CBOE reports first quarter 2017, GAAP revenue up 35%

CBOE Holdings, Inc. (NASDAQ: CBOE) today reported financial results for the first quarter of 2017, and provided updated 2017 guidance to reflect its acquisition of Bats Global Markets, Inc.

First-Quarter 2017 Highlights

  • GAAP Revenue Less Cost of Revenue of $193.4 Million, up 35%, Reflects the Bats Acquisition
  • Organic Net Revenue of $154.2 Million, up 8%, Driven by Increased Trading in VIX Futures and SPX Options
  • GAAP Diluted EPS of $0.16; Non-GAAP Adjusted Diluted EPS of $0.78
  • Bats Integration on Track; Synergy Realization Ahead of Plan
  • Reduced Debt Incurred in Connection With the Bats Acquisition by $150 Million During the Quarter
  • Quarterly Highs Set in SPX Options Trading and Bats Options Exchanges and Hotspot Market Share

CBOE Holdings completed its acquisition of Bats on February 28, 2017.

Consolidated results for the first quarter of 2017 include Bats for the period March 1 through March 31, 2017. As a result of the acquisition and related organizational changes, the company now reports five business segments:

Options, Futures, U.S. Equities, European Equities and Global FX.

Prior to the acquisition of Bats, the company reported its results in one reporting segment. Results for fiscal periods prior to first quarter 2017 are presented to conform to the new segments.

Edward T. Tilly

We were pleased to complete our acquisition of Bats this quarter and hit the ground running with a comprehensive integration plan to realize the opportunities we see to enhance our financial strength, accelerate our strategic growth initiatives and provide new areas of growth to deliver greater value to CBOE shareholders,” said Edward T. Tilly, CBOE Holdings’ Chairman and Chief Executive Officer.

Mr. Tilly continued:

While the Bats integration is a top priority, we also remain laser focused on growing our proprietary products. Despite record low realized volatility in the first quarter, trading on VIX futures rose 18 percent while trading in our index options increased 7 percent compared with first-quarter 2016, led by record trading in SPX options and significantly outpacing the options industry, which posted a 4 percent decline in average daily volume.

Our strong cash flow generation allowed us to reduce our debt position of $1.65 billion to $1.50 billion at quarter end,” said Alan Dean, CBOE Holdings’ Chief Financial Officer. “In addition, we are very pleased with our progress on synergy realization, reinforcing our confidence in meeting or exceeding our stated goals of $50 million in annualized synergies in year three and $65 million in year five post the close.

For the complete CBOE Q1 report, click here.

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