10-KPeriod: FY2019

Cboe Global Markets, Inc. Annual Report, Year Ended Dec 31, 2019

Filed February 21, 2020For Securities:CBOE

Summary

Cboe Global Markets, Inc. (CBOE) reported revenues of $2.50 billion for the year ended December 31, 2019, a decrease of 9.8% from the prior year, primarily driven by lower transaction fees due to reduced trading volumes across key segments. Despite the revenue decline, the company maintained strong operating income of $537.2 million, though this was a decrease of 10.4% compared to 2018. The Options segment remains the largest contributor to revenue, followed by U.S. Equities. Cboe continues to invest in technology and has seen a slight increase in access and capacity fees and market data fees. The company also repurchased $156.9 million of its common stock in 2019 and paid $150.0 million in dividends, reflecting a commitment to returning capital to shareholders. Looking ahead, Cboe remains focused on innovation and strategic growth while navigating a competitive and evolving market landscape.

Financial Highlights

54 data points
Beta

Revenue

$2.50B

45.5% Gross Margin

Net Income

$372.70M

14.9% Net Margin

EPS (Diluted)

$3.34

Total Assets

$5.11B

Cash & Equivalents

$229.30M

Free Cash Flow

$597.70M

Financial Statements
Beta
Revenue$2.50B
Cost of Revenue$1.36B
Gross Profit$1.14B
Operating Expenses$599.70M
Operating Income$537.20M
Interest Expense$37.80M
Net Income$372.70M
EPS (Basic)$3.35
EPS (Diluted)$3.34
Shares Outstanding (Basic)111.40M
Shares Outstanding (Diluted)111.80M

Key Highlights

  • 1Total revenues decreased by 9.8% to $2.50 billion in 2019 compared to 2018, primarily due to a 13.6% drop in transaction fees driven by lower trading volumes.
  • 2Operating income decreased by 10.4% to $537.2 million in 2019, reflecting the impact of lower revenues and increased acquisition-related costs.
  • 3The Options segment remains the largest revenue driver, contributing $983.1 million (39.4% of total revenues) in 2019, followed by U.S. Equities at $1.21 billion (48.6%).
  • 4Access and capacity fees, as well as market data fees, showed modest increases of 5.2% and 4.7% respectively, indicating growth in non-transactional revenue streams.
  • 5The company repurchased $156.9 million of its common stock in 2019 and paid $150.0 million in dividends, demonstrating a commitment to shareholder returns.
  • 6Cboe continues to manage its debt, reducing its outstanding debt balance to $867.6 million by the end of 2019.
  • 7The company is actively managing risks related to market volatility, regulatory changes (such as the SEC's transaction fee pilot and proposed consolidated data plans), and cybersecurity.

Frequently Asked Questions

In 2019, Cboe Global Markets, Inc. reported total revenues of $2.50 billion, a decrease of 9.8% from the previous year, mainly due to a decline in transaction fees driven by lower trading volumes. Operating income was $537.2 million, down 10.4% year-over-year. Net income allocated to common stockholders was $372.7 million.

The U.S. Equities segment was the largest contributor to revenue in 2019, generating $1.21 billion (48.6% of total revenues), closely followed by the Options segment, which generated $983.1 million (39.4% of total revenues).

Cboe continued its commitment to shareholder returns by repurchasing $156.9 million of its common stock and paying $150.0 million in dividends during 2019. The company also reduced its outstanding debt to $867.6 million by year-end.

Key risks highlighted include dependence on exclusive licensing agreements for proprietary products, intense price competition in the exchange industry, potential adverse impacts from legislative and regulatory changes (like the transaction fee pilot and evolving market structure regulations), cybersecurity threats, and the reliance on third-party service providers.