Q3 2023 Earnings Summary
Reported on Jan 4, 2025 (Before Market Open)
Pre-Earnings Price$162.80Last close (Nov 2, 2023)
Post-Earnings Price$163.10Open (Nov 3, 2023)
Price Change
$0.30(+0.18%)
- Strong growth in index options volume, with SPX volume reaching 2.9 million contracts in Q3, up significantly over the prior year, and continued momentum into October with 6 of the top 10 SPX trading days occurring in that month. This growth is driven by increased institutional engagement and persistent market uncertainty.
- Unique position in the digital assets space, with the upcoming launch of margin futures in early 2024, integrating both spot and margin futures trading on the same platform under the same regulatory umbrella. Additionally, Cboe is supporting 8 issuers of potential spot Bitcoin and Ethereum ETFs, which could enhance its ecosystem and attract more participants upon approval.
- Disciplined capital allocation strategy, focusing on investing in organic initiatives with good returns, paying down debt to essentially zero floating rate debt amid rising interest rates, maintaining dividends, and planning opportunistic share repurchases, while adopting a more focused M&A strategy.
- Declining EBITDA margins over the past 3-4 years, with CEO Frederic Tomczyk acknowledging: "I clearly recognize that the EBITDA margins have been falling in the last 3 or 4 years... But I think we want to sort of stabilize that trend and start to turn it..."
- The company's investment in the Digital business may not yield expected returns, as the CEO admits: "It's clearly an asset class that doesn't have the trajectory it used to have..."
- Uncertainty in strategic direction, with the new CEO stating that the current strategy is too broad and needs refinement: "I consider that the current strategy is too broad... I think a good strategy provides greater direction and focus..."