CBOE Cboe Global Markets, Inc. 10-Q 2026-09-30 section summaries

Cboe (CBOE) — Q3 and nine months ended September 30, 2026

Consolidated results

($M, except EPS and shares)

Q3 revenue grew 19.0%; operating income growth included a $71.5M gain on the Cboe Australia divestiture. Excluding that gain, Q3 operating income was $462.8M, up approximately 25%. Nine-month operating income also included the gain. Lower investment earnings partly offset operating growth: $1.6M versus $52.7M in Q3 and $13.7M versus $48.3M in 9M. Q3 interest expense was $13.1M versus $13.3M; interest income was $22.7M versus $14.3M.

Revenue categories

($M; Q3 and 9M, current period versus prior-year period)

The sharp increase in regulatory fees primarily reflects SEC Section 31 fees collected for the exchanges and passed through to the SEC. Separately, revenue by business grouping was: Cash and Spot Markets, $511.3M vs. $415.0M in Q3 and $1,573.8M vs. $1,403.5M in 9M; Data Vantage, $182.6M vs. $162.1M in Q3 and $545.5M vs. $472.9M in 9M; Derivatives Markets, $664.9M vs. $564.6M in Q3 and $1,955.1M vs. $1,633.8M in 9M. Cash and Spot growth accelerated to 23.2% in Q3 from 12.1% for 9M. Transaction and clearing revenue reflects trading activity and volume-based discounts; market data includes tape-plan, proprietary data, analytics and index licensing.

Segment results

($M; quarterly figures except where 9M values are shown)

Europe and Asia Pacific operating income includes the divestiture gain. North American Equities transaction and clearing fees were $275.0M vs. $305.1M in Q3; Options fees were $585.1M vs. $519.0M.

Cash flow, balance sheet and capital returns

($M, except shares)

Operating cash flow benefited from a $1,420.2M increase in restricted cash/customer-bank-deposit balances, versus $554.2M in 2025. Cash taxes paid rose to $713.7M from $240.9M.

Equity less goodwill and other intangible assets implies tangible equity of $1,709.5M. Goodwill and intangibles declined partly due to assets reclassified as held for sale, foreign exchange and amortization. Margin, default-fund and interoperability deposits—and corresponding liabilities—were $2,992.6M, up from $1,618.2M; these collateral balances are not unrestricted corporate cash. Shares outstanding declined from 104,647,739 at December 31, 2025 to 104,374,451 at September 30, 2026.

Strategic developments, financing and risks

Cboe sold Cboe Australia to TMX for approximately $300M; the sale closed July 31, 2026. The Canada sale remained subject to approvals. Canada assets held for sale were $169.6M, including $60.9M goodwill and $44.7M net intangible assets; related liabilities were $10.5M. The company’s broader realignment, including wind-downs of Cboe Digital, Cboe Japan and CEDX, was expected to be substantially complete by year-end. Realignment costs were $15.3M in Q3 versus $2.5M and $44.1M in 9M versus $3.0M; a further $7.7M of compensation and benefits costs was estimated.

CAT cost recovery is a significant uncertainty. Cboe recorded a $14.0M Q3 provision for CAT notes receivable; the 9M notes allowance rose to $44.1M from $30.1M. Long-term notes receivable, net, were $76.6M, down from $102.1M. The SEC’s revised CAT funding model is interim, and legal challenges remain pending. If the model is vacated without replacement, Plan Participants could bear substantial CAT costs and may not recover amounts loaned to CATLLC.

Debt includes $650M principal of 3.650% notes due 2027, $500M principal of 1.625% notes due 2030 and $300M principal of 3.000% notes due 2032. The 2027 notes are current, creating a near-term maturity. Cboe had $400M available under its unsecured revolver, with no borrowings outstanding. Its covenants require at least 4.00x interest coverage and no more than 3.50x leverage, subject to specified temporary step-ups; Cboe was compliant. Cboe Clear Europe also had no borrowings against its €1.20B facility, which matures June 2027.

Nine-month foreign-currency translation was a $25.3M loss, reducing accumulated other comprehensive income to $4.8M from $30.1M. Cboe repurchased $56.1M of shares in Q3 and declared a $0.86-per-share dividend. After quarter-end, the board authorized an additional $550M in repurchases and declared another $0.86-per-share quarterly dividend.

Cboe (CBOE) — Q3 and nine months ended September 30, 2026

Cboe operates five reportable segments—Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX—and principally assesses them by operating income. Its business combines transaction and clearing fees with market data, access and capacity fees, and listing and licensing activities.

Consolidated results

Amounts in millions, except per-share data.

Revenue grew 19% in Q3 and 16% year to date. Section 31 fees and derivatives transaction and clearing fees were key drivers; the Section 31 increase is passed through as both revenue and cost, with no operating-income effect. Revenue less cost of revenue grew 18% in Q3 and 24% for 9M. Reported Q3 operating income includes a $71.5 million net gain on the Cboe Australia sale; excluding it, adjusted operating income was $508.2 million, up 29% from $395.3 million. The effective tax rate fell to 22.8% in Q3 from 30.1%, and to 25.4% for 9M from 29.5%, primarily because the sale gain was non-taxable. Net income also benefited from lower prior-year investment gains being a less favorable comparison: Cboe exited 7Ridge by September 2026.

Segment performance

Amounts in millions. 9M values are included where year-to-date growth differed meaningfully from the quarter’s trend.

Options was the largest growth contributor, with higher index-options activity, while operating expenses limited its margin expansion. North American Equities benefited from higher net capture per 100 touched shares and access/capacity fees, partly offset by a $14.0 million incremental reserve for CAT-funding notes receivable. Europe and Asia Pacific’s reported operating income includes the Australia-sale gain; excluding it, segment adjusted operating EBITDA was $43.7 million versus $31.5 million in Q3 and $142.9 million versus $91.4 million for 9M. Futures operating income rose despite lower Q3 revenue, as expenses declined. Global FX benefited from increased trading activity.

By net revenue (revenue less cost of revenue), Q3 Cash and Spot Markets contributed $131.4 million versus $117.3 million, Data Vantage $179.1 million versus $158.9 million, and Derivatives Markets $401.7 million versus $329.3 million. For 9M, the respective figures were $415.2 million versus $339.6 million, $534.7 million versus $463.4 million, and $1,222.8 million versus $955.0 million.

Operating trends

Options activity increased, but options market share slipped. U.S. equities share also declined, and matched shares fell 12% in Q3. Futures Q3 ADV declined even as 9M ADV grew. Global FX ADNV increased 22% in both periods.

Expenses, cash flow and funding

Operating expenses rose 6% in Q3 and 5% for 9M. Strategic realignment costs were $16.7 million in Q3 and $45.5 million for 9M, versus $7.0 million and $24.6 million a year earlier. Higher severance, bonuses, technology-support costs (including cloud and AI), and other expenses contributed; other expenses included the CAT-related notes-receivable reserve. Impairment fell to $1.4 million in Q3 and 9M from $4.5 million and $21.6 million, respectively, in 2025. The company announced a resource-allocation realignment expected to be substantially complete by year-end.

Operating cash flow exceeded net income by $1,106.9 million, including a $1,420.2 million contribution from changes in clearing-related deposits and customer bank deposits, partly offset by movements in payables and receivables. At September 30, cash and cash equivalents were $2,662.6 million, plus $57.4 million in assets held for sale. Adjusted cash, a non-GAAP measure, was $2,720.5 million versus $2,216.8 million at December 31, 2025.

Debt was $1,444.3 million net of $5.7 million of unamortized discount and issuance costs; principal comprised $650 million of 3.650% notes, $500 million of 1.625% notes, and $300 million of 3.000% notes. The $650 million notes mature in January 2027, creating refinancing or repayment risk. Cboe was in covenant compliance and had $400 million available on its revolver, with a potential additional $200 million subject to lender agreement. Adjusted cash plus available revolver capacity was approximately $3.1 billion, after $189.0 million of minimum regulatory capital requirements. Cboe Clear Europe also has a €1.20 billion secured facility expected to terminate within a year; replacement financing and the facility’s ability to cover clearing obligations are material liquidity risks.

Cboe repurchased 210,667 shares in Q3 for $56.1 million, at an average $266.17 per share; $480.7 million remained authorized. Since program inception, it had repurchased 21,562,609 shares at an average $84.37, totaling $1.8 billion.

Strategy and risks

Cboe launched Cboe Predicts in June 2026 and extended its exclusive S&P Dow Jones Indices licensing agreement through 2051, preserving exclusive rights to trade SPX options. It migrated cash-settled Bitcoin and Ether futures to CFE and launched continuous contracts there; the Digital Exchange currently has no listed products. Cboe Australia was sold to TMX for approximately $300 million, with the sale closing July 31, 2026; the Cboe Canada sale remains subject to approvals. Cboe also wound down Japanese equities operations and decommissioned CEDX in February 2026.

Results remain sensitive to trading volumes, volatility, customer activity, competition and transaction-fee pricing, foreign exchange, and market conditions. Regulatory changes—including potential equity access-fee cap reductions and options fee-model changes—could affect transaction revenue. CAT funding, related litigation and collection of CAT-related notes remain risks. Clearing arrangements with central counterparties and settlement institutions support customer trade completion, but failures or disruption at relevant counterparties could expose Cboe to obligations. Management reported no significant changes to critical accounting estimates from those disclosed in the 2025 Form 10-K.

Foreign-currency operating exposure

CBOE’s operations in Europe, Canada and Asia Pacific face currency-translation risk, primarily from the euro, British pound and Canadian dollar. The table shows each currency’s share of relevant revenue (revenue less cost of revenues) and operating expenses, and the estimated effect of a 10% adverse move.

The pound represents the largest listed currency share of operating expenses.

Foreign net-investment exposure

At September 30, 2026, CBOE’s net equity investments in foreign currencies and the estimated reduction in consolidated equity from a 10% adverse currency move were:

CBOE notes increased equity exposure from Canadian-dollar assets and liabilities held for sale. Translation effects are recorded in accumulated other comprehensive income.

Counterparty, clearing and liquidity risks

Central counterparties generally guarantee matched exchange trades, limiting CBOE’s direct counterparty exposure. Residual exposures include BIDS trades before NSCC processing and validation—including trades subscribers must submit through BOA—and routed trades before NSCC validation, when performance depends on routing and clearing firms. Cboe FX is not a counterparty to spot FX trades, but a bank or prime-broker credit event could reduce available credit and transaction volumes. Monthly-billed customer fee receivables are another credit exposure. CBOE reports historically no material losses from customer failures and minimal credit-loss effects to date, while warning that market-wide distress among large participants could disrupt markets.

At September 30, 2026, Cboe Clear Europe held $3.0B of clearing-member margin deposits, default fund and interoperability fund. It prioritizes capital preservation and liquidity over yield; investment or sovereign/repo-counterparty defaults could nevertheless leave collateral insufficient. Net interest income on these funds is passed to clearing members and may be reduced or negative. Cboe Clear Europe also has a €1.2B committed syndicated multicurrency revolving and swingline facility for settlement financing and other clearing-system liquidity needs, though CBOE cautions it may not cover all obligations. European cash-equity settlement can require intraday liquidity and, if a counterparty fails to settle, short-term overnight liquidity.

Cboe Clear U.S. held cash collateral and cleared only margined products at September 30, 2026. It may be unable to meet obligations promptly if a clearing member delays payment or defaults. Both clearinghouses could incur losses if a member defaults with adverse open positions; daily and intraday collateral collection and pre-funded default resources are intended to mitigate this exposure.

Cash, investments, debt and interest-rate risk

CBOE does not invest for speculative purposes and does not expect material interest-rate sensitivity from its cash and investment portfolio, assuming its amount and composition remain unchanged.

Outstanding debt at September 30, 2026 was $1,444.3M, all fixed-rate Senior Notes. There were no borrowings under the Revolving Credit Agreement or Cboe Clear Europe facility; any floating-rate borrowings under those facilities would expose CBOE to changes in interest rates.

Cross-acceleration and cross-default provisions linking the Revolving Credit Agreement and Cboe Clear Europe facility could accelerate amounts drawn—and potentially other debt subject to those provisions—following a default, restricting liquidity, business operations and financing activities.

Disclosure Controls and Internal Control

As of the end of Q3 2026, management, including the CEO and CFO, concluded that the company’s disclosure controls and procedures were effective. No changes to internal control over financial reporting during the quarter 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 2025 Form 10-K and Q1 and Q2 2026 Forms 10-Q. Those risks remain applicable, and risks not currently known—or currently considered immaterial—could also significantly affect the company. The risks may materially adversely affect Cboe’s business, financial condition, results of operations, liquidity and cash flows. No new financial metrics or specific risk developments were disclosed in this section.

During the three months ended September 30, 2026, no CBOE directors or executive officers adopted or terminated contracts, instructions, or written plans to purchase or sell the company’s securities.