Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided to assist the reader in understanding the results of operations, liquidity and capital resources, and critical accounting estimates and policies through the eyes of our management team. The following discussion should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included in Item 8 of this Annual Report on Form 10-K. The following discussion contains forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. See “Risk Factors” and “Forward-Looking Statements” above.
A detailed comparison of the Company’s 2024 operating results to its 2023 operating results can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the Company’s 2024 Annual Report on Form 10-K filed February 21, 2025 at www.sec.gov.
INTRODUCTION
Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows:
• Executive Summary – Includes an overview of the Company’s business; a description of notable recent developments, current economic, competitive, and regulatory trends relevant to our business; the Company’s current business strategy; and the Company’s primary sources of operating and non-operating revenues and expenses.
• Results of Operations – Includes an analysis of the Company’s 2025 and 2024 financial results and a discussion of any known events or trends which are likely to impact future results.
• Liquidity and Capital Resources – Includes a discussion of the Company’s future cash requirements, capital resources, and financing arrangements.
• Critical Accounting Estimates – Provides an explanation of accounting estimates which may have a significant impact on the Company’s financial results and the judgments, assumptions, and uncertainties associated with those estimates.
• Recent Accounting Pronouncements – Includes an evaluation of recent accounting pronouncements and the potential impact of their future adoption on the Company’s financial results.
EXECUTIVE SUMMARY
Overview
Cboe Global Markets, Inc., the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing, and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, and FX, across North America, Europe, and Asia Pacific. Above all, the Company is committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future.
Cboe’s subsidiaries include the largest options exchange and the third largest equities exchange operator in the U.S. In addition, the Company operates Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges), one of the largest equities exchanges by value traded in Europe, and owns Cboe Clear Europe, a leading pan-European clearinghouse, BIDS Holdings, which owns a leading block-trading ATS by volume in the U.S., and provides block-trading services with Cboe market operators in Europe and Canada, Cboe Australia, an operator of a regulated stock exchange in Australia, Cboe Clear U.S., an operator of a regulated clearinghouse, and Cboe Canada, a recognized Canadian securities exchange. Cboe subsidiaries also serve collectively as a leading market globally for exchange-traded products (“ETPs”) listings and trading.
In 2025, following a comprehensive strategic review of its global business operations, Cboe initiated the wind down of its Japanese equities business, including the cessation of operations of its Cboe Japan proprietary trading system and Cboe BIDS Japan block trading platform, initiated a sales process for its Cboe Australia and Cboe Canada businesses, discontinued its U.S. and European Corporate Listings efforts, and reduced costs associated with its U.S. and European ETP Listings businesses, Cboe Europe Derivatives ("CEDX"), and several of Cboe’s smaller Risk and Market Analytics businesses. Subsequent to the year ended December 31, 2025, after further review of its global business operations, Cboe initiated the wind down of CEDX.
The Company is headquartered in Chicago with offices in Amsterdam, Belfast, Hong Kong, Kansas City, London, Manila, New York, San Francisco, Sarasota Springs, Singapore, Sydney, Tokyo, and Toronto.
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Executive Transitions
On May 1, 2025, the Company announced that its Board of Directors appointed longtime global financial markets executive, Craig S. Donohue, as the Company's new Chief Executive Officer and a member of the Board, effective May 7, 2025. Mr. Donohue succeeded Fredric J. Tomczyk who, as previously announced, has stepped down as Chief Executive Officer and will remain on the Board.
On May 28, 2025, the Company announced that Dave Howson, Executive Vice President and Global President, resigned from the Company, with his employment terminating at the end of the day on August 1, 2025. In connection with Mr. Howson's resignation, the Board appointed Mr. Donohue, Chief Executive Officer of the Company, as President of the Company, effective following August 1, 2025.
On August 18, 2025, the Company announced the appointment of Prashant A. Bhatia as Executive Vice President, Head of Enterprise Strategy & Corporate Development, effective September 2, 2025. Mr. Bhatia has advised the Company since December 2023 and previously led enterprise strategy and corporate development at TD Ameritrade for 11 years.
On September 30, 2025, the Company announced the appointment of two industry veterans to lead its Derivatives and Data Vantage businesses. Effective October 1, 2025, Robert A. Hocking rejoined as Executive Vice President, Global Head of Derivatives, and Brian McElligott joined as Senior Vice President, Global Head of Cboe Data Vantage. Mr. Hocking succeeded Cathy Clay who departed the Company in October 2025.
Subsequent to December 31, 2025, on January 26, 2026, the Company announced the planned appointments of Scott Johnston as Executive Vice President, Chief Operating Officer, and Heidi Fischer as Executive Vice President, Global Head of Equities and Spot Markets. Mr. Johnston will take over chief operating duties from Chris Isaacson, Executive Vice President and Chief Operating Officer, who is retiring from his role effective March 6, 2026. Ms. Fischer will assume oversight of Cboe’s global cash equities and spot markets, which Mr. Isaacson also oversaw. Mr. Isaacson will continue to serve as an advisor to Cboe through the end of 2026.
Business Segments
The Company previously operated as six reportable business segments as of December 31, 2024. As of January 1, 2025, the Company operates five reportable business segments: Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX, which is reflective of how the Company's chief operating decision maker ("CODM") reviews and operates the business, as discussed in Note 1 ("Nature of Operations"). The Company's reportable business segments represent strategic business units that offer different products and services across different geographic areas. The Company's CODM is the chief executive officer. The CODM function is supported by business segment management and executive leadership personnel who lead the day-to-day operations of each reportable business segment.
Segment performance is primarily evaluated on operating income (loss). The CODM uses segment operating income (loss) to allocate resources, including but not limited to employees, financial, and capital resources. The Company's CODM does not assess assets or income and expenses below operating income (loss) at the segment-level as key performance metrics. The Company has aggregated all of its corporate costs, as well as other business ventures, within the Corporate Items and Eliminations totals based on the decision that those activities should not be used to evaluate the operating performance of the segments; however, operating expenses that relate to activities of a specific segment have been allocated to that segment. The Company's CODM primarily reviews operating expenses at the consolidated level for purposes of evaluating actual results versus budgets.
On April 25, 2024, the Company announced plans to refocus the digital asset business to leverage its core strengths in derivatives, technology, and product innovation. Effective May 31, 2024, the Cboe Digital spot market closed for all participant and trading purposes. The Company has brought Cboe Clear U.S. under unified leadership with the Global Head of Clearing and continues to facilitate the clearing of cash-settled margin Bitcoin and Ether futures contracts. The Company retained and presented Digital as a reportable segment through December 31, 2024. As of January 1, 2025, the Company prospectively reorganized the Digital operating segment results into the Futures reporting segment as the Company expected to transition its cash-settled margin Bitcoin and Ether futures contracts, formerly available for trading on the Cboe Digital Exchange to CFE, which was completed on June 9, 2025. Cboe Digital Exchange no longer lists or trades any products. Comparative-period results have been presented for historical purposes but have not been recast as the historical results of the Digital segment were not material, nor do they materially impact the financial results, trends, or forecasts of the Futures segment. As a result, for the year ended December 31, 2025, operating results included within the Digital operating segment are presented within the Futures reporting segment.
Options. The Options segment includes options on market indices (“index options”), as well as on the stocks of individual corporations (“equity options”) and on ETPs such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”), which are “multi-listed” options and listed on a non-exclusive basis. These options are eligible to trade, as applicable, on Cboe Options, C2, BZX, EDGX, and/or other U.S. national security exchanges. Cboe Options is the Company’s primary options market and offers trading in listed options through a single system that integrates electronic trading and traditional open outcry trading on the Cboe Options trading floor in Chicago. C2 Options, BZX Options, and
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EDGX Options are all-electronic options exchanges, and typically operate with different market models and fee structures than Cboe Options. The Options segment also includes applicable market data fees revenues generated from the consolidated tape plans, the licensing of proprietary options market data, index licensing, routing services, and access and capacity services.
North American Equities. The North American Equities segment includes U.S. equities and ETP transaction services that occur on fully electronic exchanges owned and operated by BZX, BYX, EDGX, and EDGA, equities transactions that occur on the BIDS Trading platform in the U.S. and the Cboe BIDS Canada platform, and Canadian equities and other transaction services that occur on or through Cboe Canada’s order books. The North American Equities segment also includes corporate listing services on Cboe Canada, ETP listings on BZX, the Cboe Global Markets, Inc. common stock listing, and applicable market data fees revenues generated from the consolidated tape plans, the licensing of proprietary equities market data, routing services, and access and capacity services.
Europe and Asia Pacific. The Europe and Asia Pacific segment includes the pan-European derivatives transaction services, ETPs, including exchange traded funds, exchange traded notes, and exchange traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and CEDX. It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities services of Cboe Australia, an operator of a trading venue in Australia. Cboe Europe operates lit and dark books, a periodic auctions book, a closing cross book, and two BIDS order books; a Large-in-Scale (“LIS”) trading negotiation facility and a volume-weighted average price (“VWAP”) trajectory crossing facility. Cboe NL, based in Amsterdam, operates similar business functionality to that offered by Cboe Europe (with the exception of Trajectory Crossing), and provides for trading only in European Economic Area (“EEA”) symbols. Subsequent to December 31, 2025, Cboe initiated the wind down of CEDX, its pan-European derivatives platform that offered futures and options based on Cboe Europe equity indices, FLEX options, and single stock options. Prior to the wind down, CEDX contributed derivatives transaction services and market data revenues to this segment. Cboe Clear Europe offers the clearing of equity and equity-like instruments for Cboe-operated and other regulated trading venues and clearing SFTs. Prior to the CEDX wind down, Cboe Clear Europe also provided clearing services for derivative transactions executed on CEDX. This segment also includes Cboe Europe, Cboe NL, and Cboe Australia revenue generated from the licensing of proprietary market data and from access and capacity services.
Futures. The Futures segment includes transaction services provided by CFE, a fully electronic futures exchange, which includes offerings for trading of VIX futures and other futures products, the licensing of proprietary market data, as well as access and capacity services. As of January 1, 2025, the Futures segment prospectively includes all Digital operating activity, which includes Cboe Digital Exchange, a regulated futures exchange, and Cboe Clear U.S., a regulated clearinghouse, as well as revenue generated from the licensing of proprietary market data and from access and capacity services. On June 9, 2025, Cboe successfully completed the migration of cash-settled Bitcoin and Ether futures contracts from Cboe Digital Exchange to CFE. There are no products currently listed for trading on the Cboe Digital Exchange.
Comparative-period results for the Digital segment have been presented for historical purposes but have not been recast as the historical results of the Digital segment were not material, nor do they materially impact the financial results, trends, or forecasts of the Futures segment. As a result, for the year ended December 31, 2025, operating results included within the Digital operating segment are presented within the Futures reporting segment. See Note 16 (“Segment Reporting”) for more information.
Global FX. The Global FX segment includes institutional FX trading services that occur on the Cboe FX fully electronic trading platform, non-deliverable forward FX transactions (“NDFs”) offered for execution on Cboe SEF, as well as revenue generated from the licensing of proprietary market data and from access and capacity services. The segment also includes transaction services for U.S. government securities executed on the Cboe Fixed Income fully electronic trading platform.
General Factors Affecting Results of Operations
In broad terms, our business performance is impacted by a number of drivers, including macroeconomic events affecting the risk and return of financial assets, investor sentiment, the regulatory environment for capital markets, geopolitical events, tax policies, central bank policies, and changing technology, particularly in the financial services industry. We believe our future revenues and net income will continue to be influenced by a number of domestic and international economic trends, including:
• trading volumes on our proprietary products such as VIX options and futures and SPX options;
• trading volumes in listed equity securities, options, futures, and ETPs in North America, Europe, and Asia Pacific, clearing volumes in listed equity securities, options, futures, and ETPs in Europe and volumes in institutional FX trading;
• the demand for and pricing structure of the U.S. tape plan market data distributed by the Securities Information Processors ("SIPs"), which determines the pool size of the industry market data fees we receive based on our market share;
• consolidation and expansion of our customers and competitors in the industry;
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• the potential introduction of new or competing financial products or services by competitors in the industry, including those enabled by new technologies;
• the demand for information about, or access to, our markets and products, which is dependent on the products we trade, our importance as a liquidity center, quality and integrity of our proprietary indices, and the quality and pricing of our data and access and capacity services;
• implementation of the SEC's reduced equity access fee cap and other potential market structure changes may lead to decreased exchange trading, and reduced transaction fee revenue;
• continuing pressure in transaction fee pricing due to intense competition in the North American, European, and Asia Pacific markets;
• significant fluctuations in foreign currency translation rates or weakened value of currencies;
• ongoing costs and uncertainties related to the historical, current, and future funding of the implementation and operation of the CAT, litigation and regulatory developments related to CAT, and the ability to collect on the promissory notes related to the funding of CAT; and
• regulatory changes and obligations relating to market structure, increased capital or margin requirements, and those which affect certain types of instruments, transactions, products, pricing structures, capital market participants or reporting or compliance requirements.
A number of significant structural, political, monetary, and global conflicts continue to confront the global economy, and instability could continue, resulting in an increased or subdued level of inflation, market volatility, potential recession, supply chain constraints and costs, trading volumes, uncertainty, expenses, and costs due to potential new tariffs or changes to existing tariffs.
Components of Revenues
Cash and Spot Markets
Revenue aggregated into cash and spot markets includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other revenue from the Company’s North American Equities, Europe and Asia Pacific, and Global FX segments.
Data Vantage
Revenue aggregated into Data Vantage includes access and capacity fees, proprietary market data fees, and associated other revenue across the Company’s five segments.
Derivatives Markets
Revenue aggregated into derivatives markets includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other fees from the Company’s Options, Futures, and Europe and Asia Pacific segments.
Components of Cost of Revenues
Liquidity Payments
Liquidity payments are primarily correlated to the trading volumes on our markets. As stated above, we record the liquidity rebates paid to market participants providing liquidity, in the case of Cboe Options, C2, BZX, EDGX, Cboe Europe Equities and Derivatives, Cboe Clear U.S., Cboe Digital Exchange, and CFE, as cost of revenue. BYX offers an inverted pricing model where we rebate liquidity takers for executing against an order resting on our book, which is also recorded as a cost of revenue. EDGA offers a maker-taker fee model, effective November 1, 2024, under which liquidity providers receive a rebate, while liquidity takers pay a fee, all within a pricing model that does not include volume-based tiers.
Routing and Clearing
Various rules require that U.S. options and equities trade executions occur at the National Best Bid and Offer displayed by any exchange. Linkage order routing consists of the cost incurred to provide a service whereby Cboe equities and options exchanges deliver orders to other execution venues when there is a potential for obtaining a better execution price or when instructed to directly route an order to another venue by the order provider. The service affords exchange order flow providers an opportunity to obtain the best available execution price and may also result in cost benefits to those clients. Such an offering improves our competitive position and provides an opportunity to attract orders which would otherwise bypass our exchanges. We utilize third-party brokers or our broker-dealer, Cboe Trading, to facilitate such delivery. Also included within routing and clearing are the Order Management System ("OMS") and Execution Management System (“EMS”) fees incurred for U.S. Equities Off-Exchange order execution, as well as settlement costs incurred for the settlement processes executed by Cboe Clear Europe and Cboe Clear U.S.
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Regulatory Fees Cost of Revenues
Regulatory fees cost of revenues, previously labeled Section 31 fees, include Section 31 fees and other fees imposed by U.S. regulatory agencies. Exchanges under the authority of the SEC (Cboe Options, C2, BZX, BYX, EDGX, and EDGA as well as CFE to the extent that CFE offers trading in security futures products) are assessed fees under Section 31 pursuant to the Exchange Act designed to recover the costs to the U.S. government of supervision and regulation of securities markets and securities professionals. We treat these fees as a pass-through charge to customers executing eligible listed equities and listed equity options trades. Accordingly, we recognize the amount that we are charged under Section 31 as a cost of revenues and the corresponding amount that we charge our customers as regulatory transaction fees revenue. Since the regulatory transaction fees recorded in revenues are equal to the Section 31 fees recorded in cost of revenues, there is no impact on our operating income. Cboe Trading, Cboe Europe, Cboe NL, BIDS, Cboe FX, Cboe Australia, Cboe Clear U.S., Cboe Canada, and (formerly) Cboe Japan are not U.S. national securities exchanges, and, accordingly, are not charged Section 31 fees.
Royalty Fees and Other Cost of Revenues
Royalty fees primarily consist of license fees paid by us for the use of underlying indices in our proprietary products, usually based on contracts traded. The Company has licenses with the owners of the S&P 500 Index, S&P 100 Index and certain other S&P indices, FTSE Russell indices, the DJIA, and certain other index products. This category also includes fees related to the dissemination of market data related to S&P indices and other products through CGIF.
Other cost of revenues primarily consists of interest expense from clearing operations, electronic access permit fees, and other miscellaneous costs associated with other revenue.
Components of Operating Expenses
Compensation and Benefits
Compensation and benefits represent our largest expense category and tend to be driven by our staffing requirements, financial performance, and the general dynamics of the employment market. Stock-based compensation is a non-cash expense related to employee equity awards. Stock-based compensation can vary depending on the quantity and fair value of the award on the grant date and the related service period.
Depreciation and Amortization
Depreciation and amortization expense results from the depreciation of long-lived assets purchased, the amortization of purchased and internally developed software, and the amortization of intangible assets.
Technology Support Services
Technology support services consist primarily of costs related to the maintenance of computer equipment supporting our system architecture, circuits supporting our wide area network, support for production software, operating system license and support fees, fees paid to information vendors for displaying data and off-site system hosting fees.
Professional Fees and Outside Services
Professional fees and outside services consist primarily of consulting services, which include supplemental staff activities primarily related to systems development and maintenance, legal, regulatory and audit, and tax advisory services, as well as compensation paid to non-employee directors, including stock-based compensation and deferred compensation.
Travel and Promotional Expenses
Travel and promotional expenses primarily consist of advertising, costs for marketing related special events, sponsorship of industry conferences, options education seminars, and travel-related expenses.
Facilities Costs
Facilities costs primarily consist of expenses related to owned and leased properties including rent, maintenance, utilities, real estate taxes, and telecommunications costs.
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Acquisition-Related Costs
Acquisition-related costs relate to acquisitions and other strategic opportunities. The acquisition-related costs include fees for investment banking advisors, lawyers, accountants, tax advisors, public relations firms, severance and retention costs, capitalized software and facilities, and other external costs directly related to mergers and acquisitions.
Impairment of Assets
Impairment of assets consists of charges to impair indefinite or long-lived assets if the carrying value exceeds the fair value.
Other Expenses
Other expenses represent costs necessary to support our operations that are not already included in the above categories, including, but not limited to, bad debt provisions and changes in contingent consideration.
Non-Operating Income (Expenses)
Income and expenses incurred through activities outside of our core operations are considered non-operating and are classified as interest expense, interest income, earnings (loss) on investments, net, or other income (expenses), net. These activities primarily include interest earned on the investing of excess cash, commitment fees and interest expense related to outstanding debt facilities, income and unrealized gains and losses related to investments held in a trust for the Company’s non-qualified retirement and benefit plans, including non-employee director deferred compensation, unrealized and realized gains or losses or income earned related to the Company’s minority investments, exchange gain and loss, and equity earnings or losses from our investments in other business ventures.
RESULTS OF OPERATIONS
The following are summaries of changes in financial performance and include certain non-GAAP financial measures. Management uses these non-GAAP measures internally in conjunction with GAAP measures to help evaluate our performance and to help make financial and operational decisions. These non-GAAP financial measures assist management in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items management believes do not reflect our underlying operations.
We believe our presentation of these measures provides additional and comparative information to assess trends in our core operations and a means to evaluate period-to-period comparisons. Non-GAAP financial measures are provided as additional information to investors in order to provide them with an alternative method for assessing our financial condition and operating results. We have presented the following non-GAAP measures because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors, and other interested parties in the evaluation of companies. We use adjusted EBITDA as a measure of operating performance for preparation of our forecasts and evaluating our leverage ratio for the debt to earnings covenant included in our outstanding credit facility. In addition, we have presented adjusted earnings because we consider it an important supplemental measure of our performance and we use it as the basis for monitoring our own core operating financial performance relative to other operators of exchanges. We also believe that it is frequently used by analysts, investors, and other interested parties in the evaluation of companies. We believe that investors may find this non-GAAP measure useful in evaluating our performance compared to that of peer companies in our industry.
These non-GAAP financial measures are not presented in accordance with, or as an alternative to, GAAP financial measures and may be calculated differently from non-GAAP measures used by other companies, which reduces their usefulness as comparative measures. We encourage analysts, investors and other interested parties to use these non-GAAP measures as supplemental information to the GAAP financial measures included herein, including our consolidated financial statements, to enhance their analysis and understanding of our performance and in making comparisons. We note that non-GAAP measures have limitations as analytical tools and they should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Please see the footnotes below for definitions, additional information, and reconciliations from the closest GAAP measure.
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Comparison of Years Ended December 31, 2025 and 2024
Overview
The following summarizes changes in financial performance for the year ended December 31, 2025, compared to the year ended December 31, 2024:
(1) These are Non-GAAP figures for which reconciliations are provided below (in millions, except percentages, earnings per share, and as noted below).
Year Ended
December 31,
Increase/
(Decrease)
Percent
Change
Total revenues
Total cost of revenues
Revenues less cost of revenues
Total operating expenses
Operating income
Operating margin
Income before income tax provision
Income tax provision
Net income
Net income allocated to participating securities
Net income allocated to common stockholders
Net income allocated to common stockholders margin
Basic earnings per share
Diluted earnings per share
Adjusted operating income (1)
Adjusted operating margin (1)
Operating EBITDA (1)
Operating EBITDA margin (1)
Adjusted operating EBITDA (1)
Adjusted operating EBITDA margin (1)
EBITDA (2)
EBITDA margin (2)
Adjusted EBITDA (2)
Adjusted EBITDA margin (2)
Adjusted earnings (2)
Diluted weighted average shares outstanding
Adjusted diluted earnings per share (2)
* Not meaningful
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(1) Adjusted operating income is defined as operating income after relevant operating adjustments, which includes revenue, cost of revenues, and operating expense adjustments, as applicable. Adjusted operating margin represents adjusted operating income divided by revenues less cost of revenues. Operating EBITDA is defined as operating income before depreciation and amortization. Operating EBITDA margin represents operating EBITDA divided by revenues less cost of revenues. Adjusted operating EBITDA is calculated by adding back to operating EBITDA relevant operating adjustments, which includes revenue, cost of revenues, and operating expense adjustments, as applicable. Adjusted operating EBITDA margin represents adjusted operating EBITDA divided by revenues less cost of revenues. Relevant adjustments are detailed in the reconciliations that follow.
(2) EBITDA is defined as income before interest, net, income taxes, and depreciation and amortization. EBITDA margin represents EBITDA divided by revenues less cost of revenues. Adjusted EBITDA is calculated by adding back to EBITDA relevant adjustments, which includes revenue, cost of revenues, operating expense, and non-operating adjustments, as applicable. Adjusted EBITDA margin represents adjusted EBITDA divided by revenues less cost of revenues. Adjusted earnings is defined as net income after relevant adjustments, which includes revenue, cost of revenues, operating expense, non-operating adjustments, certain tax adjustments, and net income or loss allocated to participating securities, net of income tax effects of these adjustments, as applicable. Adjusted diluted earnings per share represents adjusted earnings divided by diluted weighted average shares outstanding. Relevant adjustments are detailed in the reconciliations that follow.
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The following is a reconciliation of operating income to adjusted operating income (in millions) for the year ended December 31, 2025 and 2024, respectively:
Year Ended December 31,
Operating income
Acquisition-related costs (a)
Amortization of acquired intangible assets (b)
Business realignment costs (c)
Cboe Digital syndication wind down (d)
Change in contingent consideration (e)
Executive compensation adjustment (g)
Impairment of assets (j)
Adjusted operating income
The following is a reconciliation of operating income to operating EBITDA and adjusted operating EBITDA (in millions) for the year ended December 31, 2025 and 2024, respectively:
Year Ended December 31,
Operating income
Depreciation and amortization
Operating EBITDA
Acquisition-related costs (a)
Business realignment costs (c)
Cboe Digital syndication wind down (d)
Change in contingent consideration (e)
Executive compensation adjustment (g)
Impairment of assets (j)
Adjusted operating EBITDA
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The following is a reconciliation of net income (loss) allocated to common stockholders to EBITDA and adjusted EBITDA (in millions) for the year ended December 31, 2025 and 2024, respectively:
Year Ended December 31,
Options
North American Equities
Europe and Asia Pacific
Futures
Global FX
Digital (1)
Corporate
Total
Net income allocated to common stockholders
Interest (income) expense, net
Income tax provision (benefit)
Depreciation and amortization
EBITDA
Acquisition-related costs (a)
Business realignment costs (c)
Non-operating investment adjustments, net (f)
Executive compensation adjustment (g)
Impairment of assets (j)
Adjusted EBITDA
Year Ended December 31,
Options
North American Equities
Europe and Asia Pacific
Futures
Global FX
Digital (1)
Corporate
Total
Net income (loss) allocated to common stockholders
Interest (income) expense, net
Income tax provision (benefit)
Depreciation and amortization
EBITDA
Acquisition-related costs (a)
Business realignment costs (c)
Cboe Digital syndication wind down (d)
Change in contingent consideration (e)
Non-operating investment adjustments, net (f)
Gain on Cboe Digital non-recourse notes and warrants wind down (h)
Gain on sale of property held for sale (i)
Impairment of assets (j)
Adjusted EBITDA
(1) The Digital segment results are prospectively included in the Futures segment beginning in the first quarter of 2025. Digital results from 2024 have been retained in the former Digital segment for comparative purposes. See Note 16 ("Segment Reporting") for additional information.
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The following is a reconciliation of net income allocated to common stockholders to adjusted earnings (in millions) for the year ended December 31, 2025 and 2024, respectively:
Year Ended December 31,
Net income allocated to common stockholders
Acquisition-related costs (a)
Amortization of acquired intangible assets (b)
Business realignment costs (c)
Cboe Digital syndication wind down (d)
Change in contingent consideration (e)
Non-operating investment adjustments, net (f)
Executive compensation adjustment (g)
Gain on Cboe Digital non-recourse notes and warrants wind down (h)
Gain on sale of property held for sale (i)
Impairment of assets (j)
Tax effect of adjustments
Deferred tax re-measurements (k)
Release of tax reserves (k)
Valuation allowances (l)
Net income allocated to participating securities
Adjusted earnings
(a) This amount includes acquisition-related costs primarily from the company’s Cboe Digital, Cboe Canada, and Cboe Asia Pacific acquisitions, which are included in acquisition-related costs on the consolidated statements of income
(b) This amount represents the amortization of acquired intangible assets related to the company’s acquisitions, which is included in depreciation and amortization on the consolidated statements of income.
(c) This amount represents certain business realignment costs related to announced business realignment initiatives. For the year ended December 31, 2025, the costs included $5.1 million in compensation and benefits, $0.5 million in professional fees and outside services, and $1.4 million in other expenses, respectively, on the consolidated statements of income. For the year ended December 31, 2024, the costs included $2.1 million in compensation and benefits on the consolidated statements of income.
(d) This amount represents the contra-revenue that was reversed as a result of the Cboe Digital syndication wind down, which is included in transaction and clearing fees on the consolidated statements of income.
(e) This amount represents the gains and losses related to contingent consideration liabilities achieved related to the acquisitions of Cboe Canada and Cboe Asia Pacific, which is included in other expenses on the consolidated statements of income.
(f) This amount represents the net gains associated with the partial sale of PYTH token intangible assets and from the company's various minority investments, as well as the gain associated with the completion of the investment transaction within the company's investment in the 7Ridge Fund (which owned Trading Technologies International Inc.), which included $96.8 million in earnings on investments, net on the consolidated statements of income, for the year ended December 31, 2025, and the net impairments related to the company's minority investments, which included $31.6 million in other income (expense), net on the consolidated statements of income, for the year ended December 31, 2024, and $0.2 million in earnings on investments, net on the consolidated statements of income for the year ended December 31, 2024.
(g) This amount represents the CEO sign-on long-term equity awards with a grant date value of $6.0 million (comprised of a mixture of time and performance-based awards) and subject to a 3-year cliff vesting requirement associated with the hiring of Craig Donohue as Chief Executive Officer, which is included in compensation and benefits on the consolidated statements of income. This amount does not include the CEO's annual long-term equity incentive awards that were prorated for 2025.
(h) This amount represents the revaluation and the gain associated with the wind down of the Cboe Digital non-recourse notes and warrants, which is included in other income (expense), net on the consolidated statements of income.
(i) This amount represents the net gain on the sale of the company’s former headquarters, which is included in other income (expense), net on the consolidated statements of income.
(j) This amount represents the impairment of assets related to Cboe Canada, CEDX, and Cboe Japan in 2025, as well as the impairment of assets related to the Cboe Digital wind down in 2024, which are included in impairment of assets on the consolidated statements of income.
(k) These amounts represent the tax impact related to changes in state and local filing positions for the year ended December 31, 2025 and the tax reserves related to Section 199 matters for the year ended December 31, 2024.
(l) This amount represents the valuation allowances related to the impairments of the company's minority investments in Globacap Technology Limited and StratiFi Technologies Inc.
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The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2025 compared to the year ended December 31, 2024:
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The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2025 compared to the year ended December 31, 2024 (continued from previous page):
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The following table includes operational and financial metrics for our Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX segments. The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2025 compared to the year ended December 31, 2024:
Year Ended December 31,
Increase/
(Decrease)
Percent
Change
(in millions, except percentages, trading days, and as noted below)
Options:
Average daily volume (ADV) (in millions of contracts):
Market ADV
Total touched contracts (1)
Multi-listed contract ADV
Index contract ADV
Trading days
Total Options revenue per contract (RPC) (2)
Multi-listed options RPC (2)
Index options RPC (2)
Total Options market share
Multi-listed options market share
North American Equities:
U.S. Equities:
U.S. Equities - Exchange:
ADV:
Total matched shares (in billions) (5)
Market ADV (in billions)
Market share
U.S. Equities - Exchange (net capture per one hundred touched shares) (3)
U.S. ETPs: launches (number of launches)
U.S. ETPs: listings (number of listings)
U.S. Equities - Off-Exchange:
ADV (touched shares, in millions) (1)
U.S. Equities - Off-Exchange (net capture per one hundred touched shares) (4)
Trading days
Canadian Equities:
ADV (matched shares, in millions) (5)
Trading days
Net capture (per 10,000 touched shares, in Canadian dollars) (6)
Europe and Asia Pacific:
European Equities:
ADNV:
Matched ADNV (Euros - in billions) (7)
Market ADNV (Euros - in billions)
Trading days
Market share
Net capture (per matched notional value (bps), in Euros) (8)
Cboe Clear Europe:
Trades cleared, in millions (9)
Fee per trade cleared (10)
European Equities market share cleared (11)
Net settlement volume, in millions (12)
Net fee per settlement (13)
Australian Equities:
ADNV (Australian dollars - in billions)
Trading days
Market share - Continuous
Net capture (per matched notional value (bps), in Australian dollars) (14)
Futures:
ADV (in thousands)
Trading days
RPC
Global FX:
ADNV ($ - in billions)
Trading days
Net capture (per one million dollars traded) (15)
Average British pound/U.S. dollar exchange rate
Average Canadian dollar/U.S. dollar exchange rate
Average Euro/U.S. dollar exchange rate
Average Euro/British pound exchange rate
Average Australian dollar/U.S. dollar exchange rate
* Not meaningful
Note, the percent change listed represents the change in the unrounded metrics figures.
Note, in the third quarter of 2025, the Company replaced U.S. Equities - Exchange total touched shares with total matched shares for each period presented, aligning the metric with externally reported volume summaries. The impact of this change is immaterial.
Note, the former Digital segment is not included as results were not material for the year ended December 31, 2024. In the second quarter of 2025, Digital futures products were transitioned to Cboe Futures Exchange. Futures metrics prior to the second quarter of 2025 exclude Digital futures products.
Note, as of January 2025, European equities market share cleared excludes market volume not cleared within the Cboe Clear Europe pan-European equities market space. Prior periods have been recast in accordance with this methodology.
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(1) Touched volume represents the total number of shares of equity securities and ETFs internally matched on our exchanges or routed to and executed on an external market center.
(2) Average revenue per contract, for options and futures, represents total net transaction fees recognized for the period divided by total contracts traded during the period.
(3) Net capture per one hundred touched shares refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX, and EDGA and the number of trading days.
(4) Net capture per one hundred touched shares refers to transaction fees less order and execution management system (OMS/EMS) fees and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period.
(5) Matched volume represents the total number of shares of equity securities and ETFs activity executed on our exchanges.
(6) Net capture per 10,000 touched shares refers to transaction fees divided by the product of one-ten thousandth ADV of shares of Cboe Canada and the number of trading days.
(7) Matched ADNV represents the average daily notional value of shares or contracts executed on our exchanges.
(8) Net capture per matched notional value refers to transaction fees less liquidity payments in Euros divided by the product of ADNV in Euros of shares matched on Cboe Europe Equities and the number of trading days.
(9) Trades cleared refers to the total number of non-interoperable trades cleared.
(10) Fee per trade cleared refers to clearing fees divided by the number of non-interoperable trades cleared.
(11) European Equities market share cleared represents Cboe Clear Europe’s client volume cleared divided by the total volume of the publicly reported European venues.
(12) Net settlement volume refers to the total number of settlements executed after netting.
(13) Net fee per settlement refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting.
(14) Net capture per matched notional value refers to transaction fees less liquidity payments in Australian dollars divided by the product of ADNV in Australian dollars of shares matched on Cboe Australia and the number of Australian Equities trading days.
(15) Net capture per one million dollars traded refers to net transaction fees less liquidity payments, if any, divided by the Spot and SEF products of one-thousandth of ADNV traded on the Cboe FX Markets and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction.
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Revenues
Total revenues for the year ended December 31, 2025 increased $619.7 million, or 15%, compared to the year ended December 31, 2024 primarily due to increases across all revenue captions, driven by an increase in transaction and clearing fees as a result of increased volumes traded on the Cboe options, Cboe U.S. equities, and Cboe European equities exchanges, partially offset by a decrease in regulatory fees due to a decrease in the Section 31 fee rate following a rate change in May 2025.
The following summarizes changes in revenues for the year ended December 31, 2025 compared to the year ended December 31, 2024 (in millions, except percentages):
Year Ended
December 31,
Increase/
(Decrease)
Percent
Change
Cash and spot markets
Data Vantage
Derivatives markets
Total revenues
Cash and Spot Markets
Cash and spot markets revenue increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in transaction and clearing fees, partially offset by a decrease in regulatory fees. Transaction and clearing fees increased primarily due to a 26% increase in total matched shares on Cboe U.S. equity exchanges and a 31% increase in Cboe European equities exchanges matched ADNV. Regulatory fees decreased primarily due to a 49% decrease in the Section 31 fee rate, from an average of $20.08 per million dollars of covered sales for the year ended December 31, 2024 to an average rate of $10.26 per million dollars of covered sales for the year ended December 31, 2025, following a rate change effective May 2025 to $0 per million dollars of covered sales due to the SEC having collected its entire 2025 appropriated amount. Regulatory fees revenue related to Section 31 fees is directly offset by regulatory fees cost of revenues related to Section 31 fees.
Data Vantage
Data Vantage revenue increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased logical and physical port fees in the Options, North American Equities, and Europe and Asia Pacific segments driven by increased customer demand. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, Europe and Asia Pacific, and North American Equities segments driven by increased customer demand.
Derivatives Markets
Derivatives markets revenue increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in transaction and clearing fees, partially offset by a decrease in regulatory fees. Transaction and clearing fees increased primarily due to a 21% increase in index options ADV and a 24% increase in multi-listed options ADV. Regulatory fees decreased primarily due to a 49% decrease in the Section 31 fee rate, from an average of $20.08 per million dollars of covered sales for the year ended December 31, 2024 to an average rate of $10.26 per million dollars of covered sales for the year ended December 31, 2025, following a rate change effective May 2025 to $0 per million dollars of covered sales due to the SEC having collected its entire 2025 appropriated amount. Regulatory fees revenue related to Section 31 fees is directly offset by regulatory fees cost of revenues related to Section 31 fees.
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Cost of Revenues
The following tables reconcile the disaggregated cost of revenues captions presented on the consolidated statements of income to the revenue captions presented on the consolidated statements of income for the year ended December 31, 2025 and 2024, respectively (in millions):
Year Ended December 31,
Cash and Spot Markets
Data Vantage
Derivatives Markets
Total
Liquidity payments
Routing and clearing fees
Regulatory fees cost of revenues
Royalty fees and other cost of revenues
Total cost of revenues
Year Ended December 31,
Cash and Spot Markets
Data Vantage
Derivatives Markets
Total
Liquidity payments
Routing and clearing fees
Regulatory fees cost of revenues
Royalty fees and other cost of revenues
Total cost of revenues
Total cost of revenues increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in liquidity payments as a result of volume increases in U.S. equities and multi-listed options, partially offset by a decrease in regulatory fees cost of revenues as a result of a decrease in the Section 31 fee rate.
The following summarizes the changes in the disaggregated cost of revenues for the year ended December 31, 2025 compared to the year ended December 31, 2024 (in millions, except percentages):
Year Ended
December 31,
Increase/
(Decrease)
Percent
Change
Liquidity payments
Routing and clearing
Regulatory fees cost of revenues
Royalty fees and other cost of revenues
Total cost of revenues
Liquidity Payments
Liquidity payments increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in liquidity payments on the Cboe U.S. equity exchanges as a result of a 26% increase in total matched shares, coupled with an increase in liquidity payments on the Cboe options exchanges as a result of a 24% increase in multi-listed options ADV.
Routing and Clearing
Routing and clearing fees increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in routed trades on the Cboe U.S. equity exchanges and Cboe Clear Europe settlement fees.
Regulatory Fees Cost of Revenues
Regulatory fees cost of revenues decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a 49% decrease in the Section 31 fee rate, from an average rate of $20.08 per million dollars of covered sales for the year ended December 31, 2024 to an average rate of $10.26 per million dollars of covered sales for the year ended December 31, 2025, following a rate change effective May 2025 to $0 per million dollars of covered
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sales due to the SEC having collected its entire 2025 appropriated amount. Regulatory fees revenue related to Section 31 fees is directly offset by regulatory fees cost of revenues related to Section 31 fees.
Royalty Fees and Other Cost of Revenues
Royalty fees and other cost of revenues increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in trading volumes of licensed products in the Options segment, partially offset by a decrease in operating interest expense attributable to Cboe Clear Europe as a result of the changing interest rate environment resulting in a decrease in interest paid to customers.
Revenues Less Cost of Revenues
Revenues less cost of revenues increased $356.7 million, or 17%, for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in derivatives markets revenues less cost of revenues, driven by an increase in volumes traded on the Cboe options exchanges, an increase in cash and spot markets revenues less cost of revenues driven by an increase in volumes traded on the Cboe European equities exchanges, and an increase in Data Vantage revenues less cost of revenues driven by an increase in access and capacity fees and proprietary market data across segments.
The following summarizes the components of revenues less cost of revenues for the year ended December 31, 2025, presented as a percentage of revenues less cost of revenues and compared to the year ended December 31, 2024 (in millions, except percentages):
Percentage of
Revenues Less
Cost of Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Cash and spot markets
Data Vantage
Derivatives markets
Total revenues less cost of revenues
Cash and Spot Markets
Cash and spot markets revenues less cost of revenues increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increases in transaction and clearing fees less liquidity payments and routing and clearing costs ("net transaction and clearing fees") in the Europe and Asia Pacific and Global FX segments. Net transaction and clearing fees increased primarily due to a 31% increase in Cboe European equities matched ADNV, a 13% increase in Global FX ADNV, and a 22% increase in Cboe Clear Europe net settlement volumes.
Data Vantage
Data Vantage revenues less cost of revenues increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increases in logical and physical port fees in the Options, North American Equities, and Europe and Asia Pacific segments driven by increased customer demand. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, Europe and Asia Pacific, and North American Equities segments driven by increased customer demand.
Derivatives Markets
Derivatives markets revenues less cost of revenues increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in net transaction and clearing fees, driven by a 21% increase in index options ADV and a 24% increase in multi-listed options ADV, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products in the Options segment.
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Operating Expenses
Total operating expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 decreased $12.0 million, or 1%, primarily due to decreases in impairment of assets and depreciation and amortization, partially offset by an increase in compensation and benefits.
The following summarizes changes in operating expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 (in millions, except percentages):
Year Ended
December 31,
Increase/
(Decrease)
Percent
Change
Compensation and benefits
Depreciation and amortization
Technology support services
Professional fees and outside services
Travel and promotional expenses
Facilities costs
Acquisition-related costs
Impairment of assets
Other expenses
Total operating expenses
Compensation and Benefits
Compensation and benefits increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a $21.8 million increase in accrued bonuses as a result of strong Company performance, a $10.1 million increase in salaries and wages primarily due to merit increases, a $4.6 million increase in equity compensation related to executive transitions, and a $4.1 million increase in payroll benefits, partially offset by an $8.3 million increase in capitalized wages as a result of an increase in internally developed software.
Depreciation and Amortization
Depreciation and amortization decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to declines in amortization under the discounted cash flow method for the intangibles acquired in the Merger and monthly amortization for developed and existing technology ending or being fully impaired since the third quarter of 2024.
Technology Support Services
Technology support services costs increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increases in cloud services, secondary data center hosting expenses, market data technology support services, and hardware maintenance, partially offset by decreases in purchased hardware.
Professional Fees and Outside Services
Professional and outside services fees decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in consulting fees.
Travel and Promotional Expenses
Travel and promotional expenses decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in marketing and advertising expenses driven by decreases in the Company’s advertising campaigns and sponsorships.
Facilities Costs
Facilities costs increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in repairs and maintenance related to our leased properties and an increase in office rent.
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Acquisition-Related Costs
Acquisition-related costs decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in retention-related compensation costs associated with prior acquisitions and professional fees.
Impairment of Assets
Impairment of assets decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to the $81.0 million impairment of assets recognized in the former Digital segment during the year ended December 31, 2024. This was partially offset by the impairment of Cboe Japan's assets of $23.4 million as a result of the wind down of the Company's Japanese equities business, $17.7 million in cumulative impairment charges of intangible assets related to Cboe Canada, and a $5.6 million impairment charge of internally developed software and prepaid expenses on Cboe Clear Europe related to the CEDX wind down during the year ended December 31, 2025.
Other Expenses
Other expenses decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in bad debt expense and change in contingent consideration related to prior acquisitions recorded in 2024, which did not recur in 2025.
Operating Income
As a result of the items above, operating income for the year ended December 31, 2025 was $1,467.1 million, compared to operating income of $1,098.4 million for the year ended December 31, 2024, an increase of $368.7 million.
Interest Expense
Interest expense increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in Cboe Clear Europe commitment fees on the Cboe Clear Europe Credit Facility.
Interest Income
Interest income increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to income from U.S. Treasury bills as a result of additional investment of cash and cash equivalents coupled with increases in interest on higher average daily cash and cash equivalents balances.
Earnings on Investments, Net
Earnings on investments, net increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to $90.8 million in net realized gains on the Company's equity method investment in the 7Ridge Fund (which owned Trading Technologies) recorded in 2025 as a result of Trading Technologies' sale to a third party in November 2025.
Other Income (Expense), Net
Other income (expense), net increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a $16.0 million impairment recorded on the Company's minority investment in Globacap Technology Limited recorded in 2024, coupled with a $10.5 million impairment charge on the Company's minority investment in Eris Innovations Holdings, LLC recorded in 2024, which did not recur in 2025.
Income Before Income Tax Provision
As a result of the above, income before income tax provision for the year ended December 31, 2025 was $1,566.6 million compared to income before income tax provision of $1,083.8 million for the year ended December 31, 2024, an increase of $482.8 million.
Income Tax Provision
For the year ended December 31, 2025, the income tax provision was $466.6 million compared to $318.9 million for the year ended December 31, 2024, an increase of $147.7 million, primarily due to an increase in income before income tax provision. The effective tax rate for the year ended December 31, 2025 was 29.8%, compared to a rate of 29.4% for the year ended December 31, 2024. The higher effective tax rate in the year ended December 31, 2025 compared to the year ended
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December 31, 2024 is primarily due to remeasuring deferred tax assets and liabilities due to changes in state and local filing positions.
Net Income
As a result of the items above, net income for the year ended December 31, 2025 was $1,100.0 million, or 45% of revenues less cost of revenues, compared to $764.9 million, or 37%, of revenues less cost of revenues, for the year ended December 31, 2024, an increase of $335.1 million.
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Segment Operating Results
The Company previously operated six reportable business segments as of December 31, 2024. As of January 1, 2025, we report results from our five segments: Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX. Segment performance is primarily based on operating income. We have aggregated all corporate costs, as well as other business ventures, within Corporate Items and Eliminations as those activities should not be used to evaluate a segment’s operating performance. All operating expenses that relate to activities of a specific segment have been allocated to that segment. Operating expenses increased or decreased in certain segments for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to changes in the allocation of shared-service expenses.
The following summarizes our total revenues by segment (in millions, except percentages):
Note, the chart excludes Digital revenues of $(0.1) million for the year ended December 31, 2024.
Percentage of
Total
Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Options
North American Equities
Europe and Asia Pacific
Futures
Global FX
Digital (1)
Total revenues
(1) The Digital segment results are prospectively included in the Futures segment beginning in the first quarter of 2025. Digital results from 2024 have been retained in the former Digital segment for comparative purposes. See Note 16 (“Segment Reporting”) for additional information.
* Not meaningful
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The following summarizes our revenues less cost of revenues by segment (in millions, except percentages):
Note, the chart excludes Digital revenues less cost of revenues of $(2.0) million for the year ended December 31, 2024.
Percentage of
Total Revenues
less Cost of Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Options
North American Equities
Europe and Asia Pacific
Futures
Global FX
Digital (1)
Total revenues less cost of revenues
(1) The Digital segment results are prospectively included in the Futures segment beginning in the first quarter of 2025. Digital results from 2024 have been retained in the former Digital segment for comparative purposes. See Note 16 (“Segment Reporting”) for additional information.
* Not meaningful
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Options
The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA, and EBITDA margin for our Options segment (in millions, except percentages):
Percentage
of Total
Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Revenues less cost of revenues
Operating expenses
Operating income
Operating margin
EBITDA (1)
EBITDA margin (2)
* Not meaningful
(1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
Revenues less cost of revenues increased $271.8 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in net transaction and clearing fees, driven by a 21% increase in index options ADV, and a 24% increase in multi-listed options ADV, partially offset by an increase in royalty fees due to an increase in the trading volumes of licensed products. For the year ended December 31, 2025, operating income for the Options segment increased $234.9 million compared to the year ended December 31, 2024 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses. Operating expenses increased $36.9 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increases in compensation and benefits and technology support services.
North American Equities
The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA, and EBITDA margin for our North American Equities segment (in millions, except percentages):
Percentage
of Total
Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Revenues less cost of revenues
Operating expenses
Operating income
Operating margin
EBITDA (1)
EBITDA margin (2)
* Not meaningful
(1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
Revenues less cost of revenues increased $23.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in access and capacity fees driven by an increase in logical and physical port fees revenue and an increase in market data revenue as a result of an increase in tape plan revenue and proprietary market data revenue. For the year ended December 31, 2025, operating income for the North American Equities segment increased $19.5 million compared to the year ended December 31, 2024 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses. Operating expenses increased $3.9 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in impairment of intangible assets related to $17.7 million in cumulative impairment charges related to Cboe Canada, partially offset by a decrease in depreciation and amortization.
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Europe and Asia Pacific
The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA, and EBITDA margin for our Europe and Asia Pacific segment (in millions, except percentages):
Percentage
of Total
Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Revenues less cost of revenues
Operating expenses
Operating income
Operating margin
EBITDA (1)
EBITDA margin (2)
* Not meaningful
(1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
Revenues less cost of revenues increased $53.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in net transaction and clearing fees, driven by a 31% increase in Cboe European Equities matched ADNV and a 22% increase in Cboe Clear Europe net settlement volumes, coupled with a decrease in interest expense attributable to Cboe Clear Europe, driven primarily by a decrease in interest rates. For the year ended December 31, 2025, operating income for the Europe and Asia Pacific segment increased $12.2 million compared to the year ended December 31, 2024 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses. Operating expenses increased $41.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in impairment of assets primarily related to the wind down of the Company's Japanese equities business and compensation and benefits.
Futures
The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA, and EBITDA margin for our Futures segment (in millions, except percentages):
Percentage
of Total
Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Revenues less cost of revenues
Operating expenses
Operating income
Operating margin
EBITDA (1)
EBITDA margin (2)
* Not meaningful
(1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
Revenues less cost of revenues decreased $7.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in net transaction and clearing fees as a result of a 5% decrease in ADV. For the year ended December 31, 2025, operating income for the Futures segment decreased $25.0 million compared to the year ended December 31, 2024 primarily due to an increase in operating expenses, coupled with a decrease in revenues less cost of revenues. Operating expenses increased $17.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increases in compensation and benefits, professional fees and outside services, and technology support services, due, largely, to the Digital results being prospectively included in the Futures segment beginning in the first quarter of 2025.
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Global FX
The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA, and EBITDA margin for our Global FX segment (in millions, except percentages):
Percentage
of Total
Revenues
Year Ended
December 31,
Percent
Change
Year Ended
December 31,
Revenues less cost of revenues
Operating expenses
Operating income
Operating margin
EBITDA (1)
EBITDA margin (2)
* Not meaningful
(1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
Revenues less cost of revenues increased $13.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in net transaction and clearing fees, driven by a 13% increase in ADNV. For the year ended December 31, 2025, operating income for the Global FX segment increased $12.8 million compared to the year ended December 31, 2024 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses. Operating expenses increased $0.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in compensation and benefits, partially offset by a decrease in depreciation and amortization.
Digital
The Digital segment results are prospectively included in the Futures segment beginning in the first quarter of 2025. No table is presented below as there is no comparable financial information. See Note 16 (“Segment Reporting”) for additional information.
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LIQUIDITY AND CAPITAL RESOURCES
Below are charts that reflect elements of our capital allocation:
We expect our cash on hand at December 31, 2025 and other available resources, including cash generated from operations, to be sufficient to continue to meet our cash requirements for the foreseeable future. In the near term, we expect that our cash from operations and availability under the Revolving Credit Facility, and potentially participating in future financing transactions to obtain additional capital will meet our cash needs to fund our operations, capital expenditures, interest payments on debt, any dividends, potential strategic acquisitions, to cover any adjustments arising from tax examinations, and opportunities for common stock repurchases under the previously announced program. See Note 12 ("Debt") and Note 25 ("Subsequent Events") to the consolidated financial statements for further information.
Cboe Clear Europe also has a €1.2 billion committed syndicated multicurrency revolving and swingline credit facility agreement with Cboe Clear Europe as borrower and the Company as guarantor of scheduled interest and fees on borrowings (but not the principal amount of any borrowings) (the “Facility”). The Facility is available to be drawn by Cboe Clear Europe towards (a) financing unsettled amounts in connection with the settlement of transactions in securities and other items processed through Cboe Clear Europe’s clearing system and (b) financing any other liability or liquidity requirement of Cboe Clear Europe incurred in the operation of its clearing system. Borrowings under the Facility are secured by cash, eligible bonds and eligible equity assets deposited by Cboe Clear Europe into secured accounts. As a result, should the Facility be drawn by Cboe Clear Europe it could potentially impact Cboe Clear Europe’s liquidity, and we can give no assurance that this Facility will be sufficient to meet all of such obligations or sufficiently mitigate Cboe Clear Europe’s liquidity risk to meet its payment obligations when due. Additionally, a default of the Facility may allow lenders, under certain circumstances, to accelerate any related drawn amounts and may result in the acceleration of the Company’s other outstanding debt to which a cross-acceleration or cross-default provision applies, which may limit the Company’s liquidity, business and financing activities. The Facility is expected to terminate on June 26, 2026 and we may not be able to enter into a replacement facility on commercially reasonable terms, or at all. Please refer to Note 12 ("Debt") for further information.
Our long-term cash needs will depend on many factors, including an introduction of new products, enhancements of current products, capital needs of our subsidiaries, the geographic mix of our business, and any potential acquisitions. We believe our cash from operations and the availability under our Revolving Credit Facility will meet any long-term needs unless a significant acquisition or acquisitions are identified, in which case we expect that we would be able to borrow the necessary funds and/or issue additional shares of our common stock to complete such acquisition(s).
Cash and cash equivalents includes cash in banks and all non-restricted, highly liquid investments, including certain short-term repurchase agreements, U.S. and UK Treasury securities, and money market funds, with original maturities of three months or less at the time of purchase. Cash and cash equivalents as of December 31, 2025 increased $1,296.2 million from December 31, 2024 primarily due to the results of operations, the proceeds from our equity method and minority investments, the adjustment for depreciation and amortization, and the change in accounts receivable, partially offset by cash dividends on common stock and the change in Section 31 fees payable. See “Cash Flow” below for further discussion.
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Our cash and cash equivalents held outside of the United States in various foreign subsidiaries totaled $424.4 million and $301.3 million as of December 31, 2025 and 2024, respectively. The remaining balance was held in the United States and totaled $1,792.1 million and $619.0 million as of December 31, 2025 and 2024, respectively. The majority of cash held outside the United States is available for repatriation, but under current law, could subject us to additional United States and foreign income taxes, less applicable foreign tax credits.
Our financial investments include deferred compensation plan assets, as well as investments with original or acquired maturities longer than three months, that mature in less than one year from the balance sheet date and are recorded at fair value. As of December 31, 2025, financial investments primarily consisted of U.S. Treasury securities and deferred compensation plan assets.
Cash Flow
The following table summarizes our cash flow data for the years ended December 31, 2025, 2024, and 2023 (in millions):
For the Year Ended
December 31,
Net cash flows provided by operating activities
Net cash flows provided by (used in) investing activities
Net cash flows used in financing activities
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents
Increase in cash, cash equivalents, and restricted cash and cash equivalents
As of December 31,
Reconciliation of cash, cash equivalents, and restricted cash and cash equivalents:
Cash and cash equivalents
Restricted cash and cash equivalents (included in margin deposits, clearing funds, and interoperability funds)
Restricted cash and cash equivalents (included in cash and cash equivalents)
Restricted cash and cash equivalents (included in other current assets)
Customer bank deposits (included in margin deposits, clearing funds, and interoperability funds)
Total
Net Cash Flows Provided by Operating Activities
During the year ended December 31, 2025, net cash flows provided by operating activities were $652.6 million higher than net income. The variance is primarily attributable to the change in margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe and customer bank deposits of $528.5 million, the adjustment for depreciation and amortization of $122.4 million, the change in accounts receivable of $79.4 million, the adjustment for stock-based compensation expense of $50.4 million, the change in income taxes payable of $48.5 million, and the adjustment for impairment of assets of $46.7 million, partially offset by the change in Section 31 fees payable of $181.8 million and the adjustment for equity earnings on investments of $84.2 million.
Net cash flows provided by operating activities were $1,752.6 million and $1,100.6 million for the years ended December 31, 2025 and 2024, respectively. The change in net cash flows provided by operating activities was primarily due to the change in margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe and customer bank deposits, an increase in net income, and the change in accounts receivable. This was partially offset by the change in Section 31 fees payable.
Net cash flows provided by operating activities were $335.7 million higher than net income for the year ended December 31, 2024. The variance is primarily attributable to the adjustment for depreciation and amortization of $133.0 million, the change in Section 31 fees payable of $130.1 million, the adjustment for impairment of intangible assets of $81.0
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million, the change in margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe and customer bank deposits of $76.0 million, and the change in unrecognized tax benefits of $61.2 million, partially offset by changes in accounts receivable and accounts payable and accrued liabilities of $124.3 million and $36.4 million, respectively.
Net cash flows provided by operating activities were $1,100.6 million and $1,075.6 million for the years ended December 31, 2024, and 2023, respectively. The change in net cash flows provided by operating activities was primarily due to the change in Section 31 fees payable, the adjustment for impairment of intangible assets, the change in other assets, the adjustment for impairment of investments, and the change in income taxes receivable. This was partially offset by changes in margin deposits, clearing funds, and interoperability funds, accounts receivable, and the adjustments for depreciation and amortization.
Net Cash Flows Provided by (Used in) Investing Activities
During the year ended December 31, 2025, net cash flows provided by investing activities primarily consisted of the proceeds from our equity method and minority investments of $441.8 million and proceeds from maturities of available-for-sale financial investments of $248.1 million, partially offset by purchases of available-for-sale financial investments of $174.8 million and purchases of property and equipment and leasehold improvements, net of $71.0 million.
Net cash flows provided by (used in) investing activities were $450.2 million and $141.8 million for the years ended December 31, 2025 and 2024, respectively. The variance is primarily due to the change in proceeds from our equity method and minority investments and proceeds from maturities of available-for-sale financial investments, partially offset by the change in purchases of available-for-sale financial investments for the year ended December 31, 2025 compared to the year ended December 31, 2024.
During the year ended December 31, 2024, net cash flows used in investing activities primarily consisted of purchases of available-for-sale financial investments of $115.6 million, purchases of property and equipment and leasehold improvements, net of $60.9 million, and contributions to investments of $40.2 million, partially offset by proceeds from maturities of available-for-sale financial investments of $67.9 million.
During the year ended December 31, 2023, net cash flows used in investing activities primarily consisted of purchases of available-for-sale financial investments of $89.8 million, contributions to investments of $57.1 million, and purchases of property and equipment and leasehold improvements, net of $45.0 million, partially offset by proceeds from maturities of available-for-sale financial investments of $135.7 million.
Net Cash Flows Used in Financing Activities
During the year ended December 31, 2025, net cash flows used in financing activities primarily consisted of cash dividends on common stock of $284.3 million and share repurchases of $66.7 million.
Net cash flows used in financing activities were $371.6 million and $495.0 million for the years ended December 31, 2025 and 2024, respectively. The variance is primarily due to the decrease in share repurchases, partially offset by the change in cash dividends on common stock.
Net cash flows used in financing activities totaled $495.0 million for the year ended December 31, 2024, and primarily consisted of cash dividends on common stock of $249.4 million and share repurchases of $204.8 million.
Net cash flows used in financing activities totaled $656.1 million for the year ended December 31, 2023, and primarily consisted of principal payments of the current portion of long-term debt of $305.0 million, cash dividends on common stock of $223.5 million, and share repurchases of $83.9 million.
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Financial Assets
The following summarizes our financial assets, excluding margin deposits, clearing funds, and interoperability funds as of December 31, 2025, 2024, and 2023 (in millions):
As of December 31,
Cash and cash equivalents
Financial investments
Less deferred compensation plan assets
Less cash collected for Section 31 fees
Adjusted cash (1)
(1) Adjusted cash is a non-GAAP measure and represents cash and cash equivalents plus financial investments, minus deferred compensation plan assets and cash collected for Section 31 fees. We have presented adjusted cash because we consider it an important supplemental measure of our liquidity and believe that it is frequently used by analysts, investors, and other interested parties in the evaluation of companies.
Debt
The following summarizes our debt obligations as of December 31, 2025, 2024, and 2023 (in millions):
As of December 31,
3.650% Senior Notes
1.625% Senior Notes
3.000% Senior Notes
Revolving Credit Agreement
Cboe Clear Europe Credit Facility
Less unamortized discount and debt issuance costs
Total debt
At December 31, 2025, we were in compliance with the covenants of our debt agreements.
In addition to the debt outstanding, as of December 31, 2025, we had an additional $400 million available through our revolving credit facility, with the ability to borrow another $200 million by increasing the commitments under the facility, subject to the agreement of the applicable lenders. Together with adjusted cash, we had approximately $2.6 billion available to fund our operations, capital expenditures, potential acquisitions, debt repayments, and any dividends, net of minimum regulatory capital requirements of $189.5 million , which are subject to potential applicable regulatory restrictions and approvals and potential associated tax costs.
Dividends
The Company’s expectation is to continue to pay dividends. The decision to pay a dividend, however, remains within the discretion of the Company's Board of Directors and may be affected by various factors, including our earnings, financial condition, capital requirements, level of indebtedness, and other considerations our Board of Directors deems relevant. Future debt obligations and statutory provisions, among other things, may limit, or in some cases prohibit, our ability to pay dividends.
Share Repurchase Program
In 2011, the Board of Directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and subsequently approved additional authorizations for a total authorization of $2.3 billion as of December 31, 2025. The program permits the Company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the Company to make any repurchases at any specific time or situation. Shares repurchased are recorded as treasury stock and ultimately retired, or they are available for redistribution.
Under the program, for the year ended December 31, 2025, the Company repurchased 305,317 shares of common stock at an average cost per share of $213.74, totaling $65.3 million. Since inception of the program through December 31, 2025, the Company has repurchased 21,063,700 shares of common stock at an average cost per share of $80.02, totaling $1.7 billion. The Company retired 442,315 and 1,332,430 shares of treasury stock in the years ended December 31, 2025
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and 2024, respectively. As a result of these repurchases, certain direct costs and excise taxes are incurred but do not impact our cost per share or availability. See Note 2 ("Summary of Significant Accounting Policies") for more information.
As of December 31, 2025, the Company had $614.5 million of availability remaining under its existing share repurchase authorizations.
Leases and Obligations
The Company currently leases all of its office space, data centers, and its remote network operations center, with lease terms remaining from 3 months to 116 months as of December 31, 2025.
Total rent expense related to current and former lease obligations for the years ended December 31, 2025, 2024, and 2023 totaled $37.9 million, $37.1 million, and $34.5 million, respectively. In addition to our lease obligations, we have contractual obligations related to certain operating leases, data and telecommunications agreements, and our long-term debt outstanding.
Purchase obligations include our estimate of the minimum outstanding obligations under agreements to purchase goods or services that we believe are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed or minimum and maximum amounts to be paid; and the approximate timing of the transaction. Purchase obligations include certain licensing agreements with various licensors which contain annual minimum fee requirements as well as payments calculated using agreed upon contract rates and reported cleared volumes. Purchase obligations exclude agreements that are cancellable at any time without penalty.
We have excluded from the contractual obligations listed below $1,618.2 million in margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe and Cboe Clear U.S. Clearing members of Cboe Clear Europe are required to make deposits to a clearing fund. The cash deposits made by clearing members are recorded in the consolidated balance sheets as current assets with equal and offsetting current liabilities. See Note 14 ("Clearing Operations") to the consolidated financial statements for additional information on Cboe Clear Europe and Cboe Clear U.S. and the margin deposits, clearing funds, and interoperability funds.
Future minimum payments under these leases and agreements were as follows as of December 31, 2025:
Payments Due by Period
Contractual Obligations
Total
Less than
1 year
More than
1 year
Operating leases
Purchase obligations
Principal payments of debt
Interest payments on debt
Total
Commercial Commitments and Contractual Obligations
As of December 31, 2025, our commercial commitments and contractual obligations included operating leases, data and telecommunications agreements, equipment leases, our long-term debt outstanding, contingent considerations, software development activities and other obligations. See Note 23 ("Commitments, Contingencies, and Guarantees") to the consolidated financial statements for a discussion of commitments and contingencies, Note 12 ("Debt") for a discussion of the outstanding debt, Note 14 ("Clearing Operations") for information on Cboe Clear Europe's and Cboe Clear U.S.’s clearinghouse exposure guarantees, and Note 24 ("Leases") for a discussion of operating leases and equipment leases.
Guarantees
We use Wedbush and Morgan Stanley to clear our routed equities transactions for the Cboe U.S. equity exchanges. Wedbush and Morgan Stanley guarantee the trade until the trade has been submitted to and validated by the National Securities Clearing Corporation ("NSCC"), after which time NSCC provides a guarantee until the trade settles. Thus, Cboe Trading is potentially exposed to credit risk to the counterparty from an equity trade routed to another market center until the trade has been processed and validated by the NSCC on the trade date. The BIDS Trading ATS platform delivers matched trades to BofA Securities, Inc. (“BOA”), which delivers the matched trades to the NSCC. BOA guarantees the trade until one day after the trade date, after which time the NSCC provides a guarantee until the trade settles. In the case of failure to perform on the part of Wedbush or Morgan Stanley on routed transactions for the Cboe U.S. equity exchanges, we provide the guarantee to the counterparty to the trade. In the case of failure to perform on the part of BOA on transactions for the BIDS Trading ATS platform, BIDS has obligations to the counterparties to satisfy the trades.
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OCC acts as a central counterparty on all transactions in listed equity options in our Options segment, and as such, guarantees clearance and settlement of all of our options transactions. We believe that any potential requirement for us to make payments under these guarantees is remote and accordingly, have not recorded any liability in the consolidated financial statements for these guarantees. Similarly, with respect to trades in U.S. listed equity options occurring on Cboe Options, C2, BZX, and EDGX, and to trades in CFE futures products cleared by OCC, we deliver matched trades of our customers to the OCC, which acts as a central counterparty on all transactions occurring on these exchanges and, as such, guarantees clearance and settlement of these matched options and futures trades. With respect to U.S. government securities transactions executed on Cboe Fixed Income, we use ABN and/or Mirae to deliver matched trades to the FICC GSD. FICC GSD acts as a central counterparty on all transactions occurring on Cboe Fixed Income and, as such, guarantees clearance and settlement of all of those matched trades.
With respect to Canadian equities, we deliver matched trades of our customers to The Canadian Depository for Securities, which acts as a central counterparty on all transactions occurring on Cboe Canada and, as such, guarantees clearance and settlement of all of our matched Canadian equities trades. With respect to trades in options and futures occurring on CEDX, we deliver matched trades of our customers to Cboe Clear Europe, which acts as a central counterparty on all transactions occurring on CEDX and, as such, guarantees clearance and settlement of all of those matched options and futures trades. Cboe Clear Europe, with respect to SFT services, utilizes The Bank of New York Mellon Corporation and J.P. Morgan as Tri-Party Collateral Agents for non-cash collateral, central, and correspondent banks for the exchange of cash collateral, while Pirum serves as the transmitter of transactions and post-trade lifecycle events on behalf of our mutual clients. With respect to Australian equities and derivatives, we deliver matched trades of our customers to ASX Clear Pty Ltd and ASX Settlement Pty Ltd. ASX Clear Pty Ltd acts as a central counterparty on all transactions occurring on Cboe Australia and, as such, guarantees clearance and settlement on all of our matched trades in Australia. With respect to Japanese equities, we formerly delivered matched trades of our customers to the Japanese Securities Clearing Corporation, which acted as a central counterparty on all transactions that occurred on Cboe Japan and, as such, guaranteed clearance and settlement on all of our matched trades in Japan.
With respect to trades on CFE in digital asset futures (previously traded on Cboe Digital Exchange), we deliver matched trades of our customers to Cboe Clear U.S., which acts as a central counterparty on these digital asset futures transactions. As the central counterparty, Cboe Clear U.S. guarantees clearance and settlement of all matched digital asset futures trades in digital asset futures previously listed on Cboe Digital Exchange, and now, listed on CFE.
CRITICAL ACCOUNTING ESTIMATES
The preparation of consolidated financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of the amounts of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty. The Company bases its estimates on historical experience, observation of trends in particular areas, information available from outside sources and various other assumptions that are believed to be reasonable under the circumstances. Information from these sources forms the basis for making judgments about the carrying values of assets and liabilities that may not be readily apparent from other sources.
We have identified the estimates below as critical to our business operations and the understanding of our results of operations. The impact of, and any associated risks related to, these estimates on our business operations is discussed throughout "Management's Discussion and Analysis of Financial Condition and Results of Operations." For a detailed discussion on these estimates and other accounting policies, see Note 2 ("Summary of Significant Accounting Policies") to the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Goodwill and Other Intangible Assets
Description
Our acquisitions of Bats, Silexx Financial Systems, LLC (“Silexx”), Livevol, Inc. (“LiveVol”), Hanweck, FT Options, Trade Alert, BIDS Holdings, Cboe Asia Pacific, Cboe Digital, and Cboe Canada resulted in the recording of goodwill and other intangible assets, while our acquisition of Cboe Clear Europe, resulted in a bargain purchase gain and other intangible assets. In accordance with FASB Accounting Standards Codification (“ASC”) 350 – Intangibles – Goodwill and Other, we test the carrying values of goodwill and indefinite-lived intangible assets for impairment at least annually, or more frequently when events or changes in circumstances signal indicators of impairment are present.
Judgments and Uncertainties
The estimated fair values of our reporting units are based on the market approach and the income approach (using discounted estimated future cash flows). The estimated fair values of the indefinite-lived intangibles used the income approach. The discounted estimated future cash flow analysis requires judgments about the discount rate, forecasted revenue growth rate, and operating expenses, that are inherent in these fair value estimates over the estimated remaining
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operating period. Additionally, the analysis contains uncertainty surrounding future events. As such, actual results may differ from these estimates and lead to a revaluation of our goodwill, indefinite-lived, and long-lived intangible assets.
Effect if Actual Results Differ from Assumptions
If updated estimates indicate that the fair value of goodwill or any indefinite-lived intangibles is less than the carrying value of the asset, an impairment charge is expected to be recorded in the consolidated statements of income in the period of the change in estimate, which could result in a material change to the consolidated financial statements. Due to the results of our impairment analyses completed in 2025, in which all reporting units estimated fair value exceeded their carrying value, we do not consider our goodwill, indefinite-lived, or long-lived intangible assets to have a significant risk of impairment, except as noted below.
In the second quarter of 2025, Cboe Japan experienced declines in its market share as a result of increased market competition. The decline in market share was evaluated as a potential indication of impairment and the Company performed an interim impairment test for the long-lived intangible assets recognized in the Europe and Asia Pacific reporting unit. The Company concluded that the carrying value of Cboe Japan’s customer relationships long-lived intangible assets exceeded their estimated fair value, as their projected future cash flows did not support their valuation, and recorded an impairment charge of $17.1 million in the condensed consolidated statements of income for the three and six months ended June 30, 2025. The Company also evaluated the indefinite-lived intangible assets and goodwill of the Europe and Asia Pacific reporting unit and, based on the results of the assessments, determined there was no additional impairment required for the three and six months ended June 30, 2025 as the fair values exceeded the carrying values, respectively.
On July 23, 2025, the Company announced its decision to wind down Cboe’s Japanese equities business, including the operations of its Cboe Japan proprietary trading system and Cboe BIDS Japan block trading platform. The Company suspended operations for these businesses on August 29, 2025 and expects to formally close the businesses, subject to consultation with regulators. As a result, the Company recorded an additional impairment charge of $1.8 million related to intangible assets in the Europe and Asia Pacific reporting unit for the year ended December 31, 2025.
In the fourth quarter of 2025, the Company recorded a $17.7 million impairment charge related to Cboe Canada's intangible assets in the North American Equities reporting unit.
Income Taxes
Description
The Company’s consolidated global income tax provision, deferred tax assets and liabilities, valuation allowances, and liabilities for unrecognized tax benefits are determined through the interpretation of tax laws and assumptions of future events to calculate an expectation of future tax consequences.
Judgments and Uncertainties
On an ongoing basis, the Company evaluates its tax estimates and judgments. This evaluation is based on factors including historical experience, such as the conclusions of examinations by tax authorities, communications with tax authorities, changes in tax laws or rates, new examination activity, and results of any related legal processes. We use judgment in the evaluation of uncertain tax positions and the estimation of unrecognized tax benefits when determining the largest amount greater than 50% likely to be realized upon ultimate settlement with the taxing authority, assessing the likelihood of the benefit being realized upon settlement, and calculating the expected ultimate settlement amount.
Effect if Actual Results Differ from Assumptions
Significant changes in these estimates or judgments may result in an increase or decrease to our tax provision in a future period. Additionally, it is possible that the ultimate settlement may differ from the liabilities for unrecognized tax benefits currently reported if tax authorities ultimately reach a conclusion that differs from the Company’s expectation. We believe assumptions made regarding income taxes to be reasonable and do not believe any change in the judgments made by management would result in a material change to the consolidated financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 3 ("Recent Accounting Pronouncements") to the consolidated financial statements for further discussion of recently adopted and recently issued accounting pronouncements that are applicable to the Company .
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