Cboe Global (CBOE) Q1 Earnings & Revenues Beat Estimates

Cboe Global Markets, Inc.’s CBOE first-quarter 2022 adjusted earnings of $1.73 per share beat the Zacks Consensus Estimate by 3.6%. The bottom line increased 13.1% year over year.

The quarter witnessed an increase in clearing fees and access and capacity fees, growth in European equities and clearing and higher net transaction and clearing fees.

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

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

Cboe Global Markets, Inc. price-consensus-eps-surprise-chart | Cboe Global Markets, Inc. Quote

Operational Details

Total revenues came in at $418.1 million and beat the Zacks Consensus Estimate by 2.2%. The top line increased 14.4% year over year, reflecting increases in net transaction and clearing fees and access and capacity fees.

Options revenues increased 21% year over year to $219.2 million due to double-digit increases in net transaction and clearing fees, access and capacity fees, and market data.

Revenues of North American Equities decreased 3% year over year to $93.1 million, primarily due to lower transaction and clearing fees and lower market data fees.

Futures revenues of $31.2 million were up 2% year over year due to increases in net transaction and clearing fees, access and capacity fees, and market data.

Europe and Asia Pacific revenues surged 37% year over year to $57.5 million, reflecting growth in European equities and clearing, and the addition of Cboe Asia Pacific in July 2021, which contributed $8.4 million in net revenues.

Global FX revenues decreased 16% to $17.1 million, attributable to a higher net transaction and clearing fees.

Total adjusted operating expenses increased 17% year over year to $145.8 million attributable to the acquisition of Cboe Asia Pacific, which closed in 2021, as well as an increase in salaries and wages resulting in higher compensation and benefits and higher professional fees and outside services.

Adjusted operating income increased 13% year over year to $272.3 million.

Adjusted operating margin in the quarter under review contracted 80 basis points (bps) to 65.1%.

Adjusted EBITDA margin of 67.3% contracted 120 bps.

Financial Update

As of Mar 31, 2022, CBOE Global had cash and cash equivalents of $659.4 million, up 92.9% from the figure at 2021 end. Total assets were $8.2 billion, up 20.3% from the level at 2021 end.

At the end of the quarter, the long-term debt of the company was $1.6 billion, up 22.6% year over year.

Total shareholders’ equity was $3.6 billion at the end of the reported quarter, down 1% from the value on Dec 31, 2021.

Share Repurchase and Dividend Update

Cboe Global paid out cash dividends worth $51.4 million and bought back shares worth $70 million in the reported quarter. Cboe Global had $248.9 million remaining under its existing share repurchase authorization as of Mar 31.

2022 Guidance Unveiled

Cboe Global expects total organic net revenue growth in the range of 5 to 7 percentage points in 2022.

The company expects organic net revenues from Data and Access Solutions to increase approximately 8% to 11% in 2022 from a base of $419 million in 2021, up from the earlier guidance of 7% to 10%.

CBOE expects adjusted operating expenses in 2022 in the range of $617 million to $625 million from a base of $531 million in 2021.

It expects depreciation and amortization expenses for 2022 in the range of $40 to $44 million, excluding the expected amortization of acquired intangible assets.

The company expects the effective tax rate on adjusted earnings for 2022 in the range of 27.5% to 29.5%.

Cboe Global expects capital expenditures for 2022 in the range of $47 million to $52 million.

Zacks Rank

Cboe Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities and Exchanges

Among other players from the securities and exchanges space that have reported fourth-quarter results so far, the bottom line of CME Group, Inc. CME, MarketAxess Holdings Inc. MKTX and Nasdaq, Inc. NDAQ beat the respective Zacks Consensus Estimate.

CME Group reported first-quarter 2022 adjusted earnings per share of $2.11, which beat the Zacks Consensus Estimate of $2.00. The bottom line increased 17.9% year over year due to higher clearing and transaction fees and market data and information services.

Operating income increased 18.5% from the prior-year quarter to $859.1 million. ADV was 25.9 million contracts, including non-U.S. ADV of 7.3 million contracts, led by 28% growth in Latin America, 22% in Asia and 17% in EMEA.

MarketAxess reported first-quarter 2022 earnings per share of $1.73, which beat the Zacks Consensus Estimate by 1.8%, driven by revenues and trading volumes. However, the bottom line declined from $2.11 per share a year ago.

MarketAxess' emerging markets volume decreased 7% year over year while emerging markets ADV was up 5%. For the first quarter, the company announced active total client firms of 1,913, while international client firms totaled 975. Commission revenues of $166.1 million declined 5.5% from $175.8 million.

Nasdaq reported first-quarter 2022 adjusted earnings per share of $1.97, beating the Zacks Consensus Estimate of $1.93 by 2.1%. The bottom line improved 0.5% year over year. The improvement was mainly driven by solid results in the Solutions segment.

Nasdaq’s revenues of $892 million increased 5% year over year. The upside can primarily be attributed to a $51 million impact from organic growth and a $4 million increase from the net impact of acquisitions and divestitures. It was partially offset by a $14 million decrease from the impact of changes in FX rates. The top line matched the Zacks Consensus Estimate.

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