Earnings call transcript Q2 2023

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Operator

Hello and welcome to the Cboe Global Markets Second Quarter 2023 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, today's event is being recorded.

Now, I would now like to turn the conference over to Ken Hill, Vice President of Investor Relations. Please go ahead, sir.

Kenneth Hill

morning. Good joining second for call. earnings for us you quarter our conference Thank

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

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

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

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

make these which what we During forward-looking assumptions, reasonable, are the our uncertainties. are and risks future involve and may certain performance our on believe hold. future some remarks, And while not guarantees forward-looking current judgments judgment of we'll statements, statements these represent

events may discussion results that affect and filings as statements. obligation no any any statements, otherwise the result is statements. update our forward-looking this or from future a refer materially after in factors whether any a outcomes Actual conference forward-looking expressed or new call. Please for SEC undertake We with of to what the full implied differ forward-looking may information, to publicly of

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

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

Edward Tilly

today. morning, joining Good for Ken. us you, Thank thanks and

our call. on First off, Griebenow, new Financial Chief Officer like the I'd welcome to Jill

breadth roles to global depth year helped of become we have helped needed the held XX serve and the an of today, to expertise and bringing vision enabling global drive happy Her in our across and I'm Jill has are helm CFO. the has her has tenure Cboe, our as understanding incredible strategy, During powerhouse and market our this role. her business, organization at leadership at us many to

second I'm strong on pleased to earnings report for quarter Cboe.

we were our year-over-year to EPS results Solutions index strong revenue quarter, $XXX volumes driven These by Data the the million, franchise, adjusted our by to options Access X% grew specifically our $X.XX. and continued across During expansion and and Derivatives products global business. proprietary of XX% net

options delivered products and strength Our outstanding the options quarter, net total increased index solid of Derivatives another as and organic volatility revenue XX%, driven trading. our in multi-listed continued business volumes by

in and quarter. and decreased Total our During in Markets Data Access growth and revenue our increased increased Solutions Spot total the net revenue X% XX% during business X%. business quarter, organic Cash revenue net over the

its published annual achieve momentum. report. continued fifth environmental, and to social month, our to efforts gain governance Cboe's we Last goal ESG

and Scope program. continue addition ESG year relevance In our emissions emissions. X disclosed to Scope make we each the plan This in disclosing our to with X report. to We year time, our forward our for X strides to first Scope

Data and Derivatives, In Solutions these recording across of include our wins Access second priorities, the each quarter, the during advanced Cboe strategic we growth and quarter. top second which Digital, priorities

Cboe will in first, provide I Solutions But I Derivatives Access Digital. and want update moment. and to a an turn to on Data

much settled either include enable less pleased our product and later will to futures offering US which in to approval to Digital product our launch products. During were and physically customers $X.X Cboe ADV the the making recorded year, total contracts financially Derivatives and also Bitcoin $XX trade crypto quarter, help way. billion Cboe native We offer initial rollout volumes plan and exchange include regulated clearinghouse a margin first to leverage million to spot with market. platform will we capital The regulatory intensive this than receive more on futures Digital of solid to traded contracts, expand and

preparation and the working CFTC are to customers the and unique to our with in launch for look forward this market. We bringing product

to with asset highly regulators As active we market makers. evolve, discussions policy in continues and remain the digital

to opportunities from engagement market We regulated participants trusted, see advance our to will this continue continue and class forward. transparent, asset the about and structure to market leverage industry affords the

quarter Options in continue Our Derivatives investors products to changing XXX Index and across ecosystem environment. our utilize and an flourish S&P second the as VIX flagship ever traders market

anchor right our recent contract created evolved on a for years, its for have have of with suits and VIX in to opportunity we hedge Together, that unique is size to their environments. that that toolkit we suite opportunities timeframe market a a As our products provide available needs. changing trade in help flexible portfolios products them find dimensions products of their remarkable investors and customers SVX for all

monthly options quarter, year-over-year, reached second In contracts ADV index options million the X.X in options During options quarter. increased a million while X%. XX% ADV increased products during traded. volume record record contracts XX% June, we proprietary our of SPX index increased the to total new multi-listed X.X

strong ticker increased mini year-over-year. XXX% see XSP, known SPX symbol to momentum contract, in which continued our also options We by its

in SPX opened otherwise nearly the second overall XX% options of same of for XDTE, SPX on ADV expiration, the quarter. called day comprised volumes

a there volume trading anticipate continue. evolution As this has how we’ve believe to are this fundamental in noted we product before, and we customers been

customer focus Given in more that moves we to this trade effectively customers the to product on tradable development of a to market. the designed daily continue interest, allow strong is short-term

the to that every one month, XDTE June ago. year XX% options in we compared XXXX continue expires of open monthly in trading gained attention, on lot to a in average interest volumes up of with interest While Friday strong SPX see standard third has contract our

at ADV historically levels a contracts, increase trading low year-over-year with quarter saw to options While a second the fourth increase Index best XXX,XXX VIX an VIX remained we in activity the quarter, during record. of in our significant on XX%

hours to customers provide second environments, changing global options demand manage for hedge increasing see globally, SPX options and both trading our products and XXXX. VIX VIX XX%, and And XX% SPX their market risk. interchangeably Given versus and and in quarter the respectively we flexibility continued ADV of with the products both utility that during utilizing

strong index expand our to future. base. index our to futures, help proprietary foundation functionality in Last the needs for further futures Through our designed options month which growing are Futures we leverage Exchange diverse able meet products we can of we launched bringing our corporate on customer new with evolving options of new products offerings global bond on the additional options to a Cboe products,

to ETFs same that will options index recently the index settled option. against track requirements new This for receive approval quarter adopted written underlying that also the we margin regulatory FINRA Cboe anticipate related by cash

long against SPY customers that relief by Specifically, will who ETF, XSP an capital offset are indices greater writing enabling efficiencies example margin their receive for stock, are trading. in options underlying versus

Cboe next XXX to traded And to we a this measurement Dispersion in that recognized risk. A is partnership the market, new over-the-counter Dispersion Jones S&P with market XXX the dispersion. Index plan launch in as of predominately the of strategy S&P standardize Indices, is one aims of month. S&P new Dow fundamental metrics index

pan-European other the of with participants of preparing in the this our single of providing our these look more are Exchange Europe active an Additionally, forward quarter and trading who share year, the during experience. on and ecosystem and delivering we fourth next initiatives to vision of members our call. post-trade stock Derivatives market options a from on update for the launch engagement Cboe growing We simpler efficient earnings and market

to our Data and Solutions business. Turning Access

basis an with increasing organic continue X%, We during the X% up net to total on see solid revenue quarter. growth,

our high The second quarter to we build results from our data customers quality and access the markets. strong demand on see for globally

uniform to further Access ecosystem equity growth, As we across market including the help drive now Cboe platform. trading exchange to of technology has second anticipate the opportunities year, migrated demand look for new Data our data will that half its and Australia Solutions we Australian Cboe’s

global we Cboe expanded Global proprietary customer to and data as leverage and expand feeds One our to our base, we As opportunity products, see of our Indices our also such continue reach Cboe data offering. footprint

to continue to sales our new introduce focus offering. unique proposition on value our market efforts and unrivaled marketing We participants the regions to in data of

Cboe worldwide aims network During the for the and liquidity secondary Global second a we global launch facilitate ETFs. capital which of to listings Listings, and quarter, to access companies announced first-of-its-kind

expertise, strength issuers. coordinated of combined listings new our in experience to draws exchange and our we the listing offering on for markets all centrally provide deep regional global network and optimized the Our support and equities jurisdictions operate, where locally services

helping The our to equities to enable business rounds global Cboe globe market around offering, market uniform access markets for participants to our listings. data and more equities utilize the expansion trading, of listings out

Europe year-over-year equity saw Equities markets Spot share in reflected Markets Performance by volumes to all Europe, the increased In percentage Cash Cboe second the point quarter and across second the XX.X%. quarter. one in global market we overall business our muted

remained BIDS block Cboe strong and Europe another Additionally, the share experienced largest with market European trading quarter venue. XX.X%

market Clear year grew Cboe from second the in Europe to the prior quarter, quarter. XX.X% in up XX.X% share

the is to aims cleared yet SFTs, customers. centrally to bring and or lending. taking building in approvals. XXXX also securities regulatory expansive stock for transactions, our Cboe of During our market through SFT feedback, tangible leveraging to subject quarter, help service Europe to announced financing new ease Clear introduce plans Cboe to the this market participants requirements market another for solutions service example for capital a ecosystem, Cboe

remain Cboe the subject migration quarter in XX% to launch grew in the approval. XXXX, quarter, second of the previous in Cboe regulatory second from year. equities and expected Asia-Pacific. quarter share the of In and X.X% up Australia to for XX.X% Japan up BIDS track this technology market the during Turning of was quarter, year, from share Japan Japan, Cboe to in fourth the on second X.X% market we

network Cboe will equity global top one-of-a-kind the extend With BIDS a equity seven Japan, the the block markets, launch XX creating trading of network. BIDS global to of now

a in were In business year-over-year XX.X%, up share to our XX% business, record expanded spot the quarter net revenues up X% from a FX year market ago. second global as the

strong XX% a NDF SEF volumes during increased the new customer second To SEF, Cboe during this the to Our Cboe $XXX for London matching results engine with quarter. swap increasing trades offering, continued facility, we our with of meet million. see execution ADV launched demand, quarter which second on

order With create matching flow accounting is Europe, service further expected engine SEF new for significant portion our and volumes, Asia Asia opportunities diversify currency in platform enhance to Cboe to greater based on customers this clients. and a matching the pairs of our for

our and new results. With power services to In our the to to that our Access Derivatives, Spot of these and continue Solutions, summary, quarter, solid quarter the harness Data markets delivered customers. first foundation create to strong have products with Cash products Markets, innovative coupled building ability another Cboe of we on deliver our record and

to drive the allow continue growth for us help will harvest We across and plant seasons value will consistent to that opportunity seeds all shareholders. to investments our of

With will it Jill. that, to turn over I

Jill Griebenow

Ed, for kind thank Cboe be build introduction. couldn’t momentum on you that to today. the I strong at excited more

Cboe quarter, as a contribution was highlighted, X% Solutions year-over-year and $X.XX. up strength second posted Derivatives our earnings The as diluted by continued Ed share well with adjusted per business. basis As strong franchise, our performance on to Data from Access a a steady from led

As shareholder we maximize value we in today’s through monetizing in initiatives. future long-term to done have prior investing quarters, looked while growth opportunities

highlight want assessment high some of providing second before the our to level strong a segments. takeaways detailed quarter from I more performance

finish and in Markets the our Our business. increased to by quarter and $XXX second the at strength from Access revenue category driven Data Solutions million, results XX% solid Derivatives our net

second organic net organic utility quarter net find basis and X.X% on year-over-year an produced growth toolkit products. revenue up X.X%, Specifically, the of during as Data the proprietary our XX% the to increasing revenues market Solutions in Access increased Derivatives in continued quarter. Markets

organic half improvement sequential the and quarter second the the We are of we the the revenue pleased by catalysts second remain year. in in excited with see

the and Spot second organic revenues Cash the operating of the XX% during versus net across $XXX muted million XX% X% XXXX. $XXX to grew or million a XX% expenses an as the trading solid adjusted environment on EBITDA and increased quarter globe. remained Adjusted quarter Markets decreased basis, of

key the to by Turning segment. drivers

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

and higher X%, capacity positive and our The XQXX access market Total XX% with and index performance were XX% options RPC, ADV robust, revenue up very ADV shift our index moved of options options. highest segment volumes levels. was XQ The as products. revenue XX% business increased RPC growth up respectively or delivering results trends quarter, in to XX% the increasing by were mix fees of priced Options XX%. contribution strong any to higher given for driven the per higher favorable the data again XXXX. capture a index net our contract, as of given index over And continued compared was segment

NEO, net year-over-year acquired in equities revenue inorganic was was in $X.X quarter. XXXX, American North Results X% the net a on from revenue basis. of which benefited million down contributing June during

access and and proprietary growth as XXXX revenues. fees XQ decline compared to increased in addition, as outpaced In X% capacity increased market X% SIP a market data data

transaction industry market while businesses. share activity seen in in share And volumes the given relatively lower during softer Net off-exchange US were increase has the second our and XX% quarter. adjusting market US for volume on-exchange fees remained down has basis, on an auction absolute market our share our constant when trended and

by Europe. offset The a during to year-over-year a also revenue, Clear one And decline activity grew Cboe The XX%. in largely market net quarter share from percentage softer XX% were in increase industry point by nearly levels Europe Europe share reported and a partially volumes in lower market basis. on year-over-year impacted APAC the segment X%

Second fees, partially the in by in the driver was decrease net pricing complex The down quarter in Lower XX% increase transaction capacity helped was volumes we partially in fees quarter. VIX X% the net primary Futures by and X% April fees. made decline was offset the in activity revenue by a decline as the during increase access transaction were falling of in tweaks in an X% of segment year. net this in RPC, offset a

second capacity up quarter versus last and perform well, continued X% access to year. the side, non-transaction of the On fees

for And revenue share last transaction record Net straight was value revenue as of market average a to in another quarter. as segment X% FX revenue net up daily solid hit year, compared by net was XX.X% quarter marking up X% the finally, notional the ninth X% at year-over-year and increased gains. the fees

revenues an organic be growth in and growth to additional market were Cboe’s growth quarter. organic access of for subscriptions solid second of basis. by driven accounting XX% to fee a quarter, Net Solutions revenue now up Data Net Access second the Turning business. the in X.X% X.X% organic on up units, and data continued XX% and

pleased with confident acceleration revenue guidance our organic growth year in net remain hit and our X% sequential XX%. We full the range in are to to of ability

sustained data complex. of benefiting growth Over half contributions sales, we from the second from our year the across proprietary expect solid derivatives the

around Cboe Indices We Global also anticipate solid trends licensing. from momentum with good index

sales we In migrations. in and witnessed saw a line the solid in we access since with migration, data Australia, uptick have what technology following past

capabilities momentum expect distribution presents, that to Cloud that suite Global providing We potential the continue, sales data products. Cboe to incremental of our adding enhanced for

to being our for modest offered years, We consistent increased has pricing areas has where expect utility in many also been increases pricing but the dramatically. make

expected value to selective we priced to relative the customers. remain on are our Following enhancements, the remain focused products for peers, our competitively and proposition

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

any support costs, further our expense capitalized than higher not year, and XX% in anniversary charges as an were for charges million up true-up technology moving of to headcount also to less reflecting the $XX and second marketing one-time previously included quarter promotional do or brand and to quarter, given charges acquisitions the of travel adjusted adjustments operating that a quarter $X our expect a second reclassify the year, to corporate Note last expenses celebration we impact owned increased line. the capitalized largely the forward. increased expenses capitalized certain services compared Excluding spend XXth impact for in million operating or June

Moving to our expense guidance.

million three full components growth from basic to $XXX our expenses core of growth. slide to our increase XXXX and of earnings XX year-over-year $XXX on million $XXX outlined are range acquisitions, The investments, to $XXX We expense million. the lowering million presentation; from are year guidance expense XXXX

the at expense categories. Looking of our details three

$XX expect regulatory million, in hiring expected due our range two ongoing incremental digital in $XX add million $XX previously expenses uncertainty. We to approximately to million to the business our $XX slowed below acquisitions of XXXX to part XXXX, for in million as

to regulatory committed still closely our business, the While spending digital the are and revenue continue landscape we match the to we environment. watch to incredibly adjust

generating investments. drive the line help in we the business are We onto anticipate the incremental $XX will of $XX Moving be that to million. investments bottom revenue to growth in million our making range to

efforts $X lower and is R&D we and services range new targeted marketing Our expansion, in areas ecosystem. across roughly million more like range, our our than aggressive investing but prior committed campaign to product high remain return DnA a

million. The is core million last $XX component growth, totaling $XX our expense approximately to

expectations CAT and As for our infrastructure a business. inflationary our XXXX, on reminder, in project factors investments costs in this includes

Our $X expected the as capitalized CAT of well updated charges estimates lower certain reclassification expenses. were offset expenses These for million. amortization partially $X higher as by expenses of an and one-time operating depreciation incremental factor charges in million to

continue value work across Moving ecosystem, and our will to striving strike while the for outlay shareholders. opportunity enhance to available in forward, expense the between required the we to to revenue balance put right capital value-enhancing ways

broadly year. seen ago, our the X% making This finish reflect our to businesses. to guidance a end at XXXX, half expect remains for toolkit to medium our at total Cboe. At the engagement of and we level, have outlook products to X% year-to-date of term performance across range some Looking introduced net across year of revenue reaffirming full meaningful the of for X% on solid function slide, we a Day at now we higher above the range Investor at the of X% the guidance our a revisions growth but are and our our year a organic more constructive we are positive our next high forward

revenue X% with we XX% medium As to in mentioned our rate for percent XXXX, organic line of are term DnA expectations. earlier, reaffirming net growth our

Technologies, range Fund, Trading to marks now owns to $XX in million calling the our prior on in guidance expect investment the $XX the $XX XRidge positive up from million, from benefit the of Given million minority investments to which other income million. we its be $XX for company’s

We unchanged to annual to previous rate $XX $XX million, to second XX.X% of XXXX are full interest and in guidance. $XX.X net at guidance, for the on to the expense and expect laws amortization $XX from XXXX, of depreciation quarter XX.X% was to tax adjusted million under the lowering our guidance $XX year million Outside earnings in on from tax current we come million. our effective our

For million to the be interest million. XQ, $XX $XX in range net expect expense of to we

has capital the maximizing shareholder value the $X.XX On front, per In repurchases. quarter, of and through our focus our capital. remains, second $XX and in $X been, of a form the returned quarterly million million share of total shareholders in to effective share long-term the a the of use form we dividend

Our facility having from X.X with X% comfortable of remain term slightly ratio million in in rates, prior the fixed we longer X.X as to loan $XXX that our paid on our debt. times debt We leverage our to XX% locked averaging total times medium year. low, this of December in on term matures below declined nearly down quarter profile,

solid in second the company, XXXX the of the delivering excited quarter outlook look about Cboe. summary, more not forward In ahead. to quarter quarters I and returns was for be I shareholders another the could solid at for

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

Edward Tilly

Jill. Thanks,

hard been than our to year, of consistently into the want forward footing has on and of results. delivering on execute half for team we to busy year the head look first work stronger it final growth see, ahead. and Cboe I half the thank the to continuing in ever, their outstanding can We you As a opportunities entire

portion it for to Q&A the pass I'll instructions on now call. of Ken back the

Kenneth Hill

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

Operator

session. time, Instructions] Thank begin we [Operator the will question-and-answer mentioned, this you. And as at

first morning's question from this And Ben with Budish comes Barclays.

Benjamin Budish

to mentioned taking more in made next of come you the in that for of question. unpack Is expectation a trade as it terms unpack wondering and -- customer talking do more adoption morning, comment legs could you evolution coming to bit in the XX Is your a hoping if growth see you volumes. earlier customers think of could from. the of types? adoption sort thanks of SPX? Good about were do Is was you was I from in of how kind Ed, shorter-dated the you more it global you I I about months? XX Hi. you that where Where contracts? it growth the that wanted SPX next

Edward Tilly

for It's now pretty a perspective who But the market portfolio of hedge to That institutional at exposure this Thanks to or or perfect. see benefits the have education this limited pandemic, growth. with investment perspective. Ben. the incredible of introduced a continuation to to transition primarily through being in customer the sustained been And and was remarkable. can of not allows that either do risk. Derivatives initiate with We Yeah. we look the -- from a a that been time adding retail position means,

continuation So, proprietary and our expect forward, in both products. think the to area move multi-list and that's and we that

the retail a retail. contract, SPX, which margin of I'll much What for in is very we're XSP size our of smaller built over think about, with most to benefits excited treatment friendly is we it wallet turn but a lot change and in Dave, the with

SPX, then interest the is into those institutional SPX. in trade exposures. side, from Friday very, the third institutions But for being retail see growth we very And contracts we that coming continue for the And to see platforms. short-dated typical like in the drawn

growth come. as going what is because in a keep that to the exposure, seen particular, since up think to But So to new and the on additive in you to say, the and We're completely it's to that really date so it's pandemic. change I going exposure is exciting. and and underway, we the continue we've that's quarters over it years,

individual optimistic about and in is of what investors, treatment real and what change including the retail options. think I in that allows Dave, the the shift shorter-dated we're retail for XSP adoption margin and But

David Howson

engagement hear been the the it's encouraging calls from increased at projections to customers like on And for we've got in in market here our Absolutely. general. might And really to options hedge these about we manage complementary market each and other a throughout that whole as or either see used toolkit exposure risk be to of together environment. Cboe, any isolation products in that

And as for the part see of the SPY out index user. little and that XSP reminder a we product contract. settled what product, of is toolkit, there. is the XSP one-tenth-size SPX on it The those a you for much contract cash It's options very

can in strategies you also fourth kicker all has You that defining just XSP. that's that in deploy the and of Ed the employ XSP SPX, categories, three mentioned. And

XSP is those The cash index contract. a broad-based settled is of first that the contract

you to delivered have the end expiry, the you of physically physically needing move a So, underlying. or day, of don't being at the chance deliver At cash.

that And is point for The opportunity expiring. treatment. the the is assigned be tax there third potential early or There's exercised XX/XX it's potential long-term, before second capital point for to treatment, gains that no European exercise. beneficial short-term

And then for SPY, options that written eagerly underlying settled read come to to the cash same written access against regulatory we await the option. to really approvals we final -- as that we're XSP, that ability the track at looking evolution index access XSP ETFs, required

opportunity the you so, for for hedging. offsets can see margin And there

there. you when with margin a position a that example, short override you XSP long can treatment SPY For position, get

settled from that are us increased encouraging platforms hear expect in of index deal and is activity brokerage retail that to options good for looking there to a future. the certainly we onboard what So, cash

Edward Tilly

in cash platforms out for long I'll it settlement buzz days all from this around And a trading really us. think the the to we options. settled you coming excitement I contracts But have remind not see is the the us at in to is attention Ben, cash and at So, you allow that the of the answer marketplace. that ease point. hear zero cash retail really what expiry settled and with the And that

offered have see to think to that really year. customers, keen that we're still that offering their not sometime So, Robinhood, next those

be So, and tools exciting there that the movers. early think increasing the is to and education we'll all we those breadth help certainly, with

Benjamin Budish

appreciate We'll answer. Got it. the very Thanks. thorough

Operator

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

Alex Kramm

Yes. to DTE of Hey, everyone. I good zero another morning, ask on the topic question favorite want everyone.

an other going some I'm there's also options, to investors that's phenomenon. et cetera. expectation? think that two exchanges your happens from curious expand into stock the And areas into it. as your obviously are And is what's like particularly that other talking expectation I perspective? roadmap things. from called single It's Like and about what One,

actually put I losing only guess, use. what capital I'm can out. then is DTE people maybe to other into it trying from And attention, some trading to there goes up And sorry, say the that takes index limited from again, you that there's it risk is you've end side? phenomenon, as limited that that if of benefited potentially zero secondarily, on and a away areas what those strategies seen elsewhere, gravitate

makes the it lengthy Hopefully, for Sorry sense. question.

Edward Tilly

that's day solve the in single it's and physical at settlement on end And to exposure platform take really are the Alex, And long roadblock exchanges gap the day, overnight obstacle day. some that position to the delivery good the a really offering that naked next retail subject of the instantly name. the assignment from day. perspective, At risk a end I'm having cash a No. the zero means the we of of risk, reason. the they I'm expiring for. to trying cash, risk other versus stress tail question. the settlement after for physical risk, a And really think

cash. figures be no next street into Dave for a There can market. come is margin the take said, and/or end exposure going physical, the you Now, really, you the big risk out the day the morning. allows settle name would exposure, out day those but the as zero risk offset don't difference. quickly or know how expiring into And That's enter to alternative until how And to can of day. a just close. can to is What on really offer single I closed cash at I require be in that the settlement position

the single products Do is it that's away day, with There don't. think the of At end the best in market the I end good the or retail exposure a who exposure from individual the at Cboe. think We look broad day? market, represented the of are I investors stocks. thing. for takes macro hedging U.S. the name

if no, think entire that's environment growing, is good. So, we the

for industry. have growth industry at is the day. the We all time of any any growth And and exposure good in a tool portfolios the in

Alex Kramm

guys. Thanks, good. Very

Operator

Ken from you. And question the Thank Worthington J.P. comes next with Morgan.

Kenneth Worthington

talk Maybe for Hi. Good question. at crypto morning. the like a Bitcoin It my ETF you would can spot gears, about taking in businesses touch number a changing the a seems Cboe. Thanks of for ETF U.S.? outlook

what might the company? spot a approval broad-based for So, mean for ETF

David Howson

Hi, spot Howson five Absolutely, And recently. so issuers headlines matter the you of know, put for news a we've applications Ken. forward as for far. subject Bitcoin on there a may obviously, here. Dave behalf ETF

have wrappers. good with broader number think trading surveillance exposure in get progress is and asset should place alike gain a the SSAs this We we want platforms. number for investors of class a approved, to a in surveillance this regulated and familiar these and sharing industry agreements and who of And to

thing So, the would be for this a clearly industry. good

out pleased And the receive we're to for and quarter, redeem this the the order general, market process futures underlying our SCM and in to futures exposure. in approval somewhere to to customers were going that potential market for look from to for our hedge And involved in year. with together digital They'll ETFs overall, looking launch create to And in working of we the those to and build end spot market in makers a that at are CFTC. crypto margin the that. very the need do

probably as Cboe for and we and ability for it's there, platform, such good one and futures regulated also So, spot that for good margin within good settled the all regulated the Ken, investors, United think on which physically platforms industry, the States. exchange, Digital unique and is have to cash clearinghouse,

Kenneth Worthington

Thank Great. very much. you

Operator

comes from Moley next And Patrick question Sandler. you. Thank the Piper with

Patrick Moley

question. taking Thanks morning. Good Yeah. for my

just maybe might predecessor, relates that. role But like I she's down, expense maybe, she we even So, congrats from a hasn't hoping It Jill, a ways I on expense see the and Jill, month, approaching on little as so role. to and could management. the and specifically a differ strong and about the was talk guess you're bringing that congrats her bit Thanks. new been guidance already quarter, how to that

Jill Griebenow

expense the You is new I'll say done question. I at growth really that. just we've continue forward. back high to step behind doing the things that as diligent -- to job, see do, I want well we mean, manage though, bet. be very where into the we're do you returns. to going for Thank good And want we looking as opportunities core a role the Also Definitely investing

acquisitions, focus I really have think build want set to forward, that we integrate lay forward. to the last work of global going that a productivity foundation, as expanded on did two seen the we really obviously uptick scale. team noticeable years a nice have the But

Patrick Moley

Great. I'll in hop right. the All queue. back Thanks.

Operator

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

Brian Bedell

of Actually, question, well. as the and But next the a thanks introduction opposed one, and into -- to a Jill, move prior built M&A obviously, be we series as focus about Thanks. deals? Great. exchange you've about substantially welcome, through as on thinking that acquisitions. more think as year, should morning, to product on large just strategy, the we following global Good we

the can at product be positive operating to back how acquisitions. describe favorable may we incremental leverages point if margins get what how to trying in swing do about or next you And early as if launches I'm what -- can think can And versus at think is, we as year? you

Edward Tilly

great. That's really

part how of rewarding locally over nothing I'll the in than the approach at two and U.S. or can more in Let of customers ways, exposure, me some question, first we looked nothing always turn We've questions from they on Jill it and gone and answering to then to that positive, more whether growth the and portfolio, Dave. have globally. the in their some risk standardize take the

a today investors So, look we solutions customers exposures. We example for an at with start contract here of to all solutions offering dispersion and as in our marketplace for different with the announced to labs continuing times.

They always margin. high we'll that. do So, incredibly are

out market to You are the customers customers a There's in investment look really Tuesday, to It's at the and a of whole lot asking daily delivering what that. listening for. offering. Thursday, not rounding

our approach, labs and solutions So that bring be an are always to going is customers. to here to

keep be major open. the now. and nothing seen eyes right jurisdictions our you've are to eye our But that are As out open for any competition at we especially us out that sure always always we making can We'll for need time, an in next for we do that marketplaces, what eye we're wide M&A, but have that. do in scale, and given is do on there think

way I think, philosophy at our forward. see the going and just Jill, use what allows point, us and flexibility And balance then to do, sheet capital the and that this the you the

Jill Griebenow

bet. You

consistent. from can or strategy organic, we to a that, inform our The in obviously, capital inorganic. have levers just either various is So, remain That investment that business. belts will perspective, allocation be our

the grown over then well are rate. as And We'd repurchases We also steady share have that as well. that we've expect time going really dividend utilized tool finally, forward. a

have, to we back for certain basically inorganic the going acquisitions, financed growth, And those.

As really quarter, start on that loan you the of in during the this matures December second delever term did to year. saw

So, the there. It's allocation depending noticeable factors do really those X.X times the changes time again, comfortable really wouldn't over capital very down the just any have approach. to what to environment of a a see rate leverage upon balance And is.

Brian Bedell

That's you. great, color. Thank

Operator

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

Michael Cyprys

the in compare in commentary this of the mentioned increases, does How on VIX you. of pricing What's back circle I talk to pricing adjustments? sort are Which guys Thank have done the about. of parts far? making contemplating Wanted could April. to some morning. think to business Good back past? you Thanks. you you done been what something so Great. you

David Howson

-- our Howson Michael. transaction differently. more the Thanks we bit quarter, philosophically, Dave look Solutions here. both little Access actually at our It's We a businesses and Data during and businesses

competitive time of looking the diversity use price there time also maybe the side, requires our where and it the encourage usage for perhaps patterns try of pricing and our over schedules sure has On and our stance offerings maintain products continuously reflecting flows. Also, we a some to changed to we make changing. we're of of greater and we the to value and review ensure that a transaction over

certainly quarter. second the that through saw You

look broadly or the options revenues quality, revenue businesses, share, at More equities, maximizing on capture, overall look transaction to across optimize you and multi-list constantly market we the for if market U.S. franchise there.

and we XX% periodically we in And the see there. sure And with line we've consistent new had XX general units, pricing from -- about to came review we remain movement the that our Solutions, second new to also come and where one on those remain while look prices then when had Data -- perhaps Access there. for subscribers a XX% make from generally look point, through -- users time a they to and competitive, but to remain

we there look going as be forward so And we about growth there the will think the at DnA pricing a from third changes. group, coming of

Michael Cyprys

you. Thank Great.

Operator

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

Kyle Voigt

Good morning. Hi.

say competitive bit think new will have I'd been trends I So, options backfield. That's multi-list the later a the competition likely there this quarter, be more where since been space. stable the in area some an

fee last Your well. been very five years capture as the over has stable

volume really want the there much that on certain fees. priority of there, you been remind is investor given just support wondering to market be we've us on much could other area strategy update where amount you there's share if just us give competition. just it's there of could how data recently price an defend where time on you more focused could an standpoint, or a if So, the to from And direct not also, if an

Edward Tilly

Thanks Kyle. Yes.

market options we capture and And And So, in ourselves venues really a pointed RPC. what balance market into revenue this look so new out, we quality to XX% there coming there's period between there, the see market share, again, about the the position around rightly coming the as multi-list you months. coming space solid at there. with is, and share

of business there are so margin about the market. you highly the represents time really type mentioned, that of past is new frame. be looking by, The schedules that if for price and And to will going of entrants that maker/taker today far go within XX% market, certainly, as lower the which anything overall around pricing at, portion aggressive the

Operator

Thank Securities. the question you. Bond with And comes next Rosenblatt Andrew from

Andrew Bond

in morning. stand on U.S. corporate for opportunity focus if Good with in CBOE the Can a U.S.? listings, or the be plans markets listing build corporate Thanks. and will the the thanks. for to you Hey, international team NASDAQ and NYSE, listings, to out for compete upon the potential specifically dual

David Howson

doing. cool, what United big be the that existing we've over the doing? we We're Absolutely. but for not question, going going absolutely to NYSE We're Thanks years. up and have that What They're blue-chip Yeah. there. and listings that's NASDAQ over organic the are the for inorganic Andrew. infrastructure we're initiatives using the built not using business. and the ETP regulatory in business the processes, people, the ETP exchanges puts States. two We're the five around listings listings existing number we're we're is that footprint across us today That of an the with the our off using back at which And world environment, there. capabilities and leveraging

of the driven we're the technology, see to $XX of companies the our we're corporate marginally the research, investment $XXX million market new marginal platform, of new purpose-driven in incremental drivers are by to innovation the and million customers the So, These we really in niche by terming with us. expertise a from -- trading, range. and end market world driven our what through before and data, able are and derivatives across there, the to economy indexing, underserved market that the driven portion spectrum as engage cap are that's companies. the we leverage key we And doing that these by the companies issuers

And take Critical and Minerals in who Cleantech, companies that we've in got And who Canada. Minerals, in appetite Critical interested those you particular the interest Australia Minerals. like have FinTech, in are investors example Critical of if includes companies in issuers

common be access to us able global investors global interested for those capabilities platform. with to providers and opportunity our great give in companies legal that a that's technology to to partnership liquidity global in So and capital

really growth So, to, build enabling us that built again, trajectory. use to network out global an securities we've once unrivaled with

John Deters

John. is this Andrew, And

value mean what Just when follow is one strategically. This talk mentioned world's to item creation. Dave derivatives of we really largest about drive growth one on and that last we networks the securities point building and to that

Now substantial, all bind revenue the offerings together, that. global that example create XX% that is of value almost is largest growth that great of and the markets, opportunity add drive to of GDP, we've and that our seven XX that touched services a and world's customers, this for

Andrew Bond

Thanks guys.

Operator

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

Brian Bedell

on too global in Great. for you that that be yet. quantifiable create across my don't global developed, taking in it's of global know used that's if Thanks on the terms innings product theme early. for I say can Maybe And you've -- customers? early being that you're last Actually, follow-up. to footprint would able a

into growth rate? DnA the Sorry DnA pricing that multi-parts. Are then you going a increase, be to that attributable year? CAT helping is there that Is on to going growth for -- in that one-third pricing. said this just or year's builds the pricing or questions. couple to And year, then any move you clean-up done next with was And is this is that the also

Edward Tilly

these take in let's reverse. So,

CAT we'll that and that's And And Jill, in how come that So, get of We'll then other see on questions, okay. aware the into build. that. then, exposure not you can up transparent. what and if and the process we you're cost maybe two Brian, on totally Chris, we the the on It's front. see entire comments maybe say some

Brian Bedell

Yeah. Great. Thank you.

Chris Isaacson

morning, Brian. Yeah. Hey, good

on visibility, as we quite limited. our build, is So mentioned, CAT the

limited, But have be We Jill there. so know. what when to end. visibility, our to she can we look can knows it's And on is but what exactly here say going -- some can't really advise we going Jill visibility unfortunately, and it's

Jill Griebenow

Yeah.

and those indicate we from Just refine this do at to forward-looking we'll time. They our included information. what fluctuate, as look get our best in in continue perspective, estimates the a we've expectation future to cost more

Edward Tilly

that. global how the the and effect network could and talk think, to its perhaps, has then, expected David, of And I off the between latest product we a the then November. BITS these access already that and you of comes which if in and network, in we've our bit the about can data course, offer and difference a rollout data to exchanges down little tried data, differences walk

you're while liquidity recognize that And one thoughts each we jurisdictions different are in your operate. and then biggest liquidity every of providers the are of operating in what the up are of global let that our together, say front, me in we jurisdictions beauty sources getting David,

Cboe giving through to to migrations we in how face that and So and view on team in November technology then complete to Chris constant, the Japan, and have out, the and look them again, expectation been global that a rolling repeatable customers. is

So, bit, to and in little various a the a we through stages walk where their want as with be are, different. say, a we data offering, of a products, and and provider, bit I global from liquidity where are, access, exposures can they but really little global that's

David. go But ahead,

David Howson

around Ed we tradable ending as November stages Japanese from starting be well, world. point that in What uniformity Ed there. the a the familiarity common view, to to of ability system, product, uniformity of but and that the our interaction And for with mentioned how as Absolutely. ingest us early customers in is from the not a with format data is the exchange for the get there, in it as a of necessarily replatforming Yeah. systems that, said, able trading work,

mean? customers customers. own incremental So, what effort to low for their new our does deliver that means That a capabilities to

Europe in to periodic about auctions you a USA equities. the equities examples, I'll thinking give couple of moving in from

equities bring the Now Australia. customers. is capability we and to functionality data in It going value bring, be incremental that to can got and Japan in the available that November. will our be of analytics And the in that comes now then with available toolkit whole we've

Ed November this build coming in in the that the Japan. traction, is the BIDS also buy-side will as BIDS BIDS Great from year, of of early And mentioned, out network. of part addition network interaction part migration be Australia, that with and traction September of

data the multiple saw our around We coming United in forms the can then raw in service data. volume markets volume data network, internationally of there. the So saw which or are that either for -- sets. of closed as being data to from a And revenue we cloud equity then outside customers, incremental from really create can great that that That cloud. world early SPX from open on quarter, report that launched this so delivered gained the we utility out a short traction be back pushing XX seen the there. XX% of States, the data rapid and proprietary We

uniform to out, the of capability network can bring globe we basis on as So, across see see functionality that we the build that really the platform.

we've think trading toolkit our us of you around about ladder, basis products the up to But XX already, then value X moving And we on their which can interest then about tradable products, globally. customers hours. think to tradable are actually, from got trade during available a when world the our

Brian Bedell

Super much. Thank so helpful. you

Chris Isaacson

we And think answer Brian, more is DnA have question to Chris. -- this I regarding pricing, one but

the front, data seen access immediate global On we've already seen we've we've growth and and mentioned this, post-Australia migration.

November. expect that Dave in then we interactions well. similar BIDS buy-side We something when adding in And have, September, where as Japan in mentioned comes the

with functionality immediate customers and plug from and quarters really and what there's get in around migrations, platform into the also adjust as over dive platform new they're improvements we that uniform the expecting but that's the durable So, coming improvements we then world. get there's

So, is the network effect quite durable.

question. you Dave, on to DnA maybe the back

David Howson

quarter. an in answer mentioned that Chris. this there earlier part we Thanks of Yeah. changes made We some early it the in

come one-third from expect incremental We of about increases. DnA to pricing across growth

Brian Bedell

in wasn't relatively the price other of increases. new, words, that's in And numbers correct? terms really the In it legacy

David Howson

philosophy There increase there proportions, were approach. a it's not slight increase really change pricing the portion It's always to there. or potentially but a of a in

Brian Bedell

Thanks much detailed questions. Great. Great. the for so the Okay. answers to

Operator

Stanley. also Cyprys the And is Michael Morgan you. next with question Thank from follow-up a

Michael Cyprys

for come Indices the momentum a elaborate Great. indices Indices. could of momentum taking I seeing back about are most there? that follow-up. about? comment the talk you're some was And seeing about Cboe you mentioned wanted you Which hoping Thanks there. good excited I growth across of accelerate you on to you maybe to the the to Cboe more the can initiatives bit

Edward Tilly

to began Feed, is One of and there speak the there Global us Absolutely. very, some in to Indices distribution and Cboe channels forward-looking sets allow see Indices the well. Feed APIs have good themselves good quarter indices then onboard Business. At Global data I we sales pipeline as the we've and built of Morningstar from the about quickly also customers new there. new would seen common also, there. very And this couple enterprise Cboe A out some exclusive

for we and a for low lift, service to providers index So, incremental as providers that can data distribution add alike.

we In is of great overlay to outcome the United products, The the area in forming coming globally. terms beautiful strongly indices States in benchmarks. indices you And effects. where see now which see defined really derivative we those an derivative traction this see where overlay really is flywheel market are the and

in, indices where revenues the then the comes trading calculate for off data market against that and these then and that's revenues So, us those the back list ability benchmarked that. enjoy flywheel are and to the of products indices

in for particular that indices overlay outcome space, index derivative European defined this quarter, we also our to point calculate the really would benchmarks. own I for began to platform. our indeed, So, And

Michael Cyprys

you. Thank Great.

Operator

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

Kenneth Hill

much company, our call your a in for Great. That and everyone. have Thank today. weekend you for so the time interest completes great and

Operator

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

You may lines. now your disconnect

Cboe Global Markets (CBOE) 4 Aug 232023 Q2 Earnings call transcript