8-K: Cboe Global Markets Reports Record Full Year 2024 Results, Sets 2025 Growth Targets

Cboe Global Markets announces strong fourth quarter and record full year 2024 financial results, with a positive outlook for 2025.

Summary

• Cboe Global Markets reported its financial results for the fourth quarter and full year 2024 on February 7, 2025.
• The company achieved record net revenue of $2.1 billion for the full year, an 8% increase year-over-year.
• Diluted EPS for the full year was $7.21, up 1%, and adjusted diluted EPS was $8.61, up 10%.
• For the fourth quarter, net revenue was $524.5 million, a 5% increase compared to the same period in 2023.
• Diluted EPS for the quarter was $1.86, down 6%, while adjusted diluted EPS was $2.10, up 2%.
• Cboe is establishing a 2025 organic total net revenue growth target of mid-single digits and a Cboe Data Vantage organic net revenue growth target of mid-to-high single digits.
• The company's 2025 adjusted operating expense guidance is set at $837 to $852 million.

Sentiment

Score: 7

Explanation: The sentiment is positive due to record revenue and earnings, coupled with optimistic growth targets for 2025. However, some concerns exist regarding market share declines in certain segments and increased operating expenses.

Positives

• Record full year net revenue of $2.1 billion, up 8% year-over-year.
• Adjusted diluted EPS for the full year increased by 10% to $8.61.
• Cash and Spot Markets net revenue increased an impressive 10% for the full year.
• Derivatives Markets net revenue was up 8% in 2024, driven by record volumes in the options business.
• Data Vantage net revenue grew 7% in 2024.
• Cboe European Equities had 24.6 percent market share, up from 23.9 percent in the fourth quarter of 2023.
• Cboe Australia had 20.8 percent market share for the fourth quarter of 2024, up from 20.3 percent in the fourth quarter of 2023.
• Cboe Japan grew market share to 4.9 percent in the fourth quarter of 2024 from 4.0 percent in the fourth quarter of 2023.

Negatives

• Diluted EPS for the fourth quarter decreased 6% to $1.86.
• EBITDA for the quarter decreased 5% to $316.6 million.
• Futures net revenue decreased 7% due to a 12% decline in ADV.
• Cboe's Options exchanges had total market share of 30.4 percent for the fourth quarter of 2024 compared to 33.5 percent in the fourth quarter of 2023, a result of lower multi-listed market share as compared to the fourth quarter of 2023.
• Cboes U.S. Equities exchanges had market share of 10.8 percent for the fourth quarter of 2024 compared to 13.0 percent in the fourth quarter of 2023 given higher industry off-exchange market share.
• Cboes U.S. Equities off-exchange market share was 17.3 percent, down from 18.4 percent in the fourth quarter of 2023.
• Canadian Equities market share decreased to 14.3 percent as compared to 15.3 percent in the fourth quarter of 2023.
• Cboe FX market share was 19.0 percent for the quarter compared to 21.3 percent in last years fourth quarter.

Risks

• The company operates in a very competitive and rapidly changing environment.
• Economic, political, and market conditions could impact results.
• Compliance with legal and regulatory obligations poses ongoing challenges.
• The company faces risks related to cybersecurity and data breaches.
• The company's ability to manage growth and strategic acquisitions effectively is crucial.
• Fluctuations in trading volumes and market data fees could affect revenue.

Future Outlook

Cboe expects mid-single digit organic total net revenue growth and mid-to-high single digit organic net revenue growth from Data Vantage in 2025.

Management Comments

• Fredric Tomczyk, Cboe Global Markets Chief Executive Officer, stated that the company enters 2025 on solid footing and is well positioned to benefit from secular market trends.
• Jill Griebenow, Cboe Global Markets Executive Vice President, Chief Financial Officer, mentioned that 2025 is off to a strong start and the company looks forward to delivering on its objectives for shareholders.

Industry Context

This announcement reflects the ongoing trends in the exchange industry, with a focus on growing data and access solutions alongside traditional trading revenues. Cboe's emphasis on options and global expansion aligns with broader industry strategies.

Comparison to Industry Standards

• Cboe's revenue growth of 8% is comparable to other major exchange operators like Intercontinental Exchange (ICE) and Nasdaq, which have also been focusing on diversifying revenue streams.
• The adjusted operating expense guidance of $837 to $852 million reflects Cboe's efforts to balance growth with cost discipline, similar to strategies employed by peers such as CME Group.
• Cboe's market share in various segments, such as European Equities (24.6%), is competitive with other major players like Euronext and London Stock Exchange Group (LSEG).

Stakeholder Impact

• Shareholders can expect continued growth and returns through dividends and potential share repurchases.
• Employees will likely benefit from the company's growth and strategic initiatives.
• Customers will have access to cutting-edge trading and investment solutions.
• Suppliers and creditors can expect continued business relationships with a financially stable company.

Next Steps

• Executives will host a conference call on February 7, 2025, to review the fourth quarter financial results.
• The company will focus on executing its strategic vision and delivering on its objectives for shareholders in 2025.

Key Dates

Keywords

Cboe Global Markets, financial results, net revenue, EPS, options, derivatives, data, equities, futures, FX