Cboe Global Markets Inc
For the period ended Sep 30, 2024. Filed Nov 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 1, 2024
CBOE$353.27+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001558370-24-010654
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0001628280-24-044657
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 233 previous paragraphs and 251 current paragraphs.
122 unchanged; 85 reworded; 42 added; 17 removed; 9 previous and 2 current paragraphs rearranged.
Tables are not compared: 70 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
•trading volumes on our proprietary products such as VIX options and futures and SPX options;
Current report
•trading volumes in listed equity securities, options, futures, and ETPs in North America, Europe, and Asia Pacific, clearing volumes in listed equity securities and ETPs in Europe, volumes in digital assets, and volumes in institutional FX trading;
Current report
•the demand for and pricing structure of the U.S. tape plan market data distributed by the Securities Information Processors (“SIPs”), which determines the pool size of the industry market data fees we receive based on our market share;
Current report
•consolidation and expansion of our customers and competitors in the industry;
Current report
•the demand for information about, or access to, our markets and products, which is dependent on the products we trade, our importance as a liquidity center, quality and integrity of our proprietary indices, and the quality and pricing of our data and access and capacity services;
Current report
•continuing pressure in transaction fee pricing due to intense competition in the North American, European, and Asia Pacific markets;
Current report
•significant fluctuations in foreign currency translation rates or weakened value of currencies; and
Current report
•regulatory changes and obligations relating to market structure, digital assets and increased capital or margin requirements, and those which affect certain types of instruments, transactions, products, pricing structures, capital market participants or reporting or compliance requirements.
Current report
(1)These are Non-GAAP figures for which reconciliations are provided below (in millions, except percentages, earnings per share, and as noted below).
Current report
(1)EBITDA is defined as income before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before acquisition-related costs, change in contingent consideration, impairment of intangible assets, loss (gain) on investment, costs related to the Cboe Digital wind down, gain on sale of property held for sale, contra-revenue associated with the Cboe Digital syndication wind down, gain on Cboe Digital non-recourse notes and warrants wind down, and income from investment. EBITDA and adjusted EBITDA do not represent, and should not be considered as, alternatives to net income as determined in accordance with GAAP. We have presented EBITDA and adjusted EBITDA because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors and other interested parties in the evaluation of companies. In addition, we use adjusted EBITDA as a measure of operating performance for preparation of our forecasts and evaluating our leverage ratio for the debt to earnings covenant included in our outstanding credit facility. Other companies may calculate EBITDA and adjusted EBITDA differently than we do. EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.
Current report
(4)Adjusted earnings is defined as net income adjusted for amortization of acquired intangible assets, acquisition-related costs, change in contingent consideration, impairment of intangible assets, loss (gain) on investment, costs related to the Cboe Digital wind down, loss (gain) on sale of property held for sale, contra-revenue associated with the Cboe Digital syndication wind down, gain on Cboe Digital non-recourse notes and warrants wind down, income from investment, certain tax reserve changes, and net income or loss allocated to participating securities, net of the income tax effects of these adjustments. Adjusted earnings does not represent, and should not be considered as, an alternative to net income or loss, as determined in accordance with GAAP. We have presented adjusted earnings because we consider it an important supplemental measure of our performance and we use it as the basis for monitoring our own core operating financial performance relative to other operators of exchanges. We also believe that it is frequently used by analysts, investors and other interested parties in the evaluation of companies. We believe that investors may find this non-GAAP measure useful in evaluating our performance compared to that of peer companies in our industry. Other companies may calculate adjusted earnings differently than we do. Adjusted earnings has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
Current report
(5)Adjusted diluted earnings per share represents adjusted earnings divided by diluted weighted average shares outstanding.
Current report
The following summarizes changes in certain operational and financial metrics for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Current report
(1)Touched volume represents the total number of shares of equity securities and ETFs internally matched on our exchanges or routed to and executed on an external market center.
Current report
(2)Average revenue per contract, for options and futures, represents total net transaction fees recognized for the period divided by total contracts traded during the period.
Current report
(3)Net capture per one hundred touched shares refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX, and EDGA and the number of trading days.
Current report
(4)Net capture per one hundred touched shares refers to transaction fees less order and execution management system (OMS/EMS) fees and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period.
Current report
(5)Matched volume represents the total number of shares of equity securities and ETFs activity executed on our exchanges.
Current report
(6)Net capture per 10,000 touched shares refers to transaction fees divided by the product of one-ten thousandth ADV of shares for Cboe Canada Inc. and the number of trading days.
Current report
(7)Matched ADNV represents the average daily notional value of shares or contracts executed on our exchanges.
Current report
(8)Net capture per matched notional value refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Cboe Europe Equities and the number of trading days.
Current report
(9)Trades cleared refers to the total number of non-interoperable trades cleared.
Current report
(10)Fee per trade cleared refers to clearing fees divided by number of non-interoperable trades cleared.
Current report
(11)European Equities market share cleared represents Cboe Clear Europe’s client volume cleared divided by the total volume of the publicly reported European venues.
Current report
(12)Net settlement volume refers to the total number of settlements executed after netting.
Current report
(13)Net fee per settlement refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting.
Current report
(14)Net capture per matched notional value refers to transaction fees less liquidity payments in Australian dollars divided by the product of ADNV in Australian dollars of shares matched on Cboe Australia and the number of Australian Equities trading days.
Current report
(15)Net capture per matched notional value refers to transaction fees less liquidity payments in Japanese Yen divided by the product of ADNV in Japanese Yen of shares matched on Cboe Japan and the number of Japanese Equities trading days.
Current report
(16)Net capture per one million dollars traded refers to net transaction fees less liquidity payments, if any, divided by the Spot and SEF products of one-thousandth of ADNV traded on the Cboe FX Markets and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction.
Current report
Data and access solutions revenue increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in proprietary market data fees and access and capacity fees within the Options,
Current report
Derivatives markets revenue increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in transaction and clearing fees and regulatory fees. Transaction and clearing fees increased primarily due to 12% increase in index options ADV, coupled with a 14% increase in Futures ADV, partially offset by a 2% decrease in multi-listed options ADV. Regulatory fees increased primarily due to a 57% increase in the Section 31 fee rate, from an average rate of $11.14 per million dollars of covered sales for the nine months ended September 30, 2023 to an average rate of $17.50 per million dollars of covered sales for the nine months ended September 30, 2024.
Current report
Liquidity payments decreased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to a decrease in liquidity payments on the Cboe Options exchanges as a result of a 3% decline in market share and a 2% decrease in ADV for multi-listed options, partially offset by an increase in liquidity payments on U.S Equities exchanges as a result of pricing changes and a shift in volumes of certain market participants.
Current report
Liquidity payments decreased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to a decrease in liquidity payments on the Cboe Options exchanges, as a result of a 2% decline in market share and a 2% decrease in ADV for multi-listed options.
Current report
Revenues less cost of revenues increased $51.5 million, or 11%, for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to an increase in derivatives markets revenues less cost of revenues, driven by an increase in net capture and volumes on the Options, European Equities, and Futures exchanges, coupled with an increase in access and capacity fees across segments, partially offset by a decrease in industry market data fees.
Current report
Derivatives markets revenues less cost of revenues increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to an increase in net transaction and clearing fees driven by a 13% increase in index options ADV, a 15% increase in multi-listed options RPC, and a 19% increase in Futures ADV, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products in the Options segment.
Current report
Compensation and benefits increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to an $8.9 million increase in equity compensation as a result of expense reversals related to executive departures in 2023 that did not recur in 2024, a $4.8 million increase in bonuses due to strong Company performance year to date, a $4.2 million increase in benefits related to an increase in the market value of the non-qualified deferral plan assets and increases in payroll benefits, and a $3.3 million increase in salaries and wages primarily due to merit increases. Compensation and benefits increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to a $13.7 million increase in salaries and wages primarily due to merit increases, a $10.0 million increase in bonuses due to strong Company performance year to date, a $6.7 million increase in benefits related to increases in payroll benefits and an increase in the market value of the non-qualified deferral plan assets, and a $4.1 million increase in equity compensation as a result of expense reversals related to executive departures in 2023 that did not recur in 2024, partially offset by a change in the retirement vesting requirements for new equity award agreements. See Note 17 ("Stock-Based Compensation") for additional information.
Current report
Other Income (Expense), Net
Current report
The higher effective tax rate for the three and nine months ended September 30, 2024 compared to the same periods in 2023 is primarily due to releases of penalties and interest associated with Section 199 positions in 2023.
Current report
Revenues less cost of revenues increased $30.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in net transaction and clearing fees driven by a 13% increase in index options ADV, coupled with a 15% increase in multi-listed options RPC, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products and a 2% decrease in multi-listed options ADV. For the three months ended September 30, 2024, operating income for the Options segment increased $7.3 million compared to the three months ended September 30, 2023 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses. Operating expenses increased $22.8 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to increases in compensation and benefits and travel and promotional expenses, partially offset by a decrease in depreciation and amortization.
Current report
Revenues less cost of revenues increased $2.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in net transaction and clearing fees driven by a 6% increase in U.S. Equities net capture and an increase in logical port fees, partially offset by a decrease in industry market data fees driven by a decrease in U.S. tape plan revenue as a result of a 2% decline in market share on the U.S. Equities exchanges and a decrease of 5% in U.S. Equities total touched shares. For the three months ended September 30, 2024, operating income for the North American Equities segment increased $9.2 million compared to the three months ended September 30, 2023 primarily due to a decrease in operating expenses, coupled with an increase in revenues less cost of revenues. Operating expenses decreased $6.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to decreases in professional fees and outside services, depreciation and amortization, and other expenses driven by a decrease in contingent consideration.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (17)
Previous report
Data and Access Solutions
Previous report
Derivatives Markets
Previous report
The following summarizes changes in certain operational and financial metrics for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Previous report
Data and Access Solutions
Previous report
Derivatives Markets
Previous report
Derivatives markets revenue decreased slightly for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to a decrease in industry market data fees attributable to a decrease in Options Price Reporting Authority (“OPRA”) revenue in the Options segment as a result of a decline in market share on the Cboe options exchanges.
Previous report
Liquidity payments decreased for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to a decrease in liquidity payments within the Options segment as a result of pricing changes made in the second half of 2023 to improve overall net capture, coupled with a decrease in liquidity payments within the North American Equities segment as a result of pricing changes made in the first half of 2024 to improve overall net capture.
Previous report
Data and Access Solutions
Previous report
Derivatives Markets
Previous report
Derivatives markets revenues less cost of revenues increased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to an increase in net transaction and clearing fees driven by an 11% increase in index options ADV, a 3% increase in index options RPC, and a 10% increase in futures ADV, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products in the Options segment.
Previous report
Compensation and benefits increased for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to increases in salaries, bonuses, and payroll taxes of $8.1 million and $18.1 million, respectively, driven by increased headcount, increases in bonuses from strong Company performance year to date, and merit increases. For the six months ended June 30, 2024, the increase in compensation and benefits was partially offset by a $4.8 million decrease in equity compensation compared to the same period in 2023 due to a change in the vesting requirements for new equity award agreements, which provide for additional vesting requirements after an applicable retirement date. See Note 17 (“Stock-Based Compensation”) for additional information.
Previous report
decrease in recruiting fees. For the six months ended June 30, 2024, the increase in professional fees and outside services was partially offset by a decrease in regulatory costs related to CAT fees compared to the same period in 2023.
Previous report
Other (Expense) Income, Net
Previous report
The higher effective tax rate for the three months ended June 30, 2024 compared to the same period in 2023 is primarily due to the valuation allowance associated with the impairment of the Globacap investment. The lower effective tax rate for the six months ended June 30, 2024 compared to the same period in 2023 is primarily due to the excess tax benefits from the vesting of equity awards that occurred during the first quarter of 2024.
Previous report
Revenues less cost of revenues increased $50.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to an increase in net transaction and clearing fees driven by an 11% increase in index options ADV, a 3% increase in index options RPC, an increase in physical and logical port fees, and an increase in proprietary market data revenue, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products. For the six months ended June 30, 2024, operating income for the Options segment increased $27.7 million compared to the six months ended June 30, 2023 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses. Operating expenses increased $22.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to increases in compensation and benefits, technology support services, and professional and outside services.
Previous report
Revenues less cost of revenues increased $7.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to an increase in net transaction and clearing fees driven by a 30% increase in U.S. Equities net capture, an increase in proprietary market data revenue, and an increase in physical port fees, partially offset by a decrease in industry market data fees driven by a decrease in U.S. tape plan revenue as a result of a 1% decline in market share on the U.S. Equities exchanges. For the three months ended June 30, 2024, operating income for the North American Equities segment increased $22.5 million compared to the three months ended June 30, 2023 primarily due to a decrease in operating expenses, coupled with an increase in revenues less cost of revenues. Operating expenses decreased $15.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to decreases in technology support services, depreciation and amortization, compensation and benefits, and travel and promotional expenses.
Previous report
(1) See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
Reworded paragraphs (85)
Previous wording
On April 25, 2024, the Company announced plans to refocus the digital asset business to leverage its core strengths in derivatives, technology, and product innovation. On May 31, 2024, the Company halted trading on Cboe Digital Exchange, LLC’s (“Cboe Digital Exchange”) spot market (“Cboe Digital spot market”), the Company’s spot digital asset trading platform, in-line with the Company’s plans to wind down the spot digital asset trading market by the third quarter of 2024. In addition, the company plans to transition its cash-settled Bitcoin and Ether futures contracts, currently available for trading on the Cboe Digital Exchange, to CFE in the first half of 2025, pending regulatory review. The Company plans to align Cboe Clear Digital with Cboe Clear Europe, under unified leadership, and expects to continue to facilitate the clearing of cash-settled Bitcoin and Ether futures contracts.
Current wording
On April 25, 2024, the Company announced plans to refocus the digital asset business to leverage its core strengths in derivatives, technology, and product innovation. On May 31, 2024, the Company halted trading on the Cboe Digital spot market (“Cboe Digital spot market”). The Cboe Digital spot market is closed for all participant and trading purposes. In addition, the Company plans to transition its cash-settled Bitcoin and Ether futures contracts, currently available for trading on Cboe Digital Exchange, LLC's Digital Exchange ("Cboe Digital Exchange"), to CFE in the first half of 2025, pending regulatory review. The Company has brought Cboe Clear Digital under unified leadership with the Global Head of Clearing, and expects to continue to facilitate the clearing of cash-settled Bitcoin and Ether futures contracts.
Previous wording
segment-level assets or income and expenses below operating income (loss) as key performance metrics; therefore, such information is not presented below. The Company has aggregated all of its corporate costs, as well as other business ventures, within the Corporate Items and Eliminations totals based on the decision that those activities should not be used to evaluate the operating performance of the segments; however, operating expenses that relate to activities of a specific segment have been allocated to that segment.
Current wording
The Company operates six reportable business segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital, which is reflective of how the Company's CODM reviews and operates the business, as discussed in Note 1 (“Organization and Basis of Presentation”). Segment performance is primarily evaluated based on operating income (loss). The Company’s CODM does not use segment-level assets or income and expenses below operating income (loss) as key performance metrics; therefore, such information is not presented below. The Company has aggregated all of its corporate costs, as well as other business ventures, within the Corporate Items and Eliminations totals based on the decision that those activities should not be used to evaluate the operating performance of the segments; however, operating expenses that relate to activities of a specific segment have been allocated to that segment.
Previous wording
Europe and Asia Pacific. The Europe and Asia Pacific segment includes the pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and Cboe Europe Derivatives (“CEDX”). It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities transaction services of Cboe Australia and Cboe Japan, operators of trading venues in Australia and Japan, respectively, along with equities transactions that occur on the BIDS Trading platform in Australia and Japan. Cboe Europe operates lit and dark books, a periodic auctions book, and Cboe BIDS Europe, a Large-in-Scale (“LIS”) trading negotiation facility predominately for UK and Swiss symbols. Cboe NL, based in Amsterdam, operates similar business functionality to that offered by Cboe Europe, and provides for trading only in European Economic Area (“EEA”) symbols. Cboe Europe Derivatives, a pan-European derivatives platform, offers futures and options based on Cboe Europe equity indices, and single stock options. This segment also includes Cboe Europe, Cboe NL, CEDX, Cboe Australia and Cboe Japan revenue generated from the licensing of proprietary market data and from access and capacity services.
Current wording
Europe and Asia Pacific. The Europe and Asia Pacific segment includes the pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and Cboe Europe Derivatives (“CEDX”). It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities transaction services of Cboe Australia and Cboe Japan, operators of trading venues in Australia and Japan, respectively, along with equities transactions that occur on the BIDS Trading platform in Australia and Japan. Cboe Europe operates lit and dark books, a periodic auctions book, a closing cross book, and Cboe BIDS Europe, a Large-in-Scale (“LIS”) trading negotiation facility predominately for UK and Swiss symbols. Cboe NL, based in Amsterdam, operates similar business functionality to that offered by Cboe Europe, and provides for trading only in European Economic Area (“EEA”) symbols. Cboe Europe Derivatives, a pan-European derivatives platform, offers futures and options based on Cboe Europe equity indices, and single stock options. This segment also includes Cboe Europe, Cboe NL, CEDX, Cboe Australia and Cboe Japan revenue generated from the licensing of proprietary market data and from access and capacity services.
Previous wording
Digital.** **The Digital segment includes a U.S.-based spot digital asset trading market, regulated futures exchange, and a regulated clearinghouse, as well as revenue generated from the licensing of proprietary market data and from access and capacity services. In-line with the Company’s plans to wind down the spot digital asset trading market by the third quarter of 2024, on May 31, 2024, the Company halted trading on the Cboe Digital spot market. The Company plans to transition its cash-settled Bitcoin and Ether futures contracts, currently available for trading on the Cboe Digital Exchange, to CFE in the first half of 2025, pending regulatory review. The Company intends to continue to present Digital as a distinct reportable business segment through at least the year ending December 31, 2024.
Current wording
Digital. The Digital segment includes a regulated futures exchange and a regulated clearinghouse, as well as revenue generated from the licensing of proprietary market data and from access and capacity services. Prior to May 31, 2024, the Digital segment also included a U.S.-based spot digital asset trading market. As of May 31, 2024, the Cboe Digital spot market is closed for all participant and trading purposes. In addition, the Company plans to transition its cash-settled Bitcoin and Ether futures contracts, currently available for trading on the Cboe Digital Exchange, to CFE in the first half of 2025, pending regulatory review. The Company intends to continue to present Digital as a distinct reportable business segment through at least the year ending December 31, 2024.
Previous wording
Liquidity payments are primarily correlated to the volume of securities traded on our markets. As stated above, we record the liquidity rebates paid to market participants providing liquidity, in the case of Cboe Options, C2, BZX, EDGX, and Cboe Europe Equities and Derivatives, and Cboe Digital, as cost of revenue. BYX and EDGA offer a pricing model
Current wording
Liquidity payments are primarily correlated to the volume of securities traded on our markets. As stated above, we record the liquidity rebates paid to market participants providing liquidity, in the case of Cboe Options, C2, BZX, EDGX, and Cboe Europe Equities and Derivatives, and Cboe Digital, as cost of revenue. BYX and EDGA offer a pricing model where we rebate liquidity takers for executing against an order resting on our book, which is also recorded as a cost of revenues. On October 1, 2024 Cboe announced its plan to transition EDGA from an inverted fee model to a maker/taker fee model, effective November 1, 2024, subject to regulatory review.
Previous wording
Various rules require that U.S. options and equities trade executions occur at the National Best Bid and Offer displayed by any exchange. Linkage order routing consists of the cost incurred to provide a service whereby Cboe equities and options exchanges deliver orders to other execution venues when there is a potential for obtaining a better execution price or when instructed to directly route an order to another venue by the order provider. The service affords exchange order flow providers an opportunity to obtain the best available execution price and may also result in cost benefits to those clients. Such an offering improves our competitive position and provides an opportunity to attract orders which would otherwise bypass our exchanges. We utilize third-party brokers or our broker-dealer, Cboe Trading, to facilitate such delivery. Also included within routing and clearing are the Order Management System (“OMS”) and Execution Management System (“EMS”) fees incurred for U.S. Equities Off-Exchange order execution, as well as settlement costs incurred for the settlement process executed by Cboe Clear Europe and Cboe Clear Digital.
Current wording
Various rules require that U.S. options and equities trade executions occur at the National Best Bid and Offer displayed by any exchange. Linkage order routing consists of the cost incurred to provide a service whereby Cboe equities and options exchanges deliver orders to other execution venues when there is a potential for obtaining a better execution price or when instructed to directly route an order to another venue by the order provider. The service affords exchange order flow providers an opportunity to obtain the best available execution price and may also result in cost benefits to those clients. Such an offering improves our competitive position and provides an opportunity to attract orders which would otherwise bypass our exchanges. We utilize third-party brokers or our broker-dealer, Cboe Trading, to facilitate such delivery. Also included within routing and clearing are the Order Management System (“OMS”) and Execution Management System
Previous wording
Other expenses represents costs necessary to support our operations that are not already included in the above categories, including, but not limited to, changes in contingent consideration.
Current wording
Other expenses represent costs necessary to support our operations that are not already included in the above categories, including, but not limited to, changes in contingent consideration.
Previous wording
These non-GAAP financial measures are not presented in accordance with, or as an alternative to, GAAP financial measures and may be calculated differently from non-GAAP measures used by other companies, which reduces their usefulness as comparative measures. We encourage analysts, investors and other interested parties to use these non-
Current wording
These non-GAAP financial measures are not presented in accordance with, or as an alternative to, GAAP financial measures and may be calculated differently from non-GAAP measures used by other companies, which reduces their usefulness as comparative measures. We encourage analysts, investors and other interested parties to use these non-GAAP measures as supplemental information to the GAAP financial measures included herein, including our condensed consolidated financial statements, to enhance their analysis and understanding of our performance and in making comparisons. Please see the footnotes below for definitions, additional information, and reconciliations from the closest GAAP measure.
Previous wording
The following summarizes changes in financial performance for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023. “YTD” represents the six month periods ended June 30, 2024 and 2023, respectively:
Current wording
The following summarizes changes in financial performance for the three and nine months ended September 30, 2024, compared to the three and nine months ended September 30, 2023. “YTD” represents the nine month periods ended September 30, 2024 and 2023, respectively:
Previous wording
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
Current wording
(3)Adjusted EBITDA margin represents adjusted EBITDA divided by revenues less cost of revenues.
Previous wording
The following is a reconciliation of net income allocated to common stockholders to EBITDA and adjusted EBITDA (in millions) for the six months ended June 30, 2024 and 2023, respectively:
Current wording
The following is a reconciliation of net income allocated to common stockholders to EBITDA and adjusted EBITDA (in millions) for the nine months ended September 30, 2024 and 2023, respectively:
Previous wording
The following summarizes changes in certain operational and financial metrics for the six months ended June 30, 2024, compared to the six months ended June 30, 2023 (continued from previous page):
Current wording
The following summarizes changes in certain operational and financial metrics for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 (continued from previous page):
Previous wording
The following table includes operational and financial metrics for our Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX segments. The following summarizes changes in certain operational and financial metrics for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:
Current wording
The following table includes operational and financial metrics for our Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX segments. The following summarizes changes in certain operational and financial metrics for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:
Previous wording
*The Digital segment is not included as results were not material for the three and six months ended June 30, 2024 and 2023.
Current wording
Note, the Digital segment is not included as results were not material for the three and nine months ended September 30, 2024 and 2023.
Previous wording
Total revenues for the three months ended June 30, 2024 increased $66.2 million, or 7%, compared to the same period in 2023 primarily due to increases in cash and spot markets and derivatives markets revenue, driven by an increase in the Section 31 fee rate following a rate change in May 2024, coupled with an increase in other revenue attributable to Cboe Clear Europe and an increase in volumes traded on the Cboe futures exchange. Total revenues for the six months ended June 30, 2024 increased $35.2 million, or 2%, compared to the same period in 2023 primarily due to an increase in cash and spot markets revenue, driven by an increase in other revenue attributable to Cboe Clear Europe, coupled with an increase in access and capacity fees and proprietary market data across segments, partially offset by a decrease in industry market data fees in the North American Equities and Options segments.
Current wording
Total revenues for the three months ended September 30, 2024 increased $146.9 million, or 16%, compared to the same period in 2023 primarily due to increases in cash and spot markets and derivatives markets revenue, driven by an increase in the Section 31 fee rate following a rate change in May 2024, coupled with an increase in transaction and clearing fees, driven by increased volumes traded on the Cboe Options and European Equities exchanges, as well as pricing changes on the U.S. Equities exchanges. Total revenues for the nine months ended September 30, 2024 increased $182.1 million, or 6%, compared to the same period in 2023 primarily due to an increase in cash and spot markets and derivatives markets revenue, driven by an increase in the Section 31 fee rate following rate changes in 2023 and 2024, an increase in transaction and clearing fees, driven by increased volumes traded on the Cboe Options and Futures exchanges, and an increase in other revenue attributable to Cboe Clear Europe.
Previous wording
The following summarizes changes in revenues for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 (in millions, except percentages):
Current wording
The following summarizes changes in revenues for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 (in millions, except percentages):
Previous wording
Cash and spot markets revenue increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in regulatory fees and other revenue. Regulatory fees increased primarily due to a 109% increase in the Section 31 fee rate, from an average rate of $8.00 per million dollars of covered sales for the three months ended June 30, 2023 to an average rate of $16.70 per million dollars of covered sales for the three months ended June 30, 2024. Other revenue increased primarily due to an increase in interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned in accordance with its investment policy. See Note 12 (“Clearing Operations”) for additional information.
Current wording
Cash and spot markets revenue increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in regulatory fees, transaction and clearing fees, and other revenue, partially offset by a decrease in industry market data fees. Regulatory fees increased primarily due to a 248% increase in the Section 31 fee rate, from an average rate of $8.00 per million dollars of covered sales for the three months ended September 30, 2023 to an average rate of $27.80 per million dollars of covered sales for the three months ended September 30, 2024. Transaction and clearing fees increased primarily due to pricing changes in North American Equities, a 16% increase in European Equities matched ADNV, a 9% increase in Global FX ADNV, a 20% increase in trades cleared by Cboe Clear Europe, and a 117% increase in Japanese Equities ADNV. Other revenue increased primarily due to an increase in interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned due to a change in its investment policy. See Note 12 (“Clearing Operations”) for additional information. Industry market data fees decreased primarily due to a decrease in U.S. tape plan revenue as a result of a 2% decline in market share on the U.S. Equities exchanges.
Previous wording
Cash and spot markets revenue increased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in other revenue and regulatory fees, partially offset by a decrease in industry market data fees. Other revenue increased primarily due to an increase in interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned in accordance with its investment policy. See Note 12 (“Clearing Operations”) for additional information. Regulatory fees increased primarily due to an increase in notional volumes on the U.S. Equities exchanges, partially offset by a 3% decrease in the Section 31 fee rate, from an average rate of $12.71 per million dollars of covered sales for the six months ended June 30, 2023 to an average rate of $12.35 per million dollars of covered sales for the six months ended June 30, 2024. Industry market data fees decreased primarily due a decrease in U.S. tape plan revenue driven by a 1% decline in market share on the U.S. Equities exchanges.
Current wording
Cash and spot markets revenue increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in regulatory fees, other revenue, and transaction and clearing fees, partially offset by a decrease in industry market data fees. Regulatory fees increased primarily due to a 57% increase in the Section 31 fee rate, from an average rate of $11.14 per million dollars of covered sales for the nine months ended September 30, 2023 to an average rate of $17.50 per million dollars of covered sales for the nine months ended September 30, 2024. Other revenue increased primarily due to an increase in interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned due to a change in its investment policy. See Note 12 (“Clearing Operations”) for additional information. Transaction and clearing fees increased primarily due to a 7% increase in Global FX ADNV, pricing changes in North American Equities, a 1% increase in European Equities matched ADNV, an 85% increase in Japanese Equities ADNV, and a 1% increase in trades cleared by Cboe Clear Europe. Industry market data fees decreased primarily due to a decrease in U.S. tape plan revenue driven by a 1% decline in market share on the U.S. Equities exchanges.
Previous wording
Data and access solutions revenue increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased physical and logical port fees in the North American Equities, Options, and Europe and Asia Pacific segments, both driven by increases in pricing. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the North American Equities, Options, and Futures segments.
Current wording
Data and access solutions revenue increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased logical and physical port fees in the North American Equities, Options, and Europe and Asia Pacific segments, driven by increased customer demand, led by the new North American Equities' dedicated cores product. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options and Europe and Asia Pacific segments.
Previous wording
Data and access solutions revenue increased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees, proprietary market data fees, and licensing revenue within the Options segment. Access and capacity fees increased primarily due to increased physical and logical port fees in the Options, North American Equities, and Europe and Asia Pacific segments, both driven by increases in pricing and subscribers. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, North American Equities, and Europe and Asia Pacific segments.
Current wording
North American Equities, and Europe and Asia Pacific segments. Access and capacity fees increased primarily due to increased physical and logical port fees in the Options, North American Equities, and Europe and Asia Pacific segments, driven by increased customer demand. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options and Europe and Asia Pacific segments.
Previous wording
Derivatives markets revenue increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in transaction and clearing fees and regulatory fees. Transaction and clearing fees increased primarily due to a 28% increase in futures ADV, coupled with a 9% increase in index options ADV, partially offset by a 2% decrease in multi-listed options ADV and a decrease in routed trades on the Cboe options exchanges. Regulatory fees increased primarily due to a 109% increase in the Section 31 fee rate, from an average rate of $8.00 per million dollars of covered sales for the three months ended June 30, 2023 to an average rate of $16.70 per million dollars of covered sales for the three months ended June 30, 2024, partially offset by a decrease in options regulatory fees (“ORF”).
Current wording
Derivatives markets revenue increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in transaction and clearing fees and regulatory fees. Transaction and clearing fees increased primarily due to a 13% increase in index options ADV, coupled with a 19% increase in Futures ADV, partially offset by a 2% decrease in multi-listed options ADV. Regulatory fees increased primarily due to a 248% increase in the Section 31 fee rate, from an average rate of $8.00 per million dollars of covered sales for the three months ended September 30, 2023 to an average rate of $27.80 per million dollars of covered sales for the three months ended September 30, 2024.
Previous wording
The following tables reconcile the disaggregated cost of revenues captions presented on the condensed consolidated statements of income to the net revenue captions presented on the condensed consolidated statements of income for the three and six months ended June 30, 2024 and 2023, respectively (in millions):
Current wording
The following tables reconcile the disaggregated cost of revenues captions presented on the condensed consolidated statements of income to the net revenue captions presented on the condensed consolidated statements of income for the three and nine months ended September 30, 2024 and 2023, respectively (in millions):
Previous wording
Total cost of revenues increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to increased cash and spot markets cost of revenues, driven by an increase in the Section 31 fee rate and an increase in operating interest expense attributable to Cboe Clear Europe, partially offset by a decrease in derivatives markets cost of revenues, driven by a decrease in liquidity payments on the Cboe options exchanges.
Current wording
Total cost of revenues increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to increased cash and spot markets and derivatives markets cost of revenues, as a result of an increase in the Section 31 fee rate, partially offset by a decrease in liquidity payments on the Cboe Options exchanges, as a result of decreases in multi-listed options market share and ADV.
Previous wording
Total cost of revenues decreased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to decreased derivatives markets cost of revenues, driven by a decrease in liquidity payments on the Cboe options exchanges, partially offset by an increase in cash and spot markets cost of revenue, driven by an increase in Section 31 fees.
Current wording
Total cost of revenues increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to increased cash and spot markets cost of revenues, as a result of an increase in the Section 31 fee rate, coupled with an increase in other cost of revenues, as a result of an increase in interest expense related to Cboe Clear Europe, and an increase in royalty fees due to increased royalties for licensed products, partially offset by a decrease in liquidity payments on the Cboe Options exchanges as a result of a decrease in multi-listed options market share and ADV.
Previous wording
The following summarizes changes in the disaggregated cost of revenues for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 (in millions, except percentages):
Current wording
The following summarizes changes in the disaggregated cost of revenues for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 (in millions, except percentages):
Previous wording
Routing and clearing fees decreased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to a decrease in routed trades on the Cboe options exchanges. Routing and clearing fees decreased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to a decrease in routed trades on the Cboe options exchanges, coupled with a decrease in routed shares on the U.S Equities exchanges.
Current wording
Routing and clearing fees decreased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to a decrease in routed trades on the Cboe Options exchanges. Routing and clearing fees decreased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to a decrease in routed trades on the Cboe Options exchanges, coupled with a decrease in routed shares on the Cboe U.S Equities exchanges.
Previous wording
Section 31 fees increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to a 109% increase in the Section 31 fee rate, from an average rate of $8.00 per million dollars of covered sales for the three months ended June 30, 2023 to an average rate of $16.70 per million dollars of covered sales for the three months ended June 30, 2024. Section 31 fees increased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to an increase in notional volumes, partially offset by a 3% decrease in the Section 31 fee rate, from an average rate of $12.71 per million dollars of covered sales for the six months ended June 30, 2023 to an average rate of $12.35 per million dollars of covered sales for the six months ended June 30, 2024.
Current wording
Section 31 fees increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to a 248% increase in the Section 31 fee rate, from an average rate of $8.00 per million dollars of covered sales for the three months ended September 30, 2023 to an average rate of $27.80 per million dollars of covered sales for the three months ended September 30, 2024. Section 31 fees increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to a 57% increase in the Section 31 fee rate, from an average rate of $11.14 per million dollars of covered sales for the nine months ended September 30, 2023 to an average rate of $17.50 per million dollars of covered sales for the nine months ended September 30, 2024.
Previous wording
Royalty fees and other cost of revenues increased for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to an increase in operating interest expense attributable to Cboe Clear Europe as a result of the changing interest rate environment and additional interest expense in accordance with its investment policy, coupled with an increase in trading volumes of licensed products in the Options segment. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy.
Current wording
Royalty fees and other cost of revenues increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to an increase in trading volumes of licensed products in the Options segment, coupled with an increase in operating interest expense attributable to Cboe Clear Europe as a result of the changing interest rate environment and a change in its investment policy. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy.
Previous wording
Revenues less cost of revenues increased $46.7 million, or 10%, and $77.4 million, or 8%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to increases in derivatives markets revenues less cost of revenues driven by an increase in volumes traded on the Cboe options exchanges, coupled with an increase in RPC and net capture on the Options, U.S. Equities and European Equities exchanges, as applicable, increase in access and capacity fees and proprietary market data across segments, and an increase in net other revenue attributable to Cboe Clear Europe.
Current wording
Revenues less cost of revenues increased $128.9 million, or 9%, for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to an increase in derivatives markets revenues less cost of revenues, driven by an increase in net capture and volumes on the Options, European Equities, Futures, and North American Equities exchanges, an increase in access and capacity fees across segments, and an increase in net other revenue attributable to Cboe Clear Europe, partially offset by a decrease in industry market data fees.
Previous wording
The following summarizes the components of revenues less cost of revenues for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 (in millions, except percentages):
Current wording
The following summarizes the components of revenues less cost of revenues for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 (in millions, except percentages):
Previous wording
Cash and spot markets revenues less cost of revenues increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in transaction and clearing fees less liquidity payments and routing and clearing costs (“net transaction and clearing fees”) in the North American Equities, Europe and Asia Pacific, and Global FX segments, coupled with an increase in net other revenue, partially offset by a decrease in industry market data fees. Net transaction and clearing fees increased primarily due to a 30% increase in U.S. Equities net capture, a 9% increase in European Equities net capture, a 17% increase in net fee per settlement by Cboe Clear Europe, and a 12% increase in Global FX ADNV, partially offset by a 1% decrease in total touched shares on the U.S. Equities exchanges. Net other revenue increased primarily due to an increase in operating interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment and additional interest income in accordance with its investment policy. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy. Industry market data fees decreased primarily due a decrease in U.S. tape plan revenue driven by a 1% decline in market share on the U.S. Equities exchanges.
Current wording
Cash and spot markets revenues less cost of revenues increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in transaction and clearing fees less liquidity payments and routing and clearing costs (“net transaction and clearing fees”) in the Europe and Asia Pacific, North American Equities, and Global FX segments, partially offset by a decrease in industry market data fees. Net transaction and clearing fees increased primarily due to a 16% increase in European Equities matched ADNV, a 6% increase in U.S. Equities net capture, and a 9% increase in Global FX ADNV, partially offset by a 5% decrease in total touched shares on the U.S. Equities exchanges. Industry market data fees decreased primarily due a decrease in U.S. tape plan revenue driven by a 2% decline in market share on the U.S. Equities exchanges.
Previous wording
Cash and spot markets revenues less cost of revenues increased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in net transaction and clearing fees in the North American Equities, Europe and Asia Pacific, and Global FX segments, coupled with an increase in net other revenue, partially offset by a decrease in industry market data fees. Net transaction and clearing fees increased primarily due to a 15% increase in U.S. Equities net capture, a 13% increase in European Equities net capture, a 6% increase in Global FX ADNV, and a 72% increase in Japanese Equities ADNV. Net other revenue increased primarily due to an increase in operating interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment and additional interest income in accordance with its investment policy. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy. Industry market data fees decreased primarily due a decrease in U.S. tape plan revenue driven by a 1% decline in market share on the U.S. Equities exchanges.
Current wording
Cash and spot markets revenues less cost of revenues increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in net transaction and clearing fees in the North American Equities, Europe and Asia Pacific, and Global FX segments and an increase in net other revenue, partially offset by a decrease in industry market data fees. Net transaction and clearing fees increased primarily due to a 12% increase in U.S. Equities net capture, a 13% increase in European Equities net capture, a 7% increase in Global FX ADNV, and an 85% increase in Japanese Equities ADNV. Net other revenue increased primarily due to an increase in operating interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment and additional interest income due to a change in its investment policy. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy. Industry market data fees decreased primarily due a decrease in U.S. tape plan revenue driven by a 1% decline in market share on the U.S. Equities exchanges.
Previous wording
Data and access solutions revenue increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased physical and logical port fees in the North American Equities, Options, and Europe and Asia Pacific segments, both driven by increases in pricing. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the North American Equities, Options, and Futures segments.
Current wording
Data and access solutions revenues less cost of revenues increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased physical and logical port fees in the North American Equities, Options, and Europe and Asia Pacific segments, driven by increased customer demand, led by the new North American Equities' dedicated cores product. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, Europe and Asia Pacific, and Futures segments.
Previous wording
Data and access solutions revenue increased for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees, proprietary market data fees, and licensing revenue within the Options segment. Access and capacity fees increased primarily due to increased physical and logical port fees in the Options, North American Equities, and Europe and Asia Pacific segments, both driven by increases in pricing and subscribers. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, North American Equities, and Europe and Asia Pacific segments.
Current wording
Data and access solutions revenues less cost of revenues increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased physical and logical port fees in the Options, North American Equities, and Europe and Asia Pacific segments, both driven by increased customer demand. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, North American Equities, and Europe and Asia Pacific segments.
Previous wording
Derivatives markets revenues less cost of revenues increased for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to an increase in net transaction and clearing fees driven by a 9% increase in index options ADV, a 2% increase in index options RPC, and a 28% increase in futures ADV, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products in the Options segment.
Current wording
Derivatives markets revenues less cost of revenues increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to an increase in net transaction and clearing fees driven by a 12% increase in index options ADV, a 2% increase in index options RPC, and a 14% increase in Futures ADV, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products in the Options segment.
Previous wording
Total operating expenses for the three and six months ended June 30, 2024 compared to the same periods in 2023 increased $81.4 million, or 37%, and $77.6 million, or 17%, respectively, primarily due to the impairment of intangible assets charge recorded to the Digital segment in the second quarter of 2024.
Current wording
Total operating expenses for the three months ended September 30, 2024 compared to the same period in 2023 increased $15.3 million, or 7%, primarily due to an increase in compensation and benefits, partially offset by a decrease in depreciation and amortization. Total operating expenses for the nine months ended September 30, 2024 compared to the same period in 2023 increased $92.9 million, or 14%, primarily due to the impairment of intangible assets charge recorded to the Digital segment in the second quarter of 2024.
Previous wording
The following summarizes changes in operating expenses for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 (in millions, except percentages):
Current wording
The following summarizes changes in operating expenses for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 (in millions, except percentages):
Previous wording
Depreciation and amortization decreased for the three and six months ended June 30, 2024 compared to the same periods in 2023 due to a decline in amortization under the discounted cash flow method for the intangibles acquired in the Merger.
Current wording
Depreciation and amortization decreased for the three and nine months ended September 30, 2024 compared to the same periods in 2023 due to a decline in amortization under the discounted cash flow method for the intangibles acquired in the Merger as well as a decrease in amortization as a result of the Cboe Digital impairment in the second quarter of 2024.
Previous wording
Technology support services decreased for the three and six months ended June 30, 2024 compared to the same periods in 2023 due to decreases in hardware maintenance and purchases, partially offset by increases in software maintenance, market data services, and software licenses and subscriptions.
Current wording
Technology support services increased for the three months ended September 30, 2024 compared to the same period in 2023 due to increases in software maintenance, cloud services, and software licenses and subscriptions, partially offset by decreases in hardware purchases, network and phone connectivity and hardware maintenance. Technology support services decreased for the nine months ended September 30, 2024 compared to the same period in 2023 due to decreases in hardware purchases and maintenance and network and phone connectivity, partially offset by increases in software maintenance, market data, software licenses and subscriptions, and cloud services.
Previous wording
Professional fees and outside services increased for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to increases in consulting fees, contract services, and legal fees, partially offset by a
Current wording
Professional fees and outside services decreased for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to decreases in legal fees and contract services. Professional fees and outside services increased for the nine months ended September 30, 2024 compared to same period in 2023 primarily due to increases in legal fees, contract services, and consulting fees, partially offset by decreases in regulatory costs related to CAT fees.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
(“EMS”) fees incurred for U.S. Equities Off-Exchange order execution, as well as settlement costs incurred for the settlement process executed by Cboe Clear Europe and Cboe Clear Digital.
Current report — wording carried from elsewhere
Royalty fees and other cost of revenues increased for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to an increase in operating interest expense attributable to Cboe Clear Europe as a result of the changing interest rate environment and a change in its investment policy, coupled with an increase in trading volumes of licensed products in the Options segment. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy.
Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
The Company operates six reportable business segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital, which is reflective of how the Company's chief operating decision-maker reviews and operates the business, as discussed in Note 1 (“Organization and Basis of Presentation”). Segment performance is primarily evaluated based on operating income (loss). The Company’s chief operating decision-maker does not use
Previous report — wording carried elsewhere
where we rebate liquidity takers for executing against an order resting on our book, which is also recorded as a cost of revenues.
Previous report — wording carried elsewhere
GAAP measures as supplemental information to the GAAP financial measures included herein, including our condensed consolidated financial statements, to enhance their analysis and understanding of our performance and in making comparisons. Please see the footnotes below for definitions, additional information, and reconciliations from the closest GAAP measure.
Previous report — wording carried elsewhere
months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to decreases in depreciation and amortization and technology support services.
Previous report — wording carried elsewhere
Cash and cash equivalents include cash in banks and all non-restricted, highly liquid investments, including short-term repurchase agreements, with original maturities of three months or less at the time of purchase. Cash and cash
Previous report — wording carried elsewhere
payable and accrued liabilities and the change in accounts receivable for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Previous report — wording carried elsewhere
minimum regulatory capital requirements of $171.2 million as of June 30, 2024, which are subject to potential applicable regulatory restrictions and approvals and potential associated tax costs.
Previous report — wording carried elsewhere
counterparty on all transactions occurring on Cboe Canada Inc. and, as such, guarantees clearance and settlement of all of our matched Canadian equities trades. With respect to trades in options and futures occurring on Cboe Europe Derivatives, we deliver matched trades of our customers to Cboe Clear Europe, which acts as a central counterparty on all transactions occurring on Cboe Europe Derivatives and, as such, guarantees clearance and settlement of all of those matched options and futures trades. With respect to Australian equities and derivatives, we deliver matched trades of our customers to ASX Clear Pty Ltd and ASX Settlement Pty Ltd. ASX Clear Pty Ltd acts as a central counterparty on all transactions occurring on Cboe Australia and, as such, guarantees clearance and settlement on all of our matched trades in Australia. With respect to Japanese equities, we deliver matched trades of our customers to the Japanese Securities Clearing Corporation, which acts as a central counterparty on all transactions occurring on Cboe Japan and, as such, guarantees clearance and settlement on all of our matched trades in Japan. With respect to trades in digital assets occurring on Cboe Digital Exchange, we deliver matched trades of our customers to Cboe Clear Digital, which acts as a central counterparty on all transactions occurring on Cboe Digital Exchange and, as such, guarantees clearance and settlement of all of those matched spot and futures trades.
Previous report — wording carried elsewhere
a significant risk of impairment, except as previously identified in our 2023 Annual Report on Form 10-K and as noted below.