Cboe Global Markets Q2 2025 Earnings Report

Cboe Global Markets EPS Results

• Actual EPS: $2.46
• Consensus EPS: $2.42
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A

Cboe Global Markets Revenue Results

• Actual Revenue: $587.30 million
• Expected Revenue: $572.24 million
• Beat/Miss: Beat by +$15.06 million
• YoY Revenue Growth: N/A

Cboe Global Markets Announcement Details

• Quarter: Q2 2025
• Date: 8/1/2025
• Time: Before Market Opens
• Conference Call Date: Friday, August 1, 2025
• Conference Call Time: 8:30AM ET

Cboe Global Markets (BATS:CBOE), through its subsidiaries, operates as an options exchange worldwide. It operates through six segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital. The Options segment trades in listed market indices. The North American Equities segment trades in listed U.S. and Canadian equities. This segment also offers exchange-traded products (ETP) transaction and listing services. The Europe and Asia Pacific segment provides pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts, as well as ETP listings and clearing services. The Futures segment trades in futures. The Global FX segment provides institutional foreign exchange (FX) trading and non-deliverable forward FX transactions services. The Digital segment offers Cboe Digital, an operator of the United States based digital asset spot market and a regulated futures exchange; Cboe Clear Digital, a regulated clearinghouse; licensing of proprietary market data; and access and capacity services. The company has strategic relationships with S&P Dow Jones Indices, LLC; IHS Markit Ltd.; DJI Opco, LLC; Frank Russell Company; FTSE International Limited; and MSCI Inc. The company was formerly known as CBOE Holdings, Inc. and changed its name to Cboe Global Markets, Inc. in October 2017. Cboe Global Markets, Inc. was founded in 1973 and is headquartered in Chicago, Illinois.

Cboe Global Markets Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company reported record Q2 net revenue of $587 M (+14% YoY) and adjusted EPS of $2.46 (+14% YoY), driven by strong volume growth and disciplined expense control.
• Positive Sentiment: The derivatives segment delivered a record quarter with organic net revenue up 17% YoY, SPX options volume rising 21% and Mini-SPX options up 50%, including a record 57% share for zero-DTE trades.
• Positive Sentiment: DataVantage net revenue grew 11% YoY, led by subscription data, analytics and indices, with ~45% of new sales from outside the U.S. and ongoing cloud-migration and product innovation.
• Negative Sentiment: Cboe will exit its Japan equities business on August 29, incurring an estimated $5 M pretax charge and redirecting resources to derivatives and market-data offerings in that region.
• Positive Sentiment: The firm raised its full-year organic net revenue growth outlook to high single digits, lowered expense guidance, and returned capital via $65 M of share repurchases and a $0.63/share dividend.

Presentation

[Operator]

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cboe Global Markets Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

Thank you. It is now my pleasure to turn the call over to Ken Hill, Head of Investor Relations. You may begin your conference.

[Kenneth Hill, SVP, Treasurer & Head - IR & Business Intelligence at Cboe Global Markets]

Good morning, and thank you for joining us for our second quarter earnings conference call. On the call today, Craig Donahue, our CEO, will discuss our performance for the quarter and provide an update on our strategic initiatives. Dave Howison, our Global President, will provide some comments as he hands his responsibilities to Chris Isaacson, our Chief Operating Officer and Kathy Clay, our Global Head of Derivatives, who will join us for Q and A. We will conclude our prepared remarks with Jill Griveneaux, our Chief Financial Officer, who will provide an overview of our financial results for the quarter as well as discuss our 2025 financial outlook. Following their comments, we will open the call to Q and A.

[Kenneth Hill, SVP, Treasurer & Head - IR & Business Intelligence at Cboe Global Markets]

I would like to point out that this presentation will include the use of slides. We will be showing the slides and providing commentary on each. A downloadable copy of the slide presentation is available on the Investor Relations portion of our website. During our remarks, we'll make some forward looking statements, which represent our current judgment on what the future may hold. And while we believe these judgments are reasonable, these forward looking statements are not guarantees of future performance and involve certain assumptions, risks and uncertainties.

[Kenneth Hill, SVP, Treasurer & Head - IR & Business Intelligence at Cboe Global Markets]

Actual outcomes and results may differ materially from what is expressed or implied in any forward looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward looking statements. We undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise, after this conference call. During the earnings call, we will be referring to non GAAP measures as defined and reconciled in our earnings material. Now I'd like to turn the call over to Craig.

[Craig Donohue, CEO at Cboe Global Markets]

Good morning. Thank you for joining us today to discuss our second quarter results. Having assumed the CEO role in early May, I have been impressed by the outstanding results Cboe delivered while navigating an evolving macro landscape as well as a variety of corporate developments. During the second quarter, Cboe grew net revenue 14% year over year to a record $587,000,000 and adjusted diluted EPS by 14% to $2.46 These results were again driven by robust volumes across our derivatives franchise both in multi list and proprietary index option products, strong new sales growth in our Cboe DataVantage business, resilient industry volumes in our cash and spot markets and disciplined expense management. Building on a theme we've seen gain traction in recent quarters, the second quarter strength was broad based.

[Craig Donohue, CEO at Cboe Global Markets]

All three categories, derivative markets, cash and spot markets, and data advantage produced double digit net revenue growth on a year over year basis contributing to record first half results for the firm. Taking a closer look at the second quarter trends, our derivatives franchise delivered a record quarter with organic net revenue increasing 17% year over year. Options volumes increased on the back of heightened market volatility as investors used options to help manage risk in a quarter marked by both sharp sell offs and even sharper rebounds. In our multi list options business, net transaction and clearing fees revenue was up a robust 32% given higher industry volumes and positive pricing trends. In our proprietary products, SPX options volumes jumped 21% year over year to a new record average daily volume of 3,700,000 contracts, while Mini SPX options average daily volume rose 50% to a record 108,000 contracts.

[Craig Donohue, CEO at Cboe Global Markets]

Even more importantly, the second quarter demonstrated the full utility of our S and P 500 volatility toolkit as well as the resilience of our diverse customer base. As volatility surged in April, traders gravitated to our established SPX and VIX contracts for liquidity and market debt, with SPX options setting a single day record of 6,000,000 contracts on April 4. Much of the increase in April came from institutional investors using index options to hedge, particularly longer dated options, which saw the biggest increase relative to other tenors. While institutional activity was robust in April, retail traders pulled back as evidenced by decreasing share of zero DTE volume in April. While retail investors tend to step back when volatility jumps unexpectedly, as it did in April, they typically reengage once volatility moderates, which is what we observed in May and June.

[Craig Donohue, CEO at Cboe Global Markets]

SPX zero DTE volumes rebounded to new highs, ending June with a new record monthly ADV of 2,200,000 contracts. We've highlighted the resilience of SPX Zero DTE trading in the past and it's encouraging to see it reaffirmed once again last quarter. In the past year alone, we've seen the VIX index hit a high of 60 twice and SPX intraday volatility jumped to a post global financial crisis high. Through it all, SPX Zero DTE options have continued to grow propelled by wider adoption and new use cases. In Q2, they made up a record 57% of overall SPX options volume.

[Craig Donohue, CEO at Cboe Global Markets]

Looking ahead, we remain positive about the growth potential of options as an asset class and our proprietary index options franchise. Continued uncertainty regarding monetary and trade policy is expected to support the continued use of options to dynamically manage risk. Structural factors such as increasing retail participation and international expansion should provide further tailwinds. Anecdotally, we see encouraging signs from international brokers. They continue to expand access by extending trading hours and by increasing functionality for complex and simple orders across Cboe's proprietary index product set and a greater number of symbols.

[Craig Donohue, CEO at Cboe Global Markets]

These efforts are well aligned with Cboe's initiatives to deliver education and local market intelligence to a global audience. Moving to cash and spot markets, second quarter net revenue was up a strong 11% as our European cash equities business continued to drive robust performance for the category. Led by the strength in Europe, our Europe and Asia Pacific segment delivered the strongest year over year percentage growth of any Cboe segment for the fourth quarter in a row, achieving an impressive 30% increase. The increase was driven by a 39% year over year growth in net transaction and clearing fees resulting from strong industry volumes and solid market share gains in Europe across our portfolio of products. Higher non transaction revenues in the segment also contributed to the growth with revenue up 21% year over year.

[Craig Donohue, CEO at Cboe Global Markets]

In other areas of Global Equities, last week, we announced the decision, subject to consultation with regulators, to close our Japan equities business on August 29. This will include the Cboe Japan proprietary trading system and Cboe Bids Japan business. This decision reflects our philosophy of directing resources to the highest potential return activities across our organization, specifically exiting the equities business and redeploying time, energy and investment dollars to supporting Japanese customers through our derivatives and market data capabilities. We continue to see great demand from Japanese market participants for access to international markets, U. S.

[Craig Donohue, CEO at Cboe Global Markets]

And European market data and our global derivative products. To support these efforts, Cboe will maintain a presence in Japan focused on sales and client engagement. Turning to our DataVantage business, net revenue for the category improved by 11% on a year over year basis. During the second quarter, we saw a positive contribution from all three major components of DataVantage with subscription based data, analytics and index products producing strong year over year gains. Looking more closely at the second quarter dynamics, international demand remains a key driver of new data sales with roughly 45% occurring outside The U.

[Craig Donohue, CEO at Cboe Global Markets]

S. In the second quarter. We are looking to accelerate that growth with new hires to lead our market data sales as well as our analytics and indices businesses in the Asia Pacific region. Beyond strengthening our sales capabilities, we're leveraging new technologies and developing new products to enhance our offerings. We're accelerating the migration of our derivatives data to the cloud and actively exploring new global access points where we see growing demand.

[Craig Donohue, CEO at Cboe Global Markets]

On the product front, we're leaning into the secular trend in derivatives based ETFs while leveraging our expertise to create indices and partnership with our index providers and issuers. On access, our dedicated cores offering, which provides superior performance and determinism, continued to perform well as we see the benefits of reallocating resources to revenue enhancing activities. The interconnectedness and importance of the DataVantage business at Cboe should not be understated. Each enhancement to our market access layer, subscription based data sales and even real time values from the index business provide an ecosystem benefit to Cboe in the form of better customer engagement and improved activity levels for our trading businesses. Before I conclude this portion of my remarks, I want to take a moment to sincerely thank Dave Hausen for his contributions during his time here at Cboe.

[Craig Donohue, CEO at Cboe Global Markets]

While we'll miss Dave, I also could not be more pleased to elevate Chris and Kathy, both of whom are strong and proven leaders here at Cboe. Cboe is on solid footing, and we are well positioned to deliver on the opportunities ahead. And now I'll turn the call over to Dave to say a few words.

[David Howson, EVP & Global President at Cboe Global Markets]

Thank you, Craig. I just wanted to briefly take the opportunity to express my gratitude to all of my colleagues here at Cboe and our customers that have taught me so much over the years. I am proud to have been part of such transformational change over the last twelve years as part of the Cboe and VAPS management team, and in particular, the last three years as president, over which time we've expanded our global presence through establishing a one SIBO mindset. The firm's success has been a collective achievement as we've managed through a tremendous amount of change while laying the foundation for future success. I am grateful to be able to hand things off to such capable leaders in Chris and Kathy as I return home to be closer to my family.

[David Howson, EVP & Global President at Cboe Global Markets]

I have known Chris and Kathy for twelve and eight years respectively. They are not only both longtime close partners, but seasoned leaders and respected market practitioners with a track record of driving innovation in the industry. And before I hand it over to Jill for the financial update, I want to say a heartfelt thank you to the analyst and investor community. I have enjoyed engaging with you all on earnings calls and numerous conferences over the years and will truly miss our interactions. Now I will turn the call over to Jill.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

Thanks, Dave. Cboe posted another strong quarter with adjusted diluted earnings per share up 14% on a year over year basis to $2.46 I will provide some high level takeaways from this quarter's operating results before going through segment results. Net revenue increased 14% versus the 2024 to finish at a record $587,000,000 with each of our categories producing healthy year over year growth. Specifically, derivatives markets net revenues grew 17%, data advantage net revenues grew 11% and cash and spot markets net revenues grew 11%. Adjusted operating expenses of $213,000,000 were up 8% on a year over year basis.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

Adjusted operating EBITDA of $387,000,000 grew 19% and adjusted operating EBITDA margin expanded by 2.3 percentage points to 65.8% versus the 2024, reflecting strong performance across our businesses as well as disciplined expense management. Turning to the key drivers by segment. Our press release and the appendix of our slide deck include information detailing the key metrics for our business segments, so I'll provide some highlights for each. The Options segment delivered its fourth consecutive quarter of record net revenue with 19% year over year growth. Total Options ABB was up 20% with a 17% increase in Index Options volume and a 22% increase in multi listed options volume.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

North American equities net revenue was roughly flat on a year over year basis. Access and capacity fees increased 16% as compared to the 2024 and industry volumes supported the transaction side of the businesses. Europe and APAC produced another quarter of record net revenue with a 30% year over year increase reflecting particularly strong growth in Europe. Net transaction and clearing fees for the segment were up 39%, while non transaction revenues were up a combined 21%. Futures net revenue decreased 14% from the 2024, primarily due to lower volume.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

And finally, our Global FX segment also achieved another quarter of record net revenue with 19% year over year growth driven by a 17% increase in average daily notional value. Looking at our Cboe DataVantage business, net revenues were up 11% on an organic basis in the second quarter. Net revenue growth continued to be led by strong new subscription and unit sales, which accounted for roughly three quarters of the total net revenue growth for the quarter. The remaining growth was attributable to pricing changes, which continue to play a more modest role in our DataVantage growth strategy. As Craig mentioned, we remain focused on scaling our product set by leveraging our advanced technology and differentiated product offerings.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

We believe these additions, combined with ongoing brand investments and a sharpened focus on sales outcomes, position DataVantage for sustained long term growth. Turning to expenses. Total adjusted operating expenses were $213,000,000 for the quarter and up 8% on a year over year basis. Higher compensation and benefits, depreciation and amortization and technology support services expenses were partially offset by a year over year decline in travel and promotional as well as professional fees and outside services expenses. Moving to our 2025 guidance, we are lowering our full year expense guidance range to $832,000,000 to $847,000,000 from $837,000,000 to $852,000,000 This decrease reflects our year to date operating discipline and the impact from our decision to close our Japanese equities business, partially offset by higher incentive compensation.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

Regarding the wind down of our Japanese equities business, we expect to record an estimated pretax charge of approximately $5,000,000 in the 2025, primarily related to non cash impairment of indefinite lived intangible assets and technology related software. This charge is expected to be excluded from adjusted operating expenses. From an expense savings perspective, we expect the impact on adjusted operating expenses to be in the range of 2,000,000 to $4,000,000 in 2025. Going forward, savings are expected to be in the 10,000,000 to $12,000,000 range on a normalized annual basis. Partially offsetting some of the lower expense components mentioned, our updated guidance also factors in a higher bonus accrual given both our strong year to date revenue trends as well as our healthy expectations for the second half of the year.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

In addition, we anticipate some reacceleration in marketing spend throughout the remainder of 2025. Overall, we believe our expense guidance range provides flexibility to invest in the business while also positioning us to deliver on our shareholder return objectives. Looking at our full year guidance more broadly, we are increasing our full year total organic net revenue growth guidance range to high single digits from mid to high single digits given our strong first half results. We are reaffirming our DataVantage organic net revenue growth range of mid to high single digits following solid year to date trends and a steady outlook for the 2025. Our full year guidance range for CapEx remains at 75,000,000 to $85,000,000 and we are lowering our expectation for depreciation and amortization to 53,000,000 to $57,000,000 from $55,000,000 to $59,000,000 range.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

We continue to expect the effective tax rate on adjusted earnings under the current tax laws to come in at 28.5% to 30.5% for the full year. And while we don't provide formal guidance on interest income or interest expense, we expect that interest expense, net of interest income, will be approximately $1,000,000 in the 2025. On the capital front, we remain pleased with the health of our financial position, exemplified by the $1,200,000,000 of adjusted cash on our balance sheet, an attractive debt profile and a leverage ratio of one point zero times. In the second quarter, we repurchased $35,000,000 in shares, bringing year to date repurchases to $65,000,000 Alongside our share repurchase activity, we returned $66,000,000 to shareholders in the form of a $63 dividend during the quarter. Looking ahead, we remain focused on effectively allocating capital while leveraging our flexible balance sheet and free cash flow profile to produce sustainable shareholder value.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

Lastly, I want to provide an update on our investment in the Seven Ridge Fund holding Trading Technologies. This week, Trading Technologies announced an investment transaction that is expected to result in Cboe fully exiting its investment in the Seven Ridge Fund that currently owns Trading Technologies. The transaction is expected to close in the 2025 after regulatory clearance. Cboe expects the transaction to result in the gain recorded against the 06/30/2025 carrying value of its investment in the Seven Seven Ridge Ridge Fund. While I cannot provide any incremental details around the potential gain until the transaction is complete, I will note that consistent with our historical treatment of minority investment gains and losses at sale, we anticipate adjusting out any future impacts incurred with the exit of this investment from our non GAAP metrics.

[Jill Griebenow, CFO, Chief Accounting Officer & Executive VP at Cboe Global Markets]

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

[Craig Donohue, CEO at Cboe Global Markets]

Thank you, Jill. While I have only been in the CEO role at Cboe for a few months, I wanted to leave you with some of my early impressions of the company and what you can expect from me and our senior leadership team moving forward. First, I have been impressed by the power of Cboe's suite of cash, data, and derivatives products, our global presence, and our market leading technology, all underpinned by a highly capable management team and associate base. As reflected in today's results, our portfolio of businesses is performing at a very high level. At the same time, with the continued guidance and support of our board, we are an organization that remains committed to improving, adapting, and positioning ourselves to deliver more value to shareholders over time.

[Craig Donohue, CEO at Cboe Global Markets]

This not only means exploring organic and inorganic investment opportunities around key capabilities, but optimizing the growth and profitability in our core businesses. We are committed to bringing a rigorous financial discipline to how we allocate capital, both dollars and people, across the firm. Our decision to close our Japanese equities business was representative of that thought process in action. Moving forward, we remain committed to continually assessing our business portfolio to produce the best long term returns for shareholders. As I mentioned, clearly several areas at Cboe are performing exceptionally well from cash to data to derivatives.

[Craig Donohue, CEO at Cboe Global Markets]

The second quarter was an outstanding one and the record first half results showcase the power of the business. Heading into the second half of the year, I am energized by the opportunities ahead. I'd now like to turn the call back over to Ken for questions and answers.

[Kenneth Hill, SVP, Treasurer & Head - IR & Business Intelligence at Cboe Global Markets]

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

[Operator]

And our first question comes from the line of Patrick Molley with Piper Sandler. Thank you. Please go ahead.

[Patrick Moley, Director & Senior Research Aanalyst at Piper Sandler Companies]

Yes. Good morning, and thanks for taking the question. Craig, welcome. Really looking forward to working with you. I was hoping you know, you talked a little bit about it, but I was hoping you could just maybe speak to the one or two key priorities that you have in coming into the role and how that might differ from previous leadership.

[Patrick Moley, Director & Senior Research Aanalyst at Piper Sandler Companies]

And then, you know, more recently, Fred one of the things Fred had talked about was an openness to doing potentially, you know, needle moving m and a. And just given your experience with larger scale m and a, how are you thinking about the inorganic growth opportunity for Cboe going forward?

[Craig Donohue, CEO at Cboe Global Markets]

Okay. Thanks, Patrick. Good morning. You know, I would say coming into the role, first of all, I mean, I'm very impressed with the team and the strategy that we have had in place. And I think that strategy is producing great results for the company.

[Craig Donohue, CEO at Cboe Global Markets]

I'm gonna continue to work with the team to be very focused on, you know, optimizing growth in our core and leaning into the secular trends that are supporting, I think, fantastic growth dynamics in our proprietary and multi list derivative products as well as our data advantage, businesses. You know, in terms of, you know, m and a, and even though I have obviously a strong background in that, I guess what I would say is, you know, that's something that we'll be working on as a team over time. Anything that we choose to do is gonna be something that has to be compelling from both the strategic and a financial rationale perspective. There's nothing that we need to do right now. We've got a very flexible balance sheet.

[Craig Donohue, CEO at Cboe Global Markets]

But, you know, my feeling is we should look at all of our growth opportunities, focus on optimizing the core, look at things we can do to grow around and outside of our core, but we'll remain opportunistically focused on whether there are also opportunities for us to consider growing inorganically. But that's something that we'll work on over time.

[Operator]

And your next question comes from the line of Dan Fannon with Jefferies. Please go ahead.

[Daniel Fannon, Managing Director - Research Analyst at Jefferies]

Great. Good morning, Greg. Welcome back to the quarterly earnings cycle. Just to follow-up on your previous comments here, just optimization you've mentioned a few times and obviously you've already proactively made the changes with Japan. But where where are you in just kind of the evaluation of the businesses in your footprint?

[Daniel Fannon, Managing Director - Research Analyst at Jefferies]

And how should we think about greater optimization or more changes like you've already done in the near term?

[Craig Donohue, CEO at Cboe Global Markets]

Well, I think, you know, obviously, we've got really great dynamic growth across our whole business portfolio, but, I'm working with the team to look at everything that we're doing. We're doing that in a rigorous way. We're trying to make sure that, the end goal is to just make sure that we're allocating all of our capital, both financial and especially human capital, to taking advantage of of our best growth opportunities. And I've been impressed so far. I mean, I think the Japan equity's decision is an example of that.

[Craig Donohue, CEO at Cboe Global Markets]

You know, people are being rigorous and thoughtful about where we can best redeploy our capabilities. So that's something that we're just gonna keep doing. We have a very broad business. There's been a lot of things that Steve has tried to do over the last, you know, five or six years, and we're just gonna stay focused on that because I wanna make sure that, all of our resources are focused on our best growth opportunities.

[Operator]

Our next question comes from the line of Ben Budish with Barclays. Please go ahead.

[Benjamin Budish, Director at Barclays]

Maybe a narrower question just on the DataVantage guide for the year. When I look at the sequential step up in DataVantage revenues, it looked like it was quite robust this quarter. And if the next couple of quarters look similar like maybe the last like three or four quarters, it sounds like it seems like the guidance might prove to be conservative. Just curious, if there's anything we should be thinking about in terms of the revenue model? Is there any reason that revenue shouldn't continue to sort of step up sequentially?

[Benjamin Budish, Director at Barclays]

Could you perhaps remind us like the various components, and key drivers, new unit sales pricing and things like that, as we're kind of fine tuning our models here? Thank you.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

Yeah. Happy to, Ben. This is Cathy. We remain confident in our full year guidance just recognizing that quarterly results will fluctuate, some, you know, landing above and some below the expected range. But we are on track to deliver against our full year objectives.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

Regarding q two, you may recall that last year's first half performance created a favorable comparison for q one and q two of this year. Our business has started out on strong footing. There's no denying that across all of our verticals of data and analytics and our index business. But it has been further supported by the momentum of the newer initiatives that Craig talked about, a dedicated course, for example, which is really starting to bear fruit. Looking ahead, we do believe that data advantage is well positioned for sustained long term growth.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

And we continue to invest in our global access and expand where we do business. And we are seeing about 45% of new recurring sales from outside of The US. We're really leaning into our new distribution channels like Cboe Global Cloud, where 85% of our sales are from international clients. And we're leaning into strengthening our sales execution, making sure that the derivatives team and the data advantage team across the globe are really working hand in hand because we know that the data sales often are a precursor or a leading indicator of the derivative volumes that we might enjoy. So we're really just leaning into additional distribution, capabilities, new product, suites, and our, technological capabilities going forward.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

So very confident in the full, guide that we give.

[Operator]

Your next question comes from the line of Eli Aboud with Bank of America. Please go ahead.

[Eli Abboud, Equity Research Analyst at Bank of America]

Good morning. Thanks for taking the question. I wanted to drill down into the long term growth algorithm for index options volume. When zero DTE starts to reach maturity, whenever that may be, what new themes, geographies, or products you have the most conviction can provide that next leg of growth?

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

It's a good question. Zero DTE, you know, we continue to just be confident that, these volumes are quite sustainable. When we think about our, expansion with retail broker dealers, both in The US and abroad, we feel that there's still a lot of surface area of opportunity here. Retail traders tend to start trading in other products, and then as their sophistication level rises, they move into the index option complex, primarily for the benefits of index options in general, the cash settlement, the European exercise, dental tax treatment benefits. So we really think as we continue to partner more with our retail broker dealer clients, and that means co marketing agreements where we actually get a little better view into the data that comes from those partners of ours, as well as really we're in very early innings in the Asia Pacific region where we see incredible demand for our products and our data, including we really think that this is early innings to to sustain the zero DTE complex.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

And if you look at really just some of the numbers in STX options in general, you know, kept three daily records this year, two in April and just one recently on July 31. So we really think the the secular tailwinds for this space are strong. Appetite from the retail traders can move up in the curve. We really think both of these things really drive future sustainability and growth.

[Operator]

Your next question comes from the line of Ashish Sabadra with RBC Capital Markets. Please go ahead.

[Eli Abboud, Equity Research Analyst at Bank of America]

Thanks for taking my question. Maybe just a question on, the competitive environment of, single stock zero DTE and how that's, like, how that's evolving and what does it mean for the index SPX index options going forward? Thanks.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

We actually see the single stock zero DTEs as not cannibalistic to the index option zero to ease, more for the ETF, zero to e space. We really feel that the difference between single stock options, things I just talked about, capital and the European exercise, really, they're completely different animals. And we see a lot of retail traders coming into the single stock or the ETF options and then migrating into the index option space as that level of sophistication of that trader continues to grow. And we're very optimistic as we see new entrants come into the option space, but then begin that journey of sophistication through ever increasing, new data and analytics that these retail broker platforms are providing them. It's no surprise that the retail broker dealer platforms are investing heavily in new analytics and new functionalities to really court that active retail trader segment.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

So it's a great development for us, partner with retail broker dealers as they really try to secure additional engagement from their active trader base.

[Operator]

Your next question comes from the line of Alex Kramm with UBS. Please go ahead.

[Alex Kramm, MD & Senior Equity Research Analyst at UBS Group]

Yes. Hey, good morning everyone. And Craig, welcome. Look forward to working with you again. It's been a while.

[Alex Kramm, MD & Senior Equity Research Analyst at UBS Group]

Look, in terms of strategic priorities, one of the most important relationships that Cboe has is probably the one with S and P Global on your index relationship, which obviously is a big part of your business. I know the renewal of that is still several years out, but since you just stepped into the new role, just wondering how you view that relationship and to what degree you should have appetite to maybe change the structure a little bit longer term to make it a little bit longer term since you don't want to go through this habit of having to renew this every few years. So just wondering how you view that whole relationship and how you could change it.

[Craig Donohue, CEO at Cboe Global Markets]

Yeah. Thank you for the question, Alex, and, good to hear from you. You know, I would say just philosophically, I mean, I have the same view here at Cboe as I did at CME, which is, you know, S and P is a really long term and deeply valued partner. I think we've had a long and very successful relationship. We see the world the same way, and I think we have a lot of the same goals and objectives when it comes to how to successfully grow the franchise.

[Craig Donohue, CEO at Cboe Global Markets]

So, you know, that's something that we'll be continuing to work on with them. I don't really have a lot to say at this point on that other than, you know, I think, you know, applying that same long term commitment to making sure that our relationship is mutually beneficial and that we can grow together and that we bring, you know, innovation and growth to our segment of the S and P landscape is critical from their perspective as well as ours. So we'll continue to work on it. I mean, obviously, as much as possible, we've been together for more than forty years. I'd like to see that continue for at least another forty years, and we have to find the way to do that with our partners at S and P.

[Operator]

Your next question comes from the line of Owen Lau with Oppenheimer. Please go ahead.

[Owen Lau, Executive Director at Oppenheimer & Co. Inc.]

Good morning and thank you for taking my question. Could you please give us an updated thought on attacking the globalization theme? Is there anything you would do differently over the next twelve months? And how do you plan to capture this opportunity here? Thanks a lot.

[Chris Isaacson, EVP, COO at Cboe Global Markets]

Hey. Good morning, Owen. This is Chris Isaacson. I think if I'm understanding your question about globalization, I think Kathy mentioned this quite a bit in answering the data vantage question. Where we see greatest opportunities globally is to continue to through the import export discussion, really importing flow from outside The US into our markets, especially into The US markets and our derivatives products.

[Chris Isaacson, EVP, COO at Cboe Global Markets]

But that usually starts with data. And Kathy covered that really well with data advantage. We're seeing 45% of sales outside The US and 85% of Siva Global Cloud outside The US. So hopefully, that answers that answers your question, Owen. If it didn't, feel free to get back in the queue and ask again.

[Operator]

Your next question comes from the line of Brian Bedell with Deutsche Bank. Please go ahead.

[Brian Bedell, Director at Deutsche Bank Securities]

Great. Thanks for taking my question and welcome back Greg. Looking forward to working with you as well. Maybe if I can sort of zoom out, Craig, and just your perspective on the how the securities exchange industry has evolved and how you think it might evolve in the future? And then what I'm really getting at is from a number of different angles, retail client engagement, whether you see that as classically cyclical or there's a much stronger structural trend there? And then the movement towards 20 fourseven trading and then potential adoption of tokenization And whether you think U. S. Regulators, how heavy of a lift is it to bring this on?

[Brian Bedell, Director at Deutsche Bank Securities]

And then how are you thinking about if you're believing in that, how how are you thinking about your position and what you might do to, you know, to to, to leverage these trends?

[Craig Donohue, CEO at Cboe Global Markets]

Yeah. Well, thank you for the for the question. You know, I would say that I think what we're seeing, and I think this has been borne out now for, you know, the last five or six, you know, seven years, is I I don't think the retail trend is is is sort of cyclical. I mean, I think it's a long term trend. I think there's a continued sort of growth in, sophistication, and, that's a trend that I think will continue.

[Craig Donohue, CEO at Cboe Global Markets]

So we intend to try to keep leaning into that. I mean, we've we're living in a very dynamic environment. And so when you think about, you know, exchange companies, I mean, exchange companies have become quite diverse and very broad, in the, you know, total portfolio of businesses that they now represent. And so, you know, that's how we're thinking about ourselves also is making sure that we remain relevant and competitive and have the opportunity to grow, you know, beyond our traditional core. You know, looking at digitization, tokenization, you know, events and prediction markets, these are all things that are starting to especially with the growth of retail, kind of increasingly come into our, quote, unquote, traditional world.

[Craig Donohue, CEO at Cboe Global Markets]

So we're looking at all of that and thinking about, where our place will be in that. I can't give you kind of a specific, you know, idea of exactly where we're going to go in that, but we're cognizant of this broader landscape and these larger changes that are happening. And we wanna make sure that we're able to compete and provide value in that kind of evolving landscape.

[Operator]

Your next question comes from the line of Kyle Vault with KBW. Please go ahead.

[Kyle Voigt, Managing Director at Keefe, Bruyette & Woods (KBW)]

Hey, good morning. So Craig, I echo the comments of everyone else, looking forward to working with you. We're at much later stages of direct exchange consolidation, at least relative to the last time you were an exchange CEO. And since then, many of your peer exchanges have since turned towards other non trading businesses, such as information services as a pathway for inorganic growth. I guess what are your thoughts on that strategy of diversifying away from trading oriented businesses as an exchange operator?

[Kyle Voigt, Managing Director at Keefe, Bruyette & Woods (KBW)]

And is a move towards non transaction revenues a part of the larger goal in terms of of inorganic growth for you, or kinda how do you view that as a part of your inorganic strategy?

[Craig Donohue, CEO at Cboe Global Markets]

Yeah. No. I appreciate your question.

[Craig Donohue, CEO at Cboe Global Markets]

I mean, let me just sort of say, you know, obviously, I think this is about my third or fourth month in the seat. So, there's an awful lot of work, that I have to do here with my my team and my colleagues and thinking about, you know, if we were to pursue inorganic growth through mergers and acquisitions, kind of how we think about that and where we wanna go. I'm not really prepared to answer that question today other than to say, you know, I'm certainly very cognizant of exactly what you described. You know, the exchange company landscape has matured and evolved, you know, over the course of the last, you know, fifteen years. And, you know, we see a number of our peer companies that have done, I think, a very effective job at expanding beyond the traditional core of what an exchange company is.

[Craig Donohue, CEO at Cboe Global Markets]

And they've created, you know, a level of diversity, not only in terms of the composition of the business, but the composition of the revenues and earnings that is compelling. So we're cognizant of it. We're thinking about it in a very broad way. But at the same time, take you back to my earlier comments. You know, we have a great core business that's growing.

[Craig Donohue, CEO at Cboe Global Markets]

There's lots more growth to be had, we think. And so we're in a strong position, but we're gonna be very disciplined, very rigorous, and I think conservative in how we think about if we were to employ that sort of growth, you know, tactic of of inorganic growth. We wanna do that in a very thoughtful and meaningful way.

[Operator]

Your next question comes from the line of Michael Cyprys with Morgan Stanley. Please go ahead.

[Michael Cyprys, Managing Director at Morgan Stanley]

Hey, good morning. Thanks for taking the question. I want to circle back to some of the commentary on the tokenization and blockchain, more of an industry bigger picture focused question. Just given all the advancements that we're seeing in technology and the evolving regulatory backdrop, I'd just be curious of your views on around tokenization blockchain. What use cases do you find think to be most compelling?

[Michael Cyprys, Managing Director at Morgan Stanley]

What are some of the hurdles, roadblocks as you think about implementation across the industry that could ultimately, if resolved, overcome? How that might be overcome that may lead to broader, adoption as this technology has been around for many years? So curious your views around what the big unlock might be, and then what implications might this have for the industry? Thank you.

[Chris Isaacson, EVP, COO at Cboe Global Markets]

Hi, Michael. Good morning. Thanks for the question. It's certainly the hot topic of the day, but as you say, tokenization, the topic has been around for a while. It does seem to be getting a lot more traction and as we a lot of discussion right now around actually US equities and and what would the application be there.

[Chris Isaacson, EVP, COO at Cboe Global Markets]

I think, you know, so there were some questions earlier about twenty fourseven and greater access to The US and to the extent tokenization can allow for greater access or the entry of more twenty fourseven trading, we would welcome that. However, you need to work through some of the issues that come along with tokenization like counterparty restrictions and KYC AML. You need to think about, you know, these are still securities as there's been a lot of discussions with regulators about even though it's tokenized, it still can be a security. So you need to think about what is the the problems that are being solved by tokenization and whether or not they should apply to the most liquid assets like US equities that already trade extremely well. But I think especially the the unlock here is really about 20 fourseven and greater access from those outside The U. S. Into The U. S.

[Operator]

Your next question comes from the line of Chris Allen with Citigroup. Please go ahead.

[Christopher Allen, MD - Exchanges, Brokers, & Asset Managers at Citi]

Yeah. Good morning, everyone. Craig, welcome back. Wanted to circle back on single stock, zeros. And just, based on our internal discussions, there's there's definitely an industry push here and expectation that probably gets launched sometime early next year.

[Christopher Allen, MD - Exchanges, Brokers, & Asset Managers at Citi]

So I was just wondering, is do you see any potential for the structure here to change to overcome some of the problems that Kathy talked about before? Any specific issues that would prevent, these to be launched? And then any color on just, how much of an impact, you see on SPX zeros, during maybe on days when, max seven stocks, announce earnings and things like that.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

Yeah. It is a hot topic just like tokenization when we think about expanding access to, zero DTEs and single stocks. And the industry is kinda digesting what this means in terms of how to do basic things like how do we process corporate actions, how do we make sure that the end investors is safe for additional earnings announcement type activity. So there is definitely an appetite to expand into more x rays for single stocks, and we're all for that. We we believe again that when we bring retail traders into products that they want to trade because they like the name or they're interested in the theme, they eventually grow in that journey of sophistication and find their way to index options.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

And so, you know, we compete in the multi list space in all of these initiatives for the single stock. We're watching very closely as the industry gets through these conversations about how do we do this in a proper way so that we have broad adoption and participation from all the market participants that would need to have access and they'd be feel safe in this new environment. But we're there. And when when they come to to life, we'll list them day one. We'll be there as well.

[Operator]

Again, to ask a question, press star one on your telephone keypad. And our next question comes from the line of Eli Aboud with Bank of America.

[Eli Abboud, Equity Research Analyst at Bank of America]

Hi, thanks for taking the follow-up. I believe the changes to the OCC margin model become effective this fall. How material are you anticipating that event to be? And in particular, do you think the margining changes will affect the growth trajectory of zero DTE?

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

Great question. A hot topic, really of last year about what the impact of the OCC new margin requirements were going to be. I I have to commend the OCC for really taking the time and listening industry participants. They did that really well giving everyone a little bit more opportunity to understand what the full impact of those OCC changes would be, and the industry has had time to really think about what they need to do to minimize the impact. And so I think we're in a really good position, different position probably from this time last year where I think the estimate was about 5%, capital requirement impact.

[Catherine Clay, EVP & Global Head - Derivatives at Cboe Global Markets]

Down to about 1% of the new estimation. So when we talk to market participants where this was really a put out the fire issue last year, we're not hearing that. We we we believe market participants have adjusted and digested and are ready for the changes that are coming this fall at OCC.

[Operator]

And with no further questions in queue, I will now turn the call back over to the management team for closing remarks.

[Craig Donohue, CEO at Cboe Global Markets]

Great. I just wanna thank everybody for joining us today. It is good to be back. I'm enjoying working with the team and looking forward to a great last half of the year, and we'll see you next time.

[Operator]

Thank you again for joining us today. This does conclude today's presentation. You may now disconnect.

Participants

Executives

• Kenneth Hill, SVP, Treasurer & Head - IR & Business Intelligence
• Craig Donohue, CEO
• David Howson, EVP & Global President
• Jill Griebenow, CFO, Chief Accounting Officer & Executive VP
• Catherine Clay, EVP & Global Head - Derivatives
• Chris Isaacson, EVP, COO

Analysts

• Patrick Moley, Director & Senior Research Aanalyst at Piper Sandler Companies
• Daniel Fannon, Managing Director - Research Analyst at Jefferies
• Benjamin Budish, Director at Barclays
• Eli Abboud, Equity Research Analyst at Bank of America
• Alex Kramm, MD & Senior Equity Research Analyst at UBS Group
• Owen Lau, Executive Director at Oppenheimer & Co. Inc.
• Brian Bedell, Director at Deutsche Bank Securities
• Kyle Voigt, Managing Director at Keefe, Bruyette & Woods (KBW)
• Michael Cyprys, Managing Director at Morgan Stanley
• Christopher Allen, MD - Exchanges, Brokers, & Asset Managers at Citi