• Net Revenue: Increased 5% year-over-year to $524.5 million for Q4; 8% growth to $2.1 billion for the full year 2024.
• Adjusted Diluted Earnings Per Share: Increased 2% to $2.10 for Q4; 10% growth to $8.61 for the full year 2024.
• Derivatives Business: Organic net revenue increased 8% for the full year 2024.
• Options Volume: Total volume of 3.8 billion contracts in 2024; ADV of nearly 15 million contracts.
• SPX Options ADV: Record 3.1 million contracts in 2024.
• VIX Options ADV: Record 830,000 contracts in 2024.
• Data Vantage Business: Organic net revenue increased 7% for 2024.
• Cash and Spot Markets: Organic net revenue increased 10% for 2024.
• Adjusted Operating Expenses: Increased 7% to $205 million for Q4.
• Adjusted EBITDA: Grew 3% to $332 million for Q4.
• North American Equities Net Revenue: Increased 10% year-over-year for Q4.
• European and APAC Segment Net Revenue: Increased 17% year-over-year for Q4.
• Futures Net Revenue: Decreased 7% from Q4 2023.
• FX Segment Net Revenue: Increased 3% year-over-year for Q4.
• CapEx Guidance for 2025: $75 million to $85 million.
• Effective Tax Rate for 2025: Expected to be 28.5% to 30.5%.
• Dividends Paid in 2024: Total of $249 million.
• Shareholder Returns in 2024: Total of $454 million, representing 50% of adjusted earnings.
• Adjusted Cash on Balance Sheet: $880 million entering 2025.

• Warning! GuruFocus has detected 3 Warning Sign with AVTR.

Release Date: February 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cboe Global Markets Inc (CBOE) reported a strong fourth quarter with net revenue growth of 5% year-over-year, reaching $524.5 million.
• The company achieved record net revenue of $2.1 billion for the full year 2024, marking an 8% increase.
• Cboe's derivatives business saw a solid year with organic net revenue increasing 8%, driven by record option volumes.
• The Data Vantage business experienced a 7% increase in organic net revenue, supported by technology investments.
• Cboe's cash and spot markets performed well, with organic net revenue increasing 10% due to healthy trading volumes.

Negative Points

• Adjusted operating expenses increased by 7% to $205 million for the quarter, driven by higher travel and promotional expenses.
• Futures net revenue decreased by 7% from the fourth quarter of 2023, reflecting a 12% decrease in average daily volume.
• The guidance for Data Vantage revenue growth was adjusted to mid- to high single digits, which is perceived as weaker compared to previous years.
• Significant uncertainty remains due to geopolitical tensions and market volatility, impacting investor sentiment.
• The company did not repurchase any stock in the fourth quarter due to ongoing succession planning, which may concern some investors.

Q & A Highlights

Q: Could you discuss the decision to adjust the Data Advantage revenue growth guidance to mid- to high single digits, which seems weaker than previous guidance? A: Jill Griebenow, CFO, explained that the updated guidance reflects a market-standard approach, consistent with prior ranges. The mid- to high single-digit range aligns with the previous 7% to 10% guidance, maintaining consistency with past expectations.

Q: How is the rollout of index options on Robinhood progressing, and what initiatives are planned to increase adoption? A: David Howson, Global President, noted that the rollout exceeded expectations in speed and uptake. The focus is on access, education, and product. The adoption of SPX and XSP options has been positive, with plans for joint marketing and education to drive further adoption.

Q: What are Cboe's initiatives regarding AI, and how might they impact revenue? A: An unidentified company representative stated that Cboe has established an AI center of excellence to enhance productivity and develop new products. While there are no immediate revenue opportunities, the focus is on leveraging AI for internal improvements and potential future product offerings.

Q: Can you elaborate on the decision to rebrand Cboe's technology platform as Titanium and its implications? A: Christopher Isaacson, COO, explained that the rebranding highlights Cboe's technological strength. There are no current plans to commercialize the platform as a service; the focus remains on investing in it to support Cboe's global operations.

Q: What are the expectations for the SPX franchise and customer trends that could drive growth? A: David Howson, Global President, highlighted a strong start to the year with increased demand for SPX options due to market volatility. The focus is on leveraging the volatility toolkit, expanding international access, and enhancing retail engagement through education and marketing.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.