Second Quarter Highlights*
- Diluted EPS for the Quarter of $(1.74), Down 278 percent, primarily due to the
impairment of goodwill recognized in the Digital reporting
unit
- Adjusted Diluted EPS1 for the Quarter of
$1.67, Up 21 percent
- Net Revenue for the Quarter of $424
million, Up 21 percent
- Increases Organic Total Net Revenue
Growth2 Target for 2022 to 9 to 11 percent,
from 5 to 7 percent; Increases Data and Access Solutions Organic
Net Revenue Growth2 Target to 10 to 13 percent, from 8
to 11 percent
- Increases 2022 Adjusted Operating Expense
Guidance2 to $659 to
$667 million, from $617 to $625
million.
CHICAGO, July 29,
2022 /PRNewswire/ -- Cboe Global Markets, Inc.
(Cboe: CBOE) today reported financial results for the second
quarter of 2022.
![(PRNewsfoto/Cboe Global Markets, Inc.) (PRNewsfoto/Cboe Global Markets, Inc.)](https://mma.prnewswire.com/media/622233/Cboe_Logo.jpg)
"Cboe delivered strong second quarter results to close out an
exceptional first half of 2022. Activity across our ecosystem—cash,
data and derivatives—was robust," said Edward T. Tilly, Cboe Global Markets Chairman
and Chief Executive Officer. "Many of our newer initiatives, like
the extension of trading hours for SPX and VIX Options to nearly 24
hours-a-day, five days-a-week and the addition of Tuesday and
Thursday expirations for SPX Weekly options, have outperformed our
early expectations in 2022, further accelerating the strong growth
across our core businesses. With the closing of the ErisX and NEO
acquisitions in the second quarter, the entire Cboe team remains
focused on extracting even greater value from the ecosystem we have
created. The digital asset market environment has changed
dramatically since we closed the ErisX transaction on May 2nd, which resulted in an
accounting adjustment. We believe that the $220 million book carrying value reflects the
reality of the market today, but in no way changes our enthusiasm
for the digital asset space. We are intently focused on integrating
our platforms and positioning Cboe for its next wave of growth in
the quarters ahead."
"In the second quarter, Cboe produced record-setting revenue
results as overall net revenues grew 21% year-over-year," said
Brian N. Schell, Cboe Global Markets
Executive Vice President, Chief Financial Officer and Treasurer.
"The benefits of the Cboe flywheel were apparent given the strong
year-over-year growth from each category during the quarter, with
net revenues from derivatives markets1 growing 30%, data
and access solutions1 up 20%, and cash and spot
markets1 growing 7%. Moving forward, we are increasing
our 2022 total organic net revenue
growth2 expectations, targeting 9% to 11% growth,
up from our prior guidance range of 5% to 7%. In addition, our 2022
organic net revenue growth2 expectations for our Data
and Access Solutions business are increasing to 10% to 13%, up from
our prior guidance range of 8% to 11%. The upgraded guidance is a
testament to not only the strength of the first half results, but
the durability we expect to see in the revenue base moving forward.
We look forward to building on the first half momentum with
continued investment and integration across the Cboe platform."
*All comparisons are
second quarter 2022 compared to the same period in
2021.
|
(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 Second 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
June 30, 2022 and 2021.
|
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Table
1
|
Consolidated Second
Quarter Results
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q22
|
|
2Q21
|
|
|
($ in millions except per share)
|
|
|
2Q22
|
|
2Q21
|
Change
|
|
Adjusted1
|
|
Adjusted1
|
Change
|
Total Revenues Less
Cost of Revenues
|
|
|
$
|
424.1
|
|
|
$
|
350.6
|
|
21
|
%
|
|
$
|
424.1
|
|
|
$
|
350.6
|
|
21
|
%
|
Total Operating
Expenses
|
|
|
$
|
661.5
|
|
|
$
|
160.6
|
|
312
|
%
|
|
$
|
157.0
|
|
|
$
|
128.3
|
|
22
|
%
|
Operating (Loss)
Income
|
|
|
$
|
(237.4)
|
|
|
$
|
190.0
|
|
(225)
|
%
|
|
$
|
267.1
|
|
|
$
|
222.3
|
|
20
|
%
|
Operating Margin
%
|
|
|
|
(56.0)
|
%
|
|
|
54.2
|
%
|
(110.2)
|
pp
|
|
|
63.0
|
%
|
|
|
63.4
|
%
|
(0.4)
|
pp
|
Net (Loss) Income
Allocated to Common Stockholders
|
|
|
$
|
(184.5)
|
|
|
$
|
105.2
|
|
(275)
|
%
|
|
$
|
177.3
|
|
|
$
|
147.4
|
|
20
|
%
|
Diluted EPS
|
|
|
$
|
(1.74)
|
|
|
$
|
0.98
|
|
(278)
|
%
|
|
$
|
1.67
|
|
|
$
|
1.38
|
|
21
|
%
|
EBITDA1
|
|
|
$
|
(202.0)
|
|
|
$
|
231.8
|
|
(187)
|
%
|
|
$
|
274.2
|
|
|
$
|
233.6
|
|
17
|
%
|
EBITDA Margin
% 1
|
|
|
|
(47.6)
|
%
|
|
|
66.1
|
%
|
(113.7)
|
pp
|
|
|
64.7
|
%
|
|
|
66.6
|
%
|
(1.9)
|
pp
|
- Total revenues less cost of revenues (referred to as "net
revenue") of $424.1 million increased
21 percent, compared to $350.6
million in the prior-year period, reflecting increases in
net transaction and clearing fees1 and access and
capacity fees. Inorganic net revenue1 in the second
quarter of 2022 was $9.9
million.
- Total operating expenses were $661.5
million versus $160.6 million
in the second quarter of 2021, an increase of $500.9 million, primarily due to the impairment
of goodwill recognized in the Digital reporting unit, driven by
negative events and trends in the broader digital asset
environment. Adjusted operating expenses1 of
$157.0 million increased 22 percent
compared to $128.3 million in the
second quarter of 2021, primarily due to the acquisitions of Cboe
Asia Pacific, ErisX, and NEO, as well as an increase in salaries,
wages, and bonuses resulting in higher compensation and
benefits.
- The effective tax rate for the second quarter of 2022 was 28.2
percent compared with 41.1 percent in the second quarter of 2021.
The decrease is primarily due to the remeasurement of UK deferred
tax liabilities following the UK tax rate increase from 19 percent
to 25 percent enacted during the second quarter of 2021 and
effective April 1, 2023. The
effective tax rate on adjusted earnings1 was 28.4
percent compared with 30.1 percent in last year's second quarter.
The lower effective tax rate in the second quarter of 2022 was
primarily due to changes in income tax reserves in the second
quarter of 2021.
- Diluted EPS for the second quarter of 2022 decreased 278
percent to $(1.74). Adjusted diluted
EPS1 of $1.67 increased 21
percent compared to 2021's second quarter results.
Business Segment Information:
Table
2
|
|
Total Revenues Less
Cost of Revenues by
|
|
|
|
|
|
|
|
|
|
|
Business
Segment
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
2Q22
|
2Q21
|
Change
|
Options
|
|
$
|
235.3
|
|
$
|
178.6
|
|
|
32
|
%
|
North American
Equities
|
|
|
92.7
|
|
|
89.2
|
|
|
4
|
%
|
Europe and Asia
Pacific
|
|
|
49.9
|
|
|
41.6
|
|
|
20
|
%
|
Futures
|
|
|
29.6
|
|
|
27.4
|
|
|
8
|
%
|
Global FX
|
|
|
16.6
|
|
|
13.8
|
|
|
20
|
%
|
Digital
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Corporate
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
Total
|
|
$
|
424.1
|
|
$
|
350.6
|
|
|
21
|
%
|
|
(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.
|
|
*Not meaningful, due to
the establishment of the Digital segment during the second quarter
of 2022 as a result of the ErisX acquisition on May 2,
2022.
|
Discussion of Results by Business
Segment1:
Options:
- Options net revenue of $235.3
million was up $56.7 million,
or 32 percent, from the second quarter of 2021, due to double-digit
increases in net transaction and clearing fees2, access
and capacity fees, and market data. Net transaction and clearing
fees increased primarily as a result of a 46 percent increase in
Index options trading volumes versus the second quarter of 2021,
along with a 7 percent increase in Index options revenue per
contract ("RPC") for the quarter. Access and capacity fees and
market data fees were each 29 percent higher than second quarter
2021.
- Net transaction and clearing fees2 increased
$54.6 million, or 41 percent,
reflecting an 18 percent increase in total options average daily
volume ("ADV") and a 21 percent increase in total options RPC
compared to the second quarter 2021. 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 Index
options increased 7 percent as higher-priced SPX options accounted
for a higher percentage of Index options volume.
- Cboe's Options business had total market share of 33.2 percent
for the second quarter of 2022 compared to 30.4 percent in the
second quarter of 2021, primarily reflecting an increase in Cboe's
multi-listed options market share for the quarter of 28.3 percent
compared to 26.8 percent in the second quarter of 2021.
North American (N.A.) Equities:
- N.A. Equities net revenue of $92.7
million was up $3.5 million,
or 4 percent, primarily due to higher access and capacity fees and
transaction and clearing fees. Year-over-year declines in industry
market data offset some of the growth in the segment. Transaction
and clearing fees were impacted by higher N.A. equities industry
volumes as compared to the second quarter of 2021. Net capture was
flat in the second quarter of 2022, when comparing year over
year.
- Cboe U.S. Equities exchanges had market share of 13.6 percent
for the second quarter of 2022 compared to 14.3 percent in the
second quarter of 2021, negatively impacted by pricing changes that
drove a higher net capture.
Europe and Asia Pacific (APAC):
- Europe and APAC net revenue of
$49.9 million increased by 20
percent, reflecting growth in European equities and clearing, and
the addition of Cboe Asia Pacific in July
2021, which contributed $8.2
million in net revenue. European Equities average daily
notional value ("ADNV") for the overall market was up 12 percent
during the quarter and ADNV traded on Cboe European Equities was
€10.9 billion, up 49 percent from last year's second quarter. Net
capture decreased 11 percent for the quarter, reflecting a mix
shift with the strongest gains coming in Lit market share,
outpacing the growth in higher-capture Cboe BIDS Europe and
Periodic Auction services, as well as from the impact of volume
pricing tiers with higher volumes and higher market share.
- For the second quarter of 2022, Cboe European Equities had 23.2
percent market share, up from 17.4 percent in the second quarter of
2021, as a result of positive momentum across all orderbooks, with
a particular strength in Lit markets and record Cboe BIDS Europe
market share.
Futures:
- Futures net revenue of $29.6
million increased $2.2
million, or 8 percent, due to increases in net transaction
and clearing fees2, access and capacity fees, and market
data.
- Net transaction and clearing fees2 increased
$0.8 million, or 4 percent,
reflecting slight upticks in both ADV and RPC.
Global FX:
- Global FX net revenue of $16.6
million increased 20 percent, primarily as a result of
higher net transaction and clearing fees2. ADNV traded
on the Cboe FX platform was $39.6
billion for the quarter, up 22 percent compared to last
year's second quarter and net capture per one million dollars traded was $2.71 for the quarter, flat compared to
$2.71 in the second quarter of
2021.
- Cboe FX market share was 17.0 percent for the quarter compared
to 16.3 percent in last year's second quarter.
(1) The Digital segment is
not further discussed as results were not material given its
establishment during the second quarter of 2022 as a result of the
ErisX acquisition on May 2, 2022, outside of the goodwill
impairment charge recorded in the second quarter of
2022.
|
(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.
|
2022 Fiscal Year Financial Guidance
Cboe provided guidance for the 2022 fiscal year as noted
below.
- Organic net revenue growth1 is expected to be in the
range of 9 to 11 percentage points in 2022, up from previous
guidance of 5 to 7 percentage points.
- Reaffirmed revenue from acquisitions held less than a
year1 is expected to contribute total net revenue growth
in a range of 2 to 3 percentage points in 2022.
- Organic net revenue1 from Data and Access Solutions
is now expected to increase by approximately 10 to 13 percent in
2022, from a base of $419 million in
2021, up from previous guidance of 8 to 11 percent.
- Adjusted operating expenses1 in 2022 are now
expected to be in the range of $659
to $667 million, from a base of
$531 million in 2021, up from
previous guidance of $617 to
$625 million. The updated 2022
guidance considers incremental investment spend in technology and
headcount to support Cboe's numerous growth initiatives, deals
closed during 2021 but not fully reflected in the 2021 cost base,
recent acquisitions of NEO and ErisX and increases in core
expenses. The guidance excludes the expected amortization of
acquired intangible assets of $125
million; the company plans to reflect the exclusion of this
amount in its non-GAAP reconciliation.1
- Reaffirmed depreciation and amortization expense for 2022,
which is included in adjusted operating expenses above, is expected
to be in the range of $40 to
$44 million, excluding the expected
amortization of acquired intangible assets.
- Reaffirmed the effective tax rate1 on adjusted
earnings for the full year 2022 is expected to be in the range of
27.5 to 29.5 percent. Significant changes in trading volume,
expenses, tax laws or rates and other items could materially impact
this expectation.
- Reaffirmed capital expenditures for 2022 are expected to be in
the range of $47 to $52 million.
(1) Specific
quantifications of the amounts that would be required to reconcile
the company's organic and inorganic 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.
|
Capital Management
At June 30, 2022, the company had
adjusted cash1 of $349.1
million. Total debt as of June 30,
2022 was $1,959.2 million.
The company paid cash dividends of $51.2
million, or $0.48 per share,
during the second quarter of 2022 and utilized $15.6 million to repurchase 147 thousand shares
of its common stock under its share repurchase program at an
average price of $106.12 per share.
As of June 30, 2022, the company had
approximately $233.3 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 second-quarter financial results today, July 29, 2022, 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, July 29, 2022,
through 11:00 p.m. CT, August 6,
2022, 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)
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, and to 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, FX, and digital assets, 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 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
or clearing volumes, market data fees or a shift in the mix of
products traded on our exchanges; legislative or regulatory changes
or changes in tax regimes; our ability to protect our systems and
communication networks from security risks, cybersecurity risks,
insider threats and unauthorized disclosure of confidential
information; our ability to attract and retain skilled management
and other personnel; increasing competition by foreign and domestic
entities; our dependence on and exposure to risk from third
parties; fluctuations to currency exchange rates; factors that
impact the quality and integrity of our indices; the impact of the
novel coronavirus ("COVID-19") pandemic; 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 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; the
accuracy of our estimates and expectations; litigation risks and
other liabilities; and operating a digital asset business, and
clearinghouse, including the expected benefits of our ErisX
acquisition, cybercrime, changes in digital asset regulation,
losses due to digital asset custody, and fluctuations in digital
asset prices. 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, 2021 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.
|
|
|
|
|
Cboe Media
Contacts:
|
|
|
|
Analyst
Contact:
|
Angela Tu
|
|
Tim Cave
|
|
Kenneth Hill,
CFA
|
(646)
856–8734
|
|
+44 (0) 7593 506
719
|
|
(312)
786–7559
|
atu@cboe.com
|
|
tcave@cboe.com
|
|
khill@cboe.com
|
CBOE-F
Trademarks:
Cboe®, Cboe Global Markets®, Cboe Volatility
Index®, Bats®, BIDS Trading®,
BZX®, BYX®, Chi-X®,
EDGX®, EDGA®, ErisX®,
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
|
|
|
|
|
2Q
2022
|
1Q
2022
|
4Q 2021
|
3Q
2021
|
2Q
2021
|
Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV (in
thousands)
|
|
|
39,377
|
|
|
42,464
|
|
|
40,794
|
|
|
37,548
|
|
|
36,442
|
|
Total company
Options ADV (in thousands)
|
|
|
13,054
|
|
|
13,392
|
|
|
12,694
|
|
|
11,764
|
|
|
11,092
|
|
Multi-listed
options
|
|
|
10,378
|
|
|
10,978
|
|
|
10,527
|
|
|
9,794
|
|
|
9,254
|
|
Index
options
|
|
|
2,677
|
|
|
2,414
|
|
|
2,167
|
|
|
1,970
|
|
|
1,838
|
|
Total Options market
share
|
|
|
33.2
|
%
|
|
31.5
|
%
|
|
31.1
|
%
|
|
31.3
|
%
|
|
30.4
|
%
|
Multi-listed
options
|
|
|
28.3
|
%
|
|
27.4
|
%
|
|
27.3
|
%
|
|
27.6
|
%
|
|
26.8
|
%
|
Total Options
RPC:
|
|
$
|
0.233
|
|
$
|
0.210
|
|
$
|
0.199
|
|
$
|
0.200
|
|
$
|
0.192
|
|
Multi-listed
options
|
|
$
|
0.066
|
|
$
|
0.067
|
|
$
|
0.066
|
|
$
|
0.069
|
|
$
|
0.067
|
|
Index
options
|
|
$
|
0.883
|
|
$
|
0.857
|
|
$
|
0.845
|
|
$
|
0.850
|
|
$
|
0.823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Equities -
Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADV
(shares in billions)
|
|
|
12.6
|
|
|
12.9
|
|
|
10.8
|
|
|
9.8
|
|
|
10.5
|
|
Market share
%
|
|
|
13.6
|
%
|
|
14.3
|
%
|
|
13.3
|
%
|
|
14.0
|
%
|
|
14.3
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.020
|
|
$
|
0.017
|
|
$
|
0.025
|
|
$
|
0.020
|
|
$
|
0.020
|
|
U.S. Equities -
Off-Exchange:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (touched shares, in
millions)
|
|
|
92.7
|
|
|
108.5
|
|
|
84.2
|
|
|
73.0
|
|
|
75.8
|
|
Off-Exchange ATS Block
Market Share % (reported on a two-month lag)
|
|
|
24.5
|
%
|
|
24.4
|
%
|
|
22.5
|
%
|
|
22.9
|
%
|
|
21.8
|
%
|
Net capture (per 100
touched shares)
|
|
$
|
0.108
|
|
$
|
0.117
|
|
$
|
0.115
|
|
$
|
0.122
|
|
$
|
0.123
|
|
Canadian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (matched shares, in
millions)
|
|
|
36.0
|
|
|
41.1
|
|
|
41.3
|
|
|
37.8
|
|
|
47.4
|
|
Total market share
%
|
|
|
3.1
|
%
|
|
3.2
|
%
|
|
3.3
|
%
|
|
3.4
|
%
|
|
3.4
|
%
|
Market share % - TSX
listed volume
|
|
|
4.1
|
%
|
|
4.3
|
%
|
|
4.7
|
%
|
|
4.7
|
%
|
|
4.9
|
%
|
Net capture (per 10,000
shares, in Canadian Dollars)
|
|
$
|
9.328
|
|
$
|
9.103
|
|
$
|
8.475
|
|
$
|
8.342
|
|
$
|
7.782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe and Asia
Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total industry ADNV
(Euros - in billions)
|
|
€
|
46.9
|
|
€
|
58.7
|
|
€
|
44.0
|
|
€
|
39.6
|
|
€
|
42.0
|
|
Market share
%
|
|
|
23.2
|
%
|
|
21.8
|
%
|
|
19.8
|
%
|
|
18.2
|
%
|
|
17.4
|
%
|
Net capture
(bps)
|
|
€
|
0.238
|
|
€
|
0.233
|
|
€
|
0.256
|
|
€
|
0.264
|
|
€
|
0.267
|
|
EuroCCP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trades cleared (in
thousands)
|
|
|
356,351.1
|
|
|
454,437.8
|
|
|
345,074.8
|
|
|
306,085.2
|
|
|
294,801.9
|
|
Fee per trade
cleared
|
|
€
|
0.009
|
|
€
|
0.009
|
|
€
|
0.011
|
|
€
|
0.010
|
|
€
|
0.011
|
|
Net settlement volume
(shares in thousands)
|
|
|
2,501.6
|
|
|
2,802.1
|
|
|
2,664.9
|
|
|
2,484.1
|
|
|
2,367.3
|
|
Net fee per
settlement
|
|
€
|
0.808
|
|
€
|
0.924
|
|
€
|
0.860
|
|
€
|
0.869
|
|
€
|
0.893
|
|
Australian
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (AUD
billions)
|
|
$
|
0.8
|
|
$
|
0.9
|
|
$
|
0.8
|
|
$
|
0.8
|
|
|
N/A
|
|
Market share -
Continuous
|
|
|
17.0
|
%
|
|
15.8
|
%
|
|
16.1
|
%
|
|
15.7
|
%
|
|
N/A
|
|
Net capture (per
matched notional value (bps))
|
|
$
|
0.171
|
|
$
|
0.173
|
|
$
|
0.171
|
|
$
|
0.173
|
|
|
N/A
|
|
Japanese
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADNV (JPY
billions)
|
|
¥
|
136.0
|
|
¥
|
161.4
|
|
¥
|
111.4
|
|
¥
|
88.7
|
|
|
N/A
|
|
Market share - Lit
Continuous
|
|
|
3.5
|
%
|
|
3.8
|
%
|
|
2.9
|
%
|
|
2.4
|
%
|
|
N/A
|
|
Net capture (per
matched notional value (bps))
|
|
¥
|
0.258
|
|
¥
|
0.228
|
|
¥
|
0.358
|
|
¥
|
0.364
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADV (in
thousands)
|
|
|
222
|
|
|
254
|
|
|
230
|
|
|
223
|
|
|
214
|
|
RPC
|
|
$
|
1.677
|
|
$
|
1.637
|
|
$
|
1.651
|
|
$
|
1.626
|
|
$
|
1.648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
FX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot market share
%
|
|
|
17.0
|
%
|
|
17.3
|
%
|
|
16.8
|
%
|
|
17.0
|
%
|
|
16.3
|
%
|
ADNV ($ in
billions)
|
|
$
|
39.6
|
|
$
|
42.0
|
|
$
|
33.7
|
|
$
|
32.4
|
|
$
|
32.5
|
|
Net capture (per one
million dollars traded)
|
|
$
|
2.71
|
|
$
|
2.67
|
|
$
|
2.77
|
|
$
|
2.77
|
|
$
|
2.71
|
|
|
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.
Touched volume represents the total number of shares of equity
securities and ETFs internally matched on our exchanges or routed
to and executed on an external market center.
Matched volume represents the total number of shares of equity
securities and ETFs executed on our exchanges.
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 BIDS
Trading. 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, "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.
Canadian Equities data does not include NEO data.
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 the number of trading days.
"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
Cboe Asia Pacific (formerly 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 Cboe
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 Cboe
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 Six Months
Ended June 30, 2022 and 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
(in millions, except
per share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and spot
markets
|
|
$
|
458.5
|
|
$
|
372.7
|
|
$
|
920.4
|
|
$
|
921.6
|
Data and access
solutions
|
|
|
123.9
|
|
|
103.0
|
|
|
242.8
|
|
|
203.6
|
Derivatives
markets
|
|
|
403.4
|
|
|
325.1
|
|
|
797.1
|
|
|
686.4
|
Total
Revenues
|
|
|
985.8
|
|
|
800.8
|
|
|
1,960.3
|
|
|
1,811.6
|
Cost of
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
payments
|
|
|
429.0
|
|
|
377.9
|
|
|
896.5
|
|
|
879.7
|
Routing and
clearing
|
|
|
20.9
|
|
|
19.9
|
|
|
43.2
|
|
|
47.0
|
Section 31
fees
|
|
|
79.6
|
|
|
28.8
|
|
|
115.3
|
|
|
120.7
|
Royalty fees
|
|
|
28.1
|
|
|
20.3
|
|
|
54.4
|
|
|
40.6
|
Other cost of
revenues
|
|
|
4.1
|
|
|
3.3
|
|
|
8.7
|
|
|
7.5
|
Total Cost of
Revenues
|
|
|
561.7
|
|
|
450.2
|
|
|
1,118.1
|
|
|
1,095.5
|
Revenues Less Cost
of Revenues
|
|
|
424.1
|
|
|
350.6
|
|
|
842.2
|
|
|
716.1
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
86.2
|
|
|
67.7
|
|
|
167.4
|
|
|
140.0
|
Depreciation and
amortization
|
|
|
40.2
|
|
|
40.6
|
|
|
81.1
|
|
|
82.6
|
Technology support
services
|
|
|
18.1
|
|
|
16.2
|
|
|
37.3
|
|
|
33.4
|
Professional fees and
outside services
|
|
|
24.1
|
|
|
22.4
|
|
|
43.8
|
|
|
38.0
|
Travel and promotional
expenses
|
|
|
5.5
|
|
|
1.9
|
|
|
8.4
|
|
|
3.5
|
Facilities
costs
|
|
|
6.6
|
|
|
5.4
|
|
|
13.1
|
|
|
10.7
|
Acquisition-related
costs
|
|
|
14.3
|
|
|
1.8
|
|
|
16.3
|
|
|
5.2
|
Goodwill
impairment
|
|
|
460.1
|
|
|
0.0
|
|
|
460.1
|
|
|
0.0
|
Other
expenses
|
|
|
6.4
|
|
|
4.6
|
|
|
12.4
|
|
|
8.1
|
Total Operating
Expenses
|
|
|
661.5
|
|
|
160.6
|
|
|
839.9
|
|
|
321.5
|
Operating (Loss)
Income
|
|
|
(237.4)
|
|
|
190.0
|
|
|
2.3
|
|
|
394.6
|
Non-operating
(Expenses) Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(14.6)
|
|
|
(12.3)
|
|
|
(25.4)
|
|
|
(24.6)
|
Other (expense) income,
net
|
|
|
(4.8)
|
|
|
1.5
|
|
|
(8.8)
|
|
|
2.1
|
Total Non-operating
Expenses
|
|
|
(19.4)
|
|
|
(10.8)
|
|
|
(34.2)
|
|
|
(22.5)
|
(Loss) Income Before
Income Tax (Benefit) Provision
|
|
|
(256.8)
|
|
|
179.2
|
|
|
(31.9)
|
|
|
372.1
|
Income tax (benefit)
provision
|
|
|
(72.3)
|
|
|
73.7
|
|
|
43.0
|
|
|
129.4
|
Net (Loss)
Income
|
|
|
(184.5)
|
|
|
105.5
|
|
|
(74.9)
|
|
|
242.7
|
Net income allocated to
participating securities
|
|
|
—
|
|
|
(0.3)
|
|
|
—
|
|
|
(0.7)
|
Net (Loss) Income
Allocated to Common Stockholders
|
|
$
|
(184.5)
|
|
$
|
105.2
|
|
$
|
(74.9)
|
|
$
|
242.0
|
Net (Loss) Income
Per Share Allocated to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per share
|
|
$
|
(1.74)
|
|
$
|
0.99
|
|
$
|
(0.70)
|
|
$
|
2.26
|
Diluted (loss) earnings
per share
|
|
|
(1.74)
|
|
|
0.98
|
|
|
(0.70)
|
|
|
2.26
|
Weighted average shares
used in computing income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
106.3
|
|
|
106.8
|
|
|
106.5
|
|
|
107.1
|
Diluted
|
|
|
106.3
|
|
|
106.9
|
|
|
106.5
|
|
|
107.3
|
Cboe Global Markets,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
June 30, 2022 and
2021
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
(in
millions)
|
|
2022
|
|
2021
|
Assets
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
373.3
|
|
$
|
341.9
|
Financial
investments
|
|
|
68.5
|
|
|
37.1
|
Accounts receivable,
net
|
|
|
391.3
|
|
|
326.9
|
Margin deposits and
clearing funds
|
|
|
987.2
|
|
|
745.9
|
Digital assets -
safeguarded assets
|
|
|
22.4
|
|
|
—
|
Income taxes
receivable
|
|
|
51.1
|
|
|
42.7
|
Other current
assets
|
|
|
39.0
|
|
|
36.8
|
Total Current
Assets
|
|
|
1,932.8
|
|
|
1,531.3
|
|
|
|
|
|
|
|
Investments
|
|
|
243.5
|
|
|
245.8
|
Land
|
|
|
2.3
|
|
|
2.3
|
Property and equipment,
net
|
|
|
107.5
|
|
|
105.2
|
Operating lease right
of use assets
|
|
|
124.8
|
|
|
110.1
|
Goodwill
|
|
|
3,132.0
|
|
|
3,025.4
|
Intangible assets,
net
|
|
|
1,792.8
|
|
|
1,668.6
|
Other assets,
net
|
|
|
140.4
|
|
|
125.8
|
Total
Assets
|
|
$
|
7,476.1
|
|
$
|
6,814.5
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
405.9
|
|
$
|
295.4
|
Section 31 fees
payable
|
|
|
116.3
|
|
|
40.8
|
Deferred
revenue
|
|
|
22.7
|
|
|
15.2
|
Margin deposits and
clearing funds
|
|
|
987.2
|
|
|
745.9
|
Digital assets -
safeguarded liabilities
|
|
|
22.4
|
|
|
—
|
Income taxes
payable
|
|
|
0.3
|
|
|
8.2
|
Current portion of
contingent consideration liabilities
|
|
|
44.8
|
|
|
63.8
|
Total Current
Liabilities
|
|
|
1,599.6
|
|
|
1,169.3
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,959.2
|
|
|
1,299.3
|
Unrecognized tax
benefits
|
|
|
173.5
|
|
|
197.9
|
Deferred income
taxes
|
|
|
252.6
|
|
|
372.7
|
Non-current operating
lease liabilities
|
|
|
139.4
|
|
|
129.2
|
Contingent
consideration liabilities
|
|
|
57.3
|
|
|
6.7
|
Other non-current
liabilities
|
|
|
32.6
|
|
|
34.6
|
Total
Liabilities
|
|
|
4,214.2
|
|
|
3,209.7
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
—
|
|
|
—
|
Common stock
|
|
|
1.1
|
|
|
1.1
|
Treasury stock at
cost
|
|
|
(201.0)
|
|
|
(106.8)
|
Additional paid-in
capital
|
|
|
1,525.7
|
|
|
1,509.4
|
Retained
earnings
|
|
|
1,968.0
|
|
|
2,145.5
|
Accumulated other
comprehensive (loss) income, net
|
|
|
(31.9)
|
|
|
55.6
|
Total Stockholders'
Equity
|
|
|
3,261.9
|
|
|
3,604.8
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
7,476.1
|
|
$
|
6,814.5
|
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 (loss) 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, impairment charges, 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
|
|
Six Months
Ended
|
|
(in
millions)
|
|
June 30,
|
|
June 30,
|
|
Reconciliation of
Revenue Less Cost of Revenue to Organic Net Revenue
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Revenues less cost of
revenues (net revenue)
|
|
$
|
424.1
|
|
$
|
350.6
|
|
$
|
842.2
|
|
$
|
716.1
|
|
Less
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition revenue
less cost of revenues (inorganic net revenue)
|
|
$
|
(9.9)
|
|
$
|
—
|
|
$
|
(18.3)
|
|
$
|
—
|
|
Organic net
revenue
|
|
$
|
414.2
|
|
$
|
350.6
|
|
$
|
823.9
|
|
$
|
716.1
|
|
Reconciliation of
GAAP and non-GAAP Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Table
4
|
|
June 30,
|
|
June 30,
|
|
(in millions, except
per share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to Non-GAAP
(As shown on Table 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
allocated to common stockholders
|
|
$
|
(184.5)
|
|
$
|
105.2
|
|
$
|
(74.9)
|
|
$
|
242.0
|
|
Non-GAAP
adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (1)
|
|
|
14.3
|
|
|
1.8
|
|
|
16.3
|
|
|
5.2
|
|
Investment
establishment costs (2)
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
Gain on investment
(3)
|
|
|
(7.5)
|
|
|
—
|
|
|
(7.5)
|
|
|
—
|
|
Loan forgiveness
(4)
|
|
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
Amortization of
acquired intangible assets (5)
|
|
|
30.1
|
|
|
30.5
|
|
|
60.7
|
|
|
63.4
|
|
Goodwill impairment
(6)
|
|
|
460.1
|
|
|
—
|
|
|
460.1
|
|
|
—
|
|
Impairment of
investment (7)
|
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
|
—
|
|
Total Non-GAAP
adjustments
|
|
|
506.3
|
|
|
32.3
|
|
|
541.9
|
|
|
68.6
|
|
Income tax expense
related to the items above
|
|
|
(143.2)
|
|
|
10.0
|
|
|
(151.9)
|
|
|
(15.9)
|
|
Tax reserves
(8)
|
|
|
—
|
|
|
—
|
|
|
48.5
|
|
|
—
|
|
Deferred tax
re-measurements
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.7
|
|
Net income allocated to
participating securities - effect on reconciling
items
|
|
|
(1.3)
|
|
|
(0.1)
|
|
|
(1.6)
|
|
|
(0.2)
|
|
Adjusted net income
allocated to common stockholders
|
|
$
|
177.3
|
|
$
|
147.4
|
|
$
|
362.0
|
|
$
|
312.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Diluted EPS to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings
per common share
|
|
$
|
(1.74)
|
|
$
|
0.98
|
|
$
|
(0.70)
|
|
$
|
2.26
|
|
Per share impact of
non-GAAP adjustments noted above
|
|
|
3.41
|
|
|
0.40
|
|
|
4.10
|
|
|
0.65
|
|
Adjusted diluted
earnings per common share
|
|
$
|
1.67
|
|
$
|
1.38
|
|
$
|
3.40
|
|
$
|
2.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Margin to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue less cost of
revenue
|
|
$
|
424.1
|
|
$
|
350.6
|
|
$
|
842.2
|
|
$
|
716.1
|
|
Non-GAAP adjustments
noted above
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted revenue
less cost of revenue
|
|
$
|
424.1
|
|
$
|
350.6
|
|
$
|
842.2
|
|
$
|
716.1
|
|
Operating expenses
(9)
|
|
$
|
661.5
|
|
$
|
160.6
|
|
$
|
839.9
|
|
$
|
321.5
|
|
Non-GAAP adjustments
noted above
|
|
|
504.5
|
|
|
32.3
|
|
|
537.1
|
|
|
68.6
|
|
Adjusted operating
expenses
|
|
$
|
157.0
|
|
$
|
128.3
|
|
$
|
302.8
|
|
$
|
252.9
|
|
Operating (loss)
income
|
|
$
|
(237.4)
|
|
$
|
190.0
|
|
$
|
2.3
|
|
$
|
394.6
|
|
Non-GAAP adjustments
noted above
|
|
|
504.5
|
|
|
32.3
|
|
|
537.1
|
|
|
68.6
|
|
Adjusted operating
income
|
|
$
|
267.1
|
|
$
|
222.3
|
|
$
|
539.4
|
|
$
|
463.2
|
|
Adjusted operating
margin (10)
|
|
|
63.0
|
%
|
|
63.4
|
%
|
|
64.0
|
%
|
|
64.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Rate to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
|
(256.8)
|
|
|
179.2
|
|
|
(31.9)
|
|
|
372.1
|
|
Non-GAAP adjustments
noted above
|
|
|
506.3
|
|
|
32.3
|
|
|
541.9
|
|
|
68.6
|
|
Adjusted income
before income taxes
|
|
$
|
249.5
|
|
$
|
211.5
|
|
$
|
510.0
|
|
$
|
440.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
provision
|
|
|
(72.3)
|
|
|
73.7
|
|
|
43.0
|
|
|
129.4
|
|
Non-GAAP adjustments
noted above
|
|
|
143.2
|
|
|
(10.0)
|
|
|
103.4
|
|
|
(1.8)
|
|
Adjusted income tax
expense
|
|
$
|
70.9
|
|
$
|
63.7
|
|
$
|
146.4
|
|
$
|
127.6
|
|
Adjusted income tax
rate
|
|
|
28.4
|
%
|
|
30.1
|
%
|
|
28.7
|
%
|
|
29.0
|
%
|
|
(1) This amount
includes professional fees and outside services and impairment
charges related to the company's acquisitions.
|
(2) This amount
represents the investment establishment costs related to the
company's investment in 7RIDGE Investments 3 LP, which acquired
Trading Technologies, Inc.
|
(3) This amount
represents the gain on the Company's investment in Eris Digital
Holdings LLC ("ErisX") in connection with the full acquisition of
ErisX.
|
(4) This amount
represents the forgiveness of a PPP ("Paycheck Protection Program")
loan previously held by ErisX.
|
(5) This amount
represents the amortization of acquired intangible assets related
to the company's acquisitions.
|
(6) This amount
represents the impairment of ErisX goodwill.
|
(7) This amount
represents the impairment of investment related to the Company's
minority investment in American Financial Exchange, LLC.
|
(8) This amount
represents the tax reserves related to Section 199
matters.
|
(9) 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" ($1.9 million and $1.1
million in expense for the three months ended June 30, 2022 and
2021, respectively,
and $2.5 million and $1.4 million in expense for the six months
ended June 30, 2022 and 2021, respectively), and are directly
offset by deferred
compensation income, expenses and dividends included within "Other
income, net" ($1.9 million and $1.1 million in income, expense and
dividends
in the three months ended June 30, 2022 and 2021, respectively, and
$2.5 million and $1.4 million in income, expense and dividends in
the six months
ended June 30, 2022 and 2021, respectively), on the condensed
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."
|
(10) 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, gain on investment, loan
forgiveness, investment establishment costs, goodwill impairment,
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
|
|
Six Months
Ended
|
|
(in millions, except
percentages)
|
|
June 30,
|
|
June 30,
|
|
Reconciliation of
Net Income Allocated to Common Stockholders to EBITDA and
Adjusted
EBITDA (Per Table 1)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net (loss) income
allocated to common stockholders
|
|
$
|
(184.5)
|
|
$
|
105.2
|
|
$
|
(74.9)
|
|
$
|
242.0
|
|
Interest expense,
net
|
|
|
14.6
|
|
|
12.3
|
|
|
25.4
|
|
|
24.6
|
|
Income tax (benefit)
provision
|
|
|
(72.3)
|
|
|
73.7
|
|
|
43.0
|
|
|
129.4
|
|
Depreciation and
amortization
|
|
|
40.2
|
|
|
40.6
|
|
|
81.1
|
|
|
82.6
|
|
EBITDA
|
|
$
|
(202.0)
|
|
$
|
231.8
|
|
$
|
74.6
|
|
$
|
478.6
|
|
EBITDA
Margin
|
|
|
(47.6)
|
%
|
|
66.1
|
%
|
|
8.9
|
%
|
|
66.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
not included in above line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
|
14.3
|
|
|
1.8
|
|
|
16.3
|
|
|
5.2
|
|
Gain on
investment
|
|
|
(7.5)
|
|
|
—
|
|
|
(7.5)
|
|
|
—
|
|
Loan
forgiveness
|
|
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
Investment
establishment costs
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
Goodwill
impairment
|
|
|
460.1
|
|
|
—
|
|
|
460.1
|
|
|
—
|
|
Impairment of
investment
|
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
274.2
|
|
$
|
233.6
|
|
$
|
555.8
|
|
$
|
483.8
|
|
Adjusted EBITDA
Margin
|
|
|
64.7
|
%
|
|
66.6
|
%
|
|
66.0
|
%
|
|
67.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
June 30,
|
|
December 31,
|
|
|
|
|
|
|
|
Reconciliation of
Cash and Cash Equivalents to Adjusted Cash
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
373.3
|
|
$
|
341.9
|
|
|
|
|
|
|
|
Financial
investments
|
|
|
68.5
|
|
|
37.1
|
|
|
|
|
|
|
|
Less deferred
compensation plan assets
|
|
|
(25.5)
|
|
|
(28.0)
|
|
|
|
|
|
|
|
Less cash collected for
Section 31 Fees
|
|
|
(67.2)
|
|
|
(25.9)
|
|
|
|
|
|
|
|
Adjusted
Cash
|
|
$
|
349.1
|
|
$
|
325.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Transaction and Clearing Fees by Business Segment –Three Months
Ended June 30, 2022 and 2021
|
|
Consolidated
|
|
Options
|
|
N.A.
Equities
|
|
Europe and
APAC
|
|
Futures
|
|
Global
FX
|
|
Digital
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Transaction and
clearing fees
|
$
|
735.3
|
|
$
|
618.2
|
|
$
|
353.0
|
|
$
|
283.2
|
|
$
|
304.5
|
|
$
|
268.0
|
|
$
|
40.6
|
|
$
|
33.3
|
|
$
|
23.0
|
|
$
|
22.2
|
|
$
|
14.1
|
|
$
|
11.5
|
|
$
|
0.1
|
|
$
|
—
|
Liquidity
payments
|
|
(429.0)
|
|
|
(377.9)
|
|
|
(158.4)
|
|
|
(144.1)
|
|
|
(261.4)
|
|
|
(228.4)
|
|
|
(9.1)
|
|
|
(5.4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1)
|
|
|
—
|
Routing and
clearing
|
|
(20.9)
|
|
|
(19.9)
|
|
|
(5.9)
|
|
|
(5.0)
|
|
|
(10.5)
|
|
|
(10.0)
|
|
|
(4.3)
|
|
|
(4.9)
|
|
|
—
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
—
|
|
|
—
|
Net transaction and
clearing fees
|
$
|
285.4
|
|
$
|
220.4
|
|
$
|
188.7
|
|
$
|
134.1
|
|
$
|
32.6
|
|
$
|
29.6
|
|
$
|
27.2
|
|
$
|
23.0
|
|
$
|
23.0
|
|
$
|
22.2
|
|
$
|
13.9
|
|
$
|
11.5
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Revenue by Revenue Caption –Three Months Ended June 30, 2022
and 2021
|
|
Cash and Spot
Markets
|
|
Data and Access
Solutions
|
|
Derivatives
Markets
|
|
Total
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Transaction and
clearing fees
|
$
|
359.2
|
|
$
|
312.7
|
|
$
|
—
|
|
$
|
—
|
|
$
|
376.1
|
|
$
|
305.5
|
|
$
|
735.3
|
|
$
|
618.2
|
Access and capacity
fees
|
|
—
|
|
|
—
|
|
|
81.8
|
|
|
67.1
|
|
|
—
|
|
|
—
|
|
|
81.8
|
|
|
67.1
|
Market data
fees
|
|
19.3
|
|
|
23.9
|
|
|
41.0
|
|
|
30.9
|
|
|
8.5
|
|
|
8.0
|
|
|
68.8
|
|
|
62.8
|
Regulatory
fees
|
|
68.7
|
|
|
26.1
|
|
|
—
|
|
|
—
|
|
|
18.1
|
|
|
10.8
|
|
|
86.8
|
|
|
36.9
|
Other
revenue
|
|
11.3
|
|
|
10.0
|
|
|
1.1
|
|
|
5.0
|
|
|
0.7
|
|
|
0.8
|
|
|
13.1
|
|
|
15.8
|
Total
revenues
|
$
|
458.5
|
|
$
|
372.7
|
|
$
|
123.9
|
|
$
|
103.0
|
|
$
|
403.4
|
|
$
|
325.1
|
|
$
|
985.8
|
|
$
|
800.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
payments
|
$
|
270.0
|
|
$
|
233.8
|
|
$
|
—
|
|
$
|
—
|
|
$
|
159.0
|
|
$
|
144.1
|
|
$
|
429.0
|
|
$
|
377.9
|
Routing and clearing
fees
|
|
15.0
|
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
|
5.0
|
|
|
20.9
|
|
|
19.9
|
Section 31
fees
|
|
68.2
|
|
|
25.9
|
|
|
—
|
|
|
—
|
|
|
11.4
|
|
|
2.9
|
|
|
79.6
|
|
|
28.8
|
Royalty fees and other
cost of revenues
|
|
4.1
|
|
|
3.3
|
|
|
2.3
|
|
|
2.0
|
|
|
25.8
|
|
|
18.3
|
|
|
32.2
|
|
|
23.6
|
Total cost of
revenues
|
$
|
357.3
|
|
$
|
277.9
|
|
$
|
2.3
|
|
$
|
2.0
|
|
$
|
202.1
|
|
$
|
170.3
|
|
$
|
561.7
|
|
$
|
450.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues less cost
of revenues (net
revenue)
|
$
|
101.2
|
|
$
|
94.8
|
|
$
|
121.6
|
|
$
|
101.0
|
|
$
|
201.3
|
|
$
|
154.8
|
|
$
|
424.1
|
|
$
|
350.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition revenue
less cost of
revenues (inorganic net revenue)
|
|
(3.1)
|
|
|
—
|
|
|
(6.8)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.9)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic net
revenue
|
$
|
98.1
|
|
$
|
94.8
|
|
$
|
114.8
|
|
$
|
101.0
|
|
$
|
201.3
|
|
$
|
154.8
|
|
$
|
414.2
|
|
$
|
350.6
|
|
|
|
|
|
|
|
|
Table
9
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Effective Tax Rate to Effective Tax Rate Excluding Goodwill
Impairment and Section 199 Matters - Three Months and Six Months
Ended June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
Three months
ended,
|
|
|
Six months
ended,
|
|
|
|
|
June 30,
2022
|
|
|
June 30,
2022
|
|
|
GAAP effective tax
rate
|
|
28.2
|
%
|
|
(134.8)
|
%
|
|
Tax effect of goodwill
impairment
|
|
1.8
|
%
|
|
175.9
|
%
|
|
Tax effect of Section
199 related matters
|
|
—
|
%
|
|
(11.3)
|
%
|
|
Effective tax rate
excluding goodwill impairment and Section 199 matters
|
|
30.0
|
%
|
|
29.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
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SOURCE Cboe Global Markets, Inc.