Patrick Moley

Patrick Moley asked about the significant strength in block trading, seeking a breakdown of its sources, the different strategies MarketAxess is employing to penetrate this market, and the underlying dynamics driving its growth.

Answer

CEO Chris Concannon detailed the substantial growth in block trading across various products, including 18% in US high-grade, 19% in high-yield, 27% in emerging markets, and 66% in eurobonds for 2025. He highlighted that block trading now constitutes a third of total credit volume in January, driven by protocols like targeted RFQ, traditional RFQ, automation, Algo suite, MIDX, and closing auctions, with data playing a crucial role in pricing.

Patrick Moley inquired about the significant strength observed in MarketAxess's block trading, seeking details on its origins and the various strategies employed to penetrate this market segment.

Answer

CEO Chris Concannon highlighted substantial growth in block trading across U.S. high-grade (18%), high-yield (19%), emerging markets (27%), and Eurobonds (66%) in 2025, with January 2026 showing even stronger momentum. He explained that growth is driven by data-driven pricing, targeted RFQ, traditional all-to-all RFQ, automation solutions (Auto-X, Algo suite), Mid-X, and the closing auction platform, noting increased block activity in the new issue market.

Patrick Moley asked about the size of the opportunity presented by the recently announced closing auctions, its potential impact on data and market share, and how large a piece of the overall credit market this volume could become over time.

Answer

CEO Chris Concannon highlighted the multi-year investment and partnerships (BlackRock, State Street, Alliance, DWS, S&P) behind the closing auction, emphasizing it's a true auction for price discovery, not just mid-market matching. He explained its design to support the growing indexation and ETF market in fixed income, noting the significant volume aggregation near month-end and daily close. He stressed the critical role of MarketAxess's all-to-all network and the relevance of its CP+ data, integrated with S&P's iBoxx indices, for powering the closing price.

Patrick Moley asked about the size and opportunity of MarketAxess's recently announced closing auctions, including its potential impact on data, market share, and the overall credit market volume over time.

Answer

CEO Chris Concannon explained that the closing auction is a true auction designed to support the growing indexation of the fixed income market, particularly ETFs. He highlighted its all-to-all network and the importance of its clearing price for index funds and ETFs, noting the partnership with S&P to power CP Plus data. He cited statistics on the $150 trillion global market, $2.7 trillion fixed income ETF market, and the increasing aggregation of trading activity closer to the market close.

Patrick Moley from Piper Sandler Companies inquired about the primary drivers behind the decline in fee per million during the quarter, which reached a multi-year low, and asked for expectations going forward, noting a slight recovery in July.

Answer

CFO Ilene Fiszel Bieler explained that the year-over-year reduction in fee capture was principally due to protocol mix, with higher volumes in lower-fee portfolio trading putting pressure on the metric. She noted the slight increase in July was driven by a beneficial move in high-grade duration, which offset the negative mix shift from continued strength in portfolio trading volumes.

Patrick Moley inquired about the engagement with alternative liquidity providers and market makers, asking which protocols they are most interested in utilizing on the MarketAxess platform.

Answer

CEO Christopher Concannon confirmed a significant influx of demand from alternative market makers and systematic funds, resulting in record volumes. He stated that their number one request is for the all-to-all RFQ protocol, as it allows them to price client inquiries anonymously without the operational burden of direct settlement facing. These firms are also heavy consumers of MarketAxess's proprietary data to fuel their API-driven, high-velocity trading strategies.

Patrick Moley questioned the upward trend in total credit fee per million, asking what is needed to return to historical duration levels and confirming sensitivity metrics.

Answer

CFO Ilene Bieler clarified that the weighted average years to maturity on the platform reached approximately 9 years in Q3, which is already at the higher end of the historical range. She reaffirmed the sensitivity guidance: a one-year increase in maturity adds about $15 per million to high-grade fee capture, and a 100-basis-point drop in yields adds $3 to $5 per million.

Patrick Moley asked about Cboe's 2026 Data Vantage revenue growth guidance, which is consistent with prior years despite recent trends showing higher growth. He inquired if this reflects conservatism or an expected slowdown.

Answer

Jill Griebenow, CFO, and Craig Donohue, CEO, clarified that the guidance is set on a full-year basis, expressing comfort with the mid-to-high single-digit range. They highlighted continued durability, strong momentum from new usage, and significant international sales, with 45% of new data sales from overseas clients in the last quarter.

Patrick Moley with Piper Sandler inquired about Cboe's 2026 Data Vantage revenue growth guidance, seeking clarification on whether the mid-to-high single-digit target reflects conservatism or an anticipated slowdown, given recent higher growth trends.

Answer

CFO Jill Griebenow stated the guidance is set on a full-year basis, expressing comfort with the mid-to-high single-digit range, driven by new usage and sales. CEO Craig Donohue added that sales timing varies, highlighting strong international momentum with 45% of new data sales from overseas clients and significant recurring sales from the Asia-Pacific region, alongside robust demand for CGI and analytics products.

Patrick Moley inquired about the CEO search process that led to the appointment of Craig Donohue and the specific skills that made him the ideal candidate.

Answer

CEO Frederic Tomczyk explained that the Board conducted a thoughtful and disciplined process, considering both internal and external candidates. He stated that Mr. Donohue's extensive global derivatives experience, previous CEO role, strong track record, and industry reputation were the key qualities that made him the right person for Cboe at this time.

Patrick Moley of Piper Sandler & Co. asked for clarification on the Data Vantage revenue guidance, questioning if the new 'mid-to-high single-digit' range implies a weaker outlook than the previous 7% to 10% guidance.

Answer

Chief Financial Officer Jill Griebenow clarified that the updated guidance language is intended to align with market standards and remains consistent with the prior year's ranges. She stated that the growth outlook for the Data Vantage segment has not softened.

Patrick Moley of Piper Sandler inquired about the specific drivers behind the expected Q4 acceleration in Data and Access Solutions (DnA) revenue and whether this step-up indicates a sustainable trend.

Answer

Global President David Howson detailed four key drivers supporting the DnA forecast: a strong pipeline of new sales, particularly the 40% from international markets; the ongoing impact of pricing changes from earlier in the year; positive results from technology investments like Dedicated Cores; and the creation of new, valuable data sets and insights from the core platform.

Patrick Moley inquired about the scale of the international opportunity for index options, the expected mix of institutional versus retail clients, and the competitive advantage provided by the S&P 500 benchmark.

Answer

Global President Dave Howson explained that the opportunity is driven by a secular trend of global assets being benchmarked to the U.S. market. He noted that Cboe's SPX and VIX complex is the primary toolkit for managing this risk. While recent growth has come from onboarding retail brokers, he highlighted the planned launch of VIX options on futures as a key product to attract global institutional players who cannot currently access U.S. security options.

Patrick Moley asked about Tradeweb's market outlook for 2026, key themes driving the business, and the factors contributing to the stronger-than-expected 17% year-over-year revenue growth in January.

Answer

CEO Billy Hult discussed a constructive market environment for 2026, highlighting strong debt issuance from public and private sectors (including AI infrastructure), central bank policy divergence spurring cross-border trading, and the positive impact of bank deregulation on trading operations. He noted January's strong performance, with global swap platform revenue up over 40% and global ETF revenues up 40%, driven by these themes and Tradeweb's international business strength.

Patrick Moley of Piper Sandler inquired about Tradeweb's market outlook for 2026, key themes driving the business, and the factors contributing to the stronger-than-expected 17% year-over-year revenue growth in January.

Answer

CEO Billy Hult outlined a constructive 2026 market environment, highlighting growing debt markets, AI infrastructure spending, central bank policy divergence driving cross-border activity, diversified equities exposure, and the positive impact of bank deregulation. He attributed January's strong revenue growth to a 40% increase in the global swap platform, robust treasury performance, 40% revenue growth in European swaps, government bonds, and credit, 30% growth in JGB revenues, and a 40% rise in global ETF revenues.

Patrick Moley of Piper Sandler Companies asked for an expansion on recent comments about an appetite for larger M&A, including what that could mean for the business and which areas might benefit most.

Answer

CEO Billy Hult confirmed an openness to more transformative M&A that could expand Tradeweb's total addressable market, either through new asset classes or geographies. He stressed that any deal must align with the company's strategy and culture. CFO Sara Furber added that while the company is in a position of financial strength, the bar for acquisitions is high, requiring a strong strategic fit and financial discipline, with a goal for deals to be accretive within a few years.

Patrick Moley of Piper Sandler Companies requested an update on the ICD acquisition, including integration progress, cross-selling success, and key milestones for 2025.

Answer

CFO Sara Furber responded, stating the team is pleased with ICD's progress, with the core business performing on plan with strong client growth and 99% retention. She clarified it's not a classic tech integration but a focus on long-term revenue opportunities. Key initiatives include leveraging Tradeweb's sales force internationally and expanding ICD's product offering, with U.S. Treasuries expected to be available on the platform by mid-2025 to meet strong client demand.

Patrick Moley of Piper Sandler asked for an expansion on the strength seen in the rates business beyond swaps and whether trading velocity is picking up across markets given the current rate environment.

Answer

CEO Billy Hult described it as a 'good time to be in the rates business,' citing a real rate environment, growing debt markets, and the retreat of central banks. He pointed to strong Q3 volume and revenue growth across treasuries (up ~50%), swaps (up >60%), and mortgages (up 25%). Hult attributed rising velocity to the increasing role of alternative market makers and the growing sophistication of the buy-side, which drives automation through platforms like AiEX.

Patrick Moley asked about the outlook for ICE's futures business, specifically the drivers behind record open interest in energy and financials, the sustainability of these trends, and the expected impact of recent market volatility on customer activity and open interest.

Answer

Ben Jackson, President of Intercontinental Exchange, attributed the futures business growth to geopolitical flashpoints, supply chain evolution, energy transition, and energy security concerns. He cited strong year-to-date performance in energy (up 30%) and Brent crude (up 25% year-over-year, 35% open interest growth). He also discussed new market dynamics, including Iran-related tensions, India's trade deal impacting Russian crude imports, US involvement in Venezuelan oil markets, and the exceptional performance of TTF gas contracts (up 100% year-to-date).

Patrick Moley asked about the drivers and sustainability of the record open interest and activity in ICE's futures business, particularly in energy and financials, and the expected impact of recent market volatility.

Answer

Ben Jackson, President of Intercontinental Exchange, attributed the futures business strength to global demand for risk management amidst geopolitical tensions, supply chain evolution, and energy security concerns. He cited strong year-to-date energy growth (30%), Brent crude (25% YOY), and crude overall (15% YOY), with Brent open interest up 35%. He detailed drivers like Iran issues, India's shift from Russian crude, potential Venezuelan oil flow, and the exceptional performance of TTF natural gas contracts (up 100% YTD).

Patrick Moley from Piper Sandler inquired about Polymarket's contract level, specifically the regulatory outlook and opportunities for sports versus non-sports prediction markets, and their applicability at the commercial level.

Answer

Jeff Sprecher, Chairman and CEO, stated that ICE was primarily attracted to Polymarket's non-sports activities, seeing significant interest from traditional finance in data like supply chain, weather, and corporate actions. He clarified that sports contracts are not a high priority for ICE's contribution or learning, though beneficial for Polymarket's earnings and ICE's equity stake.

Patrick Moley inquired about Polymarket's contract level, specifically the proliferation of sports contracts versus non-sports, the regulatory outlook for such markets, and their commercial applicability for Polymarket and ICE.

Answer

Jeff Sprecher, Chairman and CEO of Intercontinental Exchange, reiterated ICE's primary interest in Polymarket's non-sports activities, such as supply chain, weather, and corporate actions data, for traditional finance, noting existing informal use by institutional investors. He stated that sports contracts were not ICE's main focus, emphasizing instead the integration of Polymarket's underlying technologies to improve ICE's workflow, sales, and cost management.

Patrick Moley asked about the strategic rationale for launching the New York Stock Exchange Texas and the company's view on the potential for capital markets to shift to the state.

Answer

President of NYSE, Lynn Martin, described the move as a continuation of ICE's strategy to stay close to its customers. She noted Texas is already the largest state for NYSE-listed companies by market cap (~$4 trillion) and home to over 3,000 ICE customers. The launch was executed quickly, with the first listing secured and plans to add ETP listing functionality in Q2, reflecting a response to a clear customer opportunity.

Patrick Moley of Piper Sandler sought clarity on the 2025 mortgage revenue guidance, specifically questioning the assumptions for refinance versus purchase activity.

Answer

CFO Warren Gardiner acknowledged that the high end of the guidance, which incorporates industry forecasts of strong refi growth, might be optimistic given current rates. He emphasized that the guidance provides a wide band to account for this uncertainty and noted that fundamentals for the purchase market are improving. He reiterated that recurring revenues are expected to grow regardless of the origination environment.

Patrick Moley inquired about the engagement and interest from market makers and institutions in CME Group's new prediction market offering, covering both sports and non-sport contracts, and sought an update on the legal and regulatory landscape, including recent CFTC comments.

Answer

Chairman and CEO Terry Duffy discussed the legal and regulatory aspects, emphasizing CME Group's focus on CFTC-regulated swaps. Global Head of Financial and OTC Products Tim McCourt noted new individual participants and institutional market makers engaging with the Event Contracts, expressing satisfaction with early liquidity and client interest.

Patrick Moley from Piper Sandler asked about the engagement from market makers and institutions in CME Group's new prediction market offering, covering both sports and non-sport contracts, and sought an update on the legal and regulatory landscape, including recent CFTC comments on jurisdiction.

Answer

Tim McCourt, Global Head of Financial and OTC Products, noted new individual participants and institutional market makers engaging with the prediction markets, attracted by the product design and existing liquidity. Chairman and CEO Terry Duffy clarified CME Group's stance on legal battles, emphasizing focus on market-side activities and partnership with FanDuel. He confirmed the CFTC views these contracts as legal swaps and is committed to oversight, reiterating CME Group's participation as long as they are federally regulated swaps.

Patrick Moley inquired about the explosive growth in event contracts, particularly sports-related ones, and whether CME Group plans to list sports contracts, referencing recent media reports. He also asked about the feasibility and considerations for offering parlays in prediction markets.

Answer

Terry Duffy, Chairman and CEO, CME Group, clarified that CME Group is prepared to offer sports events if FanDuel is ready and the U.S. government approves them as swaps, not gaming, but the decision is not yet made. He expressed concerns about political events and manipulable markets. Lynne Fitzpatrick, CFO, CME Group, added that the focus is on distribution. Regarding parlays, Terry Duffy questioned if they meet the 'economically beneficial' definition of a swap and noted the government has not yet opined, and CME Group is not actively exploring the operational aspects.

Patrick Moley asked about the explosive growth in event contracts, particularly sports-related ones, and whether CME Group, in partnership with FanDuel, would list sports contracts, as well as the feasibility of offering parlays in prediction markets.

Answer

Terry Duffy, Chairman and CEO, clarified that listing sports events depends on U.S. government approval, emphasizing that CME Group is operationally ready if allowed. Lynne Fitzpatrick, CFO, added that the focus remains on distribution and getting products to the retail community. Terry Duffy also expressed caution regarding parlays in prediction markets, questioning their economic benefit and regulatory classification.

Patrick Moley of Piper Sandler Companies asked about the ongoing trial with former floor traders, inquiring about the potential damages and whether the litigation has impacted CME's capital return appetite.

Answer

Chairman & CEO Terrence Duffy stated that the company cannot comment on pending litigation as the trial is currently in progress. He reiterated what has been said publicly: CME has not accrued any funds for this matter to date.

Patrick Moley of Piper Sandler Companies asked for commentary on the ongoing trial with former floor traders, the potential damages, and any impact this might have on the company's capital return plans.

Answer

Terrence Duffy, Chairman & CEO, stated that the company cannot comment on pending litigation. He confirmed that the trial is currently in progress and reiterated the company's previous public statement that it has not accrued any reserves for this matter to date.

Patrick Moley from Piper Sandler inquired about CME Group's plans for the proceeds from the announced sale of its OSTTRA joint venture and how this impacts capital allocation priorities.

Answer

Lynne Fitzpatrick, CFO, confirmed it is a 50-50 joint venture and stated that CME will hold off on commenting on the use of proceeds until closer to the deal's close, which is expected in about six months pending regulatory review. Terrence Duffy, Chairman and CEO, added that they do not anticipate any regulatory hurdles for the transaction.

Patrick Moley requested a 'state of the union' on the competitive landscape in interest rates, specifically regarding the FMX SOFR futures launch. He also asked if it was misguided to assume that potential price increases in the rates complex are now off the table due to competition.

Answer

CEO Terrence Duffy commented that competitor volumes have been modest but emphasized CME's focus on providing client efficiencies and superior liquidity, noting CME's tighter bid-ask spreads result in a lower all-in cost for clients. He reiterated his strong opposition to U.S. Treasury futures being cleared overseas. On pricing, Duffy stated it is misguided for anyone to assume CME's strategy, highlighting that the company achieved record SOFR and Treasury volumes without introducing new incentive programs.

Patrick Moley asked about the Washington crypto market structure bill, its chances of passing, its necessity for advancing digital asset plumbing, and the aspects most exciting for Galaxy Digital's business.

Answer

CEO Mike Novogratz stated that there is a 75%-80% chance of the bill passing, driven by bipartisan necessity and a desire to move past political gridlock. He expects a compromise on controversial pieces, like interest on stablecoins, within 2-6 weeks. Novogratz believes the bill will significantly accelerate on-chain activity and potentially lead to increased M&A in the sector.

Patrick Moley from Piper Sandler Companies asked for an update on conversations with hyperscalers and other AI-adjacent companies, and inquired about engagement from traditional financial firms in the institutional client pipeline.

Answer

President & CIO Christopher Ferraro explained that demand from hyperscalers remains strong for power deliveries in 2027-2029, aligning with Galaxy's capacity pipeline. Founder, CEO & Director Michael Novogratz added that TradFi firms are increasingly preparing for tokenization and that Bitcoin has become a standard macro asset for most hedge funds, driving engagement through ETFs and balance sheet companies.

Patrick Moley asked for an update on the 1.7 gigawatts of power under study at Helios, including approval timelines, and questioned whether Galaxy might acquire new data center sites before fully contracting the Helios capacity.

Answer

Founder and CEO Michael Novogratz stated that the study for the 1.7 gigawatts is far along, with approval for the first 800 megawatts expected within a 'single-digit number of months.' He clarified that while Helios is the priority, the company is prudently evaluating other sites to build a geographically and customer-diversified portfolio, emphasizing a thoughtful acquisition strategy matched to client demand.

Patrick Moley inquired about the status of the remaining 600 megawatts of power at the Helios facility, asking if it is still exclusive to CoreWeave and how the deal specifications might change if CoreWeave exercises its option for the additional capacity.

Answer

Christopher Ferraro, an executive at Galaxy, confirmed that the remaining capacity at Helios is under option with CoreWeave in several tranches. He explained that future development would be greenfield, potentially increasing CapEx, but noted that Galaxy's arrangement provides for a fixed yield based on those costs, making it a collaborative process to determine the final design and cost structure.

Patrick Moley asked about the implications of SEC approval for expanded options expirations in Mag 7 names, specifically Monday, Wednesday, Friday trading. He inquired about the expected impact on the overall options market, how Nasdaq stands to benefit, and potential effects on market volumes. Additionally, he questioned if a proliferation of 0DTE trading in single stock options could serve as a tailwind for Nasdaq's index option franchise, given the higher weighting of Mag 7 names in Nasdaq indices compared to competitors like the S&P 500.

Answer

Adena Friedman, Chair and Chief Executive Officer of Nasdaq, expressed pleasure with the launch and noted early positive uptake. She highlighted that the expanded expirations offer clients more precise risk management capabilities, which is expected to drive both market volumes and institutional participation. While acknowledging it's too early to fully assess the impact, Nasdaq is excited about the potential for expansion over time.

Patrick Moley asked about the implications of SEC approval for expanded options expirations in Mag 7 names (Monday, Wednesday, Friday trading), how Nasdaq stands to benefit, and the potential for increased market volumes and a tailwind for Nasdaq's index option franchise, especially with the proliferation of 0DTE trading.

Answer

Adena Friedman, Chair and CEO, expressed pleasure with the launch and client satisfaction, noting early uptake. She highlighted that shorter-dated risk management allows clients to address market changes more precisely, potentially driving volumes and institutional participation. Friedman stated it's too early to fully understand the effect on markets, as it had only been live for a week.

Patrick Moley of Piper Sandler Companies questioned how customer conversations in the FinTech division trended during Q2, specifically asking about the impact of market volatility in April on sales cycle timing.

Answer

Chair & CEO Adena Friedman acknowledged that sales cycles for some U.S. Calypso clients elongated in March and April due to market uncertainty but noted they normalized by May and June. She also mentioned that regulatory uncertainty caused some implementation delays for AxiomSL, but improving clarity is helping shore up the pipeline.

Patrick Moley questioned why Nasdaq maintained its Financial Technology revenue guidance despite citing macro headwinds and delays in customer decision-making.

Answer

CEO Adena Friedman provided a breakdown by subdivision, explaining that confidence remains high due to the division's diversity. She noted robust demand in Financial Crime (Verafin) and Surveillance, while acknowledging some implementation timing shifts in RegTech (AxiomSL) and longer decision cycles for large deals in Capital Markets Tech (Calypso). However, she stressed that the overall demand characteristics and client pipelines remain strong, providing a solid ballast against uncertainty.

Patrick Moley asked for the outlook on the Financial Technology segment's overall growth rate within its 10-14% target and sought details on why the Financial Crime Management business is expected to be at the low end of its range.

Answer

Adena Friedman, Chair and CEO, explained that Financial Crime Management's growth is impacted by the timing of large Tier 1 bank deals and global expansion efforts, which are still in their early stages but have a strong pipeline. For the broader FinTech division, she reiterated confidence that growth will be within the 10% to 14% outlook range for the year, supported by strong 2024 sales.

Patrick Moley followed up on cross-selling, asking about the potential revenue size of new campaigns and Nasdaq's progress toward its $100 million cross-sell revenue target by 2027.

Answer

CEO Adena Friedman stated they are in the 'early, early' stages of the journey and that the path to exceeding the $100 million target will not be linear. She highlighted that 2024 has been a foundational 'building year' for integration, and noted that over 10% of the current FinTech pipeline already consists of cross-sell opportunities.

Patrick Moley asked for details on Figure Technology Solutions' impressive partner growth this quarter, including the composition of new partners by size and loan types, and the expected time for these new partners to reach a realistic run rate.

Answer

CEO Michael Tannenbaum explained that the biggest driver of partner growth was the Small and Medium Business (SMB) segment, benefiting from a greenfield opportunity, tailwinds from the government shutdown, and product improvements for underwriting SMB bank accounts. Figure Technology Solutions onboards a diverse range of partners, from those operational in two weeks to enterprise clients with years-long implementation cycles. This quarter saw the addition of a major servicer, a large independent mortgage bank, and a partner with Robinhood, diversifying the partner base by size and end market.

Patrick Moley asked for elaboration on Figure's impressive partner growth in the quarter, including the composition of new partners by size and loan types, and the expected time for these new partners to reach a realistic run rate.

Answer

Michael Tannenbaum (CEO) attributed significant partner growth to the SMB segment, driven by greenfield opportunity, government shutdown tailwinds, and product improvements for underwriting SMB bank accounts. He noted Figure onboards a diverse range of partners, from those operational in two weeks to enterprise clients with year-long sales cycles, including a major servicer, a large independent mortgage bank, and a partner with Robinhood.

Patrick Moley asked for MIAX's outlook on options market growth heading into next year, including major themes and expectations, given the strong performance over the last few years.

Answer

Thomas Gallagher, Chairman and Chief Executive Officer, highlighted historical growth in industry ADV (from 15M in 2012 to 67M in October) and cited industry tailwinds like a growing retail base and new short-dated options filings as drivers for continued robust growth. Shelly Brown, Chief Strategy Officer, added that retail growth will persist due to free trading, market exuberance, and the accessibility of lower-priced short-dated options.

Patrick Moley asked for MIAX's broad outlook on options market growth, considering the strong performance over recent years, and the major themes expected to play out in options heading into next year.

Answer

Thomas Gallagher, Chairman and CEO, MIAX Exchange Group, highlighted historical growth in options ADV and strong industry tailwinds, particularly from the growing retail base and new short-dated options filings, indicating robust growth opportunities. Shelly Brown, CSO, MIAX Exchange Group, added that retail growth is fueled by free trading and market exuberance, with short-dated options making trading more accessible due to lower pricing, expecting continued expansion of the retail experience.

Patrick Moley asked about the balance sheet expansion, the progress of conversations with funding partners for R&D products, and the impact of auto credit issues on private credit partners, as well as the day-one economics of the HELOC product.

Answer

Sanjay Datta, CFO of Upstart, expressed satisfaction with funding partner conversations for new products, noting that while auto fraud headlines have lengthened diligence timelines, they haven't impacted appetite. He indicated HELOC take rates would be healthy but more modest than personal loans, on much larger loan sizes. Dave Girouard, CEO of Upstart, reiterated exceptional credit performance despite UMI signals.

Patrick Moley asked about the balance sheet expansion in Q3, the progress of conversations with potential funding partners for R&D products, and whether recent auto credit issues had led to a contraction in demand from private credit partners or impacted their assessment of R&D product portfolios.

Answer

CFO Sanjay Datta expressed satisfaction with funding partner conversations, noting good appetite for large deals despite lengthy diligence processes. He clarified that Upstart's auto loans showed no credit concerns, and while broader fraud headlines lengthened diligence, they didn't alter partner motivation, as portfolio seasoning provides clear credit performance data.

Patrick Moley asked for an update on conversations with potential AI HPC tenants and inquired about the perceived market discount on Hut 8's 1.5 GW power pipeline compared to competitors.

Answer

CEO Asher Genoot stated that the market's valuation of the power pipeline will increase with execution. He noted that AI/HPC tenant demand is very high, and conversations are progressing rapidly, emphasizing a holistic approach to deals including financing, supply chain, and local relationships.

Patrick Moley from Piper Sandler Companies inquired about the composition and intended use of the 500-megawatt increase in power under exclusivity.

Answer

CEO Asher Genoot explained that the new capacity is for sites purpose-built for AI partners and dual-purpose sites (Bitcoin mining and AI), primarily in Texas. He noted that the pipeline is evolving from exclusivity to development assets like Riverbend, with more details to be shared in the next quarter.

Patrick Moley of Piper Sandler Companies inquired about the composition and intended use of the 500-megawatt increase in power under exclusivity.

Answer

CEO Asher Genoot explained that the new capacity is targeted for both dedicated AI customers and dual-purpose sites (Bitcoin and AI), primarily in Texas. He noted that the development pipeline is maturing from exclusivity to active development, with more specific project details to be shared in the next quarter.

Patrick Moley asked about Virtu Financial's shifting focus to growth opportunities, requesting a breakdown of significant growth areas (existing vs. new) and clarification on the impact of dialing back share repurchases on capital building and long-term capital return priorities.

Answer

CEO Aaron Simon explained that growth opportunities are firm-wide, with crypto options and ETF block trading being fast-growing areas. He noted that over $500 million in new trading capital has already been deployed in 2025, with a long-term plan to potentially double the capital base to double the P&L, accumulated organically over time.

Patrick Moley from Piper Sandler Companies asked about the new opportunities for Virtu from stablecoin adoption following the Genius Act and the firm's progress in its overall crypto strategy. He also followed up on the opportunity in equity tokenization.

Answer

CEO Douglas Cifu expressed significant excitement for the digital asset space, viewing stablecoins as a driver for adoption and creating a need for on/off-ramp services that Virtu is well-positioned to provide. Regarding tokenization, he described it as a "pie growing exercise" that expands access to U.S. markets for non-U.S. persons, playing directly to Virtu's strengths in providing liquidity for wrapped, multi-instrument products on a 24/7 basis.

Patrick Moley inquired about the impact of the new SEC leadership on Virtu's business, particularly digital assets, and the total addressable market. He also asked about the drivers of earnings stability in 2024 and its potential continuation into 2025.

Answer

CEO Douglas Cifu expressed strong optimism about the new regulatory environment, anticipating a "new day in Washington" with bipartisan clarity on digital assets and a more industry-friendly approach. He and Co-President Joseph Molluso attributed 2024's stability to the firm's scaled, diverse operations, significant investments in internalization, growth initiatives like crypto, and the consistent performance of the Execution Services business.

Patrick Moley of Piper Sandler asked about the potential impact of the OCC's intraday margin rule changes, particularly concerning zero DTE options, on trading volumes and capital requirements.

Answer

CEO Douglas Cifu and Co-President Joseph Molluso indicated the rule is unlikely to have a direct impact on Virtu. They view the change as primarily a timing difference for delivery rather than an overall capital difference. Mr. Molluso added that since Virtu clears through a third party, the situation is considered manageable.

Patrick Moley asked about Interactive Brokers' strategy for growing the forecast contracts business, including adding broker partners and increasing user engagement, and sought color on the drivers of the 20% quarter-over-quarter margin loan growth, customer breakout, and sustainability expectations.

Answer

Thomas Peterffy, Founder and Chairman, stated that the focus for forecast contracts growth is on adding broker partners and increasing participation from Interactive Brokers' direct customers. Milan Galik, President and CEO, explained that margin loan growth reflects an increased appetite for risk in a momentum-driven market, noting that current margin balances are at an all-time high, and expressed a preference for margin loans over clients making cheap option bets.

Patrick Moley asked for Thomas Peterffy's outlook on retail trading activity given his bullish market view, and questioned if IBKR's crypto strategy was evolving to capture more market share after previous disappointment.

Answer

Founder & Chairman Thomas Peterffy gave a concise, bullish response, stating the current environment is 'very, very favorable' for brokerage firms, especially Interactive Brokers. CEO Milan Galik acknowledged his continued disappointment with crypto market share but expressed hope that enabling crypto asset transfers will attract new clients. He also cited the friendlier regulatory administration as a key factor in expanding their crypto offering.

Patrick Moley from Piper Sandler Companies asked Founder Thomas Peterffy to expand on his bullish market outlook and its implications for retail trading and the IBKR platform. He also followed up on the crypto offering, questioning if the lack of market share gain was prompting a more aggressive product build-out to attract retail clients.

Answer

Founder & Chairman Thomas Peterffy reiterated his bullish stance, stating the current environment is very favorable for brokerage firms. CEO Milan Galik expressed continued disappointment with crypto market share but hopes that enabling asset transfers will attract new clients. He confirmed that the friendlier regulatory environment and client demand are driving the strategic push to enhance their crypto offering.

Patrick Moley questioned the rationale behind expanding the cryptocurrency offering and its future growth potential. He also asked for the company's thoughts on expanding its ForecastEx platform to include sports-related event contracts, similar to competitors.

Answer

CEO Milan Galik explained that the crypto expansion was driven by a more favorable regulatory environment, including the rescission of certain SEC accounting guidance. While crypto growth has been slower than expected despite low costs, it rounds out their offering. Regarding sports contracts, Galik clarified that the ForecastEx Exchange itself will list them for other FCMs, but Interactive Brokers has not yet decided whether to offer them to its own clients.

Patrick Moley requested an update on the ForecastEx prediction markets, asking about traction and the product roadmap. He also asked about the company's crypto offering and potential expansion areas given a potentially more favorable U.S. regulatory environment.

Answer

Chairman Thomas Peterffy described the growth of prediction markets as slow and careful, with a long-term goal of building a very large business. CEO Milan Galik added that the immediate crypto plan is expansion into the EU. He is optimistic about clearer U.S. regulations, which would allow for offering more tokens like Solana and raising the current 1% per-account asset limit for crypto.

Patrick Moley inquired about the early performance and client utilization of the new ForecastEx election contracts, as well as the potential impact of a competitor's planned launch of lower-priced index options on the competitive landscape.

Answer

President and CEO Milan Galik detailed that ForecastEx has seen initial traction, primarily in U.S.-only political contracts, and the company hopes it will attract new clients. Regarding competitive threats in index options, Galik stated they will wait to see the competitor's actual pricing before assessing the impact, noting the product's client base has been diversifying recently.

Patrick Moley of Piper Sandler Companies asked for more detail on the negative revenue in the Agriculture Market Making business in Q2 and inquired about the outlook for clearing balance growth after a sequential moderation.

Answer

Group CFO Rob Irvin attributed the negative Ags revenue to reduced market liquidity from tariff announcements and elevated prices in cocoa and coffee. Group CEO Ian Lowitt added that this headwind continued into Q3 but was offset by strength in metals and energy. Regarding clearing balances, Lowitt stated the client pipeline remains strong and expects growth consistent with H1 2025 levels.

Patrick Moley from Piper Sandler & Co. questioned the key drivers behind the sequential growth in client clearing balances over the last two quarters and asked for insight into how those balances trended into the second quarter. He also inquired about Marex's current appetite for M&A and the state of its deal pipeline.

Answer

Executive Crispin Robert Irvin explained that the growth in total balances was driven by increases in house cash, clearing balances, and prime services balances, and noted that balances have held up well into April. Executive Ian Lowitt added that a robust pipeline of new clearing clients provides good visibility for continued growth. On M&A, Ian Lowitt confirmed that Marex remains very active and disciplined, targeting a 20% ROE, and that its appetite for acquisitions has not declined. Crispin Robert Irvin noted that deal timing is inherently uneven but expects to announce transactions in the coming months.

Patrick Moley asked about the primary source of market share gains in the trading business and questioned the significant revenue drop-off in the Market Making segment for metals during Q4.

Answer

CEO Ian Lowitt stated that while Marex is gaining share with small and mid-sized clients, the more significant driver of market share gains is winning mandates with larger clients. Regarding the metals business, CFO Crispin Robert Irvin explained that Q4 performance was compared against exceptionally strong Q2 and Q3 results driven by high volatility. He also noted that a fair value adjustment on open risk positions at year-end negatively impacted the Q4 result, which Mr. Lowitt described as more of a 'technical accounting' function than a sign of underperformance.

Patrick Moley of Piper Sandler inquired about Marex's M&A pipeline, specifically asking about target geographies and asset classes. He also asked for management's perspective on the CME's application to operate an FCM and its potential risk to the business.

Answer

CEO Ian Lowitt identified Brazil as a geographic region of interest and highlighted capital markets agency as an attractive product area for M&A. Regarding the CME's FCM application, he dismissed it as a significant competitive threat, viewing it as a defensive relic from the FTX era and believing CME is unlikely to enter the different-skill-set FCM business.

Patrick Moley from Piper Sandler Companies asked for an update on capital allocation priorities and for details on the pace and timing of the newly announced share repurchase program.

Answer

CFO David Morton outlined a three-pronged capital allocation strategy: first, continued internal investment in the product roadmap, especially AI; second, pursuing strategic M&A that fits their profile; and third, utilizing the newly authorized $150 million share repurchase program to put capital to work when deemed appropriate. He did not specify the pace or timing of the buybacks.

Patrick Moley from Piper Sandler Companies asked a high-level question about the impact of real-world asset tokenization on Clearwater's business and the competitive moat provided by its single security master.

Answer

CEO Sandeep Sahai stated that trends like tokenization, growing alternatives, and global volatility play to Clearwater's strengths. He argued that the company is in a prime position to lead this evolution because its single-instance, multi-tenant platform with a single security master provides the ideal foundation for building such solutions, creating a significant competitive advantage similar to its edge in generative AI.

Patrick Moley of Piper Sandler Companies inquired about BGC Group's future growth algorithm and margin trajectory, considering the recent OTC acquisition and the new $25 million expense reduction program. He also asked for an update on the FMX futures business, specifically its market traction and the progress of FCM partner onboarding.

Answer

Co-CEO & COO Sean Windeatt explained that the OTC acquisition temporarily diluted margins, but the $25 million cost reduction program, to be completed by year-end, will align OTC's margins with BGC's by 2026. Co-CEO JP Aubin highlighted FMX's success, noting record SOFR volumes, a UST market share increase to 35%, and near-complete connectivity with equity partners. Co-CEO John Abularrage added that they expect to have 12 FCMs onboarded by year-end, covering the vast majority of the market.

Patrick Moley of Piper Sandler inquired about the FMX futures launch, asking about the reasons for its delay and the validity of rumors concerning its clearing partner, LCH. He also sought updated expectations on the OTC Global Holdings acquisition regarding its accretion, cross-sell potential, and impact on margins. Finally, he asked for guidance on the future tax rate and the cash outlay for the OTC deal.

Answer

Co-CEO Jean-Pierre Aubin confirmed the FMX launch was delayed by market volatility but is set for May 2025, stating both BGC and its clearing partner LCH are ready. Co-CEO Sean Windeatt addressed the OTC acquisition, noting that while it's early, the integration is progressing well and implied guidance shows strong growth. He explained that OTC's initially lower margins are affecting the group average but are expected to improve by the end of the first year. Co-CEO John Abularrage added that synergies are already being explored. For the modeling questions, Sean Windeatt reiterated the full-year 2025 adjusted earnings tax rate guidance of 10% to 12% and stated the cash outlay for OTC was $325 million.

Patrick Moley asked for details on the executive leadership transition timeline, including the divestiture of Howard Lutnick's shares. He also inquired about the financial impact of the Sage acquisition, the outlook for organic growth, drivers of margin expansion, the FMX launch timeline and strategy, modeling assumptions for the upcoming OTC Holdings acquisition, and the company's rationale for adjusting stock-based compensation out of earnings.

Answer

Sean Windeatt, Chief Operating Officer, explained that Howard Lutnick will divest his holdings within 90 days of Senate confirmation with no open market sales expected, and described the new leadership as 'business as usual.' He stated the Sage acquisition added 1-2 percentage points to Q4 revenue growth and will do the same in Q1. Margin expansion was attributed to operational gearing, economies of scale from acquisitions, and the shift to higher-margin electronic trading. Windeatt confirmed the FMX launch and 3-year strategy remain on track. For the OTC acquisition, he validated an estimate of ~$400 million in annual revenue with initial margins around 15%, noting it will be immediately accretive. Finally, he defended stock-based compensation as a critical and successful tool for employee retention and growth.

Patrick Moley of Piper Sandler inquired about the FMX Futures Exchange, including the initial performance of the SOFR contract, the timeline for onboarding new FCMs, and a sequential decline in CLOB market share. He also asked about the strategic rationale and financial impact of the Sage and OTC Global Holdings acquisitions, seeking details on revenue contribution, accretion, and future margins. Additionally, Moley questioned the company's capital allocation priorities post-acquisitions, the potential for divesting Fenics assets, and the sustainability of the firm's long-term organic growth targets.

Answer

CEO Howard W. Lutnick and COO Sean Windeatt addressed the questions. Lutnick stated the FMX Futures launch was successful, meeting the high end of their FCM onboarding target, and explained the multi-year rollout plan. He attributed the slight CLOB market share dip to a spike in a market segment BGC doesn't target. Windeatt detailed that the Sage and OTC acquisitions fulfill a strategy to expand in Energy & Commodities, are expected to add over $450 million in annualized revenue, and will be immediately accretive to EPS. He noted the acquisitions would contribute 1-2% to Q4's growth, with margins initially lower before normalizing around 20%. Lutnick confirmed that acquisitions were a superior use of capital, temporarily reducing share buybacks, and reiterated that BGC is open to divesting certain high-growth tech assets. He expressed confidence in achieving 10% organic growth long-term, describing current business conditions as 'lovely'.

Patrick Moley from Piper Sandler Companies asked about the Gold Card offering, noting the discrepancy between the tripling of cardholders and the slower growth in balances, and inquired about the plan to accelerate the rollout.

Answer

CFO Jason Warnick confirmed they like the economics they are seeing, with the revolve rate in line with expectations and the book performing well, giving them confidence to accelerate the rollout. CEO Vlad Tenev added that there is typically a lag between cardholder acquisition and the build-up of revolving balances, which explains the difference in growth rates.

Patrick Moley from Piper Sandler inquired about the futures offering, asking about the source of its growing volume and whether specific products or asset classes are seeing more migration.

Answer

CEO Vladimir Tenev stated that while it's early, signs indicate the volumes are incremental. He explained that futures trading opens up new behaviors for active traders, such as the ability to easily take short positions and trade around the clock, which complements their existing equity and options trading on the platform. He also mentioned futures on Legend as a key roadmap item.

Patrick Moley asked a two-part question about crypto: what specific regulatory clarity is needed to accelerate adding new tokens, and whether staking is still a focus for the company.

Answer

CEO Vladimir Tenev and CFO Jason Warnick responded. Tenev confirmed no technological barriers exist and that clarity is needed for listing crypto assets as securities, which would enable tokenization of real-world assets. Warnick added that specific SEC guidance on listing coins with security-like characteristics and on staking would be helpful, noting the current administration appears supportive of innovation.

Patrick Moley asked about the economics of index options and futures, including margins and expected volume mix, and also questioned the cause of the sequential decline in equity fee capture.

Answer

CFO Jason Warnick detailed the pricing for the new products, with industry-leading rates for non-Gold members and even better rates for Gold subscribers, noting exchange fees are passed through. He attributed the lower equity take rate in the quarter to lower market volatility and a customer trading mix shift towards more liquid, large-cap stocks.

Patrick Moley of Piper Sandler inquired about the go-to-market strategy for crypto derivatives in the U.S. and the potential timeline for offering Deribit's options products to U.S. customers, given the regulatory hurdles.

Answer

CEO Brian Armstrong stated that Coinbase is working closely with the CFTC to launch perpetual futures in the U.S. and highlighted the imminent launch of Bitcoin futures trading as a step in the right direction. President and COO Emilie Choi added that while they work on a path for U.S. options, the immediate opportunity for Deribit is international.

Patrick Moley of Piper Sandler & Co. asked for an expansion on recent comments about rethinking Coinbase's token listing process due to the massive volume of new tokens being created daily.

Answer

CEO Brian Armstrong explained that as the number of tokens explodes, Coinbase must evolve from a simple directory to a search and discovery engine. He stated the strategy involves deeply integrating decentralized exchanges (DEXs) to broaden access, while simultaneously implementing robust consumer protection measures like disclosures and reputation systems to help users navigate the vast asset landscape safely.

Patrick Moley of Piper Sandler & Co. asked for Forge's perspective on the regulatory environment regarding retail access to private markets. He also inquired about expectations for the company's cash burn for the remainder of the year and beyond.

Answer

CEO Kelly Rodriques stated that Forge actively supports and engages with policymakers on rewriting accredited investor rules to broaden access, while noting that products like the Accuidity fund are designed to provide access under current regulations. CFO James Nevin reiterated the company's goal of reaching adjusted EBITDA breakeven in 2026, noting that Q1 is typically the highest cash burn quarter and that the full-year 2025 burn is expected to be lower than in prior years.

Patrick Moley of Piper Sandler & Co. inquired about the go-to-market strategy for Forge's fully automated trading capabilities and sought the company's perspective on democratizing private market access through blockchain, referencing a recent op-ed by Robinhood's CEO.

Answer

CEO Kelly Rodriques explained that the fully automated trading experience is a core part of the company's next-generation platform vision, building upon the Forge Pro release. Rodriques also expressed strong support for democratizing private market access, noting it aligns with Forge's vision of an extensible platform that can integrate with any modern infrastructure, including retail brokerage applications like Robinhood, via APIs.

Patrick Moley asked for specifics on the land lease at the Rockdale site and whether leasing, rather than owning, makes it less attractive to hyperscalers. He also inquired about the potential length of AI/HPC contract terms based on current discussions.

Answer

CEO Jason Les clarified that the Rockdale site is on a long-term lease with an initial 10-year term and multiple 10-year renewal options. He suggested that while it could impact a deal, the urgent need for power might make it a secondary factor. For contract length, he stated that both Riot and potential partners are interested in long-term agreements of 10 years or more.