Third Quarter Highlights*
- Diluted EPS for the Quarter of $1.95, Up 38 percent
- Record Adjusted Diluted EPSĀ¹ for the Quarter of $2.06, Up 18 percent
- Record Net Revenue for the Quarter of $480.5 million, Up 9 percent
- Reaffirms High End of Organic Total Net Revenue
Growth2 Range of 7 to 9 percent in 2023;
Reaffirms Data and Access Solutions Organic Net Revenue Growth
Target2 of 7 to 10 percent
- Decreases 2023 Adjusted Operating Expense
Guidance2 to $754 to
$762 million, from $766 to $774
million.
CHICAGO, Nov. 3, 2023
/PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE) today
reported financial results for the third quarter of 2023.
"Cboe reported strong earnings, record adjusted earnings, and
record net revenues for the third quarter of 2023 as we continued
to execute on our strategic initiatives," said Fredric Tomczyk, Cboe Global Markets Chief
Executive Officer. "We saw strong performance from our Derivatives
and Data and Access Solutions categories during the quarter, and
Cboe remains incredibly well-positioned to help customers of all
sizes navigate ever-changing market conditions with a toolkit of
tradeable products and data solutions. Since taking over as CEO six
weeks ago, I have been impressed with the fortitude of the Cboe
team and their focus on our clients. I could not be more pleased to
lead Cboe in its next chapter of growth as we work to deliver
long-term shareholder value."
"In the third quarter, Cboe produced another quarter of strong
earnings and record-setting net revenue and adjusted earnings
results," said Jill Griebenow, Cboe
Global Markets Executive Vice President, Chief Financial Officer
and Chief Accounting Officer. "Our Derivatives business continued
to lead the way, delivering a 15% year-over-year net revenue
increase in the third quarter of 2023. Data and Access Solutions
net revenue trends remained solid, increasing by 9% year-over-year,
while Cash and Spot Markets net revenue decreased by 6% given the
challenging volume environment. Moving forward, we expect to be at
the high end of our unchanged organic total net revenue
growth2 target of 7-9% for 2023, and we continue to
anticipate Data and Access Solutions organic net revenue
growth2 will finish in the range of 7-10%. Our adjusted
operating expense guidance2 range for 2023 moves lower
to $754 to $762 million from $766 to $774
million. We are excited by the strong volume trends in our
core proprietary products as we look to close out 2023, and we look
forward to driving durable returns for Cboe shareholders in the
quarters ahead."
*All comparisons are
third quarter 2023 compared to the same period in
2022.
|
(1)A full reconciliation
of our non-GAAP results to our GAAP ("Generally Accepted Accounting
Principles") 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 net revenue 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 net revenue growth guidance, 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, 2023 and 2022.
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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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3Q23
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3Q22
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|
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($ in millions except per share)
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|
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3Q23
|
|
3Q22
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Change
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Adjusted1
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Adjusted1
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Change
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Total Revenues Less
Cost of Revenues
|
|
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$
|
480.5
|
|
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$
|
442.4
|
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9
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%
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$
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480.5
|
|
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$
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442.4
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9
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%
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Total Operating
Expenses
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|
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$
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209.3
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|
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$
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205.6
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|
2
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%
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$
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180.3
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|
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$
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172.8
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4
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%
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Operating
Income
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$
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271.2
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$
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236.8
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|
15
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%
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$
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300.2
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$
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269.6
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11
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%
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Operating Margin
%
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|
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56.4
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%
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|
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53.5
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%
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2.9
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pp
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62.5
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%
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60.9
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%
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1.6
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pp
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Net Income Allocated to
Common Stockholders
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$
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207.1
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$
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149.6
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38
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%
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$
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218.9
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$
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185.2
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18
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%
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Diluted Earnings Per
Share
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$
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1.95
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$
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1.41
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38
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%
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$
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2.06
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$
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1.74
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18
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%
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EBITDA1
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$
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319.7
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$
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284.7
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12
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%
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$
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320.5
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$
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287.1
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12
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%
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EBITDA Margin
%1
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|
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66.5
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%
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64.4
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%
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2.1
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pp
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66.7
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%
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|
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64.9
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%
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1.8
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pp
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- Total revenues less cost of revenues (referred to as "net
revenue") of $480.5 million increased
9 percent, compared to $442.4 million
in the prior-year period, reflecting increases in derivatives
markets and data and access solutions net revenue, partially offset
by a decrease in cash and spot markets net revenue.
- Total operating expenses were $209.3
million versus $205.6 million
in the third quarter of 2022, an increase of $3.7 million. Adjusted operating
expenses1 of $180.3
million increased 4 percent compared to $172.8 million in the third quarter of 2022.
These increases were primarily due to higher technology support
services, professional fees and outside services, and travel and
promotional expenses, partially offset by a decline in compensation
and benefits primarily due to a $9.5
million benefit from executive changes.
- The effective tax rate for the third quarter of 2023 was 22.9
percent as compared with 34.4 percent in the third quarter of 2022.
The lower effective tax rate in 2023 is primarily a result of the
release of income tax reserves associated with penalties and
interest thereon as a result of the remeasurement of tax reserves
related to Section 199 deduction claims which were in dispute with
the Internal Revenue Service ("IRS"). The Company has reached a
settlement with the IRS under which the Company has conceded all
the claimed Section 199 deductions in exchange for the IRS's
concession of penalties asserted on the Company's Section 199
deductions. Although the parties had not completed all legal
procedures to affect the settlement at September 30, 2023, the IRS provided a written
response agreeing to these terms prior to September 30, 2023. The Company accordingly
remeasured its Section 199 tax reserve liabilities and released its
reserves associated with penalties and interest thereon for its
Section 199 claims as of September 30,
2023. Subsequent to September 30,
2023, the parties have completed all legal procedures to
affect the settlement. The effective tax rate on adjusted
earnings1 was 26.4 percent, a decrease of 2.6 percent
when compared with 29.0 percent in last year's third quarter. The
lower effective tax rate on adjusted earnings in 2023 is primarily
due to a decrease in non-deductible compensation resulting from
executive changes.
- Diluted EPS for the third quarter of 2023 increased 38 percent
to $1.95 compared to the third
quarter of 2022. Adjusted diluted EPS1 of $2.06 increased 18 percent compared to 2022's
third quarter results.
Business Segment Information:
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Table
2
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Total Revenues Less
Cost of Revenues by
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Business
Segment
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(in
millions)
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3Q23
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3Q22
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Change
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Options
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$
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290.8
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$
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255.5
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14
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%
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North American
Equities
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95.1
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96.7
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(2)
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%
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Europe and Asia
Pacific
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45.6
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44.5
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2
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%
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Futures
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32.4
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28.4
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14
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%
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Global FX
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18.3
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17.3
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6
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%
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Digital
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(1.7)
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ā
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*
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%
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Total
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$
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480.5
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$
|
442.4
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9
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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.
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*Not
meaningful
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Discussion of Results by Business
Segment1:
Options:
- Options net revenue of $290.8
million was up $35.3 million,
or 14 percent, from the third quarter of 2022. Net transaction and
clearing fees2 increased primarily as a result of a 28
percent increase in index options trading volumes versus the third
quarter of 2022. Access and capacity fees were 5 percent higher
than third quarter 2022 and market data fees were 19 percent higher
than third quarter 2022.
- Net transaction and clearing fees2 increased
$38.2 million, or 18 percent,
reflecting an 8 percent increase in total options average daily
volume ("ADV") and a 12 percent increase in total options RPC
compared to the third quarter 2022. The increase in total options
RPC was due to a mix shift, with index options representing a
higher percentage of total options volume.
- Cboe's Options exchanges had total market share of 33.6 percent
for the third quarter of 2023 compared to 33.8 percent in the third
quarter of 2022.
North American (N.A.) Equities:
- N.A. Equities net revenue of $95.1
million decreased $1.6
million, or 2 percent versus the third quarter of 2022,
reflecting lower net transaction and clearing fees2 and
industry market data.
- Net transaction and clearing fees2 decreased by
$3.5 million, or 11 percent, as
compared to the third quarter of 2022. The decrease was primarily a
result of a 4 percent decrease in U.S. Equities industry volumes
and lower market share.
- Cboe's U.S. Equities exchanges had market share of 12.7 percent
for the third quarter of 2023 compared to 13.3 percent in the third
quarter of 2022. Cboe's U.S. Equities off-exchange market share was
20.1 percent versus 21.7 percent in the third quarter of 2022.
Canadian Equities market share rose to 15.2 percent as compared to
12.2 percent in the third quarter of 2022 given greater adoption by
existing clients and new client growth.
Europe and Asia Pacific (APAC):
- Europe and APAC net revenue of
$45.6 million increased by 2 percent
as compared to the third quarter of 2022, reflecting double-digit
non-transaction revenue growth led by higher market data fees,
access and capacity fees, and other. On a constant currency
basis2, net revenues were $43.2
million, down 3 percent on a year-over-year basis. European
Equities average daily notional value ("ADNV") traded on Cboe
European Equities was ā¬8.0 billion, down 17 percent compared to the
third quarter of 2022 given a 13 percent decline in industry market
volumes and lower market share.
- For the third quarter of 2023, Cboe European Equities had 23.2
percent market share, down from 24.6 percent in the third quarter
of 2022.
Futures:
- Futures net revenue of $32.4
million increased $4.0 million
compared to the third quarter of 2022, due to double-digit
increases in net transaction and clearing fees2, access
and capacity fees, and market data fees.
- Net transaction and clearing fees2 increased
$3.1 million, reflecting a 12 percent
increase in ADV during the quarter.
Global FX:
- Global FX net revenue of $18.3
million increased 6 percent, primarily due to higher net
transaction and clearing fees2. ADNV traded on the Cboe
FX platform was $44.4 billion for the
quarter, up 8 percent compared to last year's third quarter, and
net capture per one million dollars
traded was $2.64 for the quarter,
down 2 percent compared to $2.69 in
the third quarter of 2022.
- Cboe FX market share was 20.2 percent for the quarter compared
to 17.8 percent in last year's third quarter, which sets a
quarterly record for Cboe FX. The record was driven by new client
growth and increased adoption of our diverse set of FX order types
and trading protocols.
(1)The Digital and Corporate
segments are not further discussed as results were not material
during the third quarter of 2023.
|
(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.
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2023 Fiscal Year Financial Guidance
Cboe provided guidance for the 2023 fiscal year as noted
below.
- Reaffirms high end of organic total net revenue
growth1 range of 7 to 9 percentage points in 2023, above
medium-term organic total net revenue1 guidance
expectations of 5 to 7 percentage points.
- Reaffirms revenue from acquisitions held less than a
year1 is expected to contribute total net revenue growth
of approximately 0.4 percentage points in 2023.
- Reaffirms organic net revenue1 from Data and Access
Solutions is expected to increase by approximately 7 to 10
percentage points in 2023, in line with medium-term guidance
expectations.
- Adjusted operating expenses1 in 2023 are now
expected to be in the range of $754
to $762 million, down from previous
guidance of $766 to $774 million. The guidance excludes the expected
amortization of acquired intangible assets of $116 million; the company reflects the exclusion
of this amount in its non-GAAP reconciliation.
- Reaffirms depreciation and amortization expense for 2023 to be
in the range of $40 to $44 million, excluding the expected amortization
of acquired intangible assets.
- Other income (expense) from minority investments is now
expected to contribute a $38 to
$44 million benefit in 2023, up from
the previous range of $34 to
$40 million.
- The effective tax rate on adjusted earnings1 for the
full year 2023 is now expected to be in the range of 27.5 to 29.5
percent, down from previous guidance of 28.5 to 30.5 percent.
Significant changes in trading volume, expenses, tax laws or rates
and other items could materially impact this expectation.
- Capital expenditures for 2023 are now expected to be in the
range of $42 to $48 million, down from the previous guidance of
$48 to $54
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. Acquisitions are considered organic after 12
months of closing. 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, 2023, the company
had adjusted cash2 of $403.6
million. Total debt as of September
30, 2023 was $1,513.6 million,
a decrease of $89.5 million from
June 30, 2023.
The company paid cash dividends of $58.5
million, or $0.55 per share,
and there were no share repurchases in the third quarter of 2023.
As of September 30, 2023, the company
had approximately $139.8 million of
availability remaining under its existing share repurchase
authorizations. As announced on October 26,
2023, the company's Board of Directors increased its share
repurchase authorization by $250
million.āÆThis new authorization will be in addition to any
unused amount remaining under the company's existing share
repurchase authorizations.āÆAs of October 31,
2023, the company had approximately $389.8 million authorized and available for
repurchase.
Earnings Conference Call
Executives of Cboe Global Markets will host a conference call to
review its third-quarter financial results today, November 3, 2023, 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 (888) 510-2176 (toll-free) or (646)
960-0279 (toll) and using the Conference ID 7074549. 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.
(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.
|
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world's leading
derivatives and securities exchange network, delivers cutting-edge
trading, clearing and investment solutions to people around the
world. Cboe provides trading solutions and products in multiple
asset classes, including equities, derivatives, FX, and digital
assets, across North America,
Europe, and Asia Pacific. Above all, Cboe is committed to
building a trusted, inclusive global marketplace that enables
people to pursue a sustainable financial future. To learn more
about the Exchange for the World Stage,
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 vulnerabilities and breaches;
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; global expansion of operations; factors
that impact the quality and integrity of our indices; our ability
to manage our growth and strategic acquisitions or alliances
effectively; 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, counterparty investment,
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; 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 impacts of
pandemics; 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 Cboe Digital acquisition, 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,
2022 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 revision.
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Cboe Media
Contacts:
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Analyst
Contact:
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Angela Tu
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Tim Cave
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Kenneth Hill,
CFA
|
(646)
856ā8734
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+44 (0) 7593 506
719
|
|
(312)
786ā7559
|
atu@cboe.com
|
|
tcave@cboe.com
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|
khill@cboe.com
|
CBOE-F
Trademarks:
CboeĀ®, Cboe Global MarketsĀ®, Cboe Volatility IndexĀ®, BatsĀ®, BIDS
TradingĀ®, BZXĀ®, BYXĀ®, Chi-XĀ®, Cboe ClearĀ®, Cboe DigitalĀ®, EDGXĀ®,
EDGAĀ®, MATCHNowĀ®, and VIXĀ® are registered trademarks of Cboe Global
Markets, Inc. and its subsidiaries. All other trademarks and
service marks are the property of their respective owners.
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Cboe Global
Markets, Inc.
Key Performance
Statistics by Business Segment
|
|
|
|
3Q
2023
|
2Q
2023
|
1Q
2023
|
4Q 2022
|
3Q
2022
|
Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV (in
thousands)
|
|
|
43,411
|
|
|
42,964
|
|
|
46,057
|
|
|
42,694
|
|
|
39,947
|
|
Total company
Options ADV (in thousands)
|
|
|
14,592
|
|
|
14,306
|
|
|
14,657
|
|
|
14,545
|
|
|
13,521
|
|
Multi-listed
options
|
|
|
10,848
|
|
|
10,622
|
|
|
11,062
|
|
|
11,186
|
|
|
10,592
|
|
Index
options
|
|
|
3,743
|
|
|
3,683
|
|
|
3,595
|
|
|
3,359
|
|
|
2,929
|
|
Total Options market
share
|
|
|
33.6
|
%
|
|
33.3
|
%
|
|
31.8
|
%
|
|
34.1
|
%
|
|
33.8
|
%
|
Multi-listed
options
|
|
|
27.4
|
%
|
|
27.1
|
%
|
|
26.1
|
%
|
|
28.5
|
%
|
|
28.6
|
%
|
Total Options
RPC:
|
|
$
|
0.270
|
|
$
|
0.271
|
|
$
|
0.267
|
|
$
|
0.248
|
|
$
|
0.242
|
|
Multi-listed
options
|
|
$
|
0.055
|
|
$
|
0.061
|
|
$
|
0.064
|
|
$
|
0.060
|
|
$
|
0.061
|
|
Index
options
|
|
$
|
0.894
|
|
$
|
0.877
|
|
$
|
0.889
|
|
$
|
0.876
|
|
$
|
0.896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Equities -
Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV
(shares in billions)
|
|
|
10.4
|
|
|
10.7
|
|
|
11.8
|
|
|
11.2
|
|
|
10.9
|
|
Market share
%
|
|
|
12.7
|
%
|
|
12.7
|
%
|
|
12.7
|
%
|
|
13.1
|
%
|
|
13.3
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.022
|
|
$
|
0.021
|
|
$
|
0.019
|
|
$
|
0.024
|
|
$
|
0.023
|
|
U.S. Equities -
Off-Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (touched shares, in
millions)
|
|
|
71.4
|
|
|
78.7
|
|
|
89.4
|
|
|
80.8
|
|
|
80.1
|
|
Off-Exchange ATS Block
Market Share % (reported on a one-month lag)
|
|
|
20.1
|
%
|
|
19.9
|
%
|
|
20.4
|
%
|
|
21.0
|
%
|
|
21.7
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.129
|
|
$
|
0.122
|
|
$
|
0.113
|
|
$
|
0.113
|
|
$
|
0.114
|
|
Canadian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (matched shares, in
millions)
|
|
|
127.5
|
|
|
124.2
|
|
|
150.8
|
|
|
139.0
|
|
|
113.2
|
|
Total market share
%
|
|
|
15.2
|
%
|
|
14.5
|
%
|
|
14.3
|
%
|
|
13.6
|
%
|
|
12.2
|
%
|
Net capture (per 10,000
shares, in Canadian Dollars)
|
|
$
|
3.976
|
|
$
|
4.055
|
|
$
|
4.039
|
|
$
|
3.901
|
|
$
|
4.316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe and Asia
Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADNV
(Euros - in billions)
|
|
ā¬
|
34.3
|
|
ā¬
|
38.7
|
|
ā¬
|
45.8
|
|
ā¬
|
40.1
|
|
ā¬
|
39.2
|
|
Market share
%
|
|
|
23.2
|
%
|
|
23.8
|
%
|
|
24.9
|
%
|
|
24.9
|
%
|
|
24.6
|
%
|
Net capture (per
matched notional value (bps), in Euros)
|
|
ā¬
|
0.232
|
|
ā¬
|
0.230
|
|
ā¬
|
0.215
|
|
ā¬
|
0.224
|
|
ā¬
|
0.229
|
|
Cboe Clear
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trades cleared (in
thousands)
|
|
|
255,152.3
|
|
|
275,519.8
|
|
|
359,418.1
|
|
|
342,472.9
|
|
|
343,051.6
|
|
Fee per trade cleared
(in Euros)
|
|
ā¬
|
0.010
|
|
ā¬
|
0.009
|
|
ā¬
|
0.008
|
|
ā¬
|
0.007
|
|
ā¬
|
0.008
|
|
Net settlement volume
(shares in thousands)
|
|
|
2,469.5
|
|
|
2,402.0
|
|
|
2,661.9
|
|
|
2,490.5
|
|
|
2,546.8
|
|
Net fee per settlement
(in Euros)
|
|
ā¬
|
0.927
|
|
ā¬
|
0.887
|
|
ā¬
|
0.953
|
|
ā¬
|
0.886
|
|
ā¬
|
0.902
|
|
Australian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (AUD - in
billions)
|
|
$
|
0.7
|
|
$
|
0.7
|
|
$
|
0.8
|
|
$
|
0.7
|
|
$
|
0.7
|
|
Market share -
Continuous
|
|
|
17.9
|
%
|
|
18.2
|
%
|
|
18.5
|
%
|
|
17.2
|
%
|
|
16.7
|
%
|
Net capture (per
matched notional value (bps), in Australian Dollars)
|
|
$
|
0.155
|
|
$
|
0.160
|
|
$
|
0.160
|
|
$
|
0.142
|
|
$
|
0.168
|
|
Japanese
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (JPY - in
billions)
|
|
Ā„
|
148.7
|
|
Ā„
|
184.3
|
|
Ā„
|
183.3
|
|
Ā„
|
114.1
|
|
Ā„
|
160.6
|
|
Market share - Lit
Continuous
|
|
|
3.3
|
%
|
|
4.1
|
%
|
|
4.8
|
%
|
|
2.9
|
%
|
|
4.4
|
%
|
Net capture (per
matched notional value (bps), in Yen)
|
|
Ā„
|
0.257
|
|
Ā„
|
0.256
|
|
Ā„
|
0.243
|
|
Ā„
|
0.265
|
|
Ā„
|
0.259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (in
thousands)
|
|
|
230.0
|
|
|
197.4
|
|
|
231.8
|
|
|
193.3
|
|
|
205.0
|
|
RPC
|
|
$
|
1.753
|
|
$
|
1.826
|
|
$
|
1.725
|
|
$
|
1.689
|
|
$
|
1.700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
FX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot market share
%
|
|
|
20.2
|
%
|
|
19.5
|
%
|
|
19.0
|
%
|
|
18.4
|
%
|
|
17.8
|
%
|
ADNV ($ - in
billions)
|
|
$
|
44.4
|
|
$
|
42.5
|
|
$
|
45.0
|
|
$
|
40.8
|
|
$
|
41.3
|
|
Net capture (per one
million dollars traded)
|
|
$
|
2.64
|
|
$
|
2.66
|
|
$
|
2.64
|
|
$
|
2.69
|
|
$
|
2.69
|
|
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 ā Off-Exchange data reflects BIDS
Trading. For U.S. Equities ā 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 Cboe Canada and the number of trading
days. Total market share represents MATCHNow and Cboe Canada 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 Euros divided
by the product of ADNV in Euros 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).
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, 2023 and 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in millions, except
per share amounts)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and spot
markets
|
|
$
|
335.1
|
|
$
|
434.2
|
|
$
|
1,083.4
|
|
$
|
1,354.6
|
Data and access
solutions
|
|
|
137.0
|
|
|
126.1
|
|
|
401.7
|
|
|
368.9
|
Derivatives
markets
|
|
|
436.7
|
|
|
433.2
|
|
|
1,319.7
|
|
|
1,230.3
|
Total
Revenues
|
|
|
908.8
|
|
|
993.5
|
|
|
2,804.8
|
|
|
2,953.8
|
Cost of
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
payments
|
|
|
323.7
|
|
|
392.3
|
|
|
1,032.9
|
|
|
1,288.8
|
Routing and
clearing
|
|
|
17.8
|
|
|
20.2
|
|
|
62.6
|
|
|
63.4
|
Section 31
fees
|
|
|
36.1
|
|
|
105.4
|
|
|
145.5
|
|
|
220.7
|
Royalty fees and other
cost of revenues
|
|
|
50.7
|
|
|
33.2
|
|
|
144.8
|
|
|
96.3
|
Total Cost of
Revenues
|
|
|
428.3
|
|
|
551.1
|
|
|
1,385.8
|
|
|
1,669.2
|
Revenues Less Cost
of Revenues
|
|
|
480.5
|
|
|
442.4
|
|
|
1,419.0
|
|
|
1,284.6
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
96.1
|
|
|
102.0
|
|
|
313.0
|
|
|
269.4
|
Depreciation and
amortization
|
|
|
38.8
|
|
|
41.0
|
|
|
120.0
|
|
|
122.1
|
Technology support
services
|
|
|
25.0
|
|
|
19.1
|
|
|
75.5
|
|
|
56.4
|
Professional fees and
outside services
|
|
|
24.4
|
|
|
20.4
|
|
|
68.7
|
|
|
64.2
|
Travel and promotional
expenses
|
|
|
8.9
|
|
|
6.1
|
|
|
28.6
|
|
|
14.5
|
Facilities
costs
|
|
|
6.2
|
|
|
6.2
|
|
|
20.0
|
|
|
19.3
|
Acquisition-related
costs
|
|
|
0.8
|
|
|
1.6
|
|
|
7.9
|
|
|
17.9
|
Goodwill
impairment
|
|
|
ā
|
|
|
0.8
|
|
|
ā
|
|
|
460.9
|
Other
expenses
|
|
|
9.1
|
|
|
8.4
|
|
|
21.4
|
|
|
20.8
|
Total Operating
Expenses
|
|
|
209.3
|
|
|
205.6
|
|
|
655.1
|
|
|
1,045.5
|
Operating
Income
|
|
|
271.2
|
|
|
236.8
|
|
|
763.9
|
|
|
239.1
|
Non-operating
(Expenses) Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(15.4)
|
|
|
(16.1)
|
|
|
(49.2)
|
|
|
(42.9)
|
Interest
income
|
|
|
3.5
|
|
|
0.8
|
|
|
8.3
|
|
|
2.2
|
Other income (expense),
net
|
|
|
10.8
|
|
|
7.5
|
|
|
37.1
|
|
|
(1.3)
|
Total Non-operating
Expenses
|
|
|
(1.1)
|
|
|
(7.8)
|
|
|
(3.8)
|
|
|
(42.0)
|
Income Before Income
Tax Provision
|
|
|
270.1
|
|
|
229.0
|
|
|
760.1
|
|
|
197.1
|
Income tax
provision
|
|
|
61.9
|
|
|
78.8
|
|
|
210.7
|
|
|
121.8
|
Net
Income
|
|
|
208.2
|
|
|
150.2
|
|
|
549.4
|
|
|
75.3
|
Net income allocated to
participating securities
|
|
|
(1.1)
|
|
|
(0.6)
|
|
|
(2.7)
|
|
|
(0.6)
|
Net Income Allocated
to Common Stockholders
|
|
$
|
207.1
|
|
$
|
149.6
|
|
$
|
546.7
|
|
$
|
74.7
|
Net Income Per Share
Allocated to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
1.96
|
|
$
|
1.41
|
|
$
|
5.17
|
|
$
|
0.70
|
Diluted earnings per
share
|
|
|
1.95
|
|
|
1.41
|
|
|
5.15
|
|
|
0.70
|
Weighted average shares
used in computing income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
105.7
|
|
|
106.2
|
|
|
105.8
|
|
|
106.4
|
Diluted
|
|
|
106.1
|
|
|
106.4
|
|
|
106.2
|
|
|
106.6
|
Cboe Global Markets,
Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
September 30, 2023
and December 31, 2022
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
(in
millions)
|
|
2023
|
|
2022
|
Assets
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
403.1
|
|
$
|
432.7
|
Financial
investments
|
|
|
34.0
|
|
|
91.7
|
Accounts receivable,
net
|
|
|
359.1
|
|
|
369.8
|
Margin deposits,
clearing funds, and interoperability funds
|
|
|
1,324.7
|
|
|
543.0
|
Digital assets -
safeguarded assets
|
|
|
40.2
|
|
|
22.9
|
Income taxes
receivable
|
|
|
60.4
|
|
|
48.3
|
Other current
assets
|
|
|
56.4
|
|
|
47.6
|
Total Current
Assets
|
|
|
2,277.9
|
|
|
1,556.0
|
|
|
|
|
|
|
|
Investments
|
|
|
342.6
|
|
|
253.2
|
Land
|
|
|
ā
|
|
|
2.3
|
Property and equipment,
net
|
|
|
105.6
|
|
|
108.2
|
Property held for
sale
|
|
|
8.7
|
|
|
ā
|
Operating lease right
of use assets
|
|
|
111.9
|
|
|
111.7
|
Goodwill
|
|
|
3,124.9
|
|
|
3,122.8
|
Intangible assets,
net
|
|
|
1,571.3
|
|
|
1,662.8
|
Other assets,
net
|
|
|
189.6
|
|
|
181.9
|
Total
Assets
|
|
$
|
7,732.5
|
|
$
|
6,998.9
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
375.8
|
|
$
|
420.2
|
Section 31 fees
payable
|
|
|
11.6
|
|
|
147.1
|
Deferred
revenue
|
|
|
9.1
|
|
|
11.7
|
Margin deposits,
clearing funds, and interoperability funds
|
|
|
1,324.7
|
|
|
543.0
|
Income taxes
payable
|
|
|
ā
|
|
|
3.5
|
Digital assets -
safeguarded liabilities
|
|
|
40.2
|
|
|
22.9
|
Current portion of
long-term debt
|
|
|
74.9
|
|
|
304.7
|
Current portion of
contingent consideration liabilities
|
|
|
13.2
|
|
|
24.1
|
Total Current
Liabilities
|
|
|
1,849.5
|
|
|
1,477.2
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,438.7
|
|
|
1,437.3
|
Non-current
unrecognized tax benefits
|
|
|
233.9
|
|
|
196.1
|
Deferred income
taxes
|
|
|
213.1
|
|
|
222.9
|
Non-current operating
lease liabilities
|
|
|
129.0
|
|
|
129.3
|
Non-current portion of
contingent consideration liabilities
|
|
|
15.0
|
|
|
15.0
|
Other non-current
liabilities
|
|
|
65.0
|
|
|
55.8
|
Total
Liabilities
|
|
|
3,944.2
|
|
|
3,533.6
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
ā
|
|
|
ā
|
Common stock
|
|
|
1.1
|
|
|
1.1
|
Treasury stock at
cost
|
|
|
(222.9)
|
|
|
(131.0)
|
Additional paid-in
capital
|
|
|
1,506.0
|
|
|
1,455.1
|
Retained
earnings
|
|
|
2,555.5
|
|
|
2,171.1
|
Accumulated other
comprehensive loss, net
|
|
|
(51.4)
|
|
|
(31.0)
|
Total Stockholders'
Equity
|
|
|
3,788.3
|
|
|
3,465.3
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
7,732.5
|
|
$
|
6,998.9
|
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, and adjusted operating margin, adjusted net 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 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
Revenues Less Cost of Revenues to Organic Net
Revenue
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues less cost of
revenues (net revenue)
|
|
$
|
480.5
|
|
$
|
442.4
|
|
$
|
1,419.0
|
|
$
|
1,284.6
|
|
Less
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition revenues
less cost of revenues (inorganic net revenue)
|
|
|
ā
|
|
|
ā
|
|
|
(7.6)
|
|
|
ā
|
|
Organic net
revenue
|
|
$
|
480.5
|
|
$
|
442.4
|
|
$
|
1,411.4
|
|
$
|
1,284.6
|
|
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)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to Non-GAAP (As shown
on Table 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income allocated to
common stockholders
|
|
$
|
207.1
|
|
$
|
149.6
|
|
$
|
546.7
|
|
$
|
74.7
|
|
Non-GAAP
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (1)
|
|
|
0.8
|
|
|
1.6
|
|
|
7.9
|
|
|
17.9
|
|
Investment
establishment costs (2)
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
3.0
|
|
Gain on investment
(3)
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
(7.5)
|
|
Loan forgiveness
(4)
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
(1.3)
|
|
Amortization of
acquisition-related intangibles (5)
|
|
|
28.2
|
|
|
30.4
|
|
|
88.4
|
|
|
91.1
|
|
Impairment of
goodwill (6)
|
|
|
ā
|
|
|
0.8
|
|
|
ā
|
|
|
460.9
|
|
Impairment of
investment (7)
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
10.6
|
|
Income from investment
(8)
|
|
|
ā
|
|
|
ā
|
|
|
(2.1)
|
|
|
ā
|
|
Total Non-GAAP
adjustments
|
|
|
29.0
|
|
|
32.8
|
|
|
94.2
|
|
|
574.7
|
|
Income tax (expense)
benefit related to the items above
|
|
|
(6.9)
|
|
|
2.9
|
|
|
(23.3)
|
|
|
(149.0)
|
|
Tax reserves
(9)
|
|
|
(10.2)
|
|
|
ā
|
|
|
(7.9)
|
|
|
48.5
|
|
Net income allocated to
participating securities - effect on reconciling
items
|
|
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.3)
|
|
|
(1.7)
|
|
Adjusted
earnings
|
|
$
|
218.9
|
|
$
|
185.2
|
|
$
|
609.4
|
|
$
|
547.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Diluted EPS to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
$
|
1.95
|
|
$
|
1.41
|
|
$
|
5.15
|
|
$
|
0.70
|
|
Per share impact of
non-GAAP adjustments noted above
|
|
|
0.11
|
|
|
0.33
|
|
|
0.59
|
|
|
4.43
|
|
Adjusted diluted
earnings per common share
|
|
$
|
2.06
|
|
$
|
1.74
|
|
$
|
5.74
|
|
$
|
5.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Margin to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue less cost of
revenue
|
|
$
|
480.5
|
|
$
|
442.4
|
|
$
|
1,419.0
|
|
$
|
1,284.6
|
|
Non-GAAP adjustments
noted above
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
Adjusted revenue
less cost of revenue
|
|
$
|
480.5
|
|
$
|
442.4
|
|
$
|
1,419.0
|
|
$
|
1,284.6
|
|
Operating expenses
(10)
|
|
$
|
209.3
|
|
$
|
205.6
|
|
$
|
655.1
|
|
$
|
1,045.5
|
|
Non-GAAP adjustments
noted above
|
|
|
29.0
|
|
|
32.8
|
|
|
96.3
|
|
|
569.9
|
|
Adjusted operating
expenses
|
|
$
|
180.3
|
|
$
|
172.8
|
|
$
|
558.8
|
|
$
|
475.6
|
|
Operating
income
|
|
$
|
271.2
|
|
$
|
236.8
|
|
$
|
763.9
|
|
$
|
239.1
|
|
Non-GAAP adjustments
noted above
|
|
|
29.0
|
|
|
32.8
|
|
|
96.3
|
|
|
569.9
|
|
Adjusted operating
income
|
|
$
|
300.2
|
|
$
|
269.6
|
|
$
|
860.2
|
|
$
|
809.0
|
|
Adjusted operating
margin (11)
|
|
|
62.5
|
%
|
|
60.9
|
%
|
|
60.6
|
%
|
|
63.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Rate to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
270.1
|
|
|
229.0
|
|
|
760.1
|
|
|
197.1
|
|
Non-GAAP adjustments
noted above
|
|
|
29.0
|
|
|
32.8
|
|
|
94.2
|
|
|
574.7
|
|
Adjusted income
before income taxes
|
|
$
|
299.1
|
|
$
|
261.8
|
|
$
|
854.3
|
|
$
|
771.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
61.9
|
|
|
78.8
|
|
|
210.7
|
|
|
121.8
|
|
Non-GAAP adjustments
noted above
|
|
|
17.1
|
|
|
(2.9)
|
|
|
31.2
|
|
|
100.5
|
|
Adjusted income tax
expense
|
|
$
|
79.0
|
|
$
|
75.9
|
|
$
|
241.9
|
|
$
|
222.3
|
|
Adjusted income tax
rate
|
|
|
26.4
|
%
|
|
29.0
|
%
|
|
28.3
|
%
|
|
28.8
|
%
|
|
(1) This amount
includes ongoing acquisition related costs primarily from the
Company's Cboe Digital and Cboe Canada acquisitions.
|
(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 Digital
Holdings LLC ("ErisX") in connection with the full acquisition of
Cboe Digital.
|
(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 goodwill recognized in the Digital
reporting unit.
|
(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 dividend from the Company's minority ownership of
Vest Group Inc.
|
(9) This amount
represents the tax reserves related to Section 199
matters.
|
(10) 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" ($0.8 million and $0.1 million in
expense for the three months ended September 30, 2023 and 2022,
respectively, and $6.0 million and $2.6 million in expense for the
nine months ended September 30, 2023 and 2022, respectively), and
are directly offset by deferred compensation income, expenses and
dividends included within "Other income (expense), net" ($0.8
million and $0.1 million in income, expense and dividends in the
three months ended September 30, 2023 and 2022, respectively, and
$6.0 million and $2.6 million in income, expense and dividends in
the nine months ended September 30, 2023 and 2022, 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."
|
(11) 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,
impairment of goodwill, impairment of investment, and
income from 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)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income allocated
to common stockholders
|
|
$
|
207.1
|
|
$
|
149.6
|
|
$
|
546.7
|
|
$
|
74.7
|
|
Interest expense,
net
|
|
|
11.9
|
|
|
15.3
|
|
|
40.9
|
|
|
40.7
|
|
Income tax
provision
|
|
|
61.9
|
|
|
78.8
|
|
|
210.7
|
|
|
121.8
|
|
Depreciation and
amortization
|
|
|
38.8
|
|
|
41.0
|
|
|
120.0
|
|
|
122.1
|
|
EBITDA
|
|
$
|
319.7
|
|
$
|
284.7
|
|
$
|
918.3
|
|
$
|
359.3
|
|
EBITDA
Margin
|
|
|
66.5
|
%
|
|
64.4
|
%
|
|
64.7
|
%
|
|
28.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
not included in above line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
|
0.8
|
|
|
1.6
|
|
|
7.9
|
|
|
17.9
|
|
Gain on
investment
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
(7.5)
|
|
Loan
forgiveness
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
(1.3)
|
|
Investment
establishment costs
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
3.0
|
|
Impairment of
goodwill
|
|
|
ā
|
|
|
0.8
|
|
|
ā
|
|
|
460.9
|
|
Impairment of
investment
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
10.6
|
|
Income from
investment
|
|
|
ā
|
|
|
ā
|
|
|
(2.1)
|
|
|
ā
|
|
Adjusted
EBITDA
|
|
$
|
320.5
|
|
$
|
287.1
|
|
$
|
924.1
|
|
$
|
842.9
|
|
Adjusted EBITDA
Margin
|
|
|
66.7
|
%
|
|
64.9
|
%
|
|
65.1
|
%
|
|
65.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
Reconciliation of
Cash and Cash Equivalents to Adjusted Cash
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
403.1
|
|
$
|
432.7
|
|
|
|
|
|
|
|
Financial
investments
|
|
|
34.0
|
|
|
91.7
|
|
|
|
|
|
|
|
Less deferred
compensation plan assets
|
|
|
(33.5)
|
|
|
(27.5)
|
|
|
|
|
|
|
|
Less cash collected for
Section 31 Fees
|
|
|
ā
|
|
|
(93.7)
|
|
|
|
|
|
|
|
Adjusted
Cash
|
|
$
|
403.6
|
|
$
|
403.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Transaction and Clearing Fees by Business Segment āThree Months
Ended September 30, 2023 and 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
Options
|
|
N.A.
Equities
|
|
Europe and
APAC
|
|
Futures
|
|
Global
FX
|
|
Digital
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Transaction and
clearing fees
|
$
|
678.6
|
|
$
|
715.5
|
|
$
|
384.6
|
|
$
|
377.7
|
|
$
|
221.9
|
|
$
|
264.6
|
|
$
|
32.6
|
|
$
|
35.9
|
|
$
|
25.4
|
|
$
|
22.3
|
|
$
|
15.6
|
|
$
|
14.9
|
|
$
|
(1.5)
|
|
$
|
0.1
|
Liquidity
payments
|
|
(323.7)
|
|
|
(392.3)
|
|
|
(130.5)
|
|
|
(160.3)
|
|
|
(185.6)
|
|
|
(223.5)
|
|
|
(7.3)
|
|
|
(8.4)
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
(0.3)
|
|
|
(0.1)
|
Routing and
clearing
|
|
(17.8)
|
|
|
(20.2)
|
|
|
(5.8)
|
|
|
(7.3)
|
|
|
(7.3)
|
|
|
(8.6)
|
|
|
(4.4)
|
|
|
(4.0)
|
|
|
ā
|
|
|
ā
|
|
|
(0.3)
|
|
|
(0.3)
|
|
|
ā
|
|
|
ā
|
Net transaction and
clearing fees
|
$
|
337.1
|
|
$
|
303.0
|
|
$
|
248.3
|
|
$
|
210.1
|
|
$
|
29.0
|
|
$
|
32.5
|
|
$
|
20.9
|
|
$
|
23.5
|
|
$
|
25.4
|
|
$
|
22.3
|
|
$
|
15.3
|
|
$
|
14.6
|
|
$
|
(1.8)
|
|
$
|
ā
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Revenue by Revenue Caption āThree Months Ended September 30,
2023 and 2022
|
|
Cash and Spot
Markets
|
|
Data and Access
Solutions
|
|
Derivatives
Markets
|
|
Total
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Transaction and
clearing fees
|
$
|
268.6
|
|
$
|
315.5
|
|
$
|
ā
|
|
$
|
ā
|
|
$
|
410.0
|
|
$
|
400.0
|
|
$
|
678.6
|
|
$
|
715.5
|
Access and capacity
fees
|
|
ā
|
|
|
ā
|
|
|
87.7
|
|
|
81.8
|
|
|
ā
|
|
|
ā
|
|
|
87.7
|
|
|
81.8
|
Market data
fees
|
|
18.7
|
|
|
19.9
|
|
|
48.6
|
|
|
43.1
|
|
|
9.3
|
|
|
8.0
|
|
|
76.6
|
|
|
71.0
|
Regulatory
fees
|
|
30.3
|
|
|
90.4
|
|
|
ā
|
|
|
ā
|
|
|
16.7
|
|
|
24.5
|
|
|
47.0
|
|
|
114.9
|
Other
revenue
|
|
17.5
|
|
|
8.4
|
|
|
0.7
|
|
|
1.2
|
|
|
0.7
|
|
|
0.7
|
|
|
18.9
|
|
|
10.3
|
Total
revenues
|
$
|
335.1
|
|
$
|
434.2
|
|
$
|
137.0
|
|
$
|
126.1
|
|
$
|
436.7
|
|
$
|
433.2
|
|
$
|
908.8
|
|
$
|
993.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
payments
|
$
|
192.3
|
|
$
|
231.3
|
|
$
|
ā
|
|
$
|
ā
|
|
$
|
131.4
|
|
$
|
161.0
|
|
$
|
323.7
|
|
$
|
392.3
|
Routing and clearing
fees
|
|
12.0
|
|
|
12.9
|
|
|
ā
|
|
|
ā
|
|
|
5.8
|
|
|
7.3
|
|
|
17.8
|
|
|
20.2
|
Section 31
fees
|
|
29.1
|
|
|
89.9
|
|
|
ā
|
|
|
ā
|
|
|
7.0
|
|
|
15.5
|
|
|
36.1
|
|
|
105.4
|
Royalty fees and other
cost of revenues
|
|
9.6
|
|
|
2.0
|
|
|
2.3
|
|
|
2.2
|
|
|
38.8
|
|
|
29.0
|
|
|
50.7
|
|
|
33.2
|
Total cost of
revenues
|
$
|
243.0
|
|
$
|
336.1
|
|
$
|
2.3
|
|
$
|
2.2
|
|
$
|
183.0
|
|
$
|
212.8
|
|
$
|
428.3
|
|
$
|
551.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues less cost
of revenues (net revenue)
|
$
|
92.1
|
|
$
|
98.1
|
|
$
|
134.7
|
|
$
|
123.9
|
|
$
|
253.7
|
|
$
|
220.4
|
|
$
|
480.5
|
|
$
|
442.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition revenue
less cost of revenues (inorganic net revenue)
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
ā
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic net
revenue
|
$
|
92.1
|
|
$
|
98.1
|
|
$
|
134.7
|
|
$
|
123.9
|
|
$
|
253.7
|
|
$
|
220.4
|
|
$
|
480.5
|
|
$
|
442.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2023 and 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended,
|
|
|
Nine Months
Ended,
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
GAAP effective tax
rate
|
|
22.9
|
%
|
|
34.4
|
%
|
|
27.7
|
%
|
|
61.8
|
%
|
|
Tax effect of goodwill
impairment
|
|
ā
|
%
|
|
ā
|
%
|
|
ā
|
%
|
|
(22.8)
|
%
|
|
Tax effect of Section
199 related matters
|
|
4.2
|
%
|
|
ā
|
%
|
|
1.6
|
%
|
|
(7.4)
|
%
|
|
Effective tax rate
excluding goodwill impairment and excluding Section 199
matters
|
|
27.1
|
%
|
|
34.4
|
%
|
|
29.3
|
%
|
|
31.6
|
%
|
|
|
|
|
|
|
|
|
Table
10
|
|
|
|
|
|
|
Reconciliation of
GAAP Net Revenues to Net Revenues in Constant Currency - Three
Months and Nine Months Ended September 30, 2023
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended,
|
|
|
Nine Months
Ended,
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
2023
|
|
|
2023
|
Europe and Asia Pacific
net revenues
|
|
$
|
45.6
|
|
$
|
142.2
|
Constant currency
adjustment
|
|
|
(2.4)
|
|
|
1.5
|
Europe and Asia Pacific
net revenues in constant currency1
|
|
$
|
43.2
|
|
$
|
143.7
|
|
(1) Net
revenues in constant currency is calculated by converting the
current period GAAP net revenues in local currency using the
foreign currency exchange rates that were in effect during the
previous comparable period.
|
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SOURCE Cboe Global Markets, Inc.