Cboe Global Markets, Inc. (AMEX:CBOE) Q3 2025 Earnings Call Transcript

Cboe Global Markets, Inc. (AMEX:CBOE) Q3 2025 Earnings Call Transcript October 31, 2025

Cboe Global Markets, Inc. beats earnings expectations. Reported EPS is $2.67, expectations were $2.53.

Operator: Hello, everyone. Thank you for joining us, and welcome to the Cboe Global Markets Third Quarter Earnings Call. [Operator Instructions] I will now hand the call over to Ken Hill, Head of Investor Relations. Please go ahead.

Kenneth Hill: Good morning, and thank you for joining us for our third quarter earnings conference call. On the call today, Craig Donohue, our CEO, will discuss our performance for the quarter and provide an update on our strategic initiatives. Jill Griebenow, our Chief Financial Officer, will then 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&A. Also joining us for Q&A will be Chris Isaacson, our Chief Operating Officer; Prashant Bhatia, our Head of Enterprise Strategy and Corporate Development; and Rob Hocking, our Global Head of Derivatives. I would like to point out 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 the website. During our remarks, we will 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. 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 call this morning, we will be referring to non-GAAP measures as defined and reconciled in our earnings materials. Now I’d like to turn the call over to Craig.

Craig Donohue: Good morning. Thank you for joining us today to discuss our third quarter results. Our performance this quarter underscores how Cboe is operating from a position of strength, a result of our world-class products, platforms and people. We’re building on that momentum and sharpening our strategic focus designed to unlock even greater value and opportunities for growth. Following the conclusion of a rigorous review of our businesses, we will initiate a sales process for our Cboe Australia and Cboe Canada businesses. We will discontinue our U.S. and European Corporate Listings efforts, and we will reduce our costs related to our U.S. and European ETP Listings businesses, Cboe Europe Derivatives Exchange and several of our smaller Risk and Market Analytics businesses.

This strategic realignment ensures Cboe is well positioned in a dynamic and evolving market and strengthens our long-term vision to be a global derivatives leader. These changes will be accretive to earnings, and Jill will discuss in her prepared remarks how these actions strengthen our financial position and unlock new growth opportunities. I’d like to express our deep appreciation to all our team members for their dedication and hard work in supporting each of these businesses. While our Australian and Canadian equities businesses are performing well, we’ve determined that they fall outside of our core focus and strategy. We are grateful to our regulators in Australia and Canada for the support and collaboration they have shown us, and we will work closely with them to ensure a smooth transition for all of our key stakeholders.

With this renewed focus, we are directing greater attention to our core businesses, which are operating from a position of strength. We see tremendous opportunities across index and multi-list options, Futures, U.S. And European Equities and FX, inclusive of Data Vantage. Leveraging these core areas of strength for Cboe and the strong secular growth trends supporting them, we believe we are well positioned to fully capture their growth and earnings potential as we strengthen our competitive positioning. Turning now to the third quarter. Cboe grew net revenue 14% year-over-year to a record $605.5 million and adjusted diluted EPS increased a robust 20% to a record $2.67. These results were again driven by strong volumes in both our multi-list and proprietary index option products, solid new sales growth in our Cboe Data Vantage business, robust industry volumes in our Cash and Spot markets and continued strong expense discipline.

Most importantly, our performance once again underscored the durability of our net revenue generation with strength evident across nearly every segment of our business. In fact, in the third quarter, all 3 of our revenue categories: Derivatives Markets, Cash and Spot Markets and Data Vantage posted double-digit net revenue growth. As we head into the final months of the year, we look forward to building on those broad-based trends. Taking a closer look at the third quarter trends by category, our Derivatives franchise delivered another record quarter with net revenue increasing 15% year-over-year. In our multi-list options business, net transaction and clearing fees revenue was up a solid 14% given higher industry volumes and positive market share trends.

While the multi-list option space remains highly competitive, Cboe is well positioned to benefit from strong secular trends, having taken meaningful steps to deepen our talent pool in the options space, while actively pursuing thoughtful regulatory reforms that support both the industry and investors. On the index options side, net transaction and clearing fees revenue was up a strong 19% as our proprietary SPX options complex set new records, powered by robust growth in 0DTE options trading. SPX 0DTE average daily volume surged 62% year-over-year, while overall SPX ADV increased 26% to a record 3.9 million contracts. 0DTE options made up over 61% of SPX volumes, up from a 48% share a year ago. We saw a similar dynamic in Mini-SPX options, where 0DTE, ADV more than doubled over the past year and drove an impressive 66% increase in total ADV during the quarter.

0DTE options now make up roughly half of Mini-SPX volume, up from 35% a year ago. In our proprietary options business, it’s noteworthy that 9 of the 10 highest average daily volume months occurred in 2025, with September ranking as the third highest month on record only behind March and October month-to-date activity. In fact, our largest SPX day on record occurred on October 10 with 6.4 million SPX contracts traded and a record 33.2 million total options contracts traded across our index and multi-list products. It’s also worth noting that growth in our 0DTE options franchise reflects not only wider adoption and broader access, but it’s also a result of Cboe’s distinct advantages in product innovation, contract design and market structure.

We look forward to leaning into these advantages with our new [ MAG 10 ] index options and futures launch subject to regulatory approval, giving investors a simpler way to gain exposure to the AI and tech theme and a more precise way to manage risk using cash-settled European-style options. While SPX volumes in the third quarter were robust, our VIX products faced a more stable macro backdrop and lower realized volatility. The continued growth in our index options despite the lower activity in our VIX complex highlights the strength and versatility of Cboe’s comprehensive volatility toolkit. Looking ahead, we remain positive on the outlook for our core derivatives business. With trade tensions, a government shutdown and more uncertain economic outlook, we see investors continuing to utilize options to manage risk.

Secular trends of increasing retail participation and international expansion should provide further tailwinds. We continue to onboard more international brokers as global customers seek exposure to U.S. financial markets. Moving to Cash and Spot Markets. Net revenue was up a strong 14% as our European cash equities business continued to drive robust performance for the category, led by another quarter of strength in our European transaction businesses, the Europe and Asia Pacific segment delivered the strongest year-over-year net revenue percentage growth of any Cboe segment for the fifth quarter in a row, achieving an impressive 24% increase. This was driven by a 35% year-over-year growth in net transaction and clearing fees resulting from strong industry volumes, solid market share gains and a higher net capture.

Global FX also made another solid contribution, growing net revenue 13% year-over-year in Q3. Over a longer time horizon, FX has delivered quarterly year-over-year net revenue growth in 17 of the last 18 quarters, speaking to the durability of this segment’s revenue generation. Turning to Data Vantage. Net revenue increased by 12% on a year-over-year basis, reflecting continued momentum across our platform. Notably, nearly 90% of the growth across our market data and access businesses was driven by new unit and new sales as opposed to pricing. This growth speaks to the sizable demand for Cboe’s Data and Access products, including our newer offerings, Dedicated Cores and Timestamping. Now I’ll turn the call over to Jill to walk through the details of our financials and guidance for the quarter.

Jill Griebenow: Thanks, Craig. Cboe posted another strong quarter with adjusted diluted earnings per share up 20% on a year-over-year basis to $2.67. I will provide some high-level takeaways from this quarter’s operating results before going through segment results. Net revenue increased 14% versus the third quarter of 2024 to finish at a record $605.5 million, with each of our categories producing healthy year-over-year growth. Specifically, Derivatives Markets net revenues grew 15%. Data Vantage net revenues grew 12% and Cash and Spot Markets net revenues grew 14%. Adjusted operating expenses of $210 million were up 3% on a year-over-year basis. Adjusted operating EBITDA of $409 million grew 21% and adjusted operating EBITDA margin expanded by 3.8 percentage points to 67.5% versus the third quarter of 2024, demonstrating both our strong business performance and 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 fifth consecutive quarter of record net revenue with 19% year-over-year growth. Cboe total options ADV was up 26% with a 15% increase in index options volume and a 31% increase in multi-listed options volume. North American Equities net revenue increased 6% on a year-over-year basis. Access and capacity fees increased 10% as compared to the third quarter of 2024 and stronger industry volumes helped temper softer net capture and market share in our transaction net revenues. Europe and APAC produced 24% year-over-year net revenue growth, reflecting another quarter of strong growth in Europe.

Net transaction and clearing fees for the segment were up 35%, while non-transaction revenues were up a combined 14%. Futures net revenue decreased 22% from the third quarter of 2024, primarily due to lower volumes. And finally, Global FX net revenue was up 13% on a year-over-year basis, driven by a 3% increase in average daily notional value and a 9% increase in net capture. Looking at our Cboe Data Vantage business, net revenues were up 12% on an organic basis in the third quarter. Building on the solid year-to-date trends, revenue growth was again driven by strong new subscription and unit sales. New sales represented nearly 90% of Market Data and Access Solutions revenue growth in the quarter, with the remainder coming from pricing changes.

As Craig discussed, we are encouraged by the sales momentum occurring across our new product offerings. Turning to expenses. Total adjusted operating expenses were $210 million for the quarter and up 3% on a year-over-year basis. The increase was primarily driven by higher compensation and benefits expense as a result of our strong revenue trends, which have increased our bonus incentive accrual. Before moving to our 2025 guidance update, I would like to discuss the anticipated financial impact of the business decisions announced earlier this morning. While we are still working through these changes with our key stakeholders, we do not anticipate that these actions will have a material impact on our 2025 total organic net revenue growth or our 2025 adjusted operating expenses, and they are fully captured in our updated guidance.

On a go-forward basis, we expect the annualized run rate impact of both today’s announcements and the completed wind down of our Japanese Equities business to be accretive to our earnings, resulting in roughly a 3% reduction in net revenue and an 8% to 10% reduction in adjusted operating expenses using the 2025 guided ranges as a baseline. That being said, realizing the full impact of the actions will take time as we work through the various realignment actions and sales processes. We will look to provide a more fulsome progress update to help calibrate the timing of various impacts when we announce our 2026 guidance during fourth quarter earnings in February. Moving to our full year 2025 guidance. We are increasing our full year total organic net revenue growth guidance range to low double digit to mid-teens from high single digit given our strong year-to-date results and fourth quarter trends.

We are increasing our Data Vantage organic net revenue growth range to high single digit to low double digit from mid- to high single digit following stronger-than-expected year-to-date growth. We are lowering our full year adjusted operating expense guidance range to $827 million to $842 million from $832 million to $847 million. This decrease reflects our year-to-date operating discipline as well as reduced expectations for depreciation and amortization expenses, partially offset by higher incentive compensation given our healthy revenue generation. We are lowering our full year guidance range for CapEx to $73 million to $83 million from $75 million to $85 million, and we are also lowering our expectation for depreciation and amortization to $50 million to $54 million from $53 million to $57 million.

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 $3 million in the fourth quarter. On the capital front, our adjusted cash position of $1.5 billion and leverage ratio of 1.0x demonstrate our healthy balance sheet. In addition, Moody’s recently upgraded our credit rating by 1 notch to A2, reflecting the strength of our financial profile. In the third quarter, we returned $76 million to shareholders in the form of a $0.72 dividend, representing a 14% year-over-year increase in our quarterly dividend.

Turning to our investment in the 7RIDGE Fund holding Trading Technologies. The transaction detailed in last quarter’s earnings call is expected to close in the fourth quarter of 2025, subject to regulatory approval. As of September 30, 2025, the carrying value of the investment reflects assumptions, including the agreed sales price related to the estimated fair value of trading technologies. A gain of $45.6 million is included in our earnings on investments for the third quarter, but the impact has been adjusted out of our non-GAAP income statement. In the fourth quarter, we anticipate recognizing an incremental gain upon the final closure of the transaction. Similar to the third quarter, we will adjust the gain out of our non-GAAP income statement.

As an organization, we are focused on optimizing capital deployment to strike the right balance between margin efficiency and investment in emerging growth trends following our review. And while the decision process to strategically realign our business portfolio is complete, our commitment to continuously assessing new opportunities and optimizing our businesses will be unwavering. We will maintain a disciplined approach to assessing all aspects of our business with a clear emphasis on driving revenue growth and enhancing profitability to maximize shareholder returns. Now I’d like to turn it back over to Craig for some closing comments before we open it up to Q&A.

Craig Donohue: Thank you, Jill. As Jill highlighted, our business is operating from a position of exceptional strength, and we now have a clear path to unlock even greater value. The strategic realignment of our business portfolio and human capital allows us to focus on optimizing our core businesses for further growth and profitability and pursue opportunities in emerging growth areas. While we continue to undergo change, our continued success makes us a destination for talent. The realignment and focus on growth allows us to continue to build senior leadership talent across the organization. In the past 6 months, we have made key hires in strategy and corporate development, global derivatives, clearing and Data Vantage. And yesterday, we announced another key hire as we welcome JJ Kinahan as Head of Retail Expansion and Alternative Investment Products.

JJ is a well-regarded industry veteran in the retail brokerage space with deep expertise in equity derivatives markets. He brings a wealth of experience to the Cboe management team, and I look forward to working closely with him and Rob as we pursue new growth opportunities in the retail-oriented digital crypto and event contract space. We have made meaningful progress over the last 6 months, and we have a great deal more to do. I am energized by the momentum of the organization and excited to channel what we’ve learned into driving transformative change. I’ll now turn the call over to Ken for Q&A.

Kenneth Hill: At this point, we’d be happy to take questions. [Operator Instructions]

Operator: [Operator Instructions] Your first question comes from the line of Patrick Moley with Piper Sandler.

Q&A Session

Patrick Moley: 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?

Craig Donohue: Thank you, Patrick. Yes, happy to address that. I mean, obviously, as you’ve heard us comment before, the review process is something that began under my predecessor, Fred Tomczyk, that process continued. But my goal since joining Cboe has been to try to accelerate that process and reach a conclusion. And essentially, what I’ve been focused on and the team has been focused on is trying to pivot people toward the largest growth opportunities that we have among all the available choices. Obviously, we feel like we’ve done a very good job in Australia and Canada. But at the same time, our best opportunities for growth are in our current large core businesses that are hugely successful, where we’ve got a critical mass of successful markets, products, liquidity and customers.

Some of our core businesses are ones that are performing extraordinarily well and others are such that we know that we’ve got further growth opportunities within those core businesses, and we also have further opportunities to optimize for greater profitability in each of those businesses. And so from a human capital perspective, I want to make sure that we’re all focused on really the largest growth opportunities that we have in our current core business. And that’s what you’ll hear us talking about in terms of optimizing the core. At the same time, there’s a lot of emerging growth trends in the industry that I feel align really well with our core capabilities. And so we’re really starting to shift as we’ve described during the call, and as Jill commented on toward those new emerging growth opportunities.

And so I want to make sure that we’re focused on event and prediction markets, digital and crypto markets, there’s extraordinary growth there. I think they align well with our core capabilities in terms of what we’ve been able to achieve with the retail segment. Those are largely at this point, retail-oriented product opportunities. I’d like to think that we’ve been an innovator in shorter-dated contracts through 0DTE, and event and prediction is really just sort of coming at it from a different way, but that’s something that we have demonstrable expertise and success in. And then as you’ll recall, I mean, we were also an early participant in digital markets. We still have a lot of our core capabilities in that area. So those are things that I want to make sure that we are focused on.

I’ll let Jill comment on reinvestment of capital, but most of what we are focused on is going to be kind of low capital intensity in terms of further investment in the business. So what I’m primarily focused on is the reallocation and reinvestment of our human capital, but it does free up opportunities for us to make sure that where we do need to invest capital in those new growth opportunities that we have the agility and the ability to move quickly and do that.

Jill Griebenow: Yes. So just a couple of words on the reinvestment or the proceeds, the investment. I will say from an organic growth perspective, we have the flexibility to make investments into some of the areas that Craig mentioned. As it stands now, we wouldn’t expect those to be material. We will come back in February with our 2026 guidance. But really, what this affords us is just incremental flexibility, the ability to invest where it makes sense. And then to Craig’s point on the strategic allocation of human capital as well to these higher growth areas.

Operator: Your next question comes from the line of Eli Abboud with Bank of America.

Elias Abboud: 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?

Christopher Isaacson: Eli, thanks for the question. This is Chris Isaacson. So we’ve seen above expectations uptake in some new products. We rolled out in the last 1.5 years with Dedicated Cores and Timestamping Service. Customers continue to demand that. They have — each of them has their own adoption curves, and we’ve seen really strong growth throughout 2025 as well as data products outside the U.S. For instance, 85% of Cboe Global Cloud growth has come from outside the U.S. So that’s what’s contributed this year. And I can hand it to Jill about what we see looking forward.

Jill Griebenow: Yes. So really, I mean, we’ve seen some outperformance in 2025, really pleased with the results there. As I commented in my prepared remarks, about 90% of that incremental revenue has come from new units, new sales and about 10% of that then from pricing. So we, again, pleased with the 2025 results that we’ve had to date, the outlook for Q4. But what I will say is different products have different adoption curves. This has been a good grower for us. What we will do is, again, take a look and reassess our guidance. We’ll come back in February with our update on the ’26 outlook.

Operator: Your next question comes from the line of Brian Bedell with Deutsche Bank.

Brian Bedell: Can you hear me okay?

Craig Donohue: Yes.

Brian Bedell: 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’re already connected with a lot of retail participants. 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 yet.

Prashant Bhatia: Yes. Brian, Prashant here. Just real quick on prediction markets. We see broad-based interest in prediction markets. 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 are really the ultimate mini contracts. 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. 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 you with updates there as we make progress. So, yes, event and prediction market is clearly an area of interest for us. And I think we’ve got an offering that could benefit the marketplace.

Robert Hocking: Yes. And I would add, I’d just jump in, maybe giving a little more background on why we think we have the right to win in that space. Options have always been centered around forecasting future market volatility, but the direction, timing of events. So you could actually say we’ve been in the prediction business since we started in 1973. Further, a lot of this was the basis for creating products like the VIX Index. The VIX is a real-time measure of the market’s expectation of a trading range of the S&P 500 over the next 30 days. And its predictive nature is really what’s driven it to become one of the most watched equity market benchmarks in the world. And so with options, every strike expiration embeds the market consensus on where that underlying could be at any specific point in time.

That’s why we’re so excited about the space and believe with the decades of experience we have, investments in infrastructure, along with really most importantly, the community of market participants already active in doing business on Cboe that this is a tremendous opportunity. Now specifically, when I think of the liquidity providing community and really the tangential nature of the event and prediction market, we’re excited to work with those core partners and tap into the vast amount of liquidity that they provide each and every day. And to put that in perspective, an average of about $18 billion in premium trades each day in SPX options. And that event and prediction market year-to-date in similar products is less than $50 million in premium.

So if we do this correctly, we’re really bringing these liquidity pools to that event and prediction space, which give us a really unique opportunity to enter it and to grow. And so on the retail side, you mentioned that we’ve led that charge. You’ve heard it already about the ultra-short-dated options, the growth of that retail participation. In many ways, we view the event and prediction market as kind of an introductory product to help those investors in that journey to understanding more complex and more complex products. So you start with stocks. You move to kind of binary, yes, no products and then ultimately, you bring them into options and kind of the continuous spectrum of probabilities that they can work with. And so this is a process and really a formula we pioneered.

And by offering the right products, education, that’s another real important one. You may have heard we just launched our OI learning management portal, which allows individual retail investors to expand and better understand these products. And then through all of these efforts, obviously, hiring JJ was a big one with regards to 4-plus decades of retail experience and how to reach that market and understand that market and what that user and investor wants to see on our platform is crucial, and we really think we can build that long-term user base for Cboe.

Operator: Your next question comes from the line of Chris Allen with Citi.

Christopher Allen: Just would love to hear your thoughts on the strategic realignment, particularly the sales of overseas — the international businesses and 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, they were done 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: 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 when 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 added 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 U.S. 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 that are 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.

Operator: [Operator Instructions] Your next question comes from the line of Anthony Corbin with Goldman Sachs.

Anthony Corbin: 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?

Craig Donohue: I’ll start with that. I mean I think we’re looking at this as an organic opportunity, leveraging a lot of the key strengths that both Rob and Prashant have commented on. I mean, obviously, we’ll always look at inorganic opportunities if they make sense. But the primary focus that we have right now is a launch plan that’s focused on organic efforts.

Operator: Your next question comes from the line of Ashish Sabadra with RBC. [Operator Instructions]

Ashish Sabadra: 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?

Craig Donohue: Yes, I’ll start. Jill and others may want to comment, too. But I mean, we do see opportunities for continued investment in our core businesses. I mean, obviously, with the focus on adding scale in derivatives generally, event and prediction markets, retail-oriented digital and crypto products. There are opportunities for us to invest further in our clearing capabilities, both in Europe and also in the U.S. There are also investment opportunities for us in terms of developing on-chain capabilities as well as migrating increasingly toward atomized settlement capabilities that will further extend our products and reach beyond our traditional trading hours. So those are some of the kinds of things that we would be looking at.

I mean, obviously, we also have a very successful and growing business in both index options and in multi-list. And so there are also investment opportunities there, especially in multi-list in terms of how we can better facilitate more liquidity and more trading volume. So there’s a range of things that we will be focused on in terms of investment. And that’s a big part, as I said, of this whole strategic pivot is really making sure that we’re extracting as much growth and profitability as we can, not only from our current core businesses, but from these other areas that we’d like to pivot and shift to.

Operator: We have a follow-up question from Eli Abboud of Bank of America.

Elias Abboud: 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. How are 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?

Prashant Bhatia: 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 for data or U.S. 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 volumes. So we’re not seeing a high correlation there. The demand is coming, and they are trading within the 24-hour, 5-day windows that we have. So we’re seeing a 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.

Robert Hocking: And to put a finer point on the GTH hours point and how that doesn’t tell the whole story, given the larger liquidity pools in our regular trading hours session, a lot of international participants that are still buying the data and need the data for trading are trading during those regular trading hour sessions as well. And so I think we’re using that from the stance of you continue to build the liquidity pools. We have them in the regular hours. We continue to build them in the global trading hour session, and you start to see some of that flow migrate to more, I would say, call it, on-hours trading for the international clients. But I just want to be clear, like a lot of those trading in the international space are doing it during the regular trading hours.

Christopher Isaacson: And Eli, I might just finish here with our goal here is to get our data as close to customers in whatever format or mechanism that works best for them. So we’ve added Cboe Global Cloud in partnerships where we need to. But as Prashant mentioned, the real demand is coming for U.S. data from around the world, wherever we interact with customers, they want access to the U.S. markets and our bellwether products. So our goal is to get them that data in whatever format works for them. That’s where we’re seeing the growth.

Operator: Your next question comes from the line of Ben Budish with Barclays. [Operator Instructions]

Benjamin Budish: I 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 I’m 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 are already quite high, but how are you thinking about opportunities either on the product side or internally to employ or deploy more AI capabilities?

Christopher Isaacson: Glad to take that one Sorry. Thanks for the question. Yes, obviously, AI is all over the news outside of our industry, but also in our industry. AI has been a journey for us, and we’ve made significant investments in AI. It’s primarily been a productivity multiplier across all of our functions from sales, legal, HR, finance, infrastructure to software engineering, security, business intelligence is basically touching every part of our business internally. And it’s embedded in our data platform, so we can surface insights for both for us and our customers. And it’s really underpinned by our data strategy, where you’ve heard about us talk about we’ve been public about having our data platform running on Snowflake on AWS, and that underpins our AI strategy.

So we’re finding use in it for the product development life cycle, especially with the unique data sets that we have to new products. We stood up a center of excellence in mid-2024. And that’s not just a hub for software engineering, but it’s for company-wide resources to make sure we’re getting adoption across the enterprise. And now we have 900 active associates working on that. So we’re also — we’re in the age of agentic AI. We deployed multiple agents across our enterprise, including in areas such as infrastructure and information security and really focused on building infrastructure with an AI platform internally, but also in educating all of our associates. So it’s been primarily internally focused, but now we’re turning to what products can we commercialize based on the insights that AI gives us.

So we also have had a fun program internally called the AI Olympics and AI Champions and the winners of the Olympics, and we then we go implement those projects because they are delivering great value for us. So we are, frankly, all in on AI because we think it has tremendous power to unlock greater productivity. You’ve heard a lot on this call about human capital, and we have great people here. We want to make sure that we fully leverage those great people.

Operator: [Operator Instructions] We will now move to Kyle Voigt of KBW. [Operator Instructions]

Kyle Voigt: 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 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?

Robert Hocking: Yes. Thanks, Kyle. I appreciate the question. We’re really excited about the multi-list space and the revenue opportunities we see going forward. As you mentioned, multi-list is core to Cboe, and it’s an area we’re going to be heavily focused on competing in. Industry volumes are up 20% year-over-year. Retail is driving much of that growth. Options adoption amongst retail is still in the early innings. So we really see plenty of runway ahead. As far as the multi-list landscape, yes, you touched on it. It’s highly competitive. In early 2026, I think we’ll be up to 20 exchanges in the space. That said, Cboe still commands over 24% of the multi-list market share and is #1 in overall industry market share with just under 31%.

So we feel we’re playing from a position of strength. Earlier this year, we made several additions to our U.S. team. Meaghan Dugan joined us from NYSE in February. We also added Gary Hunt, long-time industry veteran from Bank of America. And between both of them, they have over 50 years of industry experience in multi-list options. I know, I look forward to working with them, and we’re going to be focused on increasing our competitiveness. On the functionality side, we’re really working on a host of, I would say, market structure and pricing improvements across our different exchange medallions, things like liquidity adding incentives for market makers, competitive rebate program for customers bringing flow to Cboe. But ultimately, we feel we’re well positioned to continue to be an industry leader, and we will remain focused on really striking that right balance between maximizing market share and revenue capture.

Christopher Isaacson: Kyle, I just might mention you’ve heard a lot in previous calls when we were deep in the heart of integrations, and we had a lot of, frankly, tech resources focused on integrations. This year, we’ve really been able to fully focus on our core businesses as outlined in this call. And it’s really encouraging to see we have a bigger and fuller derivatives road map. A lot of that is around multi-list options that I’ve seen in years. So we’re, again, using that human capital, focusing the highest growth opportunities.

Operator: Your next question comes from the line of Michael Cyprys with Morgan Stanley. [Operator Instructions]

Michael Cyprys: 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 what 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?

Christopher Isaacson: Yes, it’s a good question. I’m going to have a full clean answer here with the exact products that will come from AI. As I said, our data strategy underpins our AI strategy. I’d say the insights and the products are still yet to come. But we do have unique data sets because of the unique products we have, especially our proprietary products, and we think new products can come from that. I think one product I’ll point out that’s not really AI related, but Open-Close products, for instance, regarding SPX has had great uptake AI product, but it’s something that’s surprisingly simple, but very, very high demand. So we think we can surface more product ideas from AI or outside of AI and just use it as one…

Robert Hocking: Yes. And I would add, as Chris said, we’re in the early days. But from a product development standpoint, I think where we’ve seen the most progress is in research analysis and being able to go through these data sets faster, quicker, be able to pinpoint things where we see opportunities and need to explore them further. We can then get those opportunities, and we’re quicker to then go get in front of clients and float them and see if they’re beneficial to their portfolios. That process is starting to speed up for us. And I think we’re in early days, but it will continue to build momentum as we go.

Operator: Your next question is a follow-up from Brian Bedell from Deutsche Bank.

Brian Bedell: Maybe just zooming 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 U.S. 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 presume the global strategy is then more coming from the U.S. 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 were breakeven or losing money. I just want to confirm that.

Craig Donohue: Brian, I’ll start and just say that I think what you said is right. I mean, obviously, we have very large and successful businesses that we’re operating in certainly both the U.S. and Europe. You mentioned European cash equities. I mean, we’ve been really pleased with the growth and the results that we’re seeing there. We see between European Equities and European clearing, a lot of future growth potential and some new ideas that we’re working on there. I think the takeaway is that we don’t feel that our presence in Australia, Japan or Canada are really vital to the continued globalization strategy that we have for the firm. It’s really more along the lines of the things that you’ve heard us been commenting on during the call, which is investor education, sales and marketing in those regions, working with retail brokers throughout Asia Pacific to give them access to our markets.

There’s obviously, given the significance of the U.S. market relative to the global market, tremendous demand from institutional as well as retail customers. So our globalization path is going to be along those lines where we see continued growth, continued opportunity. And I’ll let Jill take the rest of it. And Chris, you might want to add something before Jill.

Christopher Isaacson: Yes. I just want to mention our FX business as well, which has been a nice steady grower again, this quarter, 13%, I think. It’s just — and that’s — if there’s any global business, so that would be it. It’s been an incredible business for us over the years and fairly global in the way we touch customers. Craig mentioned our super strong position in European Equities. I think its fifth straight quarter we’re the highest grower for us. That’s a great, market volumes great, market share great capture, just great competitive positioning there by our European team. So we remain very, very global. And I also say we’re deploying infrastructure where necessary globally to touch those customers so they can come back to the U.S. or other markets. So, yes, it is a strategic pivot, but we will remain very global. I hand it to Jill.

Jill Griebenow: Yes. So as it relates to the financial piece, I just want to clarify that the percentage amounts that we included in today’s call, they relate to the aggregate portfolio or collection of actions. Those figures are not specific to just Canada and Australia together. And then also further clarification is that those ranges also include the previously disclosed action that we’re taking to wind down the Cboe Japan business. So when you look at the collection of actions, as mentioned, we expect the impact on overall net revenue from all of these actions taken together to be, let’s say, roughly 3% of what our guided 2025 ranges would be. But then from an operating expense savings, we expect to save somewhere in the amount of 8% to 10%.

So as we did refer to in our prepared remarks, we do expect the collective action of these items to result in accretion to overall earnings. Again, it will take time. We’re in the very early stages of the sales processes of these also looking, obviously, some of the enhancements we’re looking to make. But again, overall, we do expect this to be accretive to earnings.

Operator: Your next question is a follow-up from Anthony Corbin with Goldman Sachs.

Anthony Corbin: 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 the incremental spend needed to support retail expansion and the build-out of prediction markets?

Jill Griebenow: Yes. So obviously, I’m not ready to share 2026 guidance just yet. But I think if you look at the results that we’ve communicated here in 2025 year-to-date, where we’re looking to land from an updated guidance perspective, — what I will say is disciplined expense management is it continues to be top of mind, but we’re also very committed to investing in long-term growth. So again, just on a go-forward basis, we’ll share our guidance for 2026 in early February. But we will be committed to striking the right balance between the disciplined expense management and the generation of future revenue. Obviously, that takes dollars to invest organically to stem that, but we will be very, very disciplined and again, just maintaining disciplined expense growth rates going forward.

Operator: Your next question is a follow-up from Ben Budish of Barclays.

Benjamin Budish: 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 2 ago about looking to add a morning session, I think, starting at 7:30 and expanding the afternoon to 4:15. Just curious, I think the release said 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?

Robert Hocking: Yes. Thanks, Ben. I’ll start out and maybe Chris can add something if you’d like. Yes, as you referenced on October 20, Bloomberg reported on our filing with the SEC to add additional hours for U.S. equity options outside the normal 9:30 to 4:00 Eastern Time regular trading session. If approved, we would be adding a morning session from 7:30 to 9:25 Eastern Time and a post-close session from 4:00 to 4:15. Additionally, our plan is to start with, call it, roughly 25 names that represent the highest market cap, the most liquid names across the underlying options and equities. As you mentioned, this is in response to the surge that we’ve seen in equity option volumes and just the generalized industry push towards 24×5 trading.

We feel it’s a good first step, and it really begins to acclimate investors to that off-hours trading session. It also accounts for where we see the majority of volume in our current GTH session. Without stressing the liquidity providers, having the staff and provide liquidity and kind of the less active overnight hours, we see the majority of our volume trading, call it, about 2 hours before the regular market opens. Lastly, this is just an evolution. It’s a good next step in single-name option trading. As the industry continues to assess the risks associated with introducing even daily expiries in single names and so forth, we think it’s generally just a good practice to introduce new functionality in stages, and this just seemed like a really good first stage.

Christopher Isaacson: And just a follow-up there, but it’s just one of many products that will be trading with more expanded trading hours. As Rob has mentioned, we already trade SPX and VIX 23×5, almost 24×5. VIX futures, our FX products. We trade U.S. equities from 4 a.m. to 8 p.m. And the theme of 24×5 and eventually 24×7 is going to be a multiyear theme. We we’ll have products, again, the industry is ready in the case of single stock options in the U.S. As soon as the industry is ready, we want to be there and leading as an innovator as we have all along list options.

Operator: Your next question comes from the line of Michael Cyprys from Morgan Stanley with a follow-up. [Operator Instructions]

Michael Cyprys: Just wanted to ask about prediction markets and 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? And to what extent might inorganic steps might help accelerate the time frame to scale? How are you thinking about that?

Prashant Bhatia: Yes. I think in terms of prediction 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 platforms. We’ve got the clearing platforms. A lot of this build-out initially will be organic. So we’re not focused as much on acquiring things like that. Obviously, there will be 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.

Robert Hocking: Yes. And even more specific, the crypto derivatives and perpetual Futures front, obviously, the market is growing rapidly. We’ve seen nice growth in our new Bitcoin index options since we’ve launched them in December of last year. ETF issuers, in particular, have gravitated towards using these products to introduce many of their options-based strategies. And so we already have, I think it’s, at this point, 20 ETFs that are using CBTX and MBTX in their strategies, and we really expect more to come. And then we’re also preparing to launch Bitcoin and Ether Continuous Futures. Now these are long-dated futures, cash settled designed to provide access to that perpetual style future in a U.S. regulated environment.

The launch obviously has been slowed down a little bit by the government shutdown, but we’re hopeful to get them out into the market soon. But we really see this even crypto events in the U.S. as a greenfield space to leverage our decades of derivatives experience. As I mentioned, a lot of this isn’t happening on U.S. soil. And so that’s where we see we can really step in and have an advantage. And I’ll just reiterate, like I said yesterday, not yesterday, but like we announced yesterday, we’re really excited to have JJ coming in. I don’t think you can underpin the 4 decades of experience serving this client base. And so as he stands up this new vertical, I think we are excited about what’s more to come.

Operator: There are no further questions at this time. I will now hand it back to the management team for closing remarks.

Craig Donohue: Well, thank you very much for joining us. I just want to say on behalf of all of us that this is a really exciting time for us. We are happy to be completing the business reviews, making the strategic realignment of the business. I want to thank all the people that have worked so hard to make us successful in these different areas that we’ve tried to work on, and we look forward to talking with you again next quarter.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.