Cboe Global Markets, Inc. · CBOE:CBOE
Cboe Global Markets — Q4 2024 Earnings Presentation
40 slides from Cboe Global Markets's earnings presentation, Feb 7, 2025
Slide 1: Fourth Quarter 2024 Earnings Presentation
FOURTH QUARTER 2024 EARNINGS PRESENTATION February 7, 2025 © 2025 Cboe Exchange, Inc. All rights reserved.
Slide 2: Agenda
Agenda Business Review Fredric Tomczyk Chief Executive Officer Dave Howson Executive Vice President, Global President Financial Review Jill Griebenow Executive Vice President, Chief Financial Officer Questions & Answers Fredric Tomczyk Dave Howson Jill Griebenow Chris Isaacson Executive Vice Preside
Slide 3: Disclosures
Disclosures Forward-Looking Statements This presentation 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,”
Slide 4: Quarterly Recap and Outlook
QUARTERLY RECAP AND OUTLOOK Fredric Tomczyk, CEO Dave Howson, Global President 4
Slide 5: 4Q24: Solid Net Revenue in Fourth Quarter Capped a Record Year
4Q24: Solid Net Revenue in Fourth Quarter Capped a Record Year* Net revenues grew 5% Y/Y, a product of continued transaction and non-transaction growth 1% increase in Derivatives Markets organic net revenue1 Total options ADV up 5%, driven by an 8% increase in multi-listed options ADV 14% increase i
Slide 6: Reflecting on 2024 Trends
Reflecting on 2024 Trends Record Setting Trends1… …Drove Broad-Based Growth Every segment and category at Cboe ◆ 3.8bn total options contracts traded across produced y/y net revenue growth in 2024 Cboe's four exchanges, the fifth consecutive record-breaking year Options +8% Derivatives ◆ SPX options
Slide 7: Derivatives: Aligned with Cyclical and Secular Trends
Derivatives: Aligned with Cyclical and Secular Trends Cyclical Tailwinds Leveraging the Cboe Volatility Toolkit Tactically Manage Reposition Portfolios for Macroeconomic and geopolitical environment Headline Risk Long-Term Trends • Hedge important • Quickly shift equity exposure macroeconomic events
Slide 8: Unlocking Global Growth Potential
Unlocking Global Growth Potential North America | Europe | Asia Pacific ◆ North American Equities net ◆ Cboe Europe remained Europe’s ◆ Grew Cboe Australia Equities market transaction and clearing fees1 were up leading market share during share to 20.8% in 4Q24 from 20.3% in 28% as compared to 4Q23
Slide 9: Cboe Data Vantage: Driving Durable Growth
Cboe Data Vantage: Driving Durable Growth Many Avenues of Potential Growth Data Access Analytics & Execution Comprehensive suite of real-time, historical, and Global access across asset classes through a robust Proprietary analytics, platforms, and risk- reference data across asset classes technolog
Slide 10: Executing on Growth Priorities
Executing on Growth Priorities Progress Opportunity More Data Global Derivatives ◆ Derivatives delivered 8% y/y organic net revenue growth1 in 2024 ◆ Targeting >150mn retail accounts with smaller & more flexible products2 ◆ 0DTE SPX trading made up 51% of 4Q24 SPX activity and ADV was up 6% y/y in 4
Slide 11: Financial Overview and Guidance
FINANCIAL OVERVIEW AND GUIDANCE Jill Griebenow, EVP, CFO 11
Slide 12: 4Q24 Financial Summary
4Q24 Financial Summary $524.5 $2,072.4 $499.0 $1,918.0 $457.1 $1,741.7 $524.5mn $390.5 $1,476.1 Net Revenue +5% Y/Y 4Q21 4Q22 4Q23 4Q24 2021 2022 2023 2024 $331.6mn $331.6 $1,351.6 $320.7 $1,244.8 $292.3 $1,135.6 $263.7 $987.1 Adjusted EBITDA¹ +3% Y/Y 67.5% 63.9% 64.3% 63.2% 66.9% 65.2% 64.9% 65.2%
Slide 13: 4Q24 Net Revenue by Segment and Key Drivers
4Q24 Net Revenue by Segment1 and Key Drivers Net Revenue Segment Net Rev. Growth Key Drivers in millions +5% Options ◆ Higher net transaction and clearing fees $524.5 CBOE - C2 - BZX - +3% ◆ Higher multi-listed options trading volume $499.0 EDGX ◆ Increased market data fees Higher net transaction an
Slide 14: Grew 4Q24 Data Vantage Net Revenue 8% YoY Organically
Grew 4Q24 Data Vantage Net Revenue 8% YoY Organically1 Introduced 2025 organic net revenue growth rate2 target for Data Vantage business of mid to high single digits3 Data Vantage Gross Revenue ◆ 4Q24 Data Vantage net revenue of $145.9 million up in millions 8% YoY organically1 $149 $138 ◆ 2024 Data
Slide 15: 4Q24 Adjusted Operating Expenses Up 7%
4Q24 Adjusted Operating Expenses1 Up 7%, Driven by Travel and Promotional and Technology Support Services Adjusted Operating Expenses¹ 4Q24 4Q23 % Chg 2024 2023 % Chg (in millions) Compensation and benefits $111.4 $112.8 -1% $460.3 $425.8 8% Depreciation and amortization 11.5 9.8 17% 44.3 41.4 7% Te
Slide 16: 2025 Guidance
2025 Guidance 1 2025 Full-Year Guidance 2025 Guidance as of 2024 Actual ($ in millions) February 7, 2025 3 2 Data Vantage organic net revenue growth rate Mid to High Single Digit 7% Total organic net revenue growth rate Mid Single Digit 8%2 4 Adjusted operating expenses $837 to 852 $798.82 implied g
Slide 17: Efficient Allocation of Capital to Create Long-Term Shareholder Value
Efficient Allocation of Capital to Create Long-Term Shareholder Value Debt Outstanding ($ in millions) Mar. 31, Jun. 30, Sep. 30, Dec. 31, Preserving balance sheet flexibility remains 2024 2024 2024 2024 a priority 3.650% Senior Notes (10Y; Due 2027) $650 $650 $650 $650 1.625% Senior Notes (10Y; Due
Slide 18: Closing Remarks
CLOSING REMARKS Fredric Tomczyk, CEO 18
Slide 19: CEO's Three Key Priorities
CEO’s Three Key Priorities Develop Talent and Management Succession ◆ ◆ Stabilized organization after CEO departure Talent and leadership development Sharpen Cboe’s Strategic Focus ◆ Conducted a data-driven strategic review ◆ Sharpened the strategy ◆ Aligned the business with secular trends and
Slide 20: Appendix
Appendix © 2023 Cboe Exchange, Inc. All rights reserved. 20
Slide 21: Options 4Q24 Net Revenue Up 3%
Options 4Q24 Net Revenue Up 3%, Reflecting Higher Net Transaction and Clearing Fees1 Options Selected Revenue Data 4Q24 4Q23 Chg 2024 2023 Chg ($ in millions) ◆ Higher net transaction Net Revenue $324.3 $314.5 3% $1,259.3 $1,169.2 8% Net transaction and clearing fees¹ $282.0 $279.4 1% $1,104.2 $1,01
Slide 22: N.A. Equities 4Q24 Net Revenue Up 10%
North American (N.A.) Equities 4Q24 Net Revenue Up 10%, Driven by Higher Net Transaction and Clearing Fees1 N.A. Equities Selected Revenue Data 4Q24 4Q23 Chg 2024 2023 Chg ($ in millions) Net Revenue $94.9 $86.3 10% $383.8 $365.3 5% ◆ Net transaction and Net transaction and clearing fees¹ $29.3 $22.
Slide 23: Europe and APAC 4Q24 Net Revenue Up 17%
Europe and APAC 4Q24 Net Revenue Up 17%, Reflecting Transaction and Non-Transaction Revenue Growth Europe and APAC Selected Revenue Data 4Q24 4Q23 Chg 2024 2023 Chg ($ in millions) Net Revenue $56.2 $48.0 17% $220.2 $190.2 16% ◆ Market data, access fees Net transaction and clearing fees¹ $28.4 $23.0
Slide 24: Futures 4Q24 Net Revenue Down 7%
Futures 4Q24 Net Revenue Down 7%, Driven by Lower Net Transaction and Clearing Fees1 Futures Selected Revenue Data 4Q24 4Q23 Chg 2024 2023 Chg ($ in millions) ◆ Net transaction and Net Revenue $30.2 $32.4 -7% $133.5 $125.1 7% Net transaction and clearing fees¹ $23.2 $25.4 -9% $105.8 $98.0 8% clearin
Slide 25: Global FX 4Q24 Net Revenue Up 3%
Global FX 4Q24 Net Revenue Up 3%, Reflecting Higher Net Transaction and Clearing Fees1 FX Selected Revenue Data 4Q24 4Q23 Chg 2024 2023 Chg ($ in millions) ◆ Net transaction and Net Revenue $19.4 $18.9 3% $77.6 $73.5 6% Net transaction and clearing fees¹ $16.2 $15.5 5% 64.9 61.0 6% clearing fees1 we
Slide 26: 4Q24 and Full Year 2024 Financial Overview
4Q24 and Full Year 2024 Financial Overview Adjusted Financial Results1 Delete 1 footnote 4Q24 4Q23 Chg 2024 2023 % Chg ($ in millions, except per share) and adjust below 2 to 1/2 Adjusted Net Revenue $524.5 $499.0 5% $2,071.4 $1,918.0 8% Adjusted Operating Expenses $204.8 $191.7 7% $798.8 $750.5 6%
Slide 27: Net Revenue Detail
Net Revenue Detail Net Revenue1 4Q24 4Q23 % Chg 2024 2023 % Chg ◆ Cash and Spot Markets (in millions) Cash and Spot Markets $98.9 $86.9 14% $403.2 $366.5 10% driven by strong Data Vantage $145.9 $135.2 8% $565.7 $530.1 7% transaction and clearing Derivatives Markets $279.7 $276.9 1% $1,103.5 $1,021.
Slide 28: Focused on Growing the Proprietary Index Suite
Focused on Growing the Proprietary Index Suite Index customers at Cboe typically use the toolkit of Cboe proprietary products interchangeably or in tandem, depending on market conditions ◆ Plan to further penetrate existing markets with an emphasis on education, targeting key market segments and geo
Slide 29: 0DTE Adding Stability to SPX Volumes
0DTE Adding Stability to SPX Volumes SPX ADV by Expiration in millions of contracts 4.0 Thursday 65% expiration Tuesday introduced 3.5 3.5 expiration May 11, 2022 3.3 3.2 3.3 3.2 3.2 3.2 3.1 3.2 introduced 3.1 3.1 3.1 2.9 3.0 3.0 3.0 3.0 55% 3.0 April 18, 2022 2.8 2.9 2.9 2.8 2.7 2.7 2.7 2.7 2.6 2.6
Slide 30: 4Q24 Net Revenue by Revenue Caption
4Q24 Net Revenue by Revenue Caption Cash and Derivatives For the Three Months Ended Spot Markets Data Vantage Markets Total December 31 (in millions) 2024 2023 2024 2023 2024 2023 2024 2023 Transaction and clearing fees $ 318.6 $ 290.2 $ - $ - $ 444.0 $ 444.3 $ 762.6 $ 734.5 Access and capacity fees
Slide 31: Full Year 2024 Net Revenue by Revenue Caption
Full Year 2024 Net Revenue by Revenue Caption Cash and Derivatives For the Twelve Months Ended Spot Markets Data Vantage Markets Total December 31 (in millions) 2024 2023 2024 2023 2024 2023 2024 2023 Transaction and clearing fees $ 1,196.3 $ 1,149.7 $ - $ - $ 1,708.3 $ 1,681.6 $ 2,904.6 $ 2,831.3 A
Slide 32: Net Transaction and Clearing Fees by Segment
Net Transaction and Clearing Fees by Segment For the Three Months Ended Options N.A. Equities Europe and Asia Pacific Futures Global FX Digital Total March 31 (in millions) 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Transaction and clearing fees $ 389.8 $ 395.8 $ 251.7 $ 2
Slide 33: Non-GAAP Information
Non-GAAP Information © 2023 Cboe Exchange, Inc. All rights reserved. 33
Slide 34: Non-GAAP Information
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- G
Slide 35: Non-GAAP Information
Non-GAAP Information Reconciliation of GAAP Net Revenues to Net Revenues in Constant Currency Three Months Three Months Twelve Months Twelve Months Ended, Ended, Ended, Ended, Net Revenue (in millions) December 31, December 31, December 31, December 31, 2024 2023 2024 2023 Europe and Asia Pacific ne
Slide 36: Non-GAAP Information
Non-GAAP Information Non-GAAP Information (1) This amount includes acquisition-related costs primarily from the Company’s Cboe Digital, Cboe (in millions, except per share amounts) 1Q23 2Q23 3Q23 4Q23 2023 1Q24 2Q24 3Q24 4Q24 2024 Canada, and Cboe Asia Pacific acquisitions, which is included in acqu
Slide 37: Non-GAAP Information
Non-GAAP Information Non-GAAP Information (in millions, except per share amounts) 1Q21 2Q21 3Q21 4Q21 2021 1Q22 2Q22 3Q22 4Q22 2022 (1) This amount includes professional fees (which includes fees associated Reconciliation of Net Income Allocated to Common Stockholders to Non-GAAP with the valuation
Slide 38: Non-GAAP Information
Non-GAAP Information 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)
Slide 39: Non-GAAP Information
Non-GAAP Information Adjusted Debt to EBITDA – Trailing Twelve Months1 Adjusted Debt to EBITDA - Trailing Twelve Months¹ (in millions) 1Q24 2Q24 3Q24 4Q24 LTM Net income allocated to common stockholders $ 208.3 $ 139.7 $ 217.4 $ 195.6 $ 761.0 Interest expense, net 8.9 8.2 1.4 5.7 24.2 Income tax pro
Slide 40: Thank You
THANK YOU 40