Cboe Global Markets (CBOE) Q4 2007 earnings summary

Executive summary

• Record 2007 revenue of $352.3M, up 37% YoY, and net income of $83.2M versus $42.1M in 2006; record trading activity drove results.

• Fourth consecutive year of record options volume; strategic priorities included expanding the platform, launching stock trading and pursuing demutualization.

Financial highlights

• Revenue rose $94.3M, or 37%, to $352.3M; transaction-volume growth was the primary driver.

• Net income reached $83.2M versus $42.1M; investment income increased $3.3M, or 69%, on higher investment balances.

• Expenses increased $26.4M, or 14%; factors included higher royalty fees, employee costs and linkage rebates, plus a $3.6M HedgeStreet investment loss.

Outlook and guidance

• 2008 priorities included continuing product and platform initiatives and advancing new market opportunities; no quantified guidance was stated.

• A combined stock-and-options electronic auction was planned for 2008, following the launch of Hybrid 4.0 in January.

• Proposed demutualization was intended to increase flexibility for business combinations and capital-market access; completion remained subject to conditions, including member approval.