MIAX

Business Context and Reporting Period

Company: Miami International Holdings, Inc. (MIH)

Filing Type: Form 10-Q (Quarterly Report)

Period Ended: March 31, 2026

MIH operates regulated financial marketplaces across options, futures, and cash equities through its MIAX Exchanges, MIAX Futures, and international listings (BSX and TISE). The quarter was defined by the completion of the sale of 90% of MIAXdx (now Rothera Exchange) to a joint venture of Robinhood and SIG, and the continued integration of the TISE acquisition.

Key Financial Metrics

Note: Net income includes a $50.5 million gain on the sale of MIAXdx and a $70.2 million tax benefit from the release of the deferred tax valuation allowance.

Material Changes vs. Prior Period

• Revenue Growth: Total revenues increased 13.0% year-over-year, driven by a 13.8% increase in Options transaction fees and a 38.5% increase in Access fees. This growth was partially offset by a $23.4 million reduction in Section 31 regulatory fees due to a temporary SEC rate reduction to $0.00 per million.
• Profitability Surge: Operating income more than doubled (106.2% increase) to $46.0 million. Net income swung from a loss of $21.4 million to a profit of $170.2 million, primarily due to the $50.5 million gain on the MIAXdx sale and the release of the deferred tax valuation allowance.
• Segment Performance:
  • Options: Operating income rose 43.9% to $72.8 million, fueled by an 18.8% increase in market contracts and an 8.1% increase in MIH market share.
  • Equities: Operating loss narrowed significantly from $4.0 million to $1.1 million due to positive pricing capture.
  • Futures: Operating loss widened slightly to $12.4 million, impacted by a 39.9% decrease in agricultural product volume.
  • International: Turned profitable with $1.3 million operating income, driven by the TISE acquisition.
• Liquidity: Cash and cash equivalents increased by $421.0 million, bolstered by IPO proceeds retained from the prior year and strong operating cash flows.

Outlook, Risks, and Unusual Items

• Unusual Items:
  • Gain on Sale of Business: Recognized a $50.5 million gain upon the January 2026 closing of the MIAXdx sale.
  • Tax Benefit: Recorded a $70.2 million non-recurring tax benefit due to the release of the entire deferred tax valuation allowance, as the company demonstrated sustained profitability.
  • Derivative Assets: Recorded a $2.5 million unrealized loss on derivative assets related to locked Pyth tokens (compared to a $42.4 million loss in Q1 2025).
• Regulatory Risks:
  • CAT Funding: The Consolidated Audit Trail (CAT) funding model remains subject to litigation. While the SEC approved a revised model in March 2026, a new petition for review was filed in April 2026. If successful, the company may be unable to recoup historical or prospective CAT costs.
  • Section 31 Fees: The SEC announced a new fee rate of $20.60 per million effective April 4, 2026, reversing the temporary $0.00 rate.
• Outlook: Management expects cash from operations to meet current liquidity needs for the next 12 months. Future performance depends on trading volumes, market share retention, and the resolution of regulatory uncertainties regarding CAT funding.

Investor Verification Checklist

• Recurring Earnings Quality: Verify the sustainability of net income by excluding the $50.5 million MIAXdx gain and the $70.2 million one-time tax benefit to assess core operational profitability.
• CAT Funding Exposure: Monitor the status of the 11th Circuit petition regarding the CAT funding model, as a negative outcome could result in significant unrecoverable costs.
• Section 31 Fee Impact: Assess the impact of the Section 31 fee rate reverting to $20.60 per million starting April 2026 on future transaction fee revenues and costs.
• Pyth Token Volatility: Review the fair value of the remaining 250 million locked Pyth tokens, as fluctuations in crypto markets will continue to impact non-operating income/loss.
• Customer Concentration: Note that the top three customers accounted for 45% of total revenue in Q1 2026; verify the stability of these relationships.