CBOE Reports 86% YoY Jump in Net Revenue at $256.6 million

The Chicago Board Options Exchange  (Cboe: CBOE | Nasdaq: CBOE) has released its full year and Q4 financial results for 2017 with an improved set operating metrics compared to previous years.

The company reported a jump of 86 percent in revenue during the Q4 to $256.6 million compared to $143 million in Q4 2016. The significant improvement in revenue figures was mostly contributed by the newly acquired Bats Global Markets, Inc in February 2017 for $3.2 billion. The CBOE’s organic net revenue growth during the quarter excluding the Bats Global’s contribution was at $154.1 million, a growth of 8 percent or $11.1 million.

The company was able to post healthy operating earnings of $108.7 million in the fourth quarter, an increase of 45 percent relative to the last quarter of 2016. The operating expenses during the fourth quarter increased to $156.9 million, an increase of 130 percent Y-o-Y from $68.1 million reflecting the Bats acquisition.

The Earnings per Share was boosted by new tax reforms enacted in the US. The diluted EPS during the fourth quarter and full-year is $2.26 and $3.69, respectively which includes a one-time benefit of $1.70 per share and $1.78 per share respectively or $191.5 million thus increasing the bottom line for the company. The company has paid cash dividends of $30.6 million during the Q42017.

During the year 2017, the company has realized a cost synergy of approximately $25 million on the BATS integration. The debt payment during the quarter was $75 million and $400 million in the full year. The long-term debt as of 31st December 2017 stands around at $1.2 billion.

Edward T. Tilly, CBOE Global Markets Chairman, and Chief Executive Officer
Edward T. Tilly, CBOE Global Markets Chairman, and Chief Executive Officer

Commenting on the results Edward T. Tilly, CBOE Global Markets Chairman, and Chief Executive Officer said:

“2017 was a transformational year for Cboe Global Markets. We made great strides in our integration with Bats Global Markets, while continuing to deliver value to our customers as well as our shareholders. We delivered on our key strategic initiatives and achieved record trading in our highest-margin proprietary products, including VIX futures and options and SPX options, while continuing to launch new innovative products such as Cboe Bitcoin Futures.”

“Looking ahead, I believe our strong financial position, proprietary products, diversified revenue mix and expanded global base will allow us to continue to grow our business and create shareholder value”

Brian Schell, CBOE Global Markets Executive Vice President, and Chief Financial Officer said:

“The fourth quarter marked a strong finish to 2017 on several financial measures, including 8 percent organic growth, EBITDA margin expansion and year-one acquisition-related synergies that exceeded our target. In 2017, our strong cash flow generation allowed us to pay down $400 million of our term loan while continuing to invest in our business and increase our dividend to shareholders. We expect the new tax law changes to favorably impact our future cash flows and plan to maintain a balanced approach to capital deployment, with a focus on increasing long-term shareholder value.”