CHICAGO, Oct. 29, 2021 /PRNewswire/ -- Cboe Global
Markets, Inc. (Cboe: CBOE) today reported financial results
for the third quarter of 2021.
"In the third quarter Cboe posted double-digit year-over-year
earnings growth, reflecting accelerated trading in our proprietary
products throughout the quarter, coupled with continued higher
demand for our suite of data and access solutions. In addition,
Cboe delivered on a number of significant strategic milestones,
including the successful launch of our European Derivatives
platform," said Edward T. Tilly,
Cboe Global Markets Chairman, President and Chief Executive
Officer. "Furthermore, we welcomed Chi-X Asia Pacific into
the Cboe network, further expanding our global footprint. By
leveraging our technological expertise, customer relationships, and
capital markets capabilities, we plan to continue to unlock
additional revenue opportunities across our businesses through
expanded access to existing products and new product launches. We
are particularly excited about our plans to enter the digital asset
market through the planned acquisition of ErisX and look forward to
partnering with industry leaders to further evolve this rapidly
growing market. Furthermore, we look forward to the planned launch
of 24x5 trading in our SPX and VIX Options in November and the
planned launch of our Nanos product in the first quarter 2022.
Overall, we exit the third quarter on stronger footing than ever,
and we look forward to continuing to execute on our growth
opportunities ahead."
"Our solid third quarter results were driven by double-digit
growth in both transaction and non-transaction revenues and reflect
net revenue growth in all of our business segments. The strong free
cash flow our businesses produce allows for continued strategic
investment to expand our global reach and product offerings," said
Brian N. Schell, Cboe Global Markets
Executive Vice President, Chief Financial Officer and Treasurer.
"The fourth quarter is off to a strong start, and as we look ahead
to 2022, we are confident in our ability to execute on our
strategic growth priorities and drive value for our shareholders
and market participants. We are increasing our full-year recurring
non-transaction organic revenue2 growth target to
approximately 14 percent from 12 to 13 percent. Recurring
non-transaction revenue, which includes acquisitions, is now
expected to increase by approximately 18 percent, up from previous
guidance of 15 to 16 percent. Given our strong revenue growth and
hiring plans we are tightening our full-year 2021 expense guidance
range and raising the midpoint to $539
million from $535 million. We
believe this continued investment in the business will allow us to
effectively deliver on our key strategic growth initiatives while
enhancing shareholder value."
*All comparisons are third quarter 2021 compared to the same
period in 2020.
(1)A full
reconciliation of our non-GAAP results to our GAAP results is
included in the attached tables. See "Non-GAAP Information" in the
accompanying financial
tables.
(2) Specific
quantifications of the amounts that would be required to reconcile
the company's organic growth guidance, adjusted operating expenses
guidance and the effective tax rate on adjusted earnings guidance
are not available. The company believes that there is
uncertainty and unpredictability with respect to certain of its
GAAP measures, primarily related to acquisition-related revenues
and expenses that would be required to reconcile to GAAP revenues
less costs of revenues, GAAP operating expenses and GAAP effective
tax rate, which preclude the company from providing accurate
guidance on certain forward-looking GAAP to non-GAAP
reconciliations. The company believes that providing estimates of
the amounts that would be required to reconcile the range of the
company's organic growth, adjusted operating expenses and the
effective tax rate on adjusted earnings would imply a degree of
precision that would be confusing or misleading to investors for
the reasons identified above.
Consolidated Third Quarter Results -Table 1
Table 1 below presents summary selected unaudited condensed
consolidated financial information for the company as reported and
on an adjusted basis for the three months ended September 30, 2021 and 2020.
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Table
1
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Consolidated Third
Quarter Results
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3Q21
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3Q20
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($ in millions except per share)
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3Q21
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3Q20
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Change
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Adjusted1
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Adjusted1
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Change
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Total Revenues Less
Cost of Revenues
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$
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369.5
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$
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292.0
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27
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%
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$
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369.5
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$
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292.0
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27
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%
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Total Operating
Expenses
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$
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178.8
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$
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152.7
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17
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%
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$
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140.3
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$
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108.9
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29
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%
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Operating
Income
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$
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190.7
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$
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139.3
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37
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%
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$
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229.2
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$
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183.1
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25
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%
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Operating Margin
%
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51.6
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%
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47.7
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%
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3.9
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pp
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62.0
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%
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62.7
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%
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(0.7)
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pp
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Net Income Allocated to
Common Stockholders
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$
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120.0
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$
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109.6
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9
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%
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$
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154.9
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$
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120.5
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29
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%
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Diluted EPS
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$
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1.12
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$
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1.01
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11
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%
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$
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1.45
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$
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1.11
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31
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%
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EBITDA1
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$
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227.9
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$
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212.1
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7
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%
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$
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239.6
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$
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192.4
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25
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%
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EBITDA Margin
% 1
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61.7
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%
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72.6
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%
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(10.9)
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pp
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64.8
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%
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65.9
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%
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(1.1)
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pp
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- Total revenues less cost of revenues (referred to as "net
revenue") of $369.5 million increased
27 percent, compared to $292.0
million in the prior-year period, reflecting increases in
net transaction and clearing fees and access and capacity
fees1. Inorganic net revenue1 in the third
quarter of 2021 was $16.7
million.
- Total operating expenses were $178.8
million versus $152.7 million
in the third quarter of 2020. Adjusted operating expenses¹ of
$140.3 million increased 29 percent
compared with $108.9 million in the
third quarter of 2020, primarily due to acquisitions closed in late
2020 and 2021, resulting in higher compensation and benefits.
Additionally, professional fees and outside services increased
compared to the third quarter of 2020 primarily related to higher
legal fees and an uptick in Consolidated Audit Trail Plan-related
regulatory costs.
- The effective tax rate for the third quarter of 2021 was 30.7
percent compared with 32.7 percent in the third quarter of 2020.
The lower effective tax rate in the third quarter of 2021 is
primarily due to the enactment of a UK tax rate increase in the
third quarter of 2020 which triggered the remeasurement of UK
deferred tax liabilities. The effective tax rate on adjusted
earnings1 was 28.5 percent compared with 30.8 percent in
last year's third quarter. The lower effective tax rate on adjusted
earnings in the third quarter of 2021 was primarily due to
decreases in uncertain tax positions.
- Diluted EPS for the third quarter of 2021 increased 11 percent
to $1.12. Adjusted diluted
EPS1 of $1.45 increased 31
percent compared to 2020's third quarter results.
- EBITDA margin for the third quarter decreased 10.9 percentage
points compared to the third quarter of 2020 as a result of the
bargain purchase gain recorded in the third quarter of 2020
attributable to the acquisition of EuroCCP.
Business Segment Information:
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Table
2
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Total Revenues
Less Cost of Revenues by
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Business
Segment
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(in
millions)
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3Q21
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3Q20
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Change
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Options
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$
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192.2
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$
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148.1
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30
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%
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North American
Equities
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85.6
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75.8
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13
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%
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Futures
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28.9
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23.3
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24
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%
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Europe and Asia
Pacific
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48.5
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31.6
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53
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%
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Global FX
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14.3
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13.2
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8
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%
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Total
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$
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369.5
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$
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292.0
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27
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%
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(1) A full reconciliation of our non-GAAP
results to our GAAP results is included in the attached tables. See
"Non-GAAP Information" in the accompanying financial
tables.
Discussion of Results by Business Segment:
Options:
- Options net revenue of $192.2
million was up $44.1 million,
or 30 percent, from the third quarter of 2020, primarily due to an
increase in net transaction and clearing fees1, as a
result of higher trading volumes and RPC in both index and
multi-listed options, as well as increases in access and capacity
fees and market data fees.
- Net transaction and clearing fees¹ increased $44.4 million, or 42 percent, reflecting a 23
percent increase in total options average daily volume ("ADV") and
a 16 percent increase in total options revenue per contract ("RPC")
compared to the third quarter 2020. The increase in total options
RPC was due to a mix shift, with index options representing a
higher percentage of total options volume. The RPC for multi-listed
options increased 23 percent, primarily due to a shift in customer
concentration. The RPC for index options increased 1 percent.
- Cboe's Options business had total market share of 31.3 percent
for the third quarter of 2021 compared to 32.4 percent in the third
quarter of 2020, primarily reflecting a decrease in Cboe's
multi-listed options market share for the quarter of 27.6 percent
compared to 29.0 percent in the third quarter of 2020. While market
share declined, revenue per contract increased 16% percent
year-over-year, reflecting a favorable balance between
profitability and market share.
North American (N.A.) Equities:
- N.A. Equities net revenue of $85.6
million was up $9.8 million,
or 13 percent, primarily due to higher transaction and clearing
fees, proprietary market data fees, and growth in access and
capacity fees. The 2020 acquisitions of BIDS Trading and MATCHNow
contributed $8.5 million in net
revenue for the quarter.
- The increase in net transaction and clearing fees from
acquisitions was offset somewhat by a 1 percent decline in U.S.
equities industry ADV compared to the third quarter of 2020.
- Cboe U.S. Equities exchanges had market share of 14.0 percent
for the third quarter of 2021 compared to 15.1 percent in the third
quarter of 2020.
Futures:
- Futures net revenue of $28.9
million increased $5.6
million, or 24 percent, primarily due to an increase in net
transaction and clearing fees1.
- Net transaction and clearing fees¹ increased $6.4 million, or 38 percent, reflecting a 30
percent increase in ADV, further aided by a 6 percent increase in
RPC. The RPC increase was primarily due to lower mix of low-priced
Mini-VIX futures, which are one-tenth the size of the standard VIX
futures and have a lower fee per contract.
Europe and Asia Pacific:
- Europe and Asia Pacific net revenue of $48.5 million increased by 53 percent, primarily
reflecting the addition of Chi-X Asia Pacific in July 2021, which contributed $8.2 million in net revenue, and growth in
European equities and clearing. Average daily notional value
("ADNV") for the overall market was up 26 percent during the
quarter and ADNV traded on Cboe European Equities was €7.2 billion,
up 29 percent from last year's third quarter, while net capture
increased 8 percent, reflecting a greater proportion of activity in
higher-margin Cboe LIS block trading and Periodic Auction
services.
- For the third quarter of 2021, Cboe European Equities had 18.2
percent market share, up from 17.7 percent in the third quarter of
2020, as a result of positive momentum across all orderbooks, with
a particular strength in Cboe LIS, as well as successfully
re-introducing Swiss securities on Cboe UK order books in
February 2021.
Global FX:
- Global FX net revenue of $14.3
million increased 8 percent, primarily as a result of higher
net transaction and clearing fees¹. ADNV traded on the Cboe FX
platform was $32.4 billion for the
quarter, up 7 percent from last year's third quarter and net
capture per one million dollars
traded was $2.77 for the quarter, up
3 percent compared to $2.70 in the
third quarter of 2020.
- Cboe FX market share hit a new all-time high of 17.0 percent
for the quarter compared to 15.9 percent in last year's third
quarter.
(1)A full reconciliation of our
non-GAAP results to our GAAP results is included in the attached
tables. See "Non-GAAP Information" in the accompanying financial
tables.
2021 Fiscal Year Financial Guidance
The company updated or reaffirmed its guidance for the 2021
fiscal year as noted below.
- Recurring non-transaction revenue, defined as access and
capacity fees plus proprietary market data, is now expected to
increase by approximately 18 percent, from a base of $342 million in 2020, up from previous guidance
of 15 to 16 percent, with organic growth targeted at approximately
14 percent versus previous guidance of 12 to 13 percent.
- Reaffirmed that revenue from acquisitions held less than a year
is expected to contribute net revenue growth in a range of 5 to 7
percentage points in 2021.
- Adjusted operating expenses are now expected to be in the range
of $536 to $541 million, up from $531 to $539
million. The tightened range and increased guidance reflects
the strong revenue environment we have seen on a year-to-day basis,
as well as Cboe's anticipated ramp up in hiring. The guidance
excludes the expected amortization of acquired intangible assets of
$127 million; the company plans to
reflect the exclusion of this amount in its non-GAAP
reconciliation.1
- Depreciation and amortization expense, which is included in
adjusted operating expenses above, is now expected to be in the
range of $38 to $42 million, up from the previous range of
$34 to $38
million, excluding the expected amortization of acquired
intangible assets.
- Reaffirmed that the effective tax rate2 on adjusted
earnings for the full year is expected to be in the range of 27.5
to 29.5 percent. The company continues to expect the adjusted
effective tax rate for the full year to be at the higher end of the
guidance range. Significant changes in trading volume, expenses,
federal, state and local tax laws or rates and other items could
materially impact this expectation.
- Capital expenditures are now expected to be in the range of
$47 to $52
million, down from the prior range of $55 to $60 million,
primarily reflecting changes in the timing of certain
projects.
Capital Management
At September 30, 2021, the company
had adjusted cash2 of $392.9
million. Total debt as of September 30, 2021 was $1,298.9 million.
The company paid cash dividends of $51.5
million, or $0.48 per share,
during the third quarter of 2021. The $0.48 dividend represents a 14% year-over-year
increase and marks the 11th straight year Cboe has increased its
dividend. As of September 30, 2021,
the company had approximately $318.9
million of availability remaining under its existing share
repurchase authorizations.
Earnings Conference Call
Executives of Cboe Global Markets will host a conference call to
review its third-quarter financial results today, October 29, 2021, at 8:30 a.m.
ET/7:30 a.m. CT. The conference call and any
accompanying slides will be publicly available via live webcast
from the Investor Relations section of the company's website at
www.cboe.com under Events & Presentations.
Participants may also listen via telephone by dialing (877)
255–4313 from the United States,
(866) 450–4696 from Canada or
(412) 317–5466 for international callers. Telephone participants
should place calls 10 minutes prior to the start of the call. The
webcast will be archived on the company's website for replay. A
telephone replay of the earnings call also will be available from
approximately 11:00 a.m. CT, October
29, 2021, through 11:00 p.m. CT, November 5, 2021, by calling (877) 344–7529 from
the U.S., (855) 669–9658 from Canada or (412) 317–0088 for international
callers, using replay code 10160639.
(1) Specific
quantifications of the amounts that would be required to reconcile
the company's organic growth guidance, adjusted operating expenses
guidance and the effective tax rate on adjusted earnings guidance
are not available. The company believes that there is
uncertainty and unpredictability with respect to certain of its
GAAP measures, primarily related to acquisition-related revenues
and expenses that would be required to reconcile to GAAP revenues
less costs of revenues, GAAP operating expenses and GAAP effective
tax rate, which preclude the company from providing accurate
guidance on certain forward-looking GAAP to non-GAAP
reconciliations. The company believes that providing estimates of
the amounts that would be required to reconcile the range of the
company's organic growth, adjusted operating expenses and the
effective tax rate on adjusted earnings would imply a degree of
precision that would be confusing or misleading to investors for
the reasons identified above.
(2) A
full reconciliation of our non-GAAP results to our GAAP results is
included in the attached tables. See "Non-GAAP Information" in the
accompanying financial tables.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), a leading provider of market
infrastructure and tradable products, delivers cutting-edge
trading, clearing and investment solutions to market participants
around the world. The company is committed to operating a trusted,
inclusive global marketplace, providing leading products,
technology and data solutions that enable participants to define a
sustainable financial future. Cboe provides trading solutions and
products in multiple asset classes, including equities, derivatives
and FX, across North America,
Europe, and Asia Pacific. To learn more, visit
www.cboe.com.
Cautionary Statements Regarding Forward-Looking
Information
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve a number of risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "might,"
"should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," and the negative of these
terms and other comparable terminology. All statements that reflect
our expectations, assumptions or projections about the future other
than statements of historical fact are forward-looking statements.
These forward-looking statements, which are subject to known and
unknown risks, uncertainties and assumptions about us, may include
projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements
are only predictions based on our current expectations and
projections about future events. There are important factors that
could cause our actual results, level of activity, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements.
We operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible to predict all risks and uncertainties, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
Some factors that could cause actual results to differ include:
the impact of the novel coronavirus ("COVID-19") pandemic,
including changes to trading behavior broadly in the market; the
loss of our right to exclusively list and trade certain index
options and futures products; economic, political and market
conditions; compliance with legal and regulatory obligations; price
competition and consolidation in our industry; decreases in trading
and clearing volumes, market data fees or a shift in the mix of
products traded on our exchanges; legislative or regulatory
changes; our ability to protect our systems and communication
networks from security risks, cybersecurity risks, insider threats
and unauthorized disclosure of confidential information; increasing
competition by foreign and domestic entities; our dependence on and
exposure to risk from third parties; fluctuations to currency
exchange rates; our index providers' ability to maintain the
quality and integrity of their indexes and to perform under our
agreements; our ability to operate our business without violating
the intellectual property rights of others and the costs associated
with protecting our intellectual property rights; our ability to
attract and retain skilled management and other personnel; our
ability to minimize the risks, including our credit and default
risks, associated with operating a European clearinghouse; our
ability to accommodate trading and clearing volume and transaction
traffic, including significant increases, without failure or
degradation of performance of our systems; misconduct by those who
use our markets or our products or for whom we clear transactions;
challenges to our use of open source software code; our ability to
meet our compliance obligations, including managing potential
conflicts between our regulatory responsibilities and our
for-profit status; our ability to maintain BIDS Trading as an
independently managed and operated trading venue, separate from and
not integrated with our registered national securities exchanges;
damage to our reputation; the ability of our compliance and risk
management methods to effectively monitor and manage our risks; our
ability to manage our growth and strategic acquisitions or
alliances effectively; restrictions imposed by our debt obligations
and our ability to make payments on or refinance our debt
obligations; our ability to maintain an investment grade credit
rating; impairment of our goodwill, long-lived assets, investments
or intangible assets; and the accuracy of our estimates and
expectations. More detailed information about factors that may
affect our actual results to differ may be found in our filings
with the SEC, including in our Annual Report on Form 10-K for the
year ended December 31, 2020 and
other filings made from time to time with the SEC.
We do not undertake, and we expressly disclaim, any duty to
update any forward-looking statement whether as a result of new
information, future events or otherwise, except as required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
The condensed consolidated statements of income and balance
sheets are unaudited and subject to reclassification.
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Cboe Media
Contacts:
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Analyst
Contact:
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Angela Tu
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Tim Cave
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|
Kenneth Hill,
CFA
|
(646)
856–8734
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+44 (0) 7593 506
719
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(312)
786–7559
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atu@cboe.com
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tcave@cboe.com
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khill@cboe.com
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CBOE-F
Trademarks:
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, Bats®, BIDS
Trading®, BZX®, BYX®, Chi-X®, EDGX®, EDGA®, EuroCCP®,
MATCHNow®, and VIX® are registered trademarks of Cboe Global
Markets, Inc. and its subsidiaries. All other trademarks and
service marks are the property of their respective owners.
Cboe Global
Markets, Inc.
Key Performance
Statistics by Business Segment
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3Q
2021
|
2Q
2021
|
1Q
2021
|
4Q
2020
|
3Q
2020
|
Options
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|
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|
Total industry ADV
(in thousands)
|
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|
37,548
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|
36,442
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|
41,974
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|
32,197
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|
29,535
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|
Total company
Options ADV (in thousands)
|
|
|
11,764
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|
|
11,092
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|
12,681
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|
10,299
|
|
|
9,569
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|
Multi-listed
options
|
|
|
9,794
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|
|
9,254
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|
|
10,779
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|
|
8,705
|
|
|
8,136
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|
Index
options
|
|
|
1,970
|
|
|
1,838
|
|
|
1,902
|
|
|
1,595
|
|
|
1,433
|
|
Total Options
market share
|
|
|
31.3
|
%
|
|
30.4
|
%
|
|
30.2
|
%
|
|
32.0
|
%
|
|
32.4
|
%
|
Multi-listed
options
|
|
|
27.6
|
%
|
|
26.8
|
%
|
|
26.9
|
%
|
|
28.5
|
%
|
|
29.0
|
%
|
Index
options
|
|
|
98.4
|
%
|
|
98.7
|
%
|
|
99.0
|
%
|
|
99.3
|
%
|
|
98.9
|
%
|
Total Options
RPC:
|
|
$
|
0.200
|
|
$
|
0.192
|
|
$
|
0.177
|
|
$
|
0.182
|
|
$
|
0.173
|
|
Multi-listed
options
|
|
$
|
0.069
|
|
$
|
0.067
|
|
$
|
0.067
|
|
$
|
0.068
|
|
$
|
0.056
|
|
Index
options
|
|
$
|
0.851
|
|
$
|
0.823
|
|
$
|
0.803
|
|
$
|
0.809
|
|
$
|
0.842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Equities -
Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV
(shares in billions)
|
|
|
9.8
|
|
|
10.5
|
|
|
14.7
|
|
|
10.5
|
|
|
9.9
|
|
Market share
%
|
|
|
14.0
|
%
|
|
14.3
|
%
|
|
15.0
|
%
|
|
15.1
|
%
|
|
15.1
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.020
|
|
$
|
0.020
|
|
$
|
0.015
|
|
$
|
0.015
|
|
$
|
0.017
|
|
U.S. Equities -
Off-Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (touched shares, in
millions)
|
|
|
73.0
|
|
|
75.8
|
|
|
99.5
|
|
|
N/A
|
|
|
N/A
|
|
Net capture (per 100
touched shares)
|
|
$
|
0.122
|
|
$
|
0.123
|
|
$
|
0.121
|
|
|
N/A
|
|
|
N/A
|
|
Canadian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (matched shares, in
millions)
|
|
|
37.8
|
|
|
47.4
|
|
|
71.4
|
|
|
45.2
|
|
|
40.0
|
|
Total market share
%
|
|
|
3.4
|
%
|
|
3.4
|
%
|
|
3.1
|
%
|
|
3.3
|
%
|
|
3.3
|
%
|
Market share % - TSX
listed volume
|
|
|
4.7
|
%
|
|
4.9
|
%
|
|
4.6
|
%
|
|
4.7
|
%
|
|
4.7
|
%
|
Net capture (per 10,000
shares, in Canadian Dollars)
|
|
$
|
8.342
|
|
$
|
7.782
|
|
$
|
7.184
|
|
$
|
8.300
|
|
$
|
8.200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (in
thousands)
|
|
|
223
|
|
|
214
|
|
|
256
|
|
|
159
|
|
|
172
|
|
RPC
|
|
$
|
1.626
|
|
$
|
1.648
|
|
$
|
1.639
|
|
$
|
1.575
|
|
$
|
1.527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe and Asia
Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADNV
(Euros - in billions)
|
|
€
|
39.6
|
|
€
|
42.0
|
|
€
|
44.8
|
|
€
|
37.5
|
|
€
|
31.5
|
|
Market share
%
|
|
|
18.2
|
%
|
|
17.4
|
%
|
|
16.8
|
%
|
|
17.5
|
%
|
|
17.7
|
%
|
Net capture
(bps)
|
|
€
|
0.264
|
|
€
|
0.267
|
|
€
|
0.284
|
|
€
|
0.259
|
|
€
|
0.245
|
|
EuroCCP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trades cleared (in
thousands)
|
|
|
306,085.2
|
|
|
294,801.9
|
|
|
298,223.5
|
|
|
290,181.9
|
|
|
255,293.1
|
|
Fee per trade
cleared
|
|
€
|
0.010
|
|
€
|
0.011
|
|
€
|
0.011
|
|
€
|
0.011
|
|
€
|
0.011
|
|
Net settlement volume
(shares in thousands)
|
|
|
2,484.1
|
|
|
2,367.3
|
|
|
2,423.2
|
|
|
2,132.7
|
|
|
1,952.3
|
|
Net fee per
settlement
|
|
€
|
0.869
|
|
€
|
0.893
|
|
€
|
0.865
|
|
€
|
0.803
|
|
€
|
0.820
|
|
Australian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (AUD
billions)
|
|
$
|
0.8
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Net capture (per
matched notional value (bps))
|
|
$
|
0.173
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Japanese
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (JPY
billions)
|
|
¥
|
88.7
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Net capture (per
matched notional value (bps))
|
|
¥
|
0.364
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
FX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market share
%
|
|
|
17.0
|
%
|
|
16.3
|
%
|
|
16.5
|
%
|
|
16.7
|
%
|
|
15.9
|
%
|
ADNV ($ in
billions)
|
|
$
|
32.4
|
|
$
|
32.5
|
|
$
|
37.1
|
|
$
|
33.7
|
|
$
|
30.2
|
|
Net capture (per one
million dollars traded)
|
|
$
|
2.77
|
|
$
|
2.71
|
|
$
|
2.65
|
|
$
|
2.67
|
|
$
|
2.70
|
|
ADV = average daily volume; ADNV = average daily notional
value.
RPC, average revenue per contract, for options and futures
represents total net transaction fees recognized for the period
divided by total contracts traded during the period.
U.S. Equities - Exchange, "net capture per 100 touched shares"
refers to transaction fees less liquidity payments and routing and
clearing costs divided by the product of one-hundredth ADV of
touched shares on BZX, BYX, EDGX and EDGA and the number of
trading days. U.S. Equities – Off-Exchange data reflects
Cboe's acquisition of BIDS Trading, effective December 31, 2020. For U.S. Equities –
Off-Exchange, "net capture per 100 touched shares" refers to
transaction fees less order and execution management system
(OMS/EMS) fees and clearing costs divided by the product of
one-hundredth ADV of touched shares on BIDS Trading and the number
of trading days for the period.
Canadian Equities data reflects the acquisition of MATCHNow
effective August 4, 2020. Canadian
Equities, "net capture per 10,000 shares" refers to transaction
fees divided by the product of one-ten thousandth ADV of shares for
MATCHNow and the number of trading days. Total market share
represents MATCHNow volume divided by the total volume of the
Canadian Equities market. TSX listed volume market share represents
MATCHNow volume divided by the total volume in TSX listed
equities.
European Equities, "net capture per matched notional value"
refers to transaction fees less liquidity payments in British
pounds divided by the product of ADNV in British pounds of shares
matched on Cboe Europe Equities and Derivatives and the number of
trading days. EuroCCP data reflects the acquisition of EuroCCP
effective July 1, 2020. "Trades
cleared" refers to the total number of non-interoperable trades
cleared, "Fee per trade cleared" refers to clearing fees divided by
number of non-interoperable trades cleared, "Net settlement volume"
refers to the total number of settlements executed after netting,
and "Net fee per settlement" refers to settlement fees less direct
costs incurred to settle divided by the number of settlements
executed after netting. Asia Pacific data reflects the
acquisition of Chi-X Asia Pacific effective July 1, 2021. Australian Equities "Net capture
per matched notional value" refers to transaction fees less
liquidity payments in Australian dollars divided by the product of
ADNV in Australian dollars of shares matched on Chi-X Australia and
the number of Australian Equities trading days. Japanese Equities
"Net capture per matched notional value" refers to transaction fees
less liquidity payments in Japanese Yen divided by the product of
ADNV in Japanese Yen of shares matched on Chi-X Japan and the
number of Japanese Equities trading days.
Global FX, "net capture per one million
dollars traded" refers to transaction fees less liquidity
payments, if any, divided by the Spot and SEF products of
one-thousandth of ADNV traded on the Cboe FX Markets and the number
of trading days, divided by two, which represents the buyer and
seller that are both charged on the transaction. Market Share
represents Cboe FX volume divided by the total volume of publicly
reporting spot FX venues (Cboe FX, EBS, Refinitiv, and Euronext
FX).
Average transaction fees per contract can be affected by various
factors, including exchange fee rates, volume-based discounts and
transaction mix by contract type and product type.
Cboe Global
Markets, Inc. and Subsidiaries
Condensed
Consolidated Statements of Income (Unaudited)
Three and Nine
Months Ended September 30, 2021 and 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
(in millions, except
per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and
clearing fees
|
|
$
|
632.9
|
|
$
|
545.5
|
|
$
|
2,014.3
|
|
$
|
1,825.3
|
Access and capacity
fees
|
|
|
72.8
|
|
|
60.6
|
|
|
206.3
|
|
|
174.0
|
Market data
fees
|
|
|
62.0
|
|
|
59.5
|
|
|
188.6
|
|
|
174.4
|
Regulatory
fees
|
|
|
34.6
|
|
|
113.8
|
|
|
173.0
|
|
|
379.3
|
Other
revenue
|
|
|
14.5
|
|
|
13.3
|
|
|
46.2
|
|
|
29.9
|
Total
Revenues
|
|
|
816.8
|
|
|
792.7
|
|
|
2,628.4
|
|
|
2,582.9
|
Cost of
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
payments
|
|
|
375.3
|
|
|
359.4
|
|
|
1,255.0
|
|
|
1,167.4
|
Routing and
clearing
|
|
|
19.0
|
|
|
14.9
|
|
|
66.0
|
|
|
48.6
|
Section 31
fees
|
|
|
27.9
|
|
|
105.4
|
|
|
148.6
|
|
|
351.8
|
Royalty fees
|
|
|
22.0
|
|
|
17.6
|
|
|
62.6
|
|
|
64.4
|
Other
|
|
|
3.1
|
|
|
3.4
|
|
|
10.6
|
|
|
3.5
|
Total Cost of
Revenues
|
|
|
447.3
|
|
|
500.7
|
|
|
1,542.8
|
|
|
1,635.7
|
Revenues Less Cost
of Revenues
|
|
|
369.5
|
|
|
292.0
|
|
|
1,085.6
|
|
|
947.2
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
74.0
|
|
|
59.2
|
|
|
214.0
|
|
|
167.4
|
Depreciation and
amortization
|
|
|
42.8
|
|
|
39.5
|
|
|
125.4
|
|
|
118.0
|
Technology support
services
|
|
|
16.7
|
|
|
15.1
|
|
|
50.1
|
|
|
39.5
|
Professional fees and
outside services
|
|
|
24.0
|
|
|
15.8
|
|
|
62.0
|
|
|
43.0
|
Travel and promotional
expenses
|
|
|
2.3
|
|
|
1.2
|
|
|
5.8
|
|
|
4.2
|
Facilities
costs
|
|
|
5.8
|
|
|
4.5
|
|
|
16.5
|
|
|
12.7
|
Acquisition-related
costs
|
|
|
6.7
|
|
|
6.2
|
|
|
11.9
|
|
|
16.4
|
Other
expenses
|
|
|
6.5
|
|
|
11.2
|
|
|
14.6
|
|
|
18.6
|
Total Operating
Expenses
|
|
|
178.8
|
|
|
152.7
|
|
|
500.3
|
|
|
419.8
|
Operating
Income
|
|
|
190.7
|
|
|
139.3
|
|
|
585.3
|
|
|
527.4
|
Non-operating Income
(Expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(11.7)
|
|
|
(9.5)
|
|
|
(36.3)
|
|
|
(24.1)
|
Other (expense) income,
net
|
|
|
(5.2)
|
|
|
33.6
|
|
|
(3.1)
|
|
|
34.2
|
Total Non-operating
Income (Expenses)
|
|
|
(16.9)
|
|
|
24.1
|
|
|
(39.4)
|
|
|
10.1
|
Income Before Income
Tax Provision
|
|
|
173.8
|
|
|
163.4
|
|
|
545.9
|
|
|
537.5
|
Income tax
provision
|
|
|
53.4
|
|
|
53.5
|
|
|
182.8
|
|
|
156.6
|
Net
Income
|
|
|
120.4
|
|
|
109.9
|
|
|
363.1
|
|
|
380.9
|
Net income allocated to
participating securities
|
|
|
(0.4)
|
|
|
(0.3)
|
|
|
(1.1)
|
|
|
(1.0)
|
Net Income Allocated
to Common Stockholders
|
|
$
|
120.0
|
|
$
|
109.6
|
|
$
|
362.0
|
|
$
|
379.9
|
Net Income Per Share
Allocated to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
1.12
|
|
$
|
1.01
|
|
$
|
3.38
|
|
$
|
3.47
|
Diluted earnings per
share
|
|
|
1.12
|
|
|
1.01
|
|
|
3.38
|
|
|
3.46
|
Weighted average shares
used in computing income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
106.8
|
|
|
108.7
|
|
|
107.0
|
|
|
109.5
|
Diluted
|
|
|
107.0
|
|
|
108.8
|
|
|
107.2
|
|
|
109.8
|
Cboe Global
Markets, Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
September 30, 2021
and 2020
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
(in
millions)
|
|
2021
|
|
2020
|
Assets
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
392.4
|
|
$
|
245.4
|
Financial
investments
|
|
|
26.7
|
|
|
92.4
|
Accounts receivable,
net
|
|
|
324.2
|
|
|
337.3
|
Margin deposits and
clearing funds
|
|
|
1,665.6
|
|
|
812.1
|
Income taxes
receivable
|
|
|
48.3
|
|
|
53.1
|
Other current
assets
|
|
|
41.6
|
|
|
26.5
|
Total Current
Assets
|
|
|
2,498.8
|
|
|
1,566.8
|
|
|
|
|
|
|
|
Investments
|
|
|
36.0
|
|
|
42.7
|
Land
|
|
|
2.3
|
|
|
—
|
Property and
equipment, net
|
|
|
102.4
|
|
|
82.6
|
Property held for
sale
|
|
|
—
|
|
|
13.0
|
Operating lease right
of use assets
|
|
|
114.1
|
|
|
111.0
|
Goodwill
|
|
|
3,024.7
|
|
|
2,895.1
|
Intangible assets,
net
|
|
|
1,701.0
|
|
|
1,729.0
|
Other assets,
net
|
|
|
103.4
|
|
|
76.3
|
Total
Assets
|
|
$
|
7,582.7
|
|
$
|
6,516.5
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
259.6
|
|
$
|
250.0
|
Section 31 fees
payable
|
|
|
9.7
|
|
|
152.9
|
Deferred
revenue
|
|
|
13.9
|
|
|
10.2
|
Margin deposits and
clearing funds
|
|
|
1,665.6
|
|
|
812.1
|
Income taxes
payable
|
|
|
5.7
|
|
|
4.2
|
Current portion of
long-term debt
|
|
|
—
|
|
|
68.7
|
Current portion of
contingent consideration liabilities
|
|
|
63.2
|
|
|
15.2
|
Total Current
Liabilities
|
|
|
2,017.7
|
|
|
1,313.3
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,298.9
|
|
|
1,135.2
|
Unrecognized tax
benefits
|
|
|
196.8
|
|
|
164.7
|
Deferred income
taxes
|
|
|
393.9
|
|
|
377.6
|
Non-current operating
lease liabilities
|
|
|
132.9
|
|
|
132.1
|
Contingent
consideration liabilities
|
|
|
12.0
|
|
|
17.5
|
Other non-current
liabilities
|
|
|
33.5
|
|
|
27.2
|
Total
Liabilities
|
|
|
4,085.7
|
|
|
3,167.6
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
—
|
|
|
—
|
Common
stock
|
|
|
1.3
|
|
|
1.2
|
Treasury stock at
cost
|
|
|
(1,337.7)
|
|
|
(1,250.4)
|
Additional paid-in
capital
|
|
|
2,736.3
|
|
|
2,713.3
|
Retained
earnings
|
|
|
2,031.1
|
|
|
1,809.8
|
Accumulated other
comprehensive income, net
|
|
|
66.0
|
|
|
75.0
|
Total
Stockholders' Equity
|
|
|
3,497.0
|
|
|
3,348.9
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
7,582.7
|
|
$
|
6,516.5
|
Non-GAAP Information
In addition to disclosing results
determined in accordance with GAAP, Cboe Global Markets has
disclosed certain non-GAAP measures of operating performance. These
measures are not in accordance with, or a substitute for, GAAP, and
may be different from or inconsistent with non-GAAP financial
measures used by other companies. The non-GAAP measures provided in
this press release include net transaction and clearing fees,
adjusted operating expenses, adjusted operating income, organic net
revenue, inorganic net revenue, adjusted operating margin, adjusted
net income allocated to common stockholders and adjusted diluted
earnings per share, effective tax rate on adjusted earnings,
adjusted cash, EBITDA, EBITDA margin, adjusted EBITDA and adjusted
EBITDA margin.
Management believes that the non-GAAP financial measures
presented in this press release, including adjusted operating
income, organic net revenue and adjusted operating expenses,
provide additional and comparative information to assess trends in
our core operations and a means to evaluate period-to-period
comparisons. Non-GAAP financial measures disclosed by management
are provided as additional information to investors in order to
provide them with an alternative method for assessing our financial
condition and operating results.
Organic net revenue, inorganic net revenue, organic
non-transaction revenue and organic net revenue
guidance: These are non-GAAP financial measures that
exclude or have otherwise been adjusted for the impact of our
acquisitions for the period or guidance, as applicable. Management
believes the organic net revenue growth and guidance measures
provide users with supplemental information regarding the company's
ongoing and future potential revenue performances and trends by
presenting revenue growth and guidance excluding the impact of the
acquisitions. Revenues from acquisitions that have been owned
for at least one year are considered organic and are no longer
excluded from organic net revenue from either period for
comparative purposes.
Amortization expense of acquired intangible assets: We
amortize intangible assets acquired in connection with various
acquisitions. Amortization of intangible assets is inconsistent in
amount and frequency and is significantly affected by the timing
and size of our acquisitions. As such, if intangible asset
amortization is included in performance measures, it is more
difficult to assess the day-to-day operating performance of the
businesses, the relative operating performance of the businesses
between periods and the earnings power of the company. Therefore,
we believe performance measures excluding intangible asset
amortization expense provide investors with an additional basis for
comparison across accounting periods.
Acquisition-related expenses: From time to time, we have
pursued acquisitions, which have resulted in expenses which would
not otherwise have been incurred in the normal course of the
company's business operations. These expenses include integration
costs, as well as legal, due diligence and other third-party
transaction costs. The frequency and the amount of such expenses
vary significantly based on the size, timing and complexity of the
transaction. Accordingly, we exclude these costs for purposes of
calculating non-GAAP measures which provide an additional analysis
of Cboe's ongoing operating performance or comparisons in Cboe's
performance between periods.
The tables below show the reconciliation of each financial
measure from GAAP to non-GAAP. The non-GAAP financial measures
exclude the impact of those items detailed below and are referred
to as adjusted financial measures.
Organic Net
Revenue Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
3
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
millions)
|
|
September 30,
|
|
September 30,
|
|
Reconciliation of
Revenue Less Cost of Revenue to Organic Net Revenue
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Revenues less cost of
revenues (net revenue)
|
|
$
|
369.5
|
|
$
|
292.0
|
|
$
|
1,085.6
|
|
$
|
947.2
|
|
Less
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition revenue
less cost of revenues (inorganic net revenue)
|
|
$
|
(16.7)
|
|
$
|
—
|
|
$
|
(65.7)
|
|
$
|
—
|
|
Organic net
revenue
|
|
$
|
352.8
|
|
$
|
292.0
|
|
$
|
1,019.9
|
|
$
|
947.2
|
|
Reconciliation of
GAAP and non-GAAP Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Table
4
|
|
September 30,
|
|
September 30,
|
|
(in millions, except
per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to Non-GAAP
(As shown on Table 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income allocated
to common stockholders
|
|
$
|
120.0
|
|
$
|
109.6
|
|
$
|
362.0
|
|
$
|
379.9
|
|
Non-GAAP
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (1)
|
|
|
6.7
|
|
|
6.2
|
|
|
11.9
|
|
|
16.4
|
|
Provision for notes
receivable (2)
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
|
6.7
|
|
Bargain purchase gain
(3)
|
|
|
—
|
|
|
(32.6)
|
|
|
—
|
|
|
(32.6)
|
|
Amortization of
acquired intangible assets (4)
|
|
|
31.8
|
|
|
30.9
|
|
|
95.2
|
|
|
93.4
|
|
Impairment of
investment (5)
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
Total Non-GAAP
adjustments
|
|
|
43.5
|
|
|
11.2
|
|
|
112.1
|
|
|
83.9
|
|
Income tax expense
related to the items above
|
|
|
(8.5)
|
|
|
(8.0)
|
|
|
(24.4)
|
|
|
(24.9)
|
|
Deferred tax
re-measurements
|
|
|
—
|
|
|
7.7
|
|
|
17.7
|
|
|
7.7
|
|
Net income allocated
to participating securities - effect on reconciling
items
|
|
|
(0.1)
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.5)
|
|
Adjusted net
income allocated to common stockholders
|
|
$
|
154.9
|
|
$
|
120.5
|
|
$
|
467.1
|
|
$
|
446.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Diluted EPS to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
$
|
1.12
|
|
$
|
1.01
|
|
$
|
3.38
|
|
$
|
3.46
|
|
Per share impact of
non-GAAP adjustments noted above
|
|
|
0.33
|
|
|
0.10
|
|
|
0.98
|
|
|
0.60
|
|
Adjusted diluted
earnings per common share
|
|
$
|
1.45
|
|
$
|
1.11
|
|
$
|
4.36
|
|
$
|
4.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Margin to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue less cost of
revenue
|
|
$
|
369.5
|
|
$
|
292.0
|
|
$
|
1,085.6
|
|
$
|
947.2
|
|
Non-GAAP adjustments
noted above
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted revenue
less cost of revenue
|
|
$
|
369.5
|
|
$
|
292.0
|
|
$
|
1,085.6
|
|
$
|
947.2
|
|
Operating expenses
(6)
|
|
$
|
178.8
|
|
$
|
152.7
|
|
$
|
500.3
|
|
$
|
419.8
|
|
Non-GAAP adjustments
noted above
|
|
|
38.5
|
|
|
43.8
|
|
|
107.1
|
|
|
116.5
|
|
Adjusted operating
expenses
|
|
$
|
140.3
|
|
$
|
108.9
|
|
$
|
393.2
|
|
$
|
303.3
|
|
Operating
income
|
|
$
|
190.7
|
|
$
|
139.3
|
|
$
|
585.3
|
|
$
|
527.4
|
|
Non-GAAP adjustments
noted above
|
|
|
38.5
|
|
|
43.8
|
|
|
107.1
|
|
|
116.5
|
|
Adjusted operating
income
|
|
$
|
229.2
|
|
$
|
183.1
|
|
$
|
692.4
|
|
$
|
643.9
|
|
Adjusted operating
margin (7)
|
|
|
62.0
|
%
|
|
62.7
|
%
|
|
63.8
|
%
|
|
68.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Rate to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
173.8
|
|
|
163.4
|
|
|
545.9
|
|
|
537.5
|
|
Non-GAAP adjustments
noted above
|
|
|
43.5
|
|
|
11.2
|
|
|
112.1
|
|
|
83.9
|
|
Adjusted income
before income taxes
|
|
$
|
217.3
|
|
$
|
174.6
|
|
$
|
658.0
|
|
$
|
621.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
53.4
|
|
|
53.5
|
|
|
182.8
|
|
|
156.6
|
|
Non-GAAP adjustments
noted above
|
|
|
8.5
|
|
|
0.3
|
|
|
6.7
|
|
|
17.2
|
|
Adjusted income
tax expense
|
|
$
|
61.9
|
|
$
|
53.8
|
|
$
|
189.5
|
|
$
|
173.8
|
|
Adjusted income
tax rate
|
|
|
28.5
|
%
|
|
30.8
|
%
|
|
28.8
|
%
|
|
28.0
|
%
|
|
(1) This amount
includes professional fees and outside services, severance,
facilities expenses, impairment charges and other costs related to
the company's acquisitions.
(2) This amount
represents the provision for notes receivable, recorded in other
expenses on the consolidated statements of income, associated with
the funding for the development of the consolidated audit trail
("CAT").
(3) This amount
represents the bargain purchase gain related to the acquisition of
EuroCCP on July 1, 2020.
(4) This amount
represents the amortization of acquired intangible assets related
to the company's acquisitions.
(5) This amount
represents the impairment of investment related to the write down
of the company's investment in CurveGlobal.
(6) The company
sponsors deferred compensation plans held in a trust. The expenses
or income related to the deferred compensation plans are included
in "Compensation and benefits" ($0.3 million and $1.0 million in
expense for the three months ended September 30, 2021 and 2020,
respectively, and $1.7 million and $1.1 million in the nine months
ended September 30, 2021 and 2020, respectively), and are directly
offset by deferred compensation income, expenses and dividends
included within "Other income, net" ($0.3 million and $1.0 million
in income, expense and dividends in the three months ended
September 30, 2021 and 2020, respectively, and $1.7 million and
$1.1 million in the nine months ended September 30, 2021 and 2020,
respectively), on the consolidated statements of income. The
deferred compensation plans' expenses are not excluded from
"adjusted operating expenses" and do not have an impact on "Income
before income taxes."
(7) Adjusted
operating margin represents adjusted operating income divided by
adjusted revenue less cost of revenue.
|
EBITDA Reconciliations
EBITDA (earnings before
interest, income taxes, depreciation and amortization) and Adjusted
EBITDA are widely used non-GAAP financial measures of operating
performance. EBITDA margin represents EBITDA divided by revenues
less cost of revenues (net revenue). It is presented as
supplemental information that the company believes is useful to
investors to evaluate its results because it excludes certain items
that are not directly related to the company's core operating
performance. EBITDA is calculated by adding back to net income
interest expense, income tax expense, depreciation and
amortization. Adjusted EBITDA is calculated by adding back to
EBITDA acquisition-related expenses, provision for notes
receivable, bargain purchase gain, and impairment of
investment. EBITDA and Adjusted EBITDA should not be
considered as substitutes either for net income, as an indicator of
the company's operating performance, or for cash flow, as a measure
of the company's liquidity. In addition, because EBITDA and
Adjusted EBITDA may not be calculated identically by all companies,
the presentation here may not be comparable to other similarly
titled measures of other companies. Adjusted EBITDA margin
represents Adjusted EBITDA divided by net revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
5
|
|
Three Months Ended
|
|
Nine
Months Ended
|
|
(in
millions)
|
|
September 30,
|
|
September 30,
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to EBITDA and Adjusted
EBITDA
(Per Table 1)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net income
allocated to common stockholders
|
|
$
|
120.0
|
|
$
|
109.6
|
|
$
|
362.0
|
|
$
|
379.9
|
|
Interest expense,
net
|
|
|
11.7
|
|
|
9.5
|
|
|
36.3
|
|
|
24.1
|
|
Income tax
provision
|
|
|
53.4
|
|
|
53.5
|
|
|
182.8
|
|
|
156.6
|
|
Depreciation and
amortization
|
|
|
42.8
|
|
|
39.5
|
|
|
125.4
|
|
|
118.0
|
|
EBITDA
|
|
$
|
227.9
|
|
$
|
212.1
|
|
$
|
706.5
|
|
$
|
678.6
|
|
EBITDA
Margin
|
|
|
61.7
|
%
|
|
72.6
|
%
|
|
65.1
|
%
|
|
71.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments not included in above line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
|
6.7
|
|
|
6.2
|
|
|
11.9
|
|
|
16.4
|
|
Provision for notes
receivable
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
|
6.7
|
|
Bargain purchase
gain
|
|
|
—
|
|
|
(32.6)
|
|
|
—
|
|
|
(32.6)
|
|
Impairment of
investment
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
239.6
|
|
$
|
192.4
|
|
$
|
723.4
|
|
$
|
669.1
|
|
Adjusted EBITDA
Margin
|
|
|
64.8
|
%
|
|
65.9
|
%
|
|
66.6
|
%
|
|
70.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
Reconciliation of
Cash and cash equivalents to Adjusted Cash
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
392.4
|
|
$
|
245.4
|
|
|
|
|
|
|
|
Financial
investments
|
|
|
26.7
|
|
|
92.4
|
|
|
|
|
|
|
|
Less deferred
compensation plan assets
|
|
|
(26.2)
|
|
|
(24.5)
|
|
|
|
|
|
|
|
Less cash collected
for Section 31 Fees
|
|
|
—
|
|
|
(103.0)
|
|
|
|
|
|
|
|
Adjusted
Cash
|
|
$
|
392.9
|
|
$
|
210.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Transaction and Clearing Fees by Business Segment –Three Months
Ended September 30, 2021 and 2020
|
|
Consolidated
|
|
Options
|
|
N.A.
Equities
|
|
Futures
|
|
Europe and
APAC
|
|
Global
FX
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Transaction and
clearing fees
|
$
|
632.9
|
|
$
|
545.5
|
|
$
|
308.4
|
|
$
|
241.4
|
|
$
|
253.2
|
|
$
|
253.0
|
|
$
|
23.2
|
|
$
|
16.8
|
|
$
|
36.2
|
|
$
|
23.4
|
|
$
|
11.9
|
|
$
|
10.9
|
Liquidity
payments
|
|
(375.3)
|
|
|
(359.4)
|
|
|
(152.7)
|
|
|
(130.1)
|
|
|
(216.9)
|
|
|
(225.1)
|
|
|
—
|
|
|
—
|
|
|
(5.7)
|
|
|
(4.2)
|
|
|
—
|
|
|
—
|
Routing and
clearing
|
|
(19.0)
|
|
|
(14.9)
|
|
|
(5.2)
|
|
|
(5.2)
|
|
|
(9.0)
|
|
|
(9.7)
|
|
|
—
|
|
|
—
|
|
|
(4.7)
|
|
|
—
|
|
|
(0.1)
|
|
|
—
|
Net transaction and
clearing fees
|
$
|
238.6
|
|
$
|
171.2
|
|
$
|
150.5
|
|
$
|
106.1
|
|
$
|
27.3
|
|
$
|
18.2
|
|
$
|
23.2
|
|
$
|
16.8
|
|
$
|
25.8
|
|
$
|
19.2
|
|
$
|
11.8
|
|
$
|
10.9
|
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SOURCE Cboe Global Markets, Inc.