Cboe Global Markets, Inc. 10-Qquarter ended 2026-06-30

Executive Summary

Cboe operates exchanges, clearinghouses and market-data services, earning fees from traders, brokers and financial institutions. It is concentrating resources on derivatives and data while selling or closing selected equities and digital-market businesses. Q2 revenue less cost of revenues rose 25%, and operating income rose 40%, as options trading expanded faster than operating expenses. The opportunity is to build more business around its proprietary products and infrastructure; investors should distinguish that progress from market-wide trading growth and regulatory fees that pass straight through to costs.

What's Happening in the Business

Options drove the quarter, with trading-volume growth accelerating against H1 even as Cboe’s market share was broadly flat. Proprietary SPX and VIX products remain important differentiators. In June, Cboe launched Cboe Predicts, centrally cleared binary options based on XSP, extending its derivatives offering into securities-based prediction markets.

The portfolio is narrowing following the 2025 strategic review. Cboe agreed to sell Cboe Australia and Cboe Canada to TMX for ≈$300M, subject to approvals; management expects Australia to close in Q3. It also wound down Japanese equities operations and discontinued corporate-listing efforts in the U.S. and Europe. Management expects the broader realignment to be substantially complete by year-end.

Digital products are being consolidated onto existing infrastructure rather than abandoned entirely. Bitcoin and Ether futures migrated to Cboe Futures Exchange, which subsequently launched continuous contracts; no products remain on Cboe Digital Exchange. Cboe European Derivatives Exchange was decommissioned in February.

Key Financial Highlights

• Options demand: Average daily volume reached 72.8M contracts, +27%, versus H1 growth of 23%. Derivatives-market revenue less cost of revenues reached $413M, +30%, explaining most of the consolidated increase.
• Equities pricing: U.S. exchange share fell to 9.4% from 10.5%. Off-exchange daily volume rose 89% to 238M touched shares, but net capture per 100 shares fell 30% to $0.058: substantially more activity generated less revenue per unit.
• Other businesses: Data Vantage revenue less cost of revenues rose 15% to $178M on connectivity and market-data demand. European equities daily traded value grew 13% and foreign-exchange daily volume grew 8%, slower than their respective H1 rates of 19% and 21%. Europe’s profit comparison also benefited from the prior-year $17.1M impairment; higher expenses reduced Futures profit.
• Costs and taxes: Operating expenses rose 3% to $256M despite $23.7M of realignment costs, versus $0.2M previously. Management expects another $13.0M of compensation-related costs. Resolution of uncertain state and local tax positions helped lower Q2’s effective tax rate to 28.6% from 29.7%.
• Cash flow: H1 operating cash flow was $1.46B, +17%, versus net income of $736M. Clearing-related and customer deposits supplied $943M of cash inflows, so headline cash flow is not a clean measure of cash available to shareholders; higher receivables and cash taxes partly offset those inflows.

Risk Assessment

• Trading and product dependence: Options growth depends on customer activity, while proprietary SPX and VIX products depend on exclusive licenses; weaker volumes or license disruption would threaten the principal earnings driver.
• Clearing liquidity and refinancing: Member defaults can create urgent settlement needs, while the European clearing facility requires replacement within a year; separately, $650M principal of notes matures in January 2027, although Cboe held $2.28B in cash and refreshed its corporate revolver after quarter-end.
• Regulatory recovery: The revised Consolidated Audit Trail funding model remains under appeal, potentially delaying fee recovery and impairing related receivables; Cboe carries a $30.1M allowance against those notes.

This 10-Q lists no risk factors of its own and refers to the annual report. The risks above come from the rest of this filing. Full list: the company's 10-Ks on SEC.

What to Watch

• Options durability: With daily volume at 72.8M contracts, watch whether proprietary-product activity sustains growth or weaker trading exposes dependence on favorable markets.
• Equities economics: Exchange share is 9.4%, and off-exchange capture is falling; success means stronger monetization, not merely more volume.
• Portfolio execution: Watch approval and completion of the ≈$300M sales and year-end realignment; delays or additional charges would weaken the simplification case.
• Data demand: Data Vantage’s 15% growth provides diversification; continued connectivity and market-data expansion would reduce reliance on transaction activity.