CBOE - Earnings call transcript Q2 2021 | Cboe Global Markets, Inc.

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Operator

Good morning, everyone, and welcome to the Cboe Global Markets Second Quarter 2021 Earnings Conference Call. At this time for opening introductions, I would like to turn the call over to Debbie Koopman, Vice President of Investor Relations.

Debbie Koopman

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

On the call today, Ed Tilly, our Chairman, President and CEO, will discuss our performance for the quarter and provide an update on our strategic initiatives. on Executive of CFO the our well an our provide Treasurer, quarter Schell, outlook. as overview financial an financial update Brian Vice and President, will as Then, XXXX our results for

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

will joined take I transition to year. lead support Investor welcome Cboe recently as will point to want who of I the would that addition, I effective In Relations. to IR this include Hill, Ken the on as slides. this August presentation President Vice use Ken the like out retirement X later and him of

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

new our expressed that any discussion forward-looking forward-looking Please or obligation filings future update publicly call. forward-looking whether or remarks, During assumptions, are not no a may what future what information, make uncertainties. to affect statements. events represent on statements, forward-looking judgment and guarantees we our this implied these current and conference outcomes statements. for statements, with materially while Actual a is any may of and differ we our certain refer from statements in SEC may to involve are will the and otherwise, performance these forward-looking factors believe future of which the risks of some result results any hold, full reasonable, the after judgments We as undertake

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

to to the turn Ed. like over I'd Now, call

Edward Tilly

well for remaining Good Debbie. thank Thank doing and hope I you, and that safe healthy. you are joining us and you today. morning

that press our this for supported release which Our that we trusted, transparency. global the guiding a in is to I issued spirit regarding indices want I spot by the purpose operate volatility a comment dive It marketplace inclusive and before active on into this quarter. morning principles, is include to results

press the the instances where calculation in related Paper, recently As the VIX which outlined described differs we spot used Index White to the from for calculation deriving details in the VIX formulas VIX. values discovered release,

closing Specifically, in which the produced These only level of not the well track VIX believe in interval that index dissemination an options, product. spot is VIX instances, a impacted. certain of as Index, value. volatility and index ETP was were at not products, the futures applicable products to the the prices, tradable instances prior resulting daily We relate tradeable the such NAV the as as not

expiring calculation In addition, settlement derivatives, was which not uses process, value VIX independent of an impacted. the final the for

to as the the impact assessment, of that we number majority same VIX but the index the and degree result yielded the redissemination current We are instances the with investigating believe cases, Paper. on VIX in vast calculation based provided occurred, which of respect of White our in initial the

strong financial on for Markets. of turning Global at Now XXXX results Cboe report am pleased second I slide the X. to to quarter

derivatives We over the last the continued strategic growth to deliver plan, as we the build largest expanding one on foundation we year world's on our global networks. laid securities of trading and

and X%. revenue transaction $XXX up million recurring XX%, adjusted quarter, up EPS and to the both over non-transaction with year-over-year reported revenues, increases in For we net

XX% volatility options index in in XX% driven options. options volumes, revenues, clients and were futures, in by increased results products. trading our engagement strong VIX X% trading recurring and products. solid year-over-year growth Our ADV in saw our VIX We of growth in and institutional non-transaction proprietary continued increased by SPX

year and I we expansion quarter, geographies key outlined Cboe access Chi-X the our Europe – four to drivers Trading, plans X, Asia and products the our to of opportunity extending planned progress acquisition the non-transaction upcoming closed of growth incremental Derivatives, Pacific. and BIDS this across revenue, on we second executing market of recurring grow also beginning services made excellent the for at During our launch the participants. July

We our are very later excited share expand this the in to new region I'll call. and further more in about plans

during First, exceeded powered Similar quarter. business. quarter, the I'll Data our of and increase included non-transaction organic This XX% fees of touch by growth data revenue, market first growth equal both proprietary XX% our Access our contribution year-over-year, and access from on targets, the recurring an we was the Solutions solid growth to by achieving and growth fees. which fueled second capacity

this of target as to XX% to XX% XX%. non-transaction increasing revenue and to strong revenue and we Pro for customers for market XX% a growth gain recurring to result XXXX new from a performance, LiveVol well growth Silexx, in non-transaction of TradeAlert, of demand to access. was such range range a our are driven The As as continued front-end data, logical ports by subscribers Cboe's look platforms, global as market as organic

data a will creating data trade data. Our to value and suite customers plan participants Global at market year, provides process. efficient and provide to of analytics, this products, Access for cloud Later launch certain for of Data we business distribution execution Data interact simple, services, the which add intelligence, our Solutions with allowing market a and way Cboe access Cloud, us every for to step

is data participants solutions to the across a believe of our tremendous the We opportunity efficiency and of to Chi-X this delivery goal and acquisition market creates for Our access globe. the optimize business.

month and regulatory are live with Derivatives to track September go report to Europe on Europe, we on this that new market Xth. to to received Turning I'm this we approvals Cboe launch pleased

customers. the over market dedication client proud exchange from to provision I market market derivatives trading of contribute that find to liquidity this market. to access firms, participants pan-European, transparent, help day homes, to able develop We needs the support and have their flow. from new of We will market and remotely of believe and address to participants will including clearing in who key firms, working months, being one, tremendous efficient, banks, lit am XX last truly and ready designed team order proprietary makers the the benefit our a our their diverse incredibly

business Europe expect overall launch was Europe in to second build on we Derivatives Cboe exceptionally of strong momentum. the and the in quarter Our this

As we've said significant overall to grow before, the in opportunity derivatives we see Europe. a market

a started just reshape simply that to structure expand intend We to existing aiming are attract market in Europe and designed get excited not both September. novel We participants. new market incumbent doing trading exchanges. from take share derivatives with to across and to We're

block of our Japan, broader we plans for Cboe from block powered coupled Asia US migration The on as platform. to the Cboe MATCHNow, world-class trading regulatory Pacific, has and of LIS offering, MATCHNow with extending in the BIDS offering plans block-sized and and Canada to BIDS February BIDS to and Canada into then excited our market trading to acquired by the trading planned base the Europe Moving year, LIS Cboe first further Australia Canadian launch BIDS and to customers. to Based enhanced to we XXXX. technology, BIDS trading system Trading. Last our Canada combine expand destination an approval, the are in in alternative is highly be announced successful our launch Europe, which month, about serve industry-leading itself Canadian liquidity. of subject an will premier center to in will network last even capabilities BIDS the create in established

numerous more XX% the in multi-listed the quarter. education increased designed than in Last VIX remain the Pacific the demand the announced quarter, learn and institutional November a committed expanding retail hours we to our and franchise, Monthly for remains acquisition the XXst also and across year react the start offering of audience continued ADV broaden we Options we ability markets entering since product SPX with XX-by-X second retail risk will access entry and to investing steady global and has looking extended market events and to continues. participants about for we Asia year-over-year proprietary their the further to happen in sessions to offering that Last continue our macroeconomic product expanding retail meet retail and are the to and Product goal in platforms We've both opportunities complement institutional strong innovation to We trading retail around to growth growing our for see platforms from into trading unique As of help as retail. growing as as engagement options by education and to development top Chi-X the and products the increasing Cboe a they with SPX investor and needs. also derivatives. efficiently, hours a review. with our seen of We've positions XX% for focus more year. options ADV subject of more meet a footprint retail contract on to evaluate system expand SPX – options base on market The growth manage learning regulatory Enhancing global services, global to and core new with opportunity global new of priority. customers trading and our trading management launching options, launched both and new see for remains broker institutional clock. a Institute month, hosted VIX traders appeal this Institute to our launch SPX training investors in our lengthened options smaller webcasts sizes investors. part adjust broader and Options initiative,

available online education system this it year. demoing currently are clients, We on-demand and to later for plan make this with

of distinguished for derivatives to marks corporate Institute investors forward and Additionally, benefits of And specialists educating decision can practitioners and we on our beginning of These July, we've faculty and a risk closed significant acquisition their Options fall. acquisition in our and Asia-Pacific derivatives Chi-X at cultivated adjunct establish last, this serve beginning look specialize operations engaging portfolios. pivotal classes a us forward hosting region. to the and instructors investment presence This management, we with theory, an in to to look as moment research expert evolution. to products, team derivatives the the enabling provide in the

efficiency, technology plan truly and time working one, world day greater participants when Cboe every through busy week We and set and the the access the more is markets diverse markets. over migrate Offering We and services provide help trading the of Cboe's unified product plan clock. functionality Chi-X to the products and are now Cboe's delivering will provider, integration around around and a to technology team market infrastructure platform operating to and global market across resiliency with timeline.

opportunity see world's one global into most we products forward, move and tradable and securities infrastructure networks. our to we comprehensive of market a significant and of expand As the ecosystem largest derivatives

nimble and see foundational markets around equities a as more derivatives securities creating as But ourselves markets globe. efficient operator importantly, We we span services the in of products proven and have landscape. securities the the and that element

and products Our and markets allows us market and creating to and Having expertise product a index us these to additional to, create, circle develop in tradable non-transaction package distribute data, growth a recognized turn, at of host analytics transactional benchmark allows products virtuous trade, transaction indices products. new for of Cboe.

the of look performance of of You on quarter with and turn launching to to extremely hard work small to started products out the potential enhanced the our to market cusp now a at the Brian. and these as power to and Europe, Cboe's this realize their unique employees also success our I pleased derivatives only our and access pan-European equity which and thank want our Chi-X customers services. a market, Cboe as shareholders family. to I'm and have and it to is for Cboe With forward relationships. delivering global We broaden welcome we network all value over I'll look that, to Cboe

Brian Schell

Thanks, good everyone. Ed. morning, And

relate unless as specifically comments to XQ XQ based XXXX Let me compared to non-GAAP results. are everyone that adjusted XXXX remind my and on our noted,

increased we on As customers as solutions. our build trading we the steadfast global our and company. our reported quarter, efforts in our in to well proprietary financial access results contributions as remain solid shareholders. a Ed data second more year-over-year as one as just strong as basis and seeing We Earnings the from products world's and indicated, to become our quarter for the a well networks, derivatives securities of enhancing balanced largest diversified value

Now, quarter. a the review quick of

year's expenses was diluted XX%, net million XX% and EBITDA was revenue up increased fees revenue up And increased up adjusted share net were $X.XX, non-transaction of last Adjusted Our XX%. operating earnings recurring was X% to Adjusted quarterly results. per transaction up finally, XX%. XX%. compared our $XXX

key by Turning drivers to the segment.

to mix North a reflecting includes provide and X% Cboe's deck increase US slide access our increase year-over-year growth, which double-digit equity our incremental Revenue accounted Total thoughts. RPC, And per trading contract our volumes by strong both was business equities revenue, in higher X%, The American revenue majority of declined XX% recurring appendix particularly lower, segment, index of going decreased XX%. our and exchange. index growth just increases also higher proprietary shift in by multi-listed share segment. our a for for and saw each detailing multi-listed the by from solid information multi-listed options. as we benefit in our summary in given to moved up continued was and total We positive net products options and driven XX% volumes as the non-transaction ADV and release press share Our off fees, options. options revenue so metrics in capacity both of up in revenue segments, this trended in primarily market industry key I'll options the

our XQ has to the While share we Protection, market, and $XX MATCHNow trading continuous market introduce, volume quarter. have to trended market a contribution are many The overall relatively share the for and and well in hours we the held introduced, options. BIDS by from and has about innovations periodic earlier Quote trading priority, optimistic up partially our retail plan Depletion million offset declines including were lower,

XX%. organic than non-transaction or more revenue million growth by recurring of XX%, Lastly, increased $X with

daily trends increase XX% The increase favorable foreign ADV. revenue the Second the quarter XX% Underlying the primarily $XX.X quarter addition contributed on a which futures by impact of EuroCCP, in of Europe million in revenue are the reflects during back quarter. increased in in net rose and currency strong average of translation. slightly X% the as Equities also capture the revenue increase. outpacing And was business during growth value market's activity. European X% higher traded the the XX%, on a trading was in broader notional Cboe Net X% of FX finally, result up

Turning total year. last operating to quarter, to for were up expenses adjusted the compared expenses, $XXX approximately XX% million

usage acquisitions Cboe's acquisitions the the to million Excluding or subscriptions momentum $XX to adjusted were growth expense non-transaction seeing in driven quarter. impact was related Again, trading Most second a More the largely of and of year-over-year revenue and opposed port specifically equities units and the operating was businesses, increases. demand a physical has variance XX%. reaching our quarter owned of as strong product expenses accelerated for are additional up both accelerated growth compensation this price the for options in benefits. year, recurring XX% less we with than logical by increased organic and capacity.

and strength have On have products as also data of market the Cboe data we seen well top-of-book growth, equities and perform the market domestically driven side, both internationally. One

approximately Chi-X on our We two-thirds is revenue trends to build are and strong excited recurring the nature. base that addition growth organic of with in its

XX% percentage XX%. to We outlook X to are by growth organic increasing our points

now percentage total our and versus remain contribution, X Chi-X the time. recurring points to XX% non-transaction up that Overall, continue diversify of in to component prior expected Cboe factor over XX% critical reach our growth for expectation. businesses accelerate stream expect non-transaction one revenue revenue we we XXXX, our to to and a As our growth the story is

expense $XXX guidance, full our $XXX of our to million. year to range we million reaffirming Moving are

expected completely of of impact initiatives. initially we locations, due Chi-X, in an a at lower that to expenses in given includes expand more slower related million, be Importantly, and operating revenues. core expect of incremental hiring continued space to our longer full a facilities than growth to our by which expenses have COVID-XX we expected, the overlap reductions its range as in XXXX guidance both to our XXXX incremental strategic than initially by offset compensation well than the now Chi-X reduction that pace into $XX as our our offset existing is expected some unchanged within expenses one to be expense incremental we ability Note

spend sequentially investments positive expense increase are the we and our we in returns and expect to expect to XQ from making. We see XQ,

increase reflect marketing, futures our retail growing to our products to the our to access tap by investors. investments and plan distributing especially products, index and enhancing existing education, content, base and in and Specifically, developing, services, our options efforts increasing and our listing, growth unique into of our

summary guidance a to full-year of now Turning slide. the on next

We are to guidance $XX our from amortization $XX lowering for million to depreciation and million million to million. $XX $XX

our XX.X% and million, lower of $XX XX.X% effective we while rate XX.X%, Our year's $XX guidance to moves of guided current range under rate the the million tax the full for year for and range tax to above above are was to $X reaffirming second CapEx XX.X%, our the quarter guidance last million laws.

expect June. effective rate of the range year in the However, adjusted at given guidance where for we the the we tax end be now are higher to full through XXXX

we interest on portion end drew second loan million a $XXX the agreement an that guidance quarter on the year term of additional While of to credit deal. are not providing at note expense, we Chi-X our full we the fund

absent July, EuroCCP forward, to significant $XX associated quarter June million $XX.X with expense favorable our XXXX slightly to $XX.X expense interest credit be the loan were below third changes early and more rates quarter for our facility effective million, reflecting our amendments and is million, any term of Going second respectively. borrowing expected that to to additional LIBOR, and late facility of

the capacity to return remain continue us flow share to through cash and quarter. in committed to repurchases priorities shareholders a repurchase call, outlined dividends returning return We shareholders share generation and second use enabled to our through dividends to million opportunistically. capital $XX perspective, we strong share plan the our earlier to we addition cash investment to In in excess the From repurchases.

capital quarter of sheet way results. most unencumbered the loan we result are to a partially at value the Overall, possible times June additional the enhancing we as as fund balance remains for Our use to put pleased leverage XX the to incremental report prior acquisition. in increased look ratio our financing summary, to used X.X slightly In XQ versus term Chi-X solid to shareholders.

investments unchanged are to even this We expense that non-transaction guidance deliver Chi-X to organic, We value expenses. expect of to overall, to set shareholders. and guidance increased in we the about for importantly addition rate, our our have and of make, our year excited are more with are made, range growth the into increase we and carrying despite an believe growth the revenue momentum and continue remainder

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

Edward Tilly

Brian. Thanks,

Before we turn developments. to corporate important a highlight of to wanted quickly Q&A, I couple

accelerate from to new operations their they and Cboe guidance to in mentorship, global next generation as students future. make on focused the opportunities month, announced through realize them we footprint, philanthropic difference help school Empowers building with excited last growth we ambitious a on a and their responsibilities, social environmental is the to endeavor As We communities To scholarships, choices most to community under-resourced equip provides which the we we career a engagement our to program and our be more in end, career. couldn't live remain educational our Cboe and date. scale, on to Empowers. elementary journey This that work. available opportunity to embark program,

our focused report. social environmental, we corporate is of recently-published well this included ESG the program, are initiatives some other about on important as and exciting information regarding as in Additional governance,

committed for to retiring immense tackling to November. take to to doing to my our service future. I'd are she will and minute in be part is a also community as global Koopman to like the her in express important Debbie our are today facing challenges gratitude help ensure We we Cboe the

strategy. ground with played miss questions, shareholders, relations and investment the Cboe's the sharp shape the in in XX a have always to years to successful her I wit, IPO working laugh potential up, she in company She indelible friendship been has During execution and has program built and investor will and analysts. major strong her through role public of our our and pivotal transition XXXX, our our investors Cboe's us, acquisition communicate from with her. and has tough mission relationships vision with community, helped appreciated research a developing

portion with President Relations. transition. month Debbie wish to thrilled make We Ken fit Hill He capital of in Debbie is succeeding pass perfect a role. are all to call. her Investor best for smooth expertise We I'll him His the Vice joined markets retirement. now and it closely Debbie on working instructions this for as of us to in a experience last have Q&A back the Debbie ensure and the

Debbie Koopman

be to take Ed. back to you get take one questions. we'll to point, everyone. please permits, in We free question. questions would Operator? this if time time to queue, At to ask Feel Thanks, that to allow person limit happy we a the second per your and get

Operator

this And question Rich Sandler. Instructions]. [Operator first with from comes Repetto morning's Piper

Richard Repetto

Debbie. got extend I've and my to to appreciation thanks

a heck had You've run. a of

She Let thank you. She back investment CBOT growth. you is ask all But way me tell about well. the And beyond it all help as the goes community. to call. better go, you've the this given CBOE the last you the said the for

So, ask about will I growth.

seems and that bit growth up is organic on on Clay X% then, is going it? points why here little by the lift by so through so the XXX And the non-transactional basis recurring more your once and roughly going you then percentage benefiting recurring Chi-X like side, basis and It then then, points, XXX revenue? deeper X% Chi-X non-transactional a explanation up the from go And organic the just Cathy reorganization is again about side? it you. recurring of On high on color can

Edward Tilly

for the Debbie. out Thanks call to

You're us the right. an She's for been long before IPL. anchor

you thank that for calling So, out.

timing to right more us. for perfect. share up Cathy's why The Brian, set But, the is there. it have really be you And, little is definitely with yes, there. couldn't bit you color don't business growth, a We over? As more leader for take excited nicely

Brian Schell

Rich. question, this love do We

we're equities, that access that again, still it's access in I'll American of equities. pure from strength And to Actually, all of strongest One, coming From is seen accelerated rate reiterate overall there. kind an capacity things. again, long. just as basically business like said, the demand kind Europe. European year for of a reflecting, contribution, on our Again, and the we've I the quality North showing options markets, couple So, doing That depth is capacity, growth well board. the what equities. options, is on overall as the across a

On we side, the would seeing the I'll the a actually I domestically. most of want it, XX% data say hit look that couple at more actually not just – market it, hinted well, there market growth, of internationally. is that I of growth I that is that things of that data and we're If as most to coming majority also is coming but say, than internationally

we're And as that far say team what then, is, that is, things doing, been assumptions still we will decline making, really around may I the or the happening. the strength look attrition have seeing we're happen. you, incremental what's guidance would tell as that seeing attrition, continuous may the rate. good we're our in there a seeing we've is I pipeline, from enhancements So, that the we not seen we've at

seeing, than actually had we So, originally say, results better we're forecasted. actually I'll

is the rate we've attrition actually the past. down experienced what from So, in

seeing we're the than in it past. So, stickier be was even it

incremental it, the, the revenue of lot guide growth on the in the a call I'll on rate driving that's tracks. non-transaction So,

bit a particularly little the and say, Japan, market Australia Australia. of On bit the a is kind uniqueness Chi-X, to more yes, of – that structure, a of

it's and it's leaning overall at roughly bit look Australia. between mix a you mix, little a And and more XX/XX of fees, the overall a market more capacity data. the weighted towards market If as access higher within percentage data

Operator

with Kramm comes from question next The UBS. Alex

Alex Kramm

on you've Chi-X, it's know revenue some specifically to growing ask past, in question given I said you fast that Not the numbers, same again the but a business.

expansion or a us current you new maybe to terms question really longwinded specifically, a expand be quickly then you go? think perspective? of just the run in the can regional immediate provided to So, the make X, going of enhancing to in going the Sorry, where for of that impact of Is going fall What's you it's if types? also, months? more on or segment all business in a sorry the just for is next maybe you can And plan rates? terms little bit And modeling here. here from this update technology the XX where plans where on then, Can terms attack before. order you've in this XX or most

Edward Tilly

go Let's off you plan, what think Chris, on Dave reverse. with start and want you to outlined. I have the

little of the So, on can that bit clarity part question. first fill Brian, there. let's you give a the in more

reverse So, Alex, if let's okay, start appreciate in that's I and it.

Chris Isaacson

region In the with our as the in bids we integration Australia, plan, we do in first to to migrate to integrations, plan bring to plan first do normally then We technology. Japan.

futures new we equity Australia transaction Cboe to Japan all our we likely technologies, put working and We run platform market. then haven't that then, And would to have first same swiftly out closed of our there. specific and dates, use colleagues we moving now with and but we're the the migrate options

the the those But around the us colleagues. We'll other pleased existing excited work more Asia, with our So, we're moving months. but markets, for initial products it also opportunities for in the about our gives both very firm the with very distribution world. They're growth have dates access really quickly. equity coming and in

Edward Tilly

also the presence as then with products don't at bigger our Chris, end you the fourth existing on region? XX/X, of the the on say, pick and you in end year quarter, effort why up of

Chris Isaacson

that market. direct XX/X. to so VIX or for better his Cboe to the are XX, hours response in customer want futures November XX/X to our in nearly plan on is around clock. futures will align options these That trading This opening As They with SPX we to Ed products mentioned our trade remarks, options extend options demand. and already CFE trading VIX

want session right XX/X market them And in here curb coming November. then, We're It we after in September. time. that to or a will be provide nearly adding so, And full access. the closes US

in those those APAC able that excited want about to really during regions to as trade our being those well other to So, distribute customers, hours. and that may as

Brian Schell

Alex, of business momentum the and we've We historically see on the forward. we And see whether of think as that growth seen we've we continuing, that's low-XXs, rate, we some that kind continuing grow. to are. XX% the that as where in far growth said the ranges looking rates of I kind of mid-teens, kind

We to know call we if John, I incremental from, when haven't color talking it, them as slowdown you we started don't the today. with are have seen where well.

John Deters

of there, times relative market the from the business, Rich's European we question like take diligenced always platforms to They're John. things revenues our indispensable can countries. a question result, businesses, It's one really in business, They're – in not why at were as grow pie, you Where platforms. share the take interesting a the see incumbent. when for platforms see really from well, grow to is of both in the the incumbents prior to of found is the of we both revenues we as the aspiration take it talk this reflected, derivatives. data these of the we your substantial to opportunity, you to we To This businesses, was size non-transaction of people just a from size countries. And the highly looking and about just XX of access, the that question, about Chi-X Alex, the just connected. two needing are

its take case we position it's today. So, business we from where pretty clear the can think

Operator

the next Goldman Blostein comes question Alex And with Sachs. from

Alexander Blostein

non-transaction could increased was more bit incremental units hoping revenues expand on and you subscription a little this you earlier. described dynamic for I

of of be And helpful markets. board, So, months, if they bit access are. you volume new it really is last customers If think much do just a tremendous would Brian, can guess, the sort it amount like that fees then, increased and for of versus be a how who options versus that characterize I given in existing from sort cyclical guys much of could both across more your kind of you customers. of of the secular? equities of is new growth coming over sounds demand XX dynamic, secondly, How all across

Brian Schell

kind some to to the looking going of it, has call of to going level of to things. One to talk be you're And high but I going of for. with have and exact providing. you're you're want what don't numbers we're primarily trends have is the, of – to the it's new, reflection I a seeing. we're and existing that you're also offerings do bulk some of the going some two see this see I'll –

of I macro. volumes. obviously, we're And higher a bit think little it's seeing

So, want going they capacity. want to in, more be they they're more access, pulling

macro and their volumes influence say, from versus So, – they hey, won't out and you're from incremental figure ports. percent internally able to And what definitely analytics macro. some to it's increased incremental from be we what they're continue as adding coming X seeing and doing

some we're trade I trade, services and pre that helping doing And with facilitate So, and analytics post both. seeing what we're we're think of them. at trade, our with

we're a of So, seeing both. combination

at. three. diversity it's go as I we roll forward keep try to would that, to really we It of driver growth the as makes one the say levers I particular it but, make would still it I a think wish I some momentum. all the could So, is We're forward and on touch existing. moving back of easier. to it the thing primary nice say, had again, I But point mix seeing new, I several certainly would

Operator

question Lau comes with Owen The next from Oppenheimer.

Owen Lau

update live? product pace the initial clients? after expect strong derivatives your of And roadmap please launch? your products investors Which goes us of an give Cboe, it about, given Could with of how very your product feel your conversation you you should

Edward Tilly

We review are ready. I've prepared approvals in We're are nicely. and As operational regulatory on coming the said time. Right? along remarks,

indices we're I And there, looking exposure. to. with So, how we'll more the is I'd to expand be couple starting. draw starting six country-specific that last like from over quarters the But attention to think of is laid out your model we with the what

interest will, being posting cross to capital CCP, the remember, you to one for if we've of to in chasing, If efficiency it's posting able efficiencies you trade, to the ability liquidity, across liquidity able that with rewarding liquidity who market, been lit, the that be accessible US the Europe, providers it's express are model, bid really a ask.

efficiency is from they to seeing post open having liquidity market, of customers the most cleared. makers really a be market and one the rewarded optimally it where benefit an at CCP the the exposure that then the can from for European and close, looking screen accessible So, cross

a an what to add? not market again, opportunity being is express to anything and This share able for play. really the and we expanding country individual an is So, growth think pure opinion risk. in pan-European Chris,

Chris Isaacson

I it. think nailed you

We've long-term just this, investment. many about We Owen. it's it said super quarters excited a now. for realize are We

good think leadership a will XXXX. why revenues for under play XXXX. projected with first, in indices right haven't Howson We've the more build in country-specific, Dave start good the six recognize futures. single this starting then That's across in massive growth well, of more had stock the slow and somewhat we we be what is on and first, options we long-term team us and the schedule. ecosystem, indices is But of So, those and readiness. demand eventually Europe. We're as And

that a customers have here growth long-term we our So, again. path are wanting

this XX/X, effort. driven like a is Just customer

better want We a this market structure we have have we exposure in than customers today. saying

Operator

Our next Deutsche comes Bank. Brian Bedell from question with

Brian Bedell

growth talk the recurring not especially size back revenue that are potentially confidence the can factored the maybe the Japan you right look XXXX? on you the is and of based Chi-X XXXX, data, organic basis, to have – guess, the guidance now? current into just second in and in value mentioned opportunity, there on guidance. has Maybe as of for subscription that of Chi-X generate updated an in double-digit that recurring Chi-X we also business early, Japan now that or ground then, increasing probably but about into given Brian of other more are XX either it's And The half incumbents what and Or the on Chris, to being XXXX, right Asia including with times revenue. I you acquisitions able opportunities, – Australia penetration

Chris Isaacson

start? to Brian, you want

Brian Schell

that. Yeah, unpack I'll try to

far you around today be as I'll to is, have conservative, and grow. – are this right? expectation we last quarters and see of in it, tend year to the some what some we It's primarily going assumptions growth we as have pipeline, is kind do We well, So, of relative visibility. we that a growth it. to we revenue As seen growth growth, as will non-transaction know. And there while a of to where consecutive you've category reflect, rate continuing our call

But time. sometimes of some about to So, we're Rich's lower in, and the earlier, in. mentioned some say as success of growth is, original factored what [indiscernible], over trying slightly to answer hard year. like I continuously it see those when rates. and we prior to running some comps we are higher higher today, it's is stronger with what seeing I the And somewhat short kind but factor changing of question predict the I rates that And primarily would reflects again, pipeline attrition said, that's percentage against

think let about as color. going little bit bit I we're the talk a how more a and that on Chi-X a that incumbents, I'm the little to the again, little and more – side, bit relative as growth far John than seeing to

John Deters

the is growth on that it's access done strategic that's transaction Chi-X in levels And these that you'll opportunity, of a for There's rate, to about the data the Brian, before both talked we to We've on data this really other and been the about distribution. But framed transaction has opportunity We in the side do the and market benefits three look opportunity. intrinsic side. when really and markets. recall, we about deal opportunity. Two, announcement, historically, the two-way growth share. two. double-digits

those really mentioned, And that's got platforms, being single-digit touched properties into is markets where drive on, significant a and data the teams on had in the will Chris the bids distribute to into the able existing representatives finally, existing and other it probably we third It'll And opportunity where direction, presence. and in past drive connectivity Asia-Pacific our to the going Japan. this now and and from as and Brian those. then, changer. distribute bids. got being So, our of will able with we've data theater, full data drive level And we've transaction markets game both volume Australia

Chris Isaacson

the about, different had just thing I broad quick. year, to sets markets. data – data with offer from we're last we're adding more also our from transactions think and able data real Brian, to more sets It's on just the

his for Global around existing So, remarks we're is the we're as Brian way globe, the a Cboe is where, distributing lot US, of increasing. the increasing; data how. getting that Ed around increasing; distributing what which the And mentioned, then, Cloud, in we're data also where, in instance. the outside that growth the mentioned

quite is a we growth This excited So, this us. for that's we're And what path think it. is. about secular

Operator

question Our Kyle comes from next KBW. Voigt with

Kyle Voigt

type several XX So, bolt-on months. over past the you've done acquisitions

Just smaller deals just trying out curious, better specifically to range? are seeking in size get you I'm And that sense. a

to scale strong a size type or more there's well? if or for ahead, whether bolt-on transactions open you'd acquisitions, Looking preference whether be larger as transformational

Edward Tilly

do. at transaction post that for a that Cboe, of classes type services that to suite the an has is we good the we've And need. But that out country in competition, not we they in and is have in we operate, importantly pre, and to there's moment, way integration knowledge, there's the they look customers to our have there's is We products Cboe deal. how in if that we the see in when like answer wake an larger done afraid yes. we size at we don't a our something at we put the We The asset go have compete. And That's trust, is that. not be you that see full in compete class so that of and core. and to there with involved say region consistency. look look job to to We're side at. really want that I M&A customers, up get to think a reliability, can pretty or filling mode. believe We our But would geographies it's help a we trade. If think for a we're a look and open advantage asset more

in also is across hard scale. to we'll for globe. We're competitive And a competition, take interested a open look. good look the So, we and if want region

So, to opportunities we'll to regions that our we for the look in today, continue presence. operate expand

M&A. John, So, I how you in. a sense feel gives of free view to hope jump that we

John Deters

of point, this. standpoint. With mentioned organic Ed's our really to focus think every an it we all capabilities. Chris and the scale consider really of And extension are an quite we opportunity. at the integration for planning drives opportunity around growth organic from think, smaller humility, as the something we're us. I team's acquisitions think good It

business, relative with the scale acquire types to are alone, be of you Chi-X these that capital returns Just meaningful. to on really basis that of really, that an to transactions the deployed had garner aggregate will

versus that in scale. So, again, one say small role we play really useful organic to favor a our But small have to can plans. other, the it's versus not growth

Operator

comes the question And next Cyprys with from Michael Stanley. Morgan

Michael Cyprys

I wanted to ask market data. about

separately? what number acquisitions maybe you're on sales you do have us strategy a here, if front. extent bringing How made just just to the of you guys how about you them growth. teams to on sales are sales you operate a could together? your data them using accelerate Or organized? the your You market talk could How teams bit update are And

Edward Tilly

how a bit detail and it about should it. where can find you you I'll Brian viewing be more up you will and little tee it give

services think, just quarter, Brian, there last and I that, But, division I access and model very, a important that, to helpful. Cathy little very will be think Clay how track would which guidance data to that is announce leading we up here did importantly, us. solutions, new a with be

Brian Schell

a outside would there's the momentum more together, focus, we're as meeting side I here and mentioned think together, I doing incremental pulling we'd as with and it and this it I and time. making Cathy on computational analytic more the is – think far that. renewed all that's two customer say things easier, bringing real what digestible demand bringing versus And what for one, that and with the Ed say

helping Again, more that and sell and that oversold, to really And that there. work working towards more effort would to across accelerate in a very missed, that. here, that's the be oversell to is it, more I broadly, so, integrated is meet classes I'll say out enabling, It's to really, offering sales cross business. I'll incremental to those talk that, be of And the to the what depth growing to And But important. force. a book, patch but there able going quality way. needs word though, done coming it's sometimes clients sales of our call that's say that we're not is is we're on of really the team. book, whatever that's the business, We're asset equities the might continue – to data top the actually of continuing see growth about cost just not transaction the market team the offerings, data, from standpoint. market seeing different a focused broadly,

effort So, been that the all to do Europe, options, across has sell cross classes, that. able the asset with Asia, team respect to

said, the market data I like all not It's the sales broader team. team even folks it's businesses, actually in businesses. across a the sales those So, transaction just

more line take frankly, on top again, So, to we want do, incent seeing we And, to all a really starting that so a behavior. that that, basis. hold. lot And we grow momentum rallying, we're

Edward Tilly

FT, is data I with TradeAlert think it Hanweck at that really and market incredibly combined effort is time relationship. to, the the importantly, analytics what real of expandable platform Brian provides, and and enhanced portable sales an hinting powerful,

We beginning the just said. just up stages, I pulling as this started So, quarter ago. a

this excited watching one. We're keep it. So, about

Operator

Kramm with a follow-up is UBS. question next the And from Alex

Alex Kramm

on non-transaction bottom quick talk of the units two the Actually, right, when I follow-ups. that this, you about the market last proprietary has over two revenues, on subscription, noticed quarters. in mentioned subscriptions you that percentage and sorry declined data incremental the XX, chart the slide but if One,

reading if or incremental I environment And a pricing, pricing. this and discuss right you've pushback you lot bit a am pricing? still can you able an if just just power had So, little So, has think take as upside changed? more update to so, of the where been you've if on there's saying, pricing from

one. tractions futures summary positive a quick business. And earlier. on slides, of futures it missed on the index you one I very bullet if then, just had chart bond On one Sorry, your and corporate

You didn't it. speak to

real on. while. going anything in heard if just So haven't opportunity a we curious frankly, that about there's Quite

Brian Schell

bit on it I'll introduction pricing. talk that. I'll was, to was a I'm about little pricing. – take, call It the some Alex, happy of

And going more some we're so, try a strategy shift capture. an it really hey, as explicit, get and wasn't to

a was bit more it normalization. little So,

in business. bit So, the it of side it of new was kind the was little And equity pricing. of a

so it been been up it been much mix. of which So, had blip. you It was that there on, that minor, much kind really that action a pricing had pretty bit going – anything little had the why Honestly, because hadn't of overall wasn't is back. it given showed push

see we it change far in as So, isn't a strategy as near to term. the really – what in expect

the highlighting the are, thanks though. been of proud yet, haven't story. large a the strong we On at That's for [indiscernible], made of growth look that incredibly headline that. we we out a futures, really although success and we're If where

it's look you as As But the relative to from somewhere. numbers, overall a huge have yet. the at know, to rest revenue not we of start scale the producer the business, you

from we've So, but seen – a iBoxx growth if first range just not we from also XX% year, before. quarter or seen last the a that were where we've the you of, growth rate complex. complex, XX% we've call only whole from more seen And it, across look at

that we build. that to momentum to continues nice that really it's continue So, see

Edward Tilly

question. great Alex,

You're not the one. only

this interest, particular, be starts blocks. to really you and can need for in of yield, is in the talking And things block to we're the solving this growth how and this to that. Volume, the get is in for is about high size The trade we'll quarters the So, see in What and come. really that the growth and especially market, inbound kind large looking we what looking is start, satisfy where in demand attention. right?

thank out. you for So, calling that

Operator

next a with is question follow-up from Deutsche also And Brian Bedell the Bank.

Brian Bedell

Just equities wanted structure equity, US market market to ask structure. – about cash

And on that exchanges update Whether your reduce realistic on. terms the penny the and on you in the it's of more mentioned. of to be tariff that's volume on regulatory getting been on then, data exchanges something view [indiscernible] structure on issue think viewpoint market Just would maybe any the for that. to helpful lit issuer price, allowing that

Edward Tilly

The Let me price discussion we're right What role – off. competition, do approach. do our it called to as Yeah, that price at from in equal the for believe for has regulatory formation? all perspective, we review. allows think the any out play more far field the review kick at is it. any desire looking his we chair SEC playing course, markets as lit any more Of movement, oversight, discovery, look

So, And in healthy general, primed just these participate in are really really, ready discussions. the to we're debate. and

couple comments trading another low as the increments, of on great. far we from I Chris, as would transparency think, fruit be your hanging think perspective, are what

Chris Isaacson

tick better Brian, But a at the be playing sizes tick is who's can the the market would Gensler is be focused or his finer has the hard good that for volume for right Everyone good that's under watching think quite sizes well allowed to on be think some done looking help remarks, of changes in to think could exchange to the And environment. match off-exchange mentioned We this that now's which time level Brian the ignore. things, even we on off exchange of been – commission that's We field. is improve growth question. outcomes operating investors. what there would today. changes Chair

transparent effort. and quotes And best help think tick around always, And then size markets execution. disclosure we And transparency, so, reform and as and could displayed markets. we for in are that greater

review reforms sure. it's sizes we're for, for but tick think So, we dramatic no pushing to time

Brian Bedell

on update Any well? the as market data issues

Chris Isaacson

market on to update material Nothing data.

track We But important we retail continue what closely. the think on welcome focus it we to investors. the frankly issues for are

Operator

session. Debbie return Koopman any I like concludes question-and-answer closing That comments. the you. Thank the for floor would to to

Debbie Koopman

And But concludes It's anyway, I'm just with friendship to working December, But look a be to. Cboe Appreciate gratifying do a all and in grandma. and appreciate to the it's before of words. but opportunity you I new over that, years. forward it's And team. know retirement, extremely of don't in to to the going I But everybody working miss That Keith. forward for it. going part of my get all Thanks, look to I – we going to call. great. able I great I I'm going I'll say to wanted end, everybody. minute be more, I'm be I was your a you. role been your thank take kind to with the been

So, going title that will forward. be my new

Edward Tilly

Thank you, Debbie.

Operator

that Thank teleconference. And attending much presentation. conclude you. today's Thank you. Thank does today's so you for

disconnect may now your You lines.

Cboe Global Markets (CBOE) 30 Jul 212021 Q2 Earnings call transcript