Summary
Cboe Global Markets, Inc.'s Q3 2017 10-Q filing reflects a transformative period, largely driven by the significant acquisition of Bats Global Markets, Inc. completed in February 2017. This acquisition has dramatically reshaped the company's financial statements, leading to a substantial increase in total assets, revenues, and operating expenses. While the integration of Bats presents complexities and initial costs, the combined entity is positioned as a larger, more diversified player in the global exchange market, with expanded offerings in U.S. and European equities, futures, and FX. Investors should note the significant growth in revenues, primarily due to the inclusion of Bats' operations, and the corresponding rise in costs, particularly in liquidity payments, depreciation, amortization, and acquisition-related expenses. Despite these increased costs and the substantial debt taken on to finance the acquisition, the company demonstrated continued operational strength in its core options business, while integrating new segments. The company's focus on innovation and expanding its global reach through strategic acquisitions will be key for future growth.
Financial Highlights
56 data points| Revenue | $611.40M |
| Cost of Revenue | $341.70M |
| Gross Profit | $269.70M |
| Operating Expenses | $150.40M |
| Operating Income | $119.30M |
| Interest Expense | $11.00M |
| Net Income | $59.70M |
| EPS (Basic) | $0.53 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Basic) | 112.30M |
| Shares Outstanding (Diluted) | 112.60M |
Key Highlights
- 1Total Assets surged from $476.7 million at year-end 2016 to $5,228.1 million as of September 30, 2017, largely due to the Bats acquisition.
- 2Total Revenues for the nine months ended September 30, 2017, more than doubled to $1,608.4 million, up from $512.3 million in the prior year period, driven significantly by the Bats acquisition.
- 3Operating Income increased to $263.2 million for the nine months ended September 30, 2017, from $223.3 million in the prior year period, indicating resilience in core operations despite integration costs.
- 4Long-term debt significantly increased to $1,312.4 million from $0 as of December 31, 2016, primarily to finance the Bats acquisition.
- 5The company has realigned its reporting structure to five business segments: Options, U.S. Equities, Futures, European Equities, and Global FX, reflecting the expanded operations post-Bats acquisition.
- 6Depreciation and amortization expenses saw a substantial increase, rising from $34.4 million for the nine months ended September 30, 2016, to $136.3 million for the same period in 2017, largely due to the amortization of intangible assets acquired in the Bats merger.