Cboe Global Markets Inc Q3 2025 Earnings Call Transcript

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

Question: Patrick Moley - Piper Jaffray Inc - Analyst : I thought maybe we'd start off, Craig, if you wouldn't mind just maybe just talk about some of the decisions made today as a result of the comprehensive review process, why were Cboe Australia and Canada, why did you decide to initiate a sales process there? And then as we think about the proceeds that you'll receive from those transactions and some of the expenses that will be freed up? What specific areas of the business are you looking to kind of deploy that capital into?

Question: Elias Abboud - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Can you help us understand the drivers behind the stronger outlook for your Data Vantage business? The past couple of years, it's been a high single-digit grower. What has changed that's going to allow you to get north of that? And then do you expect you can hit that target even in years when volumes and capacity fees are down?

Question: Brian Bedell - Deutsche Bank AG - Analyst : Can you hear me okay?

Question: Brian Bedell - Deutsche Bank AG - Analyst : Maybe just to focus in on the retail strategy and JJ's game plan for maybe just sort of expand more on how you might be doing this differently, the connection with other brokers, online brokers, the potential white space that you have there? Because I know you are connected with a lot of retail purchase cents. And then if you can talk a little bit more about the prediction markets, how that weaves into the retail strategy. What's the timing of when you think you might start to launch event contracts, and I don't know if there's any view on pricing of those, yes. Prashant Bhatia - Cboe Global Markets Inc - Executive Vice President, Head of Enterprise Strategy & Corporate Development Hi, Brian, Prashant here. Just real quick on prediction markets. We see broad-based interest in predictions we think it aligns well with the cross-section of secular trends, increased retail participation, the appetite for short-dated options. And again, smaller contract sizes, dollar-sized contracts really the ultimate mini contract. So we want to leverage our strengths and provide industry participants there with a neutral infrastructure platform. And we're thinking both on the exchange side and on the clearing side. So we think there's an opportunity there. And you can expect our focus will be on financial and economic-related contracts when it comes to those products. And we're crafting a go-to-market plan, and we'll provide these updates there as we make progress. So yes, even prediction markets clearly an area of interest for us. And I think we've got an offering that could benefit the marketplace.

Question: Christopher Allen - Citi Infrastructure Investments LLC - Analyst : I would love to hear your thoughts on strategic realignment, particularly the sales of overseas the international business. How that fits with the international strategy for the data business where clearly you're seeing good progress. Just love to hear, if I remember correctly, some of the deals that were done, are they going to expand global footprint to drive data sales, so now you're pulling back just help us think about that strategy moving forward. Prashant Bhatia - Cboe Global Markets Inc - Executive Vice President, Head of Enterprise Strategy & Corporate Development Yes. Thanks, Chris. So when we went through the process to evaluate our portfolio of businesses. We looked at each of these businesses from a strategic lens from a financial lens and from a growth potential lens. And -- but it came down to our Australia and Canadian businesses, they both performed quite well, but we simply determined that we have better opportunities to drive meaningful growth for Cboe in other areas. And that's why we decided to pursue a sale there. And when you talk about some of the linkages to data. These are core local market platforms in the Canadian market and the Australian market. In terms of our data, a lot of our data sales aren't really driven by having a local exchange presence. So we see an enormous amount of demand for our data throughout APAC. We've added salespeople. We've been marketing resources in those regions. And it really drives a lot of access from clients overseas. When you look at the connectivity we have with APAC brokers, and how we continue to grow that. There's an enormous demand around the secular trend of flows with the US being a destination. So we don't think it's going to have an impact from that perspective at all. These were more local market exchanges they're performing well. So we made the decision really driven by where we find the biggest growth opportunities going forward, so we can drive focus there.

Question: Anthony Corbin - Goldman Sachs Group Inc - Analyst : This is Anthony on for Alex. Maybe just on prediction markets. How are you thinking about M&A versus a less capital-intensive partnership? And do you see any risk of cannibalization to your existing short-dated product suite?

Question: Ashish Sabadra - RBC Capital Markets Inc - Analyst : I just wanted to follow up on the earlier question. And as you think, completed your strategic review how are you thinking about organic investments going forward, but also like inorganic investment broadly outside across all the spaces, including the Data Vantage space.

Question: Elias Abboud - Bofa Merrill Lynch Asset Holdings Inc - Analyst : You highlighted how Data Vantage revenue growth is being disproportionately driven by international unit sales in past calls, I think you've said about 50% of the incremental growth comes from international. I was hoping you could break that down a little bit further. Our international users consuming your data is the growth concentrated in one particular channel? And then how do we square your outsized international data growth with the fact that global trading hours are still a relatively small part of your total volumes? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2025 / 12:30PM, CBOE.Z - Q3 2025 Cboe Global Markets Inc Earnings Call Prashant Bhatia - Cboe Global Markets Inc - Executive Vice President, Head of Enterprise Strategy & Corporate Development Yes. So I'd say a couple of things on Data Vantage. In terms of the growth we're seeing overseas, it's absolutely driven by a lot of our -- an appetite through data or US proprietary market data, and we're seeing high demand for that. In terms of global trading hours, it's not as correlated to data sales there as to GTH volume. So we're not seeing a high correlation there. The demand is coming and they are trading within to 24x5, 24-hour, five-day videos that we have. So we're seeing good demand and appetite there. And when you look across the Data Vantage platform, we're not only seeing growth on the data side. We're seeing growth on the index side. We're seeing growth in our risk and market analytics platforms as well. So it's pretty broad-based growth again, with any kind of sales-oriented business, you end up with some variability quarter-to-quarter depending on when sales hit. This was just a particularly strong quarter for us. We continue to think we're well positioned going forward. So good story there, and all that growth is really organically driven.

Question: Benjamin Budish - Barclays Services Corp - Analyst : Wanted to ask a higher-level question about AI. It's something we've heard a lot about from some of your exchange peers this earnings cycle. Just wondering if you could share any high-level thoughts? How might that help you in terms of new data and analytics products how do you think about potential to increase efficiency in your operations? I think your margins already quite high, but how are you thinking about opportunities either on the product side or internally to employ more or deploy more AI capabilities? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2025 / 12:30PM, CBOE.Z - Q3 2025 Cboe Global Markets Inc Earnings Call

Question: Kyle Voigt - Keefe Bruyette & Woods Inc - Analyst : You noted opportunities in the multi-list options market multiple times today on the call. I don't want to say that multi-list hasn't been a priority for Cboe, but maybe it seems like it's going to be more of a focus of investment for Cboe moving forward. As you noted, it's a very competitive space. So I'm just wondering what you think you could do differently in that market versus the way Cboe has looked at and addressed that market over the past several years.

Question: Michael J Cyprys - Morgan Stanley & Co LLC - Analyst : Hopefully, you can hear me okay. I wanted to ask about AI to your earlier point. I was hoping you could elaborate a little bit on products might make sense as you look out over the next 12 to 24 months and then also more longer term, how you might see AI helping contribute to revenues at Cboe over time?

Question: Brian Bedell - Deutsche Bank AG - Analyst : Maybe just in back out on the global strategic pivot. So as we think of what you plan to divest of. Should we be thinking of the future global footprint for Cboe as largely being US and European centric? Maybe just comment on your commitment to continuing to have a leading market share in European equities trading. And then -- and I would have presumed the global strategy is then more coming from the US, as you kind of talked about in this call. And then just to confirm, Jill, I think you mentioned that the early view of the impact of this financially would be a 3% reduction in revenue, 8% to 10% reduction in OpEx. So that would indicate that the businesses you're divesting from where breakeven or losing money? I just want to confirm that.

Question: Anthony Corbin - Goldman Sachs Group Inc - Analyst : I wanted to know how you're thinking about the net impact to expense growth over time from the cost savings from today's announcement and Japan wind down versus incremental spend needed to support retail expansion and the build-out of prediction markets?

Question: Benjamin Budish - Barclays Services Corp - Analyst : I was wondering if you could talk a little bit about your expectations for expanding trading hours. I think there was a press release from maybe a week or two ago about looking to -- at a morning session, I think starting at 7:30 and expanding the afternoon to 4:15. Just curious, I think the release that you expect this would be a meaningful step on the way towards 24/5, but those hours in particular, would capture a lot of other sort of economic data releases. So just curious, like with that in mind, based on what you see historically, how do you think about capturing that time might impact your SPX volumes in particular?

Question: Michael J Cyprys - Morgan Stanley & Co LLC - Analyst : Just wanted to ask about prediction markets on crypto. I was hoping you could elaborate on your aspirations there. What steps might you be taking over the next 12 to 24 months? And how do you see this contributing to Cboe over the next couple of years to what extent my inorganic steps might help accelerate the time frame to scale? How are you thinking about that? Prashant Bhatia - Cboe Global Markets Inc - Executive Vice President, Head of Enterprise Strategy & Corporate Development Yes. I think in terms of production markets, we're going to start with what we would call financial and economic contracts. Digital is definitely something we'll explore. There's a lot of demand and activity there as well, so we will look at that. As Craig said earlier, our view is we've got the capability, we've got the exchange platform. You've got the clearing platforms, a lot of this build out and they believe the people are getting. So we're not focused as much on acquiring things like that. Obviously, the open partnerships involved think about the retail client base and the demand we're seeing there. We'll look to establish partnerships with retail platforms that want an industry utility type platform. And when we think broadly around things like M&A not relatively related to the prediction markets, but we're always interested in looking for businesses that have compelling strategic and financial rationale. There's nothing we need to do there today, but we're always open to that. You've heard Jill talk about how strong our balance sheet is. So we'll just keep our options open. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2025 / 12:30PM, CBOE.Z - Q3 2025 Cboe Global Markets Inc Earnings Call