Cboe Results Presentation Deck
Cboe
In addition to disclosing results determined in accordance with GAAP, Cboe Global Markets has disclosed certain non-GAAP measures of
operating performance. These measures are not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with
non-GAAP financial measures used by other companies. The non-GAAP measures provided in this press release include net transaction and
clearing fees, adjusted operating expenses, adjusted operating income, organic net revenue, adjusted operating margin, adjusted net income
allocated to common stockholders and adjusted diluted earnings per share, adjusted income before income taxes, adjusted revenue less cost of
revenue, effective tax rate on adjusted earnings, adjusted cash, EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin.
Non-GAAP Information
Management believes that the non-GAAP financial measures presented in this press release, including adjusted operating income, organic net
revenue and adjusted operating expenses, provide additional and comparative information to assess trends in our core operations and a means
to evaluate period-to-period comparisons. Non-GAAP financial measures disclosed by management are provided as additional information to
investors in order to provide them with an alternative method for assessing our financial condition and operating results.
Organic net revenue and organic net revenue guidance: Are non-GAAP financial measures that exclude or have otherwise been adjusted for the
impact of our acquisitions for the period or guidance, as applicable. Management believes the organic net revenue growth and guidance
measures provide users with supplemental information regarding the company's ongoing and future potential revenue performances and trends
by presenting revenue growth and guidance excluding the impact of the acquisitions.
Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Amortization
of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. As such, if
intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the
businesses, the relative operating performance of the businesses between periods and the earnings power of the company. Therefore, we believe
performance measures excluding intangible asset amortization expense provide investors with an additional basis for comparison across
accounting periods.
Acquisition-related expenses: From time to time, we have pursued small bolt-on acquisitions and in 2017 completed a larger transformative
acquisition, which have resulted in expenses which would not otherwise have been incurred in the normal course of the company's business
operations. These expenses include integration costs, as well as legal, due diligence and other third-party transaction costs. The frequency and
the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. Accordingly, we exclude these costs
for purposes of calculating non-GAAP measures which provide an additional analysis of Cboe's ongoing operating performance or comparisons in
Cboe's performance between periods.
The tables below show the reconciliation of each financial measure from GAAP to non-GAAP. The non-GAAP financial measures exclude the
impact of those items detailed below and are referred to as adjusted financial measures.
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