Cboe Sees 14% Uptick in Q4 2022 FX Revenue

by Arnab Shome
  • The company ended the quarter with net revenue of $457.1 million.
  • The market share of Cboe FX also strengthened to 18.4 percent.
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Cboe Global Markets (BATS: CBOE), the operator of a major American derivatives exchange and a stock exchange , generated $457.1 million in net revenue in the fourth quarter of 2022, which is an uptick of 17 percent. The figure for the full year came in at $1.7 billion, which is also an increase of 18 percent.

FX Revenue of Cboe Jumps

While options with $273.2 million remained the largest revenue source for the company, global FX brought in $16.9 million. This is a yearly uptick of 14 percent. The rest of the revenue was generated from equities products in North America, Europe, and Asia Pacific, and futures. Only Cboe's digital division generated a negative revenue of about 400,000.

The financial marketplace operator highlighted that its forex revenue jumped with the higher net transaction and clearing fees. The average daily notional value (ADNV) traded on Cboe FX, a spot FX exchange for institutions, came in at $40.8 billion for the quarter, which is 21 percent higher than the previous year.

Additionally, Cboe FX's market share strengthened to 18.4 percent in the last quarter of 2022 from 16.8 percent in the previous year's comparable period. The company highlighted the continued adoption of its diverse set of FX order types and trading protocols behind the increase.

Cboe ended the quarter with a diluted EPS of $1.49, which is down 3 percent. However, the adjusted EPS increased by 6 percent to $1.8. For the full year, the diluted EPS went down by 55 percent to $2.19, while the adjusted figure strengthened by 15 percent to $6.93.

"2022 was a year of substantial progress at Cboe as we continued to build out our global network, while delivering record financial results," said Edward Tilly, the Chairman and CEO at Cboe.

"We are focused on accelerating our momentum in three key areas of our business – Derivatives, Data and Access Solutions, and Digital. Furthermore, organic growth efforts aimed at deepening our geographic reach and extending market access to our unique set of products and services around the globe will be critical for us."

Check out the latest FMLS22 session on "Market Data amid Global Turmoil and Accelerated Digitalization."

Strong 2023 Guidance

The American giant now expects to end the fiscal year of 2023 with 7 to 9 percent growth in organic total net revenue. Moreover, it sets the medium-term total net revenue expectation between 5 to 7 percentage points. Further, revenue from acquisitions is expected to add around 0.5 percentage points of growth.

Cboe estimated its expense for 2023 to be in the range of $769 to $779 million, increasing from $652 million in 2022.

"While we will be making continued investments in our business to drive future durable growth, we anticipate delivering long-term shareholder value through an attractive capital return policy," Tilly added. "2022 provided us with many great opportunities to build upon in the year ahead, and we look forward to delivering on our objectives in 2023."

Cboe Global Markets (BATS: CBOE), the operator of a major American derivatives exchange and a stock exchange , generated $457.1 million in net revenue in the fourth quarter of 2022, which is an uptick of 17 percent. The figure for the full year came in at $1.7 billion, which is also an increase of 18 percent.

FX Revenue of Cboe Jumps

While options with $273.2 million remained the largest revenue source for the company, global FX brought in $16.9 million. This is a yearly uptick of 14 percent. The rest of the revenue was generated from equities products in North America, Europe, and Asia Pacific, and futures. Only Cboe's digital division generated a negative revenue of about 400,000.

The financial marketplace operator highlighted that its forex revenue jumped with the higher net transaction and clearing fees. The average daily notional value (ADNV) traded on Cboe FX, a spot FX exchange for institutions, came in at $40.8 billion for the quarter, which is 21 percent higher than the previous year.

Additionally, Cboe FX's market share strengthened to 18.4 percent in the last quarter of 2022 from 16.8 percent in the previous year's comparable period. The company highlighted the continued adoption of its diverse set of FX order types and trading protocols behind the increase.

Cboe ended the quarter with a diluted EPS of $1.49, which is down 3 percent. However, the adjusted EPS increased by 6 percent to $1.8. For the full year, the diluted EPS went down by 55 percent to $2.19, while the adjusted figure strengthened by 15 percent to $6.93.

"2022 was a year of substantial progress at Cboe as we continued to build out our global network, while delivering record financial results," said Edward Tilly, the Chairman and CEO at Cboe.

"We are focused on accelerating our momentum in three key areas of our business – Derivatives, Data and Access Solutions, and Digital. Furthermore, organic growth efforts aimed at deepening our geographic reach and extending market access to our unique set of products and services around the globe will be critical for us."

Check out the latest FMLS22 session on "Market Data amid Global Turmoil and Accelerated Digitalization."

Strong 2023 Guidance

The American giant now expects to end the fiscal year of 2023 with 7 to 9 percent growth in organic total net revenue. Moreover, it sets the medium-term total net revenue expectation between 5 to 7 percentage points. Further, revenue from acquisitions is expected to add around 0.5 percentage points of growth.

Cboe estimated its expense for 2023 to be in the range of $769 to $779 million, increasing from $652 million in 2022.

"While we will be making continued investments in our business to drive future durable growth, we anticipate delivering long-term shareholder value through an attractive capital return policy," Tilly added. "2022 provided us with many great opportunities to build upon in the year ahead, and we look forward to delivering on our objectives in 2023."

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