(Reuters) -Exchange operator Cboe Global Markets Inc on Friday reported third-quarter earnings that beat Wall Street expectations, as market uncertainty drove trading volumes higher.
Shares of Cboe were up 3.69% at $128.59 shortly after the market opened.
Cboe saw heavy demand for its proprietary products, which include options linked to the VIX volatility index, and the S&P 500, as investors sought to hedge against market volatility amid recession fears triggered by high inflation, rapidly rising interest rates, and geopolitical turmoil.
Stripping out onetime items, like merger and acquisition costs, Cboe earned $1.74​​ per share for the quarter ended Sept. 30. That was 11 cents higher than the mean expectation of analysts, according to data from Refinitiv IBES.
The stronger-than-expected earnings were driven by robust transaction fees and regulatory fees, as well as lower-than-expected expenses, said Jefferies analyst Daniel Fannon.
Cboe, which provides trading platforms and products in equities, derivatives and foreign exchange across North America, Europe and the Asia-Pacific region, said derivatives revenues surged 31%, data revenues jumped 15%, and cash and spot markets revenues rose 5% on a year-over-year basis.
Net revenue rose 20% to $442.4 million.
The Chicago-based company also increased its 2022 organic net revenue growth forecast to a range of 14% to 16%, up from a prior range of 9% to 11%.
The exchange operator said it will soon finalize its partner syndication for its recently acquired digital asset exchange. In August, Cboe said it was in talks with several market participants, including Robinhood Markets Inc, Virtu Financial, Interactive Brokers and Jane Street, about taking strategic stakes in the cryptocurrency exchange.
Cboe’s results round out an upbeat quarter for U.S. exchange operators, including Nasdaq Inc and NYSE parent Intercontinental Exchange, which benefited from strong trading volumes and robust demand for hedging tools and investment products.
(Reporting by Anirban Chakroborti in Bengaluru and John McCrank in New York; Editing by Krishna Chandra Eluri and Jonathan Oatis)