CBOE Cboe Global Markets, Inc. 10-Q 2026-06-30 section summaries

Cboe Global Markets — Q2 and H1 2026

Consolidated results

($ millions, except per-share data)

Q2 revenue grew 23.0%, faster than H1’s 14.7%; operating income and net income rose more rapidly in both periods. Q2/H1 costs of revenues included liquidity payments of $453.7M/$899.8M (from $418.0M/$812.8M), routing and clearing of $20.8M/$40.8M (from $20.7M/$40.3M), regulatory fees of $153.9M/$153.9M (from $85.3M/$238.4M), and royalty fees and other costs of $82.8M/$160.6M (from $62.2M/$124.5M). The contrast in regulatory-fee costs reflects a sharp Q2 increase but a decline for H1. Operating expenses were $255.6M/$478.9M (from $248.2M/$459.5M); Q2/H1 strategic realignment costs were $23.7M/$28.8M, versus $0.2M/$0.5M.

Revenue composition

($ millions; each cell is current period / prior-year period)

Transaction and clearing fees were the largest contract-type source; derivatives markets had the largest increase among the reported revenue captions. Regulatory fees include SEC Section 31 and options regulatory fees.

Segment performance

($ millions; each cell is current / prior-year period)

Europe and Asia Pacific’s operating-income improvement reflects a low prior-year comparison. Futures operating income declined in Q2 despite H1 growth. Cboe launched its Cboe Predicts securities-based prediction-market products in June 2026. The Cboe Digital Exchange currently has no listed products after migration of Bitcoin and Ether futures to CFE; CEDX’s wind-down was completed in February 2026.

Cash flow, balance sheet and capital

($ millions, except shares)

Operating cash flow included a $943.2M inflow from restricted cash/customer deposits, versus $555.6M; accounts receivable used $195.7M, versus a $28.1M source. Cash taxes paid rose to $577.3M from $148.6M.

Tangible equity, calculated as equity less goodwill and other intangible assets, was $1,394.2M. Goodwill declined mainly from $91.6M reclassified to assets held for sale and $11.3M of adverse currency movements; intangible assets included $75.1M reclassified to held for sale and $31.3M of H1 amortization.

Common shares outstanding declined from 104.647739M at December 31, 2025 to 104.554843M at June 30, 2026. H1 dividends were $151.5M (from $132.8M), and common-stock purchases were $75.3M (from $66.7M). Stock-based compensation expense was $28.5M (from $25.7M); $90.5M of unrecognized RSU/PSU compensation was expected to be recognized over a weighted-average 2.1 years.

Strategy, funding and risks

Cboe agreed to sell Cboe Australia and Cboe Canada to TMX Group for approximately $300M, subject to approvals; Australia was expected to close in Q3 2026. Held-for-sale assets and liabilities were $261.0M and $31.7M, respectively. The broader realignment, including wind-downs of Cboe Digital, Cboe Japan and CEDX, is expected to be substantially complete by year-end 2026; management estimated a further $13.0M of compensation and benefits costs.

Senior Notes have $1.450B principal outstanding: $650M due in 2027, $500M in 2030 and $300M in 2032. The 2027 notes’ $649.6M carrying value is current, creating a near-term maturity alongside the revolving credit agreement’s February 2027 termination date. The $400M corporate revolver was undrawn at June 30; Cboe was covenant-compliant. On July 24, it refreshed the facility as a five-year senior unsecured revolver, with potential increases to $600M subject to lender approval. Cboe Clear Europe’s €1.20B committed facility was also undrawn. H1 interest expense was $26.5M (from $25.7M), while interest income rose to $35.9M from $19.7M, moving net interest to income of $9.4M from expense of $6.0M.

The SEC’s revised CAT funding model began applying to transactions from May 1, 2026, temporarily through March 31, 2028, but remains under appeal. Challenges could delay fee recovery, leaving plan participants with significant CAT costs and potentially limiting recovery of CAT-related promissory notes. Cboe’s total allowance for credit losses was $35.5M, including $30.1M for CAT notes receivable, down from $36.9M at year-end. Regulated subsidiaries held capital above minimum requirements; CFE, for example, had $151.9M versus a $40.8M minimum. Cboe Clear U.S. must maintain resources equal to at least 12 months of projected operating costs and unencumbered liquid assets equal to at least six months.

Clearing-member cash deposits, including customer deposits, rose to $2,542.3M from $1,618.2M; these are clearing-related funds, not unrestricted corporate cash. Cboe reported no default events requiring GAAP liability recognition at Cboe Clear Europe. It stated that it did not believe unresolved litigation would cause material losses beyond amounts already recognized, while acknowledging potential CAT-related recovery risks.

Business and strategic developments

Cboe operates exchanges and market infrastructure across derivatives, equities, FX, clearing, and market data. Its five reportable segments are Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX. Results are sensitive to trading volumes, market share, volatility, pricing, and demand for data and connectivity; proprietary SPX and VIX products also depend on exclusive licenses.

Following a 2025 strategic review, Cboe began winding down its Japanese equities businesses, discontinued corporate-listing efforts in the U.S. and Europe, reduced costs in selected businesses, and initiated the sale of Cboe Australia and Cboe Canada. In April 2026, it agreed to sell the two businesses to TMX for approximately $300 million, subject to approvals and other customary conditions. CEDX was decommissioned in February 2026, and further resource-optimization actions announced in May were expected to be substantially complete by year-end. Cboe launched Cboe Predicts, offering centrally cleared binary option contracts based on XSP, in June 2026. Bitcoin and Ether futures had migrated to CFE, which subsequently launched continuous contracts; no products remain listed on Cboe Digital Exchange.

Consolidated results

Revenue grew 23% in Q2, faster than H1’s 15%, while operating income increased 40% in Q2 and 42% in H1. Operating margin expanded to 65.1% from 57.7% in Q2 and to 67.2% from 60.1% in H1. Cost of revenues increased 21% in Q2 but only 3% in H1, supporting operating leverage. Lower effective tax rates—28.6% versus 29.7% in Q2 and 26.9% versus 29.1% in H1—primarily reflected resolution of state and local uncertain tax positions.

Revenue categories and segments

Cash and spot growth reflected higher European trading and clearing volumes, increased U.S. equity capture following pricing changes, and stronger FX activity. Data Vantage benefited from access and capacity fees and market-data demand. Derivatives growth was led by options volumes; higher index-product activity also raised royalty costs. Section 31 regulatory-fee revenue and its matching expense are pass-throughs and do not directly affect revenue less cost of revenues.

Europe and Asia Pacific’s operating-income increase chiefly reflected a low prior-year comparison that included a $17.1 million asset impairment. Futures operating income declined as expenses rose despite higher revenue. Options remained the largest contributor, with strong index and multi-listed options activity.

Selected operating metrics

Options ADV rose 27% in Q2 versus 23% in H1, while market share eased. U.S. equities ADV growth accelerated from 10% in Q2 to 18% in H1, but Cboe’s exchange share declined; off-exchange volume surged while net capture fell. European equities ADNV grew 13% in Q2 and 19% in H1; FX ADNV rose 8% and 21%, respectively.

Costs, cash flow, and liquidity

Q2 cost-of-revenue increases included liquidity payments of $453.7 million versus $418.0 million, regulatory-fee costs of $153.9 million versus $85.3 million, and royalties and other costs of $82.8 million versus $62.2 million. The Section 31 rate averaged $19.95 per million dollars of covered sales in Q2, versus $13.24 a year earlier, after the rate rose in April 2026; H1’s average was $9.97 versus $20.52 because the rate had been zero from May 2025 until April 2026. Operating expenses rose 3% in Q2 and 4% in H1. Compensation increased with strategic-realignment severance ($19.2 million in Q2; $19.7 million in H1), higher bonuses, and H1 executive-transition equity compensation; the prior-year $17.1 million Cboe Japan intangible impairment did not recur. Technology costs also reflected higher AI/cloud spending and CEDX wind-down services.

Operating cash flow grew approximately 16.9%; it included a $943.2 million increase from clearing-related deposits and customer bank deposits. The H1 increase in cash was lower year over year partly because the foreign-exchange effect shifted from a $299.4 million gain to a $25.9 million loss.

At June 30, 2026, cash and cash equivalents were $2.2762 billion, including $469.9 million held outside the U.S. Cash, cash equivalents, and restricted cash totaled $4.9233 billion, including $2.5385 billion of restricted clearing-related funds; these balances include customer and clearing funds and are not equivalent to unrestricted corporate liquidity. Management cited approximately $2.7 billion available for operations, capital expenditures, acquisitions, debt repayment, and dividends, subject to restrictions and approvals.

Debt comprised $650 million of 3.650% Senior Notes, $500 million of 1.625% Senior Notes, and $300 million of 3.000% Senior Notes; there were no revolver or Cboe Clear Europe facility borrowings, and Cboe was in covenant compliance. The 3.650% notes mature in January 2027. The Cboe Clear Europe facility is expected to terminate within a year, and replacement financing may not be available on acceptable terms; cross-default provisions and refinancing needs are liquidity risks. In Q2, Cboe repurchased 127,015 shares for $32.6 million at an average $256.61 per share; $536.8 million remained authorized. Management expects cash flow and credit availability to cover long-term needs absent significant acquisitions, which could require debt or equity financing.

Principal market risks

Cboe’s principal market risks are foreign-currency translation, credit exposure in clearing and trade routing, clearinghouse liquidity and investment risks, and interest-rate and cross-default risk.

Foreign-currency operating exposure

Foreign-denominated revenue less cost of revenues and operating expenses were the following shares of the respective totals:

A 10% adverse currency move would have the following impacts on revenue less cost of revenues and operating expenses:

At June 30, 2026, Cboe’s foreign net investments were $239.0M in euros, $640.5M in British pounds, $180.6M in Canadian dollars and $135.5M in Australian dollars. A 10% adverse currency fluctuation would reduce consolidated equity by $23.9M, $64.1M, $18.1M and $13.5M, respectively. Translation exposure also includes assets and liabilities held for sale denominated in Australian and Canadian dollars, increasing equity sensitivity.

Credit, clearing and liquidity risks

Cboe generally routes matched exchange trades to central counterparties—including NSCC, OCC, Canadian and Australian clearing entities, and FICC GSD—which limits direct counterparty exposure on those trades. Exceptions and other exposures include BIDS trades that subscribers must submit to BOA, routing exposure before NSCC validates trades, and Cboe Trading’s reliance on routing and clearing firms and their return of transaction rebates. Cboe FX is not a counterparty to bilateral spot-FX trades, but volumes could fall if a bank or prime broker loses credit support. Monthly fees billed in arrears expose Cboe to receivables risk from financial-institution customers. Although customer-default losses have historically been minimal, broader distress among major market participants could disrupt markets.

At June 30, 2026, Cboe Clear Europe held $2.5B of clearing-member margin deposits, default fund and interoperability fund, primarily to preserve capital and manage risk. A sovereign or reverse-repurchase counterparty default could leave collateral inadequate and reduce returns passed through to members, potentially making those returns negative. Securities settlement can create intraday and short-term overnight liquidity needs. A €1.2B committed syndicated multicurrency revolving and swingline facility supports settlement and other clearing-system liquidity needs, but may not cover all obligations.

Cboe Clear U.S. holds cash collateral and, as of June 30, 2026, cleared only margined products. A clearing member’s default or delayed payment could affect timely payment obligations. Both clearinghouses use collateral and monitoring to mitigate credit and market risks; Cboe Clear U.S. maintains prefunded resources for probable losses in normal conditions.

Funding and interest-rate exposure

Cboe does not use its investment portfolio for trading and does not expect material interest-rate risk from it. Outstanding debt was $1,443.8M, entirely fixed-rate Senior Notes, so market-rate changes do not affect interest on that debt. No amounts were drawn under either the company Revolving Credit Agreement or the Cboe Clear Europe facility at June 30, 2026; borrowings under either would bear floating rates. Cross-acceleration and cross-default provisions could accelerate drawn amounts and potentially other debt, constraining liquidity, business operations and financing activities.

Disclosure Controls and Internal Control

At the end of Q2 2026, management, including the CEO and CFO, assessed Cboe’s disclosure controls and procedures as effective. No changes to internal control over financial reporting during Q2 2026 materially affected, or were reasonably likely to materially affect, those controls.

Risk Factors

Cboe reported no material updates to the risk factors previously disclosed in its FY2025 Form 10-K and Q1 2026 Form 10-Q. The company cautioned that risks currently unknown or considered immaterial could emerge or worsen and materially adversely affect its business, financial condition, results of operations, liquidity, and cash flows.

During Q2 2026, the three months ended June 30, no Cboe directors or executive officers adopted or terminated any contracts, instructions, or written plans to purchase or sell Cboe securities.