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CME Group (CME) Q1 Earnings and Revenues Beat, Rise Y/Y
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CME Group (CME - Free Report) reported first-quarter 2023 record adjusted earnings per share of $2.42, which beat the Zacks Consensus Estimate by 2.5% and our estimate of $2.02 per share. The bottom line increased 14.7% year over year.
Quarterly results benefited from an increase in trading volumes. Average daily volume increased in three of its six asset classes.
CME Group’s revenues of $1.4 billion increased 4.8% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 5.4% year over year) and market data and information services (up 9.3% year over year). The top line beat the Zacks Consensus Estimate by 1.9% and our estimate of $1.2 billion.
Total expenses increased 8.3% year over year to $527.9 million, attributable to higher technology, compensation and benefits, professional fees and outside services, licensing and other fee agreements and other expenses. It exceeded our estimate of $431.4 million.
Operating income increased 6.3% from the prior-year quarter to $913.7 million and beat our estimate of $804.6 million.
Average daily volume (ADV) was 26.9 million contracts. Non-U.S. ADV reached 7.2 million contracts, which included the second-highest quarterly ADV across EMEA, Asia and Latin America. ADV increased in three of its six asset classes.
Financial Update
As of Mar 31, 2023, CME Group had $1.7 billion of cash and marketable securities, down 40.7% from 2022 end. As of Mar 31, 2023, long-term debt was $3.4 billion, down 0.02% from 2022 end.
As of Mar 31, 2023, CME had total equity worth $27.4 billion, up 1.9% from 2022 end.
Capital Deployment
CME Group paid out $2 billion in dividends, taking the payout to $21 billion since the implementation of the variable dividend policy in early 2012.
Nasdaq, Inc. (NDAQ - Free Report) reported first-quarter 2023 adjusted earnings per share of 69 cents, beating the Zacks Consensus Estimate by 6.1% as well as our estimate of 62 cents. The bottom line improved 4.5% year over year. Revenues of $914 million increased 2% year over year and beat the Zacks Consensus Estimate by 0.2%.
Annualized Recurring Revenue (ARR) increased 7% year over year. Annualized SaaS revenues increased 11% and represented 36% of ARR. Operating margin of 52% remained unchanged year over year.
Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.78 billion to $1.84 billion compared with the prior expectation of $1.77 billion to $1.85 billion. Nasdaq forecasts non-GAAP tax rate in the range of 24-26% in 2023.
MarketAxess Holdings Inc. (MKTX - Free Report) reported first-quarter 2023 earnings per share of $1.96, which outpaced the Zacks Consensus Estimate by 3.7% and our estimate of $1.86. The bottom line advanced 13.3% year over year. Total revenues improved 9% year over year to $203.2 million in the quarter under review. The top line surpassed the consensus mark by 1.4% and our estimate of $200.2 million.
Commission revenues rose 9.6% year over year to $182 million in the first quarter. Information services revenue attained a record figure of $11 million, up 12.2% year over year. Meanwhile, post-trade services revenue of $10 million inched up 1% year over year in the quarter under review. MarketAxess’ U.S. high-grade trading volume climbed 14.8% year over year to $392.7 billion
Upcoming Release
Cboe Global Markets (CBOE - Free Report) is slated to release first-quarter 2023 earnings on May 5. The Zacks Consensus Estimate for the first quarter is pegged at $1.82 per share, indicating an increase of 5.2% from the year-ago reported figure.
Cboe Global delivered an earnings surprise in three of the last four reported quarters while missing in one.
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CME Group (CME) Q1 Earnings and Revenues Beat, Rise Y/Y
CME Group (CME - Free Report) reported first-quarter 2023 record adjusted earnings per share of $2.42, which beat the Zacks Consensus Estimate by 2.5% and our estimate of $2.02 per share. The bottom line increased 14.7% year over year.
Quarterly results benefited from an increase in trading volumes. Average daily volume increased in three of its six asset classes.
CME Group Inc. Price, Consensus and EPS Surprise
CME Group Inc. price-consensus-eps-surprise-chart | CME Group Inc. Quote
Performance in Detail
CME Group’s revenues of $1.4 billion increased 4.8% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 5.4% year over year) and market data and information services (up 9.3% year over year). The top line beat the Zacks Consensus Estimate by 1.9% and our estimate of $1.2 billion.
Total expenses increased 8.3% year over year to $527.9 million, attributable to higher technology, compensation and benefits, professional fees and outside services, licensing and other fee agreements and other expenses. It exceeded our estimate of $431.4 million.
Operating income increased 6.3% from the prior-year quarter to $913.7 million and beat our estimate of $804.6 million.
Average daily volume (ADV) was 26.9 million contracts. Non-U.S. ADV reached 7.2 million contracts, which included the second-highest quarterly ADV across EMEA, Asia and Latin America. ADV increased in three of its six asset classes.
Financial Update
As of Mar 31, 2023, CME Group had $1.7 billion of cash and marketable securities, down 40.7% from 2022 end. As of Mar 31, 2023, long-term debt was $3.4 billion, down 0.02% from 2022 end.
As of Mar 31, 2023, CME had total equity worth $27.4 billion, up 1.9% from 2022 end.
Capital Deployment
CME Group paid out $2 billion in dividends, taking the payout to $21 billion since the implementation of the variable dividend policy in early 2012.
Zacks Rank
CME currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Securities and Exchanges
Nasdaq, Inc. (NDAQ - Free Report) reported first-quarter 2023 adjusted earnings per share of 69 cents, beating the Zacks Consensus Estimate by 6.1% as well as our estimate of 62 cents. The bottom line improved 4.5% year over year. Revenues of $914 million increased 2% year over year and beat the Zacks Consensus Estimate by 0.2%.
Annualized Recurring Revenue (ARR) increased 7% year over year. Annualized SaaS revenues increased 11% and represented 36% of ARR. Operating margin of 52% remained unchanged year over year.
Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.78 billion to $1.84 billion compared with the prior expectation of $1.77 billion to $1.85 billion. Nasdaq forecasts non-GAAP tax rate in the range of 24-26% in 2023.
MarketAxess Holdings Inc. (MKTX - Free Report) reported first-quarter 2023 earnings per share of $1.96, which outpaced the Zacks Consensus Estimate by 3.7% and our estimate of $1.86. The bottom line advanced 13.3% year over year. Total revenues improved 9% year over year to $203.2 million in the quarter under review. The top line surpassed the consensus mark by 1.4% and our estimate of $200.2 million.
Commission revenues rose 9.6% year over year to $182 million in the first quarter. Information services revenue attained a record figure of $11 million, up 12.2% year over year. Meanwhile, post-trade services revenue of $10 million inched up 1% year over year in the quarter under review. MarketAxess’ U.S. high-grade trading volume climbed 14.8% year over year to $392.7 billion
Upcoming Release
Cboe Global Markets (CBOE - Free Report) is slated to release first-quarter 2023 earnings on May 5. The Zacks Consensus Estimate for the first quarter is pegged at $1.82 per share, indicating an increase of 5.2% from the year-ago reported figure.
Cboe Global delivered an earnings surprise in three of the last four reported quarters while missing in one.