Cboe Global Markets, Inc. CBOE reported fourth-quarter 2024 adjusted earnings of $2.10 per share, which missed the Zacks Consensus Estimate by 1.4%. The bottom line increased 1.9% year over year.
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The quarterly results reflected strong performance in Derivatives Markets, Data Vantage, and Cash and Spot Markets.
Operational Details
Total adjusted revenues of CBOE Global were a record $524.5 million, up 5.2% year over year on the back of increases in cash and spot markets, Data Vantage and derivatives markets net revenues. The top line, however, missed the consensus mark by 0.6%.
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
Options revenues climbed 3% year over year to $324.3 million. The improvement was driven by growth in market data and access and capacity fees and an increase in net transaction and clearing fees as a result of higher index options trading volumes.
Revenues of North American Equities totaled $94.9 million, up 10% year over year, reflecting higher net transaction and clearing fees and access and capacity fees, partially offset by a decline in industry market data fees. Europe and Asia Pacific revenues increased 17% year over year to $56.2 million, reflecting growth in net transaction and clearing fees and non-transaction revenues.
Futures net revenues decreased 7% year over year to $30.2 million due to a decrease in net transaction and clearing fees. Global FX net revenues rose 3% year over year to $19.4 million, reflecting higher net transaction and clearing fees.
Adjusted operating expenses were $204.8 million, which increased 7% year over year. This increase was primarily due to higher travel and promotional expenses, technology support services, and professional fees and outside services. Our estimate was $208.8 million.
Adjusted operating income grew 4% year over year to $319.7 million. Our estimate was $319.9 million.
Adjusted operating margin was 61%, which contracted 60 basis points (bps) year over year. Our estimate was 60.7%. Adjusted EBITDA margin of 66.3% contracted 110 bps year over year.
Full-Year Highlights
Adjusted earnings of $8.61 per share were up 10% from 2023. However, full-year earnings missed the consensus estimate of $8.64.
Net revenues were $2.1 billion, up 8% from 2023 and in line with the consensus estimate.
Adjusted EBITDA margin of 65.2% expanded 30 bps year over year.
Financial Update
CBOE Global exited 2024 with cash and cash equivalents of $920.3 million, which increased 69.4% from the 2023-end level.
As of Dec. 31, 2024, total assets of $7.8 billion rose 4% from the 2023-end figure.
CBOE’s long-term debt was $1.4 billion, which inched up 0.1% from the 2023-end level.
Total shareholders’ equity was $4.2 billion, up 7.4% from the Dec. 31, 2023 figure.
Share Repurchase and Dividend Update
In the fourth quarter, CBOE Global paid out cash dividends worth $66.4 million or 63 cents per share. As of Dec. 31, 2024, CBOE had $679.8 million left under its current share repurchase authorization.
CBOE’s 2025 Guidance
Organic total net revenues are expected to grow in mid-single digits. Cboe Data Vantage organic net revenue growth is expected to be in mid- to high single digits.
Adjusted operating expense is expected to be between $837 million and $852 million.
Depreciation and amortization expense is expected to be in the range of $55 to $59 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 $75 million to $85 million.
Zacks Rank
CBOE 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 Industry Players
Nasdaq, Inc. NDAQ reported fourth-quarter 2024 adjusted earnings per share of 76 cents, beating the Zacks Consensus Estimate by 1.3%. The bottom line improved 5% year over year. Nasdaq’s net revenues of $1.2 billion increased 10% year over year. The top line missed the Zacks Consensus Estimate by 0.1%.
Annualized Recurring Revenue increased 7% year over year. The company’s operating margin of 55% remained flat year over year. The Nasdaq stock market welcomed 162 new company listings in the fourth quarter of 2024, including 66 initial public offerings. The number of listed companies was 4,075 at the end of the quarter.
Intercontinental Exchange ICE reported fourth-quarter 2024 adjusted earnings per share of $1.52, which beat the Zacks Consensus Estimate by 2%. The bottom line increased 14.3% on a year-over-year basis. Intercontinental’s net revenues were $2.3 billion, down 12.9% year over year. Including exchange net revenues of $1.2 billion, the top line increased 6%. The top line beat the Zacks Consensus Estimate by 0.2%.
Adjusted operating income rose 8.1% year over year to $1.4 billion. Our estimate was $1.3 billion. Adjusted operating margin expanded 100 bps year over year to 58%. Our estimate was 45.8%.
Exchange recurring revenues are expected to grow in low single digits in 2025. Fixed Income & Data Services recurring revenues are expected to grow in mid-single digits, while Mortgage Technology revenues are expected to grow in low-to-mid single digits.
GAAP operating expenses are expected in the range of $4.915-$4.965 billion. Adjusted operating expenses are projected to be between $3.915 billion and $3.965 billion in 2025.
MarketAxess Holdings Inc. MKTX reported fourth-quarter 2024 earnings per share of $1.73, which outpaced the Zacks Consensus Estimate by 1.8%. The bottom line decreased 6% year over year. Total revenues advanced 3% year over year to $202 million. However, the top line missed the consensus mark by 0.5%.
MKTX’s operating income of $80 million advanced 4% year over year but missed our estimate of $82 million. EBITDA fell 2% year over year to $97 million, while EBITDA margin deteriorated 220 bps year over year to 47.8%.
Services revenues, which comprise Information Services, Post-Trade Services and Technology Services, are anticipated to witness mid-single-digit growth in 2025. Total expenses are estimated between $505 million and $525 million for 2025. Capital expenditure is projected between $65 million and $70 million, while the effective tax rate is expected to be between 23.5% and 24.5%.
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