Cboe Global Markets, Inc 8-K, filed Jul 31, 2020

Cboe Global Markets, Inc. (CBOE)

8-K 2020-07-31 For: 2020-07-31

View Original

Added on April 06, 2026

About this 8-K

Cboe Global Markets, Inc filed this 8-K on July 31, 2020.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


001-34774	20-5446972
(Commission File Number)	(IRS Employer Identification No.)


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, par value of $0.01 per share	CBOE	CboeBZX

	CBOE GLOBAL MARKETS, INC.
	(Registrant)

	By:	/s/ Brian N. Schell
		Brian N. Schell
		Executive Vice President and Chief
		Financial Officer

		Dated: July 31, 2020


Table 1
Consolidated Second Quarter Results									2Q20			2Q19
($ in millions except per share)	2Q20			2Q19			Change		Adjusted¹			Adjusted¹			Change
Total Revenues Less Cost of Revenues	$	296.9		$	283.2		5	%	$	296.9		$	283.2		5	%
Total Operating Expenses	$	135.2		$	158.0		(14)	%	$	95.8		$	103.1		(7)	%
Operating Income	$	161.7		$	125.2		29	%	$	201.1		$	180.1		12	%
Operating Margin %		54.5	%		44.2	%	10.3	pp		67.7	%		63.6	%	4.1	pp
Net Income Allocated to Common Stockholders	$	113.3		$	87.6		29	%	$	143.3		$	125.7		14	%
Diluted EPS	$	1.03		$	0.78		32	%	$	1.31		$	1.13		16	%
EBITDA¹	$	201.6		$	176.4		14	%	$	211.0		$	193.6		9	%
EBITDA Margin %¹		67.9	%		62.3	%	5.6	pp		71.1	%		68.4	%	2.7	pp


Table 2
Total Revenues Less Cost of Revenues by
Business Segment
(in millions)	2Q20		2Q19		Change
Options	$	150.6	$	140.8		7	%
U.S. Equities		90.6		74.1		22	%
Futures		20.9		32.6		(36)	%
European Equities		21.1		22.4		(6)	%
Global FX		13.7		13.1		5	%
Corporate		-		0.2		-	%
Total	$	296.9	$	283.2		5	%


Cboe Media Contacts:		Analyst Contact:
Angela Tu	Tim Cave	Debbie Koopman
(646) 856-8734	+44 (0) 7593 506 719	(312) 786-7136
atu@cboe.com	tcave@cboe.com	dkoopman@cboe.com


	2Q 2020			1Q 2020			4Q 2019			3Q 2019			2Q 2019
Options (ADV in thousands)
Total industry ADV		27,649			28,014			19,492			19,790			19,274
Total company Options ADV		9,944			10,731			7,297			7,720			7,261
Multi-listed options		8,354			8,069			5,552			5,715			5,329
Index options		1,590			2,663			1,745			2,005			1,932
Total Options Market Share		36.0	%		38.3	%		37.4	%		39.0	%		37.7	%
Multi-listed options		32.1	%		31.9	%		31.3	%		32.2	%		30.8	%
Index options		99.4	%		99.2	%		99.0	%		99.1	%		99.2	%
Total Options RPC:	$	0.182		$	0.234		$	0.225		$	0.236		$	0.238
Multi-listed options	$	0.051		$	0.053		$	0.055		$	0.056		$	0.058
Index options	$	0.870		$	0.781		$	0.766		$	0.751		$	0.736

U.S. Equities
Total industry ADV (shares in billions)		12.4			11.0			6.8			6.9			6.9
Market share %		16.1	%		16.7	%		16.4	%		17.2	%		15.7	%
Net capture (per 100 touched shares)	$	0.025		$	0.026		$	0.023		$	0.020		$	0.028

Futures
ADV (in thousands)		144			331			228			279			257
RPC	$	1.743		$	1.750		$	1.794		$	1.746		$	1.748

European Equities
Total industry ADNV (Euros - in billions)	€	40.1		€	51.5		€	35.1		€	34.2		€	40.8
Market share %		15.8	%		17.7	%		18.4	%		19.8	%		20.3	%
Net capture (bps)		0.248			0.244			0.248			0.233			0.224

Global FX
Market share %		16.4	%		15.7	%		16.0	%		14.1	%		15.2	%
ADNV ($ in billions)	$	31.8		$	43.3		$	30.1		$	30.3		$	32.5
Net capture (per one million dollars traded)	$	2.77		$	2.69		$	2.80		$	2.80		$	2.65


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share amounts)	2020		2019		2020		2019
Revenue:
Transaction fees	$	618.3	$	426.9	$	1,279.8	$	856.2
Access and capacity fees		55.7		54.5		113.4		108.9
Market data fees		58.7		51.8		114.9		103.4
Regulatory fees		128.7		79.7		265.5		138.4
Other revenue		7.3		7.7		16.6		15.2
Total Revenues		868.7		620.6		1,790.2		1,222.1
Cost of Revenues:
Liquidity payments		415.6		235.8		808.0		479.5
Routing and clearing		17.7		9.2		33.7		18.4
Section 31 fees		119.0		70.3		246.4		118.5
Royalty fees		19.4		21.9		46.8		42.9
Other		0.1		0.2		0.1		0.2
Total Cost of Revenues		571.8		337.4		1,135.0		659.5
Revenues Less Cost of Revenues		296.9		283.2		655.2		562.6
Operating Expenses:
Compensation and benefits		54.9		52.2		108.2		100.3
Depreciation and amortization		38.0		43.7		78.5		90.9
Technology support services		12.5		11.8		24.4		23.7
Professional fees and outside services		12.3		19.2		27.2		35.4
Travel and promotional expenses		0.9		3.0		3.0		5.6
Facilities costs		4.1		3.0		8.2		5.1
Acquisition-related costs		9.4		20.8		10.2		23.1
Other expenses		3.1		4.3		7.4		7.9
Total Operating Expenses		135.2		158.0		267.1		292.0
Operating Income		161.7		125.2		388.1		270.6
Non-operating (Expenses) Income:
Interest expense, net		(7.3)		(10.0)		(14.6)		(19.9)
Other income (expense), net		2.2		4.4		0.6		(4.4)
Total Non-operating Expense		(5.1)		(5.6)		(14.0)		(24.3)
Income Before Income Tax Provision		156.6		119.6		374.1		246.3
Income tax provision		43.0		35.1		103.1		67.7
Net Income		113.6		84.5		271.0		178.6
Net loss attributable to redeemable noncontrolling interest		—		3.8		—		4.0
Net Income Excluding Redeemable Noncontrolling Interest		113.6		88.3		271.0		182.6
Change in redemption value of redeemable noncontrolling interest		—		(0.2)		—		(0.4)
Net income allocated to participating securities		(0.3)		(0.5)		(0.7)		(1.1)
Net Income Allocated to Common Stockholders	$	113.3	$	87.6	$	270.3	$	181.1
Net Income Per Share Allocated to Common Stockholders:
Basic earnings per share	$	1.04	$	0.79	$	2.46	$	1.62
Diluted earnings per share		1.03		0.78		2.45		1.62
Weighted average shares used in computing income per share:
Basic		109.5		111.5		109.9		111.5
Diluted		109.6		111.6		110.1		111.6


	June 30,		December 31,
(in millions)	2020		2019
Assets
Current Assets:
Cash and cash equivalents	$	210.1	$	229.3
Financial investments		176.5		71.0
Accounts receivable, net		376.8		234.7
Income taxes receivable		—		56.8
Other current assets		17.8		15.8
Total Current Assets		781.2		607.6

Investments		61.3		61.2
Property and equipment, net		75.6		47.0
Property held for sale		13.0		21.1
Operating lease right of use assets		117.8		53.4
Goodwill		2,730.4		2,682.1
Intangible assets, net		1,526.2		1,589.9
Other assets, net		60.8		51.6
Total Assets	$	5,366.3	$	5,113.9

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	216.0	$	171.9
Section 31 fees payable		247.5		99.0
Deferred revenue		17.3		4.5
Income taxes payable		14.9		4.0
Current portion of contingent consideration liabilities		0.8		2.2
Total Current Liabilities		496.5		281.6

Long-term debt		868.6		867.6
Unrecognized tax benefits		148.8		135.9
Deferred income taxes		384.9		399.7
Non-current operating lease liabilities		137.3		46.7
Contingent consideration liabilities		19.7		—
Other non-current liabilities		24.2		26.8
Total Liabilities		2,080.0		1,758.3

Stockholders’ Equity:
Preferred stock		—		—
Common stock		1.2		1.2
Treasury stock at cost		(1,120.5)		(887.1)
Additional paid-in capital		2,704.5		2,691.3
Retained earnings		1,703.7		1,512.6
Accumulated other comprehensive (loss) income, net		(2.6)		37.6
Total Stockholders’ Equity		3,286.3		3,355.6

Total Liabilities and Stockholders' Equity	$	5,366.3	$	5,113.9


	Three Months Ended						Six Months Ended
Table 4	June 30,						June 30,
(in millions, except per share amounts)	2020			2019			2020			2019
Reconciliation of Net Income Allocated to Common Stockholders to Non-GAAP (As shown on Table 1)
Net income allocated to common stockholders	$	113.3		$	87.6		$	270.3		$	181.1
Non-GAAP adjustments
Acquisition-related expenses (1)		9.4			20.8			10.2			23.1
Amortization of acquired intangible assets (2)		30.0			34.1			62.5			71.7
Change in redemption value of noncontrolling interest		—			0.2			—			0.4
Total Non-GAAP adjustments		39.4			55.1			72.7			95.2
Income tax expense related to the items above		(9.3)			(13.2)			(16.9)			(23.2)
Impairment charges attributed to noncontrolling interest		—			(3.6)			—			(3.6)
Net income allocated to participating securities - effect on reconciling items		(0.1)			(0.2)			(0.5)			(0.4)
Adjusted net income allocated to common stockholders	$	143.3		$	125.7		$	325.6		$	249.1

Reconciliation of Diluted EPS to Non-GAAP
Diluted earnings per common share	$	1.03		$	0.78		$	2.45		$	1.62
Per share impact of non-GAAP adjustments noted above		0.28			0.35			0.51			0.61
Adjusted diluted earnings per common share	$	1.31		$	1.13		$	2.96		$	2.23

Reconciliation of Operating Margin to Non-GAAP
Revenue less cost of revenue	$	296.9		$	283.2		$	655.2		$	562.6
Non-GAAP adjustments noted above		—			—			—			—
Adjusted revenue less cost of revenue	$	296.9		$	283.2		$	655.2		$	562.6
Operating expenses (3)	$	135.2		$	158.0		$	267.1		$	292.0
Non-GAAP adjustments noted above		39.4			54.9			72.7			94.8
Adjusted operating expenses	$	95.8		$	103.1		$	194.4		$	197.2
Operating income	$	161.7		$	125.2		$	388.1		$	270.6
Non-GAAP adjustments noted above		39.4			54.9			72.7			94.8
Adjusted operating income	$	201.1		$	180.1		$	460.8		$	365.4
Adjusted operating margin (4)		67.7	%		63.6	%		70.3	%		64.9	%

Reconciliation of Income Tax Rate to Non-GAAP
Income before income taxes		156.6			119.6			374.1			246.3
Non-GAAP adjustments noted above		39.4			55.1			72.7			95.2
Adjusted income before income taxes	$	196.0		$	174.7		$	446.8		$	341.5

Income tax expense		43.0			35.1			103.1			67.7
Non-GAAP adjustments noted above		9.3			13.2			16.9			23.2
Adjusted income tax expense	$	52.3		$	48.3		$	120.0		$	90.9
Adjusted income tax rate		26.7	%		27.7	%		26.9	%		26.6	%



Table 5	Three Months Ended						Six Months Ended
(in millions)	June 30,						June 30,
Reconciliation of Net Income Allocated to Common Stockholders to EBITDA and Adjusted EBITDA (Per Table 1)	2020			2019			2020			2019
Net income allocated to common stockholders	$	113.3		$	87.6		$	270.3		$	181.1
Interest expense, net		7.3			10.0			14.6			19.9
Income tax provision		43.0			35.1			103.1			67.7
Depreciation and amortization		38.0			43.7			78.5			90.9
EBITDA	$	201.6		$	176.4		$	466.5		$	359.6
EBITDA Margin		67.9	%		62.3	%		71.2	%		63.9	%

Non-GAAP adjustments not included in above line items
Acquisition-related expenses		9.4			20.8			10.2			23.1
Impairment charges attributed to noncontrolling interest		—			(3.6)			—			(3.6)
Adjusted EBITDA	$	211.0		$	193.6		$	476.7		$	379.1
Adjusted EBITDA Margin		71.1	%		68.4	%		72.4	%		67.4	%


Table 6
(in millions)	June 30,				December 31,
Reconciliation of Cash and cash equivalents to Adjusted Cash	2020			2019
Cash and cash equivalents	$	210.1		$	229.3
Financial investments		176.5			71.0
Less deferred compensation plan assets		(20.9)			(23.4)
Less cash collected for Section 31 Fees		(189.4)			(69.0)
Adjusted Cash	$	176.3		$	207.9


Table 7
(in millions)
Reconciliation of Net Transaction Fees –Three Months Ended June 30, 2020 and 2019
	Consolidated				Options Segment				U.S. Equities Segment				Futures Segment				European Equities Segment				Global FX Segment
	Three Months Ended				Three Months Ended				Three Months Ended				Three Months Ended				Three Months Ended				Three Months Ended
	June 30,				June 30,				June 30,				June 30,				June 30,				June 30,
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
Transaction fees	$	618.3	$	426.9	$	250.8	$	185.9	$	325.1	$	182.0	$	15.8	$	28.3	$	15.2	$	19.5	$	11.4	$	11.2
Liquidity payments		(415.6)		(235.8)		(132.0)		(73.3)		(279.4)		(156.2)		—		—		(4.2)		(6.3)		—		—
Routing and clearing		(17.7)		(9.2)		(5.0)		(3.5)		(12.7)		(5.7)		—		—		—		—		—		—
Net transaction fees	$	185.0	$	181.9	$	113.8	$	109.1	$	33.0	$	20.1	$	15.8	$	28.3	$	11.0	$	13.2	$	11.4	$	11.2