Cboe reports strong Q3 results, FX market share hits new ATH

abdelaziz Fathi

Cboe Global Markets reported on Friday third-quarter core earnings that topped Wall Street’s expectations and repeated its full-year financial forecasts.

CBOE LIVEVOL

Cboe’s Q3 net revenue rose 27 percent year-over-year, coming in at $369.5 million compared to $292.0 million in the prior-year period. The exchange operator attributed the solid performance of its top line to increases in net transaction and clearing fees, as well as higher access and capacity fees.

Total operating expenses were $178.8 million versus $152.7 million in the third quarter of 2020.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $239.6 million for the three months ended Sept. 30, compared with $192 million a year earlier. However, the EBITDA margin decreased 10.9 percentage points compared to 2020 as a result of the bargain purchase gain recorded due to the acquisition of EuroCCP.

Other business highlights show that options revenue was up 30 percent at $192.2 million, primarily due to higher trading volumes, which boosted its net transaction, clearing and market data fees.

In terms of its FX business, Cboe’s Global FX posted $14.3 million in net revenue, up 8 percent over a yearly basis. Average daily turnover traded on the Cboe FX platform was $32.4 billion for the quarter, up 7 percent from last year’s third quarter while  net capture per one million dollars traded was $2.77.

Cboe’s foreign exchange franchise saw its market share at a new all-time high of 17.0 percent in the Q3 2021 compared to 15.9 percent in last year’s third quarter.

Cboe FX turnover crossed the $1 trillion milestone in March 2020 amid coronavirus-driven volatility that has shaken awake previously slumbering FX markets. The venue also hit its yearly peak for 2021 in March at $880 billion. Since then, demand for Cboe’s versatile products has been muted as concerns over the COVID-19 pandemic and uncertainty surrounding the FED’s policy drove many investors onto the sidelines.

“In the third quarter Cboe posted double-digit year-over-year earnings growth, reflecting accelerated trading in our proprietary products throughout the quarter, coupled with continued higher demand for our suite of data and access solutions. In addition, Cboe delivered on a number of significant strategic milestones, including the successful launch of our European Derivatives platform,” said Edward T. Tilly, Cboe Global Markets Chairman and CEO.

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