- Earnings call transcript Q3 2022

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Operator

Hello. And welcome to the Cboe Global Markets Third Quarter Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to your host today, Kenneth Hill. Mr. ahead. go please Hill,

Kenneth Hill

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

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

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

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

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

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

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

Edward Tilly

thanks third us and Global to on pleased report at joining I Thank quarter an for morning outstanding today. am Good Cboe you, Ken. Markets.

$XXX million, XX% our net were record our access earnings diluted solutions equities results and and our to trading quarter, and per record driven to in revenue increased growing XX% results, in activity businesses. These share across year-over-year achieved strong a record-setting During $X.XX. growing growth data by adjusted solid by we revenue cash the record a business, franchise, derivatives volumes

contracts, Our in strong robust franchise, Record quarter third for options. across index ADV well SPX contract specifically quarter, for above XX% Derivatives with SPX another a multi-listed year-over-year business the in X% in one X.X average million from as start contracts. our ADV delivered X% and in volume ago. third Multi-listed our by options, growth million quarter, solid with increased performance to drive trading levels. fourth quarter contracts on the up daily million driven year-over-year year complex SPX increased Cboe increase increase accelerated quarter, options options XX% helped ADV October a as the an of ADV year-over-year quarter X.X the reaching XX.X activity VIX to in options third finishing

technology, Similar Cash revenue net was to growth. growth of Solutions our business further and first Data proprietary in and Solutions, Digital. last third update Data recurring class. X%, Cboe opportunities see the in provide revenue the and strengthen on with a core net XX% increased the Year-over-year, and on expand XX%, continuing this of to on results business. increase net our organic recent asset opportunities we but fuel of significant wanted these acquisitions We integration of durability our to Solutions strategy revenue with superior remain our We consistent: posted focused increasing which business: and Cboe Markets solid fuel line the moment, year-over-year. our executing product against Spot I'll our touch by including an revenue, during Access geography organic I and Access net X% Derivatives our quarter and three core Our remains and leverage revenue Access quarter, Data business Digital. areas strong products, Derivatives, with by ongoing

firms announce the we Digital to that which intend the During initial of pleased in range includes Cboe market become group quarter, equity investors were business, to of a the diverse participants.

the terms syndication We and partner anticipate have closing very finalized material investment soon.

its opportunity areas actively finance. collaboration Japan, for the understanding reach potential the we the market, of well-regulated accelerate SBI onboarding the services We laying signed to companies work with the of range Cboe's and these The Cboe for are financial SBI our this product Cboe discuss a an overall as and respective expand leverage saw week, and access and Derivatives see digital transparent the inflation, from and development beneficial of of tensions. continued risk managing we and equities SBI how Cboe established on participants of partners extend the expand in continued Management the and expertise Tuesday enhancements positive strategists weeks Digital products, Holdings, to area the rates, bases. global The foundation world Asset our across of the SPX a geopolitical addition expirations digital of the Japanese standard in Risk of the known in we work have We to potential asset suite. business traders, and where X/XXth participants they affiliate, hear market. innovate SPX marketplace Digital SBI the in dynamic gathered investors, to Thursday to a behavior platform ago, Conference our global expertise the of and by recently and navigating for largest creates to amid to our forward from of opportunities infrastructure. the help trading internet to vision the Japan, the interest pioneer institutional SBI Mini options, of was combined with options It to momentum size we opportunities with environment. a leadership for markets globe. fantastic leveraging backdrop to look to current MoU today's mutually our of Two has ways XSP together customer around asset and in its brokerage in reshape a wide academics for we and digital and a challenges Last memorandum position Also, including hosted services Holdings. ticker firms the and are we made, to traditional through online market industry contract, rising SPX core

key was expirations themes We've navigated as driven Thursday at in market seen options investors noted volume over options. increase changing trading the was rapidly conference earlier last by also usage of and activity Weeklys SPX the by strong the of month. conditions. I since adding One Tuesday SPX short-dated SPX in options The increased shorter-dated discussed volumes in our XX% Mini

SPX of we've Volume become days-to-expiration opening users segment seen to the enabled surge contracts and fastest-growing business. positions contracts and SPX as September, of product they trading environment. are a reaching days-to-expiration continue trade US steadily well market contract month-over-month zero over SPX and and the sizes of options X.X index this SPX Adding days-to-expiration on positioned trading options These we as has total of zero volume. represented any contracts Mini zero record Additionally, day ADV of to a participants for which embrace our Thursday Tuesday strategies market year, have With navigate the all options in same increased suite, shorter-duration in investors million in expiry. volatile in the has XX% week. diverse this shapes options as expirations day

proprietary to we looking ways our footprint, suite of access to increase for global our every region. continually are products in Given

XX a in and Our incremental XXX% as volumes. efforts VIX to a further options hours trading and third for levels. week, day, adoption to greater hours XX% hours ADV XX% October VIX quarter, five trends In trading Those in third hours client year-over-year up days with to increased SPX options global expand and global to in SPX options in VIX quarter have XX%. options the ADV translated increased compared in trading SPX accelerated have and options

to trading unique access in contract whose global we Next for plan have to options global this to SPX month, trading size to enabling flexibility. and product accessibility extend market hours, encompass greater participants allows Mini smaller

of and continued value this revenue we exceptionally Cboe the launched in a to Access provide and Canada One and portfolio integration Solutions market new conviction market that well solutions combines strong have Data further into our data going to of Feed, plan unlock through in as created Our further market, globally. equities that the feed business forward we MATCHNow opportunities we and business To September, real-time to the view our Canadian perform data acquisitions. a point, expanding recent data NEO comprehensive

Europe's of we we of robust years, for Cboe's footprint able to Cboe base. to our the in extending an in increasingly added Global of Last exchange service of stock consistent and largest suite expand of bundled Equities packaging Solutions and deliver delivering the data. durability reach the data cloud quarter, needs data customers efficient globally markets continued Europe for and business. pan-European that focused manner, cost-effective market Data XX.X% our quarter. to meet us we high-quality a market share offerings data Equities a In simple, to content making our are meet diverse strategy, uniquely data we and our customers region real-time delivered market Cboe Through enabling the product its are third the our we set, world. operate, Europe, provides to month customer our data it unique across streaming of around Additionally, on to quarterly access diverse set each seven and highest In Cloud, from it the package needs nearly and to Access the and reaching

and in XX.X%. share extend to all-time to high Our levels additional from nearly October market region XXX up to order basis flow continues position, an encourage of leadership analytics-driven points our campaign the our third with overall quarter exchange

European Additionally, the during reaching a Cboe share record block-trading the trading BIDS quarter, Europe market XX% the platform third largest of block market. remained

Moving to driven XXXX, market migrate market. with the earlier X.X% review subject are to by XX.X%, new existing this liquidity retail the Australia, BIDS commitment to Australia, well healthy third Asia an Australia grew a competition our the we early Cboe extend track bringing share Japan network share Rakuten, in and year. final on These as proprietary market efforts are in to of in year-over-year of to Pacific, launch to Cboe as XXXX, technology to from the to the of increased vital program BIDS up February from our including as as approval. regulatory X.X%, quarter Cboe Japan, introduced to well provider partners XX.X% In both in Japanese region demonstration up Japan and

to BIDS the the propelled XX BIDS to Cboe with of network Turning million quarter America, power traded. North record Canada shares a

in share help potential remain grew market the equities listings businesses. our us integration the equities to maximize XX.X%. on Canada our plan We global With for NEO, see to of addition our overall focused and outstanding we

that creates in the across listing around first investors the listings of remained new the quarter first towards During launch on an This to borders the on coordinated and ETFs as the venue opportunities was our capital to provides our network end. investment with dual ETP and border quarter, stock ETFs of we the formation the the of of both unparalleled second-largest US conducted listings listing Emerge sides business, added and listing world. our our and connections vision global where of ETP become exchanges. These Canadian strength U.S. step realizing we listings capital-raisers the for

saw business average Finally, billion as rattled FX spot $XX with XX.X%. daily of markets our market volumes policy the record global volume with quarter, topping during notional share strong divergence monetary

clients saw transference billion provides which with notional volume market daily full third offering, a to also impact, our new risk with for We in order reach of quarter. $XX.X solution a increase the larger XX% low record year-over-year average amount

are to increasing year which opportunities about world serve an volumes, the FX to our lie FX, also derivatives Our diverse growth With our the around D&A and of flagship million These through feed business. our footprint ADNV. efforts global on-the-ground we $XXX presence offering set accessible expand and clock. global record saw are around ahead excited that the product NDF also the within products, XXX% the year-over- for to

key globally. on innovate, Importantly, our while successfully strategy corporate our and to grow to achieving results, strong business advance execute we continued to integrate initiatives

progress successfully on acquisitions are integration our around laser-focused remain Our acquisitions strength with excellent growth combine in to initiatives. of organic globe. strategic recent We the our and seamless ability the making lies

and several last to of technology As I access we have extended globe. revenue the The creating synergies, access points, before, of integration unique technology stated been and This reach around workflow our evolved and efficiencies for a products avoiding years teams approach holistically, and for while approach geographic both experience business, broadened we've very harmonizing cost. our siloes services set creates the better them. customers, exciting and as our maximizing

gives presence growth. and to in Brian. medium services focused expand global efficiently With of products and to creating Our on ability new us ways. business opportunities, cadence our We and that, that enable it long-term ecosystem the over consistent a helping short, to turn create of scale remain I'll unmatched a healthy

Brian Schell

Thanks, good of Ed. you. And all to day

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

was and $X.XX. and on others The quarter measured year-over-year and progress highlighted, performance. our on per but some provided each expect Ed record a The playing advance strong medium- net markets revenue the third third quarter. Adjusted and touch quarter, want franchise, to access was by notable longer-term. Cboe immediate in against before spot posted contribution role quarter, I to having opportunity up of also solutions a an macroenvironment share to and from quarter characterized XX% takeaways cash the the for segment we impact earnings many As from the results results. the us make were quickly record an exceptionally some the our to in strong, derivatives diluted high-level delving asset the outsized a across our our solidly performed and supportive into data geographies basis classes, initiatives over of the

set record at in the and quarterly category steady XX% Derivatives strength performance million, of Access and another and Spot Markets. in $XXX increase Markets revenue Data by Cash net led Our and our Solutions

XX% Spot third net in Markets the new of up growth Specifically, continued Derivatives for given strong Markets by subscription up revenues index growth. business. the driven And net Data growth unit up last backdrop last, the revenue XX%, basis, produced an organic Access strength gains million. the on share businesses. of also strong produced macro basis, XX% X% $XXX in noted an and year-over-year XX% and expenses up were Solutions quarter, organic organic net market on adjusted diluted XX% high, to and our $X.XX, and another quarter, on back again operating our Cash X% was increased Adjusted $XXX our Adjusted compared quarterly was quarterly million, a up earnings result. And of per record as many EBITDA year's of share previously, to XX%. revenue a

key to by Turning the segment. drivers

the press segments, provide Our business slide release of for key appendix our and our summary metrics the of I'll just deck include information thoughts. so detailing each

a increased as shift RPC, volumes, revenue ADV over XX% ADV increasing share, or mentioned saw The by driven growth, quarter. during our given As net again options in Options revenue we of the increased earlier, market RPC XX% the higher-priced higher options the and fees, from mix stronger market impressive strongest segments American we growth shift options growth benefit business. positive index another SPX respectively, lastly, net XXXX. double-digit moved year-over-year. to a continued compared XX%, our equities to quarter data of access and mix levels. in XXXX of revenue And mix index to XX% capacity increased products, and XX% XQ by and as many XX%. per favorable were up robust with XQ delivered and results trends. year-over-year in was XX% higher North contract, higher-priced Total index our continued given up

during compared segment net helped drive the acquired June which in year, XX% this up Solid $X.X XXXX, industry million of as in contributed quarter. volumes, NEO, to was uptick. the XQ revenue

side, year-over-year The in APAC decline was compared access X%. up X%. market the net for segment capacity of and Europe XQ third quarter a as and and fees non-transaction the reported revenue to On data XX% increased XXXX

basis, a for the FX $X.X exchange largest nearly grew on year-over-year adjusting on impact, X.X dollar However, revenue helped stronger the for given quarter. million stock market constant-currency increase by Europe point Cboe Europe X% percentage making the during in a a by in net share basis, the quarter, a

decreased an Non-transaction net a in revenues in XXXX. were fees by X% Access on an and of a growth offset year-over-year net robust And and access Net XX% benefited to XQ X% XX.X% the as market tick Data market Cboe's posting continued a quarter. fell fees net XQ, its transaction up XQ revenue as improvement during record the partially X% XXXX. and compared revenue up clearing to data the finally, basis. segment XX% from in XX% daily quarter increase growth the has and a momentum by revenues higher basis. organic transaction declined rate with and compared Solutions hitting X% on attractive for a RPC. up strong fees segment FX futures Volumes capacity XX% quarter, in levels XX% increase and average value Third notional a year-over-year higher continued to as in share,

equities and we market lap fourth driven the comps demand by products healthy seen of businesses, side, and overwhelmingly was physical opposed trends have top-of-book market saw We logical the and as More Access additional we in As will of we changes. and for And more anticipate fee revenue of and the robust continued the year. trading well. to Solutions capacity. on quarter, from of access growth units, growth depth options and quarter data in into options book for XX% over perform past the pricing quarters, XX% accounting usage growth increased business driven port meaningful our the equities Data year-end net last by in to for remain specifically, data the subscriptions as

range our in X% are XXXX XX% rate November day. to XXXX remain organic of revenue XX% range our at our targeted D&A growth net confident guidance medium-term We outlined investor and to reiterating XX%

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

less acquisitions impact a year, last as adjusted expenses largely than headcount quarter, year, were well compared higher the owned accrual quarter to third of operating for XXXX. XQ comp inflationary XX% adjustments in or up compensation additional reflecting of $XX incentive million Excluding and some the the as as

guidance. Moving our expense to

labor to guidance open is offsetting expense We strong performance are expense of long favorable management for hiring reducing $XXX The than $XXX down financial decrease not XQ product result expense of million our term. of given for competitive guidance is while trends as range in a $XXX our incentive million. million market. year-to-date And business as the year, to diligent well prior $XXX guidance wavering our expense over full and XXXX The expectations. delayed our in our are year as our to our more are a million, positions compensation expense some a we employee in incremental lower some moving guidance build operating commitment invest in from to the

fill expect the our incremental we initiatives infrastructure in we fourth to reflected As open and to we the work the behind in growth to and quarter outlined year. guidance, generating positions revenue base expense in see as our invest start

While our behind our manage investing We quarter judiciously, but the forward at into will call. XXXX we're This data to and to fourth committed we high-growth aggressively about well current remain planning, guidance solutions, earnings investments. and high-return, digital integration cost our high-conviction, of look networks. as taking continue sharing to inflationary of activities derivatives, our more expansion our organic the as the environment base access completion includes our

slide. strength year-to-date guidance summary some of confidence on call the environment. to want and current full-year the have operating I turning in we the updates given a next to Now out

XX% anticipate and XX% be we range of X% As D&A our XXXX in in growth medium-term noted continue net confident organic revenue remain to in will XX%. the guidance to to previously,

revenue X XX% points up acquisitions less prior to to organic the XX%, importantly, XXXX. a growth points X by Most total between midpoint net overall at to we of in for our guidance expect to our continue net growth to XXXX. year target than percentage X% percentage increasing to and are We revenue held contribute from X XX%

our are tax that guidance $XX note interest unchanged, guidance million. year of $XX our prior guidance lowering current tax the quarter range annual full Outside for million but our XXXX $XX million million to to third under want remain million. the rate $XX.X of I to the amortization effective CapEx and from we was adjusted guidance, to on Lastly, depreciation earnings laws on expense our $XX and of

XXXX. expense moving gain year, Trading on announced be limited interest $XX last I your about with Moving was as unrealized the investment forward, on we income forward note, the Cboe quarter million partner for you thing million we think $XX net Technologies. the last we quarter in expect models The during financial our a the XRIDGE in $X.X will in an range of other fourth to third million is XQ becoming an This line. of of that company's recognized investment the investing in acquisition Fund to

XQ that investment expect in XQ will will when we on basis we not roll do some more any to impact provide look a with out forward, and on XXXX updated guidance XXXX. results. see expect material guidance be We XXXX Moving XXXX fiscal this regular year XXXX in revalued to

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

in and our behind third made have could forward progress in we year-to-date opportunities happier look attractive invest the shareholder come. times to third loan decreased at we with remain results. ratio is to our million we June momentum We leverage be striving continuing to committed of quarters the times $XXX term at many facility. to evident the summary, in the sheet X.X not XX, have to Our business most a balance X.X and value enhancing quarter to down strong repaid the quarter, from work the value to the to In put shareholders. the maintaining capital in way as flexible end for enhance of possible we Overall,

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

Edward Tilly

closing, Thank team you, made thank throughout third to In like the incredible quarter. our Brian. progress would I for the

have be a create expand as proud continue the and to We much more to future. sustainable on business goals deliver to of our we

carbon around As as work. continue an operator the positive of around globe, we in well be in a footprint, impact live our the making markets as to we on the focused which and world communities

We have into momentum of a of lot to a going year well-positioned quarter and final for XXXX. finish the strong are the

Kenneth Hill

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

Operator

from [Operator And first question Sandler. Piper Repetto comes Instructions]. the Rich with

Richard Repetto

guess and, The continued segment question the record option specifically. my is SPX volumes through October. record I the in volumes on index right

think Ed, the volume? question, too? playbook the know about you take Did you I retail bit And sustainable? SPX growth. liquidity? sustainability help delve Could this of of into little you how the talk do is So talked is sort sort behavior And combination other the products, that and about you've institutional a of that the could to can you of but retail

Edward Tilly

continuation And trend, an hedging that build. of interest the this and this place is to and is the think, I in the reported last start. a in market. uncertain continuation is very, very called on quarter macro of quarter before and you Terrific Well, early, we this that the

And a answer begin defined engagements. position, in strategies the distinguish But we've I to and zero are give of days between that's it's any short sustainable. seen that volume risk environment. retail do in want I once volatility market I'll you work platforms, reasons. think the Because SPX or think retail necessarily number you outcome retail limited the is, And sustainable. to on expiry from using coming in So any those I retail. not platforms

think Once learn environment. semi continuation. use continue any a is customers, they that in both our and pro, I strategy, there and retail, So, a tend strategy to pro

think continue. build will do I that So

as of us is adding notional XSP you've products That's break out Tuesday, days new XSP, since Tuesday, to Thursday, volume size that other that zero seen roll one-tenth We've into seen out rolling the to and in, our month adding up the know, words, in in first which, Thursday, retail, into or SPX. in Specifically month growth XX% continues out. retail. go you

So to market. retail And market, has and, make for conversion of super course, any that the financial positions then, macro I think, structure us and the we're all the will these convertible the just these volatility short-dated starting, environment. hour. as the most watching uncertain I And news in time think term for strategies embracing certainly, the of that and short-dated every news be and some quite seeing, each day around we're every market and options to and

So hope I answered heard the question.

Richard Repetto

timely on Congrats did. You product innovation.

Operator

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

Gautam Sawant

speak a growth? how products data please you Can to Cboe's access global and are slower potentially positioned against recessionary of backdrop

David Howson

certainly. Yes,

condition, for also not the XX% packaging that platforms. really around guidance to the for And event those we customers that demand continued continues enable wanting in platforms XXXX As bundling have required. next market data products our market and our themselves, see maintain growth demand any certainly we accessing the is from what that with to as X% capacity to in up ourselves for themselves shortcut And XX to data guide XX to we to XX% any them move, XX% that well and is you for see them put this to year. positioning year, market capacity really as world, certainly, capacity see

to whether demand data quarter, environment, around reaching – our and in Canada and world, Global of again, there ability added get distribution they data the users and continues, they the able And how this the data. where we want Cloud our to finally, to and coming to in our the people being that be data data, added data our really with that the creating and list packaging on specifically, and coming us market terms that benchmarks, through in the Difficulty] the and recently products more creating index proposition, of bundling the CBOE European and are using index we procyclical thinking So those see calculation Cboe also data then we've for One from the taking [Technical last demand then that then capabilities, products products about data, to really venues consume packaging vogue platform, that the creating from from particularly derivative products back got them themselves. quarter

So in guide. XX% to feel X% next year, confident that

Operator

next And Alex question comes UBS. the with from Kramm

Alex Kramm

you because, mostly where should quick just you think it's of in or terms lot couple penetration the of those could I focus you're the But about very again what maybe upside? and a the you view on. of or a But, would certainly, business, a is is, area that specific And prior you a if what focused we out, initiatives. mentioned zoom four things talk that are how focused needle business, because most in two areas businesses the one you question diversified. think of things again, is and I feel I in TAM biggest very can the if wondering is be terms that there's This And will that follow-up like there great diversified drive move three really about D&A it's to has on. or

David Howson

States. United today. revenues, data and XX% about we when But the of total you States from around United from back of outside again, see we go XX% growth access look outside the Certainly, to the coming is when at revenue the segment,

to as capabilities, there. as able we've the that made, and and So, there it's access ground, acquisitions new that relationships, us we've access data to those through the you Those seen big there, those were mentioned we for to runway the boots on rightly we a that access the and interest with customers, to really particular. to really base that all-important integrate with and next continue we've data, got in customer allow for us coming readying to year as get US replatforms companies, data those broader those fruition in to continued sell

John Deters

Alex, John Deters. this is

also Just on in TAM, really set, in of hit it in play think but global access. the and we which question terms terms of Dave I in well the segments of data opportunity the

really data. trade time, a made, we've result historical, as of and we also derived real acquisitions a have So now data, offering the analytics, delayed, complete

access the to able this a TAM, think So past. XX the really in We've about which talked complete about if is billion TAM, you we're plus.

Operator

Lau Owen And the from comes next with Oppenheimer. question

Owen Lau

you full-year It for up to expense in about fourth driver talk will sequential from of the expense? the your for sequentially quarter? like adjusted the your And looks operating these guidance increase potential expense revenue Could implies updated QX your QX. please assumption go

Edward Tilly

of they're not then, markets. are far strong, as for would I revenue. volumes you've say, October a us on all necessarily strong seen it guidance linked very the we've Obviously, we've volumes that there as seen to October and obviously, issued for our providing folks already our see XQ

we see fourth momentum to the in quarter. midst the going strong So the into continue very of

we pick we've like – forward, services, As as at the to are P&L as as things far driven as we with that the continuing going to doing of of we our as base, little probably bit we that to hardware, we our that's XXXX. the continue initiatives like move again, a professional plans of that in throughout just continue moving things for some everything up, by, basically as grow purchase is all we integration add growing continue our we been our headcount, far as continuation along, as initiatives, up continue invest look as more do that at to look are efforts, take look just, hit ramp expense assuming the This a we like, expense activities. yes, range, example, guide midpoint continue of our to reflecting, those a to

again, the people right grow us into really no at the point. forecasted, we've it's given as little to this slowing challenges in, the some getting but business as really far what beginning not bit the we year, of a of So down the Again, originally had as hiring we'd continue than change albeit from slower usual. as profile,

Operator

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

Michael Cyprys

Maybe can rate talking bit second the would half will XXXX XXXX. a for But point to maybe little how thinking can or – just in look expenses wouldn't, sense you realize run starting it sticking not why it about maybe or here there, why of it clarify maybe help about XXXX? as with at but then, And I early sense make kind frame you for a help at you about on about going forward? may you're sort how think of the pace base be pressures do think that? that keep any today, look kind curious that pacing you accelerating Just investments, you'd Or would feel there investments, And seeing on similar inflationary of how forward? trend just of like much a to of you expense then help pacing going the the great.

Edward Tilly

and we my with answer your our working and pace our that don't budget, about quite the thinking board which about finalize it. guidance next to XXXX, those and really we're into finalize we of how provide set plans, In about talked prepared questions yet – to how remarks, we leads as want for

that key overall level Difficulty] type – trajectory last is to rate, about term years. we and explicitly about shareholder we As our opportunities, pay drive with that those talking to of believe high goal we we're is been over driving high conviction, starting which of think revenue growth growth a to look we've raise the value, that long again, couple of that long term our investment and which [Technical more And at off.

we assess that. to ROI we from continuing spends. having We're envision investments don't make sure understand to specific So, the that, those change

that's that going time the look that at, level that a we're investment XXXX. a XXXX, of will inform little taking into of bit into which So still

those generation. revenue investments we'll that take the So assessment an performance and of and

to at factored did look mid-year, relative look it, And long to As pure far seen just that of at if if X% you we've as just merit poll, we've time. – an at of that base those you the a a as we inflation kind look a probably that's a that's you inflation in as standpoint, the promotions, at look impact, from just I'll X% far of, kind wage call overall you in range into adjustment of seen wages. probably highs XXXX kind

If that labor see bucket, inflationary we at going entire away you pressure look at don't market. as the look the we necessarily

we're So I also baking in, as our that referenced remarks. something in is

of as and that at signs, titrate invest continue opportunities show those investments, pace promising our again, look we'll to continue more continue more and overall that. the to to So behind as we see we'll And fit.

Operator

And the with from question Kyle comes Voigt next KBW.

Kyle Voigt

of exchange Cboe are aggressively the losses players in market European some priced and result market competitors saying the a been share your of specifically. Some more calling that of out have

the strategy in the Europe, on And if of Just expand you're that increase calculus or at making trade-offs now record share. part the how pricing all, of market you're selling that does current wondering pricing that into when having tweaks? viewing versus you can the and XX%, that the Is data you're upon pricing XX% market and share value the that marketplace? that demand

David Howson

to contour great Really question the there.

of October growth behavior on exchange XX%, post the basis in you induced pricing it's different real terms place last our we've the us increase a making of same seen row. over then can case, with share in continue couple the years. And that in outcomes In this is the that presented or static what reasonably The year number been in we month your in we've into realization give actually XXX around better for in by customers year your us to Cboe. has really to last orders. one get data-driven that prices point Europe, That a the for the got touching choosing Cboe which changes trading one customers, fourth the has to on analytics differentiator that market

trade-off volumes tier. US the more tiers, where edge they're in people around So, push that the is there through those any unlike incremental really tiers, their cliff

share, every us then our also data – we trades the of So, us you that equity in XX% in exchanges feed, data Europe and a happens a on – where our trade we there. reporting produce in again, quality produces pricing console data different and that mechanism two have and puts And place a XX% of What mentioned with Europe. is trade the intraday, and in are market reporting top over see mechanism. the there. And one

now, to So, got and think flywheel, indices there, increase. that in derivatives franchise, capability our to our And produced and the hole, our continues available last world then internet of data when course, that global is we cloud, we wherever the that quarter, that an then, data equity data all back we've product, lever the in the leads all in And that value the that about those around connection. get with to in every in value the [indiscernible]. off then data the country in of prices produced customers we and are improve that there then, and our of about which talk can

Operator

Autonomous with Fellinger Richard from comes Research. question next the And

Richard Fellinger

capital ask wanted to on I allocation.

think on how loan to a forward? over between trade-offs those repurchases. that you should prioritize term quarter and You just of Can down million about more the $XXX little decided this decision the going the pay share we two expand

Brian Schell

comfortable ratio nearing level down When said always leverage X, create back we our with, balance sheet look that, let's again, to at feel longer that bring to flexibility. term, a we've we more

increase in to then sure just allocation capital cash the continuing on It's for our the been debt feed many providing shows environment our consistent a rate appropriate on it's years. for your not make interest beyond shares. comes obviously, always of some debt show which to flows, up And have – the is back with that, sure of then basis. growth to with view and form to opportunistically you priority balance is, Our has business P&L meaningfully changed. appropriate rising want make been dividend that an can And the reduction, flexibility, we it rate, we annual floating buy which on sheet being more

is So of balance preparing in our longer to focus, ratio want for last quarter that kind term at we that which hinted down, flexibility. that we get the leverage sheet again,

where the more of sit right was we call far – I our That just So now. wouldn't a it necessarily trade-off. was priority as as that

Operator

the like to management conclude does this session. for return floor any comments. the And would you. to I question-and-answer closing Thank

Edward Tilly

our call for concludes today. the Thanks company. That Thanks. interest your for in

Operator

attending question-and-answer session. today's for Thank presentation. concludes Thank you you. our This

You may lines. now disconnect your

Cboe Global Markets (CBOE) 4 Nov 222022 Q3 Earnings call transcript