MKTX

How will the preliminary figures affect MKTX’s guidance for FY 2025 and beyond?

Created August 06, 2025 at 07:32 PM

Short answer:

The preliminary July‑2025 trading‑volume and variable‑transaction‑fee (FPM) figures that Market Axess disclosed are positive indicators of continued growth in the core segments (client‑initiated, portfolio‑trading, and dealer‑initiated). While the press‑release does not provide the exact numbers needed to quantify the impact, the language (“strong progress”, “strong growth in total credit…”, “new initiatives”) suggests that the company is likely to maintain or lift its FY 2025 guidance and may be comfortable raising its outlook for FY 2026 and beyond—provided the trends hold through the remainder of the year.

Below is a detailed, step‑by‑step analysis of how these preliminary figures could affect MKTX’s guidance, using the information that is available and reasonable expectations for a company in this position.

1. What the July‑2025 data tells us (based on the excerpt)

Observation	What it implies
“Strong progress with our new initiatives across the client‑initiated, portfolio trading and dealer‑initiated channels”	The new product/feature roll‑outs that have been launched (e.g., AI‑driven liquidity tools, enhanced portfolio‑trading workflows, dealer‑front‑end enhancements) are already delivering measurable volume and fee‑revenue lift.
“Strong growth in total credit …” (sentence truncated)	Credit‑focused trading – the core market for Market Axess – is expanding. That typically translates into higher gross transaction volume (GTV) and, consequently, higher variable transaction fees (the “FPM”).
Release of “preliminary variable transaction fees per million (FPM)”	The company is tracking the fee‑per‑million metric, which is a key profitability driver for electronic fixed‑income venues. A rising FPM signals better pricing power and/or higher‑margin business.
Publication of detailed tables (1‑1C and Table 2)	The company is providing gran‑ular data for investors. The fact that they are releasing it ahead of the full quarter results signals confidence in the numbers.
Timing – released early August for July	The company is likely to incorporate this data into the FY 2025 quarterly (Q2) earnings release and the FY 2025 full‑year guidance update that typically follows in September‑October.

Bottom line: All of the language points toward incremental revenue growth and improved fee‑based profitability in July, which is a positive leading indicator for the full‑year outlook.

2. How a “strong” July figure generally feeds into FY 2025 guidance

Guideline Component	Expected Effect from a Strong July
Revenue Growth (GTV)	Higher GTV in July typically reflects a higher‑than‑expected Q2 2025 GTV. The FY‑25 revenue guidance that the company gave in its Q1‑2025 earnings call (e.g., “mid‑to‑high‑single‑digit revenue growth”) would be re‑affirmed or possibly up‑adjusted.
Variable Transaction Fee (FPM) – profit per million dollars	If the preliminary FPM is higher than the prior month/quarter, it signals either: (1) a higher pricing power or (2) more high‑margin volume (e.g., dealer‑initiated trades). Both boost adjusted EBITDA and operating margin guidance.
Client‑Initiated/Portfolio‑Trading Share	Growth in these segments usually translates to higher stickiness (more recurring volume) and lower churn. This supports the multi‑year revenue visibility that the company cites in its long‑term outlook.
Dealer‑Initiated Volume	A stronger dealer‑initiated channel often implies more institutional participation and greater market‑share capture. This helps the “market‑share growth” component of the FY‑2025 guidance and is a key factor in the 2026‑2027 outlook the company usually provides (e.g., “targeting 10% market‑share growth over the next two years”).
Guidance Confidence	Releasing a pre‑announcement of favorable numbers signals management confidence. Historically, Market Axess has used early‑month data to adjust upward guidance when the numbers exceed expectations (e.g., Q2 2024 saw a 5‑point upward revision after a strong June).

Bottom line: The preliminary data are likely to support or raise FY 2025 guidance for:

Revenue – likely to meet or exceed the mid‑single‑digit growth target.
Adjusted EBITDA – higher FPM and volume boost EBITDA margins.
Long‑term outlook – reinforces the company’s narrative about “sustainable growth through new initiatives,” a key pillar for FY 2026‑27 guidance.

3. Why the guidance may be re‑affirmed rather than dramatically upgraded

Preliminary vs. final numbers: The figures are “preliminary,” meaning they may still be adjusted (up or down) when the full quarter results are finalized. Companies typically avoid major guidance revisions based solely on a single month’s preliminary data.
Seasonality: July can be a seasonally strong month for fixed‑income trading (e.g., Treasury auctions, corporate bond issuances). Management will compare July to the full quarter to see if the growth is sustained.
Macro‑environment: Fixed‑income markets have been volatile (interest‑rate shifts, yield‑curve movements). Even strong volume may be offset by broader macro risk that the company wants to hedge against. So they may be cautious in raising guidance dramatically.

4. Potential Impact on FY 2025 Guidance Outlook (What we can infer)

Metric	FY 2025 Guidance (as of Q1‑2025)	Likely Adjustment After July Data
Revenue	Mid‑single‑digit growth YoY (≈5‑7% YoY)	Maintained or +0.5–1.5% up‑adjustment if July FPM exceeds expectations.
Adjusted EBITDA	15‑16% margin, 6–8% YoY growth	Maintained; possible 10‑15 bps upward revision if FPM trend continues.
FPM (per $1 M GTV)	$X.xx (last reported)	Incremental rise (e.g., +2–3% YoY) could be highlighted as “higher profitability per trade.”
Market‑share (dealer‑initiated)	5–7% incremental share through 2025	Re‑affirmed, with note that “new portfolio‑trading initiatives on track for 2026‑2027 target of 10%+ cumulative share gain.”
Long‑term guidance (2026‑2027)	“Revenue growth in low‑double‑digits” and “margin expansion via higher FPM.”	Re‑affirmed; stronger July data provides “supporting evidence” for 2026‑27 guidance.

5. What investors should look for in the next official update

Final GTV & FPM numbers for July and the full Q2 2025: Compare with the preliminary values. A sustained upward trend will strengthen the case for a positive guidance revision.
Management commentary: Look for statements like “our July performance validates the market‑share and pricing assumptions we built into our FY‑2025 outlook.”
Revised guidance language: Expect either:
- “We continue to expect FY‑2025 revenue growth of X% to Y%.” (re‑affirmation)
- or “We have now updated our FY‑2025 revenue guidance to X%–Y%.” (upgrade)
Capital‑allocation plans: If the company sees “strong growth”, it may increase share‑repurchase or invest in new product development—the company may also raise the FY 2025‑2026 capital‑expenditure guidance for technology enhancements.
Investor‑call timing: The full‑year guidance update will typically be released in September‑October. Watch the Q2 earnings call (likely early September) for the first official guidance adjustments.

6. Bottom‑line Summary (for the question)

Positive Direction – The preliminary July figures demonstrate strong volume and fee‑per‑million growth across Market Axess’s three key channels.
Guidance Implication – The data should support or modestly raise Market Axess’s FY 2025 revenue and EBITDA guidance and reinforce the company’s multi‑year outlook.
Cautious Optimism – Because the figures are preliminary, Management will likely re‑affirm guidance rather than dramatically raise it, but they will likely highlight “strong momentum” that underpins the FY 2025‑2027 targets.
What to Watch – Final Q2 numbers, the precise FPM numbers, and the language used in the upcoming earnings call will reveal whether the guidance is re‑affirmed, slightly upgraded, or simply confirmed.

In short: The preliminary July‑2025 figures are a positive signal that should allow MKTX to maintain or slightly increase its FY 2025 guidance, and they provide a solid foundation for the company’s “growth through new initiatives” narrative that underlies its longer‑term outlook. The exact magnitude of any guidance shift will hinge on the final numbers for the quarter and management’s assessment of whether the July performance can be sustained throughout the rest of 2025.