01—Abstract
Summary
Summary of the 10-Q filed October 29, 2021. Cited figures are marked; the original filing is the authoritative source.
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 billiona.
The company saw significant growth in transaction and clearing fees, up 10.4%b, 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 millionc, 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.
02—Key points
Key Highlights
- Total revenues for the first nine months of 2021 increased 1.8% to $2.63 billion, driven by strong performance in transaction and clearing fees.
- Transaction and clearing fees saw a significant increase of 10.4% year-over-year, reflecting robust trading volumes, particularly in options.
- Operating expenses increased by 19.2% to $500.3 million, largely due to higher compensation, benefits, and costs associated with recent acquisitions.
- Net income for the nine-month period decreased by 4.7% to $363.1 million, impacted by increased operating expenses.
- Adjusted Diluted Earnings Per Share (EPS) increased by 7.4% to $4.36, demonstrating effective management of profitability.
- The company completed key acquisitions, including BIDS Trading and Chi-X Asia Pacific, enhancing its strategic positioning and expanding its global reach.
- Cboe maintained a strong liquidity position, with cash and cash equivalents and restricted cash totaling $2.06 billion as of September 30, 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2021, Cboe Global Markets, Inc. kept $0.15.
- Revenue$816.8M100.0%
- Cost of revenue−$447.3M54.8%
- Gross profit$369.5M45.2%
- Operating costs−$178.8M21.9%
- Operating income$190.7M23.3%
- Interest, other & tax−$70.3M8.6%
- Net income$120.4M14.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed October 29, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $816.80M$792.70M | +3.0% |
| Cost of Revenue | $447.30M$500.70M | −10.7% |
| Gross Profit | $369.50M$292.00M | +26.5% |
| Operating Expenses | $178.80M$152.70M | +17.1% |
| Operating Income | $190.70M$139.30M | +36.9% |
| Interest Expense | $11.70M$9.60M | +21.9% |
| Net Income | $120.40M$109.90M | +9.6% |
| EPS (Basic) | $1.12$1.01 | +10.9% |
| EPS (Diluted) | $1.12$1.01 | +10.9% |
| Shares Outstanding (Basic) | 106.80M108.70M | −1.7% |
| Shares Outstanding (Diluted) | 107.00M108.80M | −1.7% |
05—Questions
Frequently Asked Questions
What was Cboe's revenue performance for the first nine months of 2021?
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.
How did Cboe's profitability change during this period?
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.
What were the key strategic developments mentioned in the report?
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.
What is the company's financial health and liquidity position?
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.
06—Continue