CBOE - Earnings call transcript Q1 2022 | Cboe Global Markets, Inc.

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Operator

Good morning, and welcome to the Cboe Global Markets First Quarter 2022 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event today's note, being recorded. Please now Ken Hill, would like Relations. to to over conference the Vice turn I President Investor of Mr. Hill, please go ahead.

Ken Hill

first thank us and for quarter our morning call. earnings Good conference you on joining

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

Following Howson, open be presentation Also Chris comments, of of Asia and President Strategy John would call will joining Chief use slides. our to Chief Operating Officer; Cboe to this Europe their Q&A. that we I point will out Isaacson, Deters, will Pacific. Q&A Dave us like the and for include our the Officer;

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

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

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

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

Ed Tilly

the to pleased today. Cboe for continued of financial thanks report Good XXXX strength results for morning, reflecting I'm you, joining the and Ken. business. first Markets, on our Thank at us quarter strong Global

quarter, year-over-year, earnings by per to revenue XX% record record and the grew During net XX% $XXX we to adjusted $X.XX. million, grew a diluted share a

quarter our expansion with driven the strong data ongoing solid our trading business, of products, by first demand in our solutions. index of for businesses, cash suite higher diversification activity and were results in and Our our proprietary and access increased volumes equity

Our Options multi-listed results contribution business and an proprietary solid from our had index strong from a business. quarter products outstanding with our options

with and to customers Our around Average remain engaged the increased manage continued risk. volume product with elevated suite products our proprietary as well to volatility daily resonated steadily world index market XX% participants our and increased year-over-year, XX to in SPX of increasing XX% year-over-year Multi-listed over contracts million options the XXXX. X% slightly up quarter with record fourth trading VIX options ADV day. new a per options year-over-year

XXXX. European industry of enhance to a since percentage had XX%, segment BIDS and Europe. by periodic their of across their and our by, favorable overall improve experience the books, expansion but order lit not market Cboe and our clients quality auctions, analytics backdrop, just help to executions and services trading the XX% dark driven of data very Net These notional market X strong Additionally, quarter. XX.X%, increased our points increased traded results the first average Equities daily and rose were year-over-year highest value the quarter share revenue as

offering. periodic BYX to month on with we periodic launch earlier On we've the replicate our exchange European hope and auctions auctions equities the our success were pleased U.S. side, had this to

new a quarter market. to new program of volume Turning Japan in result to considerably attract market increased the share a liquidity X.X% Asia Cboe fourth XXXX, up first during the quarter X.X%, designed from Pacific. provider to as to the

market in by to list in Japan, to volumes preparing and We a volume also In excited remained are crypto Australia strong Asia largest traded. footprint first weeks. the business, our equities growing the we across is world equities fourth Pacific's are have ETFs coming which in Australia, Cboe the on

be to to bring to products these market. We’re innovative helping excited

strong key corporate initiatives on largest creating Canada, we achieving new with important It's our completed Canada system to results, equities enhanced to our in footprint trading experience advance Cboe look innovate, our MATCHNow, to this our continued subject blocktrading later are the of successfully and globally. to equities while In regulatory and strategy sponsoring customers. conditions. business Importantly, benefiting in launched close latency migration execute North market forward enhancements this our XX the offering Canadian the BIDS market. increasing Along over February, technology Canada, further We for with BIDS and acquisition NEO all closing integrate quarter, brokers trading migration, approvals we and alternative grow sponsors. expanding equities technology American to bringing Cboe a a our customary with signed of improving of expected of MATCHNow we already these unified Cboe the as to activity migration the to of note from on the that Canadian with platform institutional to

as for plans migrate the early world-class this closely the ahead of Australia them review we this migration Cboe We to will be important regulatory to engagement pending with technology and their approval, in make released our XXXX, working migration. and February technical schedule. a with announced year platform also the throughout in on specifications preparations appreciate initiative month they Australia customers We and for

and ways, and in global us evolve both we our continue the gives organically broaden to unmatched network scale efficiently Cboe, ability to business As expand inorganically. our new and

joins as record of successfully As Pacific Dave team segments our a well and working Cboe's of excited and job spearheaded products execution on innovative globally. as remarkable with and last will grow Chicago business lines know David I he Asia His has President to speaks some to development has including relocate volumes, he the us customers as currently to our position most changes we serves our strategy. today. and President businesses. Howson to and management talent call was month, growth, Cboe's team May London done enhancements the European of I believe for Cboe of our to appointment services. our of to well the these to track Please leadership deep the and global incredibly oversee Dave the of Many expansion from bench and is planning Cboe Dave several of showcase you welcome future announce advance and on XX. he the business architect

we areas and Solutions, Access mentioned transformational Digital. the focused on in opportunities see and on Cboe our business; last As of core Data quarter, executing three are we Derivatives

ongoing by leverage our these fuel remains by strengthen products, consistent; and technology, class. our expand further revenue, against proprietary our strategy We recurring which our executing opportunities asset line geography increase to product and superior continue core

the progress solid first we of quarter, business. advancing these each During of core made areas our

during customers further increasing customers. subscribers Let access and expand data believe our continues proprietary which globally. to platforms. with Global quarter, set equities delivered the accessing me Cboe fourth was This to results Cboe's to This of Cboe European record increase Global new to the service begin market our revenues customer demand unique streaming quarter to cloud-based this Solutions, Cloud, Access aims set exchanges, offered the data during and driven to we growth launched by data data our with continued gain data, XX%. the market frontend further which will service new the Data the Cloud via with we data expand for summer access We base traction plan via to addition with cloud. a

positioned is well this business incredibly believe We continue to forward. moving

Access Given to our targeted from Solutions we and organic X% X% XXXX Data to XX% confidence, to increasing XX%. rate are for our growth

Our Tokyo, set, unique in Chicago meet customers needs between. to diversification, with to product asset to from the London Singapore and geographic enables our coupled of class and us everywhere

As ongoing and continues Ukraine, war uncertainty participants to mitigate by caused with challenges and volatility risk. derivatives market to pandemic, the grapple world have and interest increasingly the to inflation the the help rates, in turned vehicles rising with

expand retail and overall SPX to ongoing XXxX proprietary by franchise We XXXX. offering the our in Weeklys globally to this SPX our expirations customer trading products meet options; in week expanding popular May; business new our to day in innovate and and provide of and for trading trading launching momentum the launching in VIX continue VIX options Options SPX starting need derivatives every growing I trading November solid Nanos, Earlier, a continue see smaller-sized volumes our noted across trader. we XXxX as strong designed product since to

more During the SPX XXxX. prior daily average increased Trading launch double during in year-over-year, than XXX% volume the to Global of quarter, first the Hours options volume

Additionally, increased while Trading increased Global during volume Futures average in Options XX% XX%. volumes year-over-year daily VIX VIX Hours

XXXX our These XXxX expirations SPX build XX. early days, new the Weeklys, SPX and launched success investment. our a exposure the already they added its options equity strategies and SPX one volume we SPX add U.S. an actively precision most traded generated their as Since even week, in XX% they expirations include in complex of of Thursday which we with return seeing still the to we accounting Monday, and plan volume, attractive execute May and Friday products, of flexibility. Weeklys Wednesday, on of on beginning Although are enhancements has to Last our Weeklys listings Tuesday result incremental allow total short-term trading market expiries. currently have manage become frequency, XXXX, as investors greater for to

designed accessible to broad range strong retail a its of positive month, participants, We were On options a saw we trading first XXX,XXX of Tuesday, for feedback trader. kind have the off start. we over contract contracts launch very more Tuesday a market received to we are excited from make Last traded. expiry Nanos, to and

which we the continue pleased We brokers product. with days, been have this to several contracts offering and retail topped of have network to expand on initial X,XXX plan volumes,

flourish we engaging this to continue time to segment. growing forward and market to retail with this expect We over look

Turning now Europe. to

business September. Sweden an via contracts a continue throughout to of Norway. index derivatives since expansion momentum we and providing made European world last pleased equity efficiently clients progress year of and on with phase Derivatives and launch index options our The reported laying the customers around broadens X,XXX gain volumes. marketplace. over we in to futures Earlier week, global exposures continues Italy, upon product the risk. our second launched European almost grow quarter, last four-fold the to first of with their we build quarter's cover indices; four help country Our to single a and traded as the are navigate is the on we the manage markets, foundation to key This strong this rest suite increase franchise products additional European Volumes additional tools Spain,

clearing soon, regulated now Cboe provide and will capabilities Turning with planned on close trading, for ErisX, Digital its to blueprint clearing exchange of operating assets through very remains subject trading, This market trusted, moment conditions. we reenter to spot to couldn't acquisition Cboe regulated transparent, track success; more markets and be for a of ErisX clearing to closing our digital and which house. digital data Cboe pivotal apply and as we digital customary futures derivatives the excited data, and assets. asset is our and to

Cboe role of before, play can a market. believe revolutionary we've As we guiding the this shaping trajectory said in

actively emerging regulators We asset engaged class. shape have this with for they policy been as

the Additionally, together application Digital. the the accomplishing look at forward things team and as review for great ErisX CFTC. in ErisX margin to welcoming currently to Cboe futures We Cboe is

for at The flywheel, And our we various us across of Cboe in expiries allow periods today us We the investments like harvest and durable our come. like robustness here and time, over the are well ecosystem to to but of and focused investments Nanos, from enhance to targeted near-term Tuesday/Thursday Cboe, investments now, help growth. product on products years strengthen to the ability believe position diversify contributors term I grow turn will set our I only growth also longer revenue over not to to XXxX Brian. making are driving

Brian Schell

Ed, good everyone. morning, and Thanks,

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

share we per on producing the to consecutive the year start, business and $X.XX Overall, both record up diluted a non-transaction setting performed Cboe. As off second of quarter full is Ed very our to well. as a strong touching the favorable We continue results were on as noteworthy the adjusted to for believe these investment us advantage some the Quickly to capital help first to our to work enable strong takeaways across validate put market the from take focus dynamics. of ecosystem year-over-year elements basis of transaction XX% earnings discussed, quarter. our

Markets change I led Solutions Our and note notching to in categories. net November Markets quarterly increased our we record at would reporting reflect revenue we in we how $XXX laid and Day. out Derivatives about Access forward. to the and in strength our think our XX%, moving another update and income at Markets, results business, categories reflects Data will addition Cash by Investor to million, the the The segments, like Derivatives be Spot the how statement and Data Access and Solutions, our

business, IR share back business covering more highlights couple quarter find EBITDA quarter, net our Data the for in a Markets by for year's was strength details quarterly XX%; timeframes can unit and strong our increased up million; Solutions European are $XXX and site. basis, $X.XX, produced and for also in X% organic to Spot an XXXX up first XXXX share on basis, Adjusted given the on up available historical in XX% compared market net You XXQ. were and note our the on growth, year-over-year revenue record categories the XX% per an Cash first Derivatives to Please organic growth in the our XX% up Access results. of categories XX% operating quarterly diluted that growth and of and produced a X% values of $XXX earnings updated our XX%, helped strong equities hit and volumes Markets new cash net expenses revenues these our subscription organic up on Noting adjusted index last adjusted quarter; million the last, revenue

key the by to segment. Turning drivers

RPC, by volumes our deck access as And so of XX%, priced SPX quarter as another margin index net business. digit XX% continued in of proprietary segments, shift metrics XX%, just XQ contract, and our I'll capacity stronger growth delivered a North options X% in products appendix benefit exceptional higher in multi-listed XXXX. over by some versus higher quarter decreased ADV revenue segments of year-over-year and revenue up both compared to market a year-over-year point Our share industry and Total a by XXXX. basis, a to of and of options. thoughts. X% mix options trading and We ADV 'XX of key some better improved by comparisons On provide equities lower XX%. each volumes sequential data slide quarter fees, RPC respectively, levels. from up basis in our quarter for well we of summary includes XX market difficult growth our the double by against quarter. given nearly lastly, to growth mix first as index American and market press XX% in share first driven as the or of full release by the the Industry XX% volumes by up percentage index points our business first declined and higher XX% was index were share, XXXX. options market and positive impressive saw the was per moved increased higher higher detailing many information continued the of our net Options to revenue during options,

in led point very volume of XX% equity of volumes and by Clearing an million. industry in XX%. fees non-transaction Pacific benefited growth fee and percentage growth compared to fees fee On side, and increase capacity market quarter, year-over-year for inclusion with share. of Asia Europe's revenue XXXX. increase transaction volumes increase clearing increasing driven Net XX%. $X.X APAC of increased the higher of higher growth The the access first by net of again fees a outpaced XX% growth Transaction outsized XX% and Cboe clearing up delivered revenues strong the quarter were solid was X ADV The Cboe XX%. Europe segment as from given the

contract increased the First quarter. for and X% Futures flat and quarter gains metrics transaction revenues revenue segment in per were Volumes year-over-year. as non-transaction relatively the slight posted rate

XXXX. from first in On side, a grew fees to and as And the were traded XXXX. quarter of to up the increase first rates. and clearing as were average notional in and increase transaction value data up access slight and the in compared daily non-transaction XX% X% the capacity FX compared revenues a finally, market fees Net capture quarter of net XX% segment XX% benefited

physical and Solutions year-over-year strong with XX% total compared additional footing As to was equities data for increased specifically noted depth-of-book growth year units, saw trading growth continued opposed XQ capacity. businesses of driven logical More as XX% Access the changes. robust side, and port Data on started increase, in Cboe's 'XX. on market revenue strong by perform to growth revenue Again, the XX% previously, the well. options usage we for top-of-book by as to driven our organic pricing growth subscriptions and and the the demand over primarily products And options accounting and and equities

we look XXXX, see Data tremendous and to Solutions the Access we potential As for business.

D&A, X% X% to We guidance from rate are raising targeted the organic Day. our Investor medium-term growth at to delivered November slightly range, our XX% above net to revenue XX% the

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

the Excluding of owned million than expenses less XX% up adjusted or were for a operating acquisitions the quarter. year, impact $XX

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

our attractive this over we As build the of initiatives previously base expense the we year we stated, course have many to at invest as expect Cboe. behind

to drive is support business expect growth. investment returns needed solid $XX more revenue for recent XXXX future. spend believe few are talked past, the very million and our we million out returns as Cboe. like scale infrastructure as well. the investments our I In D&A areas approximately incremental some to levels and producing investments for $XX XXXX or attractive in We in our a enhancements We that like already producing that the would have to activity point of integration acquisition to to greater million of directly $XX of for EuroCCP

November, the to in trading last For than XX,XXX doubling hour day can the leverage first Cboe. we volumes has our though, instance, and XXxX, footprint, periods classes. global case SPX invest year-to-date quarter. unmatched start. a in our make the a of across week make we in derivatives strong harvest multi-year each framework live EU core XXXX which leverage investments asset went longer-term live other capabilities of investments In unique, technology, across trading in block the migration contract contracts We technology complexity. an levels, global from activities. saw over with like initiatives profiles, this each integration cycles very traded, went superior launch, averaging more like Tuesday and BIDS expirations endeavors ability so equities per short-term to Cboe to return introduction translated Tuesday the that The same markets this is Tuesday of and options acquisition, attributes that consistently payback XXX,XXX cohesive EuroCCP across levels We we recognize we and expiry and that different behind XXxX trading contracts ecosystem new experience over

to $XX acquisitions, closing soon, million. updated customary to review to very $XXX and acquisitions XXXX to Looking framework ahead expect Adjusting $XXX million our other million of conditions, and subject we ErisX incremental prior for our conditions. NEO guided expense the NEO, to million regulatory for timings, the also $XX to and closing to pending add of midyear range the an expect ErisX transaction subject to customary our we close anticipate closing a

in XXXX NEO expectation ErisX than its EBITDA revenues a will on offset from the for more plans are year company two. an that XXXX, to combined and acquisitions half with after the We in additions the further positive continue The expenses basis guidance that of refine to close. anticipate

full of incrementally spoke we November. the summary year many guidance our year a at for Investor the in given early performance outlooks providing are slide, next to turning businesses, positive updates and on we positive the our of for Now to Day back elements

given to Specifically, acquisitions in we up organic for remains prior revenue XXXX, guidance from the to be X at from upside $XX year-to-date organic X XXXX, total to are year range. our less of X% net range, performance X% see anticipate the growth And target expectations now the we held initiatives XX%. XX% as growth our but and growth to amortization than to X mentioned, of have we increasing X quarter guidance guidance, less our to have our revenue X% early million net well, the D&A points Depreciation up $XX macro already overall unchanged after and growth the revenue to of for first contribute calling between expected performed year than and trading potential is Acquisitions points. in our previous to a environment. percentage be net held million in and a we the percentage slightly to revenue will X%

$XX the range XXXX, Our year, anticipate $XX the laws. be tax full on earnings our under CapEx to to adjusted we rate continue is for guidance and for range to in XX.X% million XX.X% effective to tax million current the

interest Our for was million. first expense XXXX $XX.X quarter of the

ErisX costs the longer incremental XQ revolving the borrowing $XX acquisitions Given and planned includes expense NEO, 'XX. and be in ahead million $XX financing to place to to expect facility, credit we range of million tenured for expanded in of interest related the an the put which of

shares dividend and use quarter, maximizing million in shareholders, value with of authorization. capital share through We million of of the been share our our front, in million remain the the and invest opportunistically dividend, shareholder focus repurchase $XX well $XXX support $XXX on repurchase first effective positioned we repurchases. In and $XX capacity has in On payments comprised a total capital. in our remains to business, million remaining the our to returned

most strong remain issuance We in a to note the balance remain to NEO ahead. Cboe very initiatives the ratio flexible with on in we look our many leverage maintaining way and off to forward capital investing increased levels we deliver ErisX the putting our increased and possible for XX confident of XX-year and we versus were Our transactions. anticipation across the Overall, of at footing prior attractive in kicked a record to to quarter ecosystem. as shareholders. sheet March debt work X.Xx results In the strong committed continuing investors value-enhancing quarter, the XXXX in and quarters for Cboe in sustainable a with summary,

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

Ed Tilly

I our to like the And incredible the progress thank made exceptional positioned our are Thanks, globally, associates, team delivering help we to start. would the is to quarter. for closing, of shareholders. define throughout Brian. to value In with off first markets dedicated XXXX an well our customers and

Ken Hill

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

Operator

you. this session. we time, will [Operator Instructions]. Thank the begin At question-and-answer

Repetto comes Sandler The Rich from with first O’Neill. question

Richard Repetto

Brian Good Ed, morning, and Chris.

is So guess VIX Futures my on and question proprietary the volume. the products I

You've more the happened ETF is update in issue. seen volumes, guess an Futures your about and the think proprietary Barclays, mid broadly a I could a in and recovery volatility there that's picture what rebound seen since index And the guess us VXX I to you sort quarter, great can issuance due in lot and and of on But quarter the like give VIX a the slowdown. give the first of what's control talked options you product what's driven? you us you growth?

Ed Tilly

more don't of and But just heart the Big and why Barclays with macro it's the good going it of Rich. VXX question there, the we start on What's Brian, to A trading. Thanks, more question a really Rich's of macroly? one. beginning at ETF. lot really

Brian Schell

Yes. Thanks, Rich.

again the pages committed new with infrastructure on they've statement as a Barclays they the goes announcement, that that, and did with March As the as and practicable, make that far business he as to and then the we're intend sure we file out look far at products in soon the timing, to point as same just mid and themselves U.S. they as as that remain SEC cited automatic self-registration to

into to not as us the that. perspective. to funds for no reason from in seen an seen we've well we've going And also There's space be that's ETF come believe case. the So interim, new obviously, that

Ed Tilly

Brian. Thanks,

at good maybe what's our what's Rich, a way our we at control, to the volumes. is control So, in if look in not look

China, rates So knows not asset relationship we interest we aren't volatility realized continue story if a a VIX. it's of the on And of COVID mix being chain And supply are as war level across of Ukraine, result they rising, solid similar the quarter. in to the our in primarily the moving. vols is by optionality inflation, users the sustained higher key all versus than control. use about underlying we macro our When issues talked of historic what really class. protection and continued level below buying our in volatility. to The last exposure the implied drivers; products be Very of are the driven implied are cheaper and realized, primarily

gambit this large watching dated to not in trade, not moves. control. is continue paying off Customers with in very Again, be and active our our provide. intraday the they options, customer optionality that We're short is [ph] So long control. Again, driven. what they around

Well, design, it's it's the that and control? can of extension complex. access to it is what the we development So

They trading. to And around options. we and that We've we short when So amount certainly options. listen SPX to with super the for platform again customers. with the more liquidity, dated sharing in access access precision want in been of added clock access you index more round interest our competence XXxX comes so in

retail to We're to more we contract, new more a floor which in in done access to the to global And curb launched add added session. We our interest liquidity. a for and So a launching access soon S&P options trading, accommodate we designed added Thursday. trading design giving almost contract the Tuesday provides Nanos XXX. for in-person

in that control access for And our expansion and that's guess question, and Thanks is the really Rich. punch listening. line. So I

Richard Repetto

ask going Got to it. Thanks. helpful. but I the about expense, expense conservative That's guidance, very all. the was that's

Ed Tilly

We'll let you get back in queue, Rich.

Richard Repetto

someone ask. else will sure I'm

Operator

Okay. from Fannon Dan Thank with question next Jefferies. And the you. comes

Daniel Fannon

and wanted on morning. I the in follow strength up to access Good guidance. improved data Thanks. the

the you've tapped about of opportunity retail curious but of what customer incremental that capacity, seeing be for on side demand? the demand you're increased if incremental about customer, maybe into talked and what in terms really you type the So could

Ed Tilly

that, Dan. take I'll Sure.

is of about we growth, a it's retail information elements the be retail cash the direct where spot and think vol, derivatives that seeing behind can not of but the and we're As as markets the those lot D&A se want to to to per all I trends data as touch far really on providing markets.

don't driving but as is part real-time and certainly underlying that that we transaction some see of driving but it certainly that it's per a data directly real-time it's access. of se, volume, in that So that that coming

and scratching we APAC, which of it's we of we as still the where example. we of we're more is seeing the at coming where that XX% new kind saw we outside component APAC, are of because the its today. are to North that look we customers, the American upside also those growth actually surface That's far rest was about significant see. barely as love smallest of of EMEA hitting revenue, look growth America, new and composition largest those part XX% at think growth was So it's where for the numbers and we of But highlighting that the North

there. where And we we more and think do geography a wallet. share that new of putting the about have coming risk we're at can that incremental online. that we of incremental And incremental as we what together really that excited look about we're information well as coming growth we offerings analytics is So and both it cloud from, think mix in the market we're seeing

be is, across globe. very those So where again excited again, that we and offerings to continue the about

Daniel Fannon

you. Thank

Operator

Gautam Credit Suisse. comes the Thank you. from with next And Sawant question

Gautam Sawant

Thank outlook? is easing that to you. by the European you for Thank is derivatives extent business, growth? momentum fragmentation the Good volume challenges my taking And growth the Can XXXX initial market of Cboe please morning. question. million you that there the European speak €XX revenue that structural to given upside and options also slowed

Ed Tilly

to Howson, Dave welcome the call.

Dave Howson

looked European benchmarks in years acquisition single really ago value when the and enjoy or the very great and of macro that the access together thanks efficiency place customers in pool the We share bring very Thanks point able of market And at European growing in market need shop through the basis breaking with up products off of stop very for single Certainly a giving the equities liquid are based us products year, derivatives you with the on increased has equities in the as trade with based remarks, for all place much heard benchmarks factors we the summary U.S. an single opportunity products of and the indices our our market. siloing off our that all to fragmentation a two solidifying that prices. equity in the terms the are on and for those those margin came really over we're that and Europe. enjoy, much with in idea there with of what that were customers single of across to last and venues. line from XXX much trading, that screen grown prepared so into points also and really country the We European at market across EuroCCP, proposition question. Pan the that And a need ground designed looked

gone benchmarks national we those new what crucially of So customers get year. products that different now trading have with Europe this size from local from year the we is of and with launch products terms last Really in the and last initial being launched good seen Xx therefore a continuation week well new of across expertise. access we've support. commitment new to customers QX since The round with QX local new

by product out with initiative. So across out on still and we're futures really and there, -- markets looking year European on a the between of greater still of price of there, this The the size we is the single out U.S. window this going with names. good forward given revenue on the our further the this really auctions, the we out the as path to from carrying build there, picture also guidance here customers. picture the really see really the and building products, is we're on is to opportunity build looking what sort next you're followed the through addition engagement look to And and and of as

Gautam Sawant

you. Thank Got it.

Operator

the from you. Thank Kramm And Alex next comes question with UBS.

Alex Kramm

morning, Good everyone. Hi.

businesses now? they hopefully as pricing a the about what we the one does Are on just new quick on compare there us so is trading, initiatives grow any your faster Can this traditional can but incentives the might remind have than your proprietary offerings? RPC You just you before, an there flex or how these new may the afterhours that have of products, how strategy talked pricing providing, weeklies. the you're idea generally right

Ed Tilly

Yes, there's no pricing. difference in

won't you any our to session. we're in mix options. more incrementally to going the going for example, trading regular that's from see mix of products having not -- seeing it's global mix these let's SPX call, higher hour But a you're versus say, charge session a impact that any So overall hour of other trading contracts during, going to be than have

Alex Kramm

Okay.

been have I And other those markets usually that contemplation but or something contemplating higher, global you're for doing. really fees bit when are a like, they access, so never think not there's a kind of little

Ed Tilly

don't that We it's se. build market No. of per think type

the here here various, place, see bit there be call new with example. with other launched or rolled European different will do here When with rollout we've about type talked incentives little we've futures, will that products SPX. it, a liquidity iBox when say with out of we for markets, a when we've certain derivatives, done it's some products. in You'll or we new the new of But initiatives that

Alex Kramm

Fair you. enough. Thank

Operator

with Oppenheimer. from question comes And Lau you. next Thank Owen the

Owen Lau

my and you question. morning taking for thank Good

XX% started So the you year on growth. organic D&A,

your end You is you higher raised growth in but the of guidance, the keep still guidance than this investing And range. high area. the

the the analytics to of you area from Thank your into European rest expand you. clients, to you products how when may for that? what the potentially benefit growth concern your continue talk down So D&A If slow additionally, year? progress great. offering about can Europe, may that then And can this you of that will be

Ed Tilly

pipeline I'll that. particular going. of pretty work the Q you we had progress but indices global at, it's see initiatives we see a got look talking so the much the if view our and slowdown and how this on look a see the contracts say over you ramped rate the X% rates on in look at, the growth with various at that if a there consecutive And growth this we answer, for have quarter-over-quarter will We into year. comparisons the and good I 'XX, Sure, of isn't you that here. start it we that 'XX if growth kind XXXX silly the example, QX. I'm in you about up area, a QX math of Again, for

you over had you a of then X% at actually had QX, rate then on XQ. growth X% QX, that. And If at it a it look growth top look rate

momentum million seen per you've run fourth of continuous a quarter, exited We So with at million $XX started build. for a amount we of 'XX or rate an and out quarter. the XXX

you nice see up. really that ramp can So

have QX, ramp some to continue we as able see we've been do that into plans place. we So our growth, in and

relative we at as earlier benefit we we I'll look sales going driver how was if we're flywheel goes And into of you to continues biggest to create far of comparison of mentioned wallet just out off QX our that to and flattening as in is we our last the previous people, you build But share back this of have as what build going the of of that new to year. had doing versus to interrelate. higher our more we build growth growth the the benefits build force, it, flywheel And so So continue move out, continue increased analytics, market market to little that call we're the question to just and globe, more share other QX, of the across more how the back of and risk customers. been wins growth a bit network. see a I long-term as each the they out as the global we QX naturally, out to particular seeing volumes, has an at look the rate

as geographies add to bringing to to geographies we sales offering we're that the different So about new in. continue and that excited we capacity really more are capability

Owen Lau

Thank you it. Got much. very

Dave Howson

customers But a moreover, it's a data And global in customers got, the when into we've can data. retail European RMA the think that providers theoretical provides the and options European CFD Hanweck lot the got more Pacific. prices XX% to certainly the that a sets opportunity It's providers, I you real of and Europe product deeper, taking the U.S. data of then market product there. local Asia One share European set CO you've Cboe the the multifold. in derivatives share. principles, get prices Again, there little deeper [ph] bases on Cboe market sale the options first about more and Europe bit the also into opportunity. richer, And set, set, used a which chime EMEA look offers off equities for we

one Europe And in for we can opportunity of then that post-trade further we quarter strong lot and Japan, services. out XX% to with, we and where a over of eastwards, there think Management non-transaction see last venues and revenue Risk see coming for we So Analytic providing non-transaction example, as pre-trade, value at increased add Australia's look revenues core at-trade Australia compared the year.

Owen Lau

Got it. Thank you very much.

Operator

from the And Brian next question Deutsche you. Thank Bedell with comes Bank.

Brian Bedell

tape, just performance for talked any And Dave just on more obviously if market a on would macro your rather kind folks. consolidated more Brian, can that? view is speak in about this Hi, two-parter Cboe one about volatility of think your guidance just many, revenue in Maybe that been of that's potential is and to and revised for one initiatives? many one that. kind guidance, then of something that best years. Maybe comments frame growth up based project Brian I thoughts offer Dave. creating in on position or here, upside whether that's concentrated and for in Maybe importantly, a the the We data can the European more to initial say any for on the solution of for there inch you the revenue did being the you release --? global quarter that sort every the growth targets. That's potentially on just

Brian Schell

same, first will that growth And reiterate that to revenue Thanks. macro organic in there's we we'll the a positive I last environment targeted most year that And confidence is exceed call that lot going stay net asset rate. various it continue the this contribute. the prior the X% is see and across is options. only really And we index year, you quarter particularly I'll again, the, growth not a the due to see question. saw strong with asset in that all strongly again, growth over in of rate, the does actually just, if what Good the which comps, to our classes, will the to X% of environment classes

So really very, as We're of early XXxX. we're to about that the and very, early seeing up we on the excited there. answer the numbers Look, the Tuesday, kind continue encouraging. depends to it and is, honest as about going Thursday confidence. around gain That's we're as see very inch excited what quarter, full far is we question as far we how your as year

initiatives better views traction, see the pick the with visibility as of Dave, And things environment. could you if into to inch strong a really next why traction time second of then, have up obviously go continue then well, there seeing to be continue QX year up that? we we'd and part guidance macro organic we as we're And full call? So this the an that to Certainly. far those as don't continuing the of have

Dave Howson

Absolutely.

on. spot You're

as see deserve basis of and We, environment. and others, model, are team I placed will to way consolidated at fair offered We well you our the reasonable like aspects, a post-trade as be Key palpable United investors. tape UK well you us we Brexit. We've the in as many hour, a emphatic tape the provider European as out, Pan revenue seen consolidated in point as share environment. it'd much commercial be the into good things share States. with strongly because happen benefits that pre-trade operating go this the think tradable an and European well We a and are on engaged a SIPs about markets the unfold think ingest introduction I include well we in now that give and investors United the we're we save in run and European are data could and but from believe real the placed. to of the certainly that, in post a also States consolidated investable We supporters will benefit there, environment its with single globally. for we this so of policymakers. do to things reporting as with customers debate XX% But much the our market largest trade facility And in the Europe in heavily the

market as we with So that keep we progress. the will [indiscernible]

Brian Bedell

welcome. appreciate I and color. great That's it

firm future you. forward to Thanks, the on from Dave. comments hearing the Looking more in

Dave Howson

Thank you.

Operator

from Kyle question with the comes next And you. Voigt KBW. Thank

Kyle Voigt

Hi. Good morning.

Access So mentioned these incremental Data by the and is units. additional driven really you subscriptions and XX% that growth of in

we given those and retail last to investor disengage focus bit traders year. maybe the some a heightened Just saw from highs beginning on

this you or markets, other Just by do think curious for see the we'd levels ports slow key units pullback trends? kind to volumes current Thanks. a meaningful would has if -- we industry of or been of driven secular from were demand that across your meaningfully in new see kind more

Brian Schell

probably port those when pull together highest do this -- highest capacity I there volume, investors elements is make particularly a their two. this are to having back for when maintaining these driven. at primarily peak, ports, make and clients, that disentangle in a that it's we of markets sometimes future rarely forecast And they're what Yes, knew critical know this in that tend our But they for we've people say volatility you and some at know it's as to historically. not it's money, I tell those volume to a time. bit highest how those also question, P&L. it's put seen money they would and And of And hard more can that when we guidance, periods level mix we look both. capacity is the I'd overall we say we to revenue continuing see that We're when of obviously the on

we on back of So pull see rarely them do that. some

and of, I'll And couple pricing a as building base that infrastructure. of, the D&A those the said, highest continue our pull beyond actually Now, where the we and more standpoint. from within in like But real back may out, that the which there's Market dynamics tend some indices bit time see overall smallest call volume Risk broadly access growth to revenues little are we're other D&A They that are obviously of that I'll it, a call it, I of that. to percentage and the build frankly are parts just mix. a overall Analytics we of the

So again, of see over it historically hopefully heart But your sticky. out been pretty that of back it's has but it time. play we'll a the question, to see is, original little bit both, we

Ed Tilly

of traffic, engagement as retail gone port the use or retail just tend see our risk, is they've that come engagement a messaging come less probably for mentioned or think counts direction may decades to the D&A I'll is mention or counts grow, that's And which capacity or flow. across is down unit overflow, as continue regardless as really. ebb where volumes Messaging messaging not, may down just they really just north, the of lack even there we rarely I'll go traffic robustness, to well, continues markets to that well we focused. as as

there's cycling with so [ph] institutions, volatilities. the the higher a marketing been community, and the volume other And institutional

see well, jurisdictions, again, Global Access I'll there our across to very, new our a data in strong Cboe Data. but And different as expect the and very demand mention markets for network. really after We're We user our Cloud. getting using products across and

think doable we that's So also.

Kyle Voigt

Great. Thank you very much.

Operator

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

Unidentified Analyst

follow progress This morning. you've Mike. the on up I just for about XXxX. Stephanie [ph] made Good is Hi. have a around

give trends the you curious will were to to watching you if be as or moving your XXxX? extend XXxX? view thoughts to you if around are you points data towards confidence that? And Just next what steps What

Ed Tilly

that. can you the think Chris of technology I aspect handle Well,

look we this think when we really the primarily know expansion I side. there's around interest has really retail growing that well. access base clock been as in institutional access, to as on the grows And

right our from access to there's the or And got to we've introducing not a product whether set. think brokers we readiness provide on then So customers.

So say far Again, our this would we at the as is I ready just accommodating that proven on that that further really but demand. not listening technology any going customers from we've debate Cboe's expansion Chris, opening are delivering key. and my as is on, a But back level. clock. on perspective, about to remarks,

Chris Isaacson

We're Stephanie, company here. customer as access question. demand for absolutely. it's a bring a us We market. driven Yes, customers to great

to listen the of this that, this year. team. we'll is That's part to already a then provide projects. demand curb I'll So expanding we're we that Cathy I so week. and will platform the of also look index mention session of XXxX that that to example launched as great our XXxX you, ErisX for even it. XXxX, transaction trades Clay remind from closing XXxX and one D&A our the There's forward strategic

there. around customers the our that access the the community when demand's we'll clock, provide more and as wants more So investing

Unidentified Analyst

you. thank Great,

Operator

with And Goldman Alex you. Thank next question the comes from Bolstein Sachs.

Alex Bolstein

Hi. everybody the question. Good morning. Thanks for taking

one, kind you near of those rest about So you're bigger of from for revenues the maybe an more. the little over to I assets what's low then these products with the expect potentially to of fruit thinking both years. of ErisX expectations? us us more kind just into like NEO meet guess, over lower of well bit needs expenses dig through of walk sources roadmap the that integrating first, getting sources of easy next to sort provide a really sort year? two exceed of and hanging hoping into and importantly, profitability? So guys the you a the go term was these you to Can of I or And kind picture for as of what guys

Ed Tilly

soon expenses; question. the on closing NEO. start we a then the in can NEO before ErisX And Chris, effect don't move Brian to ErisX likely very It's deal we great the on Why category?

Brian Schell

as questions brief for good we Yes. to as of guidance for our on hours we to but of that and in far the be roll far kind could one our here. our earlier plans when growth year, that I'll we lines, expense far be what out it as as could in. for I'll when as laid EBITDA try P&L expect use this go Alex, contribution these, then Dave's obviously are what We've as impact call you to

even a Cboe and us what And so NEO organically much year-over-year an then And Australia so little as not grow then what specifically. the plans it's we're digital bit let growth mentioned acquisition. a that, that more Chris talk side, growth the story around and respect wonderful Dave revenues. to the has about And more been there Cboe about and seeing -- and continuing particularly has our that expense with it's trajectory growth similar on I'll done what to post Japan, about to, for in

That's though there's year. to far our P&L. been As last even comp as no own

we're existing revenue And operations franchise. NEO as listing for as I Chris important Canadian or think back ErisX. our that, So turn playing American broadly doing the growing we North operations role see to far within that I'll around synergies a very with it what around

Chris Isaacson

listings we we before data data you about transaction, the focused trading, spot data the with about if trading be the and there the FCMs. to futures application And we can a and that Yes. that. as off comes new it coin with that excited looking revenue really we built add soon. partners, Margin for we're very closing one we Alex, CFTC the And industry platform remind the opportunities and margin spot by there soon protected derivatives that's futures, as as of have work platform, can, on for think -- spot syndication we're as we get transaction scale you clearing.

forward we there for can those asset maybe And be key on we something with as is of business. cleared real that's us time. over to real a trades bilateral look some that but we derivatives be then focused to clearing that some relationships maybe think So It's grow get there. a asset not may that growing as ErisX,

could So clearing be there revenues also.

deeply now and about active. help engaged others discussion that also very many conversation to this grow and transaction class So the digital asset with that's regulation this We in want excited new very asset do transparent way, right lead rest With markets. that, markets and trusted, Dave as regulated we I'll the so cover it a in a can think we mature operate NEO. way I in help these our to to of hand great

Dave Howson

Yes, a to BIDS with the have network reminder, to February great. up foothold Canadian and introduction to Chris. enjoy Canada in Canada investors as already we the a CBOE MATCHNow of to the invest BIDS And there the in investors really vice course, world Canada and migration Thanks, and Cboe versa. opening of in and technology around

new, set competitive really the to the The those So bring welcome today. to with of place different customer landscape, consolidate super to excited NEO, number Canadian about we protocols a things. our set in existing MATCHNow trading as brings different party and trading that a diverse mechanisms we the NEO

there's and a our XX great data a do top Canada mechanisms. around fruit, but about been on Low those we XXX global ETFs bringing over can out. network that of ETPs product able hanging XXX already then to there's depository us we've how how Cboe level debentures we out? build of world. listing a couple blueprint of We've is that the think listings. trading securities about already, be a great offerings got we'll One strategy Then Listings, And on the has to that corporates, innovation listings Canadian expand think So NEO receipts, gives really there. our

data NEO then Canadian of products, data into the effect those onto additive and the those including So listings cloud. later data, our unique on products enjoys that

repeating So here. you see the patterns

really plan. forward the getting to close, according So a going team we to looking NEO going towards which with as is progress

Alex Bolstein

very Thank helpful. Great, you.

Operator

Thank follow you. UBS. is question with And the Alex up a Kramm next of

Alex Kramm

again. Hi. Thanks

Sorry for dragging out the call.

earlier. one follow Access and the quick on questions all Data up Just

many companies do. in don't I disclose retention other don't rates think the space of data like You this

give retention is when where that's it types why? trending? maybe comes and So to customer and been biggest an just can you're Thanks. update the us you or how And seeing of maybe cancellations, what cancellations products

Ed Tilly

as disclosure seen we now, I the that this look potentially -- are. when high to enhance I of we we've some that cancellations higher Alex, a is we can we at far just tell that indicated you actually right as as think did don't we on traditionally will than is very at far very, rate as year looking But of the growth where that we last saw we've call growth seen model. some and what our fewer level

focused the call we've more seen call And been fewer we've we've it's and it So it, continued, think historically, story. than would adds. a we positive fairly And I cancellations on pre-pandemic. seen new

that again we'll there, trends we disclosures. items it investor So would information. positive the metrics evaluate like Again, that can I'll and to look call for enhance but

Alex Kramm

an be And do where just seems the you the know know of guess? you're business but to in curious where have seeing turnover is it book I very just I small, most so idea? we cancels the biggest

Ed Tilly

wait until the I firm we'll -- No, have and defer the I'll think Yes. from team. data I there just

Alex Kramm

Sounds color was good. The Thank you. helpful.

Ed Tilly

Sure.

Operator

I floor for management would question. Thank comments. closing to that turn the like the to any And was you. last

Ed Tilly

Great.

our for interest so in Thank and much So time you today. your completes you. the that for Thank call company.

Operator

today's now The presentation. Thank you. concluded. attending conference has for you Thank

disconnect your now may You lines.

Cboe Global Markets (CBOE) 29 Apr 222022 Q1 Earnings call transcript