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Cboe Global Q3 Earnings Top Estimates on Record Derivatives Volume
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Cboe Global Markets, Inc. (CBOE - Free Report) reported third-quarter 2024 adjusted earnings of $2.22 per share, which beat the Zacks Consensus Estimate by 1.4%. The bottom line increased 7.7% year over year.
The quarterly results reflected record volumes across the company’s derivatives platform. Cash and spot markets performance was also strong. Data and Access Solutions too delivered strong revenue growth.
Cboe Global Markets, Inc. Price, Consensus and EPS Surprise
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Operational Details
Total adjusted revenues of CBOE Global were a record $532 million, up 11% 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 beat the consensus mark by 0.6%
Options revenues climbed 10% year over year to $320.9 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 million, up 3% year over year, reflecting higher net transaction and clearing fees and access and capacity fees, partially offset by a decline in industry market data fees.
Europe and Asia Pacific revenues increased 22% year over year to $55.6 million, reflecting growth in net transaction and clearing fees and non-transaction revenues.
Futures net revenues increased 17% year over year to $38 million due to an increase in net transaction and clearing fees.
Global FX net revenues rose 9% year over year to $20 million, primarily due to higher net transaction and clearing fees.
Adjusted operating expenses were $204 million, which increased 13% year over year. This increase was primarily due to higher compensation and benefits and travel and promotional expenses, partially offset by a decline in professional fees and outside services. Our estimate was $208.8 million.
Adjusted operating income grew 9.2% year over year to $328 million. Our estimate was $309.3 million.
Adjusted operating margin came in at 61.6%, which contracted 80 basis points (bps) year over year. Our estimate was 59.7%.
Adjusted EBITDA margin of 66.3% contracted 240 bps year over year.
Financial Update
CBOE Global exited the third quarter with cash and cash equivalents of $763.2 million, which increased 40.5% from the 2023-end level.
As of Sept. 30, 2023, total assets of $8.7 billion rose 16.3% 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 $4.2 billion, up 5.6% from the Dec. 31, 2023 figure.
Share Repurchase and Dividend Update
In the third quarter, CBOE Global paid out cash dividends worth $66.3 million or 63 cents per share and bought back shares worth $24.6 million.
As of Sept. 30, 2024, CBOE had $679.8 million left under its current share repurchase authorization.
CBOE Updates 2024 Guidance
The company raised its guidance for 2024. CBOE anticipates organic total net revenues to grow in the range of 7-9%, up from the prior guidance of 6-8%.
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 $798-$808 million, up from $795-$805 million guided earlier. The guidance excludes the expected amortization of acquired intangible assets of $89 million.
Cboe Global estimates depreciation and amortization expenses in the range of $43-$47 million, excluding the expected amortization of acquired intangible assets.
Minority investments are expected to contribute $40-$46 million in 2024 to non-operating (expenses) income, up from the previous guidance of $37 to $43 million.
It reaffirmed that $33 to $37 million of the benefit in earnings will be in the investments line. It also anticipates $7 to $9 million to come through the other income (expense), net line, up from the previous guidance of $4 to $6 million.
The effective tax rate on adjusted earnings is expected to be in the range of 28.5-30.5%.
Capital expenditures are projected between $57 million and $60 million.
CME Group (CME - Free Report) reported third-quarter 2024 adjusted earnings per share of $2.68, which beat the Zacks Consensus Estimate by 1.1%. The bottom line increased 19.1% year over year. Revenues of $1.6 billion increased 18.4% year over year. The top line beat the Zacks Consensus Estimate by 0.7%.
Operating income increased 24.8% from the prior-year quarter to $1 billion. Our estimate was $954.4 million. ADV was 28.2 million contracts, including record non-U.S. ADV, with EMEA up 30% and Asia up 28% year over year. The total average rate per contract was 66.6 cents.
Nasdaq (NDAQ - Free Report) reported third-quarter 2024 adjusted earnings per share of 74 cents, which beat the Zacks Consensus Estimate by 7.3%. Nasdaq’s revenues of $1.1 billion decreased 21% year over year. The top line missed the Zacks Consensus Estimate by 1.8%.
Annualized Recurring Revenue (ARR) increased 31% year over year to $2.7 billion. Adjusted operating margin of 54% expanded 200 basis points year over year. The Nasdaq stock market welcomed 138 new company listings in third-quarter 2024, including 48 initial public offerings. The number of listed companies was 4,039 at the quarter end.
Nasdaq expects 2024 non-GAAP operating expenses to be in the range of $2.15-$2.180 billion compared with $2.145 billion to $2.185 billion guided earlier.
Intercontinental Exchange (ICE - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.55, in line with the Zacks Consensus Estimate. The bottom line increased 6.2% on a year-over-year basis. Intercontinental’s net revenues were a record $2.3 billion, up 17% year over year. The top line missed the Zacks Consensus Estimate by 0.1%.
Adjusted operating income rose 17% year over year to a record $1.4 billion. Our estimate was $1.4 billion. Adjusted operating margin was flat year over year at 59%. Our estimate was 50%.
For fourth-quarter 2024, GAAP operating expenses are expected in the range of $1.23-$1.24 billion. Adjusted operating expenses are projected to be between $977 million and $987 million. GAAP non-operating expense as well as adjusted non-operating expense is anticipated between $180 million and $185 million. Share count is forecast in the range of 574-580 million.
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Cboe Global Q3 Earnings Top Estimates on Record Derivatives Volume
Cboe Global Markets, Inc. (CBOE - Free Report) reported third-quarter 2024 adjusted earnings of $2.22 per share, which beat the Zacks Consensus Estimate by 1.4%. The bottom line increased 7.7% year over year.
The quarterly results reflected record volumes across the company’s derivatives platform. Cash and spot markets performance was also strong. Data and Access Solutions too delivered strong revenue growth.
Cboe Global Markets, Inc. Price, Consensus and EPS Surprise
Cboe Global Markets, Inc. price-consensus-eps-surprise-chart | Cboe Global Markets, Inc. Quote
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Operational Details
Total adjusted revenues of CBOE Global were a record $532 million, up 11% 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 beat the consensus mark by 0.6%
Options revenues climbed 10% year over year to $320.9 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 million, up 3% year over year, reflecting higher net transaction and clearing fees and access and capacity fees, partially offset by a decline in industry market data fees.
Europe and Asia Pacific revenues increased 22% year over year to $55.6 million, reflecting growth in net transaction and clearing fees and non-transaction revenues.
Futures net revenues increased 17% year over year to $38 million due to an increase in net transaction and clearing fees.
Global FX net revenues rose 9% year over year to $20 million, primarily due to higher net transaction and clearing fees.
Adjusted operating expenses were $204 million, which increased 13% year over year. This increase was primarily due to higher compensation and benefits and travel and promotional expenses, partially offset by a decline in professional fees and outside services. Our estimate was $208.8 million.
Adjusted operating income grew 9.2% year over year to $328 million. Our estimate was $309.3 million.
Adjusted operating margin came in at 61.6%, which contracted 80 basis points (bps) year over year. Our estimate was 59.7%.
Adjusted EBITDA margin of 66.3% contracted 240 bps year over year.
Financial Update
CBOE Global exited the third quarter with cash and cash equivalents of $763.2 million, which increased 40.5% from the 2023-end level.
As of Sept. 30, 2023, total assets of $8.7 billion rose 16.3% 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 $4.2 billion, up 5.6% from the Dec. 31, 2023 figure.
Share Repurchase and Dividend Update
In the third quarter, CBOE Global paid out cash dividends worth $66.3 million or 63 cents per share and bought back shares worth $24.6 million.
As of Sept. 30, 2024, CBOE had $679.8 million left under its current share repurchase authorization.
CBOE Updates 2024 Guidance
The company raised its guidance for 2024. CBOE anticipates organic total net revenues to grow in the range of 7-9%, up from the prior guidance of 6-8%.
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 $798-$808 million, up from $795-$805 million guided earlier. The guidance excludes the expected amortization of acquired intangible assets of $89 million.
Cboe Global estimates depreciation and amortization expenses in the range of $43-$47 million, excluding the expected amortization of acquired intangible assets.
Minority investments are expected to contribute $40-$46 million in 2024 to non-operating (expenses) income, up from the previous guidance of $37 to $43 million.
It reaffirmed that $33 to $37 million of the benefit in earnings will be in the investments line. It also anticipates $7 to $9 million to come through the other income (expense), net line, up from the previous guidance of $4 to $6 million.
The effective tax rate on adjusted earnings is expected to be in the range of 28.5-30.5%.
Capital expenditures are projected between $57 million and $60 million.
Zacks Rank
CBOE 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 Industry Players
CME Group (CME - Free Report) reported third-quarter 2024 adjusted earnings per share of $2.68, which beat the Zacks Consensus Estimate by 1.1%. The bottom line increased 19.1% year over year. Revenues of $1.6 billion increased 18.4% year over year. The top line beat the Zacks Consensus Estimate by 0.7%.
Operating income increased 24.8% from the prior-year quarter to $1 billion. Our estimate was $954.4 million. ADV was 28.2 million contracts, including record non-U.S. ADV, with EMEA up 30% and Asia up 28% year over year. The total average rate per contract was 66.6 cents.
Nasdaq (NDAQ - Free Report) reported third-quarter 2024 adjusted earnings per share of 74 cents, which beat the Zacks Consensus Estimate by 7.3%. Nasdaq’s revenues of $1.1 billion decreased 21% year over year. The top line missed the Zacks Consensus Estimate by 1.8%.
Annualized Recurring Revenue (ARR) increased 31% year over year to $2.7 billion. Adjusted operating margin of 54% expanded 200 basis points year over year. The Nasdaq stock market welcomed 138 new company listings in third-quarter 2024, including 48 initial public offerings. The number of listed companies was 4,039 at the quarter end.
Nasdaq expects 2024 non-GAAP operating expenses to be in the range of $2.15-$2.180 billion compared with $2.145 billion to $2.185 billion guided earlier.
Intercontinental Exchange (ICE - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.55, in line with the Zacks Consensus Estimate. The bottom line increased 6.2% on a year-over-year basis. Intercontinental’s net revenues were a record $2.3 billion, up 17% year over year. The top line missed the Zacks Consensus Estimate by 0.1%.
Adjusted operating income rose 17% year over year to a record $1.4 billion. Our estimate was $1.4 billion. Adjusted operating margin was flat year over year at 59%. Our estimate was 50%.
For fourth-quarter 2024, GAAP operating expenses are expected in the range of $1.23-$1.24 billion. Adjusted operating expenses are projected to be between $977 million and $987 million. GAAP non-operating expense as well as adjusted non-operating expense is anticipated between $180 million and $185 million. Share count is forecast in the range of 574-580 million.