Cboe Global Markets Returns $418m, 14% Up in Net Revenue

Cboe Global Markets, operator of various options, equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term, futures and forex exchanges, has returned $418.1 million in net revenue for the first quarter of 2022.

The net revenue, which represents a 14% increase when compared to the $365.5 million recorded in the same period last year, reflects increases in net transactions and clearing Clearing Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Read this Term fees as well as access and capacity fees.

However, when compared to its outing for the last quarter of 2021 which stood at $391 million, it is an approximate 7% increase.

The multiple asset class products provider disclosed these figures in its Cboe Global Markets Reports Results for the First Quarter of 2022 published on Friday.

Cboe in the report disclosed that its diluted earnings per share (EPS) decreased by 20% to $1.02 primarily due to $48.5 million of additional tax reserves.

In contrast, Cboe said its adjusted diluted EPS of $1.73 increased 13 percent compared to the results of the first quarter in 2021.

On expenditure, the exchange’s operating expenses increased from $160.9 million in the first quarter of 2021 to $178.4 million.

Additionally, Cboe explained: “Adjusted operating expenses of $145.8 million increased 17% compared to $124.6 million in the first quarter of 2021, primarily due to the acquisition of Cboe Asia Pacific (formerly Chi-X Asia Pacific), which closed on July 1, 2021, as well as an increase in salaries and wages resulting in higher compensation and benefits.

“Additionally, professional fees and outside services increased compared to the first quarter of 2021 primarily due to higher legal fees.”

Regional Posture

For the first quarter of 2022, Cboe European Equities, its pan-European equities exchange, had a 21.8% market share, which is up from 16.8 percent recorded in the same period in 2021.

The exchange noted that this comes “as a result of positive momentum across all orderbooks, with a particular strength in Lit markets.”

In the same fashion, Cboe’s net revenue for Europe and the Asia Pacific stood at $57.5 million, representing a 37% increase. The posting is a reflection of the growth in European equities and clearing.

Also, the July 2021 acquisition of Cboe Asia Pacific, which contributed $8.4 million in net revenue, is a factor, the trading venue clarified.

Standing in Submarkets

Cboe FX's market share was 17.3% for the quarter compared to 16.5 percent in last year's first quarter. Its global forex net revenue of $17.1 million increased 16%, primarily as a result of the higher net transaction and clearing fees.

“Average daily notional value (ADNV) traded on the Cboe FX platform was $42.0 billion for the quarter, up 13% compared to last year's first quarter,” it added.

Cboe FX Markets, the global group's institutional foreign exchange (forex) spot trading venue, recently recorded its second-best month in the platform’s operational history after it handled $1.02 trillion in trading volume in March 2021.

Cboe's options business, meanwhile, had a total market share of 31.5% for the first quarter of 2022 compared to 30.2% in the same period last year, the report disclosed.

Options net revenue of $219.2 million was up $37.5 million or 21% "due to double-digit increases in net transaction and clearing fees, access and capacity fees, and market data."

On the other hand, its futures net revenue increased by 2% to $31.2 million due to slight increases in net transaction and clearing fees, access and capacity fees, and market data.

‘Strong Foundation’

Reacting to the upward outlook of its first-quarter earnings, Edward Tilly, the Chairman, President and Chief Executive Officer of Cboe Global Markets, said the results validate the investments the American company was making across its ecosystem around the world.

Tilly said: “2022 is off to an extraordinary start with Cboe delivering record quarterly results following a record year in 2021.

"Not only did our core derivatives franchise perform remarkably well during the quarter, but we saw strong contributions from areas like our European cash equities and our Data and Access Solutions businesses, underscoring the power of the flywheel at the heart of Cboe's global value creation model.”

“Moving forward, we look to build on our strong foundation with the expected close of the NEO and ErisX acquisitions, expansion of our SPX Weekly Options product suite and continued growth of our European Derivatives platform,” Tilly added.

This upward look probably inspired Cboe's recent restructuring of its leadership team. The exchange said the move was to prepare for the next phase of its growth.