CBOE Net Revenues Climb 86% YoY, to Reach $256.6 Million

The results of the financial report were boosted by the acquisition of Bats Global Markets, as well as the U.S.

The Chicago Board Options Exchange released its financial results for Q4 and Full Year for 2017. The report exemplifies improved numbers to end the year.

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According to the report, the company’s net revenue improved by 86% to $256.6 million, relative to Q4 of 2016 levels of $143.0 million. The substantial improvement in net revenue was impacted by the CBOE’s acquisition of Bats Global Markets, Inc., in February of last year.

The Bats acquisition is proving to be successful based on last year’s data, as overall numbers appear to have received a boost from the $3.2 billion purchase. CBOE’s organic net revenues, which exclude legacy Bats’ net revenue contribution, were released at $154.1 million, up 8% and amounting to a $11.1 million improvement.

The company was able to overcome rising operating costs as well, to post strong overall numbers on the year. Operating expenses for the fourth quarter of 2017 came in at $156.9 million, recording an increase of 130% YoY from $68.1 million. On the other side of the spectrum, operating income climbed 45% to $108.7 million during the quarter.

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EPS Boosted by U.S. Tax Reform

The end result for the CBOE’s performance last year, is an improved diluted earnings per share (EPS). Dilluted EPS for Q4 of last year came in at $2.26, a substantial improvement from the equivalent period of 2016, when diluted EPS was $0.55. Meanwhile, diluted EPS for the full FY 2017 were $3.69, posting a rise of roughly 62.5% YoY, relative to 2016 levels of $2.27.

In an incredibly influential decision, the US government passed the Tax Cuts and Jobs Act of 2017, which has affected the bottom line performance of many companies’ 2017 financial reports. The CBOE was highly impacted as well, receiving a one-time benefit of $191.5 million, boosting diluted EPS levels on a quarterly and yearly basis, by $1.70 and $1.78, respectively.

Year in Review

Edward T. Tilly, Cboe Global Markets Chairman and CEO issued a statement, with respect to the financial report. “2017 was a transformational year for Cboe Global Markets. We made great strides in our integration with Bats Global Markets, while continuing to deliver value to our customers as well as our shareholders.”

He continued, saying: “We delivered on our key strategic initiatives and achieved record trading in our highest-margin proprietary products, including VIX futures and options and SPX options, while continuing to launch new innovative products such as Cboe Bitcoin Futures. Looking ahead, I believe our strong financial position, proprietary products, diversified revenue mix and expanded global base will allow us to continue to grow our business and create shareholder value.”

As mentioned in Mr. Tilly’s remarks, the CBOE launched Bitcoin futures toward the end of 2017. The rising tide of demand toward the relatively infant assets was further elevated with the exchange’s decision to enable trading on Bitcoin futures, as the move provided validation for a heavily scrutinized industry.

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