Miami International Holdings, Inc. 2026 Q2 Earnings Call

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 In addition, this call is being webcast, and an archived version will be available there shortly after the conclusion of the call.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've 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 and 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 Tini B500 and Tini 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 products over incumbents. We think of ourselves as a disruptor in this category, and we believe there's 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. 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. 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. We see these recent developments as a potential opportunity.

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. Potential opportunities arise, we may leverage our modern agile trading and clearing infrastructure, as well as our CFTC licensed futures exchange and futures clearing house to consider offering capital-efficient derivatives products. A brief comment on our ownership stake in ReiThera. 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're excited about their recent progress and volumes as they've publicly announced. I'll turn over to Lance to walk through our second quarter financial results.

Thanks, Tom, and good afternoon. 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 three-month rolling average basis on our ir.miaxglobal.com. 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. tape 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 Equity Index 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 continued 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. 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.