First Quarter Highlights*

• Diluted EPS for the Quarter of $1.63, Up 60 percent

• Record Adjusted Diluted EPS¹ for the Quarter of $1.90, Up 10 percent

• Record Net Revenue for the Quarter of $471.4 million, Up 13 percent

• Reaffirmed Organic Total Net Revenue Growth Target2 for 2023 of 7 to 9 percent and Data and Access Solutions Organic Net Revenue Growth Target2 of 7 to 10 percent

• Reaffirmed 2023 Adjusted Operating Expense Guidance2 of $769 to $779 million, Reflecting Continued Investment to Help Drive Long-Term Revenue and Earnings Growth

Cboe Global Markets, Inc. reported financial results for the first quarter of 2023.

“Cboe marked an important milestone last week as we celebrated our fiftieth anniversary. The years since our founding in 1973 have been marked by relentless innovation and our record first quarter results reported today demonstrate that Cboe is as well positioned as ever to deliver value for our customers and shareholders for years to come,” said Edward T. Tilly, Cboe Global Markets Chairman and Chief Executive Officer. “The first quarter highlighted continued strength in Cboe’s global Derivatives and Data and Access Solutions businesses. Recent innovations including expanded trading hours and new expirations have increased access to our suite of derivatives products, providing our diverse set of customers with tools to navigate any market environment. The strong start to the year demonstrates continued progress as we invest across our global ecosystem. I would like to thank all of the employees and partners who helped make Cboe’s first 50 years so successful, and I look forward to building on our five decades of trusted expertise as we plan for the next 50 years with the same passion and entrepreneurial spirit we had in 1973.”

“Cboe built on its strong performance in 2022 by reporting record net revenue and record adjusted earnings in the first quarter of 2023. I am pleased with the steady progress we made on our key initiatives while continuing to deliver on our financial objectives,” said Brian N. Schell, Cboe Global Markets Executive Vice President, Chief Financial Officer and Treasurer. “Our derivatives business continued to generate robust growth, delivering a 29% year-over-year net revenue increase in the first quarter of 2023. Data and Access Solutions net revenue trends remained steady, increasing by 9% year-over-year, while cash and spot markets net revenue decreased by 12% given the strength of volumes in 1Q22 compared to 1Q23. Moving forward, we are reaffirming our organic total net revenue growth2 target of 7-9% for 2023, and we continue to anticipate Data and Access Solutions organic net revenue growth2 of 7-10%. Our expense guidance also remains unchanged as we see meaningful investment opportunities across our ecosystem to help drive long-term shareholder value. 2023 is off to an impressive start and we look forward to delivering on our objectives in the quarters ahead.”

Discussion of Results by Business Segment :

Options:

• Options net revenue of $280.7 million was up $61.5 million, or 28 percent, from the first quarter of 2022. The growth was driven by a double-digit increase in net transaction and clearing fees2 , as well as growth in access and capacity fees and market data. Net transaction and clearing fees2 increased primarily as a result of a 49 percent increase in index options trading volumes versus the first quarter of 2022, along with a 4 percent increase in index options revenue per contract (“RPC”) for the quarter. Access and capacity fees were 9 percent higher than first quarter 2022 and market data fees were 8 percent higher than first quarter 2022.

• Net transaction and clearing fees2 increased $67.9 million, or 39 percent, reflecting a 9 percent increase in total options average daily volume (“ADV”) and a 27 percent increase in total options RPC compared to the first quarter 2022. 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 4 percent as higher-priced SPX options accounted for a higher percentage of index options volume.

• Cboe’s Options exchanges had total market share of 31.8 percent for the first quarter of 2023 compared to 31.5 percent in the first quarter of 2022, reflecting increased proprietary index products traded compared to the first quarter of 2022.

North American (N.A.) Equities:

• N.A. Equities net revenue of $93.1 million was flat versus the first quarter of 2022, reflecting a $5.6 million first quarter net revenue contribution from the 2022 acquisition of Cboe Canada, offset by lower transaction and clearing fees and market data revenue.

• Net transaction and clearing fees2 decreased by $2.3 million, or 7 percent, as compared to the first quarter of 2022. The decrease was primarily due to lower U.S. Equities off-exchange revenue, a result of lower volumes and market share, as well as slightly lower net capture versus the first quarter of 2022. U.S. Equities exchange revenues were impacted by a 9 percent decrease in U.S. Equities industry volumes and lower market share, offsetting a 13 percent increase in net capture.

• Cboe’s U.S. Equities exchanges had market share of 12.7 percent for the first quarter of 2023 compared to 14.3 percent in the first quarter of 2022 as industry continuous on-exchange market share declined. Cboe’s U.S. Equities off-exchange market share was 20.3 percent versus 24.4 percent in the first quarter of 2022 as overall industry alternative trading systems (“ATS”) market share declined as a percentage of off-exchange share. Canadian Equities market share rose to 14.7 percent as compared to 3.2 percent in the first quarter of 2022 given the inclusion of Cboe Canada.

Europe and Asia Pacific (APAC):

• Europe and APAC net revenue of $49.3 million decreased by 14 percent, reflecting slower industry volumes and continued currency headwinds. On a constant currency basis2 , net revenues were $52.8 million, down 8 percent on a year-over-year basis. European Equities average daily notional value (“ADNV”) traded on Cboe European Equities was €11.4 billion, down 11 percent compared to the first quarter of 2022, outperforming a 22 percent decline in industry market volumes. Net capture decreased 8 percent for the quarter, reflecting a mix shift with the strongest market share gains coming in lower-capture Lit markets.

• For the first quarter of 2023, Cboe European Equities had 24.9 percent market share, up from 21.8 percent in the first quarter of 2022, as a result of positive momentum across Lit trading and Cboe BIDS Europe, making Cboe the largest stock exchange and block trading venue in Europe in the first quarter of 2023.

Futures:

• Futures net revenue of $31.1 million decreased $0.1 million compared to the first quarter of 2022, due to a decline in net transaction and clearing fees2 , largely offset by an increase in access and capacity fees.

• Net transaction and clearing fees2 decreased $1.0 million, reflecting a 9 percent decline in volumes during the quarter

Global FX:

• Global FX net revenue of $18.5 million increased 8 percent, primarily as a result of higher net transaction fees2 . ADNV traded on the Cboe FX platform was $45.0 billion for the quarter, up 7 percent compared to last year’s first quarter, and net capture per one million dollars traded was $2.64 for the quarter, down 1 percent compared to $2.67 in the first quarter of 2022.

• Cboe FX market share was 19.0 percent for the quarter compared to 17.3 percent in last year’s first quarter, which sets a quarterly record for Cboe FX. The record was driven by increased client adoption of our diverse set of FX order types and trading protocols.

The full results can be read here.

Source: Cboe