Third-quarter 2026 earnings call, November 6, 2026: record results, a EUR 350 million buyback and a CEO succession in the background

Euronext reported its strongest quarter since its IPO, with revenue and income of EUR 547.4 million, up 24.9% year on year, and adjusted EBITDA up 31.6% to EUR 364.2 million. The adjusted EBITDA margin reached 66.5%, up 3.3 percentage points. Adjusted EPS rose 31.5% to EUR 2.21. This was the 10th consecutive quarter of double-digit revenue growth. CEO Stéphane Boujnah said management is "tracking well ahead" of the Innovate for Growth 2027 targets set in November 2024. The most important qualification for investors is that the quarter was flattered by an unusually benign fixed income backdrop that has already partly reversed.

MTS: a record quarter, then a sharp October drop

Fixed income trading and clearing revenue rose 56.2% to EUR 73.1 million, helped by MTS Cash average daily value traded of EUR 88.1 billion, a record. The call showed how volatile that driver is. CFO Giorgio Modica said volumes fell to around EUR 40 billion per day in recent weeks as volatility rose, and had recovered to nearly EUR 60 billion the previous day. Analysts at UBS described the declines as roughly 50% to 60% almost overnight. That puts current activity well below the Q3 average, and Goldman Sachs asked whether volumes would return to the EUR 50 billion seen in March and April.

Modica offered a two-variable framework. Volume depends on the level of volatility and on expected changes in volatility. In his words, in very low volatility "if you want to make a lot of money, you need to deploy a lot of money," so traders build large portfolios, while an expected volatility shift prompts them to adjust positions before it arrives. Q3 benefited from "a prolonged period of stability," and the same pattern, a sharp drop followed by a stronger rebound, occurred earlier in the year. He declined to forecast a normalization date: "I don't have any crystal ball." Investors should treat Q3 as a peak rather than a run rate, and management did not offer a new one.

On pricing, Modica said MTS Cash revenue capture is "extremely stable," so volume changes feed through one-to-one into revenue. With a largely fixed cost base, the operating leverage works in both directions. BondVision, the dealer-to-client platform, is priced on client behavior, and its price per value traded rose in the quarter, which can distort apparent overall yield. Non-Italian MTS volumes are growing as fast as or faster than Italian volumes, but because Italian government bonds still make up the bulk of the business, the diversification benefit is "a bit diluted." Dealer-to-client keeps posting double-digit growth but remains a minority of revenue.

On France, which Morgan Stanley identified as the largest opportunity, Boujnah was cautious. The French debt management office is using the existing MTS France platform more but has not moved to a different incentive structure. He called a larger shift "the definition of a moonshot" and "a game changer for MTS," but added: "I don't want to create specific expectations on timing."

Euronext Securities: the technology is live, the revenue is not

The new European CSD model went live on September 21 and drew the most pointed questions. Pierre Davoust said around 16 issuers listed in Paris, Brussels and Amsterdam now use the model, four of which joined recently, and that "a couple" of trading members are live. Euro Commercial Properties announced its migration last week. He called the pipeline "healthy" but said it takes time because "it's unprecedented for clients to change the CSD post-trade structure." Euronext declined to give market share figures or revenue targets.

Boujnah was unusually direct about the lack of near-term financial impact: "You will show you the money when the money is there and the money is starting to be there, but not in a material level for the moment. But the money machine is built." Davoust defined success for 2027 as a regular flow of clients leaving incumbent infrastructure, translating gradually into visible revenue through the year. He argued that interoperability with incumbent CSDs means this is not a winner-takes-all contest.

The incumbents are responding. Davoust said they have intensified their commercial engagement with clients, cut fees and emphasized to issuers the risks of moving to the new infrastructure. Euronext says it remains competitive on price, often more so, and is competing on services such as withholding tax processing and registered share management. He said pricing is "not so much an issue" for issuers because most of the CSD fee pool comes from market participants. Boujnah noted that Euronext's entry has already reduced market prices.

Custody and settlement revenue rose 11.8% to EUR 78.9 million, with assets under custody of EUR 8.1 trillion, up 5.6%.

Athens, with a June 2027 catalyst

Euronext Athens contributed EUR 28.2 million of additional revenue to the quarter. Management said Greece's reclassification to developed market status drove exceptionally high trading volumes, including a rebalancing day that lifted Athens volumes while overall Euronext volumes fell quarter on quarter. A third shipping company listed in October. Boujnah highlighted a June 2027 milestone, when the Greek equity market connects to Euronext's single order book and technology platform, which he expects to be "a significant accelerator of volumes."

Synergies are running ahead of plan. Boujnah said Euronext will "probably beat" the EUR 12 million target. Management also plans to build a technology and support center in Athens, modeled on the roughly 500 IT staff in Porto, which should reduce group costs over time.

Cash equities: share gains and a yield flattered by mix

Cash equity trading and clearing revenue rose 34.3% to EUR 110.8 million. Average daily volume was EUR 13.7 billion, up 24.4% on a pro forma basis including Athens. Market share averaged 66.8%. Nicolas Rivard attributed this to a recapture of lit continuous market share through the liquidity management program and to a smaller weight of dark and periodic auctions in the market. He called it "a constant battle" that is "in a very good shape" for now.

Revenue capture of 0.52 basis points was slightly down year on year but up quarter on quarter. Rivard said much of the sequential improvement came from lower volumes under the tiered fee grid, plus the higher weight of Athens. A record order size of EUR 21,000 was a modest negative. The sequential yield gain therefore reflects mix and volume tiering more than pricing power.

Power and commodities

Commodities trading and clearing revenue rose 42.1% to EUR 39.3 million. Camille Beudin said Nord Pool now generates more intraday revenue outside the Nordics than within them, with share gains in Germany, France, the Netherlands and Belgium. Nordic power futures, launched in March, held a market share above 95% in Q3, and open interest reached a record 1.97 terawatt hours, up 14% since migration. September was the strongest month for the power derivatives market in five years. Euronext will extend the power futures offering to Germany in Q2 2027, then to the rest of the continent.

The power business also lifted net treasury income, up 34.8% to EUR 22.5 million, through higher cash collateral. Modica said there is a strict correlation between volatility and collateral posted under the CCP's value-at-risk model, so this line is also exposed to a normalization of volatility.

Costs, AI and capital return

Underlying costs excluding D&A were EUR 183.3 million, up 13.5%, or 8% on a like-for-like basis against 18% organic revenue growth. Euronext lowered its 2026 cost guidance to EUR 760 million from EUR 770 million. Boujnah said Euronext is "definitely observing stronger-than-expected cost reduction related to AI" but would not quantify it, because the central decision is how much of the productivity to return to shareholders versus reinvest. He cautioned that AI agents are "not free like Internet, it's expensive," and flagged outsourcing risk and talent management as constraints. Modica said 2027 guidance will come in February, with efficiency gains offset by demand for new investment in 2027 and 2028, so no easing of the cost base should be assumed.

Euronext announced a EUR 350 million buyback, about 2% of share capital, starting November 9 for up to 12 months. It will also pay a EUR 3,000 bonus to employees earning under EUR 120,000. Net debt to EBITDA was 1.1x, or 1.2x adjusted for EUR 141 million of cash in transit at Nord Pool. Operating cash flow fell to EUR 208.2 million from EUR 401 million, which Modica attributed to timing, since Nord Pool collects before it pays and swings depend on the weekday of quarter end. Excluding working capital, cash conversion was 88.5% of EBITDA versus 99.9% a year earlier. Non-controlling interests rose by EUR 10.1 million on stronger MTS and Nord Pool earnings and the Athens consolidation, and management said it has no intention to buy out partners as long as they wish to stay.

Leadership transition

The Supervisory Board intends to nominate David Knibbe, currently CEO of NN in the Netherlands, to succeed Boujnah at the May 20, 2027 AGM. Boujnah offered little on the transition, saying 2027 "will not be a transition year" and that the Board is organizing retention measures. Asked whether leaving buyback capacity for a new CEO explains the program size, he said capital allocation is not managed around a succession plan. He cited a market cap that grew from EUR 1.4 billion at the IPO to EUR 18 billion, about EUR 3 billion returned to shareholders and no impairments in 11 years. The restraint on the buyback and the outsider appointment leave the next capital allocation and medium-term target update open to the new CEO.

Regulatory and data

Advanced Data Solutions revenue rose 11.5% to EUR 73.8 million, driven by indices, non-real-time and quant data, and non-equity asset classes. Rivard said the reasonable commercial basis pricing regime effective October 1 is expected to be "revenue neutral" for Euronext as a whole and "not a driver of growth in ADS," which limits the risk of a Q4 step-up assumption in models.