10-QPeriod: Q3 FY2021

Cboe Global Markets, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 29, 2021For Securities:CBOE

Summary

Cboe Global Markets, Inc. reported solid financial results for the nine months ended September 30, 2021, with total revenues increasing by 1.8% year-over-year to $2.63 billion. The company saw significant growth in transaction and clearing fees, up 10.4%, driven by increased options trading volumes. Access and capacity fees also rose by 18.6%. This growth was partially offset by a substantial decrease in regulatory fees due to a lower Section 31 fee rate. Net income for the nine-month period declined by 4.7% to $363.1 million, impacted by higher operating expenses, which rose 19.2% primarily due to increased compensation and benefits, technology support, and professional services related to recent acquisitions. The company completed several strategic acquisitions, including BIDS Trading and Chi-X Asia Pacific, expanding its global footprint and service offerings. Despite the decrease in net income, the company demonstrated strong operational execution, with Adjusted Diluted Earnings Per Share (EPS) increasing by 7.4% to $4.36, reflecting improved operational efficiency and strategic growth initiatives.

Financial Highlights

55 data points
Beta

Revenue

$816.80M

45.2% Gross Margin

Net Income

$120.40M

14.7% Net Margin

EPS (Diluted)

$1.12

Total Assets

$7.58B

Cash & Equivalents

$392.40M

Free Cash Flow

$547.60M

Financial Statements
Beta
Revenue$816.80M
Cost of Revenue$447.30M
Gross Profit$369.50M
Operating Expenses$178.80M
Operating Income$190.70M
Interest Expense$11.70M
Net Income$120.40M
EPS (Basic)$1.12
EPS (Diluted)$1.12
Shares Outstanding (Basic)106.80M
Shares Outstanding (Diluted)107.00M

Key Highlights

  • 1Total revenues for the first nine months of 2021 increased 1.8% to $2.63 billion, driven by strong performance in transaction and clearing fees.
  • 2Transaction and clearing fees saw a significant increase of 10.4% year-over-year, reflecting robust trading volumes, particularly in options.
  • 3Operating expenses increased by 19.2% to $500.3 million, largely due to higher compensation, benefits, and costs associated with recent acquisitions.
  • 4Net income for the nine-month period decreased by 4.7% to $363.1 million, impacted by increased operating expenses.
  • 5Adjusted Diluted Earnings Per Share (EPS) increased by 7.4% to $4.36, demonstrating effective management of profitability.
  • 6The company completed key acquisitions, including BIDS Trading and Chi-X Asia Pacific, enhancing its strategic positioning and expanding its global reach.
  • 7Cboe maintained a strong liquidity position, with cash and cash equivalents and restricted cash totaling $2.06 billion as of September 30, 2021.

Frequently Asked Questions

Cboe Global Markets, Inc. reported total revenues of $2.63 billion for the nine months ended September 30, 2021, a 1.8% increase compared to the same period in 2020. This growth was primarily driven by a 10.4% increase in transaction and clearing fees and an 18.6% increase in access and capacity fees.

Net income for the nine months ended September 30, 2021, decreased by 4.7% to $363.1 million. This decrease was primarily due to a 19.2% increase in operating expenses, driven by higher compensation, benefits, and acquisition-related costs. However, Adjusted Diluted Earnings Per Share (EPS) saw an increase of 7.4% to $4.36, indicating improved operational efficiency.

The company highlighted the completion of two significant acquisitions: BIDS Holdings, which expanded its U.S. equities market presence, and Chi-X Asia Pacific, strengthening its position in the Asia Pacific region. Additionally, Cboe announced its agreement to acquire ErisX, a digital asset spot market and futures exchange, signaling an expansion into the digital asset space.

Cboe maintained a strong financial position. As of September 30, 2021, the company had $2.06 billion in cash, cash equivalents, and restricted cash. The company also had $250 million available under its revolving credit facility, along with $318.9 million remaining under its share repurchase authorization, indicating ample liquidity and financial flexibility.