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Cboe Global (CBOE) Q4 Earnings Top, Revenues Lag, View Revised
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Cboe Global Markets, Inc. (CBOE - Free Report) reported fourth-quarter 2022 adjusted earnings of $1.80 per share, which outpaced the Zacks Consensus Estimate by 1.7%. The bottom line increased 5.8% year over year.
The quarter witnessed increased adjusted revenues and adjusted earnings, double-digit increases in net transaction and clearing fees, access and capacity fees, offset by higher expenses.
Cboe Global Markets, Inc. Price, Consensus and EPS Surprise
Total adjusted revenues of CBOE amounted to $457.1 million for the fourth quarter, which improved 17% year over year on the back of growth in derivatives markets and data and access solutions. The top line missed the consensus mark by 0.6%.
Options revenues climbed 35% year over year to $273.2 million. The growth was driven by double-digit increases in net transaction and clearing fees, access and capacity fees and market data.
Revenues of North American Equities totaled $96.4 million, up 5% year over year for the fourth quarter. The growth was driven by a $5.5 million fourth-quarter net revenue contribution from the 2022 acquisition of NEO and higher access and capacity fees. It was partially offset by lower transaction and clearing fees and industry market data revenues.
Europe and Asia Pacific revenues decreased 15 % year over year to $44.2 million due to continued currency headwinds.
Futures net revenues decreased 10% year over year to $26.8 million for the quarter under review due to a decline in net transaction and clearing fees, offset slightly by an increase in market data fees.
Global FX net revenues rose 14% year over year to $16.9 million, courtesy of higher net transaction and clearing fees.
Adjusted operating expenses amounted to $176.6 million, which escalated 28% year over year. The increase was driven by the acquisitions of Cboe Digital (formerly ErisX) and NEO, as well as higher compensation and benefits, travel and promotional and technology support services expenses.
Adjusted operating income grew 10.9% year over year to $280.5 million.
Adjusted operating margin for the fourth quarter came in at 61.4%, which contracted 340 basis points (bps) year over year.
Adjusted EBITDA margin of 63.9% contracted 360 bps year over year.
Financial Update
CBOE exited the fourth quarter with cash and cash equivalents of $432.7 million, which increased 26.5% from the 2021-end level.
As of Dec 31, 2022, total assets of $6.9 billion rose 2.7% from the 2021-end figure.
CBOE’s long-term debt was $1.4 billion, up 10.6% from the Dec 31, 2021 level.
Total shareholders’ equity was $3.5 billion, down 3.9% from the Dec 31, 2021 figure.
Share Repurchase and Dividend Update
In the fourth quarter, CBOE Global paid out cash dividends worth $53.4 million or 50 cents per share.
As of Dec 31, 2022, CBOE had $217.9 million left under its current share repurchase authorizations.
Full-Year Highlights
Cboe Global’s adjusted earnings of $6.93 per share improved 15% year over year and outpaced the consensus estimate by 0.3%.
Operating revenues of roughly $1.7 billion for 2022 climbed 18% year over year and met the consensus estimate.
2023 Guidance Unveiled
Organic total net revenue growth is expected to be in the range of 7 to 9 percentage points, which is above medium-term organic total net revenue guidance expectations of 5 to 7 percentage points.
Adjusted operating expenses are expected to be in the range of $769 to $779 million, from a base of $652 million in 2022.
Depreciation and amortization expense, which is included in adjusted operating expenses above, is expected to be in the range of $48 to $52 million, excluding the expected amortization of acquired intangible assets.
The effective tax rate on adjusted earnings is expected to be in the range of 28.5% to 30.5%.
Capital expenditures are expected to be in the range of $60 to $66 million.
Performance of Other Stocks from Securities and Exchanges
Nasdaq, Inc. (NDAQ - Free Report) reported fourth-quarter 2022 adjusted earnings per share of 64 cents, missed the Zacks Consensus Estimate of 65 cents by nearly 1.5%. The bottom line remained unchanged year over year. Nasdaq’s revenues of $906 million increased 2.3% year over year. The top line matched the Zacks Consensus Estimate.
Annualized Recurring Revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 36% of ARR. Adjusted operating expenses were $460 million, up 6% from the year-ago period. Operating margin of 49% contracted 200 bps year over year. In 2022, the Nasdaq Stock Market featured six of the largest ten U.S. IPOs by capital raised, attracted 74% of all proceeds raised through the U.S. IPOs and welcomed 14 listing switches.
MarketAxess Holdings Inc. (MKTX - Free Report) reported fourth-quarter 2022 earnings per share of $1.58, beating the Zacks Consensus Estimate of $1.53 and our estimate of $1.45. The bottom line increased 15.3% year over year. Total revenues of $177.9 million rose 7.8% year over year in the quarter under review and beat the consensus mark of $176 million and our estimate of $175.7 million. Active clients of MarketAxess totaled 2,068 in the fourth quarter, which increased 10% year over year.
Commission revenues of $158.4 million increased 8.6% year over year, beating our estimate of $156 million. While information services and other revenues increased 8.8% and 10.6% year over year, respectively, post-trade services revenues fell 5.8%. MarketAxess’ U.S. high-grade trading volume came in at $334.7 billion, up 20.5% year over year in the fourth quarter and comfortably beating our estimate of $316.3 billion.
Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2022 adjusted earnings per share of $1.25, which miss the Zacks Consensus Estimate of $1.26. Also, the bottom line decreased 6.7% on a year-over-year basis.
Intercontinental Exchange’s revenues, less transaction-based expenses, of $1.8 billion decreased 4% year over year on lower revenues from Exchanges and Mortgage Technology segments. The top line missed the Zacks Consensus Estimate by 0.4%. Adjusted operating income declined 5.8% year over year to $1 billion. Adjusted operating margin contracted 100 bps from the year-ago quarter to 58%.
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Cboe Global (CBOE) Q4 Earnings Top, Revenues Lag, View Revised
Cboe Global Markets, Inc. (CBOE - Free Report) reported fourth-quarter 2022 adjusted earnings of $1.80 per share, which outpaced the Zacks Consensus Estimate by 1.7%. The bottom line increased 5.8% year over year.
The quarter witnessed increased adjusted revenues and adjusted earnings, double-digit increases in net transaction and clearing fees, access and capacity fees, offset by higher expenses.
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 amounted to $457.1 million for the fourth quarter, which improved 17% year over year on the back of growth in derivatives markets and data and access solutions. The top line missed the consensus mark by 0.6%.
Options revenues climbed 35% year over year to $273.2 million. The growth was driven by double-digit increases in net transaction and clearing fees, access and capacity fees and market data.
Revenues of North American Equities totaled $96.4 million, up 5% year over year for the fourth quarter. The growth was driven by a $5.5 million fourth-quarter net revenue contribution from the 2022 acquisition of NEO and higher access and capacity fees. It was partially offset by lower transaction and clearing fees and industry market data revenues.
Europe and Asia Pacific revenues decreased 15 % year over year to $44.2 million due to continued currency headwinds.
Futures net revenues decreased 10% year over year to $26.8 million for the quarter under review due to a decline in net transaction and clearing fees, offset slightly by an increase in market data fees.
Global FX net revenues rose 14% year over year to $16.9 million, courtesy of higher net transaction and clearing fees.
Adjusted operating expenses amounted to $176.6 million, which escalated 28% year over year. The increase was driven by the acquisitions of Cboe Digital (formerly ErisX) and NEO, as well as higher compensation and benefits, travel and promotional and technology support services expenses.
Adjusted operating income grew 10.9% year over year to $280.5 million.
Adjusted operating margin for the fourth quarter came in at 61.4%, which contracted 340 basis points (bps) year over year.
Adjusted EBITDA margin of 63.9% contracted 360 bps year over year.
Financial Update
CBOE exited the fourth quarter with cash and cash equivalents of $432.7 million, which increased 26.5% from the 2021-end level.
As of Dec 31, 2022, total assets of $6.9 billion rose 2.7% from the 2021-end figure.
CBOE’s long-term debt was $1.4 billion, up 10.6% from the Dec 31, 2021 level.
Total shareholders’ equity was $3.5 billion, down 3.9% from the Dec 31, 2021 figure.
Share Repurchase and Dividend Update
In the fourth quarter, CBOE Global paid out cash dividends worth $53.4 million or 50 cents per share.
As of Dec 31, 2022, CBOE had $217.9 million left under its current share repurchase authorizations.
Full-Year Highlights
Cboe Global’s adjusted earnings of $6.93 per share improved 15% year over year and outpaced the consensus estimate by 0.3%.
Operating revenues of roughly $1.7 billion for 2022 climbed 18% year over year and met the consensus estimate.
2023 Guidance Unveiled
Organic total net revenue growth is expected to be in the range of 7 to 9 percentage points, which is above medium-term organic total net revenue guidance expectations of 5 to 7 percentage points.
Adjusted operating expenses are expected to be in the range of $769 to $779 million, from a base of $652 million in 2022.
Depreciation and amortization expense, which is included in adjusted operating expenses above, is expected to be in the range of $48 to $52 million, excluding the expected amortization of acquired intangible assets.
The effective tax rate on adjusted earnings is expected to be in the range of 28.5% to 30.5%.
Capital expenditures are expected to be in the range of $60 to $66 million.
Zacks Rank
CBOE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Stocks from Securities and Exchanges
Nasdaq, Inc. (NDAQ - Free Report) reported fourth-quarter 2022 adjusted earnings per share of 64 cents, missed the Zacks Consensus Estimate of 65 cents by nearly 1.5%. The bottom line remained unchanged year over year. Nasdaq’s revenues of $906 million increased 2.3% year over year. The top line matched the Zacks Consensus Estimate.
Annualized Recurring Revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 36% of ARR. Adjusted operating expenses were $460 million, up 6% from the year-ago period. Operating margin of 49% contracted 200 bps year over year. In 2022, the Nasdaq Stock Market featured six of the largest ten U.S. IPOs by capital raised, attracted 74% of all proceeds raised through the U.S. IPOs and welcomed 14 listing switches.
MarketAxess Holdings Inc. (MKTX - Free Report) reported fourth-quarter 2022 earnings per share of $1.58, beating the Zacks Consensus Estimate of $1.53 and our estimate of $1.45. The bottom line increased 15.3% year over year. Total revenues of $177.9 million rose 7.8% year over year in the quarter under review and beat the consensus mark of $176 million and our estimate of $175.7 million. Active clients of MarketAxess totaled 2,068 in the fourth quarter, which increased 10% year over year.
Commission revenues of $158.4 million increased 8.6% year over year, beating our estimate of $156 million. While information services and other revenues increased 8.8% and 10.6% year over year, respectively, post-trade services revenues fell 5.8%. MarketAxess’ U.S. high-grade trading volume came in at $334.7 billion, up 20.5% year over year in the fourth quarter and comfortably beating our estimate of $316.3 billion.
Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2022 adjusted earnings per share of $1.25, which miss the Zacks Consensus Estimate of $1.26. Also, the bottom line decreased 6.7% on a year-over-year basis.
Intercontinental Exchange’s revenues, less transaction-based expenses, of $1.8 billion decreased 4% year over year on lower revenues from Exchanges and Mortgage Technology segments. The top line missed the Zacks Consensus Estimate by 0.4%. Adjusted operating income declined 5.8% year over year to $1 billion. Adjusted operating margin contracted 100 bps from the year-ago quarter to 58%.