Press Release: Cboe Global Markets Reports 2020 -2-

· 02/05/2021 07:30

-- The company expects recently closed acquisitions to contribute net revenue growth in a range of 4 to 6 percentage points. -- Recurring non-transactional revenue, defined as access and capacity fees plus proprietary market data, is targeted to increase by 7 percent to 8 percent, from a base of $342 million in 2020, with organic growth targeted in a range of 6 to 7 percent. -- Adjusted operating expenses are expected to be in the range of $531 to $539 million. The guidance excludes the amortization of acquired intangible assets, which is expected to be $116 million. The company plans to reflect the exclusion of this amount in its non-GAAP reconciliation.(1) -- Depreciation and amortization expense, which is included in adjusted operating expenses above, is expected to be in the range of $38 to $42 million, excluding the expected amortization of acquired intangible assets of $116 million. -- The effective tax rate(2) on adjusted earnings for the full year is expected to be in the range of 27.5 to 29.5 percent. Significant changes in trading volume, expenses, federal, state and local tax laws or rates and other items could materially impact this expectation. -- Capital expenditures are expected to be in the range of $60 to $65 million, reflecting expenditures associated with the company's planned trading floor relocation in 2021 and ongoing capacity and technology-related investments.-- Global FX net revenue of $14.0 million increased 9 percent, primarily as a result of higher net transaction and clearing fees(1) and access and capacity fees. ADNV traded on the Cboe FX platform was $33.7 billion for the quarter, up 12 percent from last year's fourth quarter and net capture per one million dollars traded was $2.64 for fourth-quarter 2020, down 6 percent compared to $2.80 in the fourth quarter of 2019. -- Cboe FX had record market share of 16.7 percent for the quarter compared to 16.0 percent in last year's fourth quarter.-- European Equities net revenue of $35.5 million increased by 64 percent, primarily reflecting the addition of EuroCCP, which contributed $10.9 million in net revenue, as well as higher net transaction and clearing fees1 from European Equities trading. Average daily notional value ("ADNV") for the overall market was up 7 percent during the quarter and ADNV traded on Cboe European Equities was EUR6.6 billion, up 2 percent from last year's fourth quarter, while net capture increased 4 percent. -- For the fourth quarter of 2020, Cboe European Equities had 17.5 percent market share, down from 18.4 percent in the fourth quarter of 2019, primarily as a result of market profile shifts that impacted order flow to Cboe, as well as an increase in over-the-counter trading.-- Futures net revenue of $21.5 million decreased $9.4 million, or 30 percent, primarily due to a decline in net transaction fees1. -- Net transaction and clearing fees(1) decreased $10.1 million, or 39 percent, reflecting a 30 percent decrease in ADV and a 12 percent decline in RPC. The RPC decline was primarily due to the addition of Mini-VIX futures, which are one-tenth the size of the standard VIX futures and have a lower fee per contract. The RPC variance also reflects higher volume from corporate bond index futures and associated lead market maker incentives.-- N.A. Equities net revenue of $73.6 million was down $1.9 million, or 3 percent, primarily due to lower regulatory fines and assessments, coupled with lower market data revenue, offset somewhat by higher revenue from access and capacity fees and net transaction and clearing fees1. -- Cboe U.S. Equities exchanges had market share of 15.1 percent for the fourth quarter of 2020 compared to 16.4 percent in the fourth quarter of 2019. The decrease was primarily due to record highs in off-exchange trading volume during the fourth quarter of 2020, averaging 44 percent of total market volume compared to 38 percent in the fourth quarter of 2019.market share for the quarter decreased to 28.5 percent compared to 31.3 percent in the fourth quarter of 2019.

North American (N.A.) Equities:

Futures:

European Equities:

Global FX:

(1) A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables.

2021 Fiscal Year Financial Guidance

The company provided guidance for the 2021 fiscal year as noted below. This guidance takes into account the company's acquisitions completed through December 31, 2020, including BIDS Trading; its investment in launching European derivatives trading and clearing; investments to support the company's growth initiatives; and one-time and non-recurring savings recognized in 2020.

Capital Management

At December 31, 2020, the company had adjusted cash(2) of $210.3 million. Total debt as of December 31, 2020 was $1,203.9 million.

The company paid cash dividends of $45.4 million, or $0.42 per share, during the fourth quarter of 2020 and utilized $88.0 million to repurchase 1.0 million shares of its common stock under its share repurchase program at an average price of $86.79 per share. For the full-year 2020, the company paid cash dividends of $170.6 million, or $1.56 per share, and utilized $349.1 million to repurchase 3.5 million shares of its common stock under its share repurchase program at an average price of $98.78 per share. In addition, through January 31, 2021, the company used $0.5 million to repurchase 4,957 shares at an average price of $91.97. The company also announced today that its Board of Directors authorized up to an additional $200 million in share repurchases. This new authorization will be in addition to any unused amount remaining under the company's existing share repurchase authorization, resulting in approximately $399.7 million of remaining availability under its share repurchase program.

The share repurchase program has no expiration date. The repurchase program permits the company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the company to make any repurchases at any specific time or situation. The timing and extent to which the company repurchases its shares will depend upon, among other things, market conditions, share price, liquidity targets, regulatory requirements and other factors. Share repurchases may be commenced or suspended at any time or from time to time without prior notice.

Earnings Conference Call

Executives of Cboe Global Markets will host a conference call to review its fourth-quarter financial results today, February 5, 2021, at 8:30 a.m. ET/7:30 a.m. CT. The conference call and any accompanying slides will be publicly available via live webcast from the Investor Relations section of the company's website at www.cboe.com under Events & Presentations. Participants may also listen via telephone by dialing (877) 255--4313 from the United States, (866) 450--4696 from Canada or (412) 317--5466 for international callers. Telephone participants should place calls 10 minutes prior to the start of the call. The webcast will be archived on the company's website for replay. A telephone replay of the earnings call also will be available from approximately 11:00 a.m. CT, February 5, 2021, through 11:00 p.m. CT, February 12, 2021, by calling (877) 344--7529 from the U.S., (855) 669--9658 from Canada or (412) 317--0088 for international callers, using replay code 10150489.

(1) Specific quantifications of the amounts that would be required to reconcile the company's adjusted operating expenses guidance and the effective tax rate on adjusted earnings guidance are not available. The company believes that there is uncertainty and unpredictability with respect to certain of its GAAP measures, primarily related to acquisition-related expenses that would be required to reconcile to GAAP operating expenses and GAAP effective tax rate, which preclude the company from providing accurate guidance on certain forward-looking GAAP to non-GAAP reconciliations. The company believes that providing estimates of the amounts that would be required to reconcile the range of the company's adjusted operating expenses and the effective tax rate on adjusted earnings would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.

(2) A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables.

About Cboe Global Markets

Cboe Global Markets (Cboe: CBOE) provides cutting-edge trading and investment solutions to investors around the world. The company is committed to defining markets through product innovation, leading edge technology and seamless trading solutions.

Cboe offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S., Canadian and European equities, exchange-traded products ("ETPs"), global foreign exchange ("FX") and volatility products based on the VIX Index, recognized as the world's premier gauge of U.S. equity market volatility.

Cboe's subsidiaries include the largest options exchange and the third largest stock exchange operator in the U.S. In addition, the company operates one of the largest stock exchanges by value traded in Europe, and owns EuroCCP, a leading pan-European equities clearinghouse, BIDS Trading, a leading block-trading alternative trading system ("ATS") by volume in the U.S., and MATCHNow, a leading equities ATS in Canada. Cboe also is a leading market globally for ETP listings and trading.

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February 05, 2021 07:30 ET (12:30 GMT)