NYSE Euronext Q2 2010 Earnings Call Transcript

We recorded a 25% increase in EPS to $0.64 per share and a 15% increase in operating income on a 7% increase in net revenue, with incremental margins of 76%. These results reflect the growing earnings power from our three primary businesses and the inherent operating leverage in the model. Firstly, our Derivatives segment benefited from record trading volumes as well as the addition of NYSE Liffe Clearing. During the month of May, we executed an average of 13 million contracts per day across our Global Derivatives businesses, driving a 34% increase in net revenue with an increase in our operating margin to 62%, up from 42% the prior year. We were the largest U.S. equities options exchange for the second consecutive quarter.

Turning to Cash and Listings in the first half of 2010, we continue to use see strong demand for our listing venues, both in terms of transfers and new listings. On the execution side, we are continuing to focus on stability and profitability of this business. In the U.S., our market share in Tape A is at 37%, up from 35% in the first quarter. And our share in Europe is holding steady at 74%.

Additionally, on July 13, we launched trading on Tape C stocks on an unlisted trading privilege basis over the NYSE Amex platform. Trading began with 10 issues and now has expanded to approximately 675 NASDAQ listed issues. And we've seen some positive market share developments.

Lastly, our Technology business benefited from the addition of NYFIX and improved software sales, driving a 29% increase in revenue and an increase in operating margin to 19%. I will walk you through the profiles of several deals that we’ve signed in the past few months later in the presentation. They are representative of the enterprise level dialogues that we are having with market participants, encouraging them to leverage our technology to help them run their businesses more efficiently.

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