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Cboe Global (CBOE) Q4 Earnings Beat on Higher Trading Volume

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Cboe Global Markets, Inc. (CBOE - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.70 per share, which outpaced the Zacks Consensus Estimate by 11.1%. The bottom line soared 41% year over year.

CBOE’s fourth-quarter results witnessed revenue growth driven by increased trading volumes across index and multi-listed options. Growth in transaction revenues resulting from well-performing recurring non-transaction businesses also contributed to the upside.

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 adjusted revenues of CBOE Global amounted to $390.5 million for the fourth quarter, which improved 27% year over year on the back of growth in transaction and clearing fees, access and capacity fees, market data fees, and other revenues. The top line beat the consensus mark by 0.9%.

Options revenues climbed 25% year over year to $202.5 million. The growth was backed by doubt-digit improvement in net transaction and clearing fees, access and capacity fees, and market data fees.

Revenues of North American Equities totaled $91.6 million, up 24% year over year for the fourth quarter. The growth stemmed from improved transaction and clearing fees along with access and capacity fees.

Europe and Asia Pacific revenues soared 46% year over year to $51.7 million on account of Chi-X Asia Pacific inclusion in July 2021 coupled with sound performance of European equities and clearing.

Futures revenues climbed 39% year over year to $29.9 million for the quarter under review, attributable to improved net transaction and clearing fees.

Global FX revenues rose 6% year over year to $14.8 million, courtesy of higher net transaction and clearing fees.

Adjusted operating expenses amounted to $137.5 million, which escalated 23% year over year. The increase was due to elevated compensation and benefits resulting from buyouts completed in late 2020 and mid-2021. Higher professional fees and outside services also contributed to the metric’s rise.

Adjusted operating income grew 30% year over year to $253 million.

Adjusted operating margin for the fourth quarter came in at 64.8%, which expanded 130 basis points (bps) year over year.

Adjusted EBITDA margin of 67.5% expanded 60 bps year over year.

Financial Update

CBOE Global exited the fourth quarter with cash and cash equivalents of $341.9 million, which increased 39.3% from the 2020-end level.

As of Dec 31, 2021, total assets of $6.8 billion rose 4.6% from the 2020-end figure.

CBOE’s long-term debt was $1.3 billion, up 14.5% from the Dec 31, 2020 level.

Total shareholders’ equity was $3.6 billion, up 7.6% from the Dec 31, 2020 figure.

Share Repurchase and Dividend Update

In the fourth quarter, CBOE Global paid out cash dividends worth $51.5 million or 48 cents per share.

As of Dec 31, 2021, CBOE had $318.9 million left under its current share repurchase authorizations.

Full-Year Highlights

CBOE Global achieved record results for 2021. Adjusted earnings of $6.05 per share improved 15% year over year and outpaced the consensus estimate.

Operating revenues of roughly $1.5 billion for 2021 climbed 18% year over year and met the consensus estimate.

2022 Guidance Unveiled

Total organic net revenue growth is anticipated within 5-7 percentage points this year.

Adjusted operating expenses are projected between $617 million and $625 million, indicating an increase from the 2021 base of $531 million.

Capital expenditures for 2022 are forecast in the range of $47-$52 million. Meanwhile, depreciation and amortization expense is estimated within $40-$44 million.

The effective tax rate on adjusted earnings is anticipated between 27.5% and 29.5%.

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 Stocks From Securities and Exchanges

Among other players from the securities and exchanges space that have reported fourth-quarter results so far, the bottom-line results of Nasdaq, Inc. (NDAQ - Free Report) and Intercontinental Exchange, Inc. (ICE - Free Report) beat the respective Zacks Consensus Estimate, while that of MarketAxess Holdings Inc. (MKTX - Free Report) missed expectations.

Nasdaq’s fourth-quarter 2021 adjusted earnings per share of $1.93 beat the Zacks Consensus Estimate of $1.78 by nearly 8.4%. The bottom line also improved 21% year over year. Revenues of NDAQ amounted to $885 million, which increased 12% year over year and outpaced the consensus mark by 2.5%. The Nasdaq Stock Market welcomed 1,000 new company listings in 2021, including 752 IPOs, representing $181 billion in capital raised.    

Intercontinental Exchange reported fourth-quarter 2021 adjusted earnings per share of $1.34, which beat the Zacks Consensus Estimate of $1.32. Also, the bottom line improved 16.5% on a year-over-year basis. Intercontinental Exchange’s revenues, less transaction-based expenses, of $1.8 billion increased 10.1% year over year. The top line met the consensus mark. Net revenues from Exchanges were $1 billion, up 17% year over year. Fixed Income and Data Services revenues of Intercontinental Exchange were $480 million, which increased 7% year over year.

MarketAxess’ fourth-quarter 2021 earnings per share of $1.37 missed the Zacks Consensus Estimate of $1.43. Also, the bottom line declined from $1.91 per share a year ago. MKTX’s total revenues decreased 3.6% to $165.1 million but marginally beat the Zacks Consensus Estimate of $164 million. Emerging markets volume increased 15% year over year to $160.6 billion. MarketAxess’ total credit category’s trading volumes decreased to $604.4 billion from $639.6 billion in the prior-year period.