Cboe Global Markets Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Patrick Moley - Piper Sandler - Analyst : My question was on the appointment of Mr. Donohue as CEO. Fred, you touched on a little bit. I was hoping you could just elaborate maybe on what the CEO search process looked like, and the decision ultimately choose Mr. Donohue. And then specifically, outside of his experience leading a publicly traded US exchange, what sort of skills or qualities did you and the Board feel like he possessed that made him the right person for the job? Thanks.

Question: Chris Allen - Citigroup - Analyst : One, as you pointed out in the release announcement, Craig handled $20 billion of deals for CME. So I'm wondering how you're framing the inorganic growth opportunities moving forward, whether -- and whether anything changed on that front, and how do you view the environment from that perspective?

Question: Ben Budish - Barclays - Analyst : If you could dig into retail a little bit more on the, I think in the last earnings call, you said you called out faster adoption of index options than expected at Robinhood. It looks like the SPX volumes were quite robust in the quarter. So curious if you could give us any updates, curious on Robinhood in particular, but also retail broadly, how is retail sort of responding in April versus maybe institutional? What kind of behavior you're seeing there? Thank you.

Question: Dan Fannon - Jefferies LLC - Analyst : So Asia has been a particular focus of growth, you highlighted a few regions where you're seeing some success. Can you talk about the level of investment that you're putting into that region, where you sit in terms of salespeople and platforms that you're either on or trying to basically contextualize what the opportunity is in terms of additional platforms for you to access.

Question: Alex Kramm - UBS - Analyst : I guess I want to follow up on Ben's question from earlier, partially on the retail, but really an observation in the second quarter so far that your index volumes, while they're up a lot, quarter of a quarter and year every year, they're lagging, probably some other markets out there, equities, future. et cetera. So just wondering, is that really a function of what you spoke about earlier, your retail exposure and maybe more discipline, or are there other drivers maybe on the institutional side that may have not favored index option as much relative to other, I guess, ways to express risk management.

Question: Kyle Voigt - KBW - Analyst : Maybe I could ask a question on capital return, the buyback activity was relatively late in the in the quarter. I'm just curious how much of that was related to wanting to or needing to wait until the CEO announcement was finalized. And with leverage now at one time and I think cash on the balance sheet over a billion dollars, just wanted to get your updated thoughts on whether you're open to kind of restarting a more normal cadence to buyback activity with free cash flow or whether you'd selected to leverage further from here on that basis.

Question: Ashish Sabadra - RBC - Analyst : 0DTE obviously has ramped up significantly from low 20% back in Jan 2022 to now mid-50s in March of '25. I was just wondering if you could share any perspective on how these trends might evolve, particularly in light of starting to normalize, but also growing adoption of these strategies by both retail and institutional investors. Thanks.

Question: Brian Bedell - Deutsche Bank - Analyst : My question for Dave linking the Data Vantage with organic revenue growth. So the -- good to see the non-US portion of the sales increase and as you mentioned, it's a good leading indicator typically for setting up a trading volume. So looking at the organic growth guide revised up to mid to high-single digit, it looks like your kind of run rating the first quarter on that. So just trying to get a sense of the conservatism in that considering the potential for organically growing your products. You obviously -- if we get a dramatic pullback in volumes that could pressure that, but just, I guess, your confidence around the organic growth, given the leading indicators you're seeing on the data side.

Question: Owen Lau - Oppenheimer - Analyst : So for your expense guidance, I hear that your com in marketing expense will increase in our quarters, but your com ratio in the first quarter was, like based on my math, was like 20.6%. I'm just wondering how we should think about the more normalized com ratio excluding the strong April revenue performance and how much conservatism you have baked into your expense guidance? Thanks a lot.

Question: Michael Cyprys - Morgan Stanley - Analyst : Just wanted to ask about retail. Curious your thoughts around taking the 0DTE success and bringing that to intraday options. Just curious what's your appetite for that? What hurdles might need to be overcome, and your sort of thoughts on how you might approach that. And then just more broadly on retail, as you look at the product tool kit that you have today, just curious where you're most excited about for what's next to come with retail? With the existing toolkit, what new innovations might you be able to bring to the marketplace? I'm curious your views on prediction markets and to what extent Cboe might have interest in capturing the retail interest from that, any particular categories that may be more interesting to you than others. Thank you.

Question: Madeline Daleiden - JP Morgan - Analyst : Hi, good morning. This is Madeline Daleiden on for Ken. Thanks for taking our question. We just had a question on open interest trends, particularly in your VIX franchise. So now a few weeks out from that early April volatility, are you noticing any change in behavior whether institutional or retail or perhaps even deleveraging at this time? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 12:30PM, CBOE.Z - Q1 2025 Cboe Global Markets Inc Earnings Call

Question: Anthony Carvin - Goldman Sachs. - Analyst : Maybe a follow up to Michael's earlier question. How do you view the competitive landscape evolving in the index option suite from products like Prediction Markets and levered ETS? And there were some recent headlines on Nasdaq launching single stock (inaudible) options. So what gives Cboe the competitive advantage to maintain share and products with relatively similar use cases? Thanks.

Question: Alex Kramm - UBS - Analyst : Just a quick follow up and maybe this is a little bit too big picture for today. But over the last few quarters you've talked a lot about, and it came up today again, exporting the US markets globally, but I think over the last couple of months, there's been a lot more of this theme of capital flow into other global regions into Europe, Asia, et cetera, and away from the US. And you mentioned the market data demand in Europe already, but I'm just wondering if this is a theme you feel like you're prepared for, or you think you want to lean in more? You obviously have a lot of global assets, but just wondering if you think that really plays out that you have everything in your toolkit for that? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 12:30PM, CBOE.Z - Q1 2025 Cboe Global Markets Inc Earnings Call