Cboe Reports Record Profits Driven by Options Trading Surge

Cboe Global Markets reports record quarterly net revenue of $502.1 million and adjusted EPS of $2.15, driven by strong derivatives and data solutions performance. The company reaffirms its organic net revenue growth guidance and lowers its full-year adjusted operating expense guidance.

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Emmanuel Abara Benson
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Cboe Reports Record Profits Driven by Options Trading Surge

Cboe Reports Record Profits Driven by Options Trading Surge

Cboe Global Markets Inc. (CBOE) has reported record quarterly net revenue and strong adjusted earnings for the first quarter of 2024, driven by the strength of its Derivatives and Data and Access Solutions categories. The company's net revenue grew 7% year-over-year to $502.1 million, while adjusted EPS increased by 13% to $2.15.

Cboe's impressive performance was fueled by increased options trading activity amid market volatility. The company's options net revenue grew 10% year-over-year to $307.4 million, while its adjusted EBITDA margin increased by 1.4 percentage points to 67.2%. Fredric Tomczyk, Cboe Global Markets Chief Executive Officer, stated, "These results build on our strong 2023 trends as overall net revenues grew 7% year-over-year and adjusted EPS increased by 13% as compared to the same period in 2023."

Why this matters: The surge in options trading driven by market volatility has significant implications for the overall health of the financial markets, as it can indicate investor sentiment and risk appetite. Moreover, Cboe's strong performance in this area may influence the broader exchange industry, potentially leading to increased competition and innovation in derivatives trading.

The company's Derivatives segment saw net revenues grow by 8% year-over-year, while Data and Access Solutions net revenue increased by 8%. Cash and Spot Markets net revenue remained stable year-over-year, demonstrating resilience in a competitive market. Jill Griebenow, Cboe Global Markets Executive Vice President and Chief Financial Officer, expressed her satisfaction with the results, saying, "Following a record 2023, I am incredibly pleased to report record net revenues and strong adjusted earnings in the first quarter of 2024."

Cboe reaffirmed its Data and Access Solutions organic net revenue growth guidance range of 7-10% and lowered its full-year adjusted operating expense guidance to $795-805 million from $798-808 million. The company's strong liquidity position, with cash and cash equivalents of $536.3 million as of March 31, 2024, allowed it to return value to shareholders through dividends and share repurchases. Cboe paid $58.5 million in dividends and used $89.3 million to buy back approximately 490,000 shares during the quarter.

The company's focus on driving greater margin efficiencies across its businesses contributed to its strong performance. Cboe expects to achieve organic net revenue growth at the higher end of the 5-7% guidance range for 2024. CEO Fredric Tomczyk also highlighted the company's strategic refocusing on its digital asset business, stating, "We are strategically refocusing on our digital asset business, aiming to leverage our core strengths in derivatives and technology to enhance operating efficiencies."

CboeGlobal Markets' record-breakingfirst quarter results underscore the company's ability to capitalize on market volatility and the growing demand for options trading. With a strong focus on derivatives, data solutions, and strategic initiatives, Cboe is well-positioned to continue delivering value to its shareholders and maintaining its leadership position in the exchange industry.

Key Takeaways

  • Cboe reports record quarterly net revenue of $502.1 million, up 7% year-over-year.
  • Adjusted EPS increases 13% to $2.15, driven by strong derivatives and data solutions.
  • Options trading activity surges amid market volatility, with net revenue up 10%.
  • Cboe reaffirms 7-10% organic net revenue growth guidance for Data and Access Solutions.
  • Company returns value to shareholders through $58.5 million in dividends and $89.3 million in share repurchases.