Summary
Cboe Global Markets, Inc. (CBOE) reported a transformative year in 2017, largely driven by the significant acquisition of Bats Global Markets, which closed on February 28, 2017. This acquisition substantially expanded Cboe's product offerings across multiple asset classes and geographies, bolstered its market position, and diversified its revenue streams. Total revenues more than tripled from $703.1 million in 2016 to $2,229.1 million in 2017, primarily due to the inclusion of Bats' operations for ten months of the year. While the company saw increased transaction fees, market data fees, and regulatory fees following the Bats acquisition, it also experienced a significant rise in costs of revenues and operating expenses, particularly depreciation and amortization, and acquisition-related costs. Despite these increased expenses, operating income grew by 24.7% to $371.9 million, and net income more than doubled to $400.6 million. The company also successfully integrated Bats' technology, planning to migrate existing Cboe platforms onto Bats' proprietary technology, which is expected to enhance reliability, speed, and scalability.
Financial Highlights
55 data points| Revenue | $2.23B |
| Cost of Revenue | $1.23B |
| Gross Profit | $995.60M |
| Operating Expenses | $623.70M |
| Operating Income | $371.90M |
| Interest Expense | $42.60M |
| Net Income | $396.70M |
| EPS (Basic) | $3.70 |
| EPS (Diluted) | $3.69 |
| Shares Outstanding (Basic) | 107.20M |
| Shares Outstanding (Diluted) | 107.50M |
Key Highlights
- 1The acquisition of Bats Global Markets in February 2017 was the primary driver of financial growth, significantly increasing total revenues to $2.23 billion in 2017 from $703.1 million in 2016.
- 2Net income more than doubled from $185.7 million in 2016 to $400.6 million in 2017, reflecting the combined entity's performance.
- 3Cboe's market position was strengthened, becoming the largest U.S. options exchange and the second-largest U.S. stock exchange operator by volume.
- 4The company reported strong growth in its Futures segment, with Average Daily Volume (ADV) increasing by 50%.
- 5Significant investments were made in integrating Bats' technology, with plans to migrate Cboe's trading platforms onto Bats' proprietary technology to improve efficiency and scalability.
- 6The company experienced a substantial increase in operating expenses, including acquisition-related costs, depreciation, and amortization, driven by the Bats integration.
- 7Cboe has a diversified revenue base across Options, U.S. Equities, Futures, European Equities, and Global FX segments following the acquisition.