01—Abstract
Summary
Summary of the 10-Q filed May 5, 2023. Cited figures are marked; the original filing is the authoritative source.
Cboe Global Markets, Inc. reported a strong first quarter for 2023, with net income increasing by 58% to $173.4 milliona, or $1.63 per diluted share, compared to $109.6 million, or $1.02 per diluted share, in the prior year period.
This significant growth was driven by a 13%b increase in revenue less cost of revenues, primarily fueled by a robust performance in the Derivatives Markets segment, which saw a 15% revenue increase due to higher options volumes and a rise in Section 31 fees. The Data and Access Solutions segment also contributed positively with a 9% revenue increase. Despite a decrease in Cash and Spot Markets revenue, largely due to lower U.S. Equities volumes, the company demonstrated effective cost management, with total operating expenses increasing by 25% but at a slower pace than revenue growth.
This resulted in a 10% increase in Adjusted EBITDA to $310.3 millionc. The company maintained a healthy liquidity position, with significant cash and cash equivalents, and ample availability under its revolving credit facility. Cboe's diversified business model across various asset classes and geographies continues to provide resilience and growth opportunities.
02—Key points
Key Highlights
- Net income surged by 58% year-over-year to $173.4 million ($1.63/share), significantly beating prior year results.
- Revenue less cost of revenues grew by 13% to $471.4 million, driven by strong performance in Derivatives Markets (+15% revenue) and Data and Access Solutions (+9% revenue).
- Adjusted EBITDA increased by 10% to $310.3 million, demonstrating effective operational leverage and cost management.
- The Options segment saw a notable 28% increase in revenue less cost of revenues, driven by higher index options volume and improved revenue per contract.
- Cboe maintained a solid financial position with total assets of $7.9 billion and ample liquidity, including $435.6 million in cash and cash equivalents and $1.4 billion in restricted cash.
- Despite a 12% decrease in Cash and Spot Markets revenue, the overall revenue growth was sustained by other segments, showcasing business diversification.
- The company continues to return capital to shareholders, paying $53.3 million in dividends and repurchasing $70.0 million in common stock during the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2023, Cboe Global Markets, Inc. kept $0.18.
- Revenue$988.2M100.0%
- Cost of revenue−$516.8M52.3%
- Gross profit$471.4M47.7%
- Operating costs−$223.5M22.6%
- Operating income$247.9M25.1%
- Interest, other & tax−$74.5M7.5%
- Net income$173.4M17.5%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2023filed May 5, 2023Financial Statements
Q1 FY2023 against Q1 FY2022
| Line item | Q1 FY2023Q1 FY2022 | Change |
|---|---|---|
| Revenue | $988.20M$974.50M | +1.4% |
| Cost of Revenue | $516.80M$556.40M | −7.1% |
| Gross Profit | $471.40M$418.10M | +12.7% |
| Operating Expenses | $223.50M$178.40M | +25.3% |
| Operating Income | $247.90M$239.70M | +3.4% |
| Interest Expense | $17.10M$11.70M | +46.2% |
| Net Income | $173.40M$109.60M | +58.2% |
| EPS (Basic) | $1.63$1.02 | +59.8% |
| EPS (Diluted) | $1.63$1.02 | +59.8% |
| Shares Outstanding (Basic) | 105.90M106.60M | −0.7% |
| Shares Outstanding (Diluted) | 106.20M106.80M | −0.6% |
05—Questions
Frequently Asked Questions
What was Cboe's net income for the first quarter of 2023 and how does it compare to the previous year?
Cboe reported a net income of $173.4 million ($1.63 per diluted share) for the first quarter of 2023, representing a significant increase of 58% compared to $109.6 million ($1.02 per diluted share) in the first quarter of 2022.
Which segments were the primary drivers of Cboe's revenue growth in Q1 2023?
The Derivatives Markets segment was a key driver, with revenue increasing by 15% due to higher options volumes and increased Section 31 fees. The Data and Access Solutions segment also contributed positively, with a 9% revenue increase driven by higher access and capacity fees and proprietary market data fees. The Options segment specifically showed a strong 28% increase in revenue less cost of revenues.
How did Cboe manage its expenses in Q1 2023, and what was the impact on profitability?
While total operating expenses increased by 25% primarily due to higher compensation and benefits and acquisition-related costs, this was at a slower pace than revenue growth. This resulted in a 10% increase in Adjusted EBITDA to $310.3 million and a 58% increase in net income, indicating effective cost management relative to revenue expansion.
What is Cboe's current liquidity and capital position?
Cboe maintained a strong liquidity position as of March 31, 2023, with $435.6 million in cash and cash equivalents and an additional $1.4 billion in restricted cash. The company also had $400 million available under its revolving credit facility, providing significant financial flexibility.
06—Continue