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Operator
Conference Host
The CBOE Global Markets Fourth Quarter 2022 Financial Results Conference Call. All participants will be in the synonym mode. If you do need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, today's event is being recorded. I would now like to turn the conference over to Kenneth Hill, Vice President of Investor Relations. Mr. Hill, please go ahead.
Kenneth Hill
Vice President of Investor Relations
Good morning, and thank you for joining us for our fourth quarter earnings conference call. On the call today, Ed Tilley, our Chairman and CEO, will discuss our performance for the quarter and provide an update on our strategic initiatives. Then, Brian Scheller, Executive Vice President, CFO and Treasurer, will provide an overview of financial results for the quarter, as well as discuss our 2023 financial outlook. Following their comments, we will open the call to Q&A. Also joining us for Q&A will be Chris Isaacson, our Chief Operating Officer, Dave Howson, our President, and our Chief Strategy Officer, John Dieters. 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 will make some forward-looking statements, which represent our current judgment on what the future may hold. And while we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions, risks, and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise after this conference call. During the call this morning, we'll be referring to non-GAAP measures as defined and reconciled in our earnings material. Now, I'd like to turn the call over to Ed.
Ed Tilley
Chairman and CEO
Thank you, Ken. Good morning, and thanks for joining us today. I'm pleased to report on record fourth quarter and full year results for CBO global markets. During the quarter, we grew net revenue 17% year over year to a record $457 million and adjusted diluted EPS by 6%, to a record $1.80. These results kept a record year, which saw us grow net revenue 18% to a record $1.7 billion, and adjusted diluted EPS 15% to a record $6.93. Our outstanding results were driven by strong volumes across our global network, led by derivatives complex and continued growth in our data and access solutions business. Our derivatives business delivered another outstanding quarter, driven by robust performance in our index options franchise, where average daily volume increased 55% year-over-year, while multi-list options trading increased 6% year-over-year to an ADV of 11.2 million contracts. 73% year-over-year to 2.7 million contracts. Our mini-SVX options contract, known by the ticker XSP, and one-tenth the size of the SVX options contract, increased 188% year-over-year to an ADV of nearly 66,000 contracts. Additionally, ADVs including strong organic net revenue growth of 10% year-over-year. We continue to execute on the transformational opportunities we saw in our business, derivatives, data and access solutions, and CEVO Digital. I'll touch on derivatives and data and access solutions in a moment, but first I want to provide an update on CEVO Digital. In November, we completed the syndication of minority education fiat and digital asset markets globally and contribute to the momentum of the franchise. We are actively onboarding these partners to the CEBA digital platform and look forward to working together to bring trust and transparency to the digital asset marketplace. Now more than ever, we believe the experience that established market operators provide With the onboarding of new participants and marketplace evolution, we have seen continued volume increase in industry-leading spreads on Siebel Digital to start the year. January average daily notional value topping a record $71 million. Our derivatives business delivered strong results million SBX contracts were traded, with an ADV of 2.2 million contracts, a 63% increase year-over-year. We continue to see increased demand from our non-U.S. customers and liquidity providers for the ability to trade or hedge broad U.S. market and global equity with ADV increasing 216% year-over-year during the fourth quarter to nearly 55,000 contracts, capping off a record year for global trading hours with total volumes up three times over the 2021 levels. This year is off to an even stronger start, as January volumes ran approximately 55% above 2022 levels. In December, we also added XSP, five days a week, and providing the ability to adjust positions around the clock with even greater precision and flexibility. With the addition of Tuesday and Thursday expirations late last year for XSP, both SVX and XSP now offer options that expire every weekday. We continue to see increased demand for same-day trading on SVX. on the same day of expiration increased 83% throughout 2022 and comprised over 43% of overall SPX volumes in the fourth quarter. With the utility and flexibility that options provide in any market environment, as well as the varied trading strategies utilized by a diverse customer base, we believe we will continue to see sustained momentum Turning to the VIX products, ADV and VIX options increased 7% year-over-year to over 550,000 contracts traded in the fourth quarter. During global trading hours, we saw VIX options volumes increase with ADV up 72% year-over-year in the fourth quarter, and we have seen strong momentum to start the year as January volumes ran 56% above 2022 levels. a content and opportunity for this business. Through product innovation, thoughtful integration, and superior customer service, we continue to expand our ecosystem as we build one of the world's largest and most comprehensive derivatives and securities networks. 2021. In Europe, in SIBO Bids Europe will create opportunities as we continue to expand the SIBO Bids Network around the globe. Moving to North America, the power of the Bids Network helped propel SIBO Bids Canada to another record quarter with 65 million shares traded. Overall equities market share in Canada grew to 13.6% in the fourth quarter, while U.S. equities market share was 13.1%. Turning to Asia Pacific, Australia this month. Our experience bringing bids into new markets globally, including Europe and Canada, has enabled us to perfect our approach, and we are very excited about the demand we have seen from local participants for this distinctive block trading platform. We also remain on track to launch CETO Bids Japan in the fourth quarter of this year, further extending our reach of the bids network into another key global equity market. Additionally, in Japan, we saw our in 2021. We continue to be in full integration mode since announcing our last acquisition more than 14 months ago. As mentioned, subject to regulatory approvals, we plan to migrate SIBO Australia and SIBO Japan to SIBO Technology this year, with the Australian migration happening later this month alongside the launch of SIBO Bids Australia. We've been working with our customers closely over the last year in preparation We have also continued to make solid progress enhancing the framework of our global listings business that's welcoming NIO, a Canadian exchange, last year. in the year ahead. While we expect to invest behind the meaningful opportunities we see in the market today, we expect that the investments we make this year will help position SIBO to grow in 2023 and beyond. I'll turn it over to Brian to share more.
Brian Scheller
Executive Vice President, CFO and Treasurer
Thanks, Ed, and good day to all of you. Let me remind everyone that I must specifically note that my comments relate to 4Q22 as compared to 4Q21 and are based on our non-GAAP adjusted results. As Ed highlighted, CBOE posted another incredibly strong quarter to cap off, a record year. Adjusted diluted earnings per share for the fourth quarter was up 6% on a year-over-year basis to a record $1.80. The strong performance was again characterized by the continued growth of our derivatives franchise, as well as a steady contribution from our data and access solutions business. Over the course of the year, we made meaningful progress healthy forward outlook we have for our businesses. I want to quickly touch on some of the high-level takeaways from the fourth quarter before delving into the segment performance. Our fourth quarter net revenue increased 17% we're seeing a very strong year where DNA Turn in the key drivers. RPC moved 25% higher, given a continued positive mixed shift to index products and a stronger mix of higher-priced SPX options in our index business. And lastly, we continue to benefit from another quarter of double-digit growth in market data and access and capacity fees of 34% and 15%, respectively, as compared to 4Q21. North American equities net revenue increased by 5% year-over-year, up 4%. Net transaction fees fell by 4% given a mixed volume environment across our businesses, softer market share, and capture rates. The Europe and APAC segment reported a year-over-year decline in net revenue for the fourth quarter of 15%. However, adjusting for a $5.6 million FX impact given the stronger dollar during the quarter, net revenue fell by market share on a year-over-year basis, making CBO Europe the largest stock exchange in Europe, again, for the quarter. Fourth quarter net revenue decreased 10% in the future segment as transaction fees declined 15% on a year-over-year basis. Lower volumes were the primary driver of the decline, falling 16% in the fourth quarter of 22 as compared to fourth quarter of 21. Non-transaction revenues continued to tick Turning now to CBO's data and access solutions business, organic net revenues were up an impressive 12% for the full year. Net revenues were up 13% year-over-year in the fourth quarter, up 10% on an organic basis. As we have seen in past quarters, net revenue growth continues to be driven by additional subscriptions and units, accounting for over 90% of access fee growth and 58% of market data growth. for some pricing enhancements during the quarter. In 2023, we anticipate that trends will remain resilient as we are forecasting 7% to 10% organic net revenue growth for data and access solutions, in line with our medium-term guidance range outlined at our November 2021 Investor Day. Turning to expenses. from the quarter, largely reflecting higher headcount as compared to fourth quarter of last year, as well as some inflationary comp adjustments and additional incentive compensation in 4Q22. business and core expense growth. to invest behind a robust technology offering to deliver a best-in-class client experience. Roughly 2% of our expense growth in 22 was related to core infrastructure, and we would expect a similar contribution this year as we continue to build a cohesive offering around the globe. Facilitating expanded capacity, access, and distribution of our products and services globally is important to our success, and we will continue to ensure Zivo can meet the needs of our clients. The remaining core piece make in 23 will position us well to generate attractive return for years to come. Now, turning to a summary of full year guidance on the next slide, I want to call out some highlights for 23 following our record net revenue results in 22. For gain and access solutions, we expect net revenue growth to be in the 7% to 10% range for 23. New this year, we are introducing an expected contribution of $27 to $33 million for minority investments benefiting our other income line. in the form of share repurchases. Year-to-date 23, we've also repurchased $30 million of our shares. We remain well-positioned to invest in the business, support our dividend, and opportunistically repurchase shares with $188 million in remaining capacity on our share repurchases authorization as of January 31, 2023. are told that overall, we remain committed We expect that momentum to continue.
Ed Tilley
Chairman and CEO
to invest in high-value growth initiatives that further expand the SIBO ecosystem, we can continue to deliver strong long-term results for our investors. I'm also proud
Kenneth Hill
Vice President of Investor Relations
At this point, we'd be happy to take questions. We ask that you please limit your questions to one per person to allow time to get to everyone. Feel free to get back in the queue, and if time permits, we'll take a second question.
Operator
Conference Host
Thank you. At this time, we will begin the question and answer session. To ask a question, you may press the star, then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To throw your question, please press the star, then 2. At this time, we will pause momentarily to assemble the roster. And this morning's first question comes from Rich Perpetua with Piper Sandler.
Rich Perpetua
Piper Sandler
Good morning, Ed and Brian and team. I guess my question is going to be focused on expenses and expense growth. I guess, Brian, you know, I calculate last year the overall expense increase when you subtract the acquisitions was 13.5%. And I thought we would expect, you know, a step down. It looks like, you know, 13% X the acquisitions again this year. So I guess when you look at, you know, just the core, everything beyond the acquisitions. So can you explain, you know, what's the tangible payback? I know you had something about minority investments, but is this the ongoing – You know, it looks like other exchanges are investing, you know, less than half of that and just trying to understand, you know, this 13% growth rate over each of the last two years in investments and core expenses.
Brian Scheller
Executive Vice President, CFO and Treasurer
Yeah, Rich, great question, I think. core and then the incremental revenue investments and where that rate was. And honestly, to your last comment about the other exchanges in that profile, I will suggest having a coffee a relatively smaller say some of our peers but also it's a high margin a very efficient exchange in the first place so that if there is a slight uptick it shows right we're very transparent about what those expenses are and where they show up so as we break out the core as we may look into in my prepared remarks about looking at the incremental rates or expenses coming from the consolidated audit trail right that's going to get us a little bit higher from a pure expense standpoint we're laying it out there there it is so we can see that as far as what's driving and the ability to actually continue to facilitate that capacity and our belief that it's important for us to continue to be a trusted marketplace. So it was important for us to continue to invest, And technology and operations handled that with really no issues. And in the midst of all this, also, we're doing a replatforming in Japan and Australia. Again, all right now, slightly incremental expense as we layer in as we go into 2024 moving forward. And then you look at the overall core of those other incremental I talked about is, again, we're still, as I mentioned at the end of last year, we still have to incorporate some of the infrastructure. But, again, it's against a lot of the expense categories, not just comp. As far as the revenue growth investments, and you made an explicit, you know, where do you see some of the payoff for that, I'll ask Dave to jump in here as well as some of the other team as we kind of walk this through and remind folks, you know, there's a little bit of a similar question at the beginning of last year, as you recall, as we broke this out for everyone. So I'm going to take a walk back as our big investment piece is growing SIBO is, right, the underlying themes of increasing our global network, increased access and distribution, you know, providing new and existing products. And given the size, again, of those incremental investments, we called them out. We wanted to give investors transparency. Here's what we're doing, and here's our expectations for growth. So if you go back and think about what did we carve out for 2021, right, we talked about, you know, the EU derivatives. We're going to launch that. We started beginning the dialogue around DNA, around incremental investment, around sales, products, marketing, and cloud, really leaning into the cloud And we'll talk about kind of some of the successes we've seen there more explicitly. We've talked about more of the U.S. derivatives investment with respect to incremental sales distribution and product innovation that we did around the derivatives. The continuation of the EU derivatives rollout, again, we pushed that to a more of a 24-25 contribution. And then finalizing the Canadian rollout and starting in Australia with respect to this. themes here, right? DNA is what I mentioned earlier in our prepared remarks around incremental sales, products, cloud investment, and marketing. More U.S. derivatives investment around the sales and expanded marketing. Continuation of our EO derivatives build-out to a lesser extent this year. Looking to expand with our listings, a new listings effort globally. In bids, finalizing Australia and Japan. A targeted discipline R&D effort. We continue to expect to see some benefit in the current year, again, but supporting that longer-term growth rate and support those efforts for both today and tomorrow. And you'll see a little bit more of that this year and a little bit bigger around the marketing category as we continue to create a broad brand awareness around SIBO, again, creating a foundation for that incremental growth. So first I'd like to turn it over to Dave to more address these, I'll call it the revenue growth investments. And then, Chris, I know I mentioned we'll talk some of the core as we go back to that
Dave Howson
President
Thanks, Brian. Yeah, as Brian said, really, we're looking for the revenue investments to really capitalize on opportunities that we see and to build on the foundations that we've built. We've got this tremendous network, 26 markets around the globe. We're looking to lean into where we have momentum, to build on those strong foundations, to offer differentiated offerings, but also to look for white space, to look for the opportunity to move into those circumstances from a position of strength. I probably call out, Brian gave a great backup of the previous years. You'll see that continuing into this year, and in particular, as you look at the results of 2022, these should really all be pretty, make some good sense. So the five areas are top and tailed with marketing and surrounded with marketing throughout the message here. So you've got derivatives, you've got DNA, listings, bids, and research and development. Certainly derivatives there, you heard Ed and Brian describe a great result. So leaning into education, content, sales and marketing, that global trading hours tripling volumes in 2022, really looking to lean into that as we think about broadening that access and distribution. XSP, the mini SPX being added to 24.5 in the back end of that. Really sales and marketing there pushing into the APAC region and really capitalizing on the boots on the ground we have from the CHI Asia Pacific acquisition. DNA exceeded my expectations for 2022, that 12% growth there, fantastic. And so continuing to lean in their sales, quantitative analysts, marketing, as we look to move those products and services throughout the rest of the globe. Think about our options, analytics capability we're going to be bringing to Europe. Cloud is a great theme that's been here throughout the years. 2022 saw 72% of all revenue as incremental sales. That's across the nine products, five regions that we've got set up for cloud right now. And we're really looking forward to investing this year to add SIBO Digital data to that. Some great tight spreads coming through this year from SIBO Digital, adding a new quality data set to the CCCY channel 24-7 data there. So leaning into And lastly, we saw themes around defined outcome and overwrite strategy benchmarks for the index business. We saw great gains in 2022 as well. And then the continuing theme of selling the package and bundled data, so SIBO 1 Canada there really showing great green shoots for this year. Listings is another one I'd probably drill down a little bit more into. The opportunity that is afforded us by having those listings exchanges around the world is unique. We get to provide a global cohesive offering across legal frameworks, liquidity provision in conjunction with our liquidity partners, and also access and help navigating global regulators as we go there. So great opportunity there. Coming off that great standpoint, number two in the U.S. is an ETP listings venue with 28 increase in some rather large name issuers in the U.S. And then BITS. Bid has been a great story for us since the beginning of the partnership. But after we closed the acquisition with Bid, we saw us grow to the number one block trading venue in Europe there. So we're leaning into that with people, sales, and marketing this year as we think about Asia Pacific. Canada, 76 buy side adding within one year. And when you look at the 243 connected to Europe, Then research and development, a key thing for us, we're a product company with some world renowned products. We formed SIBO Labs this year to really focus completely on how we can develop new ways to measure and benchmark exposures and bring those to the marketplace to afford our customers a range of defined outcomes. And then finally, marketing wraps the whole thing. It's about people, technology, working with partners and suppliers from the tailwind of our 50th year anniversary here as we go into new regions with new products, Asia Pacific, and lean into digital, about bringing that awareness to new regions, new audiences, so that we can better penetrate the markets that we operate in.
Rich Perpetua
Piper Sandler
Okay. Thank you very much, guys. Thanks for the info.
Operator
Conference Host
Thank you. And the next question comes from Ken Worthington with J.P. Morgan.
Ken Worthington
J.P. Morgan
Hi. Good morning. Thanks for taking the question. With the syndicate in place now for CBO Digital, can you give us more details on the investments you plan to make here? And I think one of the goals is to enhance flow in the platform for 2023. If you can give us some approach on how you want to build that liquidity there. And to the extent that things have changed for CBO Digital since FTX has imploded, how has your strategy evolved in the recent quarter since the environment seems to have changed quite a bit?
John Dieters
Chief Strategy Officer
Thanks, Ken. Thanks for the question. We continue to be very excited about CBO Digital. As Ed mentioned in his opening remarks, we're coming off a record month in January after closing the syndicate of those 13 syndicates. great investors that are deeply embedded within both traditional finance and in the crypto space. So we have industry-leading spreads now in Bitcoin and Ether. Ethereum, about one basis point is what we're seeing through the month of January. So why are we continuing to be excited about this and focused on the future is we're working with CFTC on margin futures. We're looking forward to the approval there, bringing that to the market in a way that has not been brought to the market in the US thus far. Continuing the onboarding of that syndicate as they, about half of them are now onboarded and others are in different phases of onboarding. And our strategy relating to how has it changed, if at all, since the FTX bankruptcy, I would say our strategy is unchanged. While the market has gone up and down as far as crypto prices, our strategy has stayed the same. We're going to bring a trusted, transparent, regulated market to crypto to see what digital. We're going to bring intermediary-friendly products and services, and we're going to access ultimately to end users through those intermediaries, which we view as great partners and clearly as part of our syndicate. We see growth in this nascent asset class for years to come, and that's where we're building a strong foundation right now alongside and with this syndicate. So margin futures expand the distribution of our data as the market quality is improved dramatically, as Dave mentioned, and continuing to grow as we onboard this syndicate.
John Dieters
Chief Strategy Officer
Ken, this is John Dieters. Just a couple other points to tag on there. I think, first of all, when you look at the data, it's interesting. The number of active addresses for Bitcoin, for example, has stayed relatively consistent since really the three arrows capital collapse, so even through the FTX issue. And what does that tell you? It tells you that engagement overall has stayed fairly consistent once the that the remaining customers and the new customers that continue to come into the space are gravitating towards highly compliant, regulated marketplaces. You heard this from Vlad Tena, for example, in his conversation in December. And so when this market ultimately begins to grow from its stabilization period today, we believe we're set to be the long-term.
Ken Worthington
J.P. Morgan
Great. Thank you very much. Thank you.
Operator
Conference Host
And the next question comes from Gautam Sala with Credit Suisse.
Gautam Sala
Credit Suisse
Good morning, and thank you for taking my question. Can you please walk us through the growth dynamics in the data and access segment? Organic growth came in at 12% in 2022 above your medium-term 7% to 10% guidance, but on your 2023 three outlets, you kept it in the range. Can you expand on what some of the new product sale opportunities are? And if there is a growth deceleration and maybe some of the factors that drove the elevated growth in 2022, is that why you stick to the medium-term range?
Dave Howson
President
Yeah, thanks for the question, Ken. So as you point out, 2022 was a phenomenal year with a 12% growth there. We continue with the industry-leading 7% to 10% guide as we really see continued opportunities to build on what we've built there. We talked about the revenue investments to really build that great platform for the index business to make everything scalable and also the cloud investments there. As we look forward to build on that growth rate, so 7% to 10% after a 12% year is really solid and reflects our excitement for this particular segment So what we're excited about is, again, the cloud opportunity. I mentioned that 72% of incremental revenue that came through there for the business, for the cloud portion of the business in 2022. The great story there is that we see people taking different portions of the data, whether it be Austria, as it comes through there. And then also adding new data sets. We mentioned the SIBO digital addition to the CCCY channel, that 24-7 SIBO global indices channel. So really excited about that as we go forward. And then leaning in again to that defined outcome overrides that capability by adding the European data set and bringing that capability to Europe with our customers that take their US product there, looking to expand that into Europe. And then the growth really is predominantly around selling what we have. It's growth of existing subscribers and units across the platform there. And when you look at Thank you.
Operator
Conference Host
Thank you. And the next question, Councilman Alex Graham with UBS.
Alex Graham
UBS
Yeah, hey. Good morning, everyone. I want to switch gears to the SPX ecosystem and specifically the zero DTE trading. I'm curious to what degree you see a real ecosystem building in particular on the institutional side. I guess why I'm asking is I think people still believe 50%, 80% of that business is retail. And, you know, institutionals, I think, are entering the market. But what I hear is they're trading more around certain events versus being there systematically every day. So just wondering, are you seeing that maybe changing this business, this zero DT becoming a real ecosystem? And then more importantly, what are you doing to maybe encourage and educate those institutional investors that, may be a little bit more sticky than some of the retail folks that you never know about.
Ed Tilley
Chairman and CEO
Thanks, Alex. I'll start. So we are seeing institutional flows certainly in the zero DTE, but I think most importantly is... the moves that we see over the last year or so, substantial and meaningful moves in the S&P 500 on a daily basis today, yesterday, basically every day this week is a perfect example. As far as education, you really make the products available for institutions, and institutions talk to other practitioners on the success or not of new strategies. So our focus has been on Wallet size in heaven. much more sustainable, and that's what we're teaching. Institutions, I think, will catch on and add to that traditional Third Friday and simply just gain more exposures on short data.
Alex Graham
UBS
Okay, thank you very much.
Operator
Conference Host
Thank you. And the next question comes from Dan Fannin with Jeffers.
Dan Fannin
Jeffers
Thanks, good morning. Brian, I want to come back to expenses, and I know you just gave a lot of color on the growth and what the initiatives are. I was hoping you could put some numbers around the ROI or the incremental revenue growth you're expecting from those investments, but also to maybe avoid some of the confusion going forward. How do we think about normalized expense growth, or are you in a multi-year period where we should be thinking about growth investments plus core expense growth so this elevated expense growth isn't just For 23, it should be over a multi-year period.
Brian Scheller
Executive Vice President, CFO and Treasurer
Yes, good call, and I'm happy to provide a little bit more around that. I would say part of this is as we continue to see that return, and a little bit of this is we'll continue to provide the, I'll call it the incremental contribution to the extent that we can. With the network that we have, and we don't have perfect clarity given the way the clearing works as to some of the investments and the increment of every single initiative. We know that in the aggregate, when you look at the broader ecosystem, introducing the new, you know, more expirations. The collective benefit of that is hard to separate into any one single initiative from that investment, so we tend to look at it in totality to try and measure it. Again, because we don't have the clarity of the back end to see exactly who traded what, but we can see the broader volumes, and so we have some limited view of that, but we will look at it, like I said, individually. as far as capital allocation goes, is those organic initiatives to generate incremental returns. So as we think about that, we'll continue to evaluate that on some of that might be a multi-year basis to understand the traction behind that. I would say that, and we said this last year, again, I think the moderate expansion in some of those new initiatives, particularly from the acquisitions that are coming on board. The wonderful thing, actually, we love our margins, we love the scale of our core business, and as we continue to expand, when we bring some of those operations on, you're going to get a bit of a mixed delusion as far as margin goes. more margin expansion, and you'd see a moderation of that adjusted operating expense growth kind of beyond 23. So, I wouldn't say we're going to back off of the growth investments. Again, we've called that out. I'll call it because of our efficiency and what we've done historically, and we don't want to just blur that and say we're just, you know, the way that we're spending. So, we want to call it out, continue to measure those returns. We have a return on an Some of those are going to be multi-year periods to wait to measure, and some of those will be current year. So that's the framework with how we're thinking about it. And I would say without giving explicit guidance for 2024 and 2025, we would expect to see that growth rate moderating.
Dan Fannin
Jeffers
That's helpful. Thank you.
Operator
Conference Host
Thank you. And the next question comes from Brian Bedard with Deutsche Bank.
Brian Bedard
Deutsche Bank
Great. Thanks. Good morning. Thanks for taking my questions. Maybe just building on Dan's question, how do you think about that long-term sort of trajectory of payoffs? Because obviously there's so many different growth opportunities, and you're really building a very large ecosystem across both trading in it and in recurring revenue streams. but as you see those opportunities continue to unfold, is there a desire to continue to invest, and are you thinking maybe in the long term you start to shorten some of those timeframes for profitability, or is it sort of the sky's the limit on the potential for investment? And then just maybe real specifically, Are we still looking at $25 million in annual revenue for European derivatives in year three, which I believe will be 2025, and then the timing to get to profitability in SIBO digital?
Brian Scheller
Executive Vice President, CFO and Treasurer
The point that I didn't make as clearly as I would have liked to is with these investments and say we have the, you know, we might see an increase in transactional activity, say it's the SDS complex or the other proprietary index complex. What we see with that also is incremental DNA. We see the incremental non-transaction piece of this because of the need for incremental access. You'll see that in incremental access fees. You'll see that in incremental market data fees. Dave touched on that as far as We've seen that growth, and then by enhancing the distribution or our ability then to deliver that, we're seeing that growth of not only share of wallet, say, in the access, but also then more new clients, and I'll pass it over to Dave here in a second as we continue to round that out. So we'll see it across the entire flywheel as far as maybe some of the underlying, but also the transaction and non-transaction side as that entire ecosystem continues to build. So And Dave, do you want to expand on that a little bit and then maybe talk about the EU derivatives and then we'll come back to, and then maybe follow up with you and Chris on the digital. Sure. So I guess I'll start with the European derivatives piece.
Dave Howson
President
The value, out of last quarter, the value proposition, the opportunity set remained the same. The customer feedback remained the same. And the gap between the volumes of trading and index options between the two regions remained the same. Q4, we saw good growth. It was a record quarter in terms of volumes on the platform with new customers coming on, particularly in futures. And as we laid out the past last time, it's about getting that stable price picture in the futures. Then it will be the options that follow suit from there. And then for us this year, the single stock options launch in Q4 completely rounds out the offering in order for us to break together the full ecosystem and offer the full benefits of a single margin pool and a single lit on-screen market there in Europe. So for us, the three-year guide, which we moved a year last quarter, when we reported last quarter, so the end of 2025 is still the target for us.
Brian Bedard
Deutsche Bank
And then Chris is going to ask you. Yeah, on digital, yeah.
John Dieters
Chief Strategy Officer
Yeah, I'll take that. On digital, as we said on the slide there, This has been slide 11. It's a long-term growth trajectory for us, and we haven't put out guidance on exactly when we'll break even there, but a lot of this is dependent upon our derivatives growth, margin futures, and as we said, onboarding the syndicate as we bring them on. So we haven't put out exact break-even timing, but we are very bullish on the long-term growth trajectory for that business.
Brian Bedard
Deutsche Bank
Okay, that's great. Thanks for the cover.
Operator
Conference Host
Thank you. And the next question comes from Owen Lau with Oppenheimer.
Owen Lau
Oppenheimer
Good morning, and thank you for taking my question. Going back to CBO Digital, I think you guys are planning to list more tokens beyond the five tokens you have. Could you please talk about what other tokens you feel comfortable to list? And what's the process and timing of getting approval so that you can lease tokens? Thank you.
Ed Tilley
Chairman and CEO
Chris, let me start, and then I think you can give a view of the board and the direction. But, you know, really what we're most sensitive to is regulation. As we've gone into this, eyes wide open, and you've been following along. We're embracing that regulation, so we need clarity around securities versus non-securities. But our customers, our syndication partners, are interested with us in broadening beyond the current coin offering. But we are patient. We have said this is a long-term play, a long-term move for us. So we will be participating in and helping to form what the future looks like for oversight regulation, but we are very much, we're very sensitive to where the SEC and the CFTC come out on classification. Chris, a little bit more?
John Dieters
Chief Strategy Officer
Yeah, I think Ed covered it well there. We are going to be very conservative in our listing. We do desire to list new coins as there's clarity around regulation and as we see genuine customer demand from our customers and intermediaries, but We'll make sure that there's clarity there before we start listing new coins.
John Dieters
Chief Strategy Officer
This is John. An additional thought there. We mentioned that we see real stability in the market. And that doesn't mean that the market won't be unchanged in this new environment. And among the things that we see going forward is that there will be an increased concentration on the tokens people feel comfortable with from a regulatory standpoint, from a compliance standpoint, so I think that's just a reality we see going forward. And we're fine with that. We recently had a reach out from a significant asset manager who wasn't prepared to join us in our first iteration, really interested in considering offering exposures to their clients, and they're not talking about the long tail of smaller assets. They're really focused on the most embedded, the most comfortable and understood exposures. That's the opportunity for us.
Owen Lau
Oppenheimer
Got it. Thank you very much.
Operator
Conference Host
Thank you. And the next question comes from Michael Cypress with Morgan Stanley.
Michael Cypress
Morgan Stanley
Oh, hey. Good morning. Thanks for taking the question. I wanted to circle back to your revenue outlook, your total revenue guide of 7% to 9% organic total firm-wide. That includes the DNA, right, but also I imagine also captures transactional revenues in there as well. So just the question on that, what areas do you anticipate being most meaningful in contributing on the transactional side to your 7% to 9% organic revenue growth? What underpins your confidence and strength in that into 23?
Dave Howson
President
Thanks for the question, Michael. The continued momentum that we see in the interest and engagement from our broad range of customers executing a broad range of strategies in our derivatives complex forms a good portion of the driver for the continued revenues growth 7% to 9% into next year. As you say, that's total, so it does include the data and access solution as well, which is also a guide that we've given there. As we see the growth of the utility that customers are finding in deploying options strategies, we see that continuing throughout the year. And really, one of the catalysts there last year, of course, was the addition of the Tuesday and Thursday weekly contract expirations that opened up the opportunities that Ed talked about earlier on.
Ed Tilley
Chairman and CEO
I think in the quarter's past, what we them to define their outcome, that is an incredibly sustainable, sticky, if you will, strategy. So we continue to teach that here in our institute. We continue to bring new products to the market through SIBO Labs, and we engage with our customers globally as the demand for particular for U.S. derivatives. But if you follow along like we do, listening to and observing what retail platform operators are saying about We do see potential, obviously, in derivatives as we broaden the scope in Europe.
Gautam Sala
Credit Suisse
Great.
Operator
Conference Host
Thank you. Thank you. And the next question comes from Andrew Braun of Rosenbaum.
Andrew Braun
Rosenbaum
Hey, good morning. Just on VIX futures volumes, we know there seems to be a bit of a mix shift in customer hedging to SPX and zero DT option contracts. with implied volatility underperforming realized vol. Outside of changes to some of these dynamics and more unknown unknowns, what can CBOE do on the innovation front and perhaps education front to boost volume growth of VIX futures?
Ed Tilley
Chairman and CEO
Well, let's start with just from an exchange perspective. or exposure, you call this out. If in the, over the last year, the observations of incredibly large moves in a day, like today, yesterday, as I said earlier, all this week, the Greeks associated with the exposure in the SPX allow, customers believe that they allow themselves a much better chance of monetizing those positions. Gamma, for example, the Greek that you pick up in the SPX. We did see in the observation yesterday is when investors think that the market may have run too far. They do grab the optionality and the hedge that's afforded by fixed exposure. So again, indifferent from, basically indifferent from the economics there, what we have always said is the rotation makes sense, the hedges are rational. So we continue to teach the differences and the expected payout and just want to make sure that we're bringing that through many contracts, many VIX futures, for example, and of course, I mentioned earlier, XSP is the mini 500. So that's the approach, but we do see derivatives as sticky and sustainable. Thanks.
Operator
Conference Host
Thank you. And the next question comes from Kyle Voigt with KBW.
Kyle Voigt
KBW
Hey, good morning. Maybe just one more on expenses. I apologize, Brian. But I'm wondering if you can talk about the potential expense flex and how dependent it is on the revenue environment. So, for example, if revenues came in below the low end of that 7% to 9% organic guidance range, should we expect a similar outcome in terms of coming in below the expense guidance range? And would there be any pause on investments there? And then likewise, if revenues come in above the guidance range, does that cause expense growth to move higher than the range? Or should we expect the incremental growth to fall at the bottom line? So any kind of framework you could help us with understanding the expense flex on either end of that range would be helpful.
Brian Scheller
Executive Vice President, CFO and Treasurer
Thanks, Kyle. I think your next, if you choose to have another career as a CFO as part of that, that would be awesome. So I think you think about exactly the way we frame that and out this guidance. We've laid out our plans. We have certain expectations around how these investments are going to contribute to the revenue and some of the traction we think we will gain. So there's definitely opportunity to flex. There's we will titrate the various levers there to say, how does this pull back to make sure we get to those earnings expectations of what we're trying to deliver for shareholders and continue to measure that? And then on a go-forward basis, outside of call it that incentive structure as far as exceeding expectations, we're a little bit more cautious on the upside. We'll be faster to move on the downside as far as pulling that back if we don't see the I would frame a cow.
Kyle Voigt
KBW
Great. Thank you very much.
Operator
Conference Host
Thank you. And the next question comes from Rick Fellinger with Autonomous.
Rick Fellinger
Autonomous
Hi. Good morning. I was hoping you could speak to the competitive environment in SPX options. Your competitor has now announced their intention to launch daily expirations for their micro S&P futures. Do you expect this to have any direct impact on the success you've been seeing?
Ed Tilley
Chairman and CEO
I don't. Just a reminder to everyone on the call, the amount of retail futures accounts is dwarfed. I think feeding the system and growing the pie, if there are investors who prefer futures, we think that's a good thing. So the daily exposures and what our competitors might be doing in the space on daily futures, we just think the opportunity, the pie, and the awareness is growing. And we're confident that we will continue to be the leader in the space.
Operator
Conference Host
Thank you. And this concludes the question and answer session. And now I'd like to turn it over to management for any closing comments.
Kenneth Hill
Vice President of Investor Relations
Yes, so that completes our call for today. Thanks, everyone, for the time and the interest in the company, and have a great weekend. Thanks.
Operator
Conference Host
Thank you. The conference has now concluded. Thank you for attending today's presentation. Please notice to connect your lines.
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