Bats sees earnings rise in first report since CBOE deal announcement

Exchange operator posts positive third quarter figures as it prepares to be bought by CBOE.

Global exchange operator Bats has reported a 13% increase in net income in Q3 as its recent acquisition spree comes to fruition.

The Kansas City-based firm reported net income of $28.5 million in the third quarter and adjusted earnings of $35.3 million, an increase of 13% and 17% respectively over the same period of 2015.

Bats has been heavily persuing acquisitions in recent years to expand its reach beyond its core equities trading offering, and reported a best-since acquisition market share for global FX of 12.4%, up from 11.1% last year.

However, its share of equities markets has declined slightly, down from 21.7% to 20.8% in the US and from 24.4% to 23% in Europe.

Overall net revenue climbed from $104 million in 2015 to $108.8 million this year. Despite falling market share, strong US trading activity saw increased revenue from that arm of the business, growing from $69.3 million in Q315 to $71.1 million in Q316. The European business fared less well, with revenue dropping from $17.1 million to $15.9 million in the same period.

US options revenue increased by over 50% from $7.5 million to $11.4 million.

Bats CEO, Chris Concannon, said: “The third quarter was strong for Bats and our shareholders, highlighted by the announcement with CBOE Holdings. We expect this transaction, once complete, to move the combined company into new asset classes, products and geographies, all powered by Bats market-leading proprietary technology.”

Last month, Bats revealed it had entered a definitive agreement to be acquired by CBOE Holdings, in a deal which values the business at $3.2 billion.