CBOE - Earnings call transcript Q2 2024 (2024)

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Thank you for standing by. My name is Jay, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cboe Global Markets Second Quarter Earnings Call. [Operator Instructions]I would now like to turn the conference over to Ken Hill, Treasurer and Head of Investor Relations.

You may begin.

you call. us thank quarter our and conference earnings morning, for for joining second Good

call XXXX Fred performance results our the strategic Officer, Global well and On who today, as an for initiatives; President, financial Howson, and provide discuss an our as will the our then Dave will Jill quarter discuss Chief on provide financial our update for outlook. Griebenow, quarter Tomczyk, the our our our Financial CEO; of overview

call the Q&A open Q&A. will Also Isaacson, for we comments, their us to will our joining Following Chief Chris be Operating Officer.

point that of to like would the include presentation use I out this will slides.

We the of will on of slide commentary presentation providing is our website. the the be portion slides available and Relations copy each. A downloadable on showing Investor

some forward-looking we believe statements, guarantees are is judgment results what hold. remarks, our current future make outcomes from Actual these what we of may And in expressed risks performance while involve our and differ implied reasonable, represent statements statements. will on materially are or forward-looking certain which the assumptions, may and any and not uncertainties. future judgments forward-looking these During

Please SEC full of any whether or after as for factors new future with filings of discussion information, to affect refer this undertake events forward-looking otherwise that any a may no We forward-looking statements, our these statements. conference obligation to update the publicly a call. result

referring will non-GAAP earnings and we During as be in to material. the morning, this call our reconciled measures defined

I'd to Fred. to call the over Now like turn

results pleased second joining thanks report and I'm for on Global quarter for morning, Cboe Good Markets. to today. strong us

and our a robust Solutions by adjusted volumes our earnings our continued grew $X.XX. results XX% franchise, and we per our Access from of net share driven to record of million volumes with $XXX our index and Markets, ecosystem expense solid proprietary Data products, a quarter, diluted management. contribution expansion disciplined Spot part Cash were the specifically of business to These each across and by in a option revenue improved XX% During derivatives year-over-year futures

category Our regions a contribution of compared year-over-year Spot the in solid each second second global to our growth increasing Markets The Cash well the was and as XXXX. performed quarter broad-based of XX% posting revenue with with on basis. very quarter

delivered contract of We Our million Derivatives S&P with business revenue quarter our contracts. ADV organic another across quarter increasing as solid option to year-over-year suite Index XX% solid X% X net the XXX second SPX increased and volumes saw year-over-year. products

ADV XX% during VIX strong We quarter also futures. as suite X% our second product saw increased options in year-over-year Volatility the growth and in in VIX

investors place, in the strategies. are and to Given their well we options in positioned secular cyclical portfolios and as continue believe tailwinds trading we utilize

and revenue the X% Access quarter approximately running Solutions for with through at X% durable Data and business year-over-year to Our increasing organic net deliver first continued results the second X months.

on our this for growth. optimistic further we outlook and business as are our We drive to global to network ecosystem look leverage

us grow XXXX. of and another a seen the both half of results XX%. strong adjusted it which year, diluted We per up in look Overall, the second earnings non-transaction building first by strong forward on transaction revenues, quarter half share was solid to for these has wrapping

investments areas strategy market have on to dialing including spot Throughout the to returning where align down activities winding initiatives shareholders. our away our strategic made Cboe. review focus core a remain to sharpening strategy, refocusing perspective, growth asset our for increase back with our stabilizing lowering M&A capital and and our our digital most derivates, changing opportunities we growth, activities, M&A including organic allocation resources our on and to expense adjustments strategic on digital valuable of margins strengths, I a From in our from capital see number centered in growth we strategic reallocating the process,

The core position shareholders returning strategy our platform resources leverage share the longer reallocate of and strategic capital term, how determine continued for internally, to through to our us and to the our provided dividends repurchases. company over best technology hone our a and framework strengths, and global growth review the including has with combination investing in our

of more To potential. that end, as unlock helps and global both to refocusing our an growth import us view company the our business enable even export of

our geographies Over blueprint and customers and been and out to model trading export reach very to for across the experiences customers. proven exported exchange in focused U.S. success the technology into market expanding the business, few on the years, of globe. data to create We've deploying our we new have better U.S. last type for our our Europe, build markets Derivatives also leveraging new new

enter market, client U.S. huge these appetite in traveling and our invest analysis we confirms found our to a to we there trend. last my this talking markets over our the global base opportunities customers, and listen import to From learned X months, grow As I've is to our and business. the

While want and also to in the to access in they markets, gain eager market. local investment are invest our to customers opportunities trade their the U.S.

of opportunity by Cboe They and XX% to market markets that our marketplace their and that in is world. the of our Representing cap, far in largest and about markets nearly fastest-growing has they trillion see the equity are the about the global continue are technology, U.S. in $XXX the one optimistic the local the equity U.S. brought the they market. investments to excited innovation investment

the expected will expect to investor retail changes create opportunities nearly implement year, an that are $XX endure last this and Forward legislative XX.X% reached the Cboe. as holdings approximately at for U.S. continues different growing markets the globally And CAGR of over of trillion equities trend growth last decade. we

back than Index S&P is complex, opportunity. cap investment foreign benchmark globally. ability management country's estimated the the the our import risk to an XXX individual a benchmark U.S. and with into SPX index The global any market dominant Through the is growing more trillion significant equity to it, and of facilitate $XX market options

opportunity efficient to way we Asia specifically, options where gain the serve see index exposure region Pacific to continue growing accessible significant in We U.S. for and market. the demand see as our products which to an

half of this markets. Futu Cboe long-term U.S. access SPX various Webull first access to to expanding our trend, eager added Hong to suite. and We secular platforms, Kong; options, brokers, products Futures further product Samsung the this and a to including year, global their three help facilitate are In we as the see Thailand;

trading International the markets and helps liquidity diversity the trusted participants also education, to highly trading worldwide. investors local a opinion valuable and Whether we'll global goal continue while the new products of as access regions ecosystem. to U.S. U.S. are or market efficiency through in help of it hours, to be providing lead better to markets

including We for manage generate reshaping retail and the of believe take rise participants risk the of the excellent at the data Cboe. speculative income capital revolution options globalization technology trading are the secular markets, markets, the positions and efficiently, market increased and to use investor, trends that opportunities by of create

to the and should a examine strategy review opportunities reach over The journey our in strategic against growth and an to strategic to event, you see position strengths be opportunities creation value enabled and has and and long-term continue those viewed refine we The time. process us as resources see review market. us leverage will not redeploy our

our Finally, approach disciplined combined of we to our capital. due to remain strong our the well positioned balance with allocation sheet

including technology a on focuses operations, allocation capital capital that to our investments in core to prudent strategic growth expense balanced mix approach reinvestment drive and of our shareholders. platform, sustainable Our returning management,

repurchase sheet our optimized continue flexible During growth share in and be and and balance shares organic the the efforts. technology Overall, maintaining repurchased operating to investing and growth, committed earnings margins while thereby we'll for XX we opportunistic growth to a second firm. our quarter, revenue capabilities, with million initiatives, we remain durable of efficiencies driving strong

call in I'll detail. the over Dave now to business discuss line pass the more to results

ADV of Thanks, was November a Not Derivatives Fred. on X.X high halves. spiked precipitously a back our QX the increase hitting of XX demand with tensions index up. April contracts, XXXX. least Index as with East June in auction surprisingly, as monthly in volumes month geopolitical driven April, SPX by in hedging in June, ranking tale particularly the were rising of notable highest in before and global picked VIX of the the volumes category, volatile year-to-date put of strong its falling Volatility with two Starting recording May with million Middle a since

While in year-over-year ADV X% June, quarter normalized SPX to X second activity and a May up overall was solid contracts. million still

QX even previous Zero quarter of XX% COVID-driven the made options quarter. VIX in unchanged SPX quarter XX% in on an spike. surged other on ahead contracts, and up third first over making behind the higher it from volumes, hand, XXX,XXX XXXX option of the ADV quarter-over-quarter the activity DTE to of QX, QX, largest record overall up XXXX's

on potential it Investors or surprises, all-time flocked last to hedge be geopolitical to high. have year-to-date year's options whether help VIX against ADV exceed risk, track shocks even to macroeconomic tail with

On October planned to this subject access we're launch options interest the regulatory expand Cboe's trading, our utility options back the of in VIX excited with and of to product on VIX VIX futures, suite unprecedented of review.

CFE. trade options of our settle exchange, that VIX be This the allows physically is for will us and first, provide it month they futures to future, important to us and reasons: These on not set two VIX will U.S. market options may access products into front that a participants our it to in tenants allows options wider and customer meet offer to more to demand. securities the of second, exchange; abroad to and access have underlying

for our manage of this particularly historically been risk catalyst volatility election, to demand to which markets strong. toolkit a options excited help volatility expand for meaningful and where especially has ahead U.S. We're year's is

the of two up jumped leading points both the in XX For VIX month elections. example, last index the over to

launch futures variance we the listed and to to election Variance other way as as around In Cboe's alternative regulatory to provide trade XXX well volatility VIX review. swaps September, introduce on will yet subject introducing Cboe U.S. over-the-counter addition options catalysts. plan another also Variance to futures, S&P futures an key in to exchange

Our is key one innovate cited commitment with to the they're to as partner us. customers by eager often reasons of continually

we ahead whether and us increasing trading the Strong to positioned our make election the in in XDTE the it be and continue an the responding engagement international SPX as growth grow making of As setting with GTH up for of our different our online or that U.S. rest to are in by better collaboration exciting options products continue Derivatives pipeline compete retail of us, their geographies. client well product confident enhancements our markets, we're investments business year. in import to to makes to business customers trade for has more come options,

Derivatives equity Europe, our deploying by for first leveraging in the trading exchange we customers Outside trade in auctions in technology saw of U.S. the model XX,XXX continue month create options Europe through CEDX. U.S. progress European during the experiences lots Derivatives our platform, sustained to nearly U.S. XXX exporting to traded in make better with of of our trading. specifically, to distinct first our CEDX We June blueprint the

the on quality two our to Interactive addition CEDX a noteworthy Clear From On to side, index quarter, spreads with for clearing and participant a a book announced the provision a Europe, becoming during second participant recently the implemented of trading direct direct as program, in June. options. IMC of liquidity of helping Cboe developments perspective, trading the Brokers our participant in improve to new addition we participant index the tightened back

building the have still to in hit on during second quarter we are work of While deal the milestones look pleased we that momentum ahead. and with quarters the ahead, a forward great

monetize and Taking market region year-over-year its as reaching backdrop. regions, net across Cboe very look leveraged results scale revenue cash robust with businesses year-over-year a were a strong the growth Each quarter saw second to increases XX%. a healthy infrastructure at spot

year at capture the regions, North pricing of U.S. Looking result a customer the half various on-exchange activity. as given mix a as we America, the shift changes first made in dramatic mean stock the markedly well net improved as in of rates in

to the continue Moving forward, expect share we maximize revenue outcome. and to look to right the market strike to capture balance between

our of and remain market another as XXXX, migration to basis our second produced track quarter to market of technology with of review. Canadian XX we Cboe the regulatory subject integration, final technology on Canada, XXXX the improvement share to points in In early compared

our for another hit Europe for of Periodic of another share XXth on-exchange over an Cboe auctions record, activity in retained market we XX% notched during in type estimated retained a BIDS of Cboe share also platform leading to QX, high accounting unavailable of trading, the continuous Moving month to position closing constituting for quarter. intraday Europe, the the in XX% while auction market its activity record June. market distinction the and row largest

the securities of subject areas adjacent transactions to clearing our market look for regulatory to fourth we future launch financing on our As remain review. services for track quarter growth, of we

percentage continued in to quarter Australia, share X.X percentage Cboe market Australia second Japan, point points we, second finally, reaching from quarter continues and In second market for with quarter strong share gains saw Pacific, for XX.X%, the of Asia to up X.X% records, a continued market finishing In of the the turning X.X XXXX. And at improvement XXXX. versus Japan. momentum its set quarter, the

very In volumes addition, to market strong solid continued Cboe's and with XXXX positive QX by share. increased in quarter into Japan as levels. volumes a XX% momentum of compared the third has

local more only the monetize forward and investments like maximize moving region effectively excited our to We import APAC incredibly our in one developing remains and business of efforts into opportunity transaction in where sales Japan, Australia to we activity forward. look Not fueling we about of The making anticipate the but we we ecosystem are measured Derivatives markets brand regions. do see and U.S. grow, as to nontransaction

we to of very brokers year underlying three exposure benchmark of highlights for U.S. While new early Cboe's stages are products. onboarding the of Pacific in the realizing Asia this out this the opportunity, demand early

more to the index was QX in growth and XXXX. of collections compared softer-than-expected Solutions. onetime outsized Access sales X% a revenues quarter to payment the quarter our as longer creating in Data of Net second an backfill result slower against in quarter hitting comparison XXXX, The grew XXXX. of of Turning and business as cycles second difficult a second

And first XX% initiatives given anticipate slightly the prove accelerate lower revenue our to half of trending to are have the place expansion guidance for X% and will in the the below fourth year, whilst in results we range trends quarters. third transitory we

and of guidance the year-to-date half low our range the XX% we end second XXXX. expectations, X% anticipate Given to results our hitting in

Cores behind and we enhance navigate offering side, excited year new layer. about to Solutions exchange this participants launched Access are determinism, the and the our latency dedicated access improve on offering, markets. Dedicated ability Specifically, enhancing cause momentum reduce our effectively their greatly market to help a

technology interest of Dedicated solutions currently our provide U.S. to X out live fall. are global markets We customers strong of all in example with the in to is have roll leveraging Cores equities and plans our across scaled ecosystem. on technology Europe Cboe's initial strong another to the infrastructure

sales We in outside this saw from and approximately internationally, in uptick Looking product One our Cboe of a came well XX% of quarter's growth a Europe notable of the data behind as Canada U.S. as momentum solid Australia.

global been footprint, think activity we our extending has in As expanding clients. Cboe Global instrumental about our Cloud with

quarter, Cboe XX% sales the Cloud Americas. Global the During second from came of nearly outside

revenue-enhancing technology anticipate quarters development Solutions to we Moving to move particularly U.S. as relates in to our as shift the the to from forward, auctions resources and resources we it efforts enhancements the opportunities ahead. Access able DnA greater and with our being integration around capabilities Data in of category,

infrastructure ecosystem harvest, customers, us with current highlight and markets opportunities.Cboe's to We to derivatives entire and and cash both Derivatives. forward quarter across of the data behind And a custom global of to and Data the investing our the off Data footprint all we to aggregate leveraging with prospective, enhance great services provides sets Markets, our Access unrivaled scaled deliver to look durable and delivering forward those quarter Derivatives and generation of start. second closer results breadth the and Spot and Cash power the third revenue Solutions look Cash, The is and position results. to

turn will the over With Jill. to that, call I

Dave. Thanks,

our quarterly share second earnings As Cboe adjusted basis Dave per strong year-over-year $X.XX, highlighted, on Fred previous to up XX% record. and a equaling diluted with a quarter posted

this most is notable before quarter management of capital revenue takeaways high-level diligent on number as the a results provide durable While message throughout as results robust to segment believe a of stabilization results I going reasons, of operating margin focus through assessment as for some the I return second the powerful half well will driving are from growth illustrate XXXX. an results. the first display the our expense quarter's on against of result

the Cash net Markets The business. and quarter and by results Data categories Derivatives and as revenue record increased XX% strength to was growth driven million. from a solid Access well Spot second as quarter of $XXX our finish at XXXX Our versus second our Solutions in

Markets the proprietary Cash grew produced in of organic net revenues our the we range the growth net to net quarter geographies franchise Spot Despite to an market. revenue slowdown, in end on growth. net producing to our Data increasing X% quarter Solutions revenue X% and during provide the Specifically, growth Access lower to organic second are quarter. versus XX% second basis XX% as second solid quarter revenue continued with hit year-over-year all year-over-year our product increased of markets the and XX% for the XXXX, utility ability Derivatives XXXX. targeted confident

quarter, X% the quarter outside increased modest well the and Adjusted results results and second $XXX as travel expenses And higher given as a grew promotional strong expenses revenue services, expenses. for adjusted operating professional million with healthy favorable year-to-date of year-over-year growth by to of compensation-related XX% a driven EBITDA by the the XXXX. versus in million $XXX offset fees

the result a in to quarter. continue revenue diligent make management, adjusted meaningful our focus and expense stabilizing as progress of EBITDA we on generation our strategic margins Importantly, during

second Our basis year-over-year points by EBITDA adjusted XX.X%. quarter expanded X.X to margin a percentage on

key segment. the drivers to Turning by

some contract index a options higher in Net grew total the index detailing options by options X% the volume, X% the of higher segments, up and ADV Total by release fees. volume. percentage was our transaction driven represented as metrics options per revenue higher Our segment increase slide moved a I'll in index press information business so options X%, options appendix our include led highlights each. provide revenue X%, of key and for deck for

American second as X% North net and off-exchange fees. fees capture revenue rates higher year-over-year basis on net capacity Increased market equities. well the a clearing stronger were to and transaction fees U.S. in quarter, and and volumes reflecting level equities Canadian as exchange a access increased clearing share transaction net higher driven record by net and in

nontransaction increase well capacity The continued XXXX. benefited revenue, and as market across to Australia access both the from the strong Transaction fees second and increased segment XX% of the growth quarter versus as and revenues. side, a APAC of resulting X% quarter in nontransaction year-over-year On net XXXX. second gains and greater in revenue from compared produced share volumes transaction Japan as Europe

The reported net Futures ADV. higher growth clearing fees, net revenue XX% the with transaction the a segment and for XX% increase quarter reflecting in

second And increase On XX%. FX higher side, to driven XX.X% a was transaction year-over-year the market quarter data fees. net Market of clearing were net delivered share segment an of in XXXX. with record and the up XX% finally, nontransaction for quarter as revenues the revenue quarter XX.X% compared the by

believe the ways Turning X% largest in first Data from a sales contract new we a U.S. and of international basis quarter compared annual revenue the the trends to Net can may revenues be future now increase coming sales strong strong are growth, outside growth occur, quarter driven leading One value Net And globe. partial we up coming helped sales overall only benefit approximately on growth business. revenue exchange while the the quarter. our sales double quarter by for The to provide across Canada the ecosystem sales potential networks more with than of the to many to and monetize Solutions international our indicator Cboe's they levels continued growth organic the as were highlights related product. XX% Cboe Access second an second business. in in

markets, is strength us XX%. end growth as DnA our expansion geographies demand distribution the the specifically, positioned continued believe revenue-generating for trends well acceleration fourth in increased increase helping guidance exchange we integration access lower leverage our third see capabilities More we the in to and of particularly Data U.S. organic to an options continue cores, expect Solutions efforts Access enhancing of revenue Cboe of DnA from and across the to dedicated access in deliver quarters, on and anticipate presence reallocate our and We technology global X% to our as enhancements. around and Global new Cloud, capabilities resources we layer greatly from of

partially of adjusted travel for well and in higher Total X% compared increase second result expenses. last a to as in offset compensation approximately and promotional professional a decline benefits operating of The modest million year. the to were was expenses. fees and $XXX a as quarter, an expenses by Turning services, up increase the quarter outside

year million. forward, guidance adjusted $XXX to $XXX are of Looking expense XXXX full we our reaffirming million

pressure balanced overall discipline, factors at for in expectations seen revenue accrual, by we stronger-than-expected some of for the guidance short-term revenue unchanged strong incentive half the start and bonus Our the putting upward the leaving XXXX, year have but trends of our guidance our second our supportive year. is on expense

businesses. quarters I technology that briefly provides continued the recorded marketing onetime guidance want enhancements from like our expense anticipate the adjusted investment derivative number we We provide adjustments of to areas results, continued opportunity in integration Importantly, returns the the Outside DnA for in of upgrades the of to I just will efforts and covered, touch resources attractive a spend or on. accounting reallocation ahead.

representing related spot Cboe we the noncash an market intangible assets $XX million impairment in down. Following the announced to realignment charge wind digital April, Cboe of digital recorded business the

impairment are excluded a of value reported result $XX from we a operating These million and carrying quarter minority expenses. addition, are our of considered review Cboe's the routine onetime In other of charges adjusted second a as investments.

our X% XX our our are the As we first updated to ahead growth half X% results, end supportive year. to strong on the to higher look net solid the range a and of activity July for of full outlook guidance to revenue we X% X%. reflects half organic year increasing from Slide The second guidance, XXXX

we given steady range throughout as our a broadly, growth of the increase well at net revenue hitting the while are the in Cores our for for our end offering XXXX, range X% anticipate to as more of DnA the in We demand the incremental guidance organic continued back year, growth guidance we lower given results. DnA guiding revenue anticipate Looking full Dedicated DnA our of XX% geographic half quarter business. second softer to

Our for million unchanged $XX $XX is income at expectation nonoperating to in million XXXX.

$XX $X $X million positive anticipate and our in to investment dividend to line line. $XX continue to income and on million from flow We million through other million to our to investments largely help income marks earnings our

guidance Our range CapEx at $XX million XXXX. million continue come million at full remains XXXX in XX.X% to $XX of to the and expect year. XX.X% and year amortization in for tax be expected adjusted the for range laws to we is $XX for finally, depreciation earnings for the the $XX rate effective to And current million to on to tax under

to balance sheet. Turning our

second debt the flexibility locked overall medium leverage our at balance our outstanding fixed and quarter ratio on low, profile We affords, having to X.Xx. Our comfortable debt. remain averaging sheet longer-term in roughly remained with it X.X% rates

strategic of the allocation of earlier, tenet highlighted effective is review core ongoing the Fred capital. As a

share M&A you activity, the to the such, total repurchases of or of in capital back $XXX seen repurchased in and to form to million internal returns to dividends. have As first allocate our shareholder the us shares, quarter, choosing In bringing projects second half $XX pull for repurchases we XXXX on higher-return million.

incremental $XX quarter, our buying the continued in start third back month repurchase of have We July. an million the to activity

as a first cash earnings dividend. dividends. form an of $XX.X share free we in of share balance million returned quarter, opportunistically total half million we Cboe in second to to shareholders, to in dividends Moving out repurchases continue sheet. of per to representing quarterly being strong repurchase flow as and a flexible attractive paid plan generation Factoring expected returned our of shareholders the appropriate, Also in XX% $X.XX the forward, and shares the and adjusted nearly XXXX, paid repurchases $XXX given

returns value-enhancing durable aspire we delivering look right in the optimizing and our trends half and capital to balance allocate investing in margins. first We future the the always, in most and forward ahead. resources between on growth revenue our shareholder building way, striking quarters to As

I'd over it Q&A. back Now to before some Fred like turn it closing to for open to we comments up

In first year-over-year. allocated we XX% earnings report half continued growth revenue share growth, stabilized XX% strong in our earnings closing, year-over-year with our we from and delivering strong growth share our net capital are to with strengthening another strong per returning shareholders. and margins, X% balance invest caps as to quarter, in growth reallocated growth per EBITDA expense revenue a brought pleased have capital down our M&A and our and growth sheet towards technology to away organic initiatives our and resources That

first and a combination half to repurchases. XXXX, earnings XX% through of of shareholders our For the have adjusted we our returned share dividends of

Our balance sheet return and arise. take capital and to they to opportunities is strong, of we're positioned well advantage continue shareholders to as

the Absolutely, thanks question. for

for we're so of about Timing is lot a far, we reasoning timing. different Solutions to up We general. year-to-date. around look coming a our sales at and business enterprise Data a Access the longer some some of saw product some of in factor services in timing the sales, year half plays softer And first there the and down results to the QX big the growth for As and the X% cycles seeing offerings. we're

timing during also of of the some collection the We difference quarter. cash saw in a timings

the caused back as we larger take a large there revenues comparisons. that having which XXXX And the year call, the there. in then on back And saw the we then, a a a harder of customer mentioned of little factor other course, small a bill bill consolidation place -- bit on been impact was this QX has

new And so look key we X forward, also the a X% timing have technology and year pricing; its that's to year. this areas: play last guide hitting to it's lower it's X focus throughout technology as part. products; we've confidence and sales; new portion been really or off migrations -- in And in Asia result finishing it's Pacific of throughout from comes the we those able that efforts the as new will XX% on of that

at. coming core, the full force the to on focus really our back almost So focus of on is team Cboe best technology what

I'll sections, So also us some next about those into a little and investment technology year. I'll this Chris giving pass to that see, durability throughout on through talk go and more that year we bit to

So QX, ADV sales versus we'll through those rest doubled coming throughout the of QX of sales, see those year. sales the the we the and benefit new of in amount

see more internationally And certainly Solutions we rest U.S. were we to about year, the here. of of that of the as of demand continuation macro the the with throughout for We Access time really see for pleased and capacity data when outside of growth XX% accessing think for uncertainty coming sales from Data the and you go

forward. new our channels we see products, and there index of some and going New packaging that services bundling

will of see course, were also sale data Of part. the our One there Cboe changes we their Pricing in up Canada. pleased play to

high-value will perform As where think have undervalued. we you and we're cost-effective we and review but feeds, price know, comparisons we to aim data

insights, into we've able to access that on improvement equities for of that into technology been to rest the customers value they're the which pay and technology, to platforms, book and through this us Europe that provide when for new activity into for willing important and effort system really is And to those really out rolling data produce year the the then markets world for. XXXX insights we our new enhancements come allowing

Great. down technology further I'll Dan, little dive bit a on the improvement.

we've market some are pretty been come So investments to starting in to that just making and leading-edge fruit. substantial bear technology the

data except the that And improvements mentioned, of efforts complete technology insights. year. that next Canada are greater Dave quarter these got done first our on we've are improving even and migrations organic we'll now focus As and access, for remains largely

just so we we'll finished July across that. the equities, half, the On the in see benefit all full Cores X, four on completed markets. in U.S. Dedicated equity access of second That side, was

also half, four architecture for in to access data we new quarters. of -- to it to subsequent others And we and markets data. and improvements out second the we're options, hope and one then a market improving plan in -- roll our all We're in access roll in improvements

a just optimize customers services and behavior. their greater data. fact, to of new In out end some they activity here can our July roll with provide And insights their and market at made how improved then for we trading the

invest And capacity to finally, both to continue for election this access and as the to grows. our we're going and issues, anticipated season, fully customers and elections is election enter mention actually season uncertainties geopolitical as only the demand access greater I'll to we in we're provide and from will continue grow, that for demand

overseas help relative evolve index you size us So do I that institutions just opportunity U.S.? between Could opportunity one and How had the sort international to the mix on retail there? the over to of anticipate you options. for

advantage we think think the options, in AUM much competitive the other that the how U.S. success a the index you've in $XX of landscape about about that's in might just broadly, had when competitive you trillion when for And you to index, overseas? mentioned to try Fred is benchmarked replicate that then players that

for Thanks questions. those very much

against As we are international benchmarked capital secular market. the important in consider assets we trends the remarks increase that think the about expansion, to mentioned really U.S. prepared in

the that, XXX to manage volatility around toolkit that and the of S&P is the we home risk all participants. complex equity volatility Cboe really put for global With Index that really options

we retail about brokers appeal those the this on runway to board and creates With three coming customers see to efforts. they need those gives and those they both that our good market. then customers. retail our what institutional an year, us access for can globally need talk how So Operating for ability globally a to

long. the is So us, for runway quite feel we

time. to about the use, bulk but not takes the of global to time. portion a of That's X% activity do where course, we bring of SPX markers it's metric hours the they at say in in trade this But we regular that those lot, important in place trading. the trading the point X% percentage trading the do trading this at customers, use of on of One around it's or is in as

differentiator competitive the mentioned there. You

our one excited is For mention is VIX -- to there, complex futures to -- on coming to risk the expand us, really an product that global be manage about because pipeline, development volatility about options interesting manage and that a equity, which futures, on able futures, to when to we that futures of product. this board Variance that able our be VIX the year toolkit later we think

be VIX volatility options really to environment. an as accessed cannot now in class allows a options U.S. customers trade security-based by that on futures asset

institutional So to around interesting players globe. the that's

broaden set, players retail becomes we as interesting institutional it time. really really, to product players and continues our throughout draw that for out So

region, you can So and marketing sales our our happening get of how of and data coming States. to focus on see access through internationally. that in focusing and data the the our that will closer be marketing, with we But XX% United brand sales, footprint there outside customers

switch just revenue on index rate. the to franchise the Maybe options capture

a quarter. Just I the for last your kind on little been the quarters three -- in products a increasing of the sequentially think pullback bit for proprietary second that's had of increasing

based So mix? from you to the forward. how is more on going of be Or then drivers you here? volatile re-expanding Do just And that maybe see going see that that? it

made the the You haven't And hit the great pricing is and the it beauty volatility of changes about The that on a right the It's about suite side, mix options the VIX product. Cboe for providing to us we've futures, brings options, in the as any with the back really the changes RPC toolkit affect -- utility. shift got the that the VIX to talking we driver SPX mix well as of anything. futures at end. of

hit for this of rotation and into a course, different they For we are, small capture well. the days saw caps record example, there, RUT quarter. We saw RUT versus as SPX

or that toolkit ebb So of our time. see we VIX as and shift, SPX the differently the use mix the throughout customers flow

So forward signal particularly look to the there. nothing for

about. come you Just wanted talked back to expansion that international to the

retail opportunities the than that. institutional obviously, that's untapped? And there's you it then sales all, mentioned but a Is over, and Is maybe be little a marketing.And biggest surprising bit bit that perspective? there's and turned to from expand First be little where still I to from to it since more a can a customer specific. regional of a more both marketing, maybe stones cost sales see you perspective,

So ramping and internationally, Or you should you spending? cost by your focus as absorbed expand more base? can expect we up be that

at growth Great. we global look I'll and incremental potentially on I there it, top existing call that would sales go spend, marketing is footprint. in reverse, of The really, as Alex.

place that gained the us scaled about for important sales increased now think we and really be off footprint of leapfrog expenses the years, focusing few increased allowed down did, we've and general really here. as benefit on that in That put margin. us able You of, which on course, the infrastructure, last bringing to marketing we've been expense in see focused to to

where really And Pacific, Pacific, have hubs to not Asia it's in So vast people, Asia is already are, focused to being a elsewhere, region in opportunities also the think of we Taiwan of sales but countries we we from XXX We see Korea, area. about Singapore of activity. but really of will start that which and in and in region really countries. we be able course, cover terms South Australia Japan, when the headcount, in but say

this onboards see in through. in brokerage institutional retail three and we year were go increases space, access The do as the we

break the and securities previous jurisdictional regulatory and on, user. origin, market and we've down to barriers end focus we things country-by-country And calls, we barriers, look But to our U.S., for be on the that the As it approvals basis. are pathway do access those access with customers, options in in market those can't country. to conversations in a includes spoken order a always the we a see around world to us the include the really able help

institutional reinforced that interesting will why to client that is around from which on a a roll futures eventually point before, I options we very So 'XX world. VIX the the capability having on 'XX, base becomes just basis out

be to ETF down, marketplace. think to is about to able regulators The a There's looking phase those a really we X. and number customers more we're structural infrastructure-based working crypto with the but on and on the short to need and answer it our as forward knock obstacles to regulatory ETF of options bring

on great at the And market platform. five focused focus to the ETFs on X the well Bitcoin particular, options We're index Robinhood the ETF ETF and brought listing access the already launch consider is will as set customer think retail index got -- really trade we we've -- which base. in as pleased cash-settled options, you recently listings year XX really on accounts, be listings this to Robinhood's million to product new when of really we that offer active end those and a on the funded

excited of be rest that, index this marketing appeal will our with into of educational we'll cash super Robinhood that options options the and joint conjunction with throughout in that to with lean and base. of characteristics set institute customer the looking about to really The year. and efforts We're

if consumption Can mix? about wondering VIX firms. the what's increasing a happening know we've Clearly, around little could little there's you of was customer data bit. seen to trading I bit you the been a start rise. talk unpack a of kind time, new I for some by narrative in adoption July and

from any customer look in What pickup seeing a new does you So like? degree sets mix July? the are to what

across Thanks specific seen we've no But products. usage existing mix shift is from inbounds customers saying the is The that is the July for new excitement and the for of a into number what July client in shift what really certainly rest is in toolkit the the in year. volatility the coming own worth there. question. us the that from through There's customers engagement saw of Yes, our really hiccups its right. the it with records of gives

with we XDTE there out We increase see X desks examples and an in using their the at options of to see mentioned products in mentioned, of that strategies really we've the there. continuation SPX of QIS a to providers liquidity hedge interesting number past. is times put data Couple a that position, years' looking of worth you which development

exciting. brokerage the then of really retail the in the providers And then with new of of liquidity then the with you we really the classes, looking through to mix that liquidity addition customer is there. as shift towards the are be really, And Robinhood us asset discussed, from equities complex think exciting. coming whether providers, involved is major or just other this to year, futures get And end about coming particularly it

pace just the our entire in for there as the record a And we a bit, a a seeing rotation the small to of in entire VIX caps utility on July. the points couple add saw using we're is people see And on volatility suite. Ben, then want for year options I record we're -- just record

I second run ever, in XXXX month think since our best options.

there market So conditions. we rotate and they customer some see as adjust behavior to

election rotation small increased cap whether the asset sector. other political seeing the on up U.S. it's geopolitical in from or sectors think July, with the I going whether or And into coming to -- we're in in it's just and the the what's side AI volatility

in market And so there's a on that's in July. helping now, lot going the and right

gravitate We're as investors as be towards able Yes, this to that options, this VIX the for particularly, that the been for really of the the well toolkit. of is VIX to toolkit that Owen. upside both -- seeing Thanks, risk, manage volatility downside. a the year. is seen we've while talking the historically-low parts about VIX lower little this general most in we've story

go going occurred, VIX see call during we rolling we particularly may those the as or you got monetizing risks April, core occur, we that to well around spreads as And they've see volatility see We've volatility XX options the that geopolitical yesterday macro time, got saw we about prepare risks. When then spike, to events of or for that over those then looking we through did when VIX environment. XX it those and such pop tail rolling or resetting those we customers to those in think place.

or rate for decisions big a be whether economic elections earnings We've got historically, are calls. and data, Bank really which daily catalyst it those CPIs, Central volatility

yesterday. think a VIX option really see saw when we XXX,XXX popped VIX and future over VIX, days. trade, Yesterday, VIX over large when in we XX.X you futures about see futures So contracts VIX volatility spike the to we

whether part, the and the there. that the beyond continue and always options curve through short of managing exposure elections SPX or to in it's end play at longer-term their

what the as time. well So we as product, over really in in is each isolation of see developing utility used conjunction

to job to then continue around innovate products that. is our And

you when unclear exchange, has capital-efficient and implied volatility, the to the And strategy, very about achieve which of realized rules. differences become transparent, for OTC between futures training step-forward so recently because on think hard very Variance margin

exchange, U.S. on an along VIX that options bringing all So the on those futures, there, before elections. exciting with development

setup interesting of year. the the really for rest So

on allocation. question a just Maybe capital

in quarter, million still net now up $XXX sheet about $XXX with or cash balance come the down. cash leverage with on the so you to return capital built of the and even continues So million in

that year, that? M&A up driven by building retain at So something flexibility to past first, cash the terms all some guess, is else I some of in just being or driving over wanting

secondly, And be would has M&A M&A seeing you though that there still even you're market can if anything assuming on M&A an I be some seeing could comment M&A in from guess, and I'm perspective? been you're deemphasized, attractive? hurdles, that the

that's I'm we're anything Well, not at talk now, your to if right looking going about question.

to some deploy always you never building what cash up a as think here. having I to flexibility to that, have said good know going bring and having opportunity thing tomorrow's However, on is

significant a always did last But will be learned more it will What the say be always we've years lot be said M&A. work there technology our X which I've no small immigration I more said, through will is I've selective. not M&A business. -- M&A. in an is it It lot particularly our part causes area, of work, a of important causes that of --

if So and more look be we're significant going forward, targeted much will and more we going with to one and of that strategy. our to things do options it be M&A at, in and our continue will line

from forms to us closer has well and part theme closer last nearly customers. Cloud over key customers. Global years, of putting Cboe as that the of a been And potential of streams. And data Stephanie. of the global our U.S. more revenue of the as revenue data It's in a to putting Thanks, outside for fact, part plans customers our addition interesting really it coming with really XX% expansion diversification

historical there. to us, the and certainly for of is Global priority as in ability strategic have bundled out data insights break one-stop package terms for We Cloud a feed don't as the contribution The data, really rest. powerful. from Cboe it's tremendously data us up shop well for well a But of for

to more. And on some Chris I'll to give pass

important and and use data products, our customers our access us data get for really said, Stephanie, Dave insights. closer where they it's to can to as

to committed very innings we're the still in We we're So this. very think this. of early

has As Dave the mentioned, Cboe in Cloud outside most U.S. come of the Global growth

a to company, Alex' earlier early X expanded We're we're global in having maybe X just young years. last still question, presence. globally innings relatively very in And global the or our

the to into So of as think, of part understand the secular data data. script opportunity in that's the better part that that as to import they're trend, is U.S. we mentioned closer customers, been going they trading as -- import to in our get traffic that and able their be we our to get we then data

us continue to our in data investments customers. Cboe and those make look closer Global and Cloud So products to to get for

mentioned that on wanted you I the follow earlier the up line in of to product expansion the remarks. prepared VIX

little So in bit you about options talked futures. a VIX the

market? kind thinking you whether how see the just you're product on there or So are of truly broader what relative maybe the could getting the guess, about expansion some of like uptake early be. from opening kind community cannibalization, could to feedback up be trading regular of there and you set options any I this that

Alex. Thanks,

set So broader to complexity options customers. futures the for a capability VIX that have on build of

take U.S. going As any time build. base we're security-based today to we about. new And say, customer customers that it's to seed cannot that excited base, access options, and that's that customer with new

when So product. excited expand We're 'XX, that about excited we the 'XX. we're about to

can shorter-dated is the with point extend we the And this product also, that well. tenders, the tenders here key as

the general that then secular this can end we of about with curve, trend and that begin access the desire think So product. shorter towards the to

of new and options are the ability two those go key U.S. of excitement security-based that level into curve. range the this access U.S. internationally and within can't the So the to drivers around for the our end the customer product, shorter

us. interesting really a that's for part So it of

up follow earlier question in on the call. Patrick's To

seen As a in about been the index has investment I much European part are than index options, the U.S. smaller you think cap that thesis continued of think market options in the

options us, build one? of they ADV right and Europe? did launch vision is sort remind local the is strategy, there? in now really maybe correct that has will level So you What this the I are And first, it think, What conviction been your index Cboe come. when seeing

grow market a Thanks Europe Ken. Cboe It's long long start, in from to view really worth the market seen see if European taking we secular really that the as that the That bring European a very can we we've retail great options. saying the and growth in to European style view, the structure. ability the to have much, institutions the and U.S., the we being a of that bring economy, is utility this that utility investor U.S.

So structure market a exporting our to of U.S. market capabilities bring on-screen our a know-how on-exchange capital-efficient to in customers. that manner and

That That The the provider. that's anchor stock minimum this liquidity the this we've with since options. point are futures that by showing options pointing as milestone view. at milestones really customers complements major product of milestones as interactive the and hit well worth then really viable who we've marked on had includes global and board are quarter the also of rolling think came are We tenant we've out. having which aligned out that interesting, we're and a then IMC, really that launched single year, another now, index brokers

also, We we think about we into about the in the talked steady. futures options. program. the about XXX holding ADV in seen that's in And there, coming and market then the did contracts day improve index call when July, liquidity June provision a quality We've on

top is a Our focus go make on this point with that Europe. guess to forward education infrastructure I scaled the would of options last institute. is this built on is the I on in And all

those incremental key much, us And have build anchor our patience making us can so confidence so to too board, investment. on infrastructure. It's vision not sharing continue really course. tenants it's sweat as gives we the scaled us coming the And that on an with we

for Well, today, everyone. thanks us joining

July's we We year, trading quarter. got environment with had a entering we've over a third the with start As strong here the we're got that of a said, we the And strong lots that We've of to had feel we've good on go about. balance quarter the the first initiatives half. results. here

geopolitical as much of events market we As as look the U.S. between as pretty the unfold the rest different through and rotations today, feel the year. we events election, even and good of parts about

cash EBITDA strong. We've a got is sheet balance margins. position, good The good

in opportunities good next of where advantage position to about and see we're good a in are, very to the we quarter. take feel we market. we talk So We'll you

This concludes today's conference call.

You may now disconnect.