Miami International Holdings, Inc. (MIAX) Q3 2025 Earnings Call Transcript

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Overview

The earnings call reveals strong financial performance, with significant margin improvement, increased adjusted earnings, and revenue growth in key segments. Although there are concerns about unclear timelines for new products, the company's focus on capturing market share and technology-driven growth is promising. The positive sentiment is reinforced by the Q&A insights, indicating potential for further expansion and high incremental margins. Despite some uncertainties, the overall outlook is favorable, suggesting a likely positive stock price movement.

Key Financial Performance

Net Revenue $109.5 million, a 57% increase year-over-year, driven by elevated industry options volumes and increased MIAX market share.

Market Share in Multi-Listed Options 17.2%, a 24% increase year-over-year, attributed to elevated options industry volume and strategic initiatives.

Adjusted EBITDA $48 million, a 157% increase year-over-year, with an adjusted EBITDA margin of 44%, up from 27% in the prior year period, demonstrating efficient scaling and investment in growth initiatives.

Adjusted Earnings $40 million, up from $8 million in the prior year period, reflecting strong financial performance.

Adjusted Operating Expenses $61.6 million, up from $51.1 million in the prior year period, due to higher compensation benefits, acquisition of TISE, and investments in IT and communications.

Options Segment Net Revenue $94.5 million, a 55% increase year-over-year, driven by a market share increase to 17.2% and elevated options industry volume.

Equities Segment Net Revenue $4.4 million, up from $2.2 million in the prior year period, primarily due to improved capture rate.

Futures Segment Net Revenue $4.8 million, down from $5.3 million in the prior year period, impacted by participant migrations to the new MIAX Futures Onyx platform and lower commodity market volatility.

International Segment Net Revenue $5.5 million, up from $0.8 million in the prior year period, due to the acquisition of TISE in June 2025.

Cash Balance $401 million at quarter end, significantly improved due to the IPO proceeds and debt reduction.

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Operating Highlights

New MIAX Sapphire trading floor: Launched in Miami in September to address customer demand and capture additional volume in multi-listed options.

MIAX Futures Onyx trading platform: Launched at the end of June to bring MIAX technology to futures and list new futures products, including Bloomberg 500 Index futures starting Q1 2026.

Market share in multi-listed options: Grew to a record 17.2% in Q3 2025, up 24% from the prior year period.

International expansion: Acquired The International Stock Exchange (TISE) in Guernsey, providing access to European and U.K. markets and expanding listing services for global debt issuers.

Revenue growth: Net revenues grew 57% year-over-year to $109.5 million in Q3 2025, driven by elevated options volumes and increased market share.

Adjusted EBITDA: Increased 157% year-over-year to $48 million with a margin of 44%, up from 27% in the prior year period.

Debt reduction: Retired $140 million of debt following the IPO, improving the balance sheet.

Focus on technology: Invested in low latency, high throughput, and deterministic technology to support market makers and retail investors during volatile markets.

Product expansion: Plans to launch futures on Bloomberg 500 Index and Bloomberg 100 Index, and expand equity index derivatives portfolio.

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Risk or Challenges

Geopolitical tensions and uncertain trade policy: The company anticipates elevated volatility due to geopolitical tensions and uncertain trade policy, which could impact market stability and trading volumes.

Evolving interest rate policy: Uncertainty around interest rate policies could lead to market fluctuations, affecting trading activities and revenue.

Participant migration to new platform: The migration of participants to the new MIAX Futures Onyx platform negatively impacted trading volumes for Hard Red Spring Wheat, indicating potential challenges in user adoption of new technology.

Lower commodity market volatility: Reduced volatility in commodity markets, such as Hard Red Spring Wheat, has negatively impacted trading volumes and revenue in the Futures segment.

Increased operational expenses: Higher compensation benefits, IT investments, and costs associated with new technology platforms and acquisitions have increased operational expenses, which could pressure margins.

Dependence on market volatility: The company's performance is heavily reliant on market volatility, which, if reduced, could adversely impact trading volumes and revenue.

Integration of acquisitions: The acquisition of TISE and other entities requires effective integration to realize synergies, posing potential operational and strategic risks.

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Guidance & Outlook

Elevated Volatility Expectations: The company anticipates continued elevated volatility due to geopolitical tensions, uncertain trade policy, and evolving interest rate policy. This is expected to drive demand for risk management tools and support growth in options and futures markets.

Retail Participation Growth: Expanding retail participation in futures markets is seen as a significant growth opportunity, mirroring the impact of retail trading growth on options volumes.

Product Expansion Pipeline: The company plans to launch new futures products, including futures on the Bloomberg 500 Index in Q1 2026 and the Bloomberg 100 Index thereafter. These products aim to provide margin efficiencies and broaden the portfolio of equity index derivatives.

Options Market Growth: The options market is expected to grow further, driven by short-dated expirations for actively traded stocks, options listings on new IPOs, and structured product listings.

New Trading Platforms and Facilities: The launch of the MIAX Futures Onyx trading platform and the MIAX Sapphire trading floor in Miami are expected to enhance trading capabilities and capture additional volume opportunities.

International Expansion: The acquisition of TISE expands the company's presence in European and U.K. markets, providing access to new regulatory jurisdictions and opportunities for growth in global debt listings.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What are MIAX's ambitions and aspirations for new products, asset classes, and geographies over the next 3 to 5 years?

A:MIAX's primary focus is on the products already announced, including opportunities from the recent licensing of the B500 and B100 from Bloomberg. While the near-term focus is on existing opportunities, MIAX is open to exploring areas like economic, political, or sports-related events-based contracts if compelling opportunities arise.

Q:What drove the acceleration in MIAX's multi-listed market share gains, particularly with the launch of the Sapphire trading floor?

A:The Sapphire trading floor captured about 6.5% of the industry trading floor volume in October, contributing to market share growth. However, the growth was primarily driven by strong secular tailwinds in the options industry, including growing industry ADV, new optionable classes, and innovative products like short-dated equity options. MIAX sees room for further growth in this segment.

Q:What is the pathway and timing for offering single stock options with everyday expirations (0DTE)?

A:The timing depends on regulatory approvals. MIAX is ready to support the expansion of multi-listed options, including 0DTEs and single stock options, once approved. The exchange's technology supports rapid product innovation, and MIAX sees significant growth opportunities in this area, especially in the retail trading segment.

Q:What drove MIAX's October market share increase to 19.4%, and was there a rise in complex trades?

A:The October market share gains were broad-based across MIAX's four options exchanges. There was continued growth in complex orders, where MIAX is the second-largest exchange, and in price improvement auctions. The growth is attributed to MIAX's technology and focus on capturing complex orders.

Q:Is there an opportunity for MIAX to increase revenue per contract in the options business?

A:Revenue per contract has been influenced by mix shifts and a temporary reduction in regulatory fees. MIAX focuses on maximizing revenue by pursuing business that is positive, even if it has a lower capture rate. The company has also started providing capture rates on a trailing basis for transparency.

Q:How does MIAX's market share differ between retail and institutional customers?

A:MIAX does not drive demand but focuses on enabling market makers to provide liquidity and tighter markets, which attract both retail and institutional customers. The company emphasizes customer experience and technology to cater to both segments.

Q:What is MIAX's expense outlook, and how will it evolve with volumes and revenues?

A:MIAX expects less expense growth going forward as major build-outs like Sapphire and Onyx Futures are complete. Share-based compensation was high in the quarter due to IPO-related vesting but is expected to normalize. The company anticipates high incremental margins as it grows its top line.

Q:What is MIAX's outlook for options market growth and major themes for the next year?

A:MIAX sees strong industry tailwinds, including a growing retail base and new short-dated options filings, driving continued growth in the options market. The company expects retail participation to expand further, supported by free trading and lower-priced short-dated options.

Q:Review of Unclear Management Responses

A:Management avoided providing specific timelines or detailed plans for offering single stock options with everyday expirations (0DTE), citing regulatory approvals as a dependency. Additionally, the response to the question about revenue per contract lacked clarity on specific strategies to increase it, focusing instead on general market dynamics and transparency measures.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

MIAX Transcript

Miami International Holdings, Inc. (MIAX) Q3 2025 Earnings Call Transcript

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