Cboe Global Markets, Inc.

Cboe Global Markets, Inc. operates as the world's leading derivatives and securities exchange network, delivering trading, clearing, and investment solutions across multiple asset classes including equities, derivatives, and FX, spanning North America, Europe, and Asia Pacific. The Company's subsidiaries include the largest options exchange and the third largest equities exchange operator in the U.S., and it operates Cboe Europe Equities, one of the largest equities exchanges by value traded in Europe, along with Cboe Clear Europe, a leading pan-European clearinghouse. The industry is intensely competitive, with the Company facing competition on price, quality, speed of execution, functionality, reliability, liquidity, product range, technological innovation, and brand awareness.

Cboe competes against 14 other U.S. options exchanges as of December 31, 2025 ¹, with two additional U.S. options exchanges anticipated to come to market in the first half of 2026. In U.S. equities, the Company competes against 13 other equities exchanges as of December 31, 2025 ², and over 25 other ATSs and single dealer platforms. The Company believes it competes favorably by offering access to a broad array of products and services including proprietary products and market data, offering a variety of new products and services with a focus on product innovation, offering fee schedules and pricing models that attract order flow and provide incentives to liquidity providers, providing advanced technology with low latency and high reliability, offering efficient and transparent clearing services, maintaining close customer relationships, and providing comprehensive options education. The Company holds exclusive U.S. rights to list options on the S&P 500 Index, S&P 100 Index, S&P 500 ESG Index, and S&P Select Sector Indices, with its license with S&P extending through December 31, 2033 ³, and exclusive rights to trade S&P 500 Index options through December 31, 2032 ⁴.

Cboe generates revenue through transaction and clearing fees, market data fees, access and capacity fees, and regulatory fees across its five reportable business segments: Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX. The Company's revenue is diversified across cash and spot markets, Data Vantage, and derivatives markets. In 2025, approximately 74% ⁵ of revenues less cost of revenues were generated by the transaction and clearing-based business, which is heavily oriented towards U.S. index and equity options. Approximately 69% ⁶ of net transaction and clearing fees were generated by options and futures cleared through OCC. The Company's customers generally include financial institutions, trading platforms, institutional and individual investors, and professional traders.

The Options segment includes options on market indices (index options), stocks of individual corporations (equity options), and on ETPs such as ETFs and ETNs, which are multi-listed options. Cboe Options is the Company's primary options market, offering trading through a single system integrating electronic trading and traditional open outcry trading on the Cboe Options trading floor in Chicago. C2 Options, BZX Options, and EDGX Options are all-electronic options exchanges. The Options segment also includes applicable market data fees revenues from consolidated tape plans, licensing of proprietary options market data, index licensing, routing services, and access and capacity services. In 2025, approximately 68% ⁷ of total revenues less cost of revenues were generated by the options and futures segments, the majority of which was generated by products based on exclusively licensed indices (e.g., SPX options) and products based on the proprietary VIX methodology (e.g., VIX options and futures). The Options segment contributed $1,531.1 million ⁸ in revenues less cost of revenues for the year ended December 31, 2025, representing 63% ⁹ of total revenues less cost of revenues.

The North American Equities segment includes U.S. equities and ETP transaction services on fully electronic exchanges (BZX, BYX, EDGX, EDGA), equities transactions on the BIDS Trading platform in the U.S. and Cboe BIDS Canada platform, and Canadian equities and other transaction services on Cboe Canada's order books. It also includes corporate listing services on Cboe Canada, ETP listings on BZX, the Cboe Global Markets, Inc. common stock listing, and applicable market data fees revenues. The Europe and Asia Pacific segment includes pan-European derivatives transaction services, ETPs hosted on MTFs operated by Cboe Europe Equities and CEDX, the ETP listings business on RMs, clearing activities of Cboe Clear Europe, and equities services of Cboe Australia. The Futures segment includes transaction services provided by CFE for trading of VIX futures and other futures products, and as of January 1, 2025, prospectively includes all Digital operating activity, including Cboe Digital Exchange and Cboe Clear U.S. The Global FX segment includes institutional FX trading services on the Cboe FX platform, NDF transactions on Cboe SEF, and transaction services for U.S. government securities on Cboe Fixed Income. The Data Vantage business provides market data and information solutions products across multiple asset classes and geographic regions, consisting of Market Data and Access Services, Cboe Global Indices, and Risk and Market Analytics. Over the course of 2025, Cboe added approximately 1,438 ¹⁰ listings across the globe and had approximately 2,952 ¹¹ listings as of December 31, 2025.

In 2025, following a comprehensive strategic review of its global business operations, Cboe initiated the wind down of its Japanese equities business, including the cessation of operations of its Cboe Japan proprietary trading system and Cboe BIDS Japan block trading platform, initiated a sales process for its Cboe Australia and Cboe Canada businesses, discontinued its U.S. and European Corporate Listings efforts, and reduced costs associated with its U.S. and European ETP Listings businesses, CEDX, and several of Cboe's smaller Risk and Market Analytics businesses. Subsequent to December 31, 2025, Cboe initiated the wind down of CEDX. On June 9, 2025, Cboe successfully completed the migration of cash-settled Bitcoin and Ether futures contracts from Cboe Digital Exchange to CFE. The Company expanded its derivatives product suite, including the launch of cash-settled futures and options on the Cboe Magnificent 10 Index, continuous Bitcoin and Ether futures, Cboe FTSE Bitcoin Index Futures, and options on the S&P 500 Equal Weight Index. The Company also expanded retail access with the launch of a Pan-European Best Bid and Offer trading solution, expanded dedicated cores technology offering internationally, advanced cloud-based data access with the launch of index datasets, completed the migration of Cboe Canada's technology platform, and unveiled a new brand for its exchange technology platform, Cboe Titanium. For the year ended December 31, 2025, the Company repurchased 305,317 ¹² shares of common stock at an average cost per share of $213.74 ¹³, totaling $65.3 million ¹⁴. Since inception of the program through December 31, 2025, the Company has repurchased 21,063,700 ¹⁵ shares of common stock at an average cost per share of $80.02 ¹⁶, totaling $1.7 billion ¹⁷. As of December 31, 2025, the Company had $614.5 million ¹⁸ of availability remaining under its existing share repurchase authorizations.

Total revenues for the year ended December 31, 2025 were $4,714.2 million ¹⁹, an increase of $619.7 million ²⁰, or 15% ²¹, compared to $4,094.5 million ²² for the year ended December 31, 2024. Total cost of revenues were $2,285.1 million ²³ for 2025, compared to $2,022.1 million ²⁴ for 2024. Revenues less cost of revenues were $2,429.1 million ²⁵ for 2025, an increase of $356.7 million ²⁶, or 17% ²⁷, compared to $2,072.4 million ²⁸ for 2024. Operating income was $1,467.1 million ²⁹ for 2025, compared to $1,098.4 million ³⁰ for 2024, an increase of $368.7 million ³¹, or 34% ³². Net income was $1,100.0 million ³³ for 2025, compared to $764.9 million ³⁴ for 2024, an increase of $335.1 million ³⁵, or 44% ³⁶. Diluted earnings per share was $10.42 ³⁷ for 2025, compared to $7.21 ³⁸ for 2024, an increase of $3.21 ³⁹, or 45% ⁴⁰. Adjusted diluted earnings per share was $10.67 ⁴¹ for 2025, compared to $8.61 ⁴² for 2024, an increase of $2.06 ⁴³, or 24% ⁴⁴.

A key growth vector is the expansion of the derivatives product suite. In 2025, the Company launched cash-settled futures and options on the Cboe Magnificent 10 Index, continuous Bitcoin and Ether futures, Cboe FTSE Bitcoin Index Futures, and options on the S&P 500 Equal Weight Index. The Company also expanded retail access with the launch of a Pan-European Best Bid and Offer trading solution. The Company's strategic focus includes capitalizing on emerging industry trends that align with its core strengths, potentially unlocking new opportunities to create value for clients. The Company is also focused on expanding Data Vantage offerings that draw upon its core businesses, and advanced cloud-based data access with the launch of index datasets.

Another growth vector is the strategic realignment of the business portfolio to optimize return on invested capital and potential growth trajectory. This includes rationalizing the business portfolio, optimizing core businesses of Index Options, Multi-Listed Options, Futures, U.S. Equities, European Equities, and Global FX, and maintaining a disciplined and financially rigorous approach to capital allocation. The Company initiated the wind down of its Japanese equities business, initiated a sales process for its Cboe Australia and Cboe Canada businesses, discontinued its U.S. and European Corporate Listings efforts, and reduced costs associated with its U.S. and European ETP Listings businesses, CEDX, and several smaller Risk and Market Analytics businesses. Subsequent to December 31, 2025, Cboe initiated the wind down of CEDX. The Company also completed key migrations, including the transition of Cboe Digital Exchange futures to CFE and the migration of Cboe Canada's technology platform.However, the Company's strategic realignment actions, including reducing costs associated with certain businesses, are expected to impact the cost structure. The Company reported an adjusted operating margin of 65.6% ⁴⁵ for 2025, compared to 61.4% ⁴⁶ for 2024, and an adjusted operating EBITDA margin of 67.7% ⁴⁷ for 2025, compared to 63.5% ⁴⁸ for 2024.

The Company continues to invest in its technology infrastructure. The trading platform for equities, options, and futures markets is built upon the Cboe Titanium technology platform, which is developed, owned, and operated in-house. The Company has undertaken significant efforts to upgrade this platform to meet increased performance and capacity requirements, support growth, and advance a consistent world-class platform globally. The Company is also utilizing certain technologies, such as artificial intelligence and the cloud, in limited capacities, and continues to explore the potential use of other new technologies like machine learning, blockchain, distributed ledger technology, tokenization, quantum computing, and atomic settlement. As of December 31, 2025, the Company employed 1,661 ⁴⁹ individuals.

The Company's capital allocation strategy includes maintaining a disciplined and financially rigorous approach. For the year ended December 31, 2025, the Company repurchased 305,317 ⁵⁰ shares of common stock at an average cost per share of $213.74 ⁵¹, totaling $65.3 million ⁵². As of December 31, 2025, the Company had $614.5 million ⁵³ of availability remaining under its existing share repurchase authorizations. The Company paid cash dividends on common stock of $284.3 million ⁵⁴ for the year ended December 31, 2025, or $2.70 ⁵⁵ per share. The Company's expectation is to continue to pay dividends, though the decision remains within the discretion of the Board of Directors. Capital expenditures for property and equipment and leasehold improvements, net, were $71.0 million ⁵⁶ for the year ended December 31, 2025.

The Company faces structural headwinds from intense price competition in the securities industry, especially with respect to transaction fees. The pricing model for trade execution in the options segment has changed in response to competitive market conditions, and competitors have adjusted transaction fees and fee structures accordingly, including by opening new exchanges. This has resulted in significant pricing pressures, especially on transaction fees and incentives for multi-listed products, and the average rate per multi-listed options contract may decrease. The Company also faces headwinds from potential regulatory changes, including the SEC's Tick Size/Access Fee Cap rule, which is likely to result in increased technology and compliance costs and potential adverse impact to trading volume and transaction fee revenue. Additionally, the loss of the right to exclusively list and trade certain index options and futures products, particularly for the S&P 500 Index, could have a material adverse effect on the business and profitability.

The Company faces execution risks related to its strategic realignment, including the wind down of its Japanese equities business, the sale processes for its Australia and Canada equities businesses, and the wind down of CEDX. These actions may involve transitional disruptions, regulatory complexities, loss of customer relationships, reputational impacts, or challenges in retaining key personnel during the transition. The Company also faces risks related to its global operations, including fluctuations in currency exchange rates, complying with extensive and complex compliance requirements in multiple jurisdictions, and general economic, social, and political conditions, including increased political tensions and disagreements as a result of tariffs and trade policies.

The most material risk is the potential loss of the right to exclusively list and trade certain index options and futures products, particularly the S&P 500 Index options and VIX options and futures, which generated approximately 68% ⁵⁷ of total revenues less cost of revenues in 2025 from the options and futures segments, the majority from these products. The license with S&P for exclusive rights to trade S&P 500 Index options extends through December 31, 2032 ⁵⁸, and non-renewal could result in multiple listing and loss of market share. Another critical risk is the intense price competition in the securities industry, which has resulted in significant pricing pressures on transaction fees, especially for multi-listed products, and the average rate per multi-listed options contract may decrease. The Company also faces significant risk from regulatory changes, including the SEC's Tick Size/Access Fee Cap rule, which is likely to result in increased technology and compliance costs and potential adverse impact to trading volume and transaction fee revenue. Additionally, the Company's business is heavily dependent on third parties, including OCC, which cleared approximately 69% ⁵⁹ of net transaction and clearing fees in 2025, and any interruption in their services could have a material adverse effect. Finally, the Company faces concentration risk, with its top ten customers accounting for approximately 57% ⁶⁰ of revenues in 2025, and three clearing members accounting for approximately 71% ⁶¹ of transaction and other fees collected through OCC in 2025.

Management's message emphasizes a strategic focus on leveraging core areas of strength and strong secular growth trends to unlock growth and earnings potential while reinforcing the competitive position. Key themes include rationalizing the business portfolio to optimize return on invested capital and growth trajectory, optimizing core businesses (Index Options, Multi-Listed Options, Futures, U.S. Equities, European Equities, and Global FX) while expanding Data Vantage offerings, capitalizing on emerging industry trends that align with core strengths, and maintaining a disciplined and financially rigorous approach to capital allocation. The Company conducted a comprehensive review of its global business operations, resulting in a strategic realignment of the business portfolio and an enhanced focus on core strengths and emerging growth opportunities.