Cboe Global Markets (CBOE) 1 Nov 24 2024 Q3 Earnings call transcript

In a record-breaking quarter, Cboe Global Markets reported a net revenue of $532 million, marking an 11% year-over-year increase. This robust performance was driven by strong volumes in their Derivatives franchise and solid results from their cash and spot markets, as well as their Data and Access Solutions business.

Derivatives Business Thrives on Volatility and Strategic Focus

Cboe's Derivatives business, a key contributor to the company's growth, saw a 13% year-over-year increase in net revenue. This success can be attributed to the company's strategic focus on their proprietary index options and futures products, particularly their S&P 500 Index options and futures, which saw a 7% and 33% increase in ADV, respectively. The company's emphasis on volatility products, such as VIX options and futures, also played a significant role in the Derivatives business's growth, with a 20% and 33% increase in ADV, respectively.

Cash and Spot Markets Continue to Perform

The cash and spot markets category delivered another strong quarter, with a 12% year-over-year increase in net revenue. This growth was broad-based, with each of the company's global regions posting solid growth. Notably, the Data and Access Solutions business continued to drive solid results, with a 6% year-over-year increase in organic net revenue.

Strategic Review and Future Outlook

During the call, Cboe's management team provided an update on their strategic review process, which has seen the company make fundamental adjustments to its capital and resource allocation strategy. This includes a focus on its core strengths in derivatives and data and access solutions, as well as investments in technology and organic initiatives. The company also announced a strategic framework to ensure its alignment with secular trends and drive growth.

Conclusion

Cboe Global Markets' third quarter results demonstrate the company's resilience and strategic focus, particularly in the face of market volatility. With a strong balance sheet and strategic outlook, Cboe is well-positioned to capitalize on opportunities and drive growth in the coming quarters.