Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

Cboe Global Markets Reports Results for Second Quarter 2022


Second Quarter Highlights*

CHICAGO, July 29, 2022 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the second quarter of 2022.

"Cboe delivered strong second quarter results to close out an exceptional first half of 2022. Activity across our ecosystem?cash, data and derivatives?was robust," said Edward T. Tilly, Cboe Global Markets Chairman and Chief Executive Officer. "Many of our newer initiatives, like the extension of trading hours for SPX and VIX Options to nearly 24 hours-a-day, five days-a-week and the addition of Tuesday and Thursday expirations for SPX Weekly options, have outperformed our early expectations in 2022, further accelerating the strong growth across our core businesses. With the closing of the ErisX and NEO acquisitions in the second quarter, the entire Cboe team remains focused on extracting even greater value from the ecosystem we have created. The digital asset market environment has changed dramatically since we closed the ErisX transaction on May 2nd, which resulted in an accounting adjustment. We believe that the $220 million book carrying value reflects the reality of the market today, but in no way changes our enthusiasm for the digital asset space. We are intently focused on integrating our platforms and positioning Cboe for its next wave of growth in the quarters ahead."

"In the second quarter, Cboe produced record-setting revenue results as overall net revenues grew 21% year-over-year," said Brian N. Schell, Cboe Global Markets Executive Vice President, Chief Financial Officer and Treasurer. "The benefits of the Cboe flywheel were apparent given the strong year-over-year growth from each category during the quarter, with net revenues from derivatives markets1 growing 30%, data and access solutions1 up 20%, and cash and spot markets1 growing 7%. Moving forward, we are increasing our 2022 total organic net revenue growth2 expectations, targeting 9% to 11% growth, up from our prior guidance range of 5% to 7%. In addition, our 2022 organic net revenue growth2 expectations for our Data and Access Solutions business are increasing to 10% to 13%, up from our prior guidance range of 8% to 11%. The upgraded guidance is a testament to not only the strength of the first half results, but the durability we expect to see in the revenue base moving forward. We look forward to building on the first half momentum with continued investment and integration across the Cboe platform."

*All comparisons are second quarter 2022 compared to the same period in 2021.

 (1)A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables.

(2) Specific quantifications of the amounts that would be required to reconcile the company's organic growth guidance, adjusted operating expenses guidance and the effective tax rate on adjusted earnings guidance are not available. The company believes that there is uncertainty and unpredictability with respect to certain of its GAAP measures, primarily related to acquisition-related revenues and expenses that would be required to reconcile to GAAP revenues less costs of revenues, GAAP operating expenses and GAAP effective tax rate, which preclude the company from providing accurate guidance on certain forward-looking GAAP to non-GAAP reconciliations. The company believes that providing estimates of the amounts that would be required to reconcile the range of the company's organic growth, adjusted operating expenses and the effective tax rate on adjusted earnings would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.

Consolidated Second Quarter Results -Table 1
Table 1 below presents summary selected unaudited condensed consolidated financial information for the company as reported and on an adjusted basis for the three months ended June 30, 2022 and 2021.























Table 1

Consolidated Second Quarter Results













2Q22


2Q21



($ in millions except per share)



2Q22


2Q21

Change


Adjusted1


Adjusted1

Change

Total Revenues Less Cost of Revenues



$

424.1



$

350.6


21

%


$

424.1



$

350.6


21

%

Total Operating Expenses



$

661.5



$

160.6


312

%


$

157.0



$

128.3


22

%

Operating (Loss) Income



$

(237.4)



$

190.0


(225)

%


$

267.1



$

222.3


20

%

Operating Margin % 




(56.0)

%



54.2

%

(110.2)

pp



63.0

%



63.4

%

(0.4)

pp

Net (Loss) Income Allocated to Common Stockholders



$

(184.5)



$

105.2


(275)

%


$

177.3



$

147.4


20

%

Diluted EPS



$

(1.74)



$

0.98


(278)

%


$

1.67



$

1.38


21

%

EBITDA1



$

(202.0)



$

231.8


(187)

%


$

274.2



$

233.6


17

%

EBITDA Margin % 1




(47.6)

%



66.1

%

(113.7)

pp



64.7

%



66.6

%

(1.9)

pp

 

 

Business Segment Information:

Table 2


Total Revenues Less Cost of Revenues by











Business Segment











(in millions)


2Q22

2Q21

Change

Options


$

235.3


$

178.6



32

%

North American Equities



92.7



89.2



4

%

Europe and Asia Pacific



49.9



41.6



20

%

Futures



29.6



27.4



8

%

Global FX



16.6



13.8



20

%

Digital



?



?



*


Corporate



?



?



?

%

Total


$

424.1


$

350.6



21

%


(1)  A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying
financial tables.


*Not meaningful, due to the establishment of the Digital segment during the second quarter of 2022 as a result of the ErisX acquisition on May 2, 2022.

Discussion of Results by Business Segment1:

Options:

North American (N.A.) Equities:

Europe and Asia Pacific (APAC):

Futures:

Global FX:

 

(1) The Digital segment is not further discussed as results were not material given its establishment during the second quarter of 2022 as a result of the ErisX acquisition on May 2, 2022, outside of the goodwill impairment charge recorded in the second quarter of 2022.

(2)A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables.

 

2022 Fiscal Year Financial Guidance

Cboe provided guidance for the 2022 fiscal year as noted below.

 

(1) Specific quantifications of the amounts that would be required to reconcile the company's organic and inorganic growth guidance, adjusted operating expenses guidance and the effective tax rate on adjusted earnings guidance are not available. The company believes that there is uncertainty and unpredictability with respect to certain of its GAAP measures, primarily related to acquisition-related revenues and expenses that would be required to reconcile to GAAP revenues less costs of revenues, GAAP operating expenses and GAAP effective tax rate, which preclude the company from providing accurate guidance on certain forward-looking GAAP to non-GAAP reconciliations. The company believes that providing estimates of the amounts that would be required to reconcile the range of the company's organic growth, adjusted operating expenses and the effective tax rate on adjusted earnings would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.

Capital Management

At June 30, 2022, the company had adjusted cash1 of $349.1 million. Total debt as of June 30, 2022 was $1,959.2 million.

The company paid cash dividends of $51.2 million, or $0.48 per share, during the second quarter of 2022 and utilized $15.6 million to repurchase 147 thousand shares of its common stock under its share repurchase program at an average price of $106.12 per share. As of June 30, 2022, the company had approximately $233.3 million of availability remaining under its existing share repurchase authorizations.

Earnings Conference Call

Executives of Cboe Global Markets will host a conference call to review its second-quarter financial results today, July 29, 2022, at 8:30 a.m. ET/7:30 a.m. CT. The conference call and any accompanying slides will be publicly available via live webcast from the Investor Relations section of the company's website at www.cboe.com under Events & Presentations. Participants may also listen via telephone by dialing (877) 255?4313 from the United States, (866) 450?4696 from Canada or (412) 317?5466 for international callers. Telephone participants should place calls 10 minutes prior to the start of the call. The webcast will be archived on the company's website for replay. A telephone replay of the earnings call also will be available from approximately 11:00 a.m. CT, July 29, 2022, through 11:00 p.m. CT, August 6, 2022, by calling (877) 344?7529 from the U.S., (855) 669?9658 from Canada or (412) 317?0088 for international callers, using replay code 10160639.

(1) A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables.

About Cboe Global Markets

Cboe Global Markets (Cboe: CBOE), a leading provider of market infrastructure and tradable products, delivers cutting-edge trading, clearing and investment solutions to market participants around the world. The Company is committed to operating a trusted, inclusive global marketplace, and to providing leading products, technology and data solutions that enable participants to define a sustainable financial future. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across North America, Europe, and Asia Pacific. To learn more, visit www.cboe.com.

Cautionary Statements Regarding Forward-Looking Information

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. You can identify these statements by forward-looking words such as "may," "might," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements.

We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Some factors that could cause actual results to differ include: the loss of our right to exclusively list and trade certain index options and futures products; economic, political and market conditions; compliance with legal and regulatory obligations; price competition and consolidation in our industry; decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; legislative or regulatory changes or changes in tax regimes; our ability to protect our systems and communication networks from security risks, cybersecurity risks, insider threats and unauthorized disclosure of confidential information; our ability to attract and retain skilled management and other personnel; increasing competition by foreign and domestic entities; our dependence on and exposure to risk from third parties; fluctuations to currency exchange rates; factors that impact the quality and integrity of our indices; the impact of the novel coronavirus ("COVID-19") pandemic; our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; our ability to minimize the risks, including our credit and default risks, associated with operating a European clearinghouse; our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; misconduct by those who use our markets or our products or for whom we clear transactions; challenges to our use of open source software code; our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; damage to our reputation; the ability of our compliance and risk management methods to effectively monitor and manage our risks; our ability to manage our growth and strategic acquisitions or alliances effectively; restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; our ability to maintain an investment grade credit rating; impairment of our goodwill, long-lived assets, investments or intangible assets; the accuracy of our estimates and expectations; litigation risks and other liabilities; and operating a digital asset business, and clearinghouse, including the expected benefits of our ErisX acquisition, cybercrime, changes in digital asset regulation, losses due to digital asset custody, and fluctuations in digital asset prices. More detailed information about factors that may affect our actual results to differ may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2021 and other filings made from time to time with the SEC.

We do not undertake, and we expressly disclaim, any duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

The condensed consolidated statements of income and balance sheets are unaudited and subject to reclassification.






Cboe Media Contacts:




Analyst Contact:

Angela Tu


Tim Cave


Kenneth Hill, CFA

(646) 856?8734


+44 (0) 7593 506 719


(312) 786?7559

[email protected]


[email protected]


[email protected]

CBOE-F

Trademarks:
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, Bats®, BIDS Trading®, BZX®, BYX®, Chi-X®, EDGX®, EDGA®, ErisX®, EuroCCP®, MATCHNow®, and VIX® are registered trademarks of Cboe Global Markets, Inc. and its subsidiaries. All other trademarks and service marks are the property of their respective owners.

 

Cboe Global Markets, Inc.

Key Performance Statistics by Business Segment





2Q 2022

1Q 2022

4Q 2021

3Q 2021

2Q 2021

Options

















Total industry ADV (in thousands)



39,377



42,464



40,794



37,548



36,442


Total company Options ADV (in thousands)



13,054



13,392



12,694



11,764



11,092


Multi-listed options



10,378



10,978



10,527



9,794



9,254


Index options



2,677



2,414



2,167



1,970



1,838


Total Options market share



33.2

%


31.5

%


31.1

%


31.3

%


30.4

%

Multi-listed options



28.3

%


27.4

%


27.3

%


27.6

%


26.8

%

Total Options RPC:


$

0.233


$

0.210


$

0.199


$

0.200


$

0.192


Multi-listed options


$

0.066


$

0.067


$

0.066


$

0.069


$

0.067


Index options


$

0.883


$

0.857


$

0.845


$

0.850


$

0.823



















North American Equities

















U.S. Equities - Exchange:

















Total industry ADV (shares in billions)



12.6



12.9



10.8



9.8



10.5


Market share % 



13.6

%


14.3

%


13.3

%


14.0

%


14.3

%

Net capture (per 100 touched shares)


$

0.020


$

0.017


$

0.025


$

0.020


$

0.020


U.S. Equities - Off-Exchange:

















ADV (touched shares, in millions)



92.7



108.5



84.2



73.0



75.8


Off-Exchange ATS Block Market Share % (reported on a two-month lag)



24.5

%


24.4

%


22.5

%


22.9

%


21.8

%

Net capture (per 100 touched shares)


$

0.108


$

0.117


$

0.115


$

0.122


$

0.123


Canadian Equities:

















ADV (matched shares, in millions)



36.0



41.1



41.3



37.8



47.4


Total market share %



3.1

%


3.2

%


3.3

%


3.4

%


3.4

%

Market share % - TSX listed volume



4.1

%


4.3

%


4.7

%


4.7

%


4.9

%

Net capture (per 10,000 shares, in Canadian Dollars)


$

9.328


$

9.103


$

8.475


$

8.342


$

7.782



















Europe and Asia Pacific

















European Equities:

















Total industry ADNV (Euros - in billions)


?

46.9


?

58.7


?

44.0


?

39.6


?

42.0


Market share % 



23.2

%


21.8

%


19.8

%


18.2

%


17.4

%

Net capture (bps)


?

0.238


?

0.233


?

0.256


?

0.264


?

0.267


EuroCCP:

















Trades cleared (in thousands)



356,351.1



454,437.8



345,074.8



306,085.2



294,801.9


Fee per trade cleared


?

0.009


?

0.009


?

0.011


?

0.010


?

0.011


Net settlement volume (shares in thousands)



2,501.6



2,802.1



2,664.9



2,484.1



2,367.3


Net fee per settlement


?

0.808


?

0.924


?

0.860


?

0.869


?

0.893


Australian Equities:

















ADNV (AUD billions)


$

0.8


$

0.9


$

0.8


$

0.8



N/A


Market share - Continuous



17.0

%


15.8

%


16.1

%


15.7

%


N/A


Net capture (per matched notional value (bps))


$

0.171


$

0.173


$

0.171


$

0.173



N/A


Japanese Equities:

















ADNV (JPY billions)


¥

136.0


¥

161.4


¥

111.4


¥

88.7



N/A


Market share - Lit Continuous



3.5

%


3.8

%


2.9

%


2.4

%


N/A


Net capture (per matched notional value (bps))


¥

0.258


¥

0.228


¥

0.358


¥

0.364



N/A



















Futures

















ADV (in thousands)



222



254



230



223



214


RPC


$

1.677


$

1.637


$

1.651


$

1.626


$

1.648



















Global FX

















Spot market share % 



17.0

%


17.3

%


16.8

%


17.0

%


16.3

%

ADNV ($ in billions)


$

39.6


$

42.0


$

33.7


$

32.4


$

32.5


Net capture (per one million dollars traded)


$

2.71


$

2.67


$

2.77


$

2.77


$

2.71



ADV = average daily volume; ADNV = average daily notional value.

 

RPC, average revenue per contract, for options and futures represents total net transaction fees recognized for the period divided by total contracts traded during the period.

Touched volume represents the total number of shares of equity securities and ETFs internally matched on our exchanges or routed to and executed on an external market center.

Matched volume represents the total number of shares of equity securities and ETFs executed on our exchanges.

U.S. Equities - Exchange, "net capture per 100 touched shares" refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX and EDGA and the number of trading days. U.S. Equities ? Off-Exchange data reflects BIDS Trading. For U.S. Equities ? Off-Exchange, "net capture per 100 touched shares" refers to transaction fees less order and execution management system (OMS/EMS) fees and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period.

Canadian Equities, "net capture per 10,000 shares" refers to transaction fees divided by the product of one-ten thousandth ADV of shares for MATCHNow and the number of trading days. Total market share represents MATCHNow volume divided by the total volume of the Canadian Equities market. TSX listed volume market share represents MATCHNow volume divided by the total volume in TSX listed equities. Canadian Equities data does not include NEO data.

European Equities, "net capture per matched notional value" refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Cboe Europe Equities and the number of trading days. "Trades cleared" refers to the total number of non-interoperable trades cleared, "Fee per trade cleared" refers to clearing fees divided by number of non-interoperable trades cleared, "Net settlement volume" refers to the total number of settlements executed after netting, and "Net fee per settlement" refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting. Asia Pacific data reflects the acquisition of Cboe Asia Pacific (formerly Chi-X Asia Pacific) effective July 1, 2021. Australian Equities "Net capture per matched notional value" refers to transaction fees less liquidity payments in Australian dollars divided by the product of ADNV in Australian dollars of shares matched on Cboe Australia and the number of Australian Equities trading days. Japanese Equities "Net capture per matched notional value" refers to transaction fees less liquidity payments in Japanese Yen divided by the product of ADNV in Japanese Yen of shares matched on Cboe Japan and the number of Japanese Equities trading days.

Global FX, "net capture per one million dollars traded" refers to transaction fees less liquidity payments, if any, divided by the Spot and SEF products of one-thousandth of ADNV traded on the Cboe FX Markets and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction. Market Share represents Cboe FX volume divided by the total volume of publicly reporting spot FX venues (Cboe FX, EBS, Refinitiv, and Euronext FX).

Average transaction fees per contract can be affected by various factors, including exchange fee rates, volume-based discounts and transaction mix by contract type and product type.

 

Cboe Global Markets, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

Three and Six Months Ended June 30, 2022 and 2021
















Three Months Ended  June 30, 


Six Months Ended  June 30, 

(in millions, except per share amounts)


2022


2021


2022


2021

Revenue:













Cash and spot markets


$

458.5


$

372.7


$

920.4


$

921.6

Data and access solutions



123.9



103.0



242.8



203.6

Derivatives markets



403.4



325.1



797.1



686.4

Total Revenues



985.8



800.8



1,960.3



1,811.6

Cost of Revenues:













Liquidity payments



429.0



377.9



896.5



879.7

Routing and clearing



20.9



19.9



43.2



47.0

Section 31 fees



79.6



28.8



115.3



120.7

Royalty fees



28.1



20.3



54.4



40.6

Other cost of revenues



4.1



3.3



8.7



7.5

Total Cost of Revenues



561.7



450.2



1,118.1



1,095.5

Revenues Less Cost of Revenues



424.1



350.6



842.2



716.1

Operating Expenses:













Compensation and benefits



86.2



67.7



167.4



140.0

Depreciation and amortization



40.2



40.6



81.1



82.6

Technology support services



18.1



16.2



37.3



33.4

Professional fees and outside services



24.1



22.4



43.8



38.0

Travel and promotional expenses



5.5



1.9



8.4



3.5

Facilities costs



6.6



5.4



13.1



10.7

Acquisition-related costs



14.3



1.8



16.3



5.2

Goodwill impairment



460.1



0.0



460.1



0.0

Other expenses



6.4



4.6



12.4



8.1

Total Operating Expenses



661.5



160.6



839.9



321.5

Operating (Loss) Income



(237.4)



190.0



2.3



394.6

Non-operating (Expenses) Income:













Interest expense, net



(14.6)



(12.3)



(25.4)



(24.6)

Other (expense) income, net



(4.8)



1.5



(8.8)



2.1

Total Non-operating Expenses



(19.4)



(10.8)



(34.2)



(22.5)

(Loss) Income Before Income Tax (Benefit) Provision



(256.8)



179.2



(31.9)



372.1

Income tax (benefit) provision



(72.3)



73.7



43.0



129.4

Net (Loss) Income



(184.5)



105.5



(74.9)



242.7

Net income allocated to participating securities



?



(0.3)



?



(0.7)

Net (Loss) Income Allocated to Common Stockholders


$

(184.5)


$

105.2


$

(74.9)


$

242.0

Net (Loss) Income Per Share Allocated to Common Stockholders:













Basic (loss) earnings per share


$

(1.74)


$

0.99


$

(0.70)


$

2.26

Diluted (loss) earnings per share



(1.74)



0.98



(0.70)



2.26

Weighted average shares used in computing income per share:













Basic



106.3



106.8



106.5



107.1

Diluted



106.3



106.9



106.5



107.3

 

Cboe Global Markets, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

June 30, 2022 and 2021










June 30, 


December 31, 

(in millions)


2022


2021

Assets







Current Assets:







Cash and cash equivalents


$

373.3


$

341.9

Financial investments



68.5



37.1

Accounts receivable, net



391.3



326.9

Margin deposits and clearing funds



987.2



745.9

Digital assets - safeguarded assets



22.4



?

Income taxes receivable



51.1



42.7

Other current assets



39.0



36.8

Total Current Assets



1,932.8



1,531.3








Investments



243.5



245.8

Land



2.3



2.3

Property and equipment, net



107.5



105.2

Operating lease right of use assets



124.8



110.1

Goodwill



3,132.0



3,025.4

Intangible assets, net



1,792.8



1,668.6

Other assets, net



140.4



125.8

Total Assets


$

7,476.1


$

6,814.5








Liabilities and Stockholders' Equity







Current Liabilities:







Accounts payable and accrued liabilities


$

405.9


$

295.4

Section 31 fees payable



116.3



40.8

Deferred revenue



22.7



15.2

Margin deposits and clearing funds



987.2



745.9

Digital assets - safeguarded liabilities



22.4



?

Income taxes payable



0.3



8.2

Current portion of contingent consideration liabilities



44.8



63.8

Total Current Liabilities



1,599.6



1,169.3








Long-term debt



1,959.2



1,299.3

Unrecognized tax benefits



173.5



197.9

Deferred income taxes



252.6



372.7

Non-current operating lease liabilities



139.4



129.2

Contingent consideration liabilities



57.3



6.7

Other non-current liabilities



32.6



34.6

Total Liabilities



4,214.2



3,209.7








Stockholders' Equity:







Preferred stock



?



?

Common stock



1.1



1.1

Treasury stock at cost



(201.0)



(106.8)

Additional paid-in capital



1,525.7



1,509.4

Retained earnings



1,968.0



2,145.5

Accumulated other comprehensive (loss) income, net



(31.9)



55.6

Total Stockholders' Equity



3,261.9



3,604.8








Total Liabilities and Stockholders' Equity


$

7,476.1


$

6,814.5

 

Non-GAAP Information

In addition to disclosing results determined in accordance with GAAP, Cboe Global Markets has disclosed certain non-GAAP measures of operating performance. These measures are not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. The non-GAAP measures provided in this press release include net transaction and clearing fees, adjusted operating expenses, adjusted operating income, organic net revenue, inorganic net revenue, adjusted operating margin, adjusted net (loss) income allocated to common stockholders and adjusted diluted earnings per share, effective tax rate on adjusted earnings, adjusted cash, EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin.

Management believes that the non-GAAP financial measures presented in this press release, including adjusted operating income, organic net revenue and adjusted operating expenses, provide additional and comparative information to assess trends in our core operations and a means to evaluate period-to-period comparisons. Non-GAAP financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing our financial condition and operating results.

Organic net revenue, inorganic net revenue, organic non-transaction revenue and organic net revenue guidance: These are non-GAAP financial measures that exclude or have otherwise been adjusted for the impact of our acquisitions for the period or guidance, as applicable. Management believes the organic net revenue growth and guidance measures provide users with supplemental information regarding the company's ongoing and future potential revenue performances and trends by presenting revenue growth and guidance excluding the impact of the acquisitions. Revenues from acquisitions that have been owned for at least one year are considered organic and are no longer excluded from organic net revenue from either period for comparative purposes.

Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses, the relative operating performance of the businesses between periods and the earnings power of the company. Therefore, we believe performance measures excluding intangible asset amortization expense provide investors with an additional basis for comparison across accounting periods.

Acquisition-related expenses: From time to time, we have pursued acquisitions, which have resulted in expenses which would not otherwise have been incurred in the normal course of the company's business operations. These expenses include integration costs, as well as legal, due diligence, impairment charges, and other third-party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. Accordingly, we exclude these costs for purposes of calculating non-GAAP measures which provide an additional analysis of Cboe's ongoing operating performance or comparisons in Cboe's performance between periods.

The tables below show the reconciliation of each financial measure from GAAP to non-GAAP. The non-GAAP financial measures exclude the impact of those items detailed below and are referred to as adjusted financial measures.

Organic Net Revenue Reconciliation




























Table 3


Three Months Ended


Six Months Ended


(in millions)


June 30, 


June 30, 


Reconciliation of Revenue Less Cost of Revenue to Organic Net Revenue


2022


2021


2022


2021


Revenues less cost of revenues (net revenue)


$

424.1


$

350.6


$

842.2


$

716.1


Less acquisitions:














Acquisition revenue less cost of revenues (inorganic net revenue)


$

(9.9)


$

?


$

(18.3)


$

?


Organic net revenue


$

414.2


$

350.6


$

823.9


$

716.1


 

Reconciliation of GAAP and non-GAAP Information

















Three Months Ended


Six Months Ended


Table 4


June 30, 


June 30, 


(in millions, except per share amounts)


2022


2021


2022


2021


Reconciliation of Net Income Allocated to Common Stockholders to Non-GAAP
(As shown on Table 1)














Net (loss) income allocated to common stockholders


$

(184.5)


$

105.2


$

(74.9)


$

242.0


Non-GAAP adjustments














Acquisition-related expenses (1)



14.3



1.8



16.3



5.2


Investment establishment costs (2)



?



?



3.0



?


Gain on investment (3)



(7.5)



?



(7.5)



?


Loan forgiveness (4)



(1.3)



?



(1.3)



?


Amortization of acquired intangible assets (5)



30.1



30.5



60.7



63.4


Goodwill impairment (6)



460.1



?



460.1



?


Impairment of investment (7)



10.6



?



10.6



?


Total Non-GAAP adjustments



506.3



32.3



541.9



68.6


Income tax expense related to the items above



(143.2)



10.0



(151.9)



(15.9)


Tax reserves (8)



?



?



48.5



?


Deferred tax re-measurements



?



?



?



17.7


Net income allocated to participating securities - effect on reconciling items



(1.3)



(0.1)



(1.6)



(0.2)


Adjusted net income allocated to common stockholders


$

177.3


$

147.4


$

362.0


$

312.2
















Reconciliation of Diluted EPS to Non-GAAP














Diluted (loss) earnings per common share


$

(1.74)


$

0.98


$

(0.70)


$

2.26


Per share impact of non-GAAP adjustments noted above



3.41



0.40



4.10



0.65


Adjusted diluted earnings per common share


$

1.67


$

1.38


$

3.40


$

2.91
















Reconciliation of Operating Margin to Non-GAAP














Revenue less cost of revenue


$

424.1


$

350.6


$

842.2


$

716.1


Non-GAAP adjustments noted above



?



?



?



?


Adjusted revenue less cost of revenue


$

424.1


$

350.6


$

842.2


$

716.1


Operating expenses (9)


$

661.5


$

160.6


$

839.9


$

321.5


Non-GAAP adjustments noted above



504.5



32.3



537.1



68.6


Adjusted operating expenses


$

157.0


$

128.3


$

302.8


$

252.9


Operating (loss) income


$

(237.4)


$

190.0


$

2.3


$

394.6


Non-GAAP adjustments noted above



504.5



32.3



537.1



68.6


Adjusted operating income


$

267.1


$

222.3


$

539.4


$

463.2


Adjusted operating margin (10)



63.0

%


63.4

%


64.0

%


64.7

%















Reconciliation of Income Tax Rate to Non-GAAP














(Loss) income before income taxes



(256.8)



179.2



(31.9)



372.1


Non-GAAP adjustments noted above



506.3



32.3



541.9



68.6


Adjusted income before income taxes


$

249.5


$

211.5


$

510.0


$

440.7
















Income tax (benefit) provision



(72.3)



73.7



43.0



129.4


Non-GAAP adjustments noted above



143.2



(10.0)



103.4



(1.8)


Adjusted income tax expense


$

70.9


$

63.7


$

146.4


$

127.6


Adjusted income tax rate



28.4

%


30.1

%


28.7

%


29.0

%


(1) This amount includes professional fees and outside services and impairment charges  related to the company's acquisitions.

(2) This amount represents the investment establishment costs related to the company's investment in 7RIDGE Investments 3 LP, which acquired
Trading Technologies, Inc.

(3) This amount represents the gain on the Company's investment in Eris Digital Holdings LLC ("ErisX") in connection with the full acquisition of ErisX.

(4) This amount represents the forgiveness of a PPP ("Paycheck Protection Program") loan previously held by ErisX.

(5) This amount represents the amortization of acquired intangible assets related to the company's acquisitions.

(6) This amount represents the impairment of ErisX goodwill.

(7) This amount represents the impairment of investment related to the Company's minority investment in American Financial Exchange, LLC.

(8) This amount represents the tax reserves related to Section 199 matters.

(9) The company sponsors deferred compensation plans held in a trust. The expenses or income related to the deferred compensation plans are
included in "Compensation and benefits" ($1.9 million and $1.1 million in expense for the three months ended June 30, 2022 and 2021, respectively,
and $2.5 million and $1.4 million in expense for the six months ended June 30, 2022 and 2021, respectively), and are directly offset by deferred
compensation income, expenses and dividends included within "Other income, net" ($1.9 million and $1.1 million in income, expense and dividends
in the three months ended June 30, 2022 and 2021, respectively, and $2.5 million and $1.4 million in income, expense and dividends in the six months
ended June 30, 2022 and 2021, respectively), on the condensed consolidated statements of income. The deferred compensation plans' expenses are
not excluded from "adjusted operating expenses" and do not have an impact on "Income before income taxes."

(10) Adjusted operating margin represents adjusted operating income divided by adjusted revenue less cost of revenue.

EBITDA Reconciliations
EBITDA (earnings before interest, income taxes, depreciation and amortization) and Adjusted EBITDA are widely used non-GAAP financial measures of operating performance. EBITDA margin represents EBITDA divided by revenues less cost of revenues (net revenue). It is presented as supplemental information that the company believes is useful to investors to evaluate its results because it excludes certain items that are not directly related to the company's core operating performance. EBITDA is calculated by adding back to net income interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA is calculated by adding back to EBITDA acquisition-related expenses, gain on investment, loan forgiveness, investment establishment costs, goodwill impairment, and impairment of investment. EBITDA and Adjusted EBITDA should not be considered as substitutes either for net income, as an indicator of the company's operating performance, or for cash flow, as a measure of the company's liquidity. In addition, because EBITDA and Adjusted EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA margin represents Adjusted EBITDA divided by net revenue.





























Table 5


Three Months Ended


Six Months Ended


(in millions, except percentages)


June 30, 


June 30, 


Reconciliation of Net Income Allocated to Common Stockholders to EBITDA and Adjusted
EBITDA (Per Table 1)


2022


2021


2022


2021


Net (loss) income allocated to common stockholders


$

(184.5)


$

105.2


$

(74.9)


$

242.0


Interest expense, net



14.6



12.3



25.4



24.6


Income tax (benefit) provision



(72.3)



73.7



43.0



129.4


Depreciation and amortization



40.2



40.6



81.1



82.6


EBITDA


$

(202.0)


$

231.8


$

74.6


$

478.6


EBITDA Margin



(47.6)

%


66.1

%


8.9

%


66.8

%















Non-GAAP adjustments not included in above line items














Acquisition-related expenses



14.3



1.8



16.3



5.2


Gain on investment



(7.5)



?



(7.5)



?


Loan forgiveness



(1.3)



?



(1.3)



?


Investment establishment costs



?



?



3.0



?


Goodwill impairment



460.1



?



460.1



?


Impairment of investment



10.6



?



10.6



?


Adjusted EBITDA


$

274.2


$

233.6


$

555.8


$

483.8


Adjusted EBITDA Margin



64.7

%


66.6

%


66.0

%


67.6

%





























Table 6














(in millions)


June 30, 


December 31, 








Reconciliation of Cash and Cash Equivalents to Adjusted Cash


2022


2021








Cash and cash equivalents


$

373.3


$

341.9








Financial investments



68.5



37.1








Less deferred compensation plan assets



(25.5)



(28.0)








Less cash collected for Section 31 Fees



(67.2)



(25.9)








Adjusted Cash


$

349.1


$

325.1






















 











































Table 7










































(in millions)










































Reconciliation of Net Transaction and Clearing Fees by Business Segment ?Three Months Ended June 30, 2022 and 2021


Consolidated


Options


N.A. Equities


Europe and APAC


Futures


Global FX


Digital


June 30, 


June 30, 


June 30, 


June 30, 


June 30, 


June 30, 


June 30, 


2022


2021


2022


2021


2022


2021


2022


2021


2022


2021


2022


2021


2022


2021

Transaction and clearing fees

$

735.3


$

618.2


$

353.0


$

283.2


$

304.5


$

268.0


$

40.6


$

33.3


$

23.0


$

22.2


$

14.1


$

11.5


$

0.1


$

?

Liquidity payments


(429.0)



(377.9)



(158.4)



(144.1)



(261.4)



(228.4)



(9.1)



(5.4)



?



?



?



?



(0.1)



?

Routing and clearing


(20.9)



(19.9)



(5.9)



(5.0)



(10.5)



(10.0)



(4.3)



(4.9)



?



?



(0.2)



?



?



?

Net transaction and clearing fees

$

285.4


$

220.4


$

188.7


$

134.1


$

32.6


$

29.6


$

27.2


$

23.0


$

23.0


$

22.2


$

13.9


$

11.5


$

?


$

?

 

























Table 8
























(in millions)
























Reconciliation of Net Revenue by Revenue Caption ?Three Months Ended June 30, 2022 and 2021


Cash and Spot Markets


Data and Access Solutions


Derivatives Markets


Total


Three Months Ended


Three Months Ended


Three Months Ended


Three Months Ended


June 30, 


June 30, 


June 30, 


June 30, 


2022


2021


2022


2021


2022


2021


2022


2021

Transaction and clearing fees

$

359.2


$

312.7


$

?


$

?


$

376.1


$

305.5


$

735.3


$

618.2

Access and capacity fees


?



?



81.8



67.1



?



?



81.8



67.1

Market data fees


19.3



23.9



41.0



30.9



8.5



8.0



68.8



62.8

Regulatory fees


68.7



26.1



?



?



18.1



10.8



86.8



36.9

Other revenue


11.3



10.0



1.1



5.0



0.7



0.8



13.1



15.8

Total revenues

$

458.5


$

372.7


$

123.9


$

103.0


$

403.4


$

325.1


$

985.8


$

800.8

























Liquidity payments

$

270.0


$

233.8


$

?


$

?


$

159.0


$

144.1


$

429.0


$

377.9

Routing and clearing fees


15.0



14.9



?



?



5.9



5.0



20.9



19.9

Section 31 fees


68.2



25.9



?



?



11.4



2.9



79.6



28.8

Royalty fees and other cost of revenues


4.1



3.3



2.3



2.0



25.8



18.3



32.2



23.6

Total cost of revenues

$

357.3


$

277.9


$

2.3


$

2.0


$

202.1


$

170.3


$

561.7


$

450.2

























Revenues less cost of revenues (net
revenue)

$

101.2


$

94.8


$

121.6


$

101.0


$

201.3


$

154.8


$

424.1


$

350.6

























Acquisition revenue less cost of
revenues (inorganic net revenue)


(3.1)



?



(6.8)



?



?



?



(9.9)



?

























Organic net revenue

$

98.1


$

94.8


$

114.8


$

101.0


$

201.3


$

154.8


$

414.2


$

350.6

 









Table 9








Reconciliation of GAAP Effective Tax Rate to Effective Tax Rate Excluding Goodwill Impairment and Section 199 Matters - Three Months and Six Months Ended June 30, 2022











Three months ended,



Six months ended,





June 30, 2022



June 30, 2022



GAAP effective tax rate


28.2

%


(134.8)

%


Tax effect of goodwill impairment


1.8

%


175.9

%


Tax effect of Section 199 related matters


?

%


(11.3)

%


Effective tax rate excluding goodwill impairment and Section 199 matters


30.0

%


29.8

%


























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