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Cboe Global (CBOE) Q2 Earnings Surpass Estimates, Improve Y/Y
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Cboe Global Markets, Inc. (CBOE - Free Report) reported second-quarter 2024 adjusted earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 1.8%. The bottom line increased 21% year over year.
The quarterly results benefited from higher index options trading volumes, higher net transaction and clearing fees, growth in market data and access and capacity fees, as well as improved EBITDA margins.
Cboe Global Markets, Inc. Price, Consensus and EPS Surprise
Total adjusted revenues of CBOE Global were a record $513.8 million, which improved 10% year over year on the back of an increase in cash and spot markets, derivatives markets, and data and access solutions net revenues. The top line matched the consensus mark.
Options revenues climbed 8% year over year to $306.7 million. The improvement was driven by growth in market data and access and capacity fees and an increase in net transaction and clearing fees as a result of higher index options trading volumes.
Revenues of North American Equities totaled $98.3 million, up 8% year over year, reflecting higher net transaction and clearing fees, proprietary market data fees, and access and capacity fees.
Europe and Asia Pacific revenues increased 15% year over year to $54.3 million, reflecting growth in transaction and non-transaction revenues.
Futures net revenues increased 19% year over year to $34.8 million due to an increase in net transaction and clearing fees.
Global FX net revenues rose 11% year over year to $19.8 million, primarily due to higher net transaction and clearing fees.
Adjusted operating expenses were $197.1 million, which increased 2% year over year. This increase was primarily due to higher compensation and benefits and professional fees and outside services, partially offset by a decline in travel and promotional expenses. Our estimate was $196.6 million.
Adjusted operating income grew 15% year over year to $316.7 million. Our estimate was $310.5 million.
Adjusted operating margin came in at 61.6%, which expanded 280 basis points (bps) year over year. Adjusted EBITDA margin of 66.3% expanded 350 bps year over year.
Financial Update
CBOE Global exited the second quarter with cash and cash equivalents of $614.6 million, which increased 13% from the 2023-end level. As of Jun 30, 2023, total assets of $9.2 billion rose 23.6% from the 2023-end figure.
CBOE’s long-term debt was $1.4 billion, which inched up 0.06% from the 2023-end level. Total shareholders’ equity was $4 billion, up 0.9% from the Dec 31, 2023 figure.
Share Repurchase and Dividend Update
In the second quarter, CBOE Global paid out cash dividends worth $58.2 million or 55 cents per share and bought back shares worth $90.4 million. As of Jun 30, 2024, CBOE had $204.4 million left under its current share repurchase authorization.
2024 Guidance Updated
The company reaffirmed its guidance for 2024. CBOE anticipates organic total net revenues to grow in the range of 6-8%, up from the prior guidance of 5-7%. The insurer expects organic net revenues from Data and Access Solutions to increase in the band of 7-10%.
CBOE now estimates adjusted operating expenses in the range of $795-$805 million. The guidance excludes the expected amortization of acquired intangible assets of $92 million.
Cboe Global estimates depreciation and amortization expenses in the range of $43-$47 million, excluding the expected amortization of acquired intangible assets.
CBOE reaffirms minority investments to contribute $37-$43 million benefit in 2024 to non-operating (expenses) income. It anticipates that $33-$37 million of the benefit will come in the earnings on investments line and $4-$6 million through the other (expense) income, net line.
The effective tax rate on adjusted earnings is expected in the range of 28.5-30.5%.
Capital expenditures are projected between $51 million and $57 million.
CME Group Inc. (CME - Free Report) reported second-quarter 2024 adjusted EPS of $2.56, beating the Zacks Consensus Estimate by 2%. The bottom line increased 11.3% year over year. CME Group’s revenues of $1.5 billion increased 12.5% year over year. The year-over-year upside was primarily due to higher clearing and transaction fees (up 11.8% year over year), market data and information services (up 7.3% year over year) and other (36.8% year over year). The top line beat the Zacks Consensus Estimate by almost 1%.
ADV was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts. The total average rate per contract was 70.8 cents.
Nasdaq, Inc. (NDAQ - Free Report) reported second-quarter 2024 adjusted earnings per share of 69 cents, beating the Zacks Consensus Estimate by 7.8%. The outperformance came on the back of broad-based growth across three divisions and another quarter of double-digit Solutions growth. However, the bottom line declined 2.8% year over year on higher expenses.
Nasdaq’s revenues of $1.2 billion increased 25% year over year. The upside can primarily be attributed to a $168 million benefit related to the acquisition of Adenza, partially offset by a $2-million decline from the impact of changes in FX rates. The top line beat the Zacks Consensus Estimate by 2.7%. Annualized Recurring Revenue increased 29% year over year to $2.7 billion.
Intercontinental Exchange Inc. (ICE - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.52, which beat the Zacks Consensus Estimate by 2%. The bottom line increased 6.3% on a year-over-year basis. Intercontinental’s net revenues were a record $2.3 billion, up 23% year over year. The top line beat the Zacks Consensus Estimate by 0.3%. Total operating expenses increased 34.1% year over year to $1.3 billion. Our estimate was $1.2 billion.
Adjusted operating expenses were $947 million in the quarter, up 25.3% year over year. Our estimate was $939.5 million. Adjusted operating income rose 21% year over year to a record $1.4 billion. Our estimate was $1.3 billion. Adjusted operating margin contracted 100 bps year over year to 59%.
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Cboe Global (CBOE) Q2 Earnings Surpass Estimates, Improve Y/Y
Cboe Global Markets, Inc. (CBOE - Free Report) reported second-quarter 2024 adjusted earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 1.8%. The bottom line increased 21% year over year.
The quarterly results benefited from higher index options trading volumes, higher net transaction and clearing fees, growth in market data and access and capacity fees, as well as improved EBITDA margins.
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 adjusted revenues of CBOE Global were a record $513.8 million, which improved 10% year over year on the back of an increase in cash and spot markets, derivatives markets, and data and access solutions net revenues. The top line matched the consensus mark.
Options revenues climbed 8% year over year to $306.7 million. The improvement was driven by growth in market data and access and capacity fees and an increase in net transaction and clearing fees as a result of higher index options trading volumes.
Revenues of North American Equities totaled $98.3 million, up 8% year over year, reflecting higher net transaction and clearing fees, proprietary market data fees, and access and capacity fees.
Europe and Asia Pacific revenues increased 15% year over year to $54.3 million, reflecting growth in transaction and non-transaction revenues.
Futures net revenues increased 19% year over year to $34.8 million due to an increase in net transaction and clearing fees.
Global FX net revenues rose 11% year over year to $19.8 million, primarily due to higher net transaction and clearing fees.
Adjusted operating expenses were $197.1 million, which increased 2% year over year. This increase was primarily due to higher compensation and benefits and professional fees and outside services, partially offset by a decline in travel and promotional expenses. Our estimate was $196.6 million.
Adjusted operating income grew 15% year over year to $316.7 million. Our estimate was $310.5 million.
Adjusted operating margin came in at 61.6%, which expanded 280 basis points (bps) year over year. Adjusted EBITDA margin of 66.3% expanded 350 bps year over year.
Financial Update
CBOE Global exited the second quarter with cash and cash equivalents of $614.6 million, which increased 13% from the 2023-end level. As of Jun 30, 2023, total assets of $9.2 billion rose 23.6% from the 2023-end figure.
CBOE’s long-term debt was $1.4 billion, which inched up 0.06% from the 2023-end level. Total shareholders’ equity was $4 billion, up 0.9% from the Dec 31, 2023 figure.
Share Repurchase and Dividend Update
In the second quarter, CBOE Global paid out cash dividends worth $58.2 million or 55 cents per share and bought back shares worth $90.4 million. As of Jun 30, 2024, CBOE had $204.4 million left under its current share repurchase authorization.
2024 Guidance Updated
The company reaffirmed its guidance for 2024. CBOE anticipates organic total net revenues to grow in the range of 6-8%, up from the prior guidance of 5-7%.
The insurer expects organic net revenues from Data and Access Solutions to increase in the band of 7-10%.
CBOE now estimates adjusted operating expenses in the range of $795-$805 million. The guidance excludes the expected amortization of acquired intangible assets of $92 million.
Cboe Global estimates depreciation and amortization expenses in the range of $43-$47 million, excluding the expected amortization of acquired intangible assets.
CBOE reaffirms minority investments to contribute $37-$43 million benefit in 2024 to non-operating (expenses) income. It anticipates that $33-$37 million of the benefit will come in the earnings on investments line and $4-$6 million through the other (expense) income, net line.
The effective tax rate on adjusted earnings is expected in the range of 28.5-30.5%.
Capital expenditures are projected between $51 million and $57 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
CME Group Inc. (CME - Free Report) reported second-quarter 2024 adjusted EPS of $2.56, beating the Zacks Consensus Estimate by 2%. The bottom line increased 11.3% year over year. CME Group’s revenues of $1.5 billion increased 12.5% year over year. The year-over-year upside was primarily due to higher clearing and transaction fees (up 11.8% year over year), market data and information services (up 7.3% year over year) and other (36.8% year over year). The top line beat the Zacks Consensus Estimate by almost 1%.
ADV was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts. The total average rate per contract was 70.8 cents.
Nasdaq, Inc. (NDAQ - Free Report) reported second-quarter 2024 adjusted earnings per share of 69 cents, beating the Zacks Consensus Estimate by 7.8%. The outperformance came on the back of broad-based growth across three divisions and another quarter of double-digit Solutions growth. However, the bottom line declined 2.8% year over year on higher expenses.
Nasdaq’s revenues of $1.2 billion increased 25% year over year. The upside can primarily be attributed to a $168 million benefit related to the acquisition of Adenza, partially offset by a $2-million decline from the impact of changes in FX rates. The top line beat the Zacks Consensus Estimate by 2.7%. Annualized Recurring Revenue increased 29% year over year to $2.7 billion.
Intercontinental Exchange Inc. (ICE - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.52, which beat the Zacks Consensus Estimate by 2%. The bottom line increased 6.3% on a year-over-year basis. Intercontinental’s net revenues were a record $2.3 billion, up 23% year over year. The top line beat the Zacks Consensus Estimate by 0.3%. Total operating expenses increased 34.1% year over year to $1.3 billion. Our estimate was $1.2 billion.
Adjusted operating expenses were $947 million in the quarter, up 25.3% year over year. Our estimate was $939.5 million. Adjusted operating income rose 21% year over year to a record $1.4 billion. Our estimate was $1.3 billion. Adjusted operating margin contracted 100 bps year over year to 59%.