8-K: Cboe Global Markets Reports Record Q2 2025 Revenue, Raises Full-Year Outlook

Cboe Global Markets announced record second-quarter 2025 net revenue of $587.3 million, with diluted EPS up 68% and adjusted diluted EPS up 14%, leading to increased full-year organic revenue growth targets and lowered expense guidance.

Summary

• Record quarterly net revenue of $587.3 million, representing a 14% increase compared to the second quarter of 2024.
• Diluted EPS for the quarter was $2.23, up 68% year-over-year, primarily due to a non-recurring 2024 impairment of intangible assets.
• Adjusted Diluted EPS for the quarter was $2.46, an increase of 14% year-over-year.
• Total operating expenses decreased by $55.5 million to $248.2 million, mainly attributed to the impairment of intangible assets recognized in 2024.
• Adjusted operating expenses increased to $213.3 million from $197.1 million in the prior-year period.
• The effective tax rate for Q2 2025 was 29.7%, down from 30.8% in Q2 2024.
• Derivatives net revenue grew 17%, Data Vantage 11%, and Cash and Spot Markets 11% year-over-year.
• Options net revenue reached a record $364.8 million, up 19%, driven by a 20% increase in total options average daily volume (ADV).
• North American Equities net revenue was a record $98.4 million, a slight increase of $0.1 million.
• Europe and Asia Pacific net revenue was a record $70.4 million, up 30% compared to Q2 2024.
• Futures net revenue decreased 14% to $30.1 million, primarily due to a 19% decrease in net transaction and clearing fees.
• Global FX net revenue was a record $23.6 million, an increase of 19% year-over-year.
• The company decided to wind down its Japanese equities business, including Cboe Japan proprietary trading system and Cboe BIDS Japan block trading platform, with operations expected to suspend on August 29, 2025. This is anticipated to have an immaterial impact on 2025 organic total net revenue growth and adjusted operating expense guidance, with estimated adjusted operating expense savings of $2 million to $4 million in 2025 and $10 million to $12 million annually.

Sentiment

Score: 8

Explanation: The company delivered record revenue and strong adjusted earnings growth, raised its full-year revenue guidance, and lowered expense guidance, indicating robust financial health and positive operational momentum despite some market share declines in specific equity segments.

Positives

• Achieved record quarterly net revenue of $587.3 million, marking a 14% increase year-over-year.
• Reported strong adjusted diluted EPS of $2.46, up 14% from the prior year.
• Increased the 2025 Organic Total Net Revenue Growth Target to high single digits, up from previous guidance of mid to high single digits.
• Decreased the 2025 Adjusted Operating Expense Guidance range to $832 million to $847 million, down from $837 million to $852 million, indicating improved cost management.
• Experienced strong double-digit net revenue growth across key segments: Derivatives (17%), Data Vantage (11%), and Cash and Spot Markets (11%).
• Options segment achieved record net revenue of $364.8 million, a 19% increase, driven by robust volumes.
• North American Equities and Global FX segments also reported record net revenues of $98.4 million and $23.6 million, respectively.
• Europe and Asia Pacific segment showed significant growth with record net revenue of $70.4 million, up 30%.
• Utilized $35.3 million to repurchase approximately 161 thousand shares of common stock under its share repurchase program, demonstrating commitment to shareholder returns.
• Maintained substantial availability of approximately $614.5 million under existing share repurchase authorizations.

Negatives

• Futures net revenue decreased 14% to $30.1 million, driven by a 19% decrease in net transaction and clearing fees and a 13% decrease in ADV.
• Cboe's Options exchanges total market share declined to 30.2% in Q2 2025 from 31.2% in Q2 2024.
• North American Equities net transaction and clearing fees decreased 22% due to lower market share and net capture for U.S. Equities exchanges.
• Cboe's U.S. Equities exchanges market share declined to 10.5% from 11.4% in the prior year.
• Cboe's U.S. Equities off-exchange market share decreased to 15.2% from 17.8%.
• Canadian Equities market share declined to 12.7% from 15.0%.
• Japanese Equities average daily notional value (ADNV) was 32% lower, and market share declined to 3.6% from 5.5%.
• Decision to wind down Cboe's Japanese equities business, indicating underperformance or strategic realignment away from this market.

Risks

• Loss of the right to exclusively list and trade certain index options and futures products.
• Economic, political, and market conditions.
• Compliance with legal and regulatory obligations.
• Price competition and consolidation in the industry.
• Decreases in trading or clearing volumes, market data fees, or a shift in the mix of products traded on exchanges.
• Legislative or regulatory changes or changes in tax regimes.
• Ability to protect systems and communication networks from security vulnerabilities and breaches.
• Ability to attract and retain skilled management and other personnel.
• Increasing competition by foreign and domestic entities.
• Dependence on and exposure to risk from third parties.
• Factors that impact the quality and integrity of Cboe's and other applicable indices.
• Ability to manage global operations, growth, and strategic acquisitions or alliances effectively.
• Increases in the cost of the products and services used.
• Ability to operate business without violating the intellectual property rights of others and the costs associated with protecting intellectual property rights.
• Ability to minimize the risks, including credit, counterparty investment, and default risks, associated with operating clearinghouses.
• Ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of systems.
• Misconduct by those who use markets or products or for whom transactions are cleared.
• Challenges to use of open source software code.
• Ability to meet compliance obligations, including managing business interests and regulatory responsibilities.
• Loss of key customers or a significant reduction in trading or clearing volumes by key customers.
• Ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with registered national securities exchanges.
• Damage to reputation.
• The ability of compliance and risk management methods to effectively monitor and manage risks.
• Restrictions imposed by debt obligations and ability to make payments on or refinance debt obligations.
• Ability to maintain an investment grade credit rating.
• Impairment of goodwill, long-lived assets, investments, or intangible assets.
• Accuracy of estimates and expectations.
• Litigation risks and other liabilities.

Future Outlook

Cboe Global Markets increased its 2025 organic total net revenue growth target to high single digits, up from previous guidance calling for mid to high single digits. The company reaffirmed its Data Vantage organic net revenue growth target of mid to high single digits for 2025. Adjusted operating expenses guidance for 2025 was lowered to a range of $832 million to $847 million, down from $837 million to $852 million. Depreciation and amortization expense guidance was also lowered to $53 million to $57 million. The effective tax rate on adjusted earnings for the full year 2025 is reaffirmed at 28.5% to 30.5%, and capital expenditures are reaffirmed at $75 million to $85 million.

Management Comments

• "Strong double-digit net revenue growth across Derivatives, Data Vantage, and Cash and Spot Markets drove our outstanding results." Craig Donohue, Cboe Global Markets Chief Executive Officer.
• "Net revenue grew 14 percent and adjusted diluted EPS increased 14 percent year-over-year, bringing year-to-date growth to 13 percent and 15 percent, respectively, as compared to the first half of 2024." Craig Donohue, Cboe Global Markets Chief Executive Officer.
• "Since taking over as CEO in early May, I have been impressed by our teams ability to thrive in a constantly evolving environment. I am excited to build on the exceptional first half results as we work towards delivering long-term value for shareholders." Craig Donohue, Cboe Global Markets Chief Executive Officer.
• "Cboe achieved another quarter of record net revenue and strong adjusted earnings growth, highlighting the durability across our exchange ecosystem." Jill Griebenow, Cboe Global Markets Executive Vice President, Chief Financial Officer.
• "Derivatives net revenue grew 17 percent, driven by robust volumes across our options business. Data Vantage produced 11 percent net revenue growth, and Cash and Spot Markets net revenue increased 11 percent on a year-over-year basis." Jill Griebenow, Cboe Global Markets Executive Vice President, Chief Financial Officer.
• "Moving forward, we are increasing our organic total net revenue growth guidance range to high single digits from mid to high single digits, and we are reaffirming our Data Vantage organic net revenue growth range of mid to high single digits for 2025." Jill Griebenow, Cboe Global Markets Executive Vice President, Chief Financial Officer.
• "In addition, we are lowering our full year adjusted operating expense guidance range to $832 million to $847 million from $837 to $852 million." Jill Griebenow, Cboe Global Markets Executive Vice President, Chief Financial Officer.
• "Following our strong first half performance, we remain well-positioned to advance our financial priorities and deliver meaningful impact across our global markets." Jill Griebenow, Cboe Global Markets Executive Vice President, Chief Financial Officer.

Industry Context

Cboe's strong performance in derivatives, particularly options, aligns with a broader industry trend of increased activity in complex financial products. The growth in Data Vantage also reflects the increasing value of market data services in the financial industry. While Cboe saw robust growth in its European and Global FX segments, its market share declines in North American and Japanese equities suggest competitive pressures or shifts in trading venues within those specific markets. The strategic decision to exit the Japanese equities business indicates a focused approach on more profitable or higher-growth regions and segments, adapting to the evolving global exchange landscape.

Comparison to Industry Standards

• Cboe's European Equities market share increased to 25.1% in Q2 2025 from 22.5% in Q2 2024, indicating strong competitive performance in the European market.
• Cboe's total options market share of 30.2% in Q2 2025 (down from 31.2% in Q2 2024) suggests a slight decline in its competitive position within the broader options market, despite overall industry volume growth.
• U.S. Equities exchanges market share of 10.5% (down from 11.4%) and Canadian Equities market share of 12.7% (down from 15.0%) indicate ongoing competitive pressures in North American equities markets.
• The wind-down of the Japanese equities business (market share 3.6% down from 5.5%) suggests that this operation was underperforming relative to other global equity markets or internal profitability targets, leading to a strategic divestment.

Management Changes

Stakeholder Impact

• Shareholders: Positive impact due to record revenue, strong earnings growth, increased revenue guidance, lowered expense guidance, and ongoing share repurchase program, suggesting enhanced shareholder value.
• Employees: Potential impact on employees in the Japanese equities business due to the announced wind-down of operations.
• Customers: Continued provision of trading, clearing, and investment solutions across various asset classes globally, with a strategic exit from the Japanese equities market.

Next Steps

• Executives will host a conference call to review second-quarter financial results on August 1, 2025, at 8:30 a.m. ET/7:30 a.m. CT.
• Cboe expects to suspend operations for its Japanese equities business, including the Cboe Japan proprietary trading system and Cboe BIDS Japan block trading platform, on August 29, 2025, and formally close the businesses subject to consultation with regulators.

Key Dates

Recommendation

The company delivered record revenue and strong adjusted earnings growth, significantly exceeding prior expectations by raising full-year revenue guidance and simultaneously lowering expense guidance. This indicates strong operational efficiency and market demand for its core offerings, particularly in derivatives and data. While there are minor market share declines in some equity segments and a strategic exit from Japan, the overall financial performance and forward-looking guidance are exceptionally positive, suggesting strong potential for shareholder value creation. The ongoing share repurchase program further enhances shareholder returns.

Keywords

Financial Results, Exchange, Derivatives, Equities, Options, Futures, FX, Market Data, Trading Volume, Revenue, EPS, Guidance, Cboe Global Markets, CBOE, SEC Filing, Financial Performance, Risk Management, Capital Management