Third Quarter Highlights*
- Diluted EPS for the Quarter of $1.41, Up 26 percent
- Adjusted Diluted EPS¹ for the Quarter of $1.74, Up 20 percent
- Net Revenue for the Quarter of $442.4
million, Up 20 percent
- Increases Organic Total Net Revenue Growth2
Target for 2022 to 14 to 16 percent, from 9 to 11
percent
- Decreases 2022 Adjusted Operating Expense
Guidance2 to $651 to
$659 million, from $659 to $667
million.
CHICAGO, Nov. 4, 2022
/PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE) today
reported financial results for the third quarter of 2022.
"Cboe delivered record adjusted earnings in the third quarter of
2022, building on the strong results produced over the first half
of the year. The robust trends were driven by our derivatives
franchise, supported by sizable contributions from our data and
access solutions and cash and spot markets during the quarter,"
said Edward T. Tilly, Cboe Global
Markets Chairman and Chief Executive Officer. "Through the early
part of the fourth quarter, we have seen positive momentum in our
derivatives business as we continue to expand access to our core
products. The enhancements we have recently made, including the
addition of Tuesday and Thursday expirations for SPX options and
the expansion of our trading hours, continue to help reshape
trading behavior and expand the overall market. More broadly, we
are investing in innovative solutions that leverage our ecosystem
spanning cash markets, data and derivatives markets around the
globe. Our business has never been on stronger footing, and we look
forward to continuing to deliver increased value to our
shareholders and customers."
"In the third quarter, Cboe produced another quarter of
record-setting net revenue and adjusted earnings results," said
Brian N. Schell, Cboe Global Markets
Executive Vice President, Chief Financial Officer and Treasurer.
"Continued market uncertainty, coupled with the investments we have
made across our cash, data and derivatives categories, helped drive
Cboe's outperformance in the third quarter. Net revenues from
derivatives markets grew 31 percent, data and access solutions grew
15 percent, and cash and spot markets finished 5 percent higher on
a year-over-year basis. Moving forward, we are increasing our 2022
total organic net revenue growth2 expectations to a
range of 14 to 16 percent, up from our prior guidance range of 9 to
11 percent. In addition to raising our revenue guidance, we are
reducing our expense guidance range to $651 to $659
million, down from $659 to
$667 million. We are excited by the
robust volume trends in our core proprietary products as we head
into the end of the year, complemented by healthy activity in our
data and cash businesses. Furthermore, we look forward to
continuing to make the necessary investments across our ecosystem
to drive consistent and durable returns for Cboe shareholders in
the quarters ahead."
*All comparisons are
third quarter 2022 compared to the same period in
2021.
|
(1)
|
A full
reconciliation of our non-GAAP results to our GAAP results is
included in the attached tables. See "Non-GAAP Information" in the
accompanying financial tables.
|
(2)
|
Specific
quantifications of the amounts that would be required to reconcile
the company's organic growth guidance, adjusted operating expenses
guidance and the effective tax rate on adjusted earnings guidance
are not available. The company believes that there is uncertainty
and unpredictability with respect to certain of its GAAP measures,
primarily related to acquisition-related revenues and expenses that
would be required to reconcile to GAAP revenues less cost of
revenues, GAAP operating expenses and GAAP effective tax rate,
which preclude the company from providing accurate guidance on
certain forward-looking GAAP to non-GAAP reconciliations. The
company believes that providing estimates of the amounts that would
be required to reconcile the range of the company's organic growth,
adjusted operating expenses and the effective tax rate on adjusted
earnings would imply a degree of precision that would be confusing
or misleading to investors for the reasons identified
above.
|
Consolidated Third Quarter
Results -Table 1
Table 1 below presents summary selected unaudited condensed
consolidated financial information for the company as reported and
on an adjusted basis for the three months ended September 30, 2022 and 2021.
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Table
1
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Consolidated Third
Quarter Results
|
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|
|
|
|
|
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|
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|
|
3Q22
|
|
3Q21
|
|
|
($ in millions except per share)
|
|
|
3Q22
|
|
3Q21
|
Change
|
|
Adjusted1
|
|
Adjusted1
|
Change
|
Total Revenues Less
Cost of Revenues
|
|
|
$
|
442.4
|
|
|
$
|
369.5
|
|
20
|
%
|
|
$
|
442.4
|
|
|
$
|
369.5
|
|
20
|
%
|
Total Operating
Expenses
|
|
|
$
|
205.6
|
|
|
$
|
178.8
|
|
15
|
%
|
|
$
|
172.8
|
|
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$
|
140.3
|
|
23
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%
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Operating
Income
|
|
|
$
|
236.8
|
|
|
$
|
190.7
|
|
24
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%
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$
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269.6
|
|
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$
|
229.2
|
|
18
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%
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Operating Margin
%
|
|
|
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53.5
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%
|
|
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51.6
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%
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1.9
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pp
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60.9
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%
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|
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62.0
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%
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(1.1)
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pp
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Net Income Allocated to
Common Stockholders
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$
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149.6
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|
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$
|
120.0
|
|
25
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%
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$
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185.2
|
|
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$
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154.9
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|
20
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%
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Diluted EPS
|
|
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$
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1.41
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$
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1.12
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26
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%
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$
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1.74
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|
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$
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1.45
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20
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%
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EBITDA1
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$
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284.7
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$
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227.9
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25
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%
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$
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287.1
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|
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$
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239.6
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20
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%
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EBITDA Margin
% 1
|
|
|
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64.4
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%
|
|
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61.7
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%
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2.7
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pp
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|
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64.9
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%
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|
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64.8
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%
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0.1
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pp
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- Total revenues less cost of revenues (referred to as "net
revenue") of $442.4 million increased
20 percent, compared to $369.5
million in the prior-year period, reflecting increases in
net transaction and clearing fees1 and access and
capacity fees. Inorganic net revenue1 in the third
quarter of 2022 was $5.3
million.
- Total operating expenses were $205.6
million versus $178.8 million
in the third quarter of 2021, an increase of $26.8 million. Adjusted operating expenses¹ of
$172.8 million increased 23 percent
compared to $140.3 million in the
third quarter of 2021, primarily due to the acquisitions of Cboe
Digital (formerly ErisX) and NEO, as well as an increase in
salaries, wages, and bonuses resulting in higher compensation and
benefits expense.
- The effective tax rate for the third quarter of 2022 was 34.4
percent compared with 30.7 percent in the third quarter of 2021.
The increase is primarily due to an increase in reserves for
unrecognized tax benefits. The effective tax rate on adjusted
earnings1 was 29.0 percent compared with 28.5 percent in
last year's third quarter. The higher effective tax rate in the
third quarter of 2022 was primarily due to favorable non-recurring
adjustments in the third quarter of 2021.
- Diluted EPS for the third quarter of 2022 increased 26 percent
to $1.41. Adjusted diluted
EPS1 of $1.74 increased 20
percent compared to 2021's third quarter results.
Business Segment
Information:
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Table
2
|
Total Revenues Less
Cost of Revenues by
|
|
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Business
Segment
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(in
millions)
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3Q22
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3Q21
|
Change
|
Options
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$
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255.5
|
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$
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192.2
|
|
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33
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%
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North American
Equities
|
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96.7
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85.6
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13
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%
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Europe and Asia
Pacific
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44.5
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48.5
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(8)
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%
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Futures
|
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28.4
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28.9
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(2)
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%
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Global FX
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17.3
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14.3
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21
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%
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Digital
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—
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—
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*
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Corporate
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—
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—
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—
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%
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Total
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$
|
442.4
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$
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369.5
|
|
|
20
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%
|
|
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(1)
|
A full
reconciliation of our non-GAAP results to our GAAP results is
included in the attached tables. See "Non-GAAP Information" in the
accompanying financial tables.
|
*Not meaningful, due
to the establishment of the Digital segment during the second
quarter of 2022 as a result of the Cboe Digital acquisition
on May 2, 2022.
|
Discussion of Results by Business
Segment1:
Options:
- Options net revenue of $255.5
million was up $63.3 million,
or 33 percent, from the third quarter of 2021. The growth was
driven by double-digit increases in net transaction and clearing
fees2, access and capacity fees, and market data. Net
transaction and clearing fees increased primarily as a result of a
49 percent increase in Index options trading volumes versus the
third quarter of 2021, along with a 5 percent increase in Index
options revenue per contract ("RPC") for the quarter. Access and
capacity fees were 25 percent higher than third quarter 2021 and
market data fees were 26 percent higher than third quarter
2021.
- Net transaction and clearing fees2 increased
$59.6 million, or 40 percent,
reflecting a 15 percent increase in total options average daily
volume ("ADV") and a 21 percent increase in total options RPC
compared to the third quarter 2021. The increase in total options
RPC was due to a mix shift, with Index options representing a
higher percentage of total options volume. The RPC for Index
options increased 5 percent as higher-priced SPX options accounted
for a higher percentage of Index options volume.
- Cboe's Options business had total market share of 33.8 percent
for the third quarter of 2022 compared to 31.3 percent in the third
quarter of 2021, primarily reflecting an increase in Cboe's
multi-listed options market share for the quarter of 28.6 percent
compared to 27.6 percent in the third quarter of 2021.
North American (N.A.) Equities:
- N.A. Equities net revenue of $96.7
million was up $11.1 million,
or 13 percent, primarily due to higher transaction and clearing
fees and access and capacity fees. The 2022 acquisition of NEO
contributed $5.4 million in net
revenue for the quarter.
- Transaction and clearing fees were helped by a 12 percent
increase in U.S. equities industry volumes as compared to the third
quarter of 2021. Net capture increased 18 percent year-over-year, a
result of enhancements to Cboe's pricing plans.
- Cboe U.S. Equities exchanges had market share of 13.3 percent
for the third quarter of 2022 compared to 14.0 percent in the third
quarter of 2021, negatively impacted by an increase in Trade
Reporting Facility (TRF) market share.
Europe and Asia
Pacific (APAC):
- Europe and APAC net revenue of
$44.5 million decreased by 8 percent,
reflecting softer transaction and non-transaction revenues. On a
constant currency basis2, net revenues were $51.6 million, up 6 percent on a year-over-year
basis. European Equities average daily notional value ("ADNV")
traded on Cboe European Equities was €9.7 billion, up 34 percent as
compared to the third quarter of 2021, outperforming a 1 percent
decline in industry market volumes. Net capture decreased 13
percent for the quarter, reflecting a mix shift with the strongest
gains coming in Lit market share, outpacing the growth in
higher-capture Cboe BIDS Europe and Periodic Auction services, as
well as from the impact of volume pricing tiers with higher volumes
and higher market share in the third quarter of 2022 when compared
to the third quarter of 2021.
- For the third quarter of 2022, Cboe European Equities had 24.6
percent market share, up from 18.2 percent in the third quarter of
2021, as a result of positive momentum across all orderbooks,
making Cboe the largest stock exchange and block trading venue in
Europe in the third quarter.
Futures:
- Futures net revenue of $28.4
million decreased $0.5
million, or 2 percent, due to a decline in net transaction
and clearing fees2, offset slightly by an increase in
access and capacity fees and market data fees.
- Net transaction and clearing fees2 decreased
$0.9 million, or 4 percent,
reflecting lower volumes during the quarter.
Global FX:
- Global FX net revenue of $17.3
million increased 21 percent, primarily as a result of
higher net transaction and clearing fees2. ADNV traded
on the Cboe FX platform was $41.3
billion for the quarter, up 27 percent compared to last
year's third quarter, and net capture per one million dollars traded was $2.68 for the quarter, down 3 percent compared to
$2.77 in the third quarter of
2021.
- Cboe FX market share was 17.8 percent for the quarter compared
to 17.0 percent in last year's third quarter, which is a quarterly
record for Cboe FX.
(1)
|
The Digital and
Corporate segments are not further discussed as results were not
material during the third quarter of 2022.
|
(2)
|
A full
reconciliation of our non-GAAP results to our GAAP results is
included in the attached tables. See "Non-GAAP Information" in the
accompanying financial tables.
|
2022 Fiscal Year Financial
Guidance
Cboe provided guidance for the 2022 fiscal year as noted
below.
- Organic net revenue growth1 is expected to be in the
range of 14 to 16 percentage points in 2022, up from previous
guidance of 9 to 11 percentage points.
- Reaffirmed revenue from acquisitions held less than a
year1 is expected to contribute total net revenue growth
in a range of 2 to 3 percentage points in 2022.
- Reaffirmed organic net revenue1 from Data and Access
Solutions is expected to increase by approximately 10 to 13 percent
in 2022, from a base of $419 million
in 2021.
- Adjusted operating expenses1 in 2022 are now
expected to be in the range of $651
to $659 million, from a base of
$531 million in 2021, down from
previous guidance of $659 to
$667 million. The guidance excludes
the expected amortization of acquired intangible assets of
$123 million; the company plans to
reflect the exclusion of this amount in its non-GAAP
reconciliation.1
- Reaffirmed depreciation and amortization expense for 2022,
which is included in adjusted operating expenses above, is expected
to be in the range of $40 to
$44 million, excluding the expected
amortization of acquired intangible assets.
- Reaffirmed the effective tax rate1 on adjusted
earnings for the full year 2022 is expected to be in the range of
27.5 to 29.5 percent. Significant changes in trading volume,
expenses, tax laws or rates and other items could materially impact
this expectation.
- Capital expenditures for 2022 are now expected to be in the
range of $43 to 48 million, down from
$47 to $52
million.
(1) Specific quantifications of the amounts
that would be required to reconcile the company's organic and
inorganic growth guidance, adjusted operating expenses guidance and
the effective tax rate on adjusted earnings guidance are not
available. The company believes that there is uncertainty and
unpredictability with respect to certain of its GAAP measures,
primarily related to acquisition-related revenues and expenses that
would be required to reconcile to GAAP revenues less cost of
revenues, GAAP operating expenses and GAAP effective tax rate,
which preclude the company from providing accurate guidance on
certain forward-looking GAAP to non-GAAP reconciliations. The
company believes that providing estimates of the amounts that would
be required to reconcile the range of the company's organic growth,
adjusted operating expenses and the effective tax rate on adjusted
earnings would imply a degree of precision that would be confusing
or misleading to investors for the reasons identified
above.
Capital Management
At September 30, 2022, the company
had adjusted cash1 of $355.3
million. Total debt as of September
30, 2022 was $1,859.8 million,
a decrease of $99.4 million from
June 30, 2022.
The company paid cash dividends of $53.4
million, or $0.50 per share,
during the third quarter of 2022. There were no share repurchases
in the third quarter of 2022. As of September 30, 2022, the company had approximately
$233.3 million of availability
remaining under its existing share repurchase authorizations.
Earnings Conference Call
Executives of Cboe Global Markets will host a conference call to
review its third-quarter financial results today, November 4, 2022, at 8:30 a.m.
ET/7:30 a.m. CT. The conference call and any accompanying
slides will be publicly available via live webcast from the
Investor Relations section of the company's website at www.cboe.com
under Events & Presentations. Participants may also listen
via telephone by dialing (877) 255–4313 from the United States, (866) 450–4696 from
Canada or (412) 317–5466 for
international callers. Telephone participants should place calls 10
minutes prior to the start of the call. The webcast will be
archived on the company's website for replay. A telephone replay of
the earnings call also will be available from approximately
11:00 a.m. CT, November 4, 2022,
through 11:00 p.m. CT, November 12,
2022, by calling (877) 344–7529 from the U.S., (855)
669–9658 from Canada or (412)
317–0088 for international callers, using replay code 10160639.
(1)
|
A full
reconciliation of our non-GAAP results to our GAAP results is
included in the attached tables. See "Non-GAAP Information" in the
accompanying financial tables.
|
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), a leading provider of market
infrastructure and tradable products, delivers cutting-edge
trading, clearing and investment solutions to market participants
around the world. The Company is committed to operating a trusted,
inclusive global marketplace, and to providing leading products,
technology and data solutions that enable participants to define a
sustainable financial future. Cboe provides trading solutions and
products in multiple asset classes, including equities,
derivatives, FX, and digital assets, across North America, Europe, and Asia
Pacific. To learn more, visit www.cboe.com.
Cautionary Statements Regarding
Forward-Looking Information
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve a number of risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "might,"
"should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," and the negative of these
terms and other comparable terminology. All statements that reflect
our expectations, assumptions or projections about the future other
than statements of historical fact are forward-looking statements.
These forward-looking statements, which are subject to known and
unknown risks, uncertainties and assumptions about us, may include
projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements
are only predictions based on our current expectations and
projections about future events. There are important factors that
could cause our actual results, level of activity, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements.
We operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible to predict all risks and uncertainties, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
Some factors that could cause actual results to differ include:
the loss of our right to exclusively list and trade certain index
options and futures products; economic, political and market
conditions; compliance with legal and regulatory obligations; price
competition and consolidation in our industry; decreases in trading
or clearing volumes, market data fees or a shift in the mix of
products traded on our exchanges; legislative or regulatory changes
or changes in tax regimes; our ability to protect our systems and
communication networks from security risks, cybersecurity risks,
insider threats and unauthorized disclosure of confidential
information; our ability to attract and retain skilled management
and other personnel, including compensation inflation; increasing
competition by foreign and domestic entities; our dependence on and
exposure to risk from third parties; fluctuations to currency
exchange rates; factors that impact the quality and integrity of
our indices; the impact of the novel coronavirus ("COVID-19")
pandemic; our ability to operate our business without violating the
intellectual property rights of others and the costs associated
with protecting our intellectual property rights; our ability to
minimize the risks, including our credit and default risks,
associated with operating a European clearinghouse; our ability to
accommodate trading and clearing volume and transaction traffic,
including significant increases, without failure or degradation of
performance of our systems; misconduct by those who use our markets
or our products or for whom we clear transactions; challenges to
our use of open source software code; our ability to meet our
compliance obligations, including managing potential conflicts
between our regulatory responsibilities and our for-profit status;
our ability to maintain BIDS Trading as an independently managed
and operated trading venue, separate from and not integrated with
our registered national securities exchanges; damage to our
reputation; the ability of our compliance and risk management
methods to effectively monitor and manage our risks; our ability to
manage our growth and strategic acquisitions or alliances
effectively; restrictions imposed by our debt obligations and our
ability to make payments on or refinance our debt obligations; our
ability to maintain an investment grade credit rating; impairment
of our goodwill, long-lived assets, investments or intangible
assets; the accuracy of our estimates and expectations; litigation
risks and other liabilities; and operating a digital asset business
and clearinghouse, including the expected benefits of our ErisX
acquisition, subsequently rebranded to Cboe Digital, cybercrime,
changes in digital asset regulation, losses due to digital asset
custody, and fluctuations in digital asset prices. More detailed
information about factors that may affect our actual results to
differ may be found in our filings with the SEC, including in our
Annual Report on Form 10-K for the year ended December 31, 2021 and other filings made from
time to time with the SEC.
We do not undertake, and we expressly disclaim, any duty to
update any forward-looking statement whether as a result of new
information, future events or otherwise, except as required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
The condensed consolidated statements of income and balance
sheets are unaudited and subject to reclassification.
Cboe Media
Contacts:
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|
|
|
Analyst
Contact:
|
Angela Tu
|
|
Tim Cave
|
|
Kenneth Hill,
CFA
|
(646)
856–8734
|
|
+44 (0) 7593 506
719
|
|
(312)
786–7559
|
atu@cboe.com
|
|
tcave@cboe.com
|
|
khill@cboe.com
|
CBOE-F
Trademarks:
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, Bats®, BIDS
Trading®, BZX®, BYX®, Chi-X®, EDGX®, EDGA®, ErisX®, EuroCCP®,
MATCHNow®, and VIX® are registered trademarks of Cboe Global
Markets, Inc. and its subsidiaries. All other trademarks and
service marks are the property of their respective owners.
Cboe Global
Markets, Inc.
|
Key Performance
Statistics by Business Segment
|
|
|
|
3Q
2022
|
2Q
2022
|
1Q
2022
|
4Q 2021
|
3Q
2021
|
Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV (in
thousands)
|
|
|
39,947
|
|
|
39,377
|
|
|
42,464
|
|
|
40,794
|
|
|
37,548
|
|
Total company
Options ADV (in thousands)
|
|
|
13,521
|
|
|
13,054
|
|
|
13,392
|
|
|
12,694
|
|
|
11,764
|
|
Multi-listed
options
|
|
|
10,592
|
|
|
10,378
|
|
|
10,978
|
|
|
10,527
|
|
|
9,794
|
|
Index
options
|
|
|
2,929
|
|
|
2,677
|
|
|
2,414
|
|
|
2,167
|
|
|
1,970
|
|
Total Options market
share
|
|
|
33.8
|
%
|
|
33.2
|
%
|
|
31.5
|
%
|
|
31.1
|
%
|
|
31.3
|
%
|
Multi-listed
options
|
|
|
28.6
|
%
|
|
28.3
|
%
|
|
27.4
|
%
|
|
27.3
|
%
|
|
27.6
|
%
|
Total Options
RPC:
|
|
$
|
0.242
|
|
$
|
0.233
|
|
$
|
0.210
|
|
$
|
0.199
|
|
$
|
0.200
|
|
Multi-listed
options
|
|
$
|
0.061
|
|
$
|
0.066
|
|
$
|
0.067
|
|
$
|
0.066
|
|
$
|
0.069
|
|
Index
options
|
|
$
|
0.896
|
|
$
|
0.883
|
|
$
|
0.857
|
|
$
|
0.845
|
|
$
|
0.850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Equities -
Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV
(shares in billions)
|
|
|
10.9
|
|
|
12.6
|
|
|
12.9
|
|
|
10.8
|
|
|
9.8
|
|
Market share
%
|
|
|
13.3
|
%
|
|
13.6
|
%
|
|
14.3
|
%
|
|
13.3
|
%
|
|
14.0
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.023
|
|
$
|
0.020
|
|
$
|
0.017
|
|
$
|
0.025
|
|
$
|
0.020
|
|
U.S. Equities -
Off-Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (touched shares, in
millions)
|
|
|
80.1
|
|
|
92.7
|
|
|
108.5
|
|
|
84.2
|
|
|
73.0
|
|
Off-Exchange ATS Block
Market Share % (reported on a two-month lag)
|
|
|
19.7
|
%
|
|
22.7
|
%
|
|
24.4
|
%
|
|
22.5
|
%
|
|
22.9
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.114
|
|
$
|
0.108
|
|
$
|
0.117
|
|
$
|
0.115
|
|
$
|
0.122
|
|
Canadian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (matched shares, in
millions)
|
|
|
113.2
|
|
|
36.0
|
|
|
41.1
|
|
|
41.3
|
|
|
37.8
|
|
Total market share
%
|
|
|
12.4
|
%
|
|
6.4
|
%
|
|
3.2
|
%
|
|
3.3
|
%
|
|
3.4
|
%
|
Net capture (per 10,000
shares, in Canadian Dollars)
|
|
$
|
4.478
|
|
$
|
9.328
|
|
$
|
9.103
|
|
$
|
8.475
|
|
$
|
8.342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe and Asia
Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADNV
(Euros - in billions)
|
|
€
|
39.2
|
|
€
|
46.9
|
|
€
|
58.7
|
|
€
|
44.0
|
|
€
|
39.6
|
|
Market share
%
|
|
|
24.6
|
%
|
|
23.2
|
%
|
|
21.8
|
%
|
|
19.8
|
%
|
|
18.2
|
%
|
Net capture
(bps)
|
|
€
|
0.229
|
|
€
|
0.238
|
|
€
|
0.233
|
|
€
|
0.256
|
|
€
|
0.264
|
|
EuroCCP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trades cleared (in
thousands)
|
|
|
341,549.2
|
|
|
356,351.1
|
|
|
454,437.8
|
|
|
345,074.8
|
|
|
306,085.2
|
|
Fee per trade
cleared
|
|
€
|
0.008
|
|
€
|
0.009
|
|
€
|
0.009
|
|
€
|
0.011
|
|
€
|
0.010
|
|
Net settlement volume
(shares in thousands)
|
|
|
2,546.8
|
|
|
2,501.6
|
|
|
2,802.1
|
|
|
2,664.9
|
|
|
2,484.1
|
|
Net fee per
settlement
|
|
€
|
0.902
|
|
€
|
0.808
|
|
€
|
0.924
|
|
€
|
0.860
|
|
€
|
0.869
|
|
Australian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (AUD
billions)
|
|
$
|
0.7
|
|
$
|
0.8
|
|
$
|
0.9
|
|
$
|
0.8
|
|
|
0.8
|
|
Market share -
Continuous
|
|
|
16.7
|
%
|
|
17.0
|
%
|
|
15.8
|
%
|
|
16.1
|
%
|
|
15.7
|
%
|
Net capture (per
matched notional value (bps))
|
|
$
|
0.168
|
|
$
|
0.171
|
|
$
|
0.173
|
|
$
|
0.171
|
|
|
0.173
|
|
Japanese
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (JPY
billions)
|
|
¥
|
160.6
|
|
¥
|
136.0
|
|
¥
|
161.4
|
|
¥
|
111.4
|
|
|
88.7
|
|
Market share - Lit
Continuous
|
|
|
4.4
|
%
|
|
3.5
|
%
|
|
3.8
|
%
|
|
2.9
|
%
|
|
2.4
|
%
|
Net capture (per
matched notional value (bps))
|
|
¥
|
0.259
|
|
¥
|
0.258
|
|
¥
|
0.228
|
|
¥
|
0.358
|
|
|
0.364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (in
thousands)
|
|
|
205
|
|
|
222
|
|
|
254
|
|
|
230
|
|
|
223
|
|
RPC
|
|
$
|
1.700
|
|
$
|
1.677
|
|
$
|
1.637
|
|
$
|
1.651
|
|
$
|
1.626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
FX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot market share
%
|
|
|
17.8
|
%
|
|
17.0
|
%
|
|
17.3
|
%
|
|
16.8
|
%
|
|
17.0
|
%
|
ADNV ($ in
billions)
|
|
$
|
41.3
|
|
$
|
39.6
|
|
$
|
42.0
|
|
$
|
33.7
|
|
$
|
32.4
|
|
Net capture (per one
million dollars traded)
|
|
$
|
2.68
|
|
$
|
2.71
|
|
$
|
2.67
|
|
$
|
2.77
|
|
$
|
2.77
|
|
ADV = average daily volume; ADNV = average daily notional
value.
RPC, average revenue per contract, for options and futures
represents total net transaction fees recognized for the period
divided by total contracts traded during the period.
Touched volume represents the total number of shares of equity
securities and ETFs internally matched on our exchanges or routed
to and executed on an external market center.
Matched volume represents the total number of shares of equity
securities and ETFs executed on our exchanges.
U.S. Equities - Exchange, "net capture per 100 touched shares"
refers to transaction fees less liquidity payments and routing and
clearing costs divided by the product of one-hundredth ADV of
touched shares on BZX, BYX, EDGX and EDGA and the number of
trading days. U.S. Equities – Off-Exchange data reflects BIDS
Trading. For U.S. Equities – Off-Exchange, "net capture per 100
touched shares" refers to transaction fees less order and execution
management system (OMS/EMS) fees and clearing costs divided by the
product of one-hundredth ADV of touched shares on BIDS Trading and
the number of trading days for the period.
Canadian Equities, "net capture per 10,000 shares" refers to
transaction fees divided by the product of one-ten thousandth ADV
of shares for MATCHNow and NEO and the number of trading days.
Total market share represents MATCHNow and NEO volume divided by
the total volume of the Canadian Equities market.
European Equities, "net capture per matched notional value"
refers to transaction fees less liquidity payments in British
pounds divided by the product of ADNV in British pounds of shares
matched on Cboe Europe Equities and the number of trading days.
"Trades cleared" refers to the total number of non-interoperable
trades cleared, "Fee per trade cleared" refers to clearing fees
divided by number of non-interoperable trades cleared, "Net
settlement volume" refers to the total number of settlements
executed after netting, and "Net fee per settlement" refers to
settlement fees less direct costs incurred to settle divided by the
number of settlements executed after netting. Asia Pacific data reflects the acquisition of
Cboe Asia Pacific (formerly Chi-X Asia Pacific) effective
July 1, 2021. Australian Equities
"Net capture per matched notional value" refers to transaction fees
less liquidity payments in Australian dollars divided by the
product of ADNV in Australian dollars of shares matched on Cboe
Australia and the number of Australian Equities trading days.
Japanese Equities "Net capture per matched notional value" refers
to transaction fees less liquidity payments in Japanese Yen divided
by the product of ADNV in Japanese Yen of shares matched on Cboe
Japan and the number of Japanese Equities trading days.
Global FX, "net capture per one million
dollars traded" refers to transaction fees less liquidity
payments, if any, divided by the Spot and SEF products of
one-thousandth of ADNV traded on the Cboe FX Markets and the number
of trading days, divided by two, which represents the buyer and
seller that are both charged on the transaction. Market Share
represents Cboe FX volume divided by the total volume of publicly
reporting spot FX venues (Cboe FX, EBS, Refinitiv, and Euronext
FX).
Average transaction fees per contract can be affected by various
factors, including exchange fee rates, volume-based discounts and
transaction mix by contract type and product type.
Cboe Global
Markets, Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Income (Unaudited)
|
Three and Nine
Months Ended September 30, 2022 and 2021
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
(in millions, except
per share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and spot
markets
|
|
$
|
434.2
|
|
$
|
357.3
|
|
$
|
1,354.6
|
|
$
|
1,278.9
|
Data and access
solutions
|
|
|
126.1
|
|
|
110.3
|
|
|
368.9
|
|
|
313.9
|
Derivatives
markets
|
|
|
433.2
|
|
|
349.2
|
|
|
1,230.3
|
|
|
1,035.6
|
Total
Revenues
|
|
|
993.5
|
|
|
816.8
|
|
|
2,953.8
|
|
|
2,628.4
|
Cost of
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
payments
|
|
|
392.3
|
|
|
375.3
|
|
|
1,288.8
|
|
|
1,255.0
|
Routing and
clearing
|
|
|
20.2
|
|
|
19.0
|
|
|
63.4
|
|
|
66.0
|
Section 31
fees
|
|
|
105.4
|
|
|
27.9
|
|
|
220.7
|
|
|
148.6
|
Royalty fees
|
|
|
31.2
|
|
|
22.0
|
|
|
85.6
|
|
|
62.6
|
Other cost of
revenues
|
|
|
2.0
|
|
|
3.1
|
|
|
10.7
|
|
|
10.6
|
Total Cost of
Revenues
|
|
|
551.1
|
|
|
447.3
|
|
|
1,669.2
|
|
|
1,542.8
|
Revenues Less Cost
of Revenues
|
|
|
442.4
|
|
|
369.5
|
|
|
1,284.6
|
|
|
1,085.6
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
102.0
|
|
|
74.0
|
|
|
269.4
|
|
|
214.0
|
Depreciation and
amortization
|
|
|
41.0
|
|
|
42.8
|
|
|
122.1
|
|
|
125.4
|
Technology support
services
|
|
|
19.1
|
|
|
16.7
|
|
|
56.4
|
|
|
50.1
|
Professional fees and
outside services
|
|
|
20.4
|
|
|
24.0
|
|
|
64.2
|
|
|
62.0
|
Travel and promotional
expenses
|
|
|
6.1
|
|
|
2.3
|
|
|
14.5
|
|
|
5.8
|
Facilities
costs
|
|
|
6.2
|
|
|
5.8
|
|
|
19.3
|
|
|
16.5
|
Acquisition-related
costs
|
|
|
1.6
|
|
|
6.7
|
|
|
17.9
|
|
|
11.9
|
Goodwill
impairment
|
|
|
0.8
|
|
|
—
|
|
|
460.9
|
|
|
—
|
Other
expenses
|
|
|
8.4
|
|
|
6.5
|
|
|
20.8
|
|
|
14.6
|
Total Operating
Expenses
|
|
|
205.6
|
|
|
178.8
|
|
|
1,045.5
|
|
|
500.3
|
Operating
Income
|
|
|
236.8
|
|
|
190.7
|
|
|
239.1
|
|
|
585.3
|
Non-operating
(Expenses) Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(15.3)
|
|
|
(11.7)
|
|
|
(40.7)
|
|
|
(36.3)
|
Other income (expense),
net
|
|
|
7.5
|
|
|
(5.2)
|
|
|
(1.3)
|
|
|
(3.1)
|
Total Non-operating
Expenses
|
|
|
(7.8)
|
|
|
(16.9)
|
|
|
(42.0)
|
|
|
(39.4)
|
Income Before Income
Tax Provision
|
|
|
229.0
|
|
|
173.8
|
|
|
197.1
|
|
|
545.9
|
Income tax
provision
|
|
|
78.8
|
|
|
53.4
|
|
|
121.8
|
|
|
182.8
|
Net
Income
|
|
|
150.2
|
|
|
120.4
|
|
|
75.3
|
|
|
363.1
|
Net income allocated to
participating securities
|
|
|
(0.6)
|
|
|
(0.4)
|
|
|
(0.6)
|
|
|
(1.1)
|
Net Income Allocated
to Common Stockholders
|
|
$
|
149.6
|
|
$
|
120.0
|
|
$
|
74.7
|
|
$
|
362.0
|
Net Income Per Share
Allocated to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
1.41
|
|
$
|
1.12
|
|
$
|
0.70
|
|
$
|
3.38
|
Diluted earnings per
share
|
|
|
1.41
|
|
|
1.12
|
|
|
0.70
|
|
|
3.38
|
Weighted average shares
used in computing income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
106.2
|
|
|
106.8
|
|
|
106.4
|
|
|
107.0
|
Diluted
|
|
|
106.4
|
|
|
107.0
|
|
|
106.6
|
|
|
107.2
|
Cboe Global
Markets, Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
September 30, 2022
and December 31, 2021
|
|
|
|
September 30,
|
|
December 31,
|
(in
millions)
|
|
2022
|
|
2021
|
Assets
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
353.3
|
|
$
|
341.9
|
Financial
investments
|
|
|
27.4
|
|
|
37.1
|
Accounts receivable,
net
|
|
|
380.2
|
|
|
326.9
|
Margin deposits and
clearing funds
|
|
|
1,029.3
|
|
|
745.9
|
Digital assets -
safeguarded assets
|
|
|
24.0
|
|
|
—
|
Income taxes
receivable
|
|
|
39.5
|
|
|
42.7
|
Other current
assets
|
|
|
43.3
|
|
|
36.8
|
Total Current
Assets
|
|
|
1,897.0
|
|
|
1,531.3
|
|
|
|
|
|
|
|
Investments
|
|
|
253.6
|
|
|
245.8
|
Land
|
|
|
2.3
|
|
|
2.3
|
Property and equipment,
net
|
|
|
105.8
|
|
|
105.2
|
Operating lease right
of use assets
|
|
|
114.2
|
|
|
110.1
|
Goodwill
|
|
|
3,113.9
|
|
|
3,025.4
|
Intangible assets,
net
|
|
|
1,666.1
|
|
|
1,668.6
|
Other assets,
net
|
|
|
144.5
|
|
|
125.8
|
Total
Assets
|
|
$
|
7,297.4
|
|
$
|
6,814.5
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
401.1
|
|
$
|
295.4
|
Section 31 fees
payable
|
|
|
38.0
|
|
|
40.8
|
Deferred
revenue
|
|
|
15.6
|
|
|
15.2
|
Margin deposits and
clearing funds
|
|
|
1,029.3
|
|
|
745.9
|
Digital assets -
safeguarded liabilities
|
|
|
24.0
|
|
|
—
|
Income taxes
payable
|
|
|
—
|
|
|
8.2
|
Current portion of
contingent consideration liabilities
|
|
|
37.2
|
|
|
63.8
|
Total Current
Liabilities
|
|
|
1,545.2
|
|
|
1,169.3
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,859.8
|
|
|
1,299.3
|
Unrecognized tax
benefits
|
|
|
184.8
|
|
|
197.9
|
Deferred income
taxes
|
|
|
239.1
|
|
|
372.7
|
Non-current operating
lease liabilities
|
|
|
131.8
|
|
|
129.2
|
Non-current portion of
contingent consideration liabilities
|
|
|
10.3
|
|
|
6.7
|
Other non-current
liabilities
|
|
|
32.6
|
|
|
34.6
|
Total
Liabilities
|
|
|
4,003.6
|
|
|
3,209.7
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
—
|
|
|
—
|
Common stock
|
|
|
1.1
|
|
|
1.1
|
Treasury stock at
cost
|
|
|
(201.2)
|
|
|
(106.8)
|
Additional paid-in
capital
|
|
|
1,532.9
|
|
|
1,509.4
|
Retained
earnings
|
|
|
2,064.8
|
|
|
2,145.5
|
Accumulated other
comprehensive (loss) income, net
|
|
|
(103.8)
|
|
|
55.6
|
Total Stockholders'
Equity
|
|
|
3,293.8
|
|
|
3,604.8
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
7,297.4
|
|
$
|
6,814.5
|
Non-GAAP Information
In addition to disclosing results determined in accordance with
GAAP, Cboe Global Markets has disclosed certain non-GAAP measures
of operating performance. These measures are not in accordance
with, or a substitute for, GAAP, and may be different from or
inconsistent with non-GAAP financial measures used by other
companies. The non-GAAP measures provided in this press release
include net transaction and clearing fees, adjusted operating
expenses, adjusted operating income, organic net revenue, inorganic
net revenue, adjusted operating margin, adjusted net (loss) income
allocated to common stockholders and adjusted diluted earnings per
share, effective tax rate on adjusted earnings, adjusted cash,
EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA
margin.
Management believes that the non-GAAP financial measures
presented in this press release, including adjusted operating
income, organic net revenue and adjusted operating expenses,
provide additional and comparative information to assess trends in
our core operations and a means to evaluate period-to-period
comparisons. Non-GAAP financial measures disclosed by management
are provided as additional information to investors in order to
provide them with an alternative method for assessing our financial
condition and operating results.
Organic net revenue, inorganic net revenue, organic
non-transaction revenue and organic net revenue
guidance: These are non-GAAP financial measures that
exclude or have otherwise been adjusted for the impact of our
acquisitions for the period or guidance, as applicable. Management
believes the organic net revenue growth and guidance measures
provide users with supplemental information regarding the company's
ongoing and future potential revenue performances and trends by
presenting revenue growth and guidance excluding the impact of the
acquisitions. Revenues from acquisitions that have been owned for
at least one year are considered organic and are no longer excluded
from organic net revenue from either period for comparative
purposes.
Amortization expense of acquired intangible assets: We
amortize intangible assets acquired in connection with various
acquisitions. Amortization of intangible assets is inconsistent in
amount and frequency and is significantly affected by the timing
and size of our acquisitions. As such, if intangible asset
amortization is included in performance measures, it is more
difficult to assess the day-to-day operating performance of the
businesses, the relative operating performance of the businesses
between periods and the earnings power of the company. Therefore,
we believe performance measures excluding intangible asset
amortization expense provide investors with an additional basis for
comparison across accounting periods.
Acquisition-related expenses: From time to time, we have
pursued acquisitions, which have resulted in expenses which would
not otherwise have been incurred in the normal course of the
company's business operations. These expenses include integration
costs, as well as legal, due diligence, impairment charges, and
other third-party transaction costs. The frequency and the amount
of such expenses vary significantly based on the size, timing and
complexity of the transaction. Accordingly, we exclude these costs
for purposes of calculating non-GAAP measures which provide an
additional analysis of Cboe's ongoing operating performance or
comparisons in Cboe's performance between periods.
The tables below show the reconciliation of each financial
measure from GAAP to non-GAAP. The non-GAAP financial measures
exclude the impact of those items detailed below and are referred
to as adjusted financial measures.
Organic Net Revenue
Reconciliation
|
|
Table
3
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
millions)
|
|
September 30,
|
|
September 30,
|
|
Reconciliation of
Revenue Less Cost of Revenue to Organic Net Revenue
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Revenues less cost of
revenues (net revenue)
|
|
$
|
442.4
|
|
$
|
369.5
|
|
$
|
1,284.6
|
|
$
|
1,085.6
|
|
Less
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition revenue
less cost of revenues (inorganic net revenue)
|
|
$
|
(5.3)
|
|
$
|
—
|
|
$
|
(23.6)
|
|
$
|
—
|
|
Organic net
revenue
|
|
$
|
437.1
|
|
$
|
369.5
|
|
$
|
1,261.0
|
|
$
|
1,085.6
|
|
Reconciliation of
GAAP and non-GAAP Information
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Table
4
|
|
September 30,
|
|
September 30,
|
|
(in millions, except
per share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to Non-GAAP (As shown
on Table 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income allocated to
common stockholders
|
|
$
|
149.6
|
|
$
|
120.0
|
|
$
|
74.7
|
|
$
|
362.0
|
|
Non-GAAP
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (1)
|
|
|
1.6
|
|
|
6.7
|
|
|
17.9
|
|
|
11.9
|
|
Investment
establishment costs (2)
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
Gain on investment
(3)
|
|
|
—
|
|
|
—
|
|
|
(7.5)
|
|
|
—
|
|
Loan forgiveness
(4)
|
|
|
—
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
Amortization of
acquired intangible assets (5)
|
|
|
30.4
|
|
|
31.8
|
|
|
91.1
|
|
|
95.2
|
|
Goodwill impairment
(6)
|
|
|
0.8
|
|
|
—
|
|
|
460.9
|
|
|
—
|
|
Impairment of
investment (7)
|
|
|
—
|
|
|
5.0
|
|
|
10.6
|
|
|
5.0
|
|
Total Non-GAAP
adjustments
|
|
|
32.8
|
|
|
43.5
|
|
|
574.7
|
|
|
112.1
|
|
Income tax expense
related to the items above
|
|
|
2.9
|
|
|
(8.5)
|
|
|
(149.0)
|
|
|
(24.4)
|
|
Tax reserves
(8)
|
|
|
—
|
|
|
—
|
|
|
48.5
|
|
|
—
|
|
Deferred tax
re-measurements
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.7
|
|
Net income allocated to
participating securities - effect on reconciling
items
|
|
|
(0.1)
|
|
|
(0.1)
|
|
|
(1.7)
|
|
|
(0.3)
|
|
Adjusted net income
allocated to common stockholders
|
|
$
|
185.2
|
|
$
|
154.9
|
|
$
|
547.2
|
|
$
|
467.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Diluted EPS to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
$
|
1.41
|
|
$
|
1.12
|
|
$
|
0.70
|
|
$
|
3.38
|
|
Per share impact of
non-GAAP adjustments noted above
|
|
|
0.33
|
|
|
0.33
|
|
|
4.43
|
|
|
0.98
|
|
Adjusted diluted
earnings per common share
|
|
$
|
1.74
|
|
$
|
1.45
|
|
$
|
5.13
|
|
$
|
4.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Margin to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue less cost of
revenue
|
|
$
|
442.4
|
|
$
|
369.5
|
|
$
|
1,284.6
|
|
$
|
1,085.6
|
|
Non-GAAP adjustments
noted above
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted revenue
less cost of revenue
|
|
$
|
442.4
|
|
$
|
369.5
|
|
$
|
1,284.6
|
|
$
|
1,085.6
|
|
Operating expenses
(9)
|
|
$
|
205.6
|
|
$
|
178.8
|
|
$
|
1,045.5
|
|
$
|
500.3
|
|
Non-GAAP adjustments
noted above
|
|
|
32.8
|
|
|
38.5
|
|
|
569.9
|
|
|
107.1
|
|
Adjusted operating
expenses
|
|
$
|
172.8
|
|
$
|
140.3
|
|
$
|
475.6
|
|
$
|
393.2
|
|
Operating
income
|
|
$
|
236.8
|
|
$
|
190.7
|
|
$
|
239.1
|
|
$
|
585.3
|
|
Non-GAAP adjustments
noted above
|
|
|
32.8
|
|
|
38.5
|
|
|
569.9
|
|
|
107.1
|
|
Adjusted operating
income
|
|
$
|
269.6
|
|
$
|
229.2
|
|
$
|
809.0
|
|
$
|
692.4
|
|
Adjusted operating
margin (10)
|
|
|
60.9
|
%
|
|
62.0
|
%
|
|
63.0
|
%
|
|
63.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Rate to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
229.0
|
|
|
173.8
|
|
|
197.1
|
|
|
545.9
|
|
Non-GAAP adjustments
noted above
|
|
|
32.8
|
|
|
43.5
|
|
|
574.7
|
|
|
112.1
|
|
Adjusted income
before income taxes
|
|
$
|
261.8
|
|
$
|
217.3
|
|
$
|
771.8
|
|
$
|
658.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
78.8
|
|
|
53.4
|
|
|
121.8
|
|
|
182.8
|
|
Non-GAAP adjustments
noted above
|
|
|
(2.9)
|
|
|
8.5
|
|
|
100.5
|
|
|
6.7
|
|
Adjusted income tax
expense
|
|
$
|
75.9
|
|
$
|
61.9
|
|
$
|
222.3
|
|
$
|
189.5
|
|
Adjusted income tax
rate
|
|
|
29.0
|
%
|
|
28.5
|
%
|
|
28.8
|
%
|
|
28.8
|
%
|
|
|
(1)
|
This amount includes
professional fees (which includes fees associated with the
valuation of the Cboe Digital goodwill impairment) and outside
services.
|
(2)
|
This amount represents
the investment establishment costs related to the company's
investment in 7RIDGE Investments 3 LP, which acquired Trading
Technologies, Inc.
|
(3)
|
This amount represents
the gain on the Company's investment in Eris Innovations Holdings,
LLC in connection with the full acquisition of Cboe Digital
(formerly ErisX).
|
(4)
|
This amount represents
the forgiveness of a PPP ("Paycheck Protection Program") loan
previously held by Cboe Digital.
|
(5)
|
This amount represents
the amortization of acquired intangible assets related to the
company's acquisitions.
|
(6)
|
This amount represents
the impairment of Cboe Digital goodwill.
|
(7)
|
This amount represents
the impairment of investment related to the Company's minority
investment in American Financial Exchange, LLC.
|
(8)
|
This amount represents
the tax reserves related to Section 199 matters.
|
(9)
|
The company sponsors
deferred compensation plans held in a trust. The expenses or income
related to the deferred compensation plans are included in
"Compensation and benefits" ($0.1 million and $0.3 million in
expense for the three months ended September 30, 2022 and 2021,
respectively, and $2.6 million and $1.7 million in expense for the
nine months ended September 30, 2022 and 2021, respectively), and
are directly offset by deferred compensation income, expenses and
dividends included within "Other income, net" ($0.1 million and
$0.3 million in income, expense and dividends in the three months
ended September 30, 2022 and 2021, respectively, and $2.6 million
and $1.7 million in income, expense and dividends in the nine
months ended September 30, 2022 and 2021, respectively), on
the condensed consolidated statements of income. The deferred
compensation plans' expenses are not excluded from "adjusted
operating expenses" and do not have an impact on "Income before
income taxes."
|
(10)
|
Adjusted operating
margin represents adjusted operating income divided by adjusted
revenue less cost of revenue.
|
EBITDA Reconciliations
EBITDA (earnings before interest, income taxes, depreciation and
amortization) and Adjusted EBITDA are widely used non-GAAP
financial measures of operating performance. EBITDA margin
represents EBITDA divided by revenues less cost of revenues (net
revenue). It is presented as supplemental information that the
company believes is useful to investors to evaluate its results
because it excludes certain items that are not directly related to
the company's core operating performance. EBITDA is calculated by
adding back to net income interest expense, income tax expense,
depreciation and amortization. Adjusted EBITDA is calculated by
adding back to EBITDA acquisition-related expenses, gain on
investment, loan forgiveness, investment establishment costs,
goodwill impairment, and impairment of investment. EBITDA and
Adjusted EBITDA should not be considered as substitutes either for
net income, as an indicator of the company's operating performance,
or for cash flow, as a measure of the company's liquidity. In
addition, because EBITDA and Adjusted EBITDA may not be calculated
identically by all companies, the presentation here may not be
comparable to other similarly titled measures of other companies.
Adjusted EBITDA margin represents Adjusted EBITDA divided by net
revenue.
Table
5
|
|
Three Months Ended
|
|
Nine Months
Ended
|
|
(in millions, except
percentages)
|
|
September 30,
|
|
September 30,
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to EBITDA and
Adjusted
EBITDA (Per Table 1)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net income allocated
to common stockholders
|
|
$
|
149.6
|
|
$
|
120.0
|
|
$
|
74.7
|
|
$
|
362.0
|
|
Interest expense,
net
|
|
|
15.3
|
|
|
11.7
|
|
|
40.7
|
|
|
36.3
|
|
Income tax
provision
|
|
|
78.8
|
|
|
53.4
|
|
|
121.8
|
|
|
182.8
|
|
Depreciation and
amortization
|
|
|
41.0
|
|
|
42.8
|
|
|
122.1
|
|
|
125.4
|
|
EBITDA
|
|
$
|
284.7
|
|
$
|
227.9
|
|
$
|
359.3
|
|
$
|
706.5
|
|
EBITDA
Margin
|
|
|
64.4
|
%
|
|
61.7
|
%
|
|
28.0
|
%
|
|
65.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
not included in above line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
|
1.6
|
|
|
6.7
|
|
|
17.9
|
|
|
11.9
|
|
Gain on
investment
|
|
|
—
|
|
|
—
|
|
|
(7.5)
|
|
|
—
|
|
Loan
forgiveness
|
|
|
—
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
Investment
establishment costs
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
Goodwill
impairment
|
|
|
0.8
|
|
|
—
|
|
|
460.9
|
|
|
—
|
|
Impairment of
investment
|
|
|
—
|
|
|
5.0
|
|
|
10.6
|
|
|
5.0
|
|
Adjusted
EBITDA
|
|
$
|
287.1
|
|
$
|
239.6
|
|
$
|
842.9
|
|
$
|
723.4
|
|
Adjusted EBITDA
Margin
|
|
|
64.9
|
%
|
|
64.8
|
%
|
|
65.6
|
%
|
|
66.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
September 30,
|
|
December 31,
|
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Reconciliation of
Cash and Cash Equivalents to Adjusted Cash
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2022
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2021
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Cash and cash
equivalents
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$
|
353.3
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$
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341.9
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Financial
investments
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27.4
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37.1
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Less deferred
compensation plan assets
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(25.4)
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(28.0)
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Less cash collected for
Section 31 Fees
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—
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(25.9)
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Adjusted
Cash
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$
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355.3
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$
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325.1
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Table
7
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(in
millions)
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Reconciliation of
Net Transaction and Clearing Fees by Business Segment –Three Months
Ended September 30, 2022 and 2021
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Consolidated
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Options
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N.A.
Equities
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Europe and
APAC
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Futures
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Global
FX
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Digital
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September 30,
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September 30,
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September 30,
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September 30,
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September 30,
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September 30,
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September 30,
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2022
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2021
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2022
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2021
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2022
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2021
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2022
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2021
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2022
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2021
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2022
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2021
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2022
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2021
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Transaction and
clearing fees
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$
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715.5
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$
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632.9
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$
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377.7
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$
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308.4
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$
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264.6
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$
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253.2
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$
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35.9
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$
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36.2
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$
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22.3
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$
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23.2
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$
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14.9
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$
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11.9
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$
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0.1
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$
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—
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Liquidity
payments
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(392.3)
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(375.3)
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(160.3)
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(152.7)
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(223.5)
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(216.9)
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(8.4)
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(5.7)
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—
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—
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—
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—
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(0.1)
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—
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Routing and
clearing
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(20.2)
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(19.0)
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(7.3)
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(5.2)
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(8.6)
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(9.0)
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(4.0)
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(4.7)
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—
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—
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(0.3)
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(0.1)
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—
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—
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Net transaction and
clearing fees
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$
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303.0
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$
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238.6
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$
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210.1
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$
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150.5
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$
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32.5
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$
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27.3
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$
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23.5
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$
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25.8
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$
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22.3
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$
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23.2
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$
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14.6
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$
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11.8
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$
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—
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$
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—
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Table
8
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(in
millions)
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Reconciliation of
Net Revenue by Revenue Caption –Three Months Ended September 30,
2022 and 2021
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Cash and Spot
Markets
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Data and Access
Solutions
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Derivatives
Markets
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Total
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Three Months Ended
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Three Months Ended
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Three Months Ended
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Three Months Ended
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September 30,
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September 30,
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September 30,
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September 30,
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2022
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2021
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2022
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2021
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2022
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2021
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2022
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2021
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Transaction and
clearing fees
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$
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315.5
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$
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301.2
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$
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—
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$
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—
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$
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400.0
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$
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331.7
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$
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715.5
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$
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632.9
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Access and capacity
fees
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—
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—
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81.8
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72.8
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—
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—
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81.8
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72.8
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Market data
fees
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19.9
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21.1
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43.1
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33.4
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8.0
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7.5
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71.0
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62.0
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Regulatory
fees
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90.4
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25.3
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—
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—
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24.5
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9.3
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114.9
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34.6
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Other
revenue
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8.4
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9.7
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1.2
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4.1
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0.7
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0.7
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10.3
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14.5
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Total
revenues
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$
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434.2
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$
|
357.3
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$
|
126.1
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$
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110.3
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$
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433.2
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$
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349.2
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$
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993.5
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$
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816.8
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Liquidity
payments
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$
|
231.3
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$
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222.5
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$
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—
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$
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—
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$
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161.0
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$
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152.8
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$
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392.3
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$
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375.3
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Routing and clearing
fees
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12.9
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13.8
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—
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—
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7.3
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5.2
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20.2
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19.0
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Section 31
fees
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89.9
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24.8
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—
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—
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15.5
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3.1
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105.4
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27.9
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Royalty fees and other
cost of revenues
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2.0
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3.1
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2.2
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2.1
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29.0
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19.9
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33.2
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25.1
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Total cost of
revenues
|
$
|
336.1
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$
|
264.2
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$
|
2.2
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$
|
2.1
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$
|
212.8
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$
|
181.0
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$
|
551.1
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$
|
447.3
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Revenues less cost
of revenues (net revenue)
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$
|
98.1
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$
|
93.1
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$
|
123.9
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$
|
108.2
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$
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220.4
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$
|
168.2
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$
|
442.4
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$
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369.5
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Acquisition revenue
less cost of revenues (inorganic net revenue)
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(2.2)
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—
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(3.1)
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—
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—
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—
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(5.3)
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—
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Organic net
revenue
|
$
|
95.9
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$
|
93.1
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$
|
120.8
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$
|
108.2
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$
|
220.4
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$
|
168.2
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$
|
437.1
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$
|
369.5
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Table
9
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Reconciliation of
GAAP Effective Tax Rate to Effective Tax Rate Excluding Goodwill
Impairment and Section 199 Matters - Three Months and Nine Months
Ended September 30, 2022
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Three months
ended,
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Nine Months
Ended
|
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September 30,
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September 30,
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GAAP effective tax
rate
|
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34.4
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%
|
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61.8
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%
|
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Tax effect of goodwill
impairment
|
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—
|
%
|
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(22.8)
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%
|
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Tax effect of Section
199 related matters
|
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—
|
%
|
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(7.4)
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%
|
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Effective tax rate
excluding goodwill impairment and Section 199 matters
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34.4
|
%
|
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31.6
|
%
|
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Table
10
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Reconciliation of
GAAP Net Revenues to Net Revenues in Constant Currency - Three
Months Ended September 30, 2022
|
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Three months
ended,
|
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September 30,
|
Europe and Asia Pacific
net revenues
|
$
|
44.5
|
Constant currency
adjustment1
|
|
7.1
|
Europe and Asia Pacific
net revenue in constant currency
|
$
|
51.6
|
|
|
(1)
|
We define constant
currency net revenues as total net revenues excluding the effect of
foreign exchange rate movements. Constant currency impact in
dollars is calculated by translating the current period GAAP net
revenues using the foreign currency exchange rates that were in
effect during the previous comparable period and subtracting it by
the current period GAAP net revenues.
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SOURCE Cboe Global Markets, Inc.