio trade is what's the right sizing of the individual line items. Sometimes it's more favorable to put in 1,000 line items at smaller size, than 500 line items at larger size. And we can help you size your portfolio prior to going to market. And I think ultimately the data and analytics is going to win the portfolio trading tool and the client's demand for that tool.

And then I would just, again, just add that to Chris's point on share and sort of how we're seeing this evolve for us, most recently you saw our share in May at 22%, and that was up significantly the year before was 16.8%, right? So those are the types, again, of metrics that we're looking at to say, okay, this is where we're putting our energy, our efforts, our investment dollars. Are we seeing a change in volume? Are we seeing additional share accretion? And those are places where we certainly have.

And one area that we've seen growth in portfolio trading, because it's obviously a developing asset, is emerging markets. We're the leading provider of portfolio trading in the emerging markets, and we continue to see new client adoption of portfolio trading. I think the next level of enhancement is really being able to put together a global portfolio trade, so cross USIG, high yield, NEM. That's kind of a demand that we're starting to hear about. We have that capability on our platform. we likely would expect to see other asset classes added to those global portfolio trades. Great.

Historically, periods of heavy issuance have not always translated into higher market share for you guys, which raises some excitement around the direct books partnership and the potential there. So can you talk about this new issue workflow solution and how that may potentially change the dynamics as you think about periods of elevated new issuance for you?

So, look, we love new issuance. While it dampens our market share in that given month, we don't live month by month. Unfortunately, a lot of people tend to track us month by month. But what an issue adds is secondary market trading in the months to come. And so new issuance means good, vibrant market for us and typically higher levels of turnover. because our market share has been challenged around those new issuance times, particularly in the first five days, we have spent a lot of time on how can we start to attack that new issue market and be more of kind of an ecosystem within the new issue process. That's where the direct books relationship came in. We've been working with direct books for over a year. They are owned by all the major banks. So part of that relationship is making sure you have a good relationship with the major banks as well. What's exciting about the direct books opportunity for us, and that is launching this week. It's in pilot with one client. We'll roll it out one client at a time. But what's exciting about that offering is we are redistributing the direct books new issuance process. So we are stepping into that syndicate distribution, not the syndicate process. That stays with the syndicate and with direct books. But we will be publishing, in fact, we are publishing today, any new issuance in the market. It's being broadcast out to the clients that are approved to see that new issue. Remember, our distribution, particularly in U.S. credit, is everyone you need for a new issue. So we have wide distribution to all the right investors, so we have access to them on the platform. You can then participate in that new issue over the platform, send in and submit your indications of interest, and get your allocations from the syndicate process. All exciting stuff for our clients because that's not how most clients trade new issue. It's much more manual on the client side. What we're adding to that benefit is we're getting the distribution of the data earlier in the process on market access. So that reference data that comes from the new issue prior to pricing allows us to carry that reference, some of that reference data on our platform. So we get early information for secondary trading as that new issue goes live and goes into pricing. In August, there's obviously a big enhancement coming in August. One of those enhancements is we'll be able to book the trade for the client. So think when you get your allocation today, you're manually key punching in that allocation. Many of our investors do that. This allows us to actually seamlessly book it into your OMS and your back office processing. We also have the benefit of net hedging on our platform. So if it's an IG new issue, we can help you with hedging and net hedging. And then finally, what most clients really want is secondary trading of new issue. Obviously, with new issue generally oversubscribes, you don't get your full allocation. So clients want to still trade that unallocated portion in the secondary market. So in August, we're rolling out streaming price for those new issues. so you can trade at the break that new issue in a streaming block form. Most dealers, both in the syndicate and outside the syndicate, are willing to price new issue in larger size because it's very liquid on those early days of new issue. So what's exciting, we'll be able to participate in block size solutions with dealers streaming a price and us offering a click-to-trade on that price as well.

And that would be available across the entirety of the platform? while the new issue direct books partnership is more of a rollout?

So the new issue, a direct books partnership will be a client-by-client rollout. Each client will need to be approved not only for the rollout, but also for the syndicate, obviously, so they can participate in the new issue. And then we can control what client sees what new issue on our platform generally. Once those clients are rolled out over the course of the summer, they will also be added to secondary trading access. Everyone on the platform post-August, and we'll be rolling out our new platform in August, will get secondary trading live on the platform. So they'll get the benefit of the data in August. So any protocol that a client is using today will have that new issue data in it earlier than we get today. And then obviously the streaming price will be available to any of our clients that are using that streaming price block trading solution.

Great. Why don't we shift and talk about block trading more broadly than just the new issue, block. So you've highlighted block as one of the largest remaining opportunities for electronic trading. What have you learned so far about client adoption? Where are we in the broader electronification journey? And talk about some of the steps you're taking to drive greater adoption of block trading.

So block trading, the good news is we're seeing block trading adoption play out, and we're still in the early innings of getting the right product in front of all of the traders on our platform. We rolled out block trading in both EM and Eurobonds, and we're seeing higher levels of growth rates in those products when we rolled out those early. We're seeing early adopters in those two products. We're also now seeing it in U.S. high grade. We committed that we were building a block tool, and we're starting to see clients adopt that block trading. One interesting, and this was part of our investment thesis in blocks, we're seeing clients add blocks to the platform and choose to go out to all, not just go direct to a dealer with a block. So the one thing that was keeping clients from coming onto the platform was, hey, I don't want information leakage around my block, so I'll choose to trade it over chat where it's private. And then when they come to the platform, they see the liquidity in that specific QSIP, and we see them using our all-to-all tool for blocks as well. And we're seeing now clients doing both. They have access to direct-to-dealer to protect that information or go out to all. Another area that we're seeing some excitement around blocks, and I mentioned it earlier, is in our automation suite, we are seeing clients add block size. We're seeing some of the largest clients who get what I'll call choice pricing in the credit space get success with adding blocks to full automation. So that's something that we didn't see just two years ago, and we're seeing more and more clients increase their size that they're willing to automate on the platform. Sometimes they will select a smaller dealer group to protect that information leakage. Other times they'll go out to all if the bond is a liquid bond.

So we're just about out of time. So final question, if we fast forward five years from now, what do you think is going to surprise investors most about market access, whether it's the product mix, the geographic mix, the role of AI, automation, or something else entirely?

I think both our clients and our investors are going to be surprised at the level of automation in the credit market globally, across EM, U.S. credit, Euro bonds, and into rates as well. I think while we say rates, Treasuries is 50%, 60% electronic and higher levels, depending on how you count, I think the role of AI across Treasuries and U.S. credit is going to be dramatic, where our traders will be using algorithms to trade the full panoply of product. They will be using larger size trades, just sliced into smaller segments. The most material impact that I see from our clients' trading behavior today, in a traditional RFQ, you're crossing the spread. In chat, when you're requesting price from a dealer, you're crossing spread. 95% of the executions I see in the institutional market are spread crossing executions. If you compare that to how other assets trade, they are in more like 50% is spread crossing. The other 50% clients using algorithms to avoid spread crossing. So one of the benefits that I see coming to our market is that clients will, for the first time not be crossing the spread. They'll have better selection of bonds so they can have a higher instance of not crossing spread and meeting another investor. I think you'll see a higher instance of midpoint trades because of the benefit of AI and how algorithms will work. Great. Well, we're out of time. Chris, Eileen, thank you so much for joining us here today.