Cboe Global Markets, Inc. · CBOE:CBOE
Cboe Global Markets — Bats Global Markets — Q1 2016 Earnings Presentation
28 slides from Cboe Global Markets's earnings presentation, May 5, 2016
Slide 1: First Quarter 2016 – Earnings Call
First Quarter 2016 – Earnings Call May 5, 2016
Slide 2: Disclaimers
Disclaimers Forward Looking Statements This presentation includes certain disclosures which contain “forward-looking statements.” You can identify forward-looking statements because they contain words such as “believes” and “expects.” Forward-looking statements are based on Bats’ current expectation
Slide 3: Defined Terms (Non-GAAP)
Defined Terms (Non-GAAP) Adjusted cash is defined as cash and cash equivalents and financial investments excluding cash received for payment of Section 31 fees. Adjusted earnings is defined as net income adjusted for amortization and other items, such as acquisition related costs, IPO costs, deb
Slide 4: Corporate Update and Outlook
Corporate Update and Outlook Record Net Revenue, Earnings and Margin Existing Businesses Performing Extremely Well U.S. Equities (excluding auctions) and U.S. ETF trading remain #1 European Equities and Trade Reporting remain #1 U.S. Options – Price-Time Priority market remains #1 Hotspo
Slide 5: 1Q 2016 Results
1Q 2016 Results Market Share U.S. Equities market share increased slightly in the 1st quarter as market volatility returned in January and February European Equities decreased due to pricing changes made in January to enhance net capture U.S. Options rebounded from a downturn in the 4th quarte
Slide 6: 1Q 2016 Results
1Q 2016 Results Net Revenue Growth driven by Hotspot acquisition and Direct Edge synergies Net revenue increased 35% Normalized EBITDA increased 67% Normalized EBITDA 6
Slide 7: 1Q 2016 Financial Highlights
1Q 2016 Financial Highlights $111.8 million net revenue Increase driven by the Hotspot acquisition and strong market volumes 7
Slide 8: 1Q 2016 Financial Highlights
1Q 2016 Financial Highlights $35.6 million adjusted earnings Record earnings and strong margin improvement 8
Slide 9: 1Q 2016 Financial Highlights
1Q 2016 Financial Highlights Normalized operating expenses were higher during the quarter due to incremental Hotspot expenses offset by synergies realized from the Direct Edge acquisition 9
Slide 10: 1Q 2016 Financial Highlights
1Q 2016 Financial Highlights Leverage ratio well below maximum Available liquidity of $166.6 M* * Includes adjusted cash and financial instruments 10
Slide 11: Summary
Summary Set company records for net revenue, earnings, and margin; Recorded solid market share across all of our businesses, led by U.S. Equities and U.S. Options, and the 3rd consecutive quarter of growth by Hotspot; Continued to gain momentum in our ETF Listings business; Remain on track t
Slide 12: Supplemental Data
Supplemental Data Transaction overview 12
Slide 13: 1Q 2016 Metrics
1Q 2016 Metrics U.S. Equities Market - Average Daily Volume (billions) Market Share Net Capture (per 100 shares) European Equities Market - Average Daily Notional Value (€in billions) Market Share Net Capture (basis points) U.S. Options Market - Average Daily Contracts (millions) Market Share Net Ca
Slide 14: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Net income Income tax expense Income (loss) before income tax provision Interest Depreciation and amortization EBITDA Acquisition-related costs IPO costs Normalized EBITDA Net Revenue EBITDA margin (1) Normalized EBITDA margin (2) Reconciliation of Net Inc
Slide 15: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Net Income to EBITDA and Normalized EBITDA (unaudited - in millions) Three months ended December 31, 2015 U.S. Equities European Equities U.S. Options Global FX Corporate Consolidated Net income - - - - - $8 2.7 Income tax expense - - - -
Slide 16: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Net Income to EBITDA and Normalized EBITDA (unaudited - in millions) Three months ended September 30, 2015 U.S. Equities European Equities U.S. Options Global FX Corporate Consolidated Net income $ 25.3 Income tax expense 17.2 Income (los
Slide 17: Supplemental Data
Supplemental Data Net income Income tax expense Income (loss) before income tax provision Interest Depreciation and amortization EBITDA Acquisition-related costs Normalized EBITDA Revenues less cost of revenues EBITDA margin (1) Normalized EBITDA margin (2) Bats Bats Global Markets, Inc. Reconciliat
Slide 18: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Net Income to EBITDA and Normalized EBITDA (unaudited - in millions) Three months ended March 31, 2015 U.S. Equities European Equities U.S. Options Global FX Corporate Consolidated Net income $ 14.8 Income tax expense 99 Income (loss) bef
Slide 19: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Adjusted Cash and Financial Investments to Cash and Financial Investments (unaudited - in millions) 1Q2016 492015 3Q2015 2Q2015 1902015 Cash and cash equivalents S$ 771 $ 751 $ 779 $ 696 $ 59.1 Add: Financial investments 40.2 47.7 0.5 111
Slide 20: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Adjusted Earnings (unaudited - in millions) 1Q 2016 1Q 2015 Net income S 30.1 S 14.8 Amortization 6.9 4.2 Acquisition-related costs 1.0 5.1 IPO costs 1.4 - Debt restructuring - 0.5 Gain on extinguishment of revolving credit facility - (1.
Slide 21: Historical Information - 2015
Historical Information - 2015 Three months ended December 31, 2015 European U.S. Equities Equities U.S. Options Global FX Total Revenue: Transaction fees $ 239.2 $ 22.8 $ 49.4 $ 8.7 $ 320.1 Regulatory transaction fees 67.2 - 1.5 - 68.7 Market data fees 27.5 2.3 1.8 - 31.6 Other 18.2 2.8 2.1 - 23.1 T
Slide 22: Historical Information – 2015 Continued
Historical Information – 2015 Continued Three months ended September 30, 2015 European U.S. Equities Equities U.S. Options Global FX Total Revenue: Transaction fees $ 258.3 $ 24.9 $ 68.5 $ 10.1 $ 361.8 Regulatory transaction fees 71.3 - 1.9 - 73.2 Market data fees 30.5 2.4 2.3 - 35.2 Other 17.2 2.8
Slide 23: Historical Information – 2015 Continued
Historical Information – 2015 Continued Three months ended June 30, 2015 European U.S. Equities Equities U.S. Options Global FX Total Revenue: Transaction fees $ 212.7 $ 25.0 $ 54.3 $ 10.7 $ 302.7 Regulatory transaction fees 60.3 - 1.4 - 61.7 Market data fees 29.6 2.3 1.8 - 33.7 Other 15.8 2.7 1.6 -
Slide 24: Historical Information – 2015 Continued
Historical Information – 2015 Continued Three months ended March 31, 2015 European U.S. Equities Equities U.S. Options Global FX Total Revenue: Transaction fees $ 228.5 $ 25.2 $ 49.5 $ 2.4 $ 305.6 Regulatory transaction fees 70.7 - 1.4 - 72.1 Market data fees 26.6 2.2 1.7 - 30.5 Other 13.0 2.6 1.2 -
Slide 25: Historical Information – 2014
Historical Information – 2014 Three months ended December 31, 2014 European U.S. Equities Equities U.S. Options Total Revenue: Transaction fees $ 240.8 $ 22.0 $ 39.4 $ 302.2 Regulatory transaction fees 84.2 - 1.3 85.5 Market data fees 25.8 2.1 1.2 29.1 Other 13.5 2.6 0.9 17.0 Total revenue 364.3 26.
Slide 26: Historical Information – 2014 Continued
Historical Information – 2014 Continued Three months ended September 30, 2014 European U.S. Equities Equities U.S. Options Total Revenue: Transaction fees $ 188.4 $ 18.4 $ 29.1 $ 235.9 Regulatory transaction fees 65.5 - 0.8 66.3 Market data fees 25.2 2.2 1.1 28.5 Other 13.2 2.7 0.9 16.8 Total revenu
Slide 27: Historical Information – 2014 Continued
Historical Information – 2014 Continued Three months ended June 30, 2014 European U.S. Equities Equities U.S. Options Total Revenue: Transaction fees $ 201.0 $ 18.2 $ 22.5 $ 241.7 Regulatory transaction fees 67.8 - 0.7 68.5 Market data fees 26.2 2.1 0.9 29.2 Other 13.2 2.7 0.9 16.8 Total revenue 308
Slide 28: Historical Information – 2014 Continued
Historical Information – 2014 Continued Three months ended March 31, 2014 European U.S. Equities Equities U.S. Options Total Revenue: Transaction fees $ 186.2 $ 21.2 $ 22.7 $ 230.1 Regulatory transaction fees 51.3 - 0.5 51.8 Market data fees 20.5 2.2 0.8 23.5 Other 11.8 2.6 0.9 15.3 Total revenue 26