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DATE

Wednesday, August 5, 2026 at 5:00 p.m. ET

CALL PARTICIPANTS

• Senior Vice President and Head of Investor Relations - John T. Williams
• Chairman and Chief Executive Officer - Thomas P. Gallagher
• Chief Financial Officer - Lance Emmons
• Chief Information Officer - Douglas Schafer Jr.
• Chief Executive Officer of MIAX Futures and Chief Strategy Officer of MIH - Shelly Brown

TAKEAWAYS

• Net Revenue -- $141.1 million, representing 35% growth driven by strong options business performance and elevated market volatility.
• Adjusted EBITDA -- $76.8 million, up 57% reflecting high incremental margins and operating leverage.
• Adjusted EBITDA Margin -- 54%, increasing more than 700 basis points due to a largely fixed cost base.
• GAAP Diluted EPS -- $0.40, including the impact of a $30.0 million litigation settlement.
• Adjusted Diluted EPS -- $0.48, compared to $0.48 in the prior-year period.
• Options Segment Revenue -- $124.4 million, increasing 34% through higher net transaction fees and 2026 fee increases.
• Options Average Daily Volume -- 11.0 million contracts, growing 25% in line with industry demand for risk management tools.
• Options Market Share -- 16.5%, remaining relatively flat compared to 16.7% in the prior year.
• Options Revenue Per Contract -- $0.124, reflecting a shift in mix and tiers toward higher pricing.
• Equities Segment Revenue -- $5.5 million, up 27% primarily due to higher net transaction fees from improved pricing.
• Futures Segment Revenue -- $5.1 million, remaining flat as gains in agricultural products were offset by inverted financial futures revenue.
• International Segment Revenue -- $5.7 million, increasing 151% following the acquisition of The International Stock Exchange Group in June 2025.
• Cash and Debt -- $660.5 million in cash against $1.5 million in total debt as of June 30, 2026.
• Adjusted Operating Expense Guidance -- $260 million to $270 million, lowered from previous guidance of $265 million to $275 million.
• Share-Based Compensation Guidance -- $29 million to $32 million, increased to reflect updated executive compensation plans.
• Capital Expenditures Guidance -- $40 million to $45 million, with spending front-loaded in the first half of the year.
• Litigation Settlement -- $30.0 million, incurred to resolve the Nasdaq matter and close the legal proceedings.
• FCM Capital Increase -- $40 million, allocated to the futures commission merchant to support its application for OCC membership.
• Agricultural Futures ADV -- 12,957 contracts, declining 28.6% while revenue per contract rose 14.1% to $2.262.
• Financial Futures RPC -- negative $1.766, reflecting inverted capture rates during the initial launch phase of Bloomberg products.
• Data Sales Revenue -- $1.8 million, generated from a recently introduced episodic historical report offering.
• Listed Securities -- 6,109 items, growing 6.1% in the International segment.
• Equities Market Share -- 0.9%, compared to 1.1% in the prior-year period.

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RISKS

• CFO Emmons stated, "we would not recommend modeling our Q2 RPC of $0.124 into the second half of the year," noting that market share increases and fee changes are expected to bring the capture rate back toward previous ranges of $0.103 to $0.11.
• Management acknowledged that the Futures segment reported an operating loss of $12.7 million, reflecting the costs of scaling the new Bloomberg financial futures products and inverted capture rates.

SUMMARY

Miami International Holdings, Inc. (MIAX +2.74%) reported record net revenue for the second quarter, primarily supported by elevated market volatility that drove increased volume in the multi-listed options business. Management prioritized the launch of its Bloomberg financial futures ecosystem, which is designed to compete with incumbent broad equity market products through a more aggressive fee structure and earlier inclusion of new IPOs. The company is actively focusing on enabling retail broker connectivity to these products as the next major operational milestone. Strategic initiatives also include expanding the futures commission merchant's capital base to facilitate clearing through the Options Clearing Corporation and diversifying the agricultural segment with new fertilizer-based products. Furthermore, the company indicated interest in exploring regulated perpetual futures contracts should regulatory frameworks continue to evolve in the United States.

• CEO Gallagher stated, "Getting retail distribution for our Bloomberg products is our top near-term priority," as the company moves past the initial launch phase for the B500 and B100 futures.
• The company resolved the Nasdaq litigation during the quarter, recording a $30.0 million settlement charge to close the matter.
• Management plans to launch a series of agricultural fertilizer futures in late October 2026 to meet customer demand resulting from global supply chain disruptions.
• CFO Emmons noted that the reduction in full-year operating expense guidance was partially offset by a shift from cash-based to share-based compensation following the company's transition to being public.
• Shelly Brown highlighted that MIAX's technology allows market makers to quote more aggressively in high-volatility names, noting that "the more comfortable they can quote, the longer the quotes are up on the screen, the better the quotes, and that's what draws the retail to the marketplace."
• The company's FCM, Dorman Trading, is applying for OCC membership to provide indirect clearing access for retail firms that do not have their own clearing arrangements.
• Management confirmed that capital expenditures for 2026 were front-loaded in the first half of the year and are not expected to see material increases through the remainder of the period.

INDUSTRY GLOSSARY

• ADV (Average Daily Volume): A measure of the number of shares or contracts traded on average per day during a specific period.
• B500 / B100: Proprietary index futures products based on Bloomberg equity indices tracking large-cap and mid-cap companies.
• FCM (Futures Commission Merchant): An entity that solicits or accepts orders for futures contracts and accepts money or other assets to margin or guarantee those trades.
• OCC (Options Clearing Corporation): The world's largest equity derivatives clearing organization, providing central counterparty clearing for options and futures.
• Perps (Perpetual Futures): A type of derivative contract similar to a futures contract but without an expiration or settlement date.
• RPC (Revenue Per Contract): A metric representing the net transaction and clearing fees earned by an exchange for each contract traded.
• TISE: The International Stock Exchange, an exchange based in the British Isles that provides listing and trading services.

Full Conference Call Transcript

Operator: Thank you for standing by. My name is Alan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Miami International Holdings, Inc. Second Quarter 2026 Earnings Call. [Operator Instructions] It is now my pleasure to turn the call over to John T. Williams, Senior Vice President and Head of Investor Relations. You may begin your conference.

John T. Williams: 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.

Thomas Gallagher: 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 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 in 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 T&E B500 and T&E 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 product over incumbents.

We think of ourselves as a disruptor in this category, and we believe there is 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, and 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, though 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. On the other hand, we see these recent developments as a potential opportunity.

Accordingly, 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. As potential opportunities arise, we may leverage our modern agile trading and clearing infrastructure as well as our CFTC-licensed futures exchange and futures clearinghouse to consider offering capital-efficient derivatives products. One brief comment on our ownership stake in Rothera. As a reminder, 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 are excited about the recent progress and volumes as they publicly announced. With that, I'll turn it over to Lance to walk through our second quarter financial results.

Lance Emmons: Thanks, Tom, and good afternoon. It was a strong quarter across the business, and 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 3-month rolling average basis on our IR website. 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.

[ pay ] 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 financial 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 continue 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. Now 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. Options segment net revenues were driven by an increase in both net transaction fees and non-transaction fees. Growth in net transaction fees reflected higher RPC and industry ADV, slightly offset by lower market share. Non-transaction fee growth of 36% was primarily due to increased member connections, our January 1 fee increases and market data sales.

I'll note that Q2 '26 included $1.8 million in data sales revenue from a recently introduced historical report offering. As we discussed last quarter, this type of revenue is episodic, and therefore, we would not model it into future quarterly estimates. Turning to market share and RPC. Q2 options market share was 16.5%, relatively flat year-over-year and down from 17.3% in the first quarter. As you know, our options market share varies month-to-month and quarter-to-quarter, and Q2 was part of that normal pattern. We've continued to deliver record quarterly revenue, and that's the outcome we managed toward. Q2 RPC reflected a shift in mix and tiers toward higher pricing, a byproduct of our lower Q2 market share.

Due to ongoing mix and tier effects as well as fee changes, including work-related ones that became effective on July 1, we would not recommend modeling our Q2 RPC of $0.124 into the second half of the year. With that in mind, and although it's difficult to guide on capture rates, we expect second half RPC will be closer to what we saw in the previous few quarters. Our Equities segment net revenue was $6 million, up from $4 million in the prior year period, primarily due to higher net transaction fees. Equities capture was less inverted in the quarter compared to the year ago period.

Futures segment net revenue was $5 million, which was flat compared to the prior year period. Our first Bloomberg financial futures products launched in May and did not contribute materially to the Q2 results. Our International segment net revenue was $6 million compared to $2 million in the year ago period due to the acquisition of TISE in June of 2025. Operationally, our efforts to streamline sales and marketing across our international listings businesses are underway and progressing well. Turning to our balance sheet. We ended the quarter with cash and cash equivalents of $660 million and outstanding debt of less than $2 million, which matures in December. Now let's walk through our updated 2026 guidance.

Full details, including comparison to our prior guidance, can be found on Slide 16 of our earnings deck. We are lowering our full year 2026 adjusted operating expense guidance to between $260 million and $270 million compared to the prior $265 million to $275 million range. Our expense expectations for the rest of the year still include a planned increase in marketing costs, including quoting incentives associated with our Bloomberg Index futures products. Based on recent grants, we now expect full year share-based compensation expense in a range between $29 million and $32 million versus the prior $27 million to $30 million range. We continue to expect full year capital expenditures in the range between $40 million and $45 million.

As a reminder, we front-loaded CapEx in the first half and do not expect any material cost increases over the remainder of the year. We expect depreciation and amortization expense in the range between $35 million and $39 million compared to the prior range of $33 million to $38 million. Our Q2 adjusted effective tax rate was 27%. We continue to expect our full year rate will be in the 27% to 29% range. I'll now turn it back over to Tom.

Thomas Gallagher: Thanks, Lance. We're happy with our progress this quarter and remain confident in the road ahead. We'll keep leveraging the 4 competitive pillars you heard me talk about many times -- our high-performance technology, our broad range of regulatory licenses, our diverse and expanding product range and our deep customer relationships. These remain our core competitive advantages. There's a lot to be excited about here at MIAX. Getting retail distribution for our Bloomberg products is our top near-term priority, and we continue to see opportunity in an improving IPO pipeline, strong retail demand for options and growth of structured products that use options in their strategies. We sincerely appreciate you joining us today.

As a reminder, Doug and Shelly are here with Lance and me for our Q&A. So, let's begin.

Operator: [Operator Instructions] Our first question today comes from Patrick Moley from Piper Sandler.

Patrick Moley: So, congrats on the quarter. I wanted to dive into the options business. You saw record volumes, record high RPC. Lance, I know you said in your prepared remarks there, you don't want people to extrapolate the RPC this quarter expected to be in line with where it's been the last couple of quarters. So, could you maybe just talk about what drove the step-up this quarter? What's going into that assumption that it comes back down? And then, Tom, you talked about calibrating price where it makes sense to pursue share gains. Could you maybe just talk about that as well?

And should we read that as you potentially being open to tweaking that to maybe recapture some share that's maybe been lost here year-to-date? Apologies for the multipart question.

Thomas Gallagher: Thank you, Patrick. Appreciate that question. Those series of questions. I'll turn it over to you, Lance, with respect to the RPC and your comments during the early part of our call.

Lance Emmons: Yes, Patrick, good to hear from you. The increase really from like $0.11 in the first quarter to $0.124 in the second quarter, really driven by a couple of factors. One is as market share lowered, we had less volume at sort of the highest rebate tiers or lowest fee tiers. So, it's sort of a natural sort of seesaw with those. We also saw some favorable mix in terms of higher capture flow that kind of ebbs and flows from period to period. As we look ahead, market share has sort of rebounded about 17.1% in July, still early, obviously, early days in August, but improved from there a little bit further.

So, with that, we think, again, the tier effects will sort of bring the rate back down. We're also looking at sort of more normalized mix. Mix is very difficult to predict, obviously, as you know, from day-to-day or month-to-month. So, difficult to predict on that. We also did a couple of fee changes in July and August to try to again find that right balance between capture rate and market share. And then the fourth thing, again, it all kind of contribute roughly about the same, I would say, in terms of our expectation. The really 2 impacts there.

One is just as volumes have been growing faster than our regulatory fee, the rate -- the effect on the RPC naturally comes down. And then a small part as well just due to the new methodology that came out July 1. So, I think if you take all 4 of those items, that's why we're kind of -- sort of expecting closer to the last couple of quarters, which kind of range between by about $0.103 in the third quarter to $0.11 in the first quarter.

Thomas Gallagher: Yes. And then on the last part of your question about trading off some of the RPC for increases in volume, I think when you look at the volume for July, which is historically a low period of time, we came in at -- I think it was just over 17%, Shelly, 17.1%. And Patrick, August looks even better as we obviously are only in the first couple of days. We absolutely look at RPC and market share, and we do want to continue our momentum in terms of market share. And from time to time, we do adjust some of the tiers.

In fact, one of the things that we're looking at, and we did, in fact, do, Shelly, tiers or pricing in August on Sapphire. Any comment on that, Shelly?

Shelly Brown: We made pricing changes in Sapphire, primarily for the trading floor. We tried some pricing changes in July on Pearl to try to attract further high profit flow. We reverted some of those for this month did not have the expected impact. Again, managing market share and RPC is really as much an art as it is a science. We certainly recognize that market share and RPC are inversely correlated. We're always trying to maximize the net revenue. So, we continue to work with the art as we move forward.

Patrick Moley: Congrats on the quarter, guys.

Operator: The next question comes from Michael Cyprys of Morgan Stanley.

Michael Cyprys: Just wanted to ask about the financial futures that you launched this quarter in partnership with Bloomberg. I was hoping you could elaborate a bit on the competitive fee structure that you alluded to. And maybe you could talk to some of the steps that you're going to be taking in the coming months as you think about, I guess, step 2, which is bringing retail brokers on board? And maybe you can comment on what that pipeline looks like, what your expectation is kind of going into the end of the year in terms of onboarding retail brokers? And ultimately, what do you think it's going to take to drive success with that [ community ]?

Thomas Gallagher: Great. Michael, thanks very much for the question. I appreciate that. I'll have Shelly talk to the fee structure, but we're very excited about the Bloomberg product launches, which started on May 17. Our screens are lit. The depth of the market and the volumes over the past 60 days are right in line with our expectations. And now as you were mentioning, our focus is on enabling retail engagement. So, we're having outreach to a number of the, I would call the trading firms that we're hoping to get engaged, working with them with respect to educational programs, marketing programs and trying to educate initially the retail users with respect to the benefits of trading the B500.

We've already talked about in prior calls about the index methodology, the rules-based approach to listing the securities in the index and also the benefits of the way the index is constructed, particularly as the IPO pipeline improves and more large caps come into this index. So, Shelly, maybe a little bit regarding the use of fees and the fee structuring to garner initial market share.

Shelly Brown: Thank you, Tom, and thank you, Michael, for the question. We're very pleased with the progress that Tom said. Things are going as expected with the liquidity providers. We have additional liquidity providers coming on board over the next several weeks. As far as the retail firms, several are working through various phases of connectivity and working out clearing arrangements. We're working with several firms that expect to -- we expect will be enabling customer activity over the next several weeks. So, we're very excited about that. There's been a lot of interest from several retail firms. So that's the progress. It's still very early in the game. We're only a few months in.

So, we're about where we expected to be. And I think we'll start seeing retail exposure to the product over the next several months -- next couple of months. The fee structure is really designed to incentivize retail firms to introduce their clients to the product. So, it's a different way of looking at marketing a product. As Tom said, we're working closely with the marketing teams at the retail firms to put together educational programs. We're looking at sponsoring events with customers. But again, providing the right incentives to the retail firms to want to interact with us. And of course, we have that technology advantage over the competitors.

Thomas Gallagher: And Michael, our goal is really to grow the overall pie. Maybe Shelly, you could comment on that in terms of your strategy.

Shelly Brown: It's not just taking market share from the incumbents. It's growing the index pie. The industry is looking for competition. There hasn't been any competition for a long time, either the broad market or the technology market. So, bringing these products to market with Bloomberg is really a breath of fresh air for the industry. Retail, institutional and liquidity provider sides are all excited to have competition within the business.

Thomas Gallagher: We also, as we announced earlier today that we've made application with OCC for our FCM, and we consider having that OCC approval when it's fully completed an important step in terms of getting the retail engagement for the B500 Mini and the B100 Mini.

Operator: The next question comes from Ken Worthington of JPMorgan.

Kenneth Worthington: Maybe first on expenses. You're lowering guidance on adjusted operating expenses, and you're doing this in the context of higher stock-based comp and depreciation. And you're also doing this in the context of a pretty robust volume environment. So, what are the pieces that are lower here versus your prior expectations? And how are you managing to kind of take the adjusted operating expense outlook down?

Shelly Brown: Yes. Good question, Ken. So, in terms of OpEx and share-based comp, 2 things there that are somewhat tied together. As the compensation committee updated the executive compensation plans, now that we're a public company, we moved a little less towards cash-based compensation, so that comes out of OpEx and a little more into share-based compensation. So those 2 are mostly tied together.

In terms of other OpEx, again, I think it's just looking at sort of the run rate how we've been spending and where we expect expenses to go from here from our current run rate after those 2 changes is really just some pickup in some marketing and fees related -- marketing and incentives related to the Bloomberg products.

Kenneth Worthington: Great. Makes sense. And then just you mentioned SpaceX market share exceeds your overall average, sort of similar comments you made, I think, to my last question last quarter in your presence in the single stock options. So, what's driving the better engagement in the new products relative to the legacy options products? And is there a way to leverage what you're doing in these new products to help market share in the more mature listings?

Thomas Gallagher: Ken, great question, and I'll give you that Shelly to follow up.

Shelly Brown: Thank you, Tom. So, Ken, there's a number of factors. The primary one being the more liquid classes that are higher-priced equities that tend to be slightly higher volatility, we tend to do better in because of our technology, the technology that we've built that allows the market makers to be very aggressive in their quoting. This allows them to participate more with retail because they're on the market more. Their markets are tighter. So, we tend to do better in those sorts of names. And it kind of flows over also to those names that have the Monday and Wednesday weekly expirations, where we also outperform. They're very retail focused, and we do very well in those retail-focused names.

Names that are more institutional focused, we don't perform quite as well in. We're getting there with the trading floor, I'm sure we'll talk about before the end of the day, bringing that institutional flow to the trading floor. So, it's really about the technology driving the better markets, which drive more retail volume to the exchange.

Operator: The next question comes from Jeff Schmitt of William Blair.

Jeffrey Schmitt: The non-transaction fees for options were up around 40% in the first half. And I think you called out a couple of things or fee increases on January 1 and you launched some new market data products. But could you just give us a sense of how much growth is being driven by these different factors?

Thomas Gallagher: Jeff, great question. Thank you very much for that. Lance, do you want to cover that?

Lance Emmons: Yes. Just in terms of access fees. So in terms of the access fees, we did some fee increases on January 1. We also had some fee waivers for when we launched the Sapphire Exchange. So, we either waived those fees or heavily discounted them. So, if you look at kind of the first 6 months of the year, I would say about half of that volume is from -- half of that increase is from fee increases and half of it is from additional connections that members -- additional connections and services that members have ascribed to.

Jeffrey Schmitt: Got it. And then you've talked in the past about rolling out some new agricultural futures, I believe, later this year. But could you give us an update on when you plan to roll those out and what the underlying commodities would be?

Thomas Gallagher: Yes. I'll start, and then I'll turn it over to our CEO of Futures, Shelly Brown. In late October, we are going to launch the first of a series of agricultural futures products that are primarily focused in the fertilizer area. And these are a result of demand being asked of us to provide some alternatives in this area, particularly as geopolitical events have caused a lot of upheaval in certain areas of the commodities world. Shelly, do you want to give a little more color on this for the question?

Shelly Brown: Sure, Tom. I think you pretty much covered it. But adding 4 additional products that will be in the fertilizer space. They're somewhat novel products in the industry. There's been greater demand of late given the supply chain problems that have occurred due to geopolitical issues overseas. There's been demand from our customers to bring these products to market. So, we're planning to list these late this year on the commodity side of the futures exchange.

Operator: Our next question comes from Patrick O'Shaughnessy of Raymond James.

Patrick O'Shaughnessy: Curious about your thoughts on how CME's introduction of single stock futures might impact the equity options world.

Thomas Gallagher: Okay. That's a really good question. Why don't we -- I'm going to go back to you, Shelley.

Shelly Brown: Sure. So single stock futures, first off, have been around a while. There was a single stock futures product listed on -- I believe it's Chicago Futures Exchange. They delisted in 2020, I believe, due to lack of interest. The crossover would be for all intent, single stock futures are available today. You can create a single stock future by doing an options combo. If somebody wanted to create a single stack future out in IBM in December, all you have to do is do a combo, buy call, sell put if you want to be long in the synthetic future, sell call, buy put if you want to be short in the synthetic future. It's priced the same.

It's simply a carry play, interest minus dividends. The area where there might be interest in this, if there's a potential regulatory arbitrage or margin arbitrage between a CFTC-regulated product versus an SEC regulated product, that's really the primary place. It also could be used as a synthetic method to create a stack loan business. It will be interesting to see how they play out with this reintroduction. Certainly, if we see that there's interest, it's something we could pursue on the MIAX Futures Exchange. There would be a relatively easy technology lift. There's a little bit of regulatory requirements, but nothing difficult.

So, I believe we're going to sit back and watch for a little bit because, as I said, the last product was a failure, and we'll see. If it's successful, again, we will use both a combination of our technology and pricing to get into that market. We believe we can penetrate pretty easily if there's demand. But if there's not demand, we have better things to work on from a resource perspective.

Operator: Our next question comes from Chris Brendler of Rosenblatt Securities.

Christopher Brendler: Congrats on a really nice quarter. I'd love to hear a little more about the risk management aspect of volatile markets and how you guys help your clients lean into that? And any sort of quantification on the revenue impact from your risk management activities.

Thomas Gallagher: Great. Shelly, you seem to be at the man of the hour here. So, I'm going to let you go up on some risk management for a little bit.

Shelly Brown: Thanks for the question, Chris. And no, I didn't cue Chris up on this one. This is actually my background in the marketplace coming from the market-making side of the business. When we built MIAX, we said we're going to build a system that caters to both the market makers, the consolidators and the retail firms, and we focused very much on risk management. So, we created risk management methodologies that allow market makers to be more aggressive in their quoting. Now that risk management really comes across in 2 ways. One, the technology we built with the speed and the throughput allows market makers to know they can get in and out of the market very quickly.

They can play defense when they want. Coming from Chicago, myself, being a bears fan, I know defense way more than offense. We allow the market makers to play defense. They can quote more aggressively because they know they can get out. It reduces negative expectancy trades. On top of that, we've created mechanisms similar to what we had in the trading floors back in the '80s and '90s, where our market maker can only be forced to do one trade. I can be quoting multiple options, but I make one trade. I'm now not firm in all my other quotes. We've created methodologies here within the trading system that do that instantaneously for the traders. We constantly enhance that.

In fact, we came out with a new risk management tool earlier this year that allowed market makers to [ weight ] trades in the risk management tool based on the counterparty they were trading with. So, it's all about making the market makers more comfortable to quote. The more comfortable they can quote, the longer the quotes are up on the screen, the better the quotes, and that's what draws the retail to the marketplace.

Christopher Brendler: That's great color. I'd love to ask a follow-up actually in the same area. Is this a capability that's sort of above and beyond what your competitors offer? Or is this a key competitive advantage for MIAX? I haven't really focused on risk management before. I'd love to hear if it's something we think is really a core part of the franchise.

Shelly Brown: It really -- part of it is copyable in that the functionality, once we file a rule with the SEC, anybody can copy that and they can try to build it. But the reality is they can build the functionality, they don't have the speed and the throughput we have. Doug can speak to the technology prowess and what they've built and why it's so much different and better than the other exchanges. Doug?

Douglas M. Schafer Jr: Yes, sure. Thanks, Shelly. Yes, basically, we focused on massive overbuilding of the technology so that we're not ever in a position to have to limit a market maker's intended behavior. As Shelly said, that results in deeper and tighter markets and -- there's a lot of technological things that we do that are proprietary to MIAX that allow us to achieve that with a small hardware footprint and still remain low latency, but a high determinant. So, a combination of probably 1,000 things we do on the technology side, not one big thing. And we've been in the marketplace for a number of years and still leading in round trip latency.

So, it's not an easy thing to copy, I guess, best way to say it.

Operator: Our next question comes from Michael Cyprys of Morgan Stanley.

Michael Cyprys: I just wanted to circle back to your comments around the FCM that you have applying for, I think you said OCC membership. I was hoping you could elaborate a bit on the longer-term strategy of your FCM. I know you've had that for a moment now, helping to reduce barriers for smaller customers to access your markets, particularly on the futures of the grain side of things with the wheat contracts and such. But as new competitors emerge with direct-to-customer models across the market structure landscape as we've seen some of the success overseas. We've seen some of it in the digital space.

Just how are you thinking about evolving competitive landscape in the years ahead as well as new opportunities for maybe a direct-to-customer model, perhaps even with digital wallets over time?

Thomas Gallagher: Great. Thanks for the question. So, with respect to our FCM, we wanted to have the FCM become a clearing member of OCC because there are opportunities for some retail firms that want to come and access our -- not only our -- the B100, but other financial futures products over the course of the next 2 or 3 years. And when we initially bought the FCM, we wanted the FCM to be an alternative ramp to access our futures trading exchange. We had people that wanted to trade some of the products and prospective products on MIAX futures, but they didn't have an access point.

So, the whole idea is to create less friction for predominantly retail firms to have access to our whole host of new financial futures products. Now that we've built the Onyx trading platform, we're off the old platform we were on, and we've completely redone the clearinghouse. So we have optionality in the clearinghouse for both our own clearing capabilities and as recently as May, MIAX futures becoming OCC cleared. I just want to add one other point to that by Shelly.

Shelly Brown: Yes, traditionally, FCMs have not been members of the Options Clearing Corporation. They haven't had a need to unless they were clearing a very limited set of products. So, we chose to clear our financial futures, the Bloomberg products at OCC to enhance the margin offsets and capital efficiency for our members to trade the Bloomberg products. It actually creates a huge tailwind for those products. By having Dorman a member early on at OCC, it provides those FCMs that don't have OCC access, indirect access to clearing. So it just -- it creates another tailwind. So that's really the thought process behind the first -- one of the first movers in OCC to clear the Bloomberg products.

Thomas Gallagher: And then the other aspect of your question about the trend by overseas firms to have direct access to exchanges. We still think that the FCM model for accessing the futures marketplace has a real meaningful and long-term place. There are many jobs and many responsibilities that a well-run FCM undertakes on behalf of the industry, including areas like AML and KYC and managing risk.

So, while there's been a lot of direct access internationally, particularly in the perpetuals area, even as the CFTC evolves its thinking and is trying to put up new policy statements with respect to perpetual futures, we think as a starting place, the FCM should still be the main access point to the U.S. futures marketplace.

Operator: Our next question comes from Patrick Moley of Piper Sandler.

Patrick Moley: I wanted to ask on the cash. You've got $660 million of cash, no debt. I know you said you're going to put $40 million into the FCM. But just curious how we should think about how much of that cash balance is available or truly deployable? And what does the priority order look like in terms of organic investment, M&A or at some point, returning that capital to shareholders?

Thomas Gallagher: Thanks, Patrick. As I've said in the past, it's taken us a while, and it's been a journey to get to the position that we're at today with over $600 million in capital on our balance sheet. I think the near-term uses of our capital, while it's growing, is to continue to invest in the businesses that got us here. So, we want to continue to invest in our existing futures business because we think there's more upside to that futures business, particularly as we continue to roll out new functionality on the floor. As you know, Sapphire is not even a year old as we speak here today.

We also want to grow the pipeline in the futures business and create incentive programs to garner both retail and institutional flows onto the new suite of products now that the infrastructure is built and we have the Bloomberg relationship. Now having said that, we are going to be strategic with the use of this capital. And as opportunities do arise and being that we're on the eve of the 1-year anniversary of our IPO, which is hard to believe will be next Friday, a lot of people are coming to us, including member firms with new opportunities, both overseas and domestically. And we're considering the best way to use this capital.

We have no plans specifically, Patrick, to answer your question about a dividend or any type of a share repurchase program. I'd like to get this first year under our belt and really assess the opportunities. But the core focus with this cash is reinvesting in our people, continuing to build out the futures business and continuing to be a leader in our technology stack that we've talked a lot about this afternoon.

Patrick Moley: I can't believe it's been a year already. I didn't realize that.

Thomas Gallagher: Yes. No, it's absolutely been a year, and it's been a great year.

Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Tom Gallagher for any closing remarks.

Thomas Gallagher: Well, thank you very much, everyone, for joining us this afternoon. Obviously, we've had a great quarter, and we're very grateful for the support of all our member firms and our shareholders that helped us get to this spot, as I said on the eve of our 1-year anniversary of our IPO. And we're going to continue to focus on those 4 pillars that got us here. We're going to continue to work closely with the members we developed these relationships with since our first launch in 2012. And I have to say we're really proud of the new relationship with Bloomberg. I think we got a real exciting second half in front of us.

So, thanks very much for your participation this afternoon, and we're happy to follow up individually over the next few days and answer questions of various analysts and firms. So, thank you very much.