Cboe(US:CBOE)2025-08-01 13:32Financial Data and Key Metrics Changes - Cboe reported a 14% year-over-year increase in net revenue, reaching a record $587 million, and adjusted diluted EPS also grew by 14% to $2.46 [8][21] - Adjusted operating expenses increased by 8% year-over-year to $213 million, while adjusted operating EBITDA grew by 19% to $387 million, resulting in an adjusted operating EBITDA margin expansion of 2.3 percentage points to 65.8% [21][22] Business Line Data and Key Metrics Changes - Derivatives markets net revenues increased by 17%, with options volumes rising due to heightened market volatility [9][21] - DataVantage business saw an 11% year-over-year revenue growth, driven by strong new subscription and unit sales [15][24] - Cash and spot markets net revenue grew by 11%, with European cash equities business showing robust performance and a 30% year-over-year increase [13][21] Market Data and Key Metrics Changes - The Europe and Asia Pacific segment achieved a 30% year-over-year growth, driven by a 39% increase in net transaction and clearing fees [13][21] - SPX options volumes increased by 21% year-over-year, with Mini SPX options average daily volume rising by 50% [9][11] Company Strategy and Development Direction - Cboe is focused on optimizing growth in core businesses while exploring organic and inorganic investment opportunities [32][38] - The decision to close the Japanese equities business reflects a strategy to redirect resources to higher potential return activities [14][26] - The company aims to leverage its advanced technology and differentiated product offerings to enhance its DataVantage business [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential of options as an asset class, supported by increasing retail participation and international expansion [12][32] - The company is committed to maintaining a flexible balance sheet and effectively allocating capital to produce sustainable shareholder value [28][32] Other Important Information - Cboe expects to record a pretax charge of approximately $5 million related to the wind down of its Japanese equities business [26] - The company repurchased $35 million in shares during the quarter, bringing year-to-date repurchases to $65 million [28] Q&A Session Questions and Answers Question: Key priorities for the new CEO - The new CEO emphasized optimizing growth in core businesses and exploring both organic and inorganic growth opportunities, with a focus on strategic and financial rationale [38][40] Question: Evaluation of business footprint - The CEO mentioned a rigorous evaluation of all business activities to ensure capital is allocated to the best growth opportunities, citing the closure of the Japan equities business as an example [42][43] Question: DataVantage revenue guidance - Management remains confident in the full-year guidance for DataVantage, highlighting strong new subscription sales and international demand as key drivers [46][49] Question: Long-term growth for index options volume - Management believes there is significant potential for growth in index options, particularly through partnerships with retail broker dealers and expansion in the Asia Pacific region [51][52] Question: Competitive environment for single stock zero DTE - Management sees single stock zero DTEs as complementary to index options, with retail traders likely to migrate to index options as their sophistication increases [55][56] Question: Strategic relationship with S&P Global - The CEO views the relationship with S&P Global as long-term and valuable, aiming for mutual growth and innovation [60][61] Question: Globalization strategy - The company is focused on importing flow from outside the U.S. into its markets, particularly through data and analytics initiatives [64][65] Question: Evolution of the securities exchange industry - The CEO noted that the retail trend is a long-term structural change, with a focus on remaining relevant and competitive in a dynamic environment [69][70]