10-Q: MIAX Reports Q3 Loss Amid IPO Costs, Debt Repayment

Miami International Holdings, Inc. reported a significant net loss for Q3 and 9M 2025, primarily driven by one-time debt extinguishment costs and Pyth token valuation adjustments, despite strong operational revenue growth.

Summary

• Total revenues for the three months ended September 30, 2025, increased by $63.1 million (22.8%) to $339.8 million, compared to $276.7 million in the prior year.
• Total revenues for the nine months ended September 30, 2025, increased by $178.5 million (21.9%) to $994.6 million, compared to $816.2 million in the prior year.
• Operating income for the three months ended September 30, 2025, improved to a loss of $0.3 million from a loss of $1.2 million in the prior year.
• Operating income for the nine months ended September 30, 2025, was $49.3 million, a significant improvement from an operating loss of $10.0 million in the prior year.
• Net loss for the three months ended September 30, 2025, was $102.1 million, compared to a net loss of $3.2 million in the prior year, primarily due to a $107.7 million loss on debt extinguishment.
• Net loss for the nine months ended September 30, 2025, was $100.0 million, a substantial swing from a net income of $99.1 million in the prior year, largely due to the debt extinguishment loss and a $39.0 million unrealized loss on derivative assets.
• Basic and diluted earnings per share for the three months ended September 30, 2025, were $(1.46), compared to $(0.05) in the prior year.
• Basic and diluted earnings per share for the nine months ended September 30, 2025, were $(1.51), compared to $1.64 and $1.35 respectively in the prior year.
• The company completed its Initial Public Offering (IPO) on August 15, 2025, issuing 17,250,000 shares at $23.00 per share, generating $396.8 million in gross proceeds.
• Proceeds from the IPO were used to repay the entire outstanding balance of the 2029 Senior Secured Term Loan, including the Incremental Term Loan, totaling $140.0 million principal and a $36.0 million prepayment premium.
• The TISE Acquisition was completed on June 5, 2025, for approximately $69.7 million in cash, contributing $4.7 million in revenue and $2.3 million in net income for Q3 2025.
• The SEC temporarily reduced Section 31 fees to $0.00 per million from $27.80 per million, effective May 14, 2025, significantly impacting cost of revenues.

Sentiment

Score: 4

Explanation: While operational revenues and operating income show strong growth and improvement, the significant net loss driven by one-time debt extinguishment costs and unrealized losses on Pyth tokens, coupled with ongoing regulatory uncertainties (CAT funding, Nasdaq litigation), indicates a mixed to negative short-term financial performance. The successful IPO and strategic acquisitions are positive long-term developments, but the immediate financial impact is negative.

Positives

• Total revenues increased significantly by 22.8% for the three months and 21.9% for the nine months ended September 30, 2025, demonstrating strong top-line growth.
• Operating income improved for both the three-month period (from a loss of $1.2 million to a loss of $0.3 million) and the nine-month period (from a loss of $10.0 million to an income of $49.3 million), indicating stronger core business performance.
• The Options segment showed robust growth, with revenues less cost of revenues increasing by 55.1% for the three months and 53.9% for the nine months, driven by a 56.1% increase in MIH Options contracts and a 24.1% increase in revenue per contract for the nine-month period.
• Successful completion of the Initial Public Offering (IPO) on August 15, 2025, raising $396.8 million in gross proceeds, which strengthened the company's capital structure.
• Full repayment of the $140.0 million 2029 Senior Secured Term Loan using IPO proceeds, reducing future interest expense and eliminating associated puttable warrant liabilities.
• The acquisition of The International Stock Exchange Group Limited (TISEG) on June 5, 2025, contributed $4.7 million in revenue and $2.3 million in net income for the three months ended September 30, 2025, and provides access to European and UK markets.
• A pre-tax gain of $8.6 million was recognized from the remeasurement of the pre-existing equity interest in TISE upon acquisition.
• The launch of MIAX Sapphire in August 2024 and its trading floor in September 2025 contributed to increased Options access fees and market data fees.
• The temporary reduction of Section 31 fees by the SEC to $0.00 per million from May 14, 2025, reduced cost of revenues by $20.2 million for the three months and $4.9 million for the nine months.

Negatives

• A substantial net loss of $102.1 million for the three months and $100.0 million for the nine months ended September 30, 2025, primarily due to non-operating items.
• A significant loss on debt extinguishment of $107.7 million was recorded for the nine months ended September 30, 2025, due to the repayment of the Senior Secured Term Loan, including a $36.0 million prepayment premium.
• An unrealized loss on derivative assets of $39.0 million was recorded for the nine months ended September 30, 2025, related to Pyth tokens, a significant reversal from a $76.7 million gain in the prior year.
• A $2.1 million loss on the sale of the second tranche of Pyth tokens in Q2 2025, contrasting with a $52.6 million gain on the first tranche in Q2 2024.
• The Equities segment experienced a decrease in MIAX Pearl Equities market share to 1.1% from 1.6% for the three months and 1.1% from 1.7% for the nine months, and a decrease in MIH ADV by 7.0% for the nine months.
• Futures agricultural products ADV decreased by 34.5% for the three months ended September 30, 2025, due to participant migration to the new Onyx trading platform and lower volatility.
• Futures agricultural revenue per contract decreased by 11.4% for the nine months ended September 30, 2025, partly due to incentive programs for liquidity providers.
• Impairment charges of $2.0 million were recognized for building and improvements in Q3 2025, totaling $2.7 million for the nine months.
• Professional fees and outside services decreased by $1.9 million for the three months and $4.5 million for the nine months, primarily due to lower litigation and other legal expenses, indicating ongoing legal costs.

Risks

• A significant portion of operating revenues is generated by transaction and clearing-based business, which is vulnerable to decreases in trading volume or shifts to lower revenue products.
• Dependence on attracting and maintaining order flow, with no assurance that firms participating in Equity Rights Programs (ERPs) will continue to provide the same level of order flow after the IPO or after selling their shares.
• Revenues from market data and access fees may be reduced due to declines in market share, trading volumes, or regulatory changes, including potential new constraints on charging for market access and data.
• Intense competition from other exchanges, OTC markets, clearing organizations, and technology firms, which could lead to a decline in market share and revenues.
• Business may be adversely affected by price competition, including aggressive pricing strategies by competitors or the use of inverted pricing/no-transaction fee trading to attract volume.
• Competition from other venues with respect to proprietary products, such as the Bloomberg Products, may negatively impact revenues, as gaining market share against established products takes time and is not guaranteed.
• Dependence on members of the senior management team and other key personnel, with the loss of any critical individual potentially having a material adverse effect on the business.
• Certain exchanges and Clearing Houses have a limited operating history, making it difficult to evaluate business and prospects and posing risks related to attracting members, expanding offerings, and managing growth.
• Financial or other problems experienced by third parties (customers, counterparties, clearing agents, routing brokers) could lead to credit losses and adversely affect the business.
• Exposure to risks related to defaults by clearing members and liquidity risks in operating the MIAX Futures clearing house, which could lead to substantial losses.
• Settlement bank failures could pose significant credit and liquidity risks to MIAX Futures and MIAXdx clearing houses.
• The business model of MIAXdx may introduce additional risks, including increased financial and reputational risks if new product development or launches are unsuccessful, and new risks from moving to an intermediated FCM model and margined clearing.
• Exposure to risks related to loss or theft of crypto-assets delivered as collateral to MIAXdx by its participants, despite insurance policies and safeguards.
• Legal uncertainty regarding crypto-asset custodial arrangements, with no assurance that courts will not consider such crypto-assets as part of MIAXdx's or a custodian's bankruptcy estate in the event of insolvency.
• Dorman Trading is subject to margin funding requirements on short notice and exposed to counterparty credit risk from clients and financial institutions.
• Risk management policies and procedures may not be fully effective in mitigating all risks, including unidentified or unanticipated risks.
• Inability to keep up with rapid technological changes affecting the industry, potentially leading to less competitive systems and decreased trading volumes.
• Significant or recurring systems failures or capacity constraints could harm reputation and lead to loss of business.
• Technology, including that provided by third parties, may be vulnerable to security risks, cybersecurity risks, and operational disruptions.
• Covenant restrictions in future debt agreements may limit operations and impact ability to make payments to investors.
• Inability to accurately predict future capital needs or obtain additional financing on favorable terms, potentially forcing scaling back operations or missing growth opportunities.
• Future sales and issuances of common stock or rights to purchase common stock could result in additional dilution and cause the stock price to decline.
• Potential for impairments of goodwill, other intangible assets, or investments, which could negatively impact future operating results.
• Fluctuations in the price of Pyth tokens, a highly volatile asset, may affect financial results.
• The MIAX Exchanges are subject to comprehensive regulation by the SEC, with potential for substantial sanctions for non-compliance.
• MIAX Futures and MIAXdx are subject to comprehensive regulation by the CFTC, with potential for censure, fines, or suspension of business for non-compliance.
• Dorman Trading is subject to comprehensive regulation by the CFTC, NFA, and CME, with failure to comply potentially leading to material adverse effects.
• Regulatory action adversely affecting proprietary products exclusively licensed by the company may negatively impact revenues.
• Regulatory oversight, review, or approval processes can limit or delay the ability to implement or amend rules or regulatory approval orders.
• Subject to litigation risks, regulatory compliance risks, and associated enforcement risks, including the ongoing Nasdaq matter.
• Inability to protect, maintain, defend, or enforce intellectual property rights could adversely affect the business.
• Climate change and the transition to renewable energy and a net zero economy pose operational, commercial, reputational, and regulatory risks.
• Global health crises, pandemics, and other health risks could negatively affect the business.
• Failure to continue to implement and maintain effective internal controls over financial reporting could lead to loss of investor confidence.

Future Outlook

The company plans to launch futures on the Bloomberg 500 Index (B500 Index) and Bloomberg US 100 Price Return Index (B100Q Index) in the first half of 2026, and cash options on these indices in 2026, subject to regulatory filings. It also intends to opportunistically pursue potential acquisitions and strategic alliances. The company believes its available cash, borrowings, and cash from operations will be adequate to meet liquidity needs for the next 12 months, but future capital requirements depend on growth rate, headcount, R&D, new products, and potential M&A. The SEC's temporary reduction of Section 31 fees will revert to a new rate once legislation for fiscal year 2026 appropriation is enacted. The company expects climate change-related risks to increase over time and is evaluating the impact of new accounting standards (ASU 2024-03 and ASU 2025-06) for future adoption.

Management Comments

• Believe the speed and performance of our proprietary technology coupled with our fully integrated, award-winning customer service, sets us apart from our competitors.
• Our future revenues and net income will continue to be influenced by a number of trends, including trading volumes, market share expansion, market data demand, price competition, and regulatory changes.
• The growth in Options Market ADV for the three and nine months ended September 30, 2025, is due to heightened market volatility, growing retail participation, technological advances, increased sophistication of trading strategies, and the proliferation and adoption of new asset classes and financial products.
• The increase in U.S. Equities Market ADV for the three and nine months ended September 30, 2025, is due to similar trends as seen in the Options Market.
• The company intends to continue defending its interest vigorously in the Nasdaq litigation matter.

Industry Context

The financial services industry is characterized by rapid technological change, intense competition, and evolving regulatory environments. The company's growth in Options ADV and market share aligns with broader industry trends of heightened market volatility, increased retail participation, and technological advancements. The temporary reduction in SEC Section 31 fees reflects ongoing regulatory adjustments impacting exchange operators. The challenges in the Equities segment, including market share decline, highlight intense competition and pricing pressures in that specific market. The company's strategic acquisitions (TISE) and new product launches (MIAX Sapphire, MIAX Futures Onyx, planned Bloomberg Products) are consistent with industry efforts to diversify offerings and expand geographic reach. The ongoing regulatory scrutiny and legal challenges, particularly concerning CAT funding and crypto-asset markets, underscore the complex and uncertain landscape for financial market infrastructure providers.

Comparison to Industry Standards

• The company's Options market share increased to 17.2% for the three months and 16.7% for the nine months ended September 30, 2025, indicating strong performance relative to the overall market, which saw a 25.6% and 24.7% increase in total contracts respectively.
• U.S. Equities market share decreased to 1.1% for both the three and nine months ended September 30, 2025, despite a 51.7% and 47.3% increase in the overall U.S. Equities Market ADV, suggesting underperformance relative to the broader market growth in this segment.
• The Equities segment's capture per 100 shares remained negative at $(0.015) for the three months and $(0.016) for the nine months, indicating that liquidity payments still exceeded transaction revenues, a strategy used to attract order flow in a highly competitive market, but one that impacts profitability per share.
• The Futures segment's agricultural products ADV decreased by 34.5% for the three months, contrasting with the overall market trends in other segments, potentially due to internal platform migration and lower volatility.
• The company's strategy of offering inverted pricing or no-transaction fee trading to attract market share is a common competitive tactic in the exchange industry, particularly for new or growing segments, but it directly impacts revenue per contract/share.

Management Changes

Corporate Governance

Legal Proceedings

• Ongoing patent infringement and trade secret misappropriation lawsuit filed by Nasdaq, Inc. against the company, with the court denying summary judgment motions and re-initiating discovery on counterclaims on September 29, 2025.
• The 11th Circuit U.S. Court of Appeals vacated the SEC's 2023 CAT Funding Order on July 25, 2025, remanding the matter to the SEC for further proceedings, creating uncertainty regarding the recoupment of CAT costs.
• A pending lawsuit in the U.S. District Court for the Western District of Texas Waco Division seeks to completely shut down CAT based on constitutional grounds.
• MIAXdx has responded to CFTC Division of Enforcement requests for information related to activities prior to its acquisition by the company (during FTX ownership), with potential for additional regulatory scrutiny and investigations.
• The legal status of certain event-based contracts, particularly sports-based event contracts, is unsettled, with pending litigation and CFTC guidance emphasizing uncertain legal status, which could impact future product offerings.

Related Party Transactions

• The company paid $2.7 million for financial consulting, placement, and professional fees to companies affiliated with certain shareholders, directors, and executive officers during the nine months ended September 30, 2025.
• A $5.0 million convertible promissory note issued in December 2020 to an existing shareholder, with an interest rate of 9.5% per annum, remained outstanding as of September 30, 2025.
• The company issued 137,500 warrants to a related party during the nine months ended September 30, 2024, for certain stockholder services.

Stakeholder Impact

• Shareholders experienced significant dilution from the IPO and will face further potential dilution from warrant exercises and future equity issuances.
• Shareholders are impacted by the substantial net loss due to one-time non-operating expenses, despite operational growth.
• Employees received one-time IPO bonuses and experienced accelerated vesting of share-based compensation upon the IPO.
• Customers in the Options segment benefited from increased liquidity and new product offerings like MIAX Sapphire, but Equities customers saw a decline in market share.
• Clearing members and market participants face uncertainty regarding CAT funding and potential changes to fee structures.
• Lenders of the 2029 Senior Secured Term Loan received full repayment, including a prepayment premium, from IPO proceeds.

Next Steps

• Re-initiate discovery on the company's counterclaims against Nasdaq, with a trial planned in two phases: trade secret claims followed by counterclaims.
• The SEC is expected to issue a revised CAT funding order by November 29, 2025; absent this, MIAX Exchanges may stop charging CAT fees.
• Launch futures on the Bloomberg 500 Index (B500 Index) and Bloomberg US 100 Price Return Index (B100Q Index) in the first half of 2026, subject to CFTC filings.
• Launch cash options on the B500 Index and B100Q Index in 2026, subject to CFTC and SEC approvals.
• Continue to invest in operations to maintain and grow the business, integrate acquired businesses, and fund new initiatives.
• Evaluate and potentially adopt new accounting standards (ASU 2024-03 and ASU 2025-06) in future fiscal years.

Key Dates

Recommendation

The company demonstrates strong operational growth in its core Options segment and has successfully executed a significant IPO and strategic acquisition (TISE), which are positive long-term indicators. However, the substantial net loss for the quarter and nine-month period, driven by one-time debt extinguishment costs and unrealized losses on Pyth tokens, introduces short-term volatility and uncertainty. Ongoing legal proceedings (Nasdaq) and regulatory challenges (CAT funding) also present unquantifiable risks. While the underlying business shows promise, these significant non-recurring items and external uncertainties warrant a cautious 'hold' stance until there is clearer visibility on sustained profitability and resolution of key legal/regulatory matters.

Keywords

Financial Marketplaces, Options Trading, Futures Trading, Equities Trading, SEC Filing, 10-Q, IPO, Debt Repayment, TISE Acquisition, Pyth Tokens, Market Data, Access Fees, Regulatory Compliance, Nasdaq Litigation, CAT Funding, MIAX Sapphire, MIAX Futures Onyx, Financial Technology, Exchange Operator, Clearing House, FCM, Derivatives