Conference Transcript - MIAX 2026-06-02

Thomas P. Gallagher, CEO

you guys all hear me enough and ladies so i'm tom gallagher chairman and ceo of miami international holdings and i'm joined today by lance emmons our chief financial officer i'm going to cover a few of the slides this morning but try to give you because i think there's a fair amount of generalists maybe a show of hands how many folks are not really deep into the exchange market structure space okay so i'll try to make it understandable at all levels. So I'm just going to go to our first slide. Again, for those of you that have invested in a lot of Silicon Valley opportunities and things like that, I'm here to tell you that at age 54, there's still opportunities to do some things that are really interesting in the financial space, because that's when I started Miami International Holdings. We launched our first exchange at age 54, having practiced securities law for 30 years. And I think I slept through the Exchange Act when I was in law school. So a deep learning curve here, but we're very proud of where we are today. So if you look at this first slide, why we launched MyX, we're a founder-led company serving multiple asset classes with the technology-first and customer-centric approach to building innovative marketplaces. What does that all mean? What it means is that we didn't start this exchange by a group of market participants that came together like has happened in the last 20 to 25 years. BATS was a consortium of market participants. 85% of the stock was sold by them. By the time the Philadelphia Stock Exchange sold to NASDAQ, 85% of the equity was not owned by the seat holders. It was owned by various investment banks, trading firms, Morgan Stanley, Citadel, Susquehanna, things like that. We did the opposite. We started the exchange without a consortium, and one of the biggest things that that gave us was the opportunity to make some key decisions on our own. We could decide if we wanted to build our own technology infrastructure as opposed to license it from a third party. And when you're not beholden to nine different groups in a consortium deal trying to solve for the common denominator, it's amazing what you can do when you're not being dictated in terms of your market structure. So we weren't controlled by a consortium of banks, and we decided to build the arena in a way that we thought the true market participants would be able to take advantage. From that first day, when we started the exchange, our whole business strategy was building market share. How do you build market share when you're a brand new entrant, 2008, go into 2012, all kinds of crises in the financial space, no fees, cheap fees, equity rights programs. The rocket fuel for an exchange is market share, and you have to find a way to become relevant. So we used our equity, we had low fees, no fees, got people in the door, got them to be, look at the experience and feel comfortable in trading in a brand new exchange group. So the first 10 years, the whole strategy was to build market share. After that, now it's about monetizing what we built, the infrastructure. And once you have six, seven, eight, nine, we're 17% of NVIDIA today. Over 17% of the national volume and multi-listed options is traded on one of the MyX4 electronic exchanges are on the floor. Once you get that market penetration, then you can start charging people to access your data. You can sell your data. You can do a lot of things. So in short, by being a founder-led, we could be more nimble, make quicker decisions, and take the time to build our exchanges with a clean whiteboard, and we could take a technology-first and customer-centric approach. Next slide. Who are we? Who are we today? And Lance, keep me honest with the time so we make sure we can cover everything so we're now truly an international exchange operator if you see here in the orange we have four u.s options exchanges through q1 we're 17.3 percent of the national volume we didn't exist on december 6 2012 today we are the 14th largest global exchange operator in the world i don't say that boastfully i say it proudly you got to be doing something right when just from 2016 Q1 to Q1 of this year, we've increased our market share by over 1,100 basis points, 11% market share. So four U.S. options exchanges, a cash equities exchange called MyX Pearl, a U.S. futures exchange called MyX Futures, Dorman Trading, a full-service futures brokerage firm, and international. We have two acquisitions. We did the Bermuda Stock Exchange and the Channel Islands Exchange Group. We also owned LedgerX. We did a transaction with Robinhood and Susquehanna earlier this year where we sold our majority stake over 90 percent to them. Why? Because we have a full plate as you'll hear over the next 20 minutes in building out our futures exchanges and our futures platform with Bloomberg and this gave us immediate access into the events-based prediction markets without having to build all this and bring it to market. Next slide, please. Okay. So what you see here is about our history. We started in December of 2012. The first, the startup and the scaling phase was becoming relevant. So if you look at this slide here from our first exchange, December of 2012, through the scaling period, all the way to 2023, we launched four U.S. options exchanges, and then in August of 24, you see in the green going across the slide, we launched MyX Sapphire, our fourth exchange, and then we launched MyX Sapphire Electronic in September of 2025, a trading floor, rather not an electronic exchange, a trading floor in the Wynwood section of Miami. Now, most of the people working for me spent their lives getting off of trading floors and electronifying the exchange space. Why the heck would you go and sign up for the most expensive real estate in the United States during the pandemic and launch a trading floor? Well, in 1988, there was two phone companies, Nokia and Motorola. Fast forward 20 years later, did anybody think we needed a new phone after having those phones in place for 20 years? Same thing with the trading floor. There hasn't really been any technology upgrades even in a trading floor in the past 40 years. So I put people on the trading floors for a number of years and see if we could electronify some of the back office things that were done. Reduce overhead, lower costs, and then we located it in a very tax-friendly jurisdiction and a very friendly jurisdiction for purposes of government support in Miami. So we originally came down there in 2008. we built our first office there but we launched our trading floor in September of 2025 because our customers asked us to do it and the floor brokers have been in places like Philly, Chicago and New York and they love the opportunity that a brand new trading floor presents. Also during this period if you look in the bottom of the slide in addition to the organic growth building four options exchanges a trading floor and equities exchange we did five acquisitions. Why? Because we wanted to leverage the expertise in multi-listed options and the partnerships with firms like Citadel, Susquehanna, Morgan Stanley, Interactive Brokers. We wanted to leverage these into new asset classes. So we weren't just going to be dependent on multi-listed options. So we did some acquisitions. We acquired the Minneapolis Grain Exchange in December of 2020. We acquired the Bermuda Stock Exchange also in December of 2020. We acquired a full-service brokerage firm called dormant trading and then out of the bankruptcy of ftx in may of 2023 we bought a futures exchange that was predominantly doing crypto futures owned by ftx about 90 people went in the data room we came out with the asset for 35 million dollars and gave us additional optionality owning both myx futures and ledgerx We did a deal with Robinhood and Susquehanna. We still have a full-service MyExFutures exchange. Lastly, we did a deal with Bloomberg, which we'll talk about in a few minutes. Next slide. We'll just talk about the tailwinds. Our markets have really benefited from secular tailwinds. If you look at this slide, the U.S. options average volume in 2012 was about 15 million contracts a day. The volume through Q1 2026 was 63 million contracts and growing still in double digits. You look at the futures, similar situation, 13 million contracts in 2012 to 42 million contracts through Q1. These secular tailwinds, in my opinion, are going to continue, and they're going to continue to grow robust growth in both retail access to futures and additional retail access in the options business. The SEC had a roundtable recently. Lance, how many unique customers are there in the equities exchanges from the SEC data?

Lance Emmons, CFO

On the SEC data, there's about 70 million customer accounts that trade equities and about 5 million that trade equities and options. So we still think there's some room to grow there in options penetration.

Thomas P. Gallagher, CEO

So with these secular tailwinds, the proliferation of retail, these retail firms that have a whole strategy for low cost of execution were the perfect place to be a partner with firms like Robinhood, Webull, Ninja Traders, where they are trying to lure their customers from equities to options to futures, and one of their big selling points is low cost of execution. So we have a complete whiteboard, and I'm going to be extremely aggressive working with market participants to reduce their fees dramatically, be really aggressive with the retail firms coming in to trade our financial futures. What better time to launch a series of financial futures products than now with the possibility of three major IPOs starting this month with SpaceX and then two or three other high-tech IPOs. When I look at the trading today in stocks like the SPY ETF, they're doing about 12.5% of the industry volume. You take a stock like SpaceX or potentially Anthropic or OpenAI, I think they have the ability on their own to dwarf the market share from symbols like SPY and NVIDIA. And then when you put an option contract on that as people are trying to hedge it, I think you're going to see that 63 million daily volume that you saw in the first quarter continued to grow by double digits as a factor of just these three or four AI-related IPOs. So very good tailwinds, and they're going to continue. Next slide. I'm going to throw up here. So when you think about our company, I think we have four key differentiators. In order to do what we do, you have to have the licenses. You have to have the licenses, the regulatory licenses. So we've spent 17 years convincing the regulators, the SEC, the CFTC, to give us the medallions. Today, we have them all. We could be in events-based contracts on the Minneapolis Grand Exchange now called MyExFutures. We can be in financial futures. We can be in agricultural futures. We have the various licenses with the CFTC, and we have four U.S. options exchanges, a trading floor, and an SEC-regulated equities exchange. You got to have the medallions if you're in the exchange space. We have them. Check that box. The next box is having purpose-built technology. I can't express to you how important it is to have purpose-built technology. We started this business in options. There's about 1.5 million different securities that trade on an options exchange on any given There's 10,000 to 15,000 securities that trade on an equities exchange, like the New York Stock Exchange or Amex or Philix. So when you take 1,500 securities that 10 market makers want to refresh their prices at the same time, it's a major technology lift. It's a whole lot easier to go from building options platforms to equities and then taking this technology and moving it into futures. We have the purpose-built technology. Products. You can have the best technology in the world. You can have all the licenses in the world, but you have to have something to sell. I spent three years with the team getting a relationship with Bloomberg. We now have a 10-year exclusive agreement with Bloomberg, first starting with the B100 complex, then the B500 complex. We launched these products, mini versions of these in the last two or three weeks. Bloomberg has over 5,000 indices. So we bought the asset, the MyEx Futures Exchange or the old Minneapolis Grain Exchange, not to trade just to trade wheat, although we love the product, is to get that medallion, to morph that organization from a 140-year-old clearing operation trading one product to a multifaceted, multifutures asset class exchange, and we built a brand new trading system, moved off of the CME platform, built our own clearing technology, and launching our first product literally in the last 30 days. The last thing you have to have customers. You've got to have customers. Over the last 10 years, we built a relationship with some of the biggest market participants in the world. And not only are they interested in what we're doing in options, which are our most mature business, and in cash equities, they want to support us in futures. They want choice. No disrespect to my brethren here in Chicago that have had futures exchanges for a long time, but our market participants want choice. They want to see robust technology. They want to see predictable, low latency. They also want to be able to have new products that come out that can excite their membership. So these are the four pillars that we built our company on. And I think that it'll serve us well. The last thing I want to just say is many people say, well, Tom, you don't have the resources maybe of a NASDAQ, a CBO, or CME. It's not just about the capital. It's about having people that have worked together. I think having a culture of commitment in a company is the most important approach to business. You have companies that have rock star cultures like a Tesla, nothing wrong with that, but you have bureaucratic cultures, autocratic cultures, techno-centric cultures. But I think the most successful companies are the companies that are built around a commitment culture to the employees. Our technology team has been with me for 15 years. They were together for 10 before that. It's amazing what people do when they stay together and they don't leave and take other job opportunities. So with that that's a little high level of how we got here i'm gonna turn it over to you lance right now

Lance Emmons, CFO

yeah why don't we just jump right ahead a few slides just in the interest of time yeah just a few highlights of our financials here so again given that some of us are not as deep in the exchange space as we've been for the last couple decades about 60 of our revenue comes from transaction fees that's basically a function of both industry volumes whether it be in options equities or futures our market share in each of those asset classes as well as uh the fee the spread basically the capture we make on each of those uh trades in the options business it's about 10 or 11 cents per contract on the equities business it's basically about zero in equities we make money uh more on the lines of market data and non-transaction fees and in futures right now with our ag product uh we make over two dollars a contract uh with some of the financial futures it'll be it'll be less than that but again we expect that would be higher than what we're making in in multi-listed options in terms of market data we generate about nine percent of our revenue from market data that's earned from basically a share of consolidated tape plans and options and equities as well as direct subscriptions we have in each of our asset classes monthly membership monthly subscriptions of our own data with our membership and then about 25 of our revenue is access fees AND THIS IS A NICE RECURRING REVENUE TYPE MODEL, MONTHLY FEES WE CHARGE ESSENTIALLY OUR MEMBERSHIP TO USE OUR TECHNOLOGY SO IT COVERS COSTS FOR THINGS LIKE CONNECTIVITY, PERMITS, PORTS, AND THE LIKE. AND THEN THE BALANCE ABOUT 6% IS ALL OTHER REVENUE, THE BULK OF THAT IS OUR LISTINGS BUSINESS, BOTH IN THE BERMIDA STOCK EXCHANGE AND THE INTERNATIONAL STOCK EXCHANGE THAT WE ACQUIRED IN JUNE OF LAST YEAR. TURNING THE PAGE, TOM TALKED ABOUT THIS A LITTLE BIT, But again, just kind of our market share over the last, since we launched, you know, not always a straight line, but certainly prolonged growth going from 0% to 17.3% in the quarter, first quarter of this year. And from quarter to quarter, you do see some ebbs and flows, member activity, some pricing changes that we make to either focus on more higher capture business or to go after different segments, but nice sustained growth over time. The right side is just a little picture of our trading floor down in Wynwood. We'd love to have many people down there. We'd love showing it off. In terms of our financial performance, just quickly, our revenue, adjusted net revenue, grew from 2022 to 2025, grew at a CAGR there, you see, of 29%. And in the first quarter, sorry, grew at 29% CAGR, reaching $431 million at the end of 2025. The orange bar represents our options business. Again, it's mostly an options business at this point in time, but we do have new products coming out in futures that we think will grow that mix of the non-options business. And then I think one key point, I think, for investors to pick up as well is 2022 to 2024, we're really focused on sort of building out our infrastructure, expanding into asset classes, as Tom mentioned, going into both equities, upgrading the technology at the Bermuda Stock Exchange, and really upgrading the technology in our futures business, Mike's futures, getting it off, you know, green screen technology and clearing and developing our own trading platform. And you can really see the leverage in the business, right, with the margins increasing, you know, from the 30% range to, you know, to 46% in 2020, 2025, and reaching 51% in the first quarter of 26. and maybe just a quick highlights on the q1 financial performance again hope many of you listened to our earnings release but uh you know the growth continues 40 year-over-year growth in revenue going from 92 million to under 29 million uh the organic growth was uh 35 so again strong growth with with the balance being the acquisition of tice which was uh in june of last year but we're very proud also as well of the continued margin expansion as you can see margin went from 43% to 51% in the first quarter, up 800 basis points and 66% growth year over year. We're continuing to invest in our businesses, as we mentioned, with the launch of products like Bloomberg and additional products in futures, but the incremental margin year over year for the first quarter was about 70%, very similar to trends we saw last year. And then adjusted earnings grew similar rates as well. um you know being exchange let me just talk about adjusted opx for a minute uh adjusted opex grew about 20 percent uh year over year as i said we're still continuing to grow obviously we have some public company costs now that we're public in the first quarter of this year uh reaching about 63 million dollars the bulk of our uh expenses are comp and benefits we have 431 employees as well as technology and communications uh again we're we're an infrastructure tech infrastructure market infrastructure company at heart uh so a lot of uh spend obviously on servers and storage and the like um we do provide annual expense guidance you know being an exchange group it's very hard to predict market volumes so given that 60 is related to uh of our revenues relate to uh transaction volumes uh it's difficult to predict that but we do provide uh adjusted opex and expense guidance you can see we reaffirmed that guidance in the in the first quarter with our earnings release 265 million to 275 million, an increase from the first quarter run rate, that's really as we continue to roll out some branding initiatives, both around MIX overall, and then as well as related to our futures product rollouts. Share-based comp, 27 to 30 million, CapEx, 40 to 45 million. We did spend a lot of our – or procure a lot of our CapEx in the first quarter of this year, seeing that we did see some product shortages, AI-driven shortages, but lucky we were able to to get most of that or all the equipment we needed in-house before that dna of 33 to 38 million and then in terms of adjusted tax rate uh 27 to 29 on a go forward basis in the first quarter we did have a release of evaluation allowance uh reflecting uh you know evaluation allowance on deferred tax assets only mainly historical uh nol uh balances so i think we have time for a few questions. I think we have a few more minutes left or a few questions

Thomas P. Gallagher, CEO

to take from the audience or happy to. So, so we have a retained interest of 10% and Robin Hood and Susquehanna have the other 90%. So we are a passive investor. I want to make that very clear. It is not a exclusive arrangement. So we have my ex futures exchange and clearing that we can put up other event-based contracts on our other venue. But we have a 10% stake, and the partnership is called Rothera, and they are launching their first sports-related contracts this month in anticipation of the World Cup. They will be initially predominantly based upon sports events contracts but then they're going to also look at other events particularly uh weather related things like that that may impact a retail user who may be have a flight canceled it's hedging some of the travel expenses so we're a passive investor 10 stake the events business is that's an understatement it's growing very rapidly there's also some risks associated with it as a result of the various litigation between whether these are true futures contracts or whether they're uh state regulated gaming contracts so thank you next yes sir we have a we have a 10 retained stake so obviously um the um dividend income things like that yeah

Lance Emmons, CFO

it's a 10 stake so it's not equity accounting if there's any if if or when distributions are made The reason why we kind of went after that, again, looking at sort of time to market, looking at the partners, Robin Hood and Susquehanna, we felt owning a small piece of that was our fastest exposure to that market versus everything else that was on our technology roadmap. But nothing prevents us or them from offering competing products on a go-forward basis.

Thomas P. Gallagher, CEO

You know, when you think about getting into the event space, Susquan has had a reputation of being in the bookmaking business in Europe. And when you look at the retail might of a Robinhood, it was a very logical choice to accelerate our access. And keeping that 10% stake, I think we're positioned well. Anybody else? We have about four minutes. Well, in the futures world, we just started, okay? we just launched our first financial futures products and just like in the options exchange it has to start somewhere you don't have a grand opening in a restaurant the first week you got to get used to the the menu so we started with the b 100 mini and the b 500 and those are such enormous markets that we're going after the s p franchise at cme the vix franchise at cbo it doesn't take a lot of market share penetration to start to realize some interesting gains there yeah question anybody else well really appreciate very grateful for your time today um this is the first time i actually did a public uh conference so i'm a bit of a newbie at it but uh i hope that you enjoyed our story and uh look forward to staying engaged with all of you so thank you very Thank you.