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Cboe Global (CBOE) Q3 Earnings, Revenues Top, View Revised
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Cboe Global Markets' (CBOE - Free Report) third-quarter 2022 adjusted earnings of $1.74 per share beat the Zacks Consensus Estimate by 6.8%. Moreover, the bottom line increased 20% year over year.
The quarter witnessed record net revenues and adjusted earnings, courtesy of a robust derivatives franchise, supported by sizable contributions from data and access solutions and cash and spot markets.
Net revenues from derivatives markets grew 31%, data and access solutions improved 15%, and cash and spot markets grew 5%.
Cboe Global Markets, Inc. Price, Consensus and EPS Surprise
Total revenues came in at $442 million and beat the Zacks Consensus Estimate by 0.6%. The top line increased 20% year over year, driven by increases in net transaction and clearing fees and access and capacity fees.
Options revenues increased 33% year over year to $255.5 million, driven by double-digit increases in net transaction and clearing fees, access and capacity fees, and market data.
North American Equities revenues increased 13% year over year to $96.7 million, driven by higher transaction and clearing fees and access and capacity fees.
Futures revenues of $28.4 million were down 2% year over year, attributable to a decline in net transaction and clearing fees, offset slightly by an increase in access and capacity fees and market data fees.
Europe and Asia Pacific revenues declined 8% year over year to $44.5 million, reflecting softer transaction and non-transaction revenues.
Global FX revenues increased 21% to $17.3 million, driven by higher net transaction and clearing fees.
Total adjusted operating expenses increased 23% year over year to $172.8 million, primarily due to the acquisitions of Cboe Digital (formerly ErisX) and NEO, as well as an increase in salaries, wages, and bonuses resulting in higher compensation and benefits expense.
Adjusted operating income increased 18% year over year to $269.9 million. Adjusted operating margin in the quarter under review contracted 110 basis points (bps) to 60.9%.
Adjusted EBITDA margin of 64.9% expanded 10 bps.
Financial Update
As of Sep 30, 2022, CBOE Global had cash and cash equivalents of $353.3 million, up 3.3% from the figure at 2021 end. Total assets were $7.3 billion, up 7.1% from the level at 2021 end.
At the end of the quarter, the long-term debt was $1.9 billion, up 43.1% year over year.
Total shareholders’ equity was $3.3 billion at the end of the reported quarter, down 8.6% from the value on Dec 31, 2021.
Share Repurchase and Dividend Update
Cboe Global paid out cash dividends worth $53.4 million. There were no buybacks in the third quarter and Cboe Global had $233.3 million remaining under its existing share repurchase authorization as of Sep 30.
2022 Guidance Revised
Cboe Global expects total organic net revenue growth in the range of 14% to 16%, up from 9% to 11% guided earlier. It lowered the adjusted operating expense guidance to $651 to $659 million from $659 to $667 million.
CBOE expects organic net revenues from Data and Access Solutions to increase approximately 10% to 13%.
It expects depreciation and amortization expenses for 2022 in the range of $40 to $44 million, excluding the expected amortization of acquired intangible assets.
The company expects the effective tax rate on adjusted earnings for 2022 in the range of 27.5% to 29.5%.
Cboe Global expects capital expenditures in the range of $43 million to $48 million, down from $47 million to $52 million.
Of the industry players that have reported third-quarter results so far, CME Group (CME - Free Report) , Nasdaq Inc. (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate for earnings.
CME Group’s third-quarter 2022 adjusted earnings per share of $1.98 beat the Zacks Consensus Estimate of $1.93 and increased 23.8% year over year. Revenues of $1.2 billion increased 10.6% year over year and beat the Zacks Consensus Estimate by 0.1%.
CME Group’s operating income increased 20.4% from the prior-year quarter to $738.8 million. ADV was 22.4 million contracts, including non-U.S. ADV of 6.1 million contracts, led by 41% growth in Asia, 31% in Latin America and 14% in EMEA.
Nasdaq’s third-quarter 2022 adjusted earnings per share of 68 cents beat the Zacks Consensus Estimate of 65 cents by 4.6% and improved 15% year over year. Revenues of $890 million increased 6% year over year but missed the Zacks Consensus Estimate by 0.1%.
Annualized recurring revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 35% of ARR. The Nasdaq stock market welcomed 98 new company listings in the third quarter of 2022, including 35 IPOs. The number of listed companies was 4,296 at quarter end.
MarketAxess’ third-quarter 2022 earnings per share of $1.58 beat the Zacks Consensus Estimate by 6% and improved nearly 4% year over year. Total revenues amounted to $172.1 million, rising 6% year over year but fell short of the consensus mark by a whisker.
Active clients of MarketAxess totaled 1,972 in the third quarter, which increased 7% year over year. Active international clients attained a record figure of 993 in the quarter under review. The figure advanced 6% year over year. Commission revenues of $153.2 million climbed 7.2% year over year.
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Cboe Global (CBOE) Q3 Earnings, Revenues Top, View Revised
Cboe Global Markets' (CBOE - Free Report) third-quarter 2022 adjusted earnings of $1.74 per share beat the Zacks Consensus Estimate by 6.8%. Moreover, the bottom line increased 20% year over year.
The quarter witnessed record net revenues and adjusted earnings, courtesy of a robust derivatives franchise, supported by sizable contributions from data and access solutions and cash and spot markets.
Net revenues from derivatives markets grew 31%, data and access solutions improved 15%, and cash and spot markets grew 5%.
Cboe Global Markets, Inc. Price, Consensus and EPS Surprise
Cboe Global Markets, Inc. price-consensus-eps-surprise-chart | Cboe Global Markets, Inc. Quote
Operational Details
Total revenues came in at $442 million and beat the Zacks Consensus Estimate by 0.6%. The top line increased 20% year over year, driven by increases in net transaction and clearing fees and access and capacity fees.
Options revenues increased 33% year over year to $255.5 million, driven by double-digit increases in net transaction and clearing fees, access and capacity fees, and market data.
North American Equities revenues increased 13% year over year to $96.7 million, driven by higher transaction and clearing fees and access and capacity fees.
Futures revenues of $28.4 million were down 2% year over year, attributable to a decline in net transaction and clearing fees, offset slightly by an increase in access and capacity fees and market data fees.
Europe and Asia Pacific revenues declined 8% year over year to $44.5 million, reflecting softer transaction and non-transaction revenues.
Global FX revenues increased 21% to $17.3 million, driven by higher net transaction and clearing fees.
Total adjusted operating expenses increased 23% year over year to $172.8 million, primarily due to the acquisitions of Cboe Digital (formerly ErisX) and NEO, as well as an increase in salaries, wages, and bonuses resulting in higher compensation and benefits expense.
Adjusted operating income increased 18% year over year to $269.9 million. Adjusted operating margin in the quarter under review contracted 110 basis points (bps) to 60.9%.
Adjusted EBITDA margin of 64.9% expanded 10 bps.
Financial Update
As of Sep 30, 2022, CBOE Global had cash and cash equivalents of $353.3 million, up 3.3% from the figure at 2021 end. Total assets were $7.3 billion, up 7.1% from the level at 2021 end.
At the end of the quarter, the long-term debt was $1.9 billion, up 43.1% year over year.
Total shareholders’ equity was $3.3 billion at the end of the reported quarter, down 8.6% from the value on Dec 31, 2021.
Share Repurchase and Dividend Update
Cboe Global paid out cash dividends worth $53.4 million. There were no buybacks in the third quarter and Cboe Global had $233.3 million remaining under its existing share repurchase authorization as of Sep 30.
2022 Guidance Revised
Cboe Global expects total organic net revenue growth in the range of 14% to 16%, up from 9% to 11% guided earlier. It lowered the adjusted operating expense guidance to $651 to $659 million from $659 to $667 million.
CBOE expects organic net revenues from Data and Access Solutions to increase approximately 10% to 13%.
It expects depreciation and amortization expenses for 2022 in the range of $40 to $44 million, excluding the expected amortization of acquired intangible assets.
The company expects the effective tax rate on adjusted earnings for 2022 in the range of 27.5% to 29.5%.
Cboe Global expects capital expenditures in the range of $43 million to $48 million, down from $47 million to $52 million.
Zacks Rank
Cboe Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Securities and Exchanges
Of the industry players that have reported third-quarter results so far, CME Group (CME - Free Report) , Nasdaq Inc. (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate for earnings.
CME Group’s third-quarter 2022 adjusted earnings per share of $1.98 beat the Zacks Consensus Estimate of $1.93 and increased 23.8% year over year. Revenues of $1.2 billion increased 10.6% year over year and beat the Zacks Consensus Estimate by 0.1%.
CME Group’s operating income increased 20.4% from the prior-year quarter to $738.8 million. ADV was 22.4 million contracts, including non-U.S. ADV of 6.1 million contracts, led by 41% growth in Asia, 31% in Latin America and 14% in EMEA.
Nasdaq’s third-quarter 2022 adjusted earnings per share of 68 cents beat the Zacks Consensus Estimate of 65 cents by 4.6% and improved 15% year over year. Revenues of $890 million increased 6% year over year but missed the Zacks Consensus Estimate by 0.1%.
Annualized recurring revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 35% of ARR. The Nasdaq stock market welcomed 98 new company listings in the third quarter of 2022, including 35 IPOs. The number of listed companies was 4,296 at quarter end.
MarketAxess’ third-quarter 2022 earnings per share of $1.58 beat the Zacks Consensus Estimate by 6% and improved nearly 4% year over year. Total revenues amounted to $172.1 million, rising 6% year over year but fell short of the consensus mark by a whisker.
Active clients of MarketAxess totaled 1,972 in the third quarter, which increased 7% year over year. Active international clients attained a record figure of 993 in the quarter under review. The figure advanced 6% year over year. Commission revenues of $153.2 million climbed 7.2% year over year.