Benzinga | Jul 30, 2021 07:32AM EDT

Cboe Sees FY21 Recurring Non-Transaction Revenue Up 15%-16%

2021 Fiscal Year Financial Guidance

The company updated or reaffirmed its guidance for the 2021 fiscal year as noted below. This guidance incorporates the company's acquisition of Chi-X, which closed on July 1, 2021.

* Recurring non-transaction revenue, defined as access and capacity fees plus proprietary market data, is now expected to increase by 15 to 16 percent, from a base of $342 million in 2020, up from previous guidance of 11 to 12 percent, with organic growth targeted in a range of 12 to 13 percent versus previous guidance of 10 to 11 percent. The increase reflects the addition of Chi-X, as well as stronger growth in organic recurring non-transaction revenue.

* Revenue from acquisitions held less than a year is now expected to contribute net revenue growth in a range of 5 to 7 percentage points in 2021, up from 4 to 6 percentage points, reflecting the addition of Chi-X on July 1.

* Reaffirmed that adjusted operating expenses are expected to be in the range of $531 to $539 million. The reaffirmation of adjusted expenses reflects the netting of incremental expenses related to the inclusion of Chi-X for the second half of 2021 and a reduction in guidance for expenses. The guidance excludes the expected amortization of acquired intangible assets of $126 million¹, the company plans to reflect the exclusion of this amount in its non-GAAP reconciliation.2

* Depreciation and amortization expense, which is included in adjusted operating expenses above, is now expected to be in the range of $34 to $38 million, down from the previous range of $38 to $42 million, excluding the expected amortization of acquired intangible assets.

* Reaffirmed that the effective tax rate3 on adjusted earnings for the full year is expected to be in the range of 27.5 to 29.5 percent. The company now expects the adjusted effective tax rate for the full year to be at the higher end of the guidance range, due to the second quarter rate slightly exceeding the range. 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 now expected to be in the range of $55 to $60 million, down versus the prior range of $60 to $65 million, primarily reflecting changes in the timing of certain projects.