10-QPeriod: Q3 FY2023

Cboe Global Markets, Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 3, 2023For Securities:CBOE

Summary

Cboe Global Markets, Inc. reported a robust third quarter and first nine months of 2023, demonstrating significant year-over-year growth in key financial metrics. Total revenues for the first nine months reached $2.8 billion, up 5% from the prior year, with a notable 10% increase in revenues less cost of revenues, reaching $1.4 billion. This growth was primarily driven by a strong performance in the Derivatives Markets segment, which saw a 21% increase in revenues less cost of revenues, fueled by higher volumes in index options. The Data and Access Solutions segment also showed healthy growth with a 9% increase in revenues less cost of revenues, attributed to rising subscriber numbers and pricing for access and capacity fees. The company successfully managed its expenses, with total operating expenses decreasing by 37% year-over-year for the nine-month period, largely due to the absence of a significant goodwill impairment charge recorded in the prior year. This improved cost management, combined with revenue growth, led to a substantial increase in operating income, up 228% for the nine months, reaching $763.9 million. Net income saw a dramatic increase of 630% for the nine-month period, reaching $549.4 million, translating to diluted earnings per share of $5.15. These results reflect the company's ability to leverage its diverse business segments and manage operational efficiency effectively.

Financial Highlights

54 data points
Beta

Revenue

$908.80M

52.9% Gross Margin

Net Income

$208.20M

22.9% Net Margin

EPS (Diluted)

$1.95

Total Assets

$7.73B

Cash & Equivalents

$403.10M

Free Cash Flow

$729.20M

Financial Statements
Beta
Revenue$908.80M
Cost of Revenue$428.30M
Gross Profit$480.50M
Operating Expenses$209.30M
Operating Income$271.20M
Interest Expense$15.40M
Net Income$208.20M
EPS (Basic)$1.96
EPS (Diluted)$1.95
Shares Outstanding (Basic)105.70M
Shares Outstanding (Diluted)106.10M

Key Highlights

  • 1Total revenues for the first nine months of 2023 increased by 5% to $2.8 billion, compared to the same period in 2022.
  • 2Revenues less cost of revenues grew by 10% year-over-year for the nine-month period, reaching $1.4 billion, driven by strong performance in Derivatives Markets and Data & Access Solutions.
  • 3The company reported a significant 228% increase in operating income for the nine months ended September 30, 2023, reaching $763.9 million.
  • 4Net income surged by 630% for the first nine months of 2023, totaling $549.4 million, with diluted earnings per share of $5.15.
  • 5The Options segment demonstrated strong growth, with revenues less cost of revenues up 20% year-over-year for the nine-month period.
  • 6Operating expenses decreased by 37% for the nine months ended September 30, 2023, primarily due to the absence of goodwill impairment charges compared to the prior year.
  • 7The company's balance sheet remains solid with total assets of $7.7 billion and total equity of $3.8 billion as of September 30, 2023.

Frequently Asked Questions

For the first nine months of 2023, Cboe Global Markets reported a 5% increase in total revenues, reaching $2.8 billion, and a 10% increase in revenues less cost of revenues, amounting to $1.4 billion. Operating income saw a substantial rise of 228% to $763.9 million, and net income increased by 630% to $549.4 million, resulting in diluted earnings per share of $5.15. This strong performance was driven by growth in Derivatives Markets and Data & Access Solutions, coupled with effective cost management.

Revenue growth was primarily driven by the Derivatives Markets segment, which benefited from increased trading volumes in index options, showing a 21% increase in revenues less cost of revenues. The Data and Access Solutions segment also contributed positively with a 9% increase in revenues less cost of revenues, attributed to higher subscriber numbers and pricing for access and capacity fees.

Cboe effectively managed its expenses, with total operating expenses decreasing by 37% for the nine months ended September 30, 2023, compared to the same period in 2022. This reduction was largely due to the absence of a significant goodwill impairment charge that impacted the prior year's results. Other expense categories like compensation and benefits also saw a decrease in the three-month period.

As of September 30, 2023, Cboe Global Markets reported total assets of $7.7 billion and total equity of $3.8 billion. Key assets include significant goodwill and intangible assets reflecting its business acquisitions. Total liabilities stood at $3.9 billion. The company maintained a healthy liquidity position with $403.1 million in cash and cash equivalents.