Cboe Global Markets (CBOE) Q3 2024 earnings summary

Executive summary

• Achieved record net revenue of $532 million in Q3 2024, up 11% year-over-year, driven by strong growth in derivatives, cash and spot markets, and data and access solutions.

• Adjusted diluted EPS set a record at $2.22, up 8% year-over-year; adjusted EBITDA increased 7% to $342 million, with a margin of 64.3%.

• Strategic focus included reduced M&A, increased investment in organic growth and technology, and winding down the digital spot trading business.

• Returned $387 million to shareholders year-to-date through dividends and share repurchases.

• Acquired a 14.8% minority stake in Japannext Co., Ltd. in October 2024.

Financial highlights

• Q3 2024 revenues less cost of revenues: $532 million (+11% YoY); adjusted EBITDA: $342 million (+7% YoY); adjusted EBITDA margin: 64.3%.

• Derivatives net revenue grew 13% year-over-year, with options ADV up 2% and index options ADV up 13%.

• Cash and Spot Markets revenue increased 12% year-over-year, with all regions contributing; Europe and Asia Pacific up 22%, North American Equities up 3%.

• Adjusted operating expenses increased 13% to $204 million, mainly due to higher compensation and marketing.

• Net income allocated to common stockholders was $217.4 million, up 5% year-over-year.

Outlook and guidance

• Raised full-year 2024 organic net revenue growth guidance to 7%-9% (from 6%-8%).

• Expect to hit the lower end of DnA organic net revenue growth guidance of 7%-10%.

• Increased full-year adjusted expense guidance to $798M-$808M and CapEx to $57M-$63M, reflecting technology investments.

• Effective tax rate on adjusted earnings for 2024 reaffirmed at 28.5%-30.5%.

• Plans to transition digital asset futures contracts to CFE in 2025, pending regulatory approval.