Cboe Global Markets, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the CBOE Global Markets first quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Ken Hill, Head of Investor Relations. Please go ahead.

Good morning. Thank you for joining us for our first quarter earnings conference call. On the call today, Craig Donahue, our CEO, will discuss our performance for the quarter and provide an update on our strategic initiatives. Scott Johnston, our Chief Operating Officer, will provide an update on the additional strategic realignment actions announced today. And Jill Greveno, our Chief Financial Officer, will provide an overview of our financial results for the quarter as well as discuss our 2026 financial outlook. Following their comments, we will open the call to Q&A. Also joining us for Q&A will be Prashant Bhatia, our head of enterprise strategy and corporate development, and Rob Hawking, our global head of derivatives. I would like to point out that this presentation will include the use of slides. We will be showing the slides and providing commentary on each. A downloadable copy of the slide presentation is available on the investor relations portion of our website. During our remarks, we'll make some forward-looking statements, which represent current judgment on what the future may hold. And while we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions, risks, and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements. whether as a result of new information, future events, or otherwise after this conference call. During the call this morning, we'll be referring to non-GAAP measures as identified and reconciled in our earnings materials.

Now, I'd like to turn the call over to Craig. Good morning, and thank you for joining us to review our first quarter results. SIBO delivered another quarter of record net revenue and adjusted earnings powered by continued strength across all of our core businesses. The results underscore the strong foundation we have in place as we take the next steps in advancing our strategy. I will provide some high-level comments before turning the call over to Scott Johnston to talk through the additional strategic realignment changes announced this morning, and then to Jill for a financial update. During the first quarter, CBOE grew net revenue 29% year over year to a record $729 million, and adjusted diluted EPS increased an exceptional 48% to a record $3.70. The robust results in the first quarter were, again, broad-based, driven by record net revenue in every major category at CBOE, and double-digit net revenue growth in four of our five company segments. Taking a closer look at the first quarter trends in our derivatives business, we delivered another record quarter with net revenue increasing 32% year over year. Index options net transaction and clearing fees revenue drove the upside, increasing a robust 35% as our proprietary SPX options set another quarterly record with average daily volume increasing 34% year over year to 4.9 million contracts. Interestingly, the drivers of that growth evolved as market conditions changed throughout the quarter. When things were steady, as they were in January and February, zero DTE options continued to power the growth of the overall SPX franchise on the back of deeper retail and institutional engagement. In March, as the macro outlook shifted abruptly with the Iran war, investors turned to non-zero DTE options to help manage their portfolios as longer-term risks over inflation and growth increased. Zero DTE options still grew, but at a more steady 6% rate month over month in March, while non-zero DTE options jumped over 26%, helping to drive a new monthly ADV record of 5.4 million SPX options contracts. Outside of SPX, we saw multiple quarterly ADV records across our mini SPX options, Russell 2000 index options, as well as our VIX options complex, speaking to the utility of CBOE's volatility toolkit across market environments. Overall, we see a supportive macro environment for our derivatives business while we continue to expand global access and retail engagement. Last quarter, global trading hours volumes rose more than 32% to a record high, driven by strong growth during Asian hours as we continue onboarding local brokers. We are also investing at home. Our trading floor helps traders to efficiently manage complex multi-leg risk capabilities that can't be replicated electronically and supports broader market liquidity through both direct execution and related hedging activity. On April 6th, we were pleased to be joined by our long-term partner, S&P Dow Jones Indices, for the inaugural televised bell ringing on the SIBO floor as part of our new multi-year collaboration with CNBC. Through our new partnership with CNBC, we are bringing the power and expertise of SIBO's iconic trading floor to a global audience. leveraging a differentiated asset within our market ecosystem to deliver live market insight and investor education, elevate the SIBO brand, and reinforce our leadership in global markets. Turning to event contracts, subject to regulatory approval, we plan to bring our securities-based event contracts to market. Based on our mini SPX contract and leveraging our existing options infrastructure, The product is designed to mirror the risk-reward profile of a widely used option strategy, the vertical call spread, allowing investors to take a simple yes or no view on an outcome with defined downside risk and a capped payout range. By incorporating a broader payout zone, the structure enables customers to benefit from being directionally right without requiring a binary all or nothing result. This unique spread element is also being well received by the retail brokerage community as we educate in an easy to understand way one of the primary risk defined strategies in options trading. This launch is just the first step in our broader event contract strategy. We see significant growth ahead as these products become increasingly integrated into the financial markets and we intend to expand beyond index-based outcomes by leveraging our capabilities across both securities and futures. Longer term, we see a compelling opportunity to introduce additional contracts around economic and financial indicators. This is a rapidly growing and compelling area of the market, and we believe CBOE is uniquely positioned to succeed as a trusted partner to customers and regulators with deep experience that spans securities, futures, and clearing. We have consistently designed products that meet the needs of both institutional and retail participants while creating thoughtful education on-ramps that support broader adoption. Leveraging our market infrastructure expertise, our product design capabilities, and regulatory integrity we believe SIBO is best positioned to bring differentiated event contract solutions to market across both securities and futures. Our move into event and prediction markets will bring capabilities and enhancements designed to address many of the weaknesses we see in the current event and prediction market space. Moving to cash and spot markets, Net revenue was up a strong 34% as we saw record results in each of our respective segments across the category, Europe and Asia Pacific, North American equities, and global FX. Led by another quarter of strength in our European transaction business, the Europe and Asia Pacific segment delivered a 32% year-over-year increase in net revenue. This was driven by 43% year-over-year growth in net transaction and clearing fees given stronger industry volumes, market share, and net capture dynamics as we saw the quarter and month of March set new records for average daily value traded. In fact, five of the 10 highest trading days in SIBO Europe's history occurred during the quarter, with records across key services such as periodic auctions, SIBO closing cross, and SIBO bids VWAPX. Higher non-transaction revenues in the segment also contributed to the growth, with revenue up 21% year over year. North American equities made a solid contribution, with net transaction and clearing fees revenues up 40% given strong industry equity volumes in each of our markets. And rounding out cash and spot market businesses, Global FX made another record contribution, increasing net revenue 38% year-over-year in Q1. The year-over-year growth displayed by the FX business was the strongest of any of our segments in the first quarter. Turning now to DataVantage, net revenue increased by 19% on a year-over-year basis reflecting continued momentum across the platform in the first quarter. Roughly 85% of the growth across our market data and access businesses was driven by new units and new sales as opposed to pricing. The first quarter saw a strong contribution from new product sales, complementing continued demand for access to our markets and a durable and growing international contribution. Now I'd like to introduce our COO, Scott Johnston. Scott joined us in February, and while this is his first earnings call at SIBO, he has quickly taken on a very active role in shaping our strategic framework and strengthening discipline, efficiency, and accountability as we position the company for future success. Scott brings an extensive track record in leadership roles at several key buy-side firms, And I have personally had the opportunity to work closely with Scott during our time together at CME. Scott will now cover additional strategic realignment changes announced today.