Back to top

Image: Bigstock

Cboe Global (CBOE) Q1 Earnings & Revenues Top Estimates

Read MoreHide Full Article

Cboe Global Markets, Inc. (CBOE - Free Report) reported first-quarter 2020 adjusted earnings of $1.65 per share that beat the Zacks Consensus Estimate by 7.1%. Moreover, the bottom line increased 48% year over year on increased trading activity, decline in expenses and operational efficiencies.

Total revenues came in at $358.3 million and beat the Zacks Consensus Estimate by 1.1%. The top line increased 28%, reflecting higher trading volumes across each business segment, particularly in options and futures.

Operational Details

Options revenues increased 36% year over year to $188.5 million driven by higher revenues from net transaction fees and market data. However, increase in royalty fees was a partial offset.

Revenues of U.S. Equities increased 14% year over year to $86.6 million, driven by higher revenue from net transaction fees as well as higher revenues from non-transaction fees.

Futures revenues of $40.1 million were up 36% year over year, reflecting growth in net transaction fees.

European Equities revenues improved 15% year over year to $26.2 million, increases in net transaction fees and non-transaction revenues.   

Global FX revenues increased 22% to $16.9 million driven by higher net transaction fees.

Total adjusted operating expenses increased 5% year over year to $98.6 million attributable to higher compensation and benefits expense.

Adjusted operating income improved 39% year over year to $259.7 million with margin in the quarter under review expanding 600 basis points (bps) to 72.5%. The improvement was driven by higher net revenues and lower operating expenses.

Adjusted EBITDA margin of 74.2% expanded 770 bps.

Cboe Global Markets, Inc. Price, Consensus and EPS Surprise

Financial Update

CBOE Global had cash and cash equivalents of $165.2 million at quarter end, down about 28% from 2019 end. Total assets were $5.2 billion, up 2.4% from 2019 end.

At the end of the first quarter, long-term debt was $868.1 million, up 0.1% from 2019 end.

Total shareholders’ equity was $3.3 billion at the end of the reported quarter, up 1.4% from 2019 end.

Share Repurchase and Dividend Update

The company also bought back shares worth $119.5 million and paid out $40 million in dividends. As of Mar 31, 2020, the company had $179.7 million of availability remaining under its existing share repurchase authorizations.

2020 Guidance

Adjusted operating expenses are now expected to be in the range of $419 to $427 million, down $16 million from the previous guidance of $435 to $443 million, primarily reflecting near-term cost reductions due to the COVID-19 pandemic.

Capital expenditures are still expected in the $65-$70 million band.

Depreciation and amortization expense is estimated between $34 million and $38 million.

The effective tax rate on adjusted earnings is expected between 26.5% and 28.5%.

Zacks Rank

Cboe Global currently has 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 (NDAQ - Free Report) , CME Group (CME - Free Report) and MarketAxess Holdings (MKTX - Free Report) outperformed the respective Zacks Consensus Estimate for first-quarter 2020 earnings.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Published in