10-K: Cboe Global Markets Reports Strong 2025 Growth Amid Strategic Shifts

Cboe Global Markets reported a significant increase in 2025 revenues and net income, driven by strong derivatives and cash markets, alongside strategic business realignments and executive transitions.

Summary

• Total revenues increased by 15% to $4,714.2 million in 2025 from $4,094.5 million in 2024.
• Revenues less cost of revenues rose by 17% to $2,429.1 million in 2025 from $2,072.4 million in 2024.
• Net income allocated to common stockholders increased by 44% to $1,094.8 million in 2025 from $761.0 million in 2024.
• Diluted earnings per share increased by 45% to $10.42 in 2025 from $7.21 in 2024.
• The Options segment's revenues less cost of revenues increased by 22%, driven by a 21% increase in index options Average Daily Volume (ADV) and a 24% increase in multi-listed options ADV.
• The North American Equities segment's revenues less cost of revenues increased by 6%, primarily due to higher access and capacity fees and market data revenue.
• The Europe and Asia Pacific segment's revenues less cost of revenues increased by 24%, driven by a 31% increase in European equities matched Average Daily Notional Value (ADNV) and a 22% increase in Cboe Clear Europe net settlement volumes.
• The Futures segment's revenues less cost of revenues decreased by 5% due to a 5% decrease in ADV.
• The Global FX segment's revenues less cost of revenues increased by 17% due to a 13% increase in ADNV.
• The company initiated the wind down of its Japanese equities business and Cboe Europe Derivatives (CEDX) (subsequent to year-end), and sales processes for its Australia and Canada businesses.
• Craig S. Donohue was appointed CEO and President, and other key executive appointments were made.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, with significant revenue and net income growth driven by core business strength and strategic realignments, despite some operational wind-downs and ongoing regulatory uncertainties.

Positives

• Total revenues increased by 15% to $4,714.2 million in 2025, demonstrating strong top-line growth.
• Net income allocated to common stockholders surged by 44% to $1,094.8 million in 2025, indicating enhanced profitability.
• Diluted earnings per share grew by 45% to $10.42 in 2025, reflecting strong per-share performance.
• Operating income increased by 34% to $1,467.1 million in 2025, with operating margin improving to 60.4% from 53.0% in 2024.
• The Options segment showed robust growth with a 22% increase in revenues less cost of revenues, driven by a 21% rise in index options ADV and a 24% rise in multi-listed options ADV.
• Cash and spot markets experienced growth, including a 26% increase in U.S. equity matched shares and a 31% increase in European equities matched ADNV.
• Cboe Clear Europe's net settlement volumes increased by 22%, highlighting strong clearing operations.
• Data Vantage revenue increased by 10%, driven by higher customer demand for access and capacity fees and proprietary market data.
• Successfully completed the migration of cash-settled Bitcoin and Ether futures contracts from Cboe Digital Exchange to CFE.
• Expanded derivatives product suite with 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.
• Expanded retail access with the launch of a Pan-European Best Bid and Offer trading solution.
• Advanced cloud-based data access with the launch of index datasets.
• Unveiled a new exchange technology platform, Cboe Titanium, enhancing performance and reliability.
• Proceeds from equity method and minority investments totaled $441.8 million, including a $84.2 million gain from the sale of Trading Technologies.
• The company had $614.5 million of availability remaining under its share repurchase authorizations as of December 31, 2025.

Negatives

• The Futures segment experienced a 5% decrease in revenues less cost of revenues due to a 5% decrease in ADV.
• Regulatory fees decreased primarily due to a 49% decrease in the Section 31 fee rate, impacting revenue.
• Impairment charges totaling $18.9 million were recorded in the Europe and Asia Pacific segment related to the wind down of the Japanese equities business.
• A $17.7 million impairment charge was recorded related to Cboe Canada's intangible assets.
• A $5.6 million impairment charge was recognized for internally developed software and prepaid expenses related to the CEDX wind down.
• Christopher A. Isaacson, Executive Vice President, Chief Operating Officer, plans to resign effective March 6, 2026, which could lead to transitional disruptions.
• One customer accounted for approximately 10% of total revenue in 2025, indicating a concentration risk.
• Three clearing members accounted for approximately 71% of transaction and other fees collected through OCC in 2025, highlighting significant customer concentration risk.
• The Cboe Clear Europe Credit Facility is expected to terminate on June 26, 2026, and there is no assurance a replacement facility will be secured on commercially favorable terms.

Risks

• The potential loss of exclusive rights to list and trade certain index options and futures products, such as S&P 500 Index options and VIX Index products, could materially adversely affect financial performance.
• General economic, political, and market conditions, including inflation, recession, geopolitical activity, government actions, and natural disasters, could significantly reduce demand for products and services.
• Intense price competition in the securities industry, particularly for transaction fees and market data, may require pricing adjustments that could adversely impact business and financial results.
• Decreases in trading or clearing volumes, or a shift in product mix to lower-revenue products, could lead to a reduction in transaction and clearing fees.
• Legislative or regulatory changes, such as SEC equity market structure proposals, MiFID II/MiFIR, potential changes to Rule 611 of Regulation NMS, and financial transaction taxes, could increase compliance costs, reduce revenues, or alter market structure.
• Cybersecurity vulnerabilities or breaches in technology systems, including those of third-party service providers, could harm the business, reputation, and financial results, especially given the company's role as critical infrastructure.
• Failure to attract or retain highly skilled management and other employees could harm the business, particularly in a competitive talent market and during executive transitions.
• Significant dependence on third parties, including clearing organizations, data processors, technology providers, and routing/clearing firms, exposes the company to risks of service interruption, increased fees, or operational failures.
• If index providers fail to maintain the quality and integrity of their indices, or if customer preferences change, revenues generated from proprietary products could suffer.
• Ineffective management of growth, including expansion into new asset classes (e.g., SFT, U.S. Treasuries, event prediction markets) or new geographies, or failure to effectively manage strategic divestitures or wind-downs, could materially adversely affect growth strategy and future profitability.
• Global operations are complex and subject to increased business and economic risks, including currency exchange rate fluctuations, extensive compliance requirements, political tensions, and protectionist laws.
• Inability to protect intellectual property rights, or infringement on the intellectual property rights of others, could result in costly litigation and adverse effects on operations.
• Clearinghouse operations expose the company to credit, liquidity, market, and investment risks related to defaults of clearing members and other counterparties, potentially leading to substantial losses or reputational harm.
• Computer and communications systems failures, capacity constraints, or disruptions to the supply chain for technology infrastructure could harm reputation and business operations.
• The use of open-source software code may subject proprietary software to general release or require costly re-engineering.
• Misconduct by Trading Permit Holders (TPHs), members, participants, or employees could lead to regulatory and legal sanctions and serious harm to the company's reputation.
• Managing competing business interests and regulatory responsibilities as a parent company of Self-Regulatory Organizations (SROs) may adversely affect the business.
• Required regulatory review processes can limit or delay the implementation or amendment of rules, negatively affecting the ability to make needed changes or introduce new products.
• Changes in tax laws and regulations, both domestically and internationally, could result in higher taxes for the company or its market participants, reducing net income or trading volumes.
• The company is subject to litigation risks and other liabilities, including ongoing legal and tax disputes, which could result in substantial damages or restrictions on business operations.
• Outstanding indebtedness and commitments may decrease business flexibility, increase future borrowing costs, and limit the ability to fund operations or strategic initiatives.
• Deterioration in the company's credit profile could lead to increased costs of borrowing money.
• Provisions in organizational documents and governing law could prevent or delay a change of control, potentially affecting shareholder value.
• Uncertainty regarding the funding model for the Consolidated Audit Trail (CAT) due to litigation and regulatory developments could lead to additional significant costs and uncollectible promissory notes related to its funding.

Future Outlook

The company expects its cash on hand and cash generated from operations, along with available resources under its Revolving Credit Facility, to be sufficient to meet cash requirements for the foreseeable future, including funding operations, capital expenditures, interest payments, dividends, and potential strategic acquisitions. Significant investments in technology, facilities, personnel, and financial/management systems are anticipated to support continued growth. The company expects to continue paying dividends and will monitor updates to Climate Disclosure Rules. It plans to formally close its Japanese equities business and decommission the CEDX exchange service, while continuing sales processes for its Australia and Canada businesses.

Management Comments

• Cboe is committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future.
• Our strategic direction is focused on leveraging our core areas of strength and the strong secular growth trends supporting them.
• The Company plans to continue to explore potential applicable avenues to recoup historical and potential future CAT costs if the SEC does not approve the pending proposed funding model or other funding mechanism, and to reduce the costs of operating the CAT while maintaining core regulatory functionality.
• The Company's expectation is to continue to pay dividends.

Industry Context

StockSavvy.ai notes that Cboe Global Markets' strong performance in derivatives and cash markets aligns with broader industry trends of increased electronic trading and demand for diversified financial products. The strategic review and divestitures reflect a focus on optimizing core strengths in a competitive and evolving global financial landscape, particularly with the electronification of FX markets and the ongoing regulatory scrutiny of market data and structure. The company's emphasis on proprietary products and data solutions positions it well within the growing demand for specialized financial information and analytics.

Comparison to Industry Standards

• Cboe is the largest options exchange and the third largest equities exchange operator in the U.S., indicating a strong competitive position.
• Cboe Europe Equities is one of the largest equities exchanges by value traded in Europe.
• Cboe Clear Europe is a leading pan-European equities and derivatives clearinghouse.
• BIDS Holdings owns a leading block-trading ATS by volume in the U.S.
• The listed options industry is highly competitive with 14 other U.S. options exchanges as of December 31, 2025, and two more expected in the first half of 2026.
• U.S. equities and the BIDS Trading ATS compete against 13 other equities exchanges and over 25 other ATSs and single dealer platforms.
• The global FX market is severely fragmented, but Cboe FX is challenging a small number of similarly situated competitors.

Management Changes

Corporate Governance

Legal Proceedings

• CAT Putative Class Action: A class action was filed on April 16, 2024, alleging the SEC engaged in unlawful agency action regarding the creation and funding of the Consolidated Audit Trail (CAT). The case is currently in abeyance until July 15, 2026.
• Citadel Petition for Review of SEC Temporary Conditional Exemptive Order: Citadel filed a Petition for Review (PFR) on July 17, 2024, challenging an SEC order related to CAT reporting. The PFR is stayed until the CAT Funding Model Order litigation is resolved.
• Citadel vs. CATLLC: Citadel filed a Petition for Rulemaking and a Complaint for Declaratory and Injunctive Relief on January 15-16, 2026, challenging CATLLC's use of reserve funds. A motion for preliminary injunction was continued.
• Former Employee Litigation: A former employee filed a complaint on January 26, 2026, alleging wrongful termination, violations of the Family and Medical Leave Act of 1993, and Sarbanes-Oxley Act retaliation for purported whistleblower activity. The company plans to vigorously defend itself.
• Ongoing routine reviews and inspections by various regulatory authorities including the SEC, CFTC, FINRA, FCA, DNB, AFM, CIRO, OSC, ASIC, JFSA, and JSDA.

Stakeholder Impact

• Shareholders: Positive impact from increased net income, diluted EPS, and continued dividend payments. Potential dilution from future capital raises if needed for acquisitions. Risk of share price volatility due to market conditions, regulatory changes, and litigation.
• Employees: Impacted by executive transitions, new appointments, and stock-based compensation plans. Potential for job security concerns in divested/wound-down businesses (Japanese equities, CEDX, Australia, Canada).
• Customers: Benefit from expanded product suite, enhanced technology (Cboe Titanium), and Pan-European Best Bid and Offer trading solution. Risk of reduced trading activity due to increased capital/margin requirements or changes in market structure.
• Regulators: Ongoing engagement with various regulatory bodies due to the highly regulated nature of the industry, including compliance with new rules (e.g., Rule 605, Tick Size/Access Fee Cap) and ongoing legal challenges related to CAT funding.
• Suppliers/Partners: Dependence on third-party service providers for technology, clearing, and data centers, posing risks if services are interrupted or costs increase.

Next Steps

• Formally close Japanese equities business, subject to consultation with regulators.
• Decommission CEDX exchange service effective February 23, 2026.
• Continue sales processes for Cboe Australia and Cboe Canada businesses.
• Scott Johnston to take over Chief Operating duties from Christopher A. Isaacson effective March 6, 2026.
• Heidi Fischer to assume oversight of global cash equities and spot markets.
• The Board of Directors and Compensation and Human Capital Committee approved granting $37.8 million of RSUs and $6.4 million of PSUs with an effective date of February 19, 2026.
• A quarterly cash dividend of $0.72 per share is payable on March 13, 2026, to stockholders of record on February 27, 2026.
• The company expects to adopt ASU 2025-06 for annual financial statements issued for the year ending December 31, 2027.
• The company expects to adopt ASU 2024-03 for annual financial statements issued for the year ending December 31, 2027.
• The company will continue to monitor updates to the Climate Disclosure Rules.
• The company plans to continue to explore potential avenues to recoup historical and potential future CAT costs.

Key Dates

Recommendation

Cboe Global Markets demonstrates strong financial performance in 2025 with significant revenue and earnings growth, driven by robust derivatives and cash markets. Strategic realignments and product innovation are positive. However, ongoing regulatory uncertainties, particularly regarding CAT funding and equity market structure changes, coupled with the costs and potential reputational impact of business wind-downs and litigation, present notable headwinds. The concentration of revenue from a limited number of customers and clearing members also adds a layer of risk. While the company shows resilience and growth, these factors suggest a 'hold' position until there is greater clarity on regulatory outcomes and the successful execution of its strategic portfolio optimization.

Keywords

Cboe Global Markets, Financial Results, Derivatives, Equities, FX, Market Data, Clearing, Options, Futures, Strategic Review, Executive Changes, Risk Management, Regulatory Compliance, Capital Allocation, Stock Repurchase, Dividends, Cybersecurity, Intellectual Property, Market Structure, S&P 500 Index, VIX Index, Consolidated Audit Trail