Miami International Holdings Stock

Thank you for standing by. My name is Alan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Miami International Holdings, Inc. Second Quarter 2026 Earnings Call. [Operator Instructions]

It is now my pleasure to turn the call over to John T. Williams, Senior Vice President and Head of Investor Relations. You may begin your conference.

Thank you, operator. Good afternoon, and thank you for joining us for MIAX's Second Quarter 2026 Earnings Conference Call. I'm John T. Williams, Head of Investor Relations. With us today are Thomas P. Gallagher, Chairman and Chief Executive Officer; and Lance Emmons, Chief Financial Officer. We will also have Douglas Schafer Jr., Chief Information Officer; and Shelly Brown, Chief Executive Officer of MIAX Futures and Chief Strategy Officer of MIH, joining us for the Q&A session following our prepared remarks.

Our earnings announcement was released prior to this call, and we have published an accompanying slide presentation on our Investor Relations website at ir.miaxglobal.com. In addition, this call is being webcast, and an archived version will be available there shortly after the conclusion of the call. Our discussion today includes forward-looking statements that are based on the expectations, estimates and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

These statements are not guarantees of future performance, and therefore, you should not place undue reliance on them. We refer you to our earnings press release and filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of MIAX. We do not intend to update any forward-looking statements made on this conference call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. During today's call, we will refer to non-GAAP measures as defined and reconciled in our earnings materials.

With that, I'll now turn the call over to Tom.

Thanks, John, and good afternoon, everyone. We appreciate you joining us today. MIAX had a strong second quarter, delivering record net revenue as the industry trading environment continued to work in our favor. We were also thrilled to launch our first group of Bloomberg futures products, an important milestone that creates the foundation for our financial futures ecosystem. I'll first walk you through what drove our results, then hand things over to Lance for the financial details. Three things stood out to us in this quarter. First, our net revenue reached a record level and our margins once again improved, and we did it while continuing to invest in our product pipeline.

Second, our first group of Bloomberg Financial Futures products is live. Screens are lit, market depth and volumes are in line with our expectations and enabling retail access is the next big step. Third, our options business continues to grow profitably as we balance market share with discipline on revenue per contract. During the quarter, market conditions remained volatile as geopolitical tensions, trade policy uncertainty and continued AI-related market swings led to elevated options volumes. These market conditions might give some businesses pause. But remember that for MIAX, sustained market volatility drives higher demand for the risk management tools we offer and increased contract volumes on our exchanges.

As a result of these market conditions and the strength of our platform, second quarter total net revenue grew 35% year-over-year to $141 million. Adjusted EBITDA margin improved by more than 700 basis points year-over-year to 54%, while our adjusted diluted EPS was $0.48. The story in Q2 was very similar to Q1. Options business strength, operating leverage and momentum across our exchanges.

Let's now talk about our business segments. Our second quarter market share in multi-listed options was 16.5%, essentially flat versus the prior year period and a bit lower than what we saw in the first quarter. However, revenue per contract or RPC, was a strength again this quarter, driven largely by mix. We continue to see opportunity for option share gains over time as we build out new functionality and calibrate pricing where it makes sense to do so. A growing pipeline of new listings, including SpaceX and SK Hynix are part of a broader trend of additional IPO supply that is good for MIAX and the broader options market. Our early market share in these new listings is tracking ahead of our overall market share. We view this as an additive volume driver and believe volumes will grow as additional companies come to market. Before moving on to the futures business, we note that as disclosed in our recent 8-K filing, we resolved the Nasdaq litigation and now consider this matter closed.

Turning now to futures. We were pleased with the performance of our agricultural futures business versus Q1 as ADV grew 20% and capture rates improved by 14%. We are also pleased with the progress we've made with our Bloomberg financial futures. Step one was getting tight in liquid markets in our recently launched B500 and B100 futures contracts. Connecting retail brokers to the platform is the next milestone, and that work is actively underway.

As a reminder, the institutional size B500 contract and the smaller T&E B500 and T&E B100 contracts are designed to serve both institutional and retail participants. These products deliver similar broad equity market exposure as S&P 500 and Nasdaq-100 products with the added benefits of earlier inclusion of new IPOs and a very competitive fee structure. We believe the index composition, our fee structure, our technology and the existing relationships we have with market makers and trading firms deliver a strong foundation for our new products. This also provides market participants with compelling reasons to choose our Bloomberg Index product over incumbents. We think of ourselves as a disruptor in this category, and we believe there is room for a differentiated alternative to take root and grow the overall pie, not just take share. It's still early, but we very much like our position.

I want to spend a moment on why we're excited about where this can go. Bloomberg maintains a broad global suite of index products, and we have a services license agreement with them to develop a suite of branded proprietary products. Our 10-year exclusive license allows us to list index futures, options on futures and cash index options based on the B500, B100 and B500 volatility indices in North and South America. We also believe that the clearing and settlement agreement we've announced with the Options Clearing Corporation, or OCC, which is the world's largest equity derivatives clearing organization, will make it easier for market participants to transact in financial futures trading on our MIAX Futures Exchange. Our FCM is in the process of applying for OCC membership, further demonstrating our strong commitment to financial futures. In that connection, we are increasing its net capital by $40 million.

I also want to spend a moment on perpetual futures or perps, which came up frequently in many investor conversations over the past few months. Our focus remains on our core options and futures businesses, though we're open to offering new supplemental products if and when regulatory approval and market demand exists. Our technology with some enhancements is capable of supporting these products on our MIAX Futures Exchange. We welcome the CFTC's framework bringing perpetual contracts into regulated U.S. markets. This policy shift, if it takes hold, could bring volumes that are currently being executed on offshore venues to U.S. regulated markets. We recognize that the CFTC's recent approvals in this area have led to litigation.

On the other hand, we see these recent developments as a potential opportunity. Accordingly, we are pursuing a path of active regulatory engagement with our regulators, both at the CFTC and the SEC as well as with our MIAX Futures Exchange members and prospective new partners to identify emerging opportunities. As potential opportunities arise, we may leverage our modern agile trading and clearing infrastructure as well as our CFTC-licensed futures exchange and futures clearinghouse to consider offering capital-efficient derivatives products.

One brief comment on our ownership stake in Rothera. As a reminder, we hold our remaining 10% stake at cost with any future distributions flowing through as dividend income. As a passive minority investor, we're not involved in the day-to-day management of the business, but we are excited about the recent progress and volumes as they publicly announced.

With that, I'll turn it over to Lance to walk through our second quarter financial results.

Thanks, Tom, and good afternoon. It was a strong quarter across the business, and I'm glad to walk you through the details. I'll start by briefly recapping MIAX's revenue model. We generate revenue from transaction and non-transaction fees. Our key transaction fee revenue drivers are industry trading volumes, market share and revenue per contract or share, which measures the average revenue we earn per contract or share traded. As a reminder, we post RPC and capture rates on a 3-month rolling average basis on our IR website.

Non-transaction fee revenue comes from access fees, which customers pay to connect to our exchanges, market data earned through direct subscriptions and our participation in the U.S. [ pay ] plans and listings fees, primarily in our International segment. Q2 total net revenue grew 35% year-over-year to a record $141 million, reflecting continued options business strength and growth from our other business segments. Adjusted Q2 operating expenses were $64 million compared to $57 million in the prior year period. This increase was primarily due to planned headcount expansion, advertising and promotion expenses related to our brand campaign and marketing programs for our Bloomberg financial futures. Adjusted EBITDA was $77 million, up 57% year-over-year, and adjusted EBITDA margin was 54% compared to 47% in the year ago period. We continue to generate operating leverage given our revenue growth, high incremental margins and largely fixed cost base. Adjusted earnings grew 41% year-over-year to $53 million in Q2 compared to $38 million in the prior year period.

Now let's move on to Q2 segment performance. Options segment net revenue was $124 million, up 34% year-over-year. This represents average daily volume of 11 million contracts, a 25% year-over-year increase that was in line with industry ADV growth. Options segment net revenues were driven by an increase in both net transaction fees and non-transaction fees. Growth in net transaction fees reflected higher RPC and industry ADV, slightly offset by lower market share. Non-transaction fee growth of 36% was primarily due to increased member connections, our January 1 fee increases and market data sales. I'll note that Q2 '26 included $1.8 million in data sales revenue from a recently introduced historical report offering. As we discussed last quarter, this type of revenue is episodic, and therefore, we would not model it into future quarterly estimates.

Turning to market share and RPC. Q2 options market share was 16.5%, relatively flat year-over-year and down from 17.3% in the first quarter. As you know, our options market share varies month-to-month and quarter-to-quarter, and Q2 was part of that normal pattern. We've continued to deliver record quarterly revenue, and that's the outcome we managed toward. Q2 RPC reflected a shift in mix and tiers toward higher pricing, a byproduct of our lower Q2 market share. Due to ongoing mix and tier effects as well as fee changes, including work-related ones that became effective on July 1, we would not recommend modeling our Q2 RPC of $0.124 into the second half of the year. With that in mind, and although it's difficult to guide on capture rates, we expect second half RPC will be closer to what we saw in the previous few quarters.

Our Equities segment net revenue was $6 million, up from $4 million in the prior year period, primarily due to higher net transaction fees. Equities capture was less inverted in the quarter compared to the year ago period. Futures segment net revenue was $5 million, which was flat compared to the prior year period. Our first Bloomberg financial futures products launched in May and did not contribute materially to the Q2 results. Our International segment net revenue was $6 million compared to $2 million in the year ago period due to the acquisition of TISE in June of 2025. Operationally, our efforts to streamline sales and marketing across our international listings businesses are underway and progressing well.

Turning to our balance sheet. We ended the quarter with cash and cash equivalents of $660 million and outstanding debt of less than $2 million, which matures in December. Now let's walk through our updated 2026 guidance. Full details, including comparison to our prior guidance, can be found on Slide 16 of our earnings deck. We are lowering our full year 2026 adjusted operating expense guidance to between $260 million and $270 million compared to the prior $265 million to $275 million range. Our expense expectations for the rest of the year still include a planned increase in marketing costs, including quoting incentives associated with our Bloomberg Index futures products.

Based on recent grants, we now expect full year share-based compensation expense in a range between $29 million and $32 million versus the prior $27 million to $30 million range. We continue to expect full year capital expenditures in the range between $40 million and $45 million. As a reminder, we front-loaded CapEx in the first half and do not expect any material cost increases over the remainder of the year. We expect depreciation and amortization expense in the range between $35 million and $39 million compared to the prior range of $33 million to $38 million. Our Q2 adjusted effective tax rate was 27%. We continue to expect our full year rate will be in the 27% to 29% range.

I'll now turn it back over to Tom.

Thanks, Lance. We're happy with our progress this quarter and remain confident in the road ahead. We'll keep leveraging the 4 competitive pillars you heard me talk about many times -- our high-performance technology, our broad range of regulatory licenses, our diverse and expanding product range and our deep customer relationships. These remain our core competitive advantages. There's a lot to be excited about here at MIAX. Getting retail distribution for our Bloomberg products is our top near-term priority, and we continue to see opportunity in an improving IPO pipeline, strong retail demand for options and growth of structured products that use options in their strategies. We sincerely appreciate you joining us today.

As a reminder, Doug and Shelly are here with Lance and me for our Q&A. So, let's begin.

[Operator Instructions] Our first question today comes from Patrick Moley from Piper Sandler.

So, congrats on the quarter. I wanted to dive into the options business. You saw record volumes, record high RPC. Lance, I know you said in your prepared remarks there, you don't want people to extrapolate the RPC this quarter expected to be in line with where it's been the last couple of quarters. So, could you maybe just talk about what drove the step-up this quarter? What's going into that assumption that it comes back down? And then, Tom, you talked about calibrating price where it makes sense to pursue share gains. Could you maybe just talk about that as well? And should we read that as you potentially being open to tweaking that to maybe recapture some share that's maybe been lost here year-to-date? Apologies for the multipart question.

Thank you, Patrick. Appreciate that question. Those series of questions. I'll turn it over to you, Lance, with respect to the RPC and your comments during the early part of our call.

Yes, Patrick, good to hear from you. The increase really from like $0.11 in the first quarter to $0.124 in the second quarter, really driven by a couple of factors. One is as market share lowered, we had less volume at sort of the highest rebate tiers or lowest fee tiers. So, it's sort of a natural sort of seesaw with those. We also saw some favorable mix in terms of higher capture flow that kind of ebbs and flows from period to period. As we look ahead, market share has sort of rebounded about 17.1% in July, still early, obviously, early days in August, but improved from there a little bit further. So, with that, we think, again, the tier effects will sort of bring the rate back down. We're also looking at sort of more normalized mix. Mix is very difficult to predict, obviously, as you know, from day-to-day or month-to-month. So, difficult to predict on that. We also did a couple of fee changes in July and August to try to again find that right balance between capture rate and market share.

And then the fourth thing, again, it all kind of contribute roughly about the same, I would say, in terms of our expectation. The really 2 impacts there. One is just as volumes have been growing faster than our regulatory fee, the rate -- the effect on the RPC naturally comes down. And then a small part as well just due to the new methodology that came out July 1. So, I think if you take all 4 of those items, that's why we're kind of -- sort of expecting closer to the last couple of quarters, which kind of range between by about $0.103 in the third quarter to $0.11 in the first quarter.

Yes. And then on the last part of your question about trading off some of the RPC for increases in volume, I think when you look at the volume for July, which is historically a low period of time, we came in at -- I think it was just over 17%, Shelly, 17.1%. And Patrick, August looks even better as we obviously are only in the first couple of days. We absolutely look at RPC and market share, and we do want to continue our momentum in terms of market share. And from time to time, we do adjust some of the tiers. In fact, one of the things that we're looking at, and we did, in fact, do, Shelly, tiers or pricing in August on Sapphire. Any comment on that, Shelly?

We made pricing changes in Sapphire, primarily for the trading floor. We tried some pricing changes in July on Pearl to try to attract further high profit flow. We reverted some of those for this month did not have the expected impact. Again, managing market share and RPC is really as much an art as it is a science. We certainly recognize that market share and RPC are inversely correlated. We're always trying to maximize the net revenue. So, we continue to work with the art as we move forward.

Congrats on the quarter, guys.

The next question comes from Michael Cyprys of Morgan Stanley.

Just wanted to ask about the financial futures that you launched this quarter in partnership with Bloomberg. I was hoping you could elaborate a bit on the competitive fee structure that you alluded to. And maybe you could talk to some of the steps that you're going to be taking in the coming months as you think about, I guess, step 2, which is bringing retail brokers on board? And maybe you can comment on what that pipeline looks like, what your expectation is kind of going into the end of the year in terms of onboarding retail brokers? And ultimately, what do you think it's going to take to drive success with that [ community ]?

Great. Michael, thanks very much for the question. I appreciate that. I'll have Shelly talk to the fee structure, but we're very excited about the Bloomberg product launches, which started on May 17. Our screens are lit. The depth of the market and the volumes over the past 60 days are right in line with our expectations. And now as you were mentioning, our focus is on enabling retail engagement. So, we're having outreach to a number of the, I would call the trading firms that we're hoping to get engaged, working with them with respect to educational programs, marketing programs and trying to educate initially the retail users with respect to the benefits of trading the B500. We've already talked about in prior calls about the index methodology, the rules-based approach to listing the securities in the index and also the benefits of the way the index is constructed, particularly as the IPO pipeline improves and more large caps come into this index.

So, Shelly, maybe a little bit regarding the use of fees and the fee structuring to garner initial market share.

Thank you, Tom, and thank you, Michael, for the question. We're very pleased with the progress that Tom said. Things are going as expected with the liquidity providers. We have additional liquidity providers coming on board over the next several weeks. As far as the retail firms, several are working through various phases of connectivity and working out clearing arrangements. We're working with several firms that expect to -- we expect will be enabling customer activity over the next several weeks. So, we're very excited about that. There's been a lot of interest from several retail firms. So that's the progress. It's still very early in the game. We're only a few months in. So, we're about where we expected to be. And I think we'll start seeing retail exposure to the product over the next several months -- next couple of months. The fee structure is really designed to incentivize retail firms to introduce their clients to the product. So, it's a different way of looking at marketing a product. As Tom said, we're working closely with the marketing teams at the retail firms to put together educational programs. We're looking at sponsoring events with customers. But again, providing the right incentives to the retail firms to want to interact with us. And of course, we have that technology advantage over the competitors.

And Michael, our goal is really to grow the overall pie. Maybe Shelly, you could comment on that in terms of your strategy.

It's not just taking market share from the incumbents. It's growing the index pie. The industry is looking for competition. There hasn't been any competition for a long time, either the broad market or the technology market. So, bringing these products to market with Bloomberg is really a breath of fresh air for the industry. Retail, institutional and liquidity provider sides are all excited to have competition within the business.

We also, as we announced earlier today that we've made application with OCC for our FCM, and we consider having that OCC approval when it's fully completed an important step in terms of getting the retail engagement for the B500 Mini and the B100 Mini.

The next question comes from Ken Worthington of JPMorgan.

Maybe first on expenses. You're lowering guidance on adjusted operating expenses, and you're doing this in the context of higher stock-based comp and depreciation. And you're also doing this in the context of a pretty robust volume environment. So, what are the pieces that are lower here versus your prior expectations? And how are you managing to kind of take the adjusted operating expense outlook down?

Yes. Good question, Ken. So, in terms of OpEx and share-based comp, 2 things there that are somewhat tied together. As the compensation committee updated the executive compensation plans, now that we're a public company, we moved a little less towards cash-based compensation, so that comes out of OpEx and a little more into share-based compensation. So those 2 are mostly tied together.

In terms of other OpEx, again, I think it's just looking at sort of the run rate how we've been spending and where we expect expenses to go from here from our current run rate after those 2 changes is really just some pickup in some marketing and fees related -- marketing and incentives related to the Bloomberg products.

Great. Makes sense. And then just you mentioned SpaceX market share exceeds your overall average, sort of similar comments you made, I think, to my last question last quarter in your presence in the single stock options. So, what's driving the better engagement in the new products relative to the legacy options products? And is there a way to leverage what you're doing in these new products to help market share in the more mature listings?

Ken, great question, and I'll give you that Shelly to follow up.

Thank you, Tom. So, Ken, there's a number of factors. The primary one being the more liquid classes that are higher-priced equities that tend to be slightly higher volatility, we tend to do better in because of our technology, the technology that we've built that allows the market makers to be very aggressive in their quoting. This allows them to participate more with retail because they're on the market more. Their markets are tighter. So, we tend to do better in those sorts of names. And it kind of flows over also to those names that have the Monday and Wednesday weekly expirations, where we also outperform. They're very retail focused, and we do very well in those retail-focused names. Names that are more institutional focused, we don't perform quite as well in. We're getting there with the trading floor, I'm sure we'll talk about before the end of the day, bringing that institutional flow to the trading floor. So, it's really about the technology driving the better markets, which drive more retail volume to the exchange.

The next question comes from Jeff Schmitt of William Blair.

The non-transaction fees for options were up around 40% in the first half. And I think you called out a couple of things or fee increases on January 1 and you launched some new market data products. But could you just give us a sense of how much growth is being driven by these different factors?

Jeff, great question. Thank you very much for that. Lance, do you want to cover that?

Yes. Just in terms of access fees. So in terms of the access fees, we did some fee increases on January 1. We also had some fee waivers for when we launched the Sapphire Exchange. So, we either waived those fees or heavily discounted them. So, if you look at kind of the first 6 months of the year, I would say about half of that volume is from -- half of that increase is from fee increases and half of it is from additional connections that members -- additional connections and services that members have ascribed to.

Got it. And then you've talked in the past about rolling out some new agricultural futures, I believe, later this year. But could you give us an update on when you plan to roll those out and what the underlying commodities would be?

Yes. I'll start, and then I'll turn it over to our CEO of Futures, Shelly Brown. In late October, we are going to launch the first of a series of agricultural futures products that are primarily focused in the fertilizer area. And these are a result of demand being asked of us to provide some alternatives in this area, particularly as geopolitical events have caused a lot of upheaval in certain areas of the commodities world.

Shelly, do you want to give a little more color on this for the question?

Sure, Tom. I think you pretty much covered it. But adding 4 additional products that will be in the fertilizer space. They're somewhat novel products in the industry. There's been greater demand of late given the supply chain problems that have occurred due to geopolitical issues overseas. There's been demand from our customers to bring these products to market. So, we're planning to list these late this year on the commodity side of the futures exchange.

Our next question comes from Patrick O'Shaughnessy of Raymond James.

Curious about your thoughts on how CME's introduction of single stock futures might impact the equity options world.

Okay. That's a really good question. Why don't we -- I'm going to go back to you, Shelley.

Sure. So single stock futures, first off, have been around a while. There was a single stock futures product listed on -- I believe it's Chicago Futures Exchange. They delisted in 2020, I believe, due to lack of interest. The crossover would be for all intent, single stock futures are available today. You can create a single stock future by doing an options combo. If somebody wanted to create a single stack future out in IBM in December, all you have to do is do a combo, buy call, sell put if you want to be long in the synthetic future, sell call, buy put if you want to be short in the synthetic future. It's priced the same. It's simply a carry play, interest minus dividends. The area where there might be interest in this, if there's a potential regulatory arbitrage or margin arbitrage between a CFTC-regulated product versus an SEC regulated product, that's really the primary place. It also could be used as a synthetic method to create a stack loan business. It will be interesting to see how they play out with this reintroduction. Certainly, if we see that there's interest, it's something we could pursue on the MIAX Futures Exchange. There would be a relatively easy technology lift. There's a little bit of regulatory requirements, but nothing difficult. So, I believe we're going to sit back and watch for a little bit because, as I said, the last product was a failure, and we'll see. If it's successful, again, we will use both a combination of our technology and pricing to get into that market. We believe we can penetrate pretty easily if there's demand. But if there's not demand, we have better things to work on from a resource perspective.

Our next question comes from Chris Brendler of Rosenblatt Securities.

Congrats on a really nice quarter. I'd love to hear a little more about the risk management aspect of volatile markets and how you guys help your clients lean into that? And any sort of quantification on the revenue impact from your risk management activities.

Great. Shelly, you seem to be at the man of the hour here. So, I'm going to let you go up on some risk management for a little bit.

Thanks for the question, Chris. And no, I didn't cue Chris up on this one. This is actually my background in the marketplace coming from the market-making side of the business. When we built MIAX, we said we're going to build a system that caters to both the market makers, the consolidators and the retail firms, and we focused very much on risk management. So, we created risk management methodologies that allow market makers to be more aggressive in their quoting.

Now that risk management really comes across in 2 ways. One, the technology we built with the speed and the throughput allows market makers to know they can get in and out of the market very quickly. They can play defense when they want. Coming from Chicago, myself, being a bears fan, I know defense way more than offense. We allow the market makers to play defense. They can quote more aggressively because they know they can get out. It reduces negative expectancy trades. On top of that, we've created mechanisms similar to what we had in the trading floors back in the '80s and '90s, where our market maker can only be forced to do one trade. I can be quoting multiple options, but I make one trade. I'm now not firm in all my other quotes. We've created methodologies here within the trading system that do that instantaneously for the traders.

We constantly enhance that. In fact, we came out with a new risk management tool earlier this year that allowed market makers to [ weight ] trades in the risk management tool based on the counterparty they were trading with. So, it's all about making the market makers more comfortable to quote. The more comfortable they can quote, the longer the quotes are up on the screen, the better the quotes, and that's what draws the retail to the marketplace.

That's great color. I'd love to ask a follow-up actually in the same area. Is this a capability that's sort of above and beyond what your competitors offer? Or is this a key competitive advantage for MIAX? I haven't really focused on risk management before. I'd love to hear if it's something we think is really a core part of the franchise.

It really -- part of it is copyable in that the functionality, once we file a rule with the SEC, anybody can copy that and they can try to build it. But the reality is they can build the functionality, they don't have the speed and the throughput we have. Doug can speak to the technology prowess and what they've built and why it's so much different and better than the other exchanges.

Doug?

Yes, sure. Thanks, Shelly. Yes, basically, we focused on massive overbuilding of the technology so that we're not ever in a position to have to limit a market maker's intended behavior. As Shelly said, that results in deeper and tighter markets and -- there's a lot of technological things that we do that are proprietary to MIAX that allow us to achieve that with a small hardware footprint and still remain low latency, but a high determinant. So, a combination of probably 1,000 things we do on the technology side, not one big thing. And we've been in the marketplace for a number of years and still leading in round trip latency. So, it's not an easy thing to copy, I guess, best way to say it.

Our next question comes from Michael Cyprys of Morgan Stanley.

I just wanted to circle back to your comments around the FCM that you have applying for, I think you said OCC membership. I was hoping you could elaborate a bit on the longer-term strategy of your FCM. I know you've had that for a moment now, helping to reduce barriers for smaller customers to access your markets, particularly on the futures of the grain side of things with the wheat contracts and such. But as new competitors emerge with direct-to-customer models across the market structure landscape as we've seen some of the success overseas. We've seen some of it in the digital space. Just how are you thinking about evolving competitive landscape in the years ahead as well as new opportunities for maybe a direct-to-customer model, perhaps even with digital wallets over time?

Great. Thanks for the question. So, with respect to our FCM, we wanted to have the FCM become a clearing member of OCC because there are opportunities for some retail firms that want to come and access our -- not only our -- the B100, but other financial futures products over the course of the next 2 or 3 years. And when we initially bought the FCM, we wanted the FCM to be an alternative ramp to access our futures trading exchange. We had people that wanted to trade some of the products and prospective products on MIAX futures, but they didn't have an access point. So, the whole idea is to create less friction for predominantly retail firms to have access to our whole host of new financial futures products. Now that we've built the Onyx trading platform, we're off the old platform we were on, and we've completely redone the clearinghouse. So we have optionality in the clearinghouse for both our own clearing capabilities and as recently as May, MIAX futures becoming OCC cleared.

I just want to add one other point to that by Shelly.

Yes, traditionally, FCMs have not been members of the Options Clearing Corporation. They haven't had a need to unless they were clearing a very limited set of products. So, we chose to clear our financial futures, the Bloomberg products at OCC to enhance the margin offsets and capital efficiency for our members to trade the Bloomberg products. It actually creates a huge tailwind for those products. By having Dorman a member early on at OCC, it provides those FCMs that don't have OCC access, indirect access to clearing. So it just -- it creates another tailwind. So that's really the thought process behind the first -- one of the first movers in OCC to clear the Bloomberg products.

And then the other aspect of your question about the trend by overseas firms to have direct access to exchanges. We still think that the FCM model for accessing the futures marketplace has a real meaningful and long-term place. There are many jobs and many responsibilities that a well-run FCM undertakes on behalf of the industry, including areas like AML and KYC and managing risk. So, while there's been a lot of direct access internationally, particularly in the perpetuals area, even as the CFTC evolves its thinking and is trying to put up new policy statements with respect to perpetual futures, we think as a starting place, the FCM should still be the main access point to the U.S. futures marketplace.

Our next question comes from Patrick Moley of Piper Sandler.

I wanted to ask on the cash. You've got $660 million of cash, no debt. I know you said you're going to put $40 million into the FCM. But just curious how we should think about how much of that cash balance is available or truly deployable? And what does the priority order look like in terms of organic investment, M&A or at some point, returning that capital to shareholders?

Thanks, Patrick. As I've said in the past, it's taken us a while, and it's been a journey to get to the position that we're at today with over $600 million in capital on our balance sheet. I think the near-term uses of our capital, while it's growing, is to continue to invest in the businesses that got us here. So, we want to continue to invest in our existing futures business because we think there's more upside to that futures business, particularly as we continue to roll out new functionality on the floor. As you know, Sapphire is not even a year old as we speak here today. We also want to grow the pipeline in the futures business and create incentive programs to garner both retail and institutional flows onto the new suite of products now that the infrastructure is built and we have the Bloomberg relationship.

Now having said that, we are going to be strategic with the use of this capital. And as opportunities do arise and being that we're on the eve of the 1-year anniversary of our IPO, which is hard to believe will be next Friday, a lot of people are coming to us, including member firms with new opportunities, both overseas and domestically. And we're considering the best way to use this capital. We have no plans specifically, Patrick, to answer your question about a dividend or any type of a share repurchase program. I'd like to get this first year under our belt and really assess the opportunities. But the core focus with this cash is reinvesting in our people, continuing to build out the futures business and continuing to be a leader in our technology stack that we've talked a lot about this afternoon.

I can't believe it's been a year already. I didn't realize that.

Yes. No, it's absolutely been a year, and it's been a great year.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Tom Gallagher for any closing remarks.

Well, thank you very much, everyone, for joining us this afternoon. Obviously, we've had a great quarter, and we're very grateful for the support of all our member firms and our shareholders that helped us get to this spot, as I said on the eve of our 1-year anniversary of our IPO. And we're going to continue to focus on those 4 pillars that got us here. We're going to continue to work closely with the members we developed these relationships with since our first launch in 2012. And I have to say we're really proud of the new relationship with Bloomberg. I think we got a real exciting second half in front of us. So, thanks very much for your participation this afternoon, and we're happy to follow up individually over the next few days and answer questions of various analysts and firms. So, thank you very much.

So good morning, everyone. Thanks for staying with us. I'm Mike Cyprys, equity analyst covering brokers, asset managers and exchanges for Morgan Stanley Research. And for our next session, we have MIAX, and I'm excited to welcome Tom Gallagher, Chairman and CEO of MIAX; and Lance Emmons, Chief Financial offer.

Good morning, everybody.

Thanks so much for joining us.

Thank you.

So MIAX as many of you know, is a technology-driven exchange operator, best known for its U.S. options exchanges. And it's expanded across futures, equities and international listings, which we'll get into this morning.

So let's kick off big picture, particularly for those that are maybe a little bit less familiar with your story. MIAX is now approaching its first anniversary as a public company. So for those that are still getting familiar with the story. What do you believe is most differentiated about your business model? And maybe give a little bit of context for those that are a bit less familiar?

Well, I think that -- what differentiates us today is our technology. And I don't say that lightly, because everyone says they have great technology. But I think what differentiates us is the speed, the throughput and the determinism consistently day in and day out, Michael. And in times of volatility, starting with the President coming out on the White House lawn on March 13, 2020, and then the market is going crazy on March 16, that following Monday. The comparison of the experience by major market participants on a MIAX exchange and being able to refresh their prices consistently faster than anywhere in the United States, really help propel our market.

And if you look back from Q1 of '16 to Q1 of this year, we've grown 1,100 basis points of market share. You have to be doing something right to have that kind of growth. So I'm very happy to be here after reporting 3 quarters since being a public company. It's hard to believe we've had 3, but we've had double-digit growth this quarter in first quarter net revenues of 40%. Our adjusted EBITDA, is up 66% over the quarter 1, 2025, 66% growth and $66 million of EBITDA.

And then our margins. For the first time, our margins have exceeded 50%, 800 basis point growth in our margins. And then when you look at the average daily volumes in Q1, the industry was up by 17%. We grew 60% faster than the industry this quarter with our market share, our ADV rather going up 27%. So I think to keep it simple, the technology is the differentiator. But if it was all about the technology, we'd even have a larger market share. It's more than that.

But why don't we dive in a little bit on technology something you have consistently emphasized as a core competitive advantage of yours. Where does that advantage matter most? How difficult is it for others to replicate that.

Well, diving into the technology, we're about to start historic IPOs with SpaceX coming out later this week or early next week, which is going to have a tremendous retail component to it. When a liquidity provider wants to provide that liquidity, and he's paying to see order flow from a retail firm. He wants to make darn sure that he can put up that flow in a place that's safe. It's got a lot of risk protections in that he can refresh his prices very quickly if market conditions change.

With a guy like Elon Musk at the top of the capsule -- you can expect, particularly with the retail component, there's going to be a lot of volatility. And that's where our market makers were really gravitate to us, and I think we'll get an outsized share of these IPOs, whether it's Anthropic, OpenAI, SpaceX, and we have been getting an outsized share, particularly in these tech stocks that are now part of the Monday and Wednesday short-dated expirations that started in January. And Lance, what do you think?

Yes. I think we're about -- we over-index maybe 1 to 3 points in some of these most active names. So I'd expect to see similar type of trends with some of these large IPOs coming. Again, given our technology advantage.

And you've mentioned speed, throughput and determinism. Can you just maybe help elaborate a bit and maybe more layman's terms what exactly that means and how that benefits you guys.

Okay. So let's take speed, throughput and determination. You're a pilot. I'll use the analogy of flying an airline. You're a pilot. You're flying into Logan Airport on Thanksgiving Eve and you're 1 of 20 planes in the queue. And it's foggy out. You're coming over the Atlantic, you're coming into Boston. You're 1,000 feet away from the runway and the tower. And you asked for some guidance in coordinates and you don't hear anything back. Why don't you hear anything back. You don't hear anything back, because the tower is overwhelmed.

The same thing happens in the U.S. financial markets at the most critical time you send a message to an exchange to refresh your price. I don't want this price anymore. This doesn't make sense. Cancel my quote. Well, it's a really volatile day and you haven't heard back from the tower. You haven't heard back from the exchange that they acknowledge that you're out of the market. That's a terrible feeling to be 1,000 feet away from the runway and you want some critical information and the tower is too busy. While the matching engine is too overwhelmed at our competition.

And therefore, you get ambushed because someone picks you off because your price is stale. That's what we've invested so much technology, whether it's Thanksgiving Eve coming into Logan or New Year's Day. You're going to get the same reliable ability to cancel your quote and get an acknowledgment back that you're out of the market. So if you know that whether you're 600 feet from the tower, a mile from the tower on Thanksgiving Eve or New Year's Day, you're going to get a message back in response to your refreshing the price.

And you know what, Michael, if you know that in 18 million of a second, you're out of the market. Well, guess what, you hang in there. It's like a quarter back in the football game. If he can stay around for another second in the case of that, a lot can happen, same thing in the exchange space. So if a major market maker knows he can get out 18 million of a second and what really gets interesting is that the 99.99% percentile when there's extreme volatility, our latency goes from 18 to maybe 2x, okay?

Some of our competition goes to a 50x, 50x before you know what the hell happened, whether you're out of the market. That's the secret sauce, that predictable, consistent latency. What would you pay to go from Manhattan to JFK it was always a 22-minute ride, no matter what time of year. That's what I'm selling, if that makes sense to those that are not deep into market structure.

Great, thank you. Why don't we shift and talk a little bigger picture about the options industry. Volumes have remained exceptionally strong helped by retail engagement, volatility and growth in short-dated options which you alluded to, and we'll dig into that in a moment. I guess how much of the strength that we're seeing in options across the industry, do you feel is cyclical versus structural? And how do you see the industry evolving over the next couple of years?

Yes. I think there's continued structural tailwinds that we've seen really since the pandemic, haven't really gone away. Again, I think the no commission model from the retail broker certainly helped introduce more retail traders to both equities and options. I think the educational efforts that they've done around there with their apps or their websites in terms of explaining how options work, introduce them to things like complex orders. And then, of course, the expansion of the short-term expirations, which, again, has driven some additional volume as well.

There was an interesting stat at the SEC options roundtable. One of the first ones I think they've had in almost 20 years. And they looked at some data from the CAT. And they said there's about 70 million unique customer IDs at trade equities, and there's only about $5 million of that trade options and equity. So we still think there's actually some room to grow there. But I think it kind of gives us that, hey, this is not just a cyclical thing, but there are long-term structural trends.

And then look, in terms of cyclical, I don't necessarily -- I don't know about anyone else in the room, but we don't necessarily see volatility going away, at least for the next couple of years, maybe past 2028 not to get political, but we're a tweet or an announcement away from a major move in the market up or down. So we see that considering for sure.

And is there a particular long-term structural trend that you think is most durable, most compelling and maybe the biggest driver as you look ahead? Or how would you sort of rank order?

I think there's a couple of things here to play on what Lance said. We're in a massive generational wealth transfer, Michael. And I think that's going to be going on with the baby boomers leaving assets to the next generation and the next generation over the next, say, 9 to 10 years. That's going to fuel amazing growth in retail futures, retail futures similar to 20 years ago, that growth in the retail options.

And the other big thing coincidental with the pandemic in 2020 was firms like Robinhood going to 0 fees and having a strategy of 0 or low-cost execution for their customers, and that fueled our growth as well from 20 million contracts a day to upwards to $65 million to $70 million. So the fact that these firms are becoming very low-cost operators is a tailwind that I think is increasing the generational wealth transfer that we're seeing before our own eyes.

And then I think you've got some mega IPOs that are going to have a retail component to it. So I think the tailwinds that have been blowing favorably for our industry for the last 2 to 3 years, I think you're actually going to be blowing stronger for the next 2 years.

Yes. And I think we've also seen some structured products, right, that basically have embedded basically trade options within the funds. So there's some leverage ETFs that provide that. Then of course, there's options on those leverage ETFs that again, continue to drive volume. And as Tom mentioned, the upcoming IPOs, if, again, hard to predict what SpaceX or Anthropic or OpenAI will do. But if you look at things like NVIDIA or Tesla, they are currently about 4% to 6% of industry volume.

So again, we believe especially things like SpaceX could have similar types of volumes going forward once options are launched. And those options will SpaceX, if the IPO goes across on Friday, those options would be available for trading on Tuesday. Tuesday that the following. Okay.

Let's shift and talk about 0 DTEs, short-dated options, which the industry rolled out in January across 9 symbols. So I guess what have you learned so far from the rollout across these short-dated options on the single names on Monday and Wednesday expiries, which were added to complement the Fridays. And what needs to happen before we see this expand to Tuesday, Thursday expiries versus maybe even additional symbols over time?

Yes, a very good question. So I think steady as it goes, I'm happy to report that I think we get an outsized market share in those 7 or 8 symbols. I think the volume has not been cannibalistic. I think it's been additive to the industry. Although it's early days. It's less than 6 months, Michael, since these Monday and Wednesday expirations have come on. But I think that we need another 3 to 4 months to see how things shake out. The options industry has been good about making sure that things like these are rolled out cautiously. And I think another 3 or 4 months, I think you'll see more symbols being added to this list before you're going to add another day.

Yes. And there was a proposal by another exchange, but we'll all have a similar proposal filed earlier this week or I think it was yesterday, not Friday, but adding Tuesdays and Thursdays to 2 different ETFs. ETFs are a little easier, because there's no earnings on ETFs. So it's a little easier to sort of schedule around that and trade them 5 days a week. So the proposal is to add 2 more ETFs and then Tuesdays and Thursdays and then also add 2 more ETFs as well that will go through the SEC review process.

But yes, I think as Tom said, we'll probably sort of take incremental expansions like that first, again, making sure that the customer experience is ultimately what matters, like the customer protection, making sure that they don't get burned on an Auto-X or something on an earnings post close earnings announcement or something.

Any sense on the time frame for that?

No.

But your sense is maybe 3, 4 months out from now, maybe we get to see more additional names that.

Yes.

Okay. All right. Another topic that's been coming up are perpetual futures or perps as folks like to refer to them as a hot topic in recent weeks. Can you talk about how these may or may not impact MIAX?

Sure. So we are just getting into the futures business. We have 1 product, Hard Red Spring Wheat, it's an agricultural commodity product. It's the flagship of our MIAX futures. And that's an institutional product that is providing hedging to the wheat community, whether it's crane elevator operators, whether it's farmers, co-ops, so for us, in our main business that we have today, there's no place for a perp in a product that I think is consumed, whether it's energy, whether it's a food product, a commodity like grains, you really -- it's not the forum for a perpetual security.

Now, having said that, I think that the CFTC made a decision to allow Kalshi to put up perpetual futures on Bitcoin, and I think it stops there for several reasons. Number one, I think the use case for perps was really from Asia and Europe, because of the difficulties in settling a crypto futures contract. I think it's going to be a long time away from now, within the CFTC is going to allow perpetual futures on retail products outside of crypto, because when you look at the legislation that governs futures products, and I don't often agree with Terry, but I agree with him wholeheartedly in his approach that this seems to be an illegal act, as it relates to allowing something that have been here to prohibited in the U.S. perps on crypto products.

So I think that this was overblown, overblown reaction, similar to what happened maybe in February or early March that the data businesses of CME, ICE and NASDAQ are going to be threatened by AI. So now having said that, if a reputable member firm for potential partner comes to me, Michael, and says, listen, we want to try a perpetual futures contract in this way. I'll look at it, just as any business person would look at it. But my focus is on the business we have and the business we're rolling out that started May 17 in futures with the Bloomberg franchise. I don't know if you want to add anything to that?

Nothing, you've covered.

Yes, that's my view. I think that we just have to take it for what it was. We have only 1 commissioner at the CFTC. I think that the options industry and the futures industry has grown dramatically from 10 million or 11 million contracts 10, 15 years ago to 65 because we look out for the retail investor as much as the institutional investor. And I hate to think about what would happen if there was some auto liquidation of a whole group of inexperienced people that are entering the market my son's age at 30.

And I think that the reason we've had the growth is we've provided the guardrails. I look at myself as a fiduciary to not only my shareholders, but to the marketplace. There's a reason there's only a handful of U.S. exchanges as opposed to 90,000 or 100,000 bank savings, loans and thrift. We have a duty to the industry to make sure that when markets have a lot of volatility, a lot of turmoil that we're putting some good guardrails. And I'd be afraid as a result of allowing this expansion of perpetual futures to create a situation where we have a tremendous shock to the retail community that's just getting into futures.

So I look at us as being stewards, and I covered the licenses that I have, and I want to make sure that we don't ruin an industry that's grown dramatically with regulation. So that's my answer.

I think there's some concern that with the administration being perhaps supportive of innovation and then the name of innovation that maybe there could be some potential for them to approve it beyond crypto, a view of some investors in the marketplace. And if it were to be approved beyond crypto, say, index or single names or others, I guess, to what extent do you think that could be additive to volumes across markets versus cannibalized? And how do you think about the appeal of, say, multi-list options on single names in terms of what that offers is the ability for investors to have in the portfolios versus the attributes of these perps?

Yes. I think in terms of the -- yes, I mean as Tom mentioned, right, if ultimately, that is the way the industry goes on perps. And that's the way the regulation goes. We are not cannibalizing anything in futures, right? Our future is our agricultural product, and we're just getting started on the Bloomberg financial indices. If our members think that's something they haven't asked for to this point, if our members think that's something that they would like, then certainly, we have the technology, we have the licenses to bring that to market.

I think, again, we want to tread cautiously and make sure we're building for the long term, not just getting a quick hit. In terms of options versus futures, will this be additive or I don't see it cannibalizing multi-listed options. If you remember, right, if you're buying a call, your risk is limited to the premium you paid, right? If you buy a perp, your risk is essentially unlimited. And I think that's it's certainly a different use case.

Are there opportunities? Obviously, across the asset classes for hedging between the 2 or are being between the 2, I should say. I think that's interesting and that could be additive volume to both. But I think our view is we'll see how this goes. It's not something we feel the need to be a leader on, we'll take a step back. But if that's the way the market and the regulation moves, then we have all the tools we need to be there.

Great. Why don't we talk about market share. MIAXs take a meaningful market share over any which time period folks want to look at that in multi-list options. What would you say the biggest drivers of those gains are? How do you think about the durability and sustainability of that as you look out from here. And recently, we've seen some volatility in the market share. Maybe you can help unpack why that is, why we might see that from time to time?

Sure. Great question, Michael. So I think our market share ended about 17 in quarter Q1. I don't look at market share day-to-day. I look at the market share trends. I look at the market share versus the capture rate that drives our business as a public company. So I always want to favor increasing our transaction revenue per contract. For the first 10 years, the Rocket Fuel foreign exchange is market share.

If you're not 5%, 6%, 7% in Tesla, no one -- but no 1 is going to connect to your exchange. When you start to become 10%, 12%, 15%, 18% of a symbol, then people are calling me up and say, "hey, Mr. Gallagher. I know we had a tech freeze, but we have a regulatory problem. We have to be exposed to your market. So for my first 10 years as an exchange operator, it was all about getting that Rocket Fuel that market share. How did I do it? -- How did we do it? Low fees, no fees, equity rights programs, whereby we offer deep equity in our parent company if you did more volume on our exchange.

Well, guess what? Now that we got people into the arena. They like the experience. They love the risk protections, the latency I talked about, the throughput and the determinism, now what I want to do as a public company, 3 quarters, I want to maximize the revenue and I might not go after someone that calls me up and says, Tom, I've got this prime auction business. I think I can get you 2 points of additional market share, but you got to pay me $0.02.

I'm not going to chase that. I'm going to tell my sales guys. We don't need that. So I'm going to be much more selective. Why am I optimistic? I'm optimistic because we only opened up a trading floor in September in Miami, only the second trading floor to open in the history of our country, in Miami, in Florida, and I'm at about 0.4% to 0.5% market share. On any given day, you can do 6% to 8% of the multi-listed volume is still done on the floor. So I have aspirations to get more than my 1/6 of that floor volume by new functionality, incentive pricing, putting some additional members on the floor.

So I feel that we can garner potentially much better than our 1/6. And the other thing is areas like complex order functionality, we're #2 in the country. That's what I call capture risk, capture its good capture business. And we're going to roll out additional functionality to capture more of that complex orders, more floor volume, and then when you add to it, what we bring into the table on the eve of these historic IPOs that we can provide that safe environment for the liquidity providers, I think, our mature options business has more runway to go.

And then you put the new foray that only started on May 17 into futures. We're going to take the infrastructure. We're going to take the relationship with these market makers, the licenses that we've gotten from the CFTC in futures and this powerful new relationship with Bloomberg to put up a host of financial futures products on our futures exchanges. But here's the icing why I'm so excited about the options business still is next year, we're going to launch options on our SEC regulated exchanges on the B100, the B500 and these financial futures products.

And they'll be proprietary meeting similar to the VIX. The only place you can bet on the B100 option is on a MIAX exchange. So I think you're going to get more market share because of the floor, because the new functionality and I'm going to incentivize people. The other thing is when you start a new business, I don't care if it's a restaurant or it's a stock exchange, you're going to be very careful, a lot of risk protections. There are people that come to us and say, Tom, we can't put up any big size on your exchange. I'm just using this as a hypothetical.

We want to do an order with 100,000 contracts. Well, your staff only allows 50,000. I can't send you any business because your risk protection setting is too low. Well, we want to wait. We've waited now 9 months. We can change that risk protection. If it makes sense, and that's a whole new customer that I wouldn't see. So there's a lot of anecdotal things, Michael, that helps you grow the pie. And I feel good about it. Again, giving them low fees, no fees and an equity component in these ERPs, equity rights programs, that's what got them here. What's keeping them here is the experience.

And I think that, that experience is what's going to propel us to even more market share growth.

Great. Why don't we shift and talk about the futures business? You've invested heavily in the platform the technology, the Bloomberg partnership. What's your long-term vision would you say, for the futures business? And what would success look like, say, 3, 5 years from now?

I think success would look like being the first exchange operator to really make inroads so that the futures industry is not subject to only 1 dominant market participant as they have been for the last 20 years to 25 years. If we can come in with our suite of agricultural products and our financial futures products and provide meaningful competition in the future space, we would be successful. And why do I think we can do it is we're showing up with the chicken and the egg. What do I mean by that?

We have brand-new platform. We've moved off of the CME Globex platform to the MIAX On-X platform. We've already been told anecdotally that we're 5x faster than our competition in terms of latency. We're going to create disruptive, aggressive pricing mechanisms that our competition never had to use because they were a proprietary nonfungible exchange with products that only trade on ICE or CME, so to be -- to bring disruptive competition in the next 36 to 48 months, I'll say, hats off team, we did it. That's what I think gets me excited about this next journey, and it's leveraging everything we've done to today in options and equities into financial futures in MIAX.

Agricultural community, that's our legacy. When I bought the exchange, are you just going to get rid of the product because you want the license. I look these people in the eye that have been holding a seat on the Minneapolis Grain Exchange from their parents and grandparents and said, "No, we're going to respect the heritage. We're going to continue to work on the grains. And boy, am I excited to have this platform as we see historic disruption particularly with the Straight of Hormuz impacting everything from energy to fertilizer. So that's what success looks like to me.

Yes. And I think if you look at our options business, right, what we -- the margin profile we've been able to obtain in options and being a very competitive multi-list environment. I think the key point to bring across is, look, we've built what we need or substantially build what we need in futures in terms of data center in Chicago for the commodities, a data center in Secaucus for the financial products. We've built the system, again, obviously, a little bit of incremental work to launch each new product.

But every dollar of revenue that comes in now that we've built a platform will be at a very high incremental margin. And I think over time, it wouldn't be unreasonable to see our futures margins look similar to our options business.

Great. Maybe just a question on the product side, the Bloomberg 100, the Bloomberg 500 products features are probably amongst the most anticipated launches in your history. What feedback are you hearing from brokers, market makers, end users? What gives you confidence on these products can sort of carve out a meaningful niche and a broader market backdrop and maybe update us on the launch here.

Okay. So we've had 3 launches since May 17. And the markets have been tight, the markets have been liquid. We've had probably about 13,000 contracts a day on average. We started the first product, the B100 with 3 market makers making great markets. These market makers are displaying what I think is necessary to attract the retail player. So it's been really good. I think people have really seen a flawless execution with these 3 launches. And I think that between now and the end of the year, we're going to see some of the big 5 names in retail become involved with the B100 and the B500.

I think it will take a longer time for adoption on the institutional side, but that's where I'm going to lean into Bloomberg. That's where I'm going to lean into that relationship with Bloomberg on the institutional side. The game plan was start with retail, start with aggressive pricing in the retail sense, to get those retail firms that are all about low cost of execution, engaged, have tight markets, and we've accomplished that, Michael. So we feel good about it.

And the pipeline you mentioned?

The pipeline being that -- we're going to look at a number of grain products. I'm not -- I can't make any news today on what those are, but we are going to be launching the first new grain products in a long time in Q4. And I think that will be in response to customer demand.

And the retail brokerage pipeline, I think you said 5% by year-end, you'd expect to be onboarded?

Yes, we are -- there's various levels of engagement with these firms. And I'm pleasantly pleased with where we stand. And I think we've created some good incentives for the retail shops, incentives to the market makers. So I think I'm hopeful that we have 5 firms fully engaged by the end of the year, which should be really, really I feel good about it.

Great. We're just about out of time. Final question, if we revisit this conversation 5 years from now, what do you think will surprise investors most about how MIAX has evolved?

I think what will surprise you all 5 years from now is we started on this venture in 2012, launching our first options exchange, and we will become the first truly global exchange operator that can honestly say that we grew internationally, not to just grow revenues in an uncorrelated way, but we thoughtfully became one of the first truly global exchange operators. And it comes down to the teams and the people. It's a lot easier to buy an exchange than to integrate it.

We started with Bermuda. We went on to the Channel Islands in Guernsey. We learn a lot from these smaller venues, and it gives us opportunities to try new things. I would never call them the minor leagues or the proving grounds. But I think you can do things in respected jurisdictions, like Bermuda that has a great regulatory regime. But I think what will surprise people is what started out as a dream has become a truly global exchange operator that has a culture of commitment to its employees, and we'll continue to grow and to thrive.

Great. We're out of time. Tom?

Thank you so much. Thanks a lot, you guys.

Thank you.

Thank you for standing by. My name is Chad, and I will be your conference operator today. At this time, I would like to welcome everyone to the Miami International Holdings, Inc. First Quarter 2026 Earnings Call. [Operator Instructions] Please note, this event is being recorded.

It is now my pleasure to turn the call over to John T. Williams, Senior Vice President and Head of Investor Relations. You may begin your conference.

Thank you, operator. Good afternoon, and thank you for joining us for Miami International Holdings, Inc. or MIAX's first quarter 2026 earnings conference call. I'm John T. Williams, Head of Investor Relations. With us today are Thomas P. Gallagher, Chairman and Chief Executive Officer; and Lance Emmons, Chief Financial Officer. We will also have Douglas Schafer, Jr., Chief Information Officer; and Shelly Brown, Chief Executive Officer of MIAX Futures and Chief Strategy Officer of MIH, joining us for the Q&A session following our prepared remarks.

Our earnings announcement was released prior to this call and we published an accompanying slide presentation on our Investor Relations website at ir.miaxglobal.com. In addition, this call is being webcast and an archived version will be available there shortly after the conclusion of the call.

Our discussion today includes forward-looking statements that are based on the expectations, estimates and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance, and therefore, you should not place undue reliance on them.

We refer you to our earnings press release and filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of MIAX. We do not intend to update any forward-looking statements made on this conference call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. During today's call, we will refer to non-GAAP measures as defined and reconciled in our earnings materials.

With that, I'll now turn the call over to Tom.

Thanks, John, and good afternoon, everyone. We appreciate you joining us today. In Q1, we executed well and continued to benefit from industry tailwinds, posting record quarterly revenue in a volatile market environment. That is the story of this quarter, and I want to spend a few minutes walking you through what drove our results before Lance takes you through the financial details.

I'll first highlight 3 things I hope every investor takes away from today's call. First, we continue to execute well and our options business had another strong quarter. We are seeing the benefits of our technology investment show up in sustained year-over-year volume growth and healthy revenue per contract levels. This continued strong performance is the result of the strong relationships we have built over the last decade.

Second, we continue to benefit from powerful secular tailwinds in our core market. Options industry ADV reached 63 million contracts in Q1, up 17% year-over-year, driven by elevated volatility, broad investor participation and growing volume in the new short-term expirations in single name stocks. On top of that, when the market gets volatile, industry volumes tend to rise.

Third, we are seeing broadening revenue and margin contributions across our business and continue to invest in offerings that will drive the next leg of our growth. Our equities business maintained its positive trajectory and our International segment performed well. Our futures business is set to expand as we are on track for the May 17 launch of our Bloomberg Equity Futures.

Q1 was defined by elevated volatility across asset classes, driven by geopolitical tensions, trade policy uncertainty and shifting expectations around rates and growth. While most businesses are volatility adverse, for MIAX, elevated volatility is good for our business. Sustained geopolitical volatility drives an increased need for risk management tools for virtually all market participants; institutions hedging equity exposure, corporations managing exposure to underlying markets or retail investors protecting positions. Options are an important tool that can help end users manage risk and increased hedging demand translates directly into higher contract volumes on our exchanges. All of these factors contribute to our Q1 performance.

First quarter total net revenue grew 40% year-over-year to $129 million and adjusted EBITDA margin improved by 800 basis points year-over-year to 51%. Q1 adjusted diluted EPS was $0.42. These results reflect the continued strength of our options business, the operating leverage in our model and the broadening contributions we are seeing across the platform.

Taking a broader look at our business segments, our options franchise continued to perform well in Q1 with market share and volumes tracking ahead of levels seen in the first quarter of 2025. Our market share in multi-listed options was 17.3% in the first quarter, up from 16% in the prior year period. We continue to see opportunity for share gains over time as we build out new functionality and bring new products to market. Our Sapphire trading floor continues to build momentum. And on April 14 of this year, we had our first 1 million contract day. We've also seen improvements in our equities business with improved capture rates during Q1 and line of sight to sustained profitability.

Our International segment delivered another strong quarter. And looking ahead, we'll continue to streamline operations across TISE and BSX to maximize revenue as well as cost synergies. In futures, our Onyx platform continues to perform well, and we are in the final stages of industry testing ahead of the launch of our new Bloomberg Equity Index futures. We will be launching the first product, a retail size contract based on the Bloomberg 100 Equity Index on the evening of May 17. We are launching with 3 different contracts designed to serve both institutional and retail participants.

The full B500 contract provides large notional exposure for institutions, while the [ TEB500 ] and B100 contracts are smaller-sized versions of those indexes targeted at retail investors with fees that we expect will be very competitive with existing contracts traded by our peers. These new futures will clear at the Options Clearing Corporation, giving our members real margin efficiencies as part of their broader equity derivatives activity.

The Bloomberg 500 and the Bloomberg 100 indices are built differently than the competing futures and options market benchmarks. Rather than relying on a committee to make decisions about which companies belong in the index, Bloomberg uses a transparent rules-based algorithmic methodology. Constituents are added and removed based on predetermined criteria, eliminating subjectivity and delays and newly minted public companies can be added faster than under a committee-driven process. We think this is a better construction and a meaningful structural advantage as the IPO pipeline improves and we believe the market will come to appreciate these differences.

We have been working closely with liquidity providers on both onboarding and platform integration and Bloomberg is an active partner in our go-to-market effort. Building a futures market takes time, but we are doing it in the right way. The infrastructure is in place, the participants are engaged and we are confident in the long-term opportunity this product suite creates for MIAX, Bloomberg and our members. Following our Bloomberg product launch and given clear customer demand, we intend to bring additional commodity and agricultural products to the market.

I also want to provide a brief update on our sale of MIAXdx, now called Rothera. As previously announced back in January, we completed the sale of 90% of the business to a joint venture established by Robinhood Markets in partnership with Susquehanna International Group. MIAX retains a 10% equity stake in that joint venture, giving us accelerated access to the predictions marketplace without tying up capital or resources. We will carry that stake at cost with any future distributions flowing through as dividend income. In other words, this is not something investors should be building into their revenue models.

What it represents for MIAX is real long-term optionality, a position in a growing market alongside 2 strong partners with upside if the prediction market volumes scale the way we believe they can. We remain focused on what we can control, which is running our business exceptionally well. With positive free cash flow, we are generating cash and ended Q1 with more than $550 million in cash on our balance sheet.

Our capital allocation priorities are unchanged; organic growth opportunities, including our futures business, supporting the Bloomberg product launch and investing in technology and people. Beyond that, we are open to opportunistic acquisitions that fit our strategy and make sense for our business. We understand that our cash position is a competitive advantage and we intend to deploy it thoughtfully.

With that, I will turn it over to Lance to walk through the financial details.

Thanks, Tom, and good afternoon. We are pleased with how the quarter came together across the business. Before I get into the numbers, let me briefly remind you of MIAX's revenue model. We generate revenue from transaction and non-transaction fees. Our key performance drivers for transaction fees include industry trading volumes, market share and revenue per contract or share, which measures the average revenue we earn from contracts or shares traded.

Also, as a reminder, we provide RPC and capture rates on a 3-month rolling average basis on our Investor Relations website. For non-transaction fees, we generate revenue from access fees, which we charge customers to connect to our exchanges for market data, which we earn through direct subscriptions and through our participation in the U.S. pay plans and from listings fees, primarily in our International segment.

Q1 total net revenue grew 40% year-over-year to a record $129 million, reflecting strong performance in our options business and growing contributions from our other business segments. Organic net revenue growth, excluding the contribution from TISE, was approximately 35% year-over-year. Adjusted Q1 operating expenses were $63 million compared to $52 million in the prior year period. This increase was primarily due to planned expansion of headcount to support our growth initiatives and higher employer payroll taxes tied to the timing of incentive compensation payments.

Adjusted EBITDA was $66 million, up 66% year-over-year and adjusted EBITDA margin was 51%, up 800 basis points year-over-year. This reflects the operating leverage in our model as revenue scales across a largely fixed cost base. GAAP net income of $170 million includes a $51 million gain on the sale of MIAXdx and a $70 million income tax benefit for the quarter, primarily resulting from the release of our valuation allowance on deferred tax assets. The release is based on 12 quarters of cumulative positive pretax income and our expectations for future profitability. Adjusted earnings grew 51% year-over-year to $45 million in Q1 compared to $30 million in the prior year period.

Moving to Q1 segment performance, starting with options. Options segment net revenue was $111 million, up 37% year-over-year. This represents average daily volume of 10.9 million contracts, a 27% year-over-year increase that outpaced industry ADV of 17%. Options segment net revenue growth was driven by an increase in both net transaction fees and non-transaction fees. Growth in net transaction fees reflected higher industry average daily volume, continued year-over-year market share gains and higher revenue per contract. Non-transaction fee growth of 45% was primarily due to increases in member connections, fee increases, market data sales and the expiration of certain MIAX Sapphire fee waivers.

I will note that Q1 '26 included $2.7 million in ad hoc historical market data sales from a new market data offering. We expect this type of revenue will be episodic in nature and we would not recommend [indiscernible] as a run rate item. Our options market share for the quarter was 17.3%, up year-over-year, but down slightly on a sequential basis. Market share fluctuates quarter-to-quarter and we continue to manage our business for the right mix of volume and economics rather than for headline share number. With that in mind, we do continue to see opportunities to grow share over time.

Underneath the share number, our technology remains differentiated. Our complex order franchise continues to grow and the Sapphire floor is performing well. RPC remains strong, reflecting the quality of order flow we are attracting. That includes complex orders and high-touch flow rather through our Sapphire trading floor, which carry higher capture rates. Early market share in the single name Monday and Wednesday expirations across the 9 names has largely tracked in line with our historical share in those classes. We view this as an additive volume driver and support expansion to additional names over time, subject to market demand and regulatory approvals.

Our Equities segment net revenue was $7 million, up from $4 million in the prior year period, primarily due to higher net transaction fees from improved pricing. Equities capture was net positive for the quarter compared to inverted in the year ago period. Futures segment net revenue was $5 million compared to $6 million in the prior year period due to lower listings and interest revenues and decreased net transaction fees.

Our International segment net revenue was $6 million compared to $1 million in the year ago period due to the acquisition of TISE in June of 2025. Following our TISE acquisition, we're beginning to streamline sales and marketing processes across our international operations to better serve global debt issuers and listings clients. Turning to our balance sheet. We ended the quarter with cash and cash equivalents of $551 million and outstanding debt of less than $2 million.

Now let's walk through our 2026 guidance. We are reaffirming our full year 2026 adjusted operating expense guidance of $265 million to $275 million. We note that our expense expectations for the rest of the year include planned increases in marketing costs, including for quoting incentives associated with our Bloomberg Index futures products and for our recently launched Excellence in Every Exchange nationwide advertising campaign.

We continue to expect full year share-based compensation expense in a range between $27 million and $30 million. We also continue to expect full year capital expenditures in a range between $40 million and $45 million. CapEx was a bit front-loaded in Q1 as we locked in many equipment purchases ahead of AI-driven price increases. Given that, we are comfortable with reiterating our full year guide. Our Q1 adjusted effective tax rate, which excludes the release of our deferred tax valuation allowance, was 27.2%. Beginning in Q2, we expect our tax rate will be in the 27% to 29% range, consistent with the guidance we provided in February.

I'll now turn it back over to Tom.

Thanks, Lance. We are very excited about our recent progress and look forward to another productive year in 2026. We'll keep doing the things we said we'll do and leverage the 4 competitive pillars you've heard me talk about before: our high-performance technology, our broad range of regulatory licenses, our diverse and expanding product range and our deep customer relationships that now include Bloomberg. These remain real competitive advantages and will help us drive long-term shareholder value.

We like what we see ahead. The upcoming launch of our Bloomberg Index futures products represents a major milestone and the growth we are seeing in single name short-dated expirations is encouraging. We also see incremental volume opportunities for our exchanges, given an improving IPO pipeline and continued growth in structured products that use options as part of their strategies.

Before we close, I want to acknowledge the recent sudden passing of our friend and Board member, Murray Stahl, who passed away a few weeks ago. Murray was an exceptional leader who brought insight and integrity to our Board and his positive impact will be felt by our team for years to come. One of the things Murray believed is that there is a real opportunity for a truly global exchange operator. Thanks to him and the support of our employees, members and shareholders, we're well on our way towards realizing this vision.

We're grateful to each of you for joining us today. And as a reminder, Doug and Shelly are here with Lance and I for Q&A. So let's begin. Operator?

We will now begin the question-and-answer session. [Operator Instructions] And the first question will be from Patrick Moley from Piper Sandler.

Maybe just starting off with one on options market share. The year-over-year growth has been quite impressive, and you mentioned that you were optimistic on some of the opportunities for further market share gains there. I understand the Bloomberg options would probably be some or part of that. But maybe if you could just walk us through what you think are the biggest opportunities to grow market share and how we should think about some of the puts and takes here throughout the rest of the year?

Thanks very much, Patrick, for that question. I'll start, and maybe I'll turn to some of my colleagues here. There always are normal shifts in volume and market share quarter-to-quarter. And obviously, myself and our team watch it really closely. With regards to Q1, our RPC was very strong and I think it reflected order flow quality and market share gains in areas with higher capture rates. So anecdotally, I did see some shifts in what I would call lower capture or negative capture volume, but I consider this the normal quarter-to-quarter migrations from time to time.

At my disposal, we have a range of pricing mechanisms that we can use to grow market share. And what we really do is try and target the right mix of volume and economics rather than look for a headline share number. Maybe I'll turn it over to Shelly to talk about some of the ways that we think we can increase that market share that we experienced here in Q1 of 17.3%. Shelly?

Thank you, Tom, and thank you, Patrick, for the question. As Tom said, we focus not just on market share but also capture rate. And by our changing market share in terms of less low capture volume and less negative capture volume, it's truly a positive from a revenue perspective. But as Tom said, we do have some ability to raise market share by focusing on other lower quality or lower volume -- excuse me, lower capture products and it's a constant mix between that market share and net capture.

Shelly, in terms of the dials to increase our volumes and our market shares. Can you just talk about quickly the Sapphire floor and maybe some other releases coming out in 2026?

Absolutely, Tom. We continue to see growth in the Sapphire floor. That's higher capture business from the -- rather than the electronic business, which tends to be lower capture. We're seeing growth there and we have additional releases coming throughout the year, first one next month to enhance functionality, which we believe will draw a greater flow to the trading floor. Again, that trading floor is higher capture than the electronic markets.

And Shelly, just quickly to finalize the question from Patrick. Give us a sense of what the volumes were on floors in Q4 versus Q1 of this year?

Market shares in the trading floors have been ranging from about 6% to 8%. The first quarter this year, it was 8.1% across all the trading floors versus 6.5% in '25. So we're seeing growth in the volume on trading floors, and we're seeing some growth from our trading floor as well and I expect continued growth with the new functionality.

Great. And I think lastly, Patrick, the secular tailwinds that have been driving ADV in the industry and driving ours, to me, they remain intact. Some of the same concerns and issues with global strike, interest rate questions, a political season, those are still creating the tailwinds that we had as we ended 2025. So thank you for the question.

And the next question will come from Michael Cyprys from Morgan Stanley.

I was just hoping to dig in a little bit further on the market share. You mentioned scope for new functionality, new products. I was hoping you could elaborate exactly on what that entails, what the timing looks like, what the sort of, I guess, benefit and ramping that you expect on the back of that?

Yes. I think, Shelly, if you wouldn't mind just following up on that. And the things that I'm thinking about are the expanded single name expiration, Shelly and the IPOs. But do you want to throw a little more color on that for Michael?

Absolutely. Michael, thank you for the question. So there's multiple aspects to this, as Tom said. We see continued growth in the -- it's still very early in the daily, weeklies on equities, equity options. That's been very positive for the industry and positive for us as well. Our overall market share in those names tends to be higher and continues to be higher than the other names that we trade. The flow of IPOs in the marketplace has improved over the last year and it's going to accelerate into this year.

As you're aware, there's 3 -- I think they're calling them mega IPOs expected to happen this year and we believe there will be tremendous option volume in those classes once they become options eligible. So there's definitely tailwinds here. And then the functionality enhancements, there's -- it's a constant -- we're constantly working with our members in the trading floor to see what we can do to help them bring additional volume here to our marketplace. And that growth, we believe, will continue throughout the year with the additional releases bringing additional volume to the trading floor.

And Shelly, would you speak for a moment about maybe increases in the folks that are joining the Sapphire floor and how does that look?

There's continued growth in the floor. We have additional brokers coming to the floor as well as additional market makers. There's a lot of interest in what's going on in our trading floor. When members from other exchanges come down and visit the floor, they're very impressed with the functionality, with the feature set we've built in the environment and of course, the fabulous economic environment in Miami. There's a lot of excitement about our floor and I believe there are more members to come, which will, of course, bring additional value.

And the next question comes from Ken Worthington from JPMorgan.

So on the short-dated company options, clearly, they're off to the races. Maybe first, could you refresh us on your market share in these short-term company options in the quarter? And you mentioned the mega IPOs, but how are you thinking about the build-out of new single company options? I think to my question last quarter, you said you preferred the build-out of new options rather than doing the Tuesdays and the Thursdays. So how does the pathway to more listings look for you?

Yes. Shelly, why don't you take that as well, Shell?

Sure. Thank you. Our market share in those 9 classes range between 18% and 20% of the multi-listed volume, which is higher than our overall market share across all classes. That's why we believe we win these new listings. So we're excited about that program eventually expanding. It's an open discussion and there's actually been discussion at several recent industry events, including this week at OIC, about whether the growth in the single name weekly options will come from adding Tuesdays and Thursdays or adding additional classes.

The reality is both options are available to the industry. It's not our decision individually as an exchange decide. This is these listings, whichever exchange adds new classes or would add Tuesdays and Thursdays, the entire industry will follow. I believe that expanding the program across additional classes is probably the next wave, but it's still very early in the program and we're still just letting the industry absorb this new volume and these new products and the decision will be made over the next several months as to which way that we will build out additional volume.

The next question will be from Jeff Schmitt with William Blair.

So the EBITDA margin expansion continued to be really strong, helped by higher volatility in the quarter. But what do you think is kind of a good run rate there in a more normalized environment? Obviously, it should go up over time, but would you expect that to fall a bit as volatility comes down?

Thanks for the question, Jeff. We're very excited about the continued margin expansion that 800 basis points, I'm very proud of. And we'll give you some more details. Lance?

Yes, Jeff. Yes, I mean, look, we do focus on our -- on maintaining and growing that EBITDA margin and getting that above 50% obviously, was a big milestone for us in the fourth quarter and continued in the first quarter. We do expect to grow that over time, especially as we bring in revenues outside of the options business. You can see the equities business has remained profitable in the quarter, nice contribution in the international business now with the acquisition of TISE. I think in the futures business, as we see new revenue come in from the Bloomberg and other products we're going to launch, that will come at a very high incremental margin.

Quarter-to-quarter, you might see some shifts, particularly in the next couple of quarters as we start to spend more on branding and marketing initiatives and incentives. around the launch of the Bloomberg products. But again, we'll be very judicious in how we spend those. But we really think we've got some really good opportunities to bring in volume and new revenue in the futures business.

Okay. And then the physical trading floor, I may have missed it, but did you mention what your share was of those industry volumes, which I think you said were like hovering around 6% to 8%. And do you see that floor helping with adoption of index options potentially later this year? I mean, aren't a lot of those volumes still traded on floors?

Yes, I'll cover the market share, and Shelly, you can discuss the index options. But the market share for the quarter was about 40 to 50 basis points. So slowly picking up. But again, we think as we release additional functionality over the next several months that we'll be able to capture even more and -- more than our sort of 1/6 of that 8%.

Shelly, you might want to take the follow up?

Yes. Thank you. To add on what Lance said about the market share, we've been steadily rising from about 5% of floor volume to about 10% of floor volume. There's an ebb and flow each day, but that's growing over time. With regards to index options and the trading floor, the first point I want to make is we're listing the cash settled options on the Bloomberg indexes on MIAX options and our trading floor is Sapphire options. So they are 2 different exchanges within the MIAX family.

That being said, we certainly have the optionality to carve out part of the physical space on the existing Sapphire trading floor and make that a MIAX options trading floor specifically for index products. And that is one option we have in our back pocket. But it's really an open question as to whether or not an index product really needs a trading floor. Certainly, our competitor has a trading floor. The products initially traded in trading floors before they went electronic many years ago. And they've seen a steady shift of volume from the floor to the screens.

That being said, we did experience during COVID, the shutdown of the trading floors and 100% of that index volume went electronic for several months, eventually coming back to the trading floor. My belief is that you can operate a full suite of index options on an electronic marketplace without a trading floor that the incumbent chooses to keep the trading floor open because that's what they've traditionally done and they have a lot of members on that trading floor.

I believe having a fully electronic market would lead to better quality markets, more screen activity because of tighter markets and more liquidity being shown because the electronic market makers who are also the floor market makers aren't competing with themselves in the electronic versus floor. A lot of the floor business is also complex business and the incumbents do not allow electronic options over a certain size. We think those are disadvantages to customers and we will automate those functions. So that -- therefore, we think our product will be a superior product because of the electronic features.

The next question is from Chris Allen from KBW.

I was wondering if you could unpack the growth in access fees, a very nice trajectory, both on a year-over-year and sequential basis. I know you mentioned member connections and fee increases. Just wondering if you could maybe quantify the impact of the fee increases, whether any of the MIAX Sapphire fee waivers were in there as well. Just trying to understand organic growth trajectory in terms of what's being driven by new connections, new sales versus fee increases.

That's a great question, Chris. Lance, do you want to take that?

Yes. Chris, good to hear from you. Yes, it's basically split down the middle between new member connections for the most part and fee changes. On the fee changes, it was both fee increases we made January 1 as well as the expiration of some Sapphire fee waivers, just like we've done in the past when we launch a new exchange, we tend to either waive fees or discount them and then kind of remove those waivers over time. So net-net, half is fee increases and half is new member connections.

Next question is from Patrick O'Shaughnessy from Raymond James.

Curious if you guys anticipate any impact either positively or negatively from options regulatory fee reform that looks like it's going to take place on July 1.

Thanks for the question, Patrick. As have other exchanges, we have, in fact, filed rule changes that may or may not be effective on July 1, depending upon whether the industry is capable to do what they have to do from the technology perspective. We have not finalized our rates as of this time. So I really don't have an opinion as to whether or not these will cost us impact revenues or they'll be neutral. So right now, this evening, I'm really not in a position to tell you how that's going to impact our regulatory expense reimbursement or any other exchange.

Lance, any color on that you want to add?

No, I think you covered.

All right. I appreciate that. And then for my follow-up, so you mentioned that you're launching the Bloomberg 100 product on May 17. What's the sequencing then for launching the 500 products? And why are you starting with the 100 rather than the 500?

Great question, Patrick. Shelly, do you want to pick up?

Sure. Thank you, Patrick. That was a very good question. It was an interesting call between the 3 initial futures, which to list first. Working closely with our retail firms that are interested in the product, many of them felt that their retail customers would have more interest in the B100 index initially because of the makeup of the index. They find a lot of their retail likes to trade in that family of indexes, the software technology companies. So that's why we made that choice.

As far as the rollout, we certainly wanted to start slow. So we're starting with just one product on day 1 on May 18. We're listing the B500 TEB contract 2 weeks later on June 1 and the B500 big contract a week later from that June 8. But we want a slow rollout. It's a new product. It's a new data center for us, a new relationship that we're clearing these products at OCC, which benefits the entire industry from a margin and capital perspective. So that was the decision process.

And then when do we follow with the big, Shelly, to answer the back end of the question?

The big is June 8. The B500 big will be June 8. It's the third rollout.

Shelly, maybe before we break Shelly, just a question, I mean, a point to make. What has you excited about this new proprietary product suite now that we finished the Onyx trading platform, the clearing and now the relationship with OCC for futures, what has you excited about this launch?

The buzz in the industry has been -- there hasn't been a real strong competitor to the existing index complex. I believe over 95% of index volume is concentrated in 2 products, the SPX -- for the options side, the SPX and the VIX. The industry of buzz is we need competition. We'd like to see competition in these products. We'd like to see competition across exchanges. We believe these are better constructed indexes for all the reasons Tom mentioned earlier.

We believe our technology is a differentiator. It's how we've gone from 0 to 17-plus percent market share just since the last 15 years. Combine those with, again, electronic trading and some of the other functionality we built, the buzz, both from the market makers who are interested in trading the product and the retail firms has been very positive.

Thank you, Shelly. I think we have time for one more question.

Certainly. And that question will be from Chris Brendler from Rosenblatt.

Congrats on strong results here. I wanted to ask a question just given it's topical since I covered more of the crypto names, Bullish's acquisition recently, sort of thrown some ideas around about tokenization. It seems like it's really gathering steam. How do you guys think about tokenization and how it might impact your business?

Well, great question, Chris. Tokenization is not our focus right now. Our focus is really on the core business and maximizing the new product launches, particularly in the futures area based on the investments that we've made over the last several years. We're going to watch it. We're going to see what develops over the course of the next year. But I really want to focus on the businesses that we've acquired and the organic growth and the technology we've just brought to the futures market. So we're watching it closely, but I just want to be very frank, it's not a core focus today.

Yes, makes sense. I'll ask a core business question as a follow-up. I may have missed this. But can you -- the impact from the new single stock weekly, I assume that's still negligible at this point. It's not actually having a material impact on your results.

Yes. Yes, that's correct. And Lance, do you want to just add some color to that?

Yes. We're hearing the same. I mean we're seeing the same things in the data. It's still early days. I mean we all sort of believe across the industry that it is additive. But as I said, it's still a small negligible contributor at this point, but we do think it could grow over time.

Absolutely. Just add to the secular tailwinds.

And ladies and gentlemen, this concludes today's question-and-answer session. I would like to turn the conference back to Tom Gallagher for any closing remarks.

Well, thank you very much, everyone, for joining on this evening. Obviously, we've had a great quarter and we're very grateful for the support of all of our member firms and our shareholders that have helped us get to this spot. I'm continuing to focus on our 4 pillars that have gotten us here and we're going to continue to work closely with the members that we have developed relationships since our first launch in 2012 and we're really proud of the new relationship with Bloomberg and I think we've got a real exciting future here in 2026.

So thanks very much for your participation this evening and we're happy to follow up individually over the next few days. So have a nice evening. Thank you again.

And thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Thank you for standing by. My name is Debbie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Miami International Holdings, Inc. Fourth Quarter and Year-End 2025 Earnings Call. [Operator Instructions]. It is now my pleasure to turn the call over to John T. Williams, Senior Vice President and Head of Investor Relations. You may begin your conference.

Good afternoon, and thank you for joining us for Miami International Holdings or MIAX's Fourth Quarter and Full Year 2025 Earnings Conference Call. I'm John T. Williams, Head of Investor Relations.

With us today are Thomas P. Gallagher, Chairman and Chief Executive Officer; and Lance Emmons, Chief Financial Officer. We will also have Douglas Schafer, Jr., Chief Information Officer; and Shelly Brown, Chief Executive Officer of MIAX Futures and Chief Strategy Officer, joining us for the Q&A session following our prepared remarks.

Our earnings announcement was released prior to this call, and we have published an accompanying slide presentation on our Investor Relations website, ir.miaxglobal.com. In addition, this call is being webcast, and an archived version will be available there shortly after the conclusion of the call.

Our discussion today includes forward-looking statements that are based on the expectations, estimates and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

These statements are not guarantees of future performance, and therefore, you should not place undue reliance on them. We refer you to our earnings press release and filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of MIAX. We do not intend to update any forward-looking statements made on this conference call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law.

During today's call, we will refer to non-GAAP measures as defined and reconciled in our earnings materials. With that, I'll now turn the call over to Tom.

Thanks, John, and welcome to MIAX. We're excited to have you on board as our new Head of Investor Relations, taking over for Andy Nybo, who will turn his focus back to Corporate Communications.

Thank you all for your interest in MIAX. What an extraordinary year 2025 has been, as we've achieved significant strategic milestones while delivering outstanding financial performance across our business. Today, I will provide high-level fourth quarter and full year results, update you on our business segments and discuss key strategic developments. Then Lance will walk through our financial highlights and our 2026 guidance.

For the fourth quarter, total net revenue grew 52% year-over-year to $125 million. Adjusted EBITDA more than doubled year-over-year to $62 million, and adjusted EBITDA margin improved by 1,400 basis points to 50%. Q4 adjusted diluted EPS was $0.52. For the full year 2025, total net revenue grew 56% year-over-year to $431 million, and adjusted EBITDA more than doubled to $199 million. Full year adjusted EBITDA margin was 46%, reflecting 1,600 basis points of year-over-year improvement, while adjusted diluted EPS was $1.82.

These impressive results reflect our ability to capitalize on elevated market volatility and drive continued volume and market share gains across our core business lines. Our market share in multi-listed options grew to a record 18.2% in the fourth quarter, up from 15.9% in the prior year period. This represents average daily volume of 11.1 million contracts, a 46% year-over-year increase that far outpaced industry ADV growth of approximately 28.4%.

We have significantly increased our market share over the past few years and see additional opportunities for further expansion. And we'll continue to balance market share growth with healthy RPC levels. 2025 also brought several transformational developments for MIAX. Following on our successful IPO, we completed a secondary public offering in December with the closing of a public offering of 7.8 million shares of common stock, which consisted entirely of secondary shares.

While MIAX did not sell shares or receive proceeds from this offering, it represents another milestone in our evolution as a public company and enhances our liquidity. In late '25, we announced the strategic sale of 90% of MIAX Derivatives Exchange or MIAXdx to Robinhood Markets in partnership with Susquehanna International Group while retaining a 10% equity stake. This transaction, which closed in January of 2026, provides MIAX with expedited access to the growing prediction markets through our retained equity position while also enabling us to maintain focus on our core product offerings.

The strategic alignment with Robinhood and Susquehanna closely aligns with our approach of partnering with industry leaders to offer innovative trading products, and we're excited about the long-term value potential that our equity stake creates for MIAX's shareholders. Our MIAX Sapphire options trading floor in Miami that we launched in the third quarter continues to perform in line with our expectations and demonstrates the continued value of floor-based trading in today's hybrid market structure. We continue to build out new and innovative functionality to support the needs of our floor broker community and their customers, and we intend to roll out a number of additional enhancements in the first half of 2026.

Miami's emergence as Wall Street South continues to accelerate, and we're proud to be at the center of this transformation as we look to scale our market share over time.

Reflecting back on other notable accomplishments in 2025. The acquisition of TISE enables us to expand our international footprint, the launch of MIAX Futures Onyx and the completion of the new MIAX Futures clearing infrastructure allow us to provide the industry with a high-performance proprietary trading and clearing platform with state-of-the-art risk management capabilities. We remain very excited about our Bloomberg Index Futures products and plan to launch B100 and B500 Futures in the second quarter of 2026.

While we previously communicated a February launch date, we recently made the decision to reschedule it to ensure we have the same reliability and performance profile on our futures platform that we pioneered in options markets. Importantly, we want to ensure the full ecosystem of participants are, in fact, connected to the new exchange on day 1.

We will be introducing retail size contracts first to meet retail broker demand for access to products with low trading fees. We are also focused on offering products to meet emerging retail investor demand that allow them to hedge and efficiently manage exposure to equity markets. We maintain strong conviction in the strategic importance of these products to MIAX's long-term growth trajectory.

Taking a broader look at several of our business segments. The options market environment in 2025 was exceptionally favorable for MIAX. Industry volatility remained elevated throughout the year, driven by a complex web of factors. While many businesses are volatility adverse, for MIAX, volatility creates increased demand for risk management tools and our technology infrastructure has proven its resilience during these high-volume periods.

We expect elevated volatility throughout 2026, driven by geopolitics, domestic policy and political dynamics, tariff impacts and the evolving AI investment cycle. We're particularly excited about the rapid growth in new Monday and Wednesday short-term expirations in single stocks. This market segment has become increasingly important to retail and institutional participants alike. And our technology advantage with industry-leading throughput, low latency and deterministic performance positions us exceptionally well to capture this growing opportunity.

We listed new Monday and Wednesday short-term options in 9 actively traded options classes, which we expect will contribute to both industry and our volume growth in 2026. Furthermore, we are positioned to benefit from an improving IPO pipeline and continued growth in structured products that use options as part of their strategies. Together, these should create additional trading opportunities and volume growth across our platforms. These trends, combined with our technology advantages, position us well to capitalize on the evolving options landscape.

Turning to equities. Our equities business continues to evolve as our U.S. equity market presence creates strategic positioning to capture opportunities across market data and related asset classes. We have implemented an improved rate structure and reached breakeven adjusted EBITDA in the fourth quarter, demonstrating our commitment to operational efficiency.

Our international operations continue to demonstrate their strategic value with the annuity value of this business becoming increasingly evident throughout 2025. We are actively working to maximize operational and revenue synergies across our TISE and BSX businesses, reflecting our ongoing commitment to optimizing our international footprint.

As we look ahead, we remain focused on our 4 key competitive pillars: our differentiated technology, our broad range of regulatory licenses across multiple jurisdictions, our diverse and expanding product range and most importantly, our deep relationships with customers that allow us to develop the technology, services and products that support their evolving strategies.

We are particularly optimistic about the current regulatory landscape, which creates exciting opportunities for us to expand into new products and services. On the operational front, we see opportunity to expand our market share on the MIAX Sapphire trading floor as we continue to enhance functionality to support demands from floor participants. We're experiencing strong growth in options products across our exchanges, driven by increased activity in short-term weekly options, the improving IPO pipeline and structured products and ETFs, all of which we expect to support sustained volume growth across the industry and on our exchanges.

Perhaps most importantly, our collaboration and relationships with our members and industry participants remain strong and continue to be drivers of volume growth. These strategic relationships position us well to capitalize on market opportunities and continue delivering value to our customers as we execute on our strategic vision.

Now I will turn the call over to Lance to provide details on our fourth quarter financial performance and 2026 guidance.

Thanks, Tom, and good afternoon. We had an exceptional fourth quarter and full year 2025 across our business. I will briefly remind you of MIAX's revenue model before I jump into the financial details.

We generate revenue from transaction and nontransaction fees. Our key performance drivers for transaction fees include industry trading volumes, market share and revenue per contract or share, which measures the average revenue we earn per contracts or shares traded. Also, as a reminder, we provide RPC and capture rates on a 3-month rolling average basis on our Investor Relations website.

In terms of non-transaction fees, we generate revenue from access fees, which we charge customers to connect to our exchanges; from market data, which we earn through direct subscriptions and through our participation in the U.S. pay plans; and from listings fees, primarily in our International segment.

Full year 2025 total net revenue was $431 million, representing 56% year-over-year growth. Adjusted EBITDA more than doubled year-over-year to $199 million, and adjusted EBITDA margin was 46%, a significant increase from 30% in the prior year period. This performance demonstrates our ability to scale efficiently while also continuing to invest in our growth initiatives. Q4 total net revenue grew 52% year-over-year to $125 million, while adjusted EBITDA more than doubled year-over-year to $62 million.

Q4 adjusted EBITDA margin was 50%, up 14 percentage points year-over-year. Adjusted earnings nearly tripled year-over-year to $57 million in Q4 versus $20 million in the prior year period. Adjusted Q4 operating expenses were $62 million compared to $53 million in the prior year period. This increase was primarily due to higher compensation and benefits costs, driven by planned expansion of headcount to support our growth initiatives.

Also contributing to the increase were higher investments in IT and communications costs due to the build-out of the MIAX Sapphire Exchange and new technology platforms we rolled out for MIAX Futures and BSX.

Moving to Q4 segment performance. Our Options segment delivered strong results with net revenue of $107 million, up 46% year-over-year. Market share was 18.2%, up from 15.9% in the prior year period. This, along with elevated options industry volume, led to the MIAX average daily volume of 11.1 million contracts for the fourth quarter, representing a 46% increase year-over-year.

Our Equities segment net revenue reached $6 million, up from $2 million in the prior year period, primarily due to higher net transaction fees from improved pricing. Equities capture was net neutral for the quarter as compared to historically inverted.

Our Futures segment net revenue was $5 million compared to $6 million in the prior year period due to lower listings revenues and decreased transaction fees. The decrease in transaction fees was caused by timing of participant migrations to MIAX Futures Onyx and lower commodity market volatility, partially offset by the elimination of expenses related to CME Globex.

In the International segment, net revenue was $6 million compared to $1 million in the prior year period, with the increase primarily due to the acquisition of TISE in June 2025.

Turning to our balance sheet. Our cash balance at year-end was $434 million, and we had less than $2 million in outstanding debt. Also as of December 31, 2025, we have classified the assets and liabilities of MIAXdx as held for sale.

Now on to our 2026 guidance. We expect full year 2026 adjusted operating expenses in a range between $265 million and $275 million, representing a 13% to 18% increase over full year 2025 or a 6% to 10% increase from our annualized Q4 2025. This accounts for increased headcount and technology costs to support our new product launches, higher public company expenses as well as increased company branding and advertising. We expect full year share-based compensation expense in a range between $27 million and $30 million. The year-over-year decrease is due to IPO-related accelerations, partially offset by new 2026 grants.

We expect full year CapEx, which includes capitalization of internally developed software, in a range between $40 million and $45 million and depreciation and amortization in a range between $33 million and $38 million.

On our tax rate, we expect to release our deferred tax valuation allowance during 2026, reflecting our ability to realize the benefit of our NOLs. Following that release, we expect our effective tax rate on adjusted earnings to be in the range between 27% and 29%.

In summary, we delivered outstanding financial results in 2025 while making strategic investments in our technology platforms and expanding our product offerings. That, along with our strong balance sheet, positions us well for continued growth in 2026.

I will now turn it back over to Tom.

Thanks, Lance. As you can see, we are very excited about our recent progress and look forward to another productive year in 2026. We'll keep doing the things we said we'd do. We'll continue to leverage the strategic pillars you've heard me talk about before: our technology, our regulatory licenses, broad product range and relationships with our customers. These are real competitive advantages that will help us drive long-term shareholder value over time.

Thank you again for joining us on today's call. We're now ready to begin Q&A. As a reminder, Doug and Shelly are here with Lance and me, so let's begin. Operator?

[Operator Instructions]. Our first question comes from Patrick Moley with Piper Sandler.

Thomas, maybe just starting off high level. You talked a little bit about it in your prepared remarks, but if you could just maybe give an update on your outlook for options volumes this year and how MIAX is positioned?

And then on the market share side of things, you reported record market share in the fourth quarter. That's come down a little bit in 1Q. So just also wondering if you could talk through some of the dynamics there and how you expect market share to play out throughout the rest of the year?

Thanks, Patrick. Really appreciate the question. I think that the market dynamics, as we are in Q1 here 2026, are going to continue to provide volatility. Issues surrounding the tariff, issues surrounding the midterms coming up and issues surrounding some of the tension in global politics, particularly the Middle East, I think, are going to lead to continued volatility.

I also think that the presence of the short-dated expirations, which just came on the market in January are going to continue to fuel strong growth in our U.S. options marketplace. So I think you're not going to see, I believe, the kind of growth we had almost 30% growth in volumes in 2025, but I think you're going to see continued growth throughout the balance of 2026. Shelly, any comment on that from your perspective real quickly?

Yes, Tom, thank you. And Patrick, thank you for the question. I agree that the growth in the industry will continue. The short-dated options in those 9 stocks, we're only a few weeks into that program. It's been successful so far, and there's certainly a chance that could expand going forward.

With regards to our market share. October was an outlier in volume. While we were 18.2% for the quarter, if you look at the last 3 calendar months, November, December and January, it's been very consistent. We look at market share relative to capture, where our fees evolve according to needs within the market, but we're comfortable with the market share as it is.

Okay. Great. And then as a follow-up, on the Bloomberg derivative products that you're rolling out in 2Q, you said that you were planning to start with retail size contracts and putting those on our retail platforms. Could you talk about just your conversations with those platforms, and maybe how many platforms you plan to launch on initially and how that will scale over time?

I'm going to turn that over to you, Shelly.

Thank you, Tom. Another great question, Patrick. I'm not going to talk so much about how many firms. There's a lot of interest in the retail firms in these smaller products. A lot of the growth in the futures markets over the last 2 years have come from these smaller retail-sized products. We're going to start with what we call our T&E contract size for both the Bloomberg 100 and the Bloomberg 500 Index, very focused in the retail market, working closely with the liquidity providers as well as the retail firms to come up with a model that works for the retail. And they're very excited about having competition in this space. It's traditionally been a market held by one competitor, and they're looking for competition in price and bringing our technology to that marketplace.

The next question is from Michael Cyprys with Morgan Stanley.

Maybe just continuing with the B100 and the B500 Index options that you're looking to bring to the marketplace here in the coming months. Can you just maybe elaborate a bit how you're thinking about how you might make this model work for retail? I think maybe one of the challenges -- but maybe not a challenge from a volume standpoint. But just one of the, I guess, frictions maybe has been commissions on some of these products on the index side. Is there -- what's the scope for commission free? How are you thinking about economics between what you might capture versus what the brokers might capture?

Michael, great question. And a centerpiece of our strategy for launching the B100 and the B500, particularly the minis or the Tinis is to get retail engagement. And if you look at someone like a Robinhood or someone like a Webull or a Ninja, they're all about cost of execution. And if you can get cost of execution for them down to something similar to what they enjoy in the options marketplace, where essentially their customers trade for free, I think you have a real ability to get quick adoption of a competitor to the S&P franchise.

So I think we think about doing things that have not had to happen before, whether it's on CME or Cboe because they had basically a monopoly franchise on the S&P. So what we're going to try and do is come up with some alternative pricing mechanisms that will allow for these firms to enjoy extremely low cost of execution and then also provide opportunities with respect to strategies to engage with the market makers.

Maybe 30 seconds for you, Shelly, on that side of it.

Yes. It's about getting retail engagement in the retail -- as Tom said, retail has gotten used to trading virtually for free in the equities and options space. Without giving away my full pricing strategy, we believe we can work with the retail firms and engage the retail customer. And what I believe we'll see is growth across the industry, just like free trading and options spurred growth from 18 million contracts a day pre-2020 to 60 million contracts-plus in the most recent year. So we think the whole pie will grow, and we believe we have a very competitive product, and the fees will be very appealing for the retail firms.

Thank you, Shelly.

And then could you maybe elaborate on what the suite might look like initially versus over time? Would you expect to launch with the 0DTE complex initially or roll into that, what that might look like? And then can you talk a little bit about the go-to-market strategy? How you're thinking about building the brand, the awareness, the investor education? What sort of resources are you putting up against that?

Great question, Michael. So to be clear, we're starting to launch with the futures first. Futures will launch in the second quarter. The options will follow sometime later based on the take-up in the futures. You need a solid futures market for hedging purposes to support those options. Both the futures and the options will have a similar pricing strategy. Once we do list the options, we certainly plan to list short-dated options. Those have been extremely successful in other index products.

I believe it's over 60% of the volume in SPX is short-dated options. So we certainly are planning to go down that path. You will see a very similar product suite across all products for both the Bloomberg 100 and the Bloomberg 500 compared to what's out there today with one of the key differentiators being all of our products will clear at the Options Clearing Corporation.

And then just on the investor education?

In the investor education, we're going to work extremely closely with Bloomberg and also with the retail firms who are known for their great educational tools that they use, whether it's an NinjaTrader, whether it's a Schwab or whether it's a Robinhood. So we're going to work closely with the retail firms and then also with Bloomberg, who is very much aligned with us in this regard.

Yes. It's a combination of getting investors to understand that you get very similar exposure with these products. What we believe with Bloomberg to be a better constructed product based on the deterministic algorithmic methodology for our stocks that will be added, deleted from the indexes without a committee bias. Add that to the fact that, again, we're going to be very fee-friendly, but we're going to work very closely with the retail firms to provide co-education. And then Bloomberg, of course, is involved.

The next question is from Ken Worthington with JPMorgan.

I wanted to dig more into the Monday and Wednesday options. Maybe what are you seeing in terms of activity initially? And you and your peers sort of launched at the same time, how is market share trending between you and the others? And are you seeing the technology advantage sort of accrue to your benefit in terms of share?

Thank you, Ken. Great question. I'll start and maybe I'll talk to Shelly, who runs this business and turn to you about some of the volumes.

But it's early right now, Ken. It only got listed on January 22, but we think the volumes in these names will come to us, but it's a bit early to tell. I think it really grows the pie overall for the options marketplace. And I'm very comfortable that we're going to get our normal cut of what we've been seeing in these 3 symbols. But Shelly, do you want to comment on what you're seeing so far?

Sure. And thanks for the question, Ken. It's been very successful to date. Of course, we've only been through a few weeks of expirations, today being one of them. We're seeing very large volume in each of these 9 stocks on these Monday and Wednesday expirations, similar to what we've seen on the Fridays historically. We think this is very positive for the industry. It's still too early to say how big of an impact it will have on overall volume.

I think it is worth pointing out that in these 9 stocks, our market share over the last several months leading into this program has been just over 20% compared to 17.6% recent volume overall market. So we do outperform in these classes before the Mondays and Wednesdays were introduced. We're seeing similar market share in those front weeklies. Again, it goes back to the technology that Doug's team has built and the risk protections. So we do outperform in those stacks, and we believe that this will help us outperform overall.

Okay. Great. Maybe as a follow-up, when do we start to see the Tuesday and the Thursdays come online? And what do you need to see out of the -- I know it's just launched and I'm already asking that, right? What a j***. But given -- once you get all 5 days, it's different dynamics. So what do you think you need to see in the Mondays and Wednesdays to start to realistically consider asking for the Tuesdays and the Thursdays?

Reasonable question, Ken. There's a couple of considerations here. One of the things we're doing is we're trying to avoid earnings days for these stocks. So we're going to be careful not to saturate the calendar too much. I would expect that going forward, expansion of the program would be adding additional stocks to the Monday and Wednesday program long before we had Tuesdays and Thursdays to these 9 classes.

I think that having Monday, Wednesday and Friday gives us good coverage across the week. They only are listed out 2 weeks. So there's a limited focus here. But I believe the pilot -- or it's not a pilot program, but the program will expand across classes far before it adds additional days. If you remember back when Mondays and Wednesdays were added to the ETFs, primarily SPY, QQQ and IWM, they were Monday, Wednesday, Friday for quite a long period of time. But I think investor demand would be better answered by expanding the program to additional classes rather than adding the Tuesdays and Thursdays.

The next question is from Jeff Schmitt with William Blair.

You had guided to adjusted operating expense growth of 13% to 18% for '26. What does that assume for top line growth? Or I guess, how should we think about the sensitivity of that number to volumes?

Good question. Yes, we don't -- it's Lance here, Jeff. Look, it's very hard to predict total top line revenue given that 60% of the revenue is transaction-based, so it's really based on market volumes. I will say there's certainly some sensitivity in those expenses, there is some discretionary investments that if volumes don't pan out the way we anticipate them to that we could peel that back. But nevertheless, we do have some planned investments in futures as well as some additional new product launches that's baked into that number.

Okay. And then I may have missed it, but do you plan on -- still plan on launching crypto and event-based products later this year? Or where do you stand on those plans?

So as you know, we announced that we recently entered into a transaction with Susquehanna and Robinhood, whereby we sold our stake in MIAXdx. So we now have accelerated access to the prediction markets. As it relates to the crypto markets, we're really focused on expanding our market share in the mature but robust options business and then executing the strategy that I've laid out for our new futures products, transforming MIAX Futures from a one-product agricultural exchange to a full-service financial futures exchange that not only caters to the institutional firms, but also the retail. So if an opportunity comes along that we think makes sense in the crypto area, we'll look at it, but it's not our primary focus right now. We have been in discussions with a number of folks, but it's not something I'm focused right now in 2026.

The next question is from Patrick O'Shaughnessy with Raymond James.

So you had some market makers participate in your secondary offering in December. Is there any evidence that they've shifted their market share at all since selling some of their shares?

Great question. So we see no evidence of that whatsoever. I think that you should look at us as similar to our exchange peers. Our equity rights program that allowed the strategic members to get their position in our company through their warrants and possibly the exercise of those warrants helped grow the business in the early years. But what's really keeping these market participants trading every day is the technology that Doug built with the low latency, high throughput, extreme determinism and also the risk protections that Shelly and Doug worked on together. So to the extent that a member firm was to sell some of their shares in that secondary offering, we've seen no impact whatsoever in our market share or their use of our 4 options and equities exchanges.

Very helpful. And then I appreciate that you're not giving a quantitative outlook for access fees and market data revenue in 2026. But can you kind of broadly speak to your expectations for how those revenue streams might trend?

Access fees and market data, Patrick?

Correct. How they would trend.

Yes. Look, I think in terms of access fees, we did put in some fee increases in January of this year. We think that will add a couple of percentage points to some fee increases. And then we continue to see member adoption taking additional lines in that nature. So continued growth in that area. In terms of market data, we have launched some new products, particularly in the last -- actually in the first quarter that we think will continue to grow our market data, not just again, the share from the tape plans, which is mostly driven by market share of trades loosely, but also from our own proprietary market data offerings.

Shelly, if you want to talk for 10 seconds just on the new market data offering we introduced?

I don't know if I can only talk for 10 seconds. Some of the market data offerings are historical data and reports. There are several new reports out that are high demand. There's some both historical data available and ongoing reports. So it's been very good for us. We have several new reports in the pipeline. And it's again, high demand data that's very valuable in the industry. So we're mining our data and monetizing that.

The next question is from Chris Brendler with Rosenblatt Securities.

Great job. I wanted to ask a follow-up actually on the fee increases that are proposed last week. Just some of the strategy and the thought process around the different categories here and whether or not you would have any impact on market share within your larger constituents versus your smaller customers? What's sort of the goal here? And how much elasticity do you think there is with some of these fee changes?

Thanks, Chris. Shelly, do you want to take that?

Sure. The primary fee change that you've seen going into March, we didn't change transaction fees. We did -- we had a small transaction fee change in January. The primary change you're seeing for March is we waived non-transaction fees for members on the Sapphire trading floor. And those members that have gone out to memorialize the fact that the waiver period ends the end of this month, this Friday, and fees will start to be charged on March 1. So that's the primary change for March.

Yes. Our practice, Chris, has historically been that when we launch a new venue, we have no non-transaction fees for a period of time or much lower to try and accommodate firms as they connect and volumes grow. So that was really just an expiration of what I thought was quite a generous moratorium on fees that started in September and it's going all the way through to the end of this month.

That's fantastic color. Follow-up question is in a different area, and I'm not sure if this is relevant or not yet, but just thinking about how fast markets are developing and this push towards tokenized equities, does tokenization have any implications for MIAX today and possibly in the future?

Yes. Great question, Chris. We currently have no plans with respect to tokenization, but we are evaluating potential opportunities from partners. As you know, obviously, we operate several markets across securities and futures products and internationally. So when the right opportunity comes by, I think we're well positioned to take advantage of this.

But I want to be very clear, it's not our primary focus right now. But as a market disruptor from the day we launched our first exchange in 2012, I fully support market innovation. But for right now, it's not part of our current plan. And I also want to see what shakes out in some of the filings that have been made by our competition with respect to some types of tokenized equity securities. Shelly, any last comments in a minute or 2?

Yes. I also understand that up to this point, the tokenization is focused on clearing of equities. Equities is a very small piece of our business right now. The majority of our business is options. There hasn't been talk about tokenization and options. And again, the talk of tokenization is primarily focused on post-trade clearing, not of actual trading. I'm not sure the technology is near ready for trading of tokenized securities on the chain.

Yes, our reliance is on OCC in this regard. So that's kind of our view on tokenization right now, Chris.

That's fantastic color. Enough growth in the core business, you don't need to worry about it right now.

Yes. Thanks very much. Thanks for the support.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Tom Gallagher for closing remarks.

Thank you very much, Debbie. I just want to thank those of you that listened in today to our presentation. And I can't tell you how excited we are to bring to the marketplace our new financial futures products. From day 1 in working with Doug and our team, we never bring a product to market until prime time and everybody is connected. And we're really excited about the opportunity to demonstrate our capabilities as we move from options to cash equities into a full suite of financial futures products and primarily also taking advantage of the risk protections and the pricing strategies that Shelly, Doug and myself have developed.

So really appreciate the support. It's been an exciting 6 months since the IPO. It's hard to believe it's been 6 months. But stay tuned for an exciting year in 2026, as we bring our futures products to market. So thank you very much, and have a great evening.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Thank you for standing by. My name is Gary, and I will be your conference operator today. At this time, I would like to welcome everyone to the Miami International Holdings, Inc. Third Quarter Earnings Call. [Operator Instructions] Please note this event is being recorded.

It is now my pleasure to turn the call over to Andy Nybo, Chief Communications Officer. You may begin your conference.

Good afternoon, and thank you all for joining us today for MIAX's third quarter earnings conference call and our first earnings call as a public company. With us today are your host, Thomas P. Gallagher, Chairman and Chief Executive Officer; and Lance Emmons, Chief Financial Officer. We also have Douglas Schafer, Chief Information Officer; and Shelly Brown, Chief Strategy Officer on the call, who will participate in the Q&A session today.

Everyone should have access to our earnings announcement, which was released prior to this call. We have also published a slide presentation to accompany the press release. In addition, this call is being webcast and an archived version will be available shortly after the call ends. All of these materials can be found on the Investor Relations section of our website at ir.miaxglobal.com.

We want to remind everyone that part of our discussion today includes forward-looking statements, which are based on the expectations, estimates and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them.

We refer all of you to our press releases and filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results, financial condition of MIAX. We undertake no obligation to update any forward-looking statements made in this announcement to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law.

During the call today, we will be referring to non-GAAP measures as defined and reconciled in our earnings materials.

With that, I'd now like to turn the call over to Tom. Please go ahead, Tom.

Thanks, Andy, and welcome to our third quarter 2025 earnings call. We're excited to have you join us for our first call as a public company and appreciate your interest in MIAX. Today, I will provide high-level third quarter results and a brief overview of MIAX, followed by Lance walking through our third quarter 2025 financial highlights, and then we'll open it up to your questions.

For the third quarter, MIAX delivered strong results, growing net revenues 57% year-over-year to a record $109.5 million. These results were primarily driven by elevated industry options volumes and increased MIAX market share. Our market share in multi-listed options grew to a record 17.2% in the third quarter, up 24% from the prior year period.

Furthermore, our successful IPO in August of this year represented a significant milestone that increased our access to capital markets and further enhanced our brand awareness. The proceeds from the offering allowed us to retire $140 million of debt and build a strong cash position.

I'll now take a few minutes to walk through our value proposition and the factors supporting our long-term growth. MIAX is a technology-driven leader in building and operating regulated financial markets across multiple asset classes. Since our inception, we have built and launched 4 Options exchanges and 1 Equities exchange. We've also grown strategically through acquisitions. And since 2020, we've acquired 2 futures exchanges and clearing houses, 2 international exchanges and a futures commission merchant. This broad portfolio of licenses supports our growth initiatives and allows us to offer new products designed to meet the needs of a multitude of investor segments, both domestically and internationally.

Our vision remains to cater to the needs of our customers and trading community and serve as the exchange of choice by delivering best-in-class technology, customer support, risk protections and reliability. A critical differentiator for MIAX is our commitment and focus on technology, which is the lifeblood of an exchange. Importantly, MIAX differentiates its technology by providing low latency, high throughput and industry-leading determinism, which serves as the foundation of our technology-first customer-centric approach to building innovative marketplaces.

When we built our technology infrastructure, I'd like to say we built the church for Easter Sunday. Even when volume and quote traffic spikes in periods of extreme volatility such as the 2020 COVID outbreak or what was experienced in April of this year, we were ready and our technology performed without issue. In fact, these high volatility events reinforce our reputation for providing best-in-class technology. We understand the importance of continuing to invest in order to provide our members with high-performance technology to support their activity in today's rapidly evolving derivatives markets.

Broadly, the options market is experiencing significant growth. Multi-listed options volumes are surging to record levels, with industry third quarter 2025 average daily volume of 56 million contracts, up 26% year-over-year.

September industry ADV reached 61 million contracts while October ADV reached 67 million contracts. This growth has been driven by periods of elevated volatility in certain market sectors as well as continued strong demand from a range of market participants, especially for shorter exploration options products. While many industries and businesses are volatility adverse. For MIAX, volatility creates an increased need for risk management tools.

As we look ahead, we continue to expect elevated volatility due to geopolitical tensions, uncertain trade policy and an evolving interest rate policy. Additionally, structural tailwinds, including increased retail participation which has begun extending into the futures markets and growing international investor demand are creating secular growth opportunities as we launch new futures products.

Just as retail trading growth has fueled record options volume, expanding retail participation in futures represents another significant opportunity alongside our comprehensive product expansion pipeline. Our focus remains on offering technology designed to support the needs of our market makers by providing high throughput, low latency and highly deterministic technology with industry-leading risk protections, we allow our market makers to have greater confidence in their ability to properly manage their quotes and risk during volatile markets, offering those market makers the ability to quote more aggressively.

For the retail investor, this means tighter and deeper markets, not just during normal trading, but also during times of volatility when liquidity is most in demand. In options, we see additional growth potential from a number of areas, including short-dated expirations for the most actively traded stocks, options listings on new IPOs and the use of options in structured product listings, all of which support higher industry volumes.

Furthermore, we launched our new MIAX Sapphire trading floor in Miami in September. This state-of-the-art facility, which we built to address customer demand allows us to capture the additional volume opportunity in multi-listed options while bringing greater efficiencies to floor brokers and market makers.

Miami has emerged as a major global financial center and is quickly becoming Wall Street South, and we're proud to have expanded our presence in our namesake City. We remain excited about the substantial growth opportunities in options as an asset class, driven by continued elevated global volatility issues that support the ongoing use of options for dynamic risk management.

Moving to our growth initiatives. We continue to cultivate collaborative and strategic relationships across the industry that we are leveraging to introduce new and innovative proprietary products. In our Futures business, the launch of the new MIAX Futures Onyx trading platform at the end of June brings the MIAX technology advantage to this new asset class and offers MIAX the ability to list a range of new futures products. We plan to list futures on the Bloomberg 500 Index in collaboration with Bloomberg, starting in Q1 2026 with futures on the Bloomberg 100 Index to follow.

Importantly, the new financial products will trade in a data center located in close proximity to U.S. equity markets, allowing our market participants to reduce potential latency in their trading strategies. Additionally, the Bloomberg 500 Index and Bloomberg 100 Index Futures products will clear at the Options Clearing Corporation, which is the central clearinghouse for all U.S. listed options. This provides our members with improved margin efficiencies in their equity derivative trading strategies. We believe these Bloomberg Index futures will provide the foundation for a broad portfolio of equity index derivatives we plan to offer on MIAX futures.

Now moving to our Equities business. Our current focus is to maximize revenue by continuing to improve our capture rate and profitability. We continue to believe our presence in U.S. equity markets positions us to leverage a range of opportunities, including market data and adjacent assets. With the acquisition of the International Stock Exchange, or TISE, in Guernsey, we have expanded our ability to offer listing services to global debt issuers beyond what we currently provide through the Bermuda Stock Exchange.

The TISE acquisition provides us with access to the European and U.K. markets and a valuable license in a respected regulatory jurisdiction. This helps accelerate our growth strategy by utilizing both BSX's and TISE's numerous international recognition and expertise in their respective products and markets.

Now I'll turn over the call to Lance to provide details on our third quarter financial performance.

Thanks, Tom, and good afternoon. As Tom mentioned, we had a strong quarter across our business. I will briefly discuss MIAX's revenue model before I jump into the financial details. We generate revenue from transaction and nontransaction fees. Our key performance drivers for transaction fees include industry trading volumes, market share and revenue per contract or share, which measures the average revenue we earn per contracts or shares traded. Beginning this month, we will publish RPC and capture rates on a 3-month rolling average basis on our website, in conjunction with our monthly volume press release.

In terms of non-transaction fees, we generate revenue from access fees, which we charge to customers to connect to our exchanges. From market data, which we earned through direct subscriptions and through our participation in the U.S. pay plans and from listing fees in our International segment.

For the third quarter, on a consolidated basis, total net revenue grew 57% year-over-year to $109 million. This was driven primarily by strong performance in our Options business. The third quarter also includes a full quarter contribution from the June 2025 acquisition of TISE, which contributed $4.7 million in revenue.

Our adjusted EBITDA increased 157% year-over-year to $48 million for the quarter with an adjusted EBITDA margin of 44%, a significant improvement from the 27% margin in the prior year period. This performance demonstrates our ability to scale efficiently while also continuing to invest in our growth initiatives. Adjusted earnings significantly increased to $40 million compared to $8 million in the prior year period.

Our adjusted operating expenses in the third quarter were $61.6 million compared to $51.1 million in the prior year period. The increase was primarily due to higher compensation benefits driven by planned increases in headcount to support our growth initiatives as well as the acquisition of TISE. Also contributing to the increase were investments in IT and communications costs due to the build-out of the MIAX Sapphire Exchange and the new technology platforms we rolled out for MIAX Futures and BSX.

Moving to performance by segment. Our Options segment delivered strong results with net revenue of $94.5 million, up 55% year-over-year. Market share was 17.2%, up from 13.9% in the prior year period. This, along with elevated options industry volume led to MIAX average daily volume of 9.6 million contracts for the third quarter, representing a 56% increase year-over-year. Although we are still early in the fourth quarter, the momentum carried into October with our options ADV reaching 13.1 million contracts and our market share reaching 19.4%.

Our Equities segment net revenue reached $4.4 million, up from $2.2 million in the prior year period, primarily due to improved capture rate as we continue to focus on maximizing total net revenues in this segment.

Our Futures segment net revenue was $4.8 million compared to $5.3 million in the prior year period. Hard Red Spring Wheat revenues decreased during the third quarter as trading volumes were negatively impacted by participant migrations to our new MIAX Futures Onyx platform, as well as lower commodity market volatility.

Our International segment net revenue was $5.5 million compared to $0.8 million in the prior year period, which was due to the acquisition of TISE in June of this year. The IPO enhanced our balance sheet. With a quarter end cash balance reaching $401 million and outstanding debt reduces $6.5 million following the payoff of our senior secured term loan. Additionally, our outstanding foot liabilities were terminated upon the IPO, further improving our balance sheet.

In summary, we delivered strong financial results while investing in our technology platforms and expanding our product offerings. We believe that MIAX is well positioned to capitalize on the growing demand for innovative exchange solutions.

With that, I will turn it back over to Tom.

Thanks, Lance. We believe MIAX's differentiated technology, exceptional customer experience, track record of building innovative marketplaces and disciplined growth strategy positions us to deliver long-term shareholder value.

To sum up, we now have in place a solid foundation to enable continued growth as the global technology-driven multi-asset class market leader that is anchored by 4 key pillars that I'd like to highlight next. First, we have now completed all of our purpose-built scalable technology platforms, which are differentiated by throughput, latency determinism and reliability. Second, we have a broad range of regulatory licenses, allowing us to operate across multiple asset classes and in multiple jurisdictions around the world.

Third, we have secured a broad range of products that are diverse and expanding with multiple opportunities to launch new products across our exchanges. Fourth and most importantly, we have long-standing relationships with customers that we intend to leverage as we move into new asset classes together. These 4 pillars are technology, regulatory licenses, broad product range and relationships with our customers are real competitive advantages that we believe will continue to drive our performance.

I'll now turn over the call back to Andy.

Thank you, Tom. We will now open the call up for questions. Operator, first question please.

[Operator Instructions] Our first question today comes from Michael Cyprys with Morgan Stanley.

Welcome to being a public company. Congratulations on your first quarter out of the gate here. I was just hoping to ask more of a bigger picture question. You mentioned just a moment ago around a lot of different licenses, aspirations for new products, asset classes, geographies. I was hoping you could unpack that a little bit more elaborate on your ambitions there. I think there may be some aspirations for crypto event contracts. So maybe you could help flesh out how you're thinking about new product opportunities, asset classes, geographies, you mentioned licenses. What are your ambitions and aspirations as you look out over the next 3 to 5 years? How might MIAX look compared to the MIAX today?

Thanks, Michael, for that question. I think given where we are today, Michael, our primary focus is on the products we've already announced. We've got so many good things on our plate now in our primary businesses. That's going to remain my near-term focus in terms of opportunities.

Having said that, if and when an opportunity presents itself that is compelling. Based on what we've built over the last 3 or 4 years, we have the technology infrastructure. We have the licenses and the various tools, so we could jump in, in areas such as economic or political or sports-related events-based contracts. But the near-term focus for us with the licenses that we have in both options and futures, is to exploit the opportunities that we've secured, including the opportunities as a result of the recent licensing of the B500 and the B100 from Bloomberg.

The next question is from Ken Worthington with JPMorgan.

I'll echo my congratulations. On the multi-listed market share, you rose to a new record during the quarter. We look at October. And as you mentioned, it had another step up again this past month. Can you talk about the launch of the Sapphire trading floor and help us better understand the dynamics that have driven the acceleration in market share gains that we've been seeing over the last quarter plus?

Thanks, Ken, and I appreciate the kind words. I'm going to turn this one over to Shelly Brown. Shelly?

Thank you, Ken, and thank you, Tom. So Options continue to be our most mature market segment, but we believe there's still room for additional growth. There are strong secular tailwinds in the industry, growing industry ADV, new optionable classes resulting from a robust IPO market and innovative products like short-dated equity options.

That being said, we are very excited about the new Sapphire trading floor volume, but is a fractional portion of our recent market share growth. The Sapphire trading floor captured about 6.5% of the industry trading floor volume in October, our first full month of trading or about 0.35% of total multi-list volume.

We are 1 of 6 trading floors, so we understand and believe there's lots of room to grow in that segment. We are not managing our current market conditions for the short term, but for the long term. We believe that there's going to be additional flow and there's plenty of room to grow. We're very happy with the trend for our market share.

The next question is from Kyle Voigt with KBW.

Maybe just a question on single stock options. There have been some exchange filings in the past couple of quarters to offer additional expiries weekly for larger cap single stocks, I think, paving the way towards an eventual single-stock 0DTE type of launch. Can you just remind us what you see as the pathway to being able to offer single stock options with everyday expirations? And from a timing perspective, can you just kind of lay out a pathway in terms of how far away you think that ultimately will be?

Yes. Thank you very much for that question, Kyle. It's certainly an area that we're well positioned for. So I'm going to turn it over to Shelly Brown, and maybe, Shelly, you could talk about the response here.

Yes. Thank you for the question. With regards to 0DTE options, the timing for that depends on regulatory approvals, there's already an initiative with the commission, to list short-dated options initially just from Mondays -- ending Mondays and Wednesdays to the existing Fridays. Once these multi-list products are approved, we will certainly list them and all 4 of our options exchanges, meaning that they are multi-list options.

Our exchange technology already supports rapid product innovation and launches such as this, and we're ready to support an expansion of the multi-listed options, 0DTEs and single stock options. Our system speed, throughput, and risk protections allow liquidity providers to offer tighter and deeper markets for these products. So we think we'll be able to gather an outsized market share. We do believe that the 0DTE actions in single stocks represent a significant growth opportunity across the industry, especially in the retail trading segment. But timing really depends on regulatory approval and market demand.

The next question is from Jeff Schmitt with William Blair.

A question about your October market share. It jumped quite a bit to 19.4%. Growth was obviously really strong. And just curious if you can maybe talk about what drove that sharp increase? And did you see a rise in complex trades at all during the month?

Well, Jeff, thanks for that question. At the risk of overworking Shelly here. Shelly, do you want to just talk about the October market share gains? Thank you very much.

The October gains were across the board. As you know, we have 4 options exchanges. We saw growth in all segments across those exchanges. There has been growth -- continued growth in complex orders. That's a focus for us due to capture, and we continue to be the second largest exchange in complex orders and continue to grow that segment. We've seen growth across all the different segments, including the price improvement auctions. I believe it comes back to the use of our technology.

[Operator Instructions] The next question is from Chris Brendler with Rosenblatt.

Just wanted to drill down a second on seeing such strong market share gains and revenue per contract has been trending in an upward direction, ticked down a little bit this quarter, which I imagine is mixed. But is there any opportunity for you to lean into your success? I think like the market tailwinds are behind you and maybe extract a little more out of your revenue per contract in the options business? Or is it just naturally falling out of other successes you're having in the areas? I love to see if you get any more detail there?

I really appreciate the question, Chris. I'm going to ask Lance to talk about the revenue per contract to the extent that he can. But I will say that as our market participants need to provide greater and greater liquidity to their retail customers, the investments we've made over the last 3 or 4 years in technology in terms of the latency, the throughput and the determinism, we really feel that we've differentiated ourselves and we're a partner that can help firms provide this liquidity to their retail customers. And because we can provide this assistance through the technology infrastructure, we're getting more and more volumes.

Now in terms of your second part of your question. Lance?

Yes, Chris. So yes, there's -- you know that there are some mix shifts between the second quarter and the third quarter. We haven't done any major fee changes other than we did do a change to the regulatory fee, a temporary reduction from September to December, which had a slight impact for the quarter. I'll also note that we continue to focus on, again, on maximizing revenue. So if there is business out there that is positive to us, even if it's a lower capture rate as long as it's positive, we will focus on it.

And just also just to highlight again that beginning with today's monthly volume release, we are putting out the capture rates on a trailing basis. So I'll provide some additional transparency there.

The next question is from Patrick O'Shaughnessy with Raymond James.

As we are seeing more participation in the options space by retail investors, do you have a sense for how your market share might differ between retail versus institutional customers?

Patrick, thank you very much for the question. Shelly, do you want to address that in terms of the retail versus institutional mix?

Certainly. Thank you, and I appreciate the question, Patrick. The retail versus institutional mix, obviously, we can't drive the demand from the end user. We're here to respond to that demand. Our focus has always been on giving the market makers the ability to provide liquidity, provide deeper markets, tighter markets and the tighter markets are what draw that -- those orders from both the institutional market and the retail market to our exchange.

So it's all about the customer experience. We continue to roll out new technology and improve our customer service to continue that offering the premium product to those customers.

Our final question today is a follow-up from Michael Cyprys with Morgan Stanley.

Just wanted to ask about the expense outlook. I was hoping maybe you could unpack how you anticipate the pace of expense growth to trend from here, how that might evolve or flex with volumes and revenues? And then if you could maybe just elaborate on the stock-based comp in the quarter, I think it looked like maybe $29 million was more recurring. Maybe you can elaborate on that, how much we can expect on a go-forward basis? And any other broadly notables to speak of in the quarter?

Yes. Thank you, Michael. Lance?

Yes. I can cover that, Michael. So in terms of total expenses, I think as you look at the third quarter, we did -- first quarter as a public company, so a little uplift in terms of like D&O and board fees and things like that. So maybe a little bit more in the fourth quarter as you kind of get a full quarter effect into that.

I think that what you've seen also in the quarter is a pretty high incremental margin as we've sort of really completed the build-out, as sort of mentioned, right, we finished the build-out of Sapphire, both the electronic and the floor. We finished the rollout of the Onyx Futures trading platform earlier sort of middle of this year. So we would expect to see sort of less expense growth going forward. But look, we're still growing the top line pretty heavily. So I think that should be a consideration as well.

In terms of share-based comp, yes, certainly a lot of noise in the quarter, a lot of uneven expenses. There was a lot of RSAs that vested at the time of the IPO and some additionals that kind of accelerate or vest over the next 180 days following the -- or up until the expiration of the lockup.

But on Slide 23 of our deck, we provided sort of a breakout of the share-based comp, and that includes sort of the restricted stock awards, the options and some -- a little bit of warrant expense and I would probably consider the option expense to be sort of more recurring. Now that may change form. But in terms of the dollar amount, I would consider that more a recurring type of expense only because, as I mentioned, the RSAs as a private company, we're a little lumpy, and a lot of them vested either at the time of the IPO or over the period of the lockup. So hopefully, that gives you some good color there.

The next question is from Patrick Moley with Piper Sandler.

I just had a broad one on options market growth. We've seen very strong strength over the last few years. So just wondering how you guys are thinking about the setup from here, and I apologize if this was addressed earlier, we jug on a few calls, but just the outlook. And then heading into next year, what are one of -- some of the major themes that you're kind of focused on or expect to play out in options?

Patrick, thank you very much for the question. I'll start it, and then I'll ask Shelly to add to it. But -- we -- when you look historically at what's happened in our industry, back in 2012, we were doing 15 million contracts a day. And then we hit 54 million contracts a day last year, only to see ourselves in October at 67 million contracts today. I feel that the industry tailwinds, particularly the growing retail base of market participants bodes very well for continued growth in our Options segment.

When you couple that with some of the new filings from some of our competitors with respect to short-dated options, I see continued growth opportunities. Yes, this is our more mature business segment, but we still think there's robust growth because of the industry tailwinds, the infrastructure that we've invested in and the very recent launch of the MIAX Sapphire trading floor. Maybe Shelly, you could fill in a little more details as we talk about the opportunities for our more mature business.

Thank you, Tom, and thank you for the question, Patrick. The growth in retail, I believe, will continue. The experience they have by the offerings from the retail firms, the ability to trade basically for free will fuel further growth with the market rising, I think there's more exuberance in the marketplace. There's more ability for people to get involved in the marketplace and the short-dated options bring prices -- options that are priced lower and can -- the retail can reach easier. So we think that the retail experience will continue to expand going forward.

This concludes our question-and-answer session. I would like to turn the conference back over to Tom Gallagher for any closing remarks.

Thank you very much. Obviously, we're very excited to have just released our third quarter earnings, and we're very grateful for the support that our member-based community of our members in options, equities and now futures. We're very excited about the opportunities going forward. And we really feel good about having a fortress-type balance sheet now as a result of the IPO. So thank you for your time today, and we're looking forward to future calls as we move forward as a public company. Thank you, and have a nice evening.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.