01—Abstract
Summary
Summary of the 10-K filed February 17, 2023. Cited figures are marked; the original filing is the authoritative source.
Cboe Global Markets, Inc. (CBOE) reported strong revenue growth in its 2022 10-K filing, with total revenues increasing by 13% to $3.96 billiona.
This growth was driven by increased trading volumes across its key segments, particularly in Options and European Equities, as well as higher regulatory fees and contributions from recent acquisitions. The company also highlighted its strategic expansion into digital assets with the acquisition of ErisX (now Cboe Digital) and into the Canadian market with the acquisition of NEO.
Despite the top-line growth, net income decreased by 56% to $235 millionb, largely impacted by a significant goodwill impairment charge of $460.9 million related to the Cboe Digital segment and higher operating expenses, including compensation and benefits. The company continues to manage its debt effectively and returned capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Total revenues increased 13% to $3.96 billion in 2022, driven by higher trading volumes and acquisitions.
- Net income declined 56% to $235 million, primarily due to a $460.9 million goodwill impairment charge related to the Cboe Digital segment.
- Operating expenses increased significantly by 87% to $1.25 billion, largely due to the goodwill impairment and increased compensation and benefits.
- The Options segment showed strong performance, with revenues less cost of revenues up 30% and operating income up 38%.
- The company completed two key acquisitions in 2022: Cboe Digital (expanding into digital assets) and NEO (strengthening its Canadian presence).
- Despite the net income decrease, adjusted EBITDA increased 15% to $1.14 billion, and adjusted diluted EPS rose 15% to $6.93, indicating underlying operational strength.
- Cboe Global Markets maintained a solid financial position with total assets of $7.00 billion and managed its debt effectively, with $400 million available under its revolving credit facility at year-end.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Cboe Global Markets, Inc. kept $0.06.
- Revenue$3.96B100.0%
- Cost of revenue−$2.22B56.0%
- Gross profit$1.74B44.0%
- Operating costs−$1.25B31.6%
- Operating income$489.6M12.4%
- Interest, other & tax−$254.6M6.4%
- Net income$235.0M5.9%
Where FY2022 revenue went
$3.96B- Cost of revenue: $2.22B, 56% of revenue
- Operating costs: $1.25B, 32% of revenue
- Net income: $235.0M, 5.9% of revenue
- Interest, other & tax: $254.6M, 6.4% of revenue
Kept 5.9% as net incomeNet income $235.0M · 5.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 17, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $3.96B$3.49B | +13.3% |
| Cost of Revenue | $2.22B$2.02B | +9.8% |
| Gross Profit | $1.74B$1.48B | +18.0% |
| Operating Expenses | $1.25B$670.20M | +86.8% |
| Operating Income | $489.60M$805.90M | −39.2% |
| Interest Expense | $60.00M$48.00M | +25.0% |
| Net Income | $235.00M$529.00M | −55.6% |
| EPS (Basic) | $2.20$4.93 | −55.4% |
| EPS (Diluted) | $2.19$4.92 | −55.5% |
| Shares Outstanding (Basic) | 106.30M107.00M | −0.7% |
| Shares Outstanding (Diluted) | 106.70M107.20M | −0.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Cboe's revenue growth in 2022?
Cboe's revenue growth in 2022 was primarily driven by increased trading volumes across its Options and European Equities segments, higher regulatory fees resulting from an increase in the Section 31 fee rate, increased access and capacity fees in the Options and North American Equities segments, and the revenue contributions from recent acquisitions, including Cboe Digital and NEO.
Why did Cboe's net income decrease significantly in 2022?
Cboe's net income saw a substantial decrease due to a significant goodwill impairment charge of $460.9 million related to the Digital segment's performance and outlook. Additionally, higher operating expenses, particularly in compensation and benefits, contributed to the decline in profitability.
How did the acquisitions of Cboe Digital and NEO impact the company's financial performance?
The acquisition of Cboe Digital allowed Cboe to enter the digital asset market, but it also led to a substantial goodwill impairment charge. The acquisition of NEO strengthened Cboe's Canadian presence and contributed to revenue growth in the North American Equities segment. While these acquisitions expanded Cboe's global reach and product offerings, they also contributed to increased operating expenses and integration costs.
What is the significance of the 'adjusted' financial metrics provided by Cboe?
Cboe provides adjusted EBITDA and adjusted diluted EPS to offer a view of its underlying operational performance, excluding items like acquisition-related costs, impairment charges, and other non-recurring items. The increase in these adjusted metrics suggests that the core business operations remained strong despite the reported net income decline.
06—Continue