First Quarter Highlights*
- Diluted EPS for the Quarter of $1.63, Up 60 percent
- Record Adjusted Diluted EPS¹ for the Quarter of $1.90, Up 10 percent
- Record Net Revenue for the Quarter of $471.4 million, Up 13 percent
- Reaffirmed Organic Total Net Revenue Growth
Target2 for 2023 of 7 to 9 percent and Data and
Access Solutions Organic Net Revenue Growth Target2 of 7
to 10 percent
- Reaffirmed 2023 Adjusted Operating Expense
Guidance2 of $769 to
$779 million, Reflecting Continued
Investment to Help Drive Long-Term Revenue and Earnings
Growth
CHICAGO, May 5, 2023
/PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE) today
reported financial results for the first quarter of 2023.
"Cboe marked an important milestone last week as we celebrated
our fiftieth anniversary. The years since our founding in 1973 have
been marked by relentless innovation and our record first quarter
results reported today demonstrate that Cboe is as well positioned
as ever to deliver value for our customers and shareholders for
years to come," said Edward T.
Tilly, Cboe Global Markets Chairman and Chief Executive
Officer. "The first quarter highlighted continued strength in
Cboe's global Derivatives and Data and Access Solutions businesses.
Recent innovations including expanded trading hours and new
expirations have increased access to our suite of derivatives
products, providing our diverse set of customers with tools to
navigate any market environment. The strong start to the year
demonstrates continued progress as we invest across our global
ecosystem. I would like to thank all of the employees and partners
who helped make Cboe's first 50 years so successful, and I look
forward to building on our five decades of trusted expertise as we
plan for the next 50 years with the same passion and
entrepreneurial spirit we had in 1973."
"Cboe built on its strong performance in 2022 by reporting
record net revenue and record adjusted earnings in the first
quarter of 2023. I am pleased with the steady progress we made on
our key initiatives while continuing to deliver on our financial
objectives," said Brian N. Schell,
Cboe Global Markets Executive Vice President, Chief Financial
Officer and Treasurer. "Our derivatives business continued to
generate robust growth, delivering a 29% year-over-year net revenue
increase in the first quarter of 2023. Data and Access Solutions
net revenue trends remained steady, increasing by 9%
year-over-year, while cash and spot markets net revenue decreased
by 12% given the strength of volumes in 1Q22 compared to 1Q23.
Moving forward, we are reaffirming our organic total net revenue
growth2 target of 7-9% for 2023, and we continue to
anticipate Data and Access Solutions organic net revenue
growth2 of 7-10%. Our expense guidance also remains
unchanged as we see meaningful investment opportunities across our
ecosystem to help drive long-term shareholder value. 2023 is off to
an impressive start and we look forward to delivering on our
objectives in the quarters ahead."
*All comparisons are
first quarter 2023 compared to the same period in
2022.
|
(1)A full reconciliation
of our non-GAAP results to our GAAP ("Generally Accepted Accounting
Principles") results is included in the attached tables. See
"Non-GAAP Information" in the accompanying financial
tables.
|
(2)Specific quantifications of
the amounts that would be required to reconcile the company's
organic growth guidance, adjusted operating expenses guidance and
the effective tax rate on adjusted earnings guidance are not
available. The company believes that there is uncertainty and
unpredictability with respect to certain of its GAAP measures,
primarily related to acquisition-related revenues and expenses that
would be required to reconcile to GAAP revenues less cost of
revenues, GAAP operating expenses and GAAP effective tax rate,
which preclude the company from providing accurate guidance on
certain forward-looking GAAP to non-GAAP reconciliations. The
company believes that providing estimates of the amounts that would
be required to reconcile the range of the company's organic growth,
adjusted operating expenses and the effective tax rate on adjusted
earnings would imply a degree of precision that would be confusing
or misleading to investors for the reasons identified
above.
|
Consolidated First Quarter Results -Table 1
Table 1 below presents summary selected unaudited condensed
consolidated financial information for the company as reported and
on an adjusted basis for the three months ended March 31, 2023 and 2022.
Table
1
|
Consolidated First
Quarter Results
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q23
|
|
1Q22
|
|
|
($ in millions except per share)
|
|
|
1Q23
|
|
1Q22
|
Change
|
|
Adjusted1
|
|
Adjusted1
|
Change
|
Total Revenues Less
Cost of Revenues
|
|
|
$
|
471.4
|
|
|
$
|
418.1
|
|
13
|
%
|
|
$
|
471.4
|
|
|
$
|
418.1
|
|
13
|
%
|
Total Operating
Expenses
|
|
|
$
|
223.5
|
|
|
$
|
178.4
|
|
25
|
%
|
|
$
|
186.2
|
|
|
$
|
145.8
|
|
28
|
%
|
Operating
Income
|
|
|
$
|
247.9
|
|
|
$
|
239.7
|
|
3
|
%
|
|
$
|
285.2
|
|
|
$
|
272.3
|
|
5
|
%
|
Operating Margin
%
|
|
|
|
52.6
|
%
|
|
|
57.3
|
%
|
(4.7)
|
pp
|
|
|
60.5
|
%
|
|
|
65.1
|
%
|
(4.6)
|
pp
|
Net Income Allocated to
Common Stockholders
|
|
|
$
|
172.6
|
|
|
$
|
109.2
|
|
58
|
%
|
|
$
|
201.8
|
|
|
$
|
184.3
|
|
9
|
%
|
Diluted EPS
|
|
|
$
|
1.63
|
|
|
$
|
1.02
|
|
60
|
%
|
|
$
|
1.90
|
|
|
$
|
1.73
|
|
10
|
%
|
EBITDA1
|
|
|
$
|
303.9
|
|
|
$
|
276.2
|
|
10
|
%
|
|
$
|
310.3
|
|
|
$
|
281.2
|
|
10
|
%
|
EBITDA Margin
%1
|
|
|
|
64.5
|
%
|
|
|
66.1
|
%
|
(1.6)
|
pp
|
|
|
65.8
|
%
|
|
|
67.3
|
%
|
(1.5)
|
pp
|
- Total revenues less cost of revenues (referred to as "net
revenue") of $471.4 million increased
13 percent, compared to $418.1
million in the prior-year period, reflecting increases in
derivatives markets and data and access solutions net revenue,
partially offset by a decrease in cash and spot markets net
revenue. Inorganic net revenue1 in the first quarter of
2023 was $4.4 million.
- Total operating expenses were $223.5
million versus $178.4 million
in the first quarter of 2022, an increase of $45.1 million, while adjusted operating
expenses1 of $186.2
million increased 28 percent compared to $145.8 million in the first quarter of 2022.
These increases were primarily due to the acquisitions of Cboe
Digital (formerly ErisX) and Cboe Canada (formerly NEO), as well as
higher compensation and benefits, travel and promotional, and
technology support services expenses.
- The effective tax rate for the first quarter of 2023 was 30.1
percent compared with 51.3 percent (29.9 percent excluding Section
199 related matters1) in the first quarter of 2022. The
lower effective tax rate in 2023 is primarily due to the
derecognition of the Company's Section 199 tax benefits and related
interest and penalties upon the filing of an unfavorable decision
by the United States Tax Court in the matter of Bats Global
Markets Holdings, Inc., and Subsidiaries v. Commissioner on
March 31, 2022. The effective tax
rate on adjusted earnings1 was 29.0 percent, flat when
compared with 29.0 percent in last year's first quarter.
- Diluted EPS for the first quarter of 2023 increased 60 percent
to $1.63 compared to the first
quarter of 2022. Adjusted diluted EPS1 of $1.90 increased 10 percent compared to 2022's
first quarter results.
Business Segment Information:
Table
2
|
Total Revenues Less
Cost of Revenues by
|
|
|
|
|
|
|
|
|
|
|
Business
Segment
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
1Q23
|
1Q22
|
Change
|
Options
|
|
$
|
280.7
|
|
$
|
219.2
|
|
|
28
|
%
|
North American
Equities
|
|
|
93.1
|
|
|
93.1
|
|
|
—
|
%
|
Europe and Asia
Pacific
|
|
|
49.3
|
|
|
57.5
|
|
|
(14)
|
%
|
Futures
|
|
|
31.1
|
|
|
31.2
|
|
|
—
|
%
|
Global FX
|
|
|
18.5
|
|
|
17.1
|
|
|
8
|
%
|
Digital
|
|
|
(1.3)
|
|
|
—
|
|
|
*
|
|
Total
|
|
$
|
471.4
|
|
$
|
418.1
|
|
|
13
|
%
|
|
(1)A full reconciliation of our
non-GAAP results to our GAAP results is included in the attached
tables. See "Non-GAAP Information" in the accompanying financial
tables.
|
*Not meaningful, due
to the establishment of the Digital segment during the second
quarter of 2022 as a result of the Cboe Digital acquisition on May
2, 2022.
|
Discussion of Results by Business
Segment1:
Options:
- Options net revenue of $280.7
million was up $61.5 million,
or 28 percent, from the first quarter of 2022. The growth was
driven by a double-digit increase in net transaction and clearing
fees2, as well as growth in access and capacity fees and
market data. Net transaction and clearing fees2
increased primarily as a result of a 49 percent increase in index
options trading volumes versus the first quarter of 2022, along
with a 4 percent increase in index options revenue per contract
("RPC") for the quarter. Access and capacity fees were 9 percent
higher than first quarter 2022 and market data fees were 8 percent
higher than first quarter 2022.
- Net transaction and clearing fees2 increased
$67.9 million, or 39 percent,
reflecting a 9 percent increase in total options average daily
volume ("ADV") and a 27 percent increase in total options RPC
compared to the first quarter 2022. The increase in total options
RPC was due to a mix shift, with index options representing a
higher percentage of total options volume. The RPC for index
options increased 4 percent as higher-priced SPX options accounted
for a higher percentage of index options volume.
- Cboe's Options exchanges had total market share of 31.8 percent
for the first quarter of 2023 compared to 31.5 percent in the first
quarter of 2022, reflecting increased proprietary index products
traded compared to the first quarter of 2022.
North American (N.A.) Equities:
- N.A. Equities net revenue of $93.1
million was flat versus the first quarter of 2022,
reflecting a $5.6 million first
quarter net revenue contribution from the 2022 acquisition of Cboe
Canada, offset by lower transaction and clearing fees and market
data revenue.
- Net transaction and clearing fees2 decreased by
$2.3 million, or 7 percent, as
compared to the first quarter of 2022. The decrease was primarily
due to lower U.S. Equities off-exchange revenue, a result of lower
volumes and market share, as well as slightly lower net capture
versus the first quarter of 2022. U.S. Equities exchange revenues
were impacted by a 9 percent decrease in U.S. Equities industry
volumes and lower market share, offsetting a 13 percent increase in
net capture.
- Cboe's U.S. Equities exchanges had market share of 12.7 percent
for the first quarter of 2023 compared to 14.3 percent in the first
quarter of 2022 as industry continuous on-exchange market share
declined. Cboe's U.S. Equities off-exchange market share was 20.3
percent versus 24.4 percent in the first quarter of 2022 as overall
industry alternative trading systems ("ATS") market share declined
as a percentage of off-exchange share. Canadian Equities market
share rose to 14.7 percent as compared to 3.2 percent in the first
quarter of 2022 given the inclusion of Cboe Canada.
Europe and Asia Pacific (APAC):
- Europe and APAC net revenue of
$49.3 million decreased by 14
percent, reflecting slower industry volumes and continued currency
headwinds. On a constant currency basis2, net revenues
were $52.8 million, down 8 percent on
a year-over-year basis. European Equities average daily notional
value ("ADNV") traded on Cboe European Equities was €11.4 billion,
down 11 percent compared to the first quarter of 2022,
outperforming a 22 percent decline in industry market volumes. Net
capture decreased 8 percent for the quarter, reflecting a mix shift
with the strongest market share gains coming in lower-capture Lit
markets.
- For the first quarter of 2023, Cboe European Equities had 24.9
percent market share, up from 21.8 percent in the first quarter of
2022, as a result of positive momentum across Lit trading and Cboe
BIDS Europe, making Cboe the largest stock exchange and block
trading venue in Europe in the
first quarter of 2023.
Futures:
- Futures net revenue of $31.1
million decreased $0.1 million
compared to the first quarter of 2022, due to a decline in net
transaction and clearing fees2, largely offset by an
increase in access and capacity fees.
- Net transaction and clearing fees2 decreased
$1.0 million, reflecting a 9 percent
decline in volumes during the quarter.
Global FX:
- Global FX net revenue of $18.5
million increased 8 percent, primarily as a result of higher
net transaction fees2. ADNV traded on the Cboe FX
platform was $45.0 billion for the
quarter, up 7 percent compared to last year's first quarter, and
net capture per one million dollars
traded was $2.64 for the quarter,
down 1 percent compared to $2.67 in
the first quarter of 2022.
- Cboe FX market share was 19.0 percent for the quarter compared
to 17.3 percent in last year's first quarter, which sets a
quarterly record for Cboe FX. The record was driven by increased
client adoption of our diverse set of FX order types and trading
protocols.
(1)The Digital and Corporate
segments are not further discussed as results were not material
during the first quarter of 2023.
|
(2)A full reconciliation of our
non-GAAP results to our GAAP results is included in the attached
tables. See "Non-GAAP Information" in the accompanying financial
tables.
|
2023 Fiscal Year Financial Guidance
Cboe provided guidance for the 2023 fiscal year as noted
below.
- Reaffirmed organic total net revenue growth1 is
expected to be in the range of 7 to 9 percentage points in 2023,
above medium-term organic total net revenue1 guidance
expectations of 5 to 7 percentage points.
- Reaffirmed revenue from acquisitions held less than a
year1 is expected to contribute total net revenue growth
of 0.5 percentage points in 2023.
- Reaffirmed organic net revenue1 from Data and Access
Solutions is expected to increase by approximately 7 to 10
percentage points in 2023, in line with medium-term guidance
expectations.
- Reaffirmed adjusted operating expenses1 in 2023 are
expected to be in the range of $769
to $779 million, from a base of
$652 million in 2022. The guidance
excludes the expected amortization of acquired intangible assets of
$112 million; the company plans to
reflect the exclusion of this amount in its non-GAAP
reconciliation.
- Reaffirmed depreciation and amortization expense for 2023,
which is included in adjusted operating expenses above, is expected
to be in the range of $48 to
$52 million, excluding the expected
amortization of acquired intangible assets.
- Reaffirmed other income (expense), net, is expected to
contribute a $27 to $33 million benefit in 2023 given expected
performance of minority investments.
- Reaffirmed the effective tax rate on adjusted
earnings1 for the full year 2023 is expected to be in
the range of 28.5 to 30.5 percent. Significant changes in trading
volume, expenses, tax laws or rates and other items could
materially impact this expectation.
- Reaffirmed capital expenditures for 2023 are expected to be in
the range of $60 to $66 million.
(1)Specific quantifications of
the amounts that would be required to reconcile the company's
organic and inorganic growth guidance, adjusted operating expenses
guidance and the effective tax rate on adjusted earnings guidance
are not available. Acquisitions are considered organic after 12
months of closing. The company believes that there is
uncertainty and unpredictability with respect to certain of its
GAAP measures, primarily related to acquisition-related revenues
and expenses that would be required to reconcile to GAAP revenues
less cost of revenues, GAAP operating expenses and GAAP effective
tax rate, which preclude the company from providing accurate
guidance on certain forward-looking GAAP to non-GAAP
reconciliations. The company believes that providing estimates of
the amounts that would be required to reconcile the range of the
company's organic growth, adjusted operating expenses and the
effective tax rate on adjusted earnings would imply a degree of
precision that would be confusing or misleading to investors for
the reasons identified above.
|
Capital Management
At March 31, 2023, the company had
adjusted cash2 of $435.1
million. Total debt as of March 31,
2023 was $1,742.6 million, an
increase of $0.6 million from
December 31, 2022.
The company paid cash dividends of $53.3
million, or $0.50 per share,
during the first quarter of 2023 and utilized $70.0 million to repurchase approximately 567
thousand shares of its common stock under its share repurchase
program at an average price of $123.42 per share. As of March 31, 2023, the company had approximately
$147.9 million of availability
remaining under its existing share repurchase authorizations.
Earnings Conference Call
Executives of Cboe Global Markets will host a conference call to
review its first-quarter financial results today, May 5, 2023, at 8:30 a.m. ET/7:30 a.m.
CT. The conference call and any accompanying slides will be
publicly available via live webcast from the Investor Relations
section of the company's website at www.cboe.com under
Events & Presentations. Participants may also listen via
telephone by dialing (877) 255–4313 from the United States, (866) 450–4696 from
Canada or (412) 317–5466 for
international callers. Telephone participants should place calls 10
minutes prior to the start of the call. The webcast will be
archived on the company's website for replay. A telephone replay of
the earnings call also will be available from approximately
11:00 a.m. CT, May 5, 2023,
through 11:00 p.m. CT, May 12,
2023, by calling (877) 344–7529 from the U.S., (855)
669–9658 from Canada or (412)
317–0088 for international callers, using replay code 8520876.
(2)A full reconciliation of our
non-GAAP results to our GAAP results is included in the attached
tables. See "Non-GAAP Information" in the accompanying financial
tables.
|
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world's leading
derivatives and securities exchange network, delivers cutting-edge
trading, clearing and investment solutions to people around the
world. Cboe provides trading solutions and products in multiple
asset classes, including equities, derivatives, FX, and digital
assets, across North America,
Europe, and Asia Pacific. Above all, Cboe is committed to
building a trusted, inclusive global marketplace that enables
people to pursue a sustainable financial future. To learn more
about the Exchange for the World Stage,
visit www.cboe.com.
Cautionary Statements Regarding Forward-Looking
Information
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve a number of risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "might,"
"should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," and the negative of these
terms and other comparable terminology. All statements that reflect
our expectations, assumptions or projections about the future other
than statements of historical fact are forward-looking statements.
These forward-looking statements, which are subject to known and
unknown risks, uncertainties and assumptions about us, may include
projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements
are only predictions based on our current expectations and
projections about future events. There are important factors that
could cause our actual results, level of activity, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements.
We operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible to predict all risks and uncertainties, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
Some factors that could cause actual results to differ include:
the loss of our right to exclusively list and trade certain index
options and futures products; economic, political and market
conditions; compliance with legal and regulatory obligations; price
competition and consolidation in our industry; decreases in trading
or clearing volumes, market data fees or a shift in the mix of
products traded on our exchanges; legislative or regulatory changes
or changes in tax regimes; our ability to protect our systems and
communication networks from security vulnerabilities and breaches;
our ability to attract and retain skilled management and other
personnel, including compensation inflation; increasing competition
by foreign and domestic entities; our dependence on and exposure to
risk from third parties; global expansion of operations; factors
that impact the quality and integrity of our indices; our ability
to manage our growth and strategic acquisitions or alliances
effectively; our ability to operate our business without violating
the intellectual property rights of others and the costs associated
with protecting our intellectual property rights; our ability to
minimize the risks, including our credit and default risks,
associated with operating a European clearinghouse; our ability to
accommodate trading and clearing volume and transaction traffic,
including significant increases, without failure or degradation of
performance of our systems; misconduct by those who use our markets
or our products or for whom we clear transactions; challenges to
our use of open source software code; our ability to meet our
compliance obligations, including managing potential conflicts
between our regulatory responsibilities and our for-profit status;
our ability to maintain BIDS Trading as an independently managed
and operated trading venue, separate from and not integrated with
our registered national securities exchanges; damage to our
reputation; the ability of our compliance and risk management
methods to effectively monitor and manage our risks; restrictions
imposed by our debt obligations and our ability to make payments on
or refinance our debt obligations; our ability to maintain an
investment grade credit rating; impairment of our goodwill,
long-lived assets, investments or intangible assets; the impacts of
pandemics; the accuracy of our estimates and expectations;
litigation risks and other liabilities; and operating a digital
asset business and clearinghouse, including the expected benefits
of our Cboe Digital acquisition, cybercrime, changes in digital
asset regulation, losses due to digital asset custody, and
fluctuations in digital asset prices. More detailed information
about factors that may affect our actual results to differ may be
found in our filings with the SEC, including in our Annual Report
on Form 10-K for the year ended December 31,
2022 and other filings made from time to time with the
SEC.
We do not undertake, and we expressly disclaim, any duty to
update any forward-looking statement whether as a result of new
information, future events or otherwise, except as required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
The condensed consolidated statements of income and balance
sheets are unaudited and subject to revision.
Cboe Media
Contacts:
|
|
|
|
Analyst
Contact:
|
Angela Tu
|
|
Tim Cave
|
|
Kenneth Hill,
CFA
|
(646)
856–8734
|
|
+44 (0) 7593 506
719
|
|
(312)
786–7559
|
atu@cboe.com
|
|
tcave@cboe.com
|
|
khill@cboe.com
|
CBOE-F
Trademarks:
Cboe®, Cboe Global Markets®, Cboe
Volatility Index®, Bats®, BIDS
Trading®, BZX®, BYX®,
Chi-X®, Cboe Clear®, EDGX®,
EDGA®, ErisX®, EuroCCP®,
MATCHNow®, and VIX® are registered trademarks
of Cboe Global Markets, Inc. and its subsidiaries. All other
trademarks and service marks are the property of their respective
owners.
Cboe Global
Markets, Inc.
|
|
Key Performance
Statistics by Business Segment
|
|
|
|
|
|
1Q
2023
|
4Q 2022
|
3Q
2022
|
2Q
2022
|
1Q
2022
|
Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV (in
thousands)
|
|
|
46,057
|
|
|
42,694
|
|
|
39,947
|
|
|
39,377
|
|
|
42,464
|
|
Total company
Options ADV (in thousands)
|
|
|
14,657
|
|
|
14,545
|
|
|
13,521
|
|
|
13,054
|
|
|
13,392
|
|
Multi-listed
options
|
|
|
11,062
|
|
|
11,186
|
|
|
10,592
|
|
|
10,378
|
|
|
10,978
|
|
Index
options
|
|
|
3,595
|
|
|
3,359
|
|
|
2,929
|
|
|
2,677
|
|
|
2,414
|
|
Total Options market
share
|
|
|
31.8
|
%
|
|
34.1
|
%
|
|
33.8
|
%
|
|
33.2
|
%
|
|
31.5
|
%
|
Multi-listed
options
|
|
|
26.1
|
%
|
|
28.5
|
%
|
|
28.6
|
%
|
|
28.3
|
%
|
|
27.4
|
%
|
Total Options
RPC:
|
|
$
|
0.267
|
|
$
|
0.248
|
|
$
|
0.242
|
|
$
|
0.233
|
|
$
|
0.210
|
|
Multi-listed
options
|
|
$
|
0.064
|
|
$
|
0.060
|
|
$
|
0.061
|
|
$
|
0.066
|
|
$
|
0.067
|
|
Index
options
|
|
$
|
0.889
|
|
$
|
0.876
|
|
$
|
0.896
|
|
$
|
0.883
|
|
$
|
0.857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Equities -
Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV
(shares in billions)
|
|
|
11.8
|
|
|
11.2
|
|
|
10.9
|
|
|
12.6
|
|
|
12.9
|
|
Market share
%
|
|
|
12.7
|
%
|
|
13.1
|
%
|
|
13.3
|
%
|
|
13.6
|
%
|
|
14.3
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.019
|
|
$
|
0.024
|
|
$
|
0.023
|
|
$
|
0.020
|
|
$
|
0.017
|
|
U.S. Equities -
Off-Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (touched shares, in
millions)
|
|
|
89.4
|
|
|
80.8
|
|
|
80.1
|
|
|
92.7
|
|
|
108.5
|
|
Off-Exchange ATS Block
Market Share % (reported on a two-month lag)
|
|
|
20.3
|
%
|
|
21.0
|
%
|
|
21.7
|
%
|
|
22.7
|
%
|
|
24.4
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.113
|
|
$
|
0.113
|
|
$
|
0.114
|
|
$
|
0.108
|
|
$
|
0.117
|
|
Canadian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (matched shares, in
millions)
|
|
|
150.8
|
|
|
139.0
|
|
|
113.2
|
|
|
73.7
|
|
|
41.1
|
|
Total market share
%
|
|
|
14.7
|
%
|
|
13.6
|
%
|
|
12.2
|
%
|
|
6.4
|
%
|
|
3.2
|
%
|
Net capture (per 10,000
shares, in Canadian Dollars)
|
|
$
|
4.039
|
|
$
|
3.901
|
|
$
|
4.316
|
|
$
|
5.668
|
|
$
|
9.103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe and Asia
Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADNV
(Euros - in billions)
|
|
€
|
45.8
|
|
€
|
40.1
|
|
€
|
39.2
|
|
€
|
46.9
|
|
€
|
58.7
|
|
Market share
%
|
|
|
24.9
|
%
|
|
24.9
|
%
|
|
24.6
|
%
|
|
23.2
|
%
|
|
21.8
|
%
|
Net capture
(bps)
|
|
€
|
0.215
|
|
€
|
0.224
|
|
€
|
0.229
|
|
€
|
0.238
|
|
€
|
0.233
|
|
Cboe Clear
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trades cleared (in
thousands)
|
|
|
359,418.1
|
|
|
342,472.9
|
|
|
343,051.6
|
|
|
357,914.1
|
|
|
456,459.1
|
|
Fee per trade
cleared
|
|
€
|
0.008
|
|
€
|
0.007
|
|
€
|
0.008
|
|
€
|
0.009
|
|
€
|
0.009
|
|
Net settlement volume
(shares in thousands)
|
|
|
2,661.9
|
|
|
2,490.5
|
|
|
2,546.8
|
|
|
2,501.6
|
|
|
2,802.1
|
|
Net fee per
settlement
|
|
€
|
0.953
|
|
€
|
0.886
|
|
€
|
0.902
|
|
€
|
0.808
|
|
€
|
0.924
|
|
Australian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (AUD
billions)
|
|
$
|
0.8
|
|
$
|
0.7
|
|
$
|
0.7
|
|
$
|
0.8
|
|
$
|
0.9
|
|
Market share -
Continuous
|
|
|
18.5
|
%
|
|
17.2
|
%
|
|
16.7
|
%
|
|
17.0
|
%
|
|
15.8
|
%
|
Net capture (per
matched notional value (bps), in Australian Dollars)
|
|
$
|
0.160
|
|
$
|
0.142
|
|
$
|
0.168
|
|
$
|
0.171
|
|
$
|
0.173
|
|
Japanese
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (JPY
billions)
|
|
¥
|
183.3
|
|
¥
|
114.1
|
|
¥
|
160.6
|
|
¥
|
136.0
|
|
¥
|
161.8
|
|
Market share - Lit
Continuous
|
|
|
4.8
|
%
|
|
2.9
|
%
|
|
4.4
|
%
|
|
3.5
|
%
|
|
3.8
|
%
|
Net capture (per
matched notional value (bps))
|
|
¥
|
0.243
|
|
¥
|
0.265
|
|
¥
|
0.259
|
|
¥
|
0.258
|
|
¥
|
0.228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (in
thousands)
|
|
|
231.8
|
|
|
193.3
|
|
|
205.0
|
|
|
221.7
|
|
|
253.7
|
|
RPC
|
|
$
|
1.725
|
|
$
|
1.689
|
|
$
|
1.700
|
|
$
|
1.677
|
|
$
|
1.637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
FX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot market share
%
|
|
|
19.0
|
%
|
|
18.4
|
%
|
|
17.8
|
%
|
|
17.0
|
%
|
|
17.3
|
%
|
ADNV ($ in
billions)
|
|
$
|
45.0
|
|
$
|
40.8
|
|
$
|
41.3
|
|
$
|
39.6
|
|
$
|
42.0
|
|
Net capture (per one
million dollars traded)
|
|
$
|
2.64
|
|
$
|
2.69
|
|
$
|
2.69
|
|
$
|
2.71
|
|
$
|
2.67
|
|
ADV = average daily volume; ADNV = average daily notional
value.
RPC, average revenue per contract, for options and futures
represents total net transaction fees recognized for the period
divided by total contracts traded during the period.
Touched volume represents the total number of shares of equity
securities and ETFs internally matched on our exchanges or routed
to and executed on an external market center.
Matched volume represents the total number of shares of equity
securities and ETFs executed on our exchanges.
U.S. Equities - Exchange, "net capture per 100 touched shares"
refers to transaction fees less liquidity payments and routing and
clearing costs divided by the product of one-hundredth ADV of
touched shares on BZX, BYX, EDGX and EDGA and the number of
trading days. U.S. Equities – Off-Exchange data reflects BIDS
Trading. For U.S. Equities – Off-Exchange, "net capture per 100
touched shares" refers to transaction fees less order and execution
management system (OMS/EMS) fees and clearing costs divided by the
product of one-hundredth ADV of touched shares on BIDS Trading and
the number of trading days for the period.
Canadian Equities, "net capture per 10,000 shares" refers to
transaction fees divided by the product of one-ten thousandth ADV
of shares for MATCHNow and Cboe Canada and the number of trading
days. Total market share represents MATCHNow and Cboe Canada volume
divided by the total volume of the Canadian Equities market.
European Equities, "net capture per matched notional value"
refers to transaction fees less liquidity payments in Euros divided
by the product of ADNV in Euros of shares matched on Cboe Europe
Equities and the number of trading days. "Trades cleared" refers to
the total number of non-interoperable trades cleared, "Fee per
trade cleared" refers to clearing fees divided by number of
non-interoperable trades cleared, "Net settlement volume" refers to
the total number of settlements executed after netting, and "Net
fee per settlement" refers to settlement fees less direct costs
incurred to settle divided by the number of settlements executed
after netting.
Asia Pacific data reflects the
acquisition of Cboe Asia Pacific (formerly Chi-X Asia Pacific).
Australian Equities "Net capture per matched notional value" refers
to transaction fees less liquidity payments in Australian dollars
divided by the product of ADNV in Australian dollars of shares
matched on Cboe Australia and the number of Australian Equities
trading days. Japanese Equities "Net capture per matched notional
value" refers to transaction fees less liquidity payments in
Japanese Yen divided by the product of ADNV in Japanese Yen of
shares matched on Cboe Japan and the number of Japanese Equities
trading days.
Global FX, "net capture per one million
dollars traded" refers to transaction fees less liquidity
payments, if any, divided by the Spot and SEF products of
one-thousandth of ADNV traded on the Cboe FX Markets and the number
of trading days, divided by two, which represents the buyer and
seller that are both charged on the transaction. Market Share
represents Cboe FX volume divided by the total volume of publicly
reporting spot FX venues (Cboe FX, EBS, Refinitiv, and Euronext
FX).
Average transaction fees per contract can be affected by various
factors, including exchange fee rates, volume-based discounts and
transaction mix by contract type and product type.
Cboe Global Markets,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Income (Unaudited)
|
Three Months Ended
March 31, 2023 and 2022
|
|
|
|
Three Months
Ended March 31,
|
(in millions, except
per share amounts)
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
|
|
|
Cash and spot
markets
|
|
$
|
407.0
|
|
$
|
461.9
|
Data and access
solutions
|
|
|
129.4
|
|
|
118.9
|
Derivatives
markets
|
|
|
451.8
|
|
|
393.7
|
Total
Revenues
|
|
|
988.2
|
|
|
974.5
|
Cost of
Revenues:
|
|
|
|
|
|
|
Liquidity
payments
|
|
|
371.8
|
|
|
467.5
|
Routing and
clearing
|
|
|
24.0
|
|
|
22.3
|
Section 31
fees
|
|
|
74.9
|
|
|
35.7
|
Royalty fees and other
cost of revenues
|
|
|
46.1
|
|
|
30.9
|
Total Cost of
Revenues
|
|
|
516.8
|
|
|
556.4
|
Revenues Less Cost
of Revenues
|
|
|
471.4
|
|
|
418.1
|
Operating
Expenses:
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
110.4
|
|
|
81.2
|
Depreciation and
amortization
|
|
|
41.4
|
|
|
40.9
|
Technology support
services
|
|
|
22.2
|
|
|
19.2
|
Professional fees and
outside services
|
|
|
23.9
|
|
|
19.7
|
Travel and promotional
expenses
|
|
|
6.2
|
|
|
2.9
|
Facilities
costs
|
|
|
7.6
|
|
|
6.5
|
Acquisition-related
costs
|
|
|
6.4
|
|
|
2.0
|
Other
expenses
|
|
|
5.4
|
|
|
6.0
|
Total Operating
Expenses
|
|
|
223.5
|
|
|
178.4
|
Operating
Income
|
|
|
247.9
|
|
|
239.7
|
Non-operating
(Expenses) Income:
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(15.1)
|
|
|
(10.8)
|
Other income (expense),
net
|
|
|
15.4
|
|
|
(4.0)
|
Total Non-operating
Expenses
|
|
|
0.3
|
|
|
(14.8)
|
Income Before Income
Tax Provision
|
|
|
248.2
|
|
|
224.9
|
Income tax
provision
|
|
|
74.8
|
|
|
115.3
|
Net
Income
|
|
|
173.4
|
|
|
109.6
|
Net income allocated to
participating securities
|
|
|
(0.8)
|
|
|
(0.4)
|
Net Income Allocated
to Common Stockholders
|
|
$
|
172.6
|
|
$
|
109.2
|
Net Income Per Share
Allocated to Common Stockholders:
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
1.63
|
|
$
|
1.02
|
Diluted earnings per
share
|
|
|
1.63
|
|
|
1.02
|
Weighted average shares
used in computing income per share:
|
|
|
|
|
|
|
Basic
|
|
|
105.9
|
|
|
106.6
|
Diluted
|
|
|
106.2
|
|
|
106.8
|
Cboe Global Markets,
Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
March 31, 2023 and
December 31, 2022
|
|
|
|
March 31,
|
|
December 31,
|
(in
millions)
|
|
2023
|
|
2022
|
Assets
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
435.6
|
|
$
|
432.7
|
Financial
investments
|
|
|
80.2
|
|
|
91.7
|
Accounts receivable,
net
|
|
|
393.4
|
|
|
369.8
|
Margin deposits and
clearing funds
|
|
|
1,452.8
|
|
|
543.0
|
Digital assets -
safeguarded assets
|
|
|
42.0
|
|
|
22.9
|
Income taxes
receivable
|
|
|
4.5
|
|
|
48.3
|
Other current
assets
|
|
|
49.6
|
|
|
47.6
|
Total Current
Assets
|
|
|
2,458.1
|
|
|
1,556.0
|
|
|
|
|
|
|
|
Investments
|
|
|
269.7
|
|
|
253.2
|
Land
|
|
|
2.3
|
|
|
2.3
|
Property and equipment,
net
|
|
|
112.1
|
|
|
108.2
|
Operating lease right
of use assets
|
|
|
110.1
|
|
|
111.7
|
Goodwill
|
|
|
3,128.4
|
|
|
3,122.8
|
Intangible assets,
net
|
|
|
1,636.5
|
|
|
1,662.8
|
Other assets,
net
|
|
|
186.3
|
|
|
181.9
|
Total
Assets
|
|
$
|
7,903.5
|
|
$
|
6,998.9
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
368.2
|
|
$
|
420.2
|
Section 31 fees
payable
|
|
|
75.4
|
|
|
147.1
|
Deferred
revenue
|
|
|
21.7
|
|
|
11.7
|
Margin deposits and
clearing funds
|
|
|
1,452.8
|
|
|
543.0
|
Income taxes
payable
|
|
|
19.4
|
|
|
3.5
|
Digital assets -
safeguarded liabilities
|
|
|
42.0
|
|
|
22.9
|
Current portion of
long-term debt
|
|
|
304.8
|
|
|
304.7
|
Current portion of
contingent consideration liabilities
|
|
|
19.2
|
|
|
24.1
|
Total Current
Liabilities
|
|
|
2,303.5
|
|
|
1,477.2
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,437.8
|
|
|
1,437.3
|
Non-current
unrecognized tax benefits
|
|
|
210.5
|
|
|
196.1
|
Deferred income
taxes
|
|
|
211.4
|
|
|
222.9
|
Non-current operating
lease liabilities
|
|
|
126.9
|
|
|
129.3
|
Non-current portion of
contingent consideration liabilities
|
|
|
15.0
|
|
|
15.0
|
Other non-current
liabilities
|
|
|
59.7
|
|
|
55.8
|
Total
Liabilities
|
|
|
4,364.8
|
|
|
3,533.6
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
—
|
|
|
—
|
Common stock
|
|
|
1.1
|
|
|
1.1
|
Treasury stock at
cost
|
|
|
(213.7)
|
|
|
(131.0)
|
Additional paid-in
capital
|
|
|
1,472.3
|
|
|
1,455.1
|
Retained
earnings
|
|
|
2,291.2
|
|
|
2,171.1
|
Accumulated other
comprehensive loss, net
|
|
|
(12.2)
|
|
|
(31.0)
|
Total Stockholders'
Equity
|
|
|
3,538.7
|
|
|
3,465.3
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
7,903.5
|
|
$
|
6,998.9
|
Non-GAAP Information
In addition to disclosing results determined in accordance with
GAAP, Cboe Global Markets has disclosed certain non-GAAP measures
of operating performance. These measures are not in accordance
with, or a substitute for, GAAP, and may be different from or
inconsistent with non-GAAP financial measures used by other
companies. The non-GAAP measures provided in this press release
include net transaction and clearing fees, adjusted operating
expenses, adjusted operating income, organic net revenue, inorganic
net revenue, net revenues on a constant currency basis, and
adjusted operating margin, adjusted net income allocated to common
stockholders and adjusted diluted earnings per share, effective tax
rate on adjusted earnings, net revenues on a constant currency
basis, adjusted cash, EBITDA, EBITDA margin, adjusted EBITDA and
adjusted EBITDA margin.
Management believes that the non-GAAP financial measures
presented in this press release provide additional and comparative
information to assess trends in our core operations and a means to
evaluate period-to-period comparisons. Non-GAAP financial measures
disclosed by management are provided as additional information to
investors in order to provide them with an alternative method for
assessing our financial condition and operating results.
Organic net revenue, inorganic net revenue, organic
non-transaction revenue and organic net revenue
guidance: These are non-GAAP financial measures that
exclude or have otherwise been adjusted for the impact of our
acquisitions for the period or guidance, as applicable. Management
believes the organic net revenue growth and guidance measures
provide users with supplemental information regarding the company's
ongoing and future potential revenue performances and trends by
presenting revenue growth and guidance excluding the impact of the
acquisitions. Revenues from acquisitions that have been owned for
at least one year are considered organic and are no longer excluded
from organic net revenue from either period for comparative
purposes.
Amortization expense of acquired intangible assets: We
amortize intangible assets acquired in connection with various
acquisitions. Amortization of intangible assets is inconsistent in
amount and frequency and is significantly affected by the timing
and size of our acquisitions. As such, if intangible asset
amortization is included in performance measures, it is more
difficult to assess the day-to-day operating performance of the
businesses, the relative operating performance of the businesses
between periods and the earnings power of the company. Therefore,
we believe performance measures excluding intangible asset
amortization expense provide investors with an additional basis for
comparison across accounting periods.
Acquisition-related expenses: From time to time, we have
pursued acquisitions, which have resulted in expenses which would
not otherwise have been incurred in the normal course of the
company's business operations. These expenses include integration
costs, as well as legal, due diligence, impairment charges, and
other third-party transaction costs. The frequency and the amount
of such expenses vary significantly based on the size, timing and
complexity of the transaction. Accordingly, we exclude these costs
for purposes of calculating non-GAAP measures which provide an
additional analysis of Cboe's ongoing operating performance or
comparisons in Cboe's performance between periods.
The tables below show the reconciliation of each financial
measure from GAAP to non-GAAP. The non-GAAP financial measures
exclude the impact of those items detailed below and are referred
to as adjusted financial measures.
Organic Net Revenue
Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
3
|
|
Three Months
Ended
|
|
|
(in
millions)
|
|
March 31,
|
|
|
Reconciliation of
Revenues Less Cost of Revenues to Organic Net
Revenue
|
|
2023
|
|
2022
|
|
|
Revenues less cost of
revenues (net revenue)
|
|
$
|
471.4
|
|
$
|
418.1
|
|
|
Less
acquisitions:
|
|
|
|
|
|
|
|
|
Acquisition revenues
less cost of revenues (inorganic net revenue)
|
|
$
|
(4.4)
|
|
$
|
—
|
|
|
Organic net
revenue
|
|
$
|
467.0
|
|
$
|
418.1
|
|
|
Reconciliation of
GAAP and non-GAAP Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Table
4
|
|
March 31,
|
|
(in millions, except
per share amounts)
|
|
2023
|
|
2022
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to Non-GAAP (As shown
on Table 1)
|
|
|
|
|
|
|
|
Net income allocated to
common stockholders
|
|
$
|
172.6
|
|
$
|
109.2
|
|
Non-GAAP
adjustments
|
|
|
|
|
|
|
|
Acquisition-related
expenses (1)
|
|
|
6.4
|
|
|
2.0
|
|
Investment
establishment costs (2)
|
|
|
—
|
|
|
3.0
|
|
Amortization of
acquired intangible assets (3)
|
|
|
30.9
|
|
|
30.6
|
|
Total Non-GAAP
adjustments
|
|
|
37.3
|
|
|
35.6
|
|
Income tax expense
related to the items above
|
|
|
(9.5)
|
|
|
(8.7)
|
|
Tax reserves
(4)
|
|
|
1.5
|
|
|
48.5
|
|
Net income allocated to
participating securities - effect on reconciling
items
|
|
|
(0.1)
|
|
|
(0.3)
|
|
Adjusted net income
allocated to common stockholders
|
|
$
|
201.8
|
|
$
|
184.3
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Diluted EPS to Non-GAAP
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
$
|
1.63
|
|
$
|
1.02
|
|
Per share impact of
non-GAAP adjustments noted above
|
|
|
0.27
|
|
|
0.71
|
|
Adjusted diluted
earnings per common share
|
|
$
|
1.90
|
|
$
|
1.73
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Margin to Non-GAAP
|
|
|
|
|
|
|
|
Revenue less cost of
revenue
|
|
$
|
471.4
|
|
$
|
418.1
|
|
Non-GAAP adjustments
noted above
|
|
|
—
|
|
|
—
|
|
Adjusted revenue
less cost of revenue
|
|
$
|
471.4
|
|
$
|
418.1
|
|
Operating expenses
(5)
|
|
$
|
223.5
|
|
$
|
178.4
|
|
Non-GAAP adjustments
noted above
|
|
|
37.3
|
|
|
32.6
|
|
Adjusted operating
expenses
|
|
$
|
186.2
|
|
$
|
145.8
|
|
Operating
income
|
|
$
|
247.9
|
|
$
|
239.7
|
|
Non-GAAP adjustments
noted above
|
|
|
37.3
|
|
|
32.6
|
|
Adjusted operating
income
|
|
$
|
285.2
|
|
$
|
272.3
|
|
Adjusted operating
margin (6)
|
|
|
60.5
|
%
|
|
65.1
|
%
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Rate to Non-GAAP
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
248.2
|
|
|
224.9
|
|
Non-GAAP adjustments
noted above
|
|
|
37.3
|
|
|
35.6
|
|
Adjusted income
before income taxes
|
|
$
|
285.5
|
|
$
|
260.5
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
74.8
|
|
|
115.3
|
|
Non-GAAP adjustments
noted above
|
|
|
8.0
|
|
|
(39.8)
|
|
Adjusted income tax
expense
|
|
$
|
82.8
|
|
$
|
75.5
|
|
Adjusted income tax
rate
|
|
|
29.0
|
%
|
|
29.0
|
%
|
|
(1) This amount
includes ongoing acquisition related costs primarily from the
Company's Cboe Digital and Cboe Canada acquisitions.
|
(2) This amount
represents the investment establishment costs related to the
company's investment in 7RIDGE Investments 3 LP, which acquired
Trading Technologies, Inc.
|
(3) This amount
represents the amortization of acquired intangible assets related
to the company's acquisitions.
|
(4) This amount
represents the tax reserves related to Section 199
matters.
|
(5) The company
sponsors deferred compensation plans held in a trust. The expenses
or income related to the deferred compensation plans are included
in "Compensation and benefits" ($3.2 million and $0.6 million in
expense for the three months ended March 31, 2023 and 2022,
respectively), and are directly offset by deferred compensation
income, expenses and dividends included within "Other income, net"
($3.2 million and $0.6 million in income, expense and dividends in
the three months ended March 31, 2023 and 2022, respectively), on
the condensed consolidated statements of income. The deferred
compensation plans' expenses are not excluded from "adjusted
operating expenses" and do not have an impact on "Income before
income taxes."
|
(6) Adjusted
operating margin represents adjusted operating income divided by
adjusted revenue less cost of revenue.
|
EBITDA Reconciliations
EBITDA (earnings before interest, income taxes, depreciation and
amortization) and Adjusted EBITDA are widely used non-GAAP
financial measures of operating performance. EBITDA margin
represents EBITDA divided by revenues less cost of revenues (net
revenue). It is presented as supplemental information that the
company believes is useful to investors to evaluate its results
because it excludes certain items that are not directly related to
the company's core operating performance. EBITDA is calculated by
adding back to net income interest expense, income tax expense,
depreciation and amortization. Adjusted EBITDA is calculated by
adding back to EBITDA acquisition-related expenses and investment
establishment costs. EBITDA and Adjusted EBITDA should not be
considered as substitutes either for net income, as an indicator of
the company's operating performance, or for cash flow, as a measure
of the company's liquidity. In addition, because EBITDA and
Adjusted EBITDA may not be calculated identically by all companies,
the presentation here may not be comparable to other similarly
titled measures of other companies. Adjusted EBITDA margin
represents Adjusted EBITDA divided by net revenue.
Table
5
|
|
Three Months Ended
|
|
(in millions, except
percentages)
|
|
March 31,
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to EBITDA and Adjusted
EBITDA (Per Table 1)
|
|
2023
|
|
2022
|
|
Net income allocated
to common stockholders
|
|
$
|
172.6
|
|
$
|
109.2
|
|
Interest expense,
net
|
|
|
15.1
|
|
|
10.8
|
|
Income tax
provision
|
|
|
74.8
|
|
|
115.3
|
|
Depreciation and
amortization
|
|
|
41.4
|
|
|
40.9
|
|
EBITDA
|
|
$
|
303.9
|
|
$
|
276.2
|
|
EBITDA
Margin
|
|
|
64.5
|
%
|
|
66.1
|
%
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
not included in above line items
|
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
|
6.4
|
|
|
2.0
|
|
Investment
establishment costs
|
|
|
—
|
|
|
3.0
|
|
Adjusted
EBITDA
|
|
$
|
310.3
|
|
$
|
281.2
|
|
Adjusted EBITDA
Margin
|
|
|
65.8
|
%
|
|
67.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
6
|
|
|
|
|
|
|
|
(in
millions)
|
|
March 31,
|
|
December 31,
|
|
Reconciliation of
Cash and Cash Equivalents to Adjusted Cash
|
|
2023
|
|
2022
|
|
Cash and cash
equivalents
|
|
$
|
435.6
|
|
$
|
432.7
|
|
Financial
investments
|
|
|
80.2
|
|
|
91.7
|
|
Less deferred
compensation plan assets
|
|
|
(30.7)
|
|
|
(27.5)
|
|
Less cash collected for
Section 31 Fees
|
|
|
(50.0)
|
|
|
(93.7)
|
|
Adjusted
Cash
|
|
$
|
435.1
|
|
$
|
403.2
|
|
Table
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Transaction and Clearing Fees by Business Segment –Three Months
Ended March 31, 2023 and 2022
|
|
Consolidated
|
|
Options
|
|
N.A.
Equities
|
|
Europe and
APAC
|
|
Futures
|
|
Global
FX
|
|
Digital
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Transaction and
clearing fees
|
$
|
732.5
|
|
$
|
769.6
|
|
$
|
395.8
|
|
$
|
348.3
|
|
$
|
255.0
|
|
$
|
330.8
|
|
$
|
42.1
|
|
$
|
50.1
|
|
$
|
24.8
|
|
$
|
25.8
|
|
$
|
15.8
|
|
$
|
14.6
|
|
$
|
(1.0)
|
|
$
|
—
|
Liquidity
payments
|
|
(371.8)
|
|
|
(467.5)
|
|
|
(144.2)
|
|
|
(167.6)
|
|
|
(215.9)
|
|
|
(288.3)
|
|
|
(11.3)
|
|
|
(11.6)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4)
|
|
|
—
|
Routing and
clearing
|
|
(24.0)
|
|
|
(22.3)
|
|
|
(9.7)
|
|
|
(6.7)
|
|
|
(9.4)
|
|
|
(10.5)
|
|
|
(4.6)
|
|
|
(4.9)
|
|
|
—
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
Net transaction and
clearing fees
|
$
|
336.7
|
|
$
|
279.8
|
|
$
|
241.9
|
|
$
|
174.0
|
|
$
|
29.7
|
|
$
|
32.0
|
|
$
|
26.2
|
|
$
|
33.6
|
|
$
|
24.8
|
|
$
|
25.8
|
|
$
|
15.5
|
|
$
|
14.4
|
|
$
|
(1.4)
|
|
$
|
—
|
Table
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Revenue by Revenue Caption –Three Months Ended March 31, 2023
and 2022
|
|
Cash and Spot
Markets
|
|
Data and Access
Solutions
|
|
Derivatives
Markets
|
|
Total
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Transaction and
clearing fees
|
$
|
311.9
|
|
$
|
395.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
420.6
|
|
$
|
374.1
|
|
$
|
732.5
|
|
$
|
769.6
|
Access and capacity
fees
|
|
—
|
|
|
—
|
|
|
84.2
|
|
|
77.9
|
|
|
—
|
|
|
—
|
|
|
84.2
|
|
|
77.9
|
Market data
fees
|
|
17.9
|
|
|
22.9
|
|
|
44.5
|
|
|
39.6
|
|
|
8.5
|
|
|
8.2
|
|
|
70.9
|
|
|
70.7
|
Regulatory
fees
|
|
62.6
|
|
|
31.9
|
|
|
—
|
|
|
—
|
|
|
21.9
|
|
|
10.7
|
|
|
84.5
|
|
|
42.6
|
Other
revenue
|
|
14.6
|
|
|
11.6
|
|
|
0.7
|
|
|
1.4
|
|
|
0.8
|
|
|
0.7
|
|
|
16.1
|
|
|
13.7
|
Total
revenues
|
$
|
407.0
|
|
$
|
461.9
|
|
$
|
129.4
|
|
$
|
118.9
|
|
$
|
451.8
|
|
$
|
393.7
|
|
$
|
988.2
|
|
$
|
974.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
payments
|
$
|
227.0
|
|
$
|
299.6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
144.8
|
|
$
|
167.9
|
|
$
|
371.8
|
|
$
|
467.5
|
Routing and clearing
fees
|
|
14.3
|
|
|
15.6
|
|
|
—
|
|
|
—
|
|
|
9.7
|
|
|
6.7
|
|
|
24.0
|
|
|
22.3
|
Section 31
fees
|
|
61.4
|
|
|
31.8
|
|
|
—
|
|
|
—
|
|
|
13.5
|
|
|
3.9
|
|
|
74.9
|
|
|
35.7
|
Royalty fees and other
cost of revenues
|
|
7.1
|
|
|
4.6
|
|
|
2.2
|
|
|
2.4
|
|
|
36.8
|
|
|
23.9
|
|
|
46.1
|
|
|
30.9
|
Total cost of
revenues
|
$
|
309.8
|
|
$
|
351.6
|
|
$
|
2.2
|
|
$
|
2.4
|
|
$
|
204.8
|
|
$
|
202.4
|
|
$
|
516.8
|
|
$
|
556.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues less cost
of revenues (net revenue)
|
$
|
97.2
|
|
$
|
110.3
|
|
$
|
127.2
|
|
$
|
116.5
|
|
$
|
247.0
|
|
$
|
191.3
|
|
$
|
471.4
|
|
$
|
418.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition revenue
less cost of revenues (inorganic net revenue)
|
|
(0.9)
|
|
|
—
|
|
|
(3.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.4)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic net
revenue
|
$
|
96.3
|
|
$
|
110.3
|
|
$
|
123.7
|
|
$
|
116.5
|
|
$
|
247.0
|
|
$
|
191.3
|
|
$
|
467.0
|
|
$
|
418.1
|
Table
9
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Effective Tax Rate to Effective Tax Rate Excluding Section 199
Matters - Three Months Ended March 31, 2023 and 2022
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended,
|
|
|
|
|
March 31,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
GAAP effective tax
rate
|
|
30.1
|
%
|
|
51.3
|
%
|
|
Tax effect of Section
199 related matters
|
|
—
|
%
|
|
(21.4)
|
%
|
|
Effective tax rate
excluding Section 199 matters
|
|
30.1
|
%
|
|
29.9
|
%
|
|
Table
10
|
|
|
Reconciliation of
GAAP Net Revenues to Net Revenues in Constant Currency - Three
Months Ended March 31, 2023
|
|
|
|
|
|
Three Months
Ended,
|
|
|
March
31,
|
|
|
2023
|
Europe and Asia Pacific
net revenues
|
$
|
49.3
|
Constant currency
adjustment
|
|
3.5
|
Europe and Asia Pacific
net revenues in constant currency1
|
$
|
52.8
|
|
(1) Net
revenues in constant currency is calculated by converting the
current period GAAP net revenues in local currency using the
foreign currency exchange rates that were in effect during the
previous comparable period.
|
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SOURCE Cboe Global Markets, Inc.