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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.03pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.14pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.07pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
disruptions+6
divestitures+5
default+2
unable+2
failures+2
Positive rising
adequately+1
succeed+1
enable+1
improve+1
enhancement+1
Risk Factors (Item 1A)
16,862 words
Item 1A. Risk Factors.
The risks and uncertainties described below are those that we believe are material at this time relating to our business. These risks and uncertainties, however, are not the only risks and uncertainties that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also significantly impact us. Any of these risks and uncertainties may materially and adversely affect our business, financial condition or results of operations, liquidity, and cash flows.
Summary of Risk Factors
The following is a summary of the key risks and uncertainties described below that we believe are material to us at this time:
• the loss of our right to exclusively list and trade certain index options and futures products;
• economic, political, and market conditions;
• compliance with legal and regulatory obligations;
• price and new products and services competition and consolidation in our industry;
• decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges;
• legislative or regulatory changes or changes in tax regimes;
• our ability to protect our systems and communication networks from security and ;
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairment+7
impairments+2
declines+2
losses+1
bad+1
Positive rising
effective+9
succeeded+2
gains+1
leadership+1
able+1
MD&A (Item 7)
17,243 words
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.
• our ability to attract and retain skilled management and other personnel;
• increasing competition by foreign and domestic entities;
• our business and operational dependence on and exposure to risk from third parties;
• factors that impact the quality and integrity of our and other applicable indices;
• our ability to manage our global operations, growth, and strategic acquisitions, wind downs, divestitures, or alliances effectively;
• increases in the cost of the products and services we use;
• our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights;
• our ability to minimize the risks, including our credit, liquidity, market, investment, counterparty, and default risks, associated with operating our clearinghouses;
• our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems;
• misconduct by those who use our markets or our products or for whom we clear transactions;
• challenges to our use of open source software code;
• our ability to meet our compliance obligations, including managing our business interests and our regulatory responsibilities;
• the loss of key customers or a significant reduction in trading or clearing volumes by key customers;
• damage to our reputation;
• the ability of our compliance and risk management methods to effectively monitor and manage our risks;
• restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations;
• our ability to maintain an investment grade credit rating;
• impairment of our goodwill, long-lived assets, investments or intangible assets; and
• litigation risks and other liabilities.
Risks Relating to Our Business
Loss of our right to exclusively list and trade certain index options and futures could have a material adverse effect on our financial performance.
We hold exclusive licenses to list securities index options on the S&P 500 Index, the Russell 2000 Index, and other indices granted to us by the owners of such indices, and additionally hold exclusive rights to our proprietary VIX Index methodology that provides the basis for VIX options and futures. In 2025, approximately 68% of our total revenues less cost of revenues were generated by the options and futures segments, the majority of which was generated by products based on exclusively licensed indices (e.g., SPX options) and products based on our proprietary VIX methodology (e.g., VIX options and futures). The bulk of this revenue is attributable to our SPX options and VIX options and futures. As a result, our revenues less cost of revenues are dependent in large part on the exclusive licenses we hold for these indices and our ability to maintain our exclusive proprietary rights in the VIX Index methodology and related products and indices.
There is a risk, with respect to each of our current exclusive licenses, that the owner of the index may not renew the license with us on an exclusive basis or at all. In the first event, we would be subject to multiple listing in the trading of what is now an index product traded by us on an exclusive basis, which could result in a loss of market share and negatively
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impact our profitability. In the second event, we could lose the right to list the index product entirely. The loss or limited use or change in the commercial terms of any of our exclusive index licenses, especially for the S&P 500 Index, for any reason could have a material adverse effect on our business and profitability.
In addition to the risks related to our exclusive licenses, if we are unable to retain exclusive proprietary rights in the VIX Index methodology and related products and indices, competitors could create substantially similar volatility indices and products or list products based on Cboe volatility indices, which could have a material adverse effect on us.
Emerging or changing regulatory regimes around the world may impact international customers’ interest in or ability to trade index-based products listed on our U.S. exchanges, as well as impact our expansion into foreign trading of our index-based products and our ability to license proprietary indices for use outside of the U.S.
Furthermore, our competitors may succeed in developing, offering and providing a market for the trading of financial or investment products, such as new options products on indices or ETFs or certain event prediction market products, that are economically similar to those that we offer and they may become successful and take away volume from our products. It is also possible that a third-party may offer trading in index-based products that are the same as those that are the subject of one of our exclusive licenses, but in a jurisdiction in which the index owner cannot require a license or in a manner otherwise not limited by our exclusive license. In addition, a diminished perceived attractiveness of or change in demand for any of the indices underlying our products and services, especially the S&P 500 Index, for any reason could have a material adverse effect on our business and profitability.
The value of our licenses to exclusively list index options and futures also depends on the continued ability of index owners to require licenses for the trading of options and futures based on their indices. Although we and other index owners have prevailed in legal actions seeking to challenge our rights to exclusively license indices, we may be subject to changes in the law or other actions taken in the future that might impede our ability to exclusively offer trading in certain index options and futures.
General economic conditions and other factors beyond our control could significantly reduce demand for our products and services and harm our business.
The volume of trading and clearing transactions and the demand for our products and services are directly affected by macroeconomic and other conditions in the U.S., Europe and elsewhere in the world that are beyond our control, including:
• economic, political, and geopolitical market conditions;
• broad trends in business and finance;
• concerns over inflation levels and recessions;
• wavering institutional or retail confidence levels;
• government or central bank actions, such as, but not limited to, tariffs, changes in government fiscal and monetary policy, or foreign currency exchange rates;
• other legislative and regulatory changes;
• the availability of short-term and long-term funding and capital;
• the perceived attractiveness of the U.S., European, Canadian, or Australian capital markets;
• the availability or perceived attractiveness of the indices that we offer proprietary products on, such as the S&P 500 index, or alternative investment or trading opportunities;
• changes in the level of trading activity in underlying instruments;
• changes and volatility in the prices of securities;
• changes in the volume of foreign currency transactions;
• changes in supply and demand for currencies;
• movements in currency exchange rates;
• the level and volatility of interest rates;
• changes in the financial strength of market participants;
• consolidation among market participants and market data subscribers;
• decline in the number of public company listings or an increase in delistings, acquisitions, privatizations, or bankruptcies;
• unforeseen market closures, suspensions of open outcry trading, disruptions at other market infrastructure providers or exchanges including upon which we rely for data or connectivity, or other disruptions in trading and clearing; and
• disruptions due to terrorism, war, extreme weather events, pandemics, or other catastrophes.
Any of these factors, individually or collectively, could have a material adverse effect on our business, financial condition, and operating results by causing a substantial decline in the financial services markets and reducing trading and clearing volumes and demand for market data.
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Our business may be adversely affected by price competition.
The securities industry is characterized by intense price competition, especially with respect to transaction fees. We may be required to adjust pricing to respond to actions by new or existing competitors, which could adversely impact our business, financial condition, and operating results. We also compete with respect to the pricing of market data and value-added market data, such as historical market data.
In our options segment, the pricing model for trade execution has changed in response to competitive market conditions, and our competitors have adjusted transaction fees and fee structures accordingly, including by opening new exchanges, which allow them to offer multiple pricing models that can appeal to different segments of market participants. These changes have resulted in significant pricing pressures on us, especially on transaction fees and incentives for multi-listed products. As a result of these pricing pressures, our average rate per multi-listed options contract may decrease. It is likely that this pressure will continue and even intensify as our competitors continue to seek to increase their share of trading by further reducing their transaction fees or by offering other financial incentives to order providers and liquidity providers to induce them to direct orders to their markets.
In addition, one or more competitors may engage in aggressive pricing strategies and significantly decrease or completely eliminate their profit margin for a period of time in order to capture a greater share of trading volume. Some order-providing firms on our exchanges have taken ownership positions in options exchanges that compete with us and such exchanges have given those firms added economic incentives to direct orders to them.
With respect to our proprietary products, we compete with futures exchanges and swap execution facilities that offer similar products and other financial market participants that offer over-the-counter derivatives. We also compete against certain event prediction market or multi-listed options products, such as SPY options, which offer some of the features of our proprietary products, such as SPX options.
To attract market share, we may offer “inverted” pricing specials or non-transaction fee trading from time to time, per various fee schedules across our equities exchanges. These forms of promotions, along with other supplemental liquidity programs, may adversely affect our profitability.
Further, regulatory and legal developments, including the equity market structure proposals and the Volume Based Proposal, if adopted as-is, could also adversely impact our ability to adjust our equities transaction fee schedules to respond to actions by new or existing competitors, our ability to incentivize on-exchange liquidity provision, as well as our ability to offer members volume-based pricing. Additionally, in the U.S., we are generally required to file with the SEC any changes to the fees that we charge and in recent years the SEC has more heavily scrutinized pricing changes. See “Legal Proceedings” for more information.
If we are unable to compete successfully with respect to the pricing of our services and products, our business, financial condition, and operating results may be materially and adversely affected. We could lose a substantial percentage of our share of trading if we are unable to price transactions in a competitive manner. Also, our profits could decline if competitive pressures or regulatory changes force us to reduce fees.
A significant portion of our operating revenues is generated by our transaction and clearing-based businesses. If the amount of trading volume on our markets or clearing volume decreases, or the product mix shifts to lower revenue products, our revenues from transaction and clearing fees will most likely decrease.
In 2025, approximately 74% of our revenues less cost of revenues were generated by our transaction and clearing-based business. which is heavily oriented towards U.S. index and equity options. This business is dependent on our ability to attract and maintain order flow, both in absolute terms and relative to other market centers. If the amount of trading volume on our Exchanges, CFE, BIDS Trading, Cboe Canada Inc., notional value traded on Cboe FX, Cboe SEF, Cboe Europe Equities and Derivatives, and Cboe Australia or clearing volumes at Cboe Clear Europe or Cboe Clear U.S. decrease, we are likely to see a decrease in fees.
Our total trading or clearing volumes could decline if our market participants reduce their trading or clearing activity for any reason, such as:
• heightened capital or margin requirements;
• transaction, sales, or other tax;
• regulatory or legislative actions;
• reduced need to trade due to changes in volatility and/or passive investment trends;
• reduced access to capital required to fund trading activities;
• consolidation among market participants;
• suspensions of open outcry trading; or
• significant market disruptions or system failures.
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Over the past few years, a number of legislative actions have been taken, both domestically and internationally, or actions by other third parties that may cause market participants to be subject to increased capital or margin requirements and additional compliance burdens. These actions, including MiFID II, MiFIR, OCC margin requirements, the equity market structure rules and proposals and potential changes to Rule 611 of Regulation NMS (the Order Protection Rule), may incentivize trading away from our markets or cause market participants to reduce trading activity on or routing to our markets.
In addition, the transaction fees generated are different based on type of product and other factors, including the type of customer and certain volume discounts. If our equities trading volume decreases, including as a result of the Volume Based Proposal's proposed prohibition on volume-based agency tiers in the equities markets, or options trading volume shifts to our lower revenue per contract products, our revenues from transaction fees will most likely decrease. We can offer no assurance that we would be able to reduce our costs to match the amount of any such decrease.
Revenues from our market data fees and access and capacity fees may be reduced due to declines in our market share, trading volumes or regulatory changes.
The occurrence of any event that reduces the amount of market data fees that we receive, whether as a result of fee reductions, fewer members subscribing to the U.S. tape plans or other market data offerings, lack of new products, declines in market share, trading volumes, or notional volumes, or regulatory changes may have a direct negative impact on our business, financial condition, and operating results. For example, if our market share of U.S. listed equities and options or Cboe’s European equities trading volume were to decline, our share of market data fees could also decline. Moreover, market data fees could decline as a result of a reduction in the number of market data users, for example because of consolidation among market data subscribers or due to a decline in professional subscriptions as a result of staff reductions in the financial services industry or otherwise.
Regulatory and legal developments could also impact the fees we receive from market data and access and capacity, or our cost in providing such services. In the U.S., we are generally required to file with the SEC any changes to the fees that we charge for our securities market data products and access and capacity fees. In recent years, certain industry groups have objected to the ability of exchanges to charge for certain market data products. In addition, the SEC and some media have scrutinized market data and market access products and fees. As discussed above, the implementation of MDIR, the equity market structure rules and proposals, or potential changes to Rule 611 of Regulation NMS (the Order Protection Rule) could cause Cboe’s equities exchanges, BZX, BYX, EDGX, and EDGA, to require additional resources to comply with the new rules, and may have a material impact on our business, financial condition, and operating results, including if, for example, there are lower SIP plan revenues or we must reduce the fees or access fee caps we charge. Further, following the SEC’s disapproval of our 2024 proposed rule change to adopt a rule providing that our order and execution management systems (“OEMS") that operate independently from our registered national securities exchanges are not “facilities” of those exchanges, we are seeking exemptive relief for our OEMSs from certain exchange regulations, such as rule filing requirements. Being required to continue to follow exchange regulations could reduce our OEMSs’ competitiveness, could result in a reduction of the value of OEMSs to us, and is likely to increase our compliance costs. See “Legal Proceedings” for more information.
In addition, the SEC approved a Consolidated Data Plan to replace the three equity data plans that govern the dissemination of real-time, consolidated market data for NMS stocks. If implemented as-is, the Consolidated Data Plan will reduce Cboe’s voting share in the Operating Committee for the Securities Information Processors, which in turn, may impact Cboe’s ability to influence votes on market data revenue matters.
We believe Cboe Europe Equities and Derivatives currently offers market data to customers on a non-discriminatory basis at a reasonable cost. As European regulators determine how market data should be disaggregated and what is a reasonable commercial basis for providing market data, it could affect our ability to offer market data products in the same manner that we do today thereby causing an adverse effect on our European market data revenues. While MiFID II and MiFIR aim to encourage a commercial solution to a consolidated tape in Europe, should this fail to materialize, policy makers might be encouraged to implement a mandatory solution that could impact our ability to develop our own commercial offering. As discussed above, the E.C. published provisions for a consolidated tape for the EU, which is expected to be implemented in 2026. As proposed, these provisions may have a material impact on our business, financial condition, and operating results if, for example, we must reduce the fees we charge for market data.
The technology upon which we rely, including that of our service providers, may be susceptible to security vulnerabilities or breaches that could harm our business and our role in the global marketplace puts us at heightened risk relative to other public companies.
The secure and reliable operation of our technology, including our computer systems and communications networks, and those of our service providers, market participants, investments, and other third parties, is a critical element of our operations or our business, financial condition, or operating results. These systems and networks may be subject to various cybersecurity incidents such as improper or inadvertent access to or disclosure of confidential, commercially sensitive, or personally identifiable information, data theft, corruption or destruction, ransomware, supply chain attack, denial of service attack, malware, and other security problems, as well as acts of terrorism, attacks by threat actors including criminal groups,
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political activist groups and nation-state actors, attacks in connection with geopolitical activity, criminal insider activity, employee error, and service provider, market participant or third-party disruptions or security breaches. Additionally, cyber threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence (“AI”) and quantum computing. Our hybrid work environment, usage of mobile, AI and cloud-based technologies, and ongoing divestitures and wind downs may increase our risk for a cybersecurity incident. Moreover, given our position in the global financial services industry and as critical infrastructure, we may be more likely than other companies to be a direct target, or an indirect casualty, of such events. While we, and the third parties with which we interact, have experienced in the past, and we expect to continue to experience, cybersecurity threats and events of varying degrees, including events impacting personally identifiable information, we are not aware of any of these threats or events having a material impact on our business, financial condition, or operating results to date, however we cannot assure you that we, or the third parties with which we interact, will not experience future threats or events that may be material.
We maintain policies, procedures, and controls designed to safeguard against cybersecurity incidents and unauthorized access by protecting the confidentiality, integrity, availability, and reliability of our systems, networks, and information. These policies, procedures, and controls are subject to monitoring, auditing, and evaluation practices, pursuant to our Enterprise Risk Management program, which is supported by a three lines of defense approach, and our other governance practices. Further, we developed and maintain cybersecurity and data privacy training programs for our employees and our third-party consultants who have access to our systems. We also conduct simulations, tabletop exercises, and response readiness tests and engage independent third parties on a routine basis to perform cybersecurity penetration assessments. Collectively, these safeguards and measures or those of our third-party providers, including any cloud-based technologies, may prove inadequate to prevent the attendant risk posed by cybersecurity incidents, subjecting us to contractual restrictions, liability and damages, loss of business, penalties, unfavorable publicity, increased scrutiny by our regulators, and may materially impact our business, financial condition, and operating results. We may be required to expend significant resources in the event of any real or threatenedbreaches in security, including to protect againstthreatenedbreaches, to alleviate harm caused by an actual breach, and to address any reputational harm or litigation or regulatory liability. Despite our cybersecurity measures, security vulnerabilities or breaches may remain undetected for an extended period of time. As a result of our ongoing risk management and related assurance activities, we have identified, addressed, and continue to address potential security vulnerabilities and/or internal control weaknesses. We are not aware of any of these vulnerabilities having a material impact on our business, financial condition, or operating results to date. However, we cannot provide assurance that any future vulnerabilities, internal control weaknesses, or events that may be experienced will not be material. Such harms also could cause us to lose market participants, experience lower trading volume, and negatively impact our competitive advantage and business, financial condition, and operating results.
Additionally, as threats continue to evolve and increase, as we continue to expand ongoing risk management and related assurance activities, and as the domestic and international regulatory environment related to cybersecurity and data protection becomes increasingly rigorous, we may be required to devote significant additional resources to modify and enhance our security controls and to identify and remediate any security vulnerabilities. Those additional resources could have an adverse effect on our business, financial condition, and operating results.
If we fail to attract or retain highly skilled management and other employees our business may be harmed.
Our success largely depends on the skills, experience and continued efforts of management and other key personnel. As a result, to be successful, we must retain and motivate executives and other key employees. However, we have no assurances that these employees will remain with us. The roles and responsibilities of departing executive officers and employees will need to be filled either by existing or new officers and employees, which may require us to devote time and resources to identifying, hiring, and integrating replacements for the departed executives and employees that could otherwise be used to pursue business opportunities, which could have a material adverse effect on our overall business, financial condition, and operating results.
There is substantial competition for qualified and capable personnel which may make it difficult for us to retain and recruit qualified employees in sufficient numbers. We have previously faced and may in the future face increased challenges in retaining and attracting qualified employees, including as we implement a return to office plan and our business review actions. Further, potential negative perceptions of our human capital management related programs, including whether due to perceived over- or under-pursuit of such programs, may result in increased challenges in retaining or attracting qualified employees, as well as potential litigation or other adverse impacts. If we fail to retain our current employees, it would be difficult and costly to identify, recruit, and train replacements needed to continue to conduct and expand our business. In particular, failure to retain and attract qualified technology personnel could result in systems failures. Consequently, our reputation may be harmed, we may incur additional costs and our profitability could decline. There can be no assurance that we will be able to retain and motivate our employees in the same manner as we have historically done.
Additionally, effective succession planning is important to our long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving our management team and key employees, including the recent transitions of our Chief Executive Officer, our Chief Operating Officer, and our other leaders, could hinder our strategic planning and execution.
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Intense competition could materially adversely affect our market share and financial performance.
The market for trade execution services, clearing, and products is intensely competitive in the asset classes and geographies in which we operate. Increased competition may result in a decline in our share of trading activity and a decline in our revenues from transaction and clearing fees and market data fees, thereby materially adversely affecting our operating results. We compete with a number of entities and markets on several different fronts, including the cost, quality, and speed of our trade execution, functionality and ease of use of our trading and clearing platforms, range of our products and services, our technological innovation and adaptation and our reputation. In particular, we have seen increased competition from off-exchange venues, which have increased their share of trading activity. See “Business – Competition” for more information.
Some of our competitors and potential competitors have greater financial, marketing, technological, personnel, and other resources than we do. These factors may enable them to develop similar or more innovative products, to offer lower transaction and clearing fees or better execution to their customers or to execute their business strategies more quickly or efficiently than we can. In addition, our business, financial condition, and operating results may be materially adversely affected if we cannot successfully develop, introduce and/or market new services and products or if we need to adopt costly and customized technology for our services and products.
Emerging technologies, alternative settlement mechanisms, and 24-hour trading may also affect our traditional business models. For example, the adoption of tokenization or other emerging settlement technologies that enable self-clearing may reduce demand for traditional clearing services. New or existing competitors may also develop products or technologies that provide similar economic exposure or functionality to our existing offerings through different mechanisms, which may reduce demand for our products.
Furthermore, new or existing competitors may:
• respond more quickly to competitive pressures;
• develop products that compete with our products or are preferred by our customers;
• offer products and services at prices below ours to gain market share and to promote other businesses;
• develop and expand their technology and service offerings more efficiently;
• provide better, more user-friendly, and more reliable technology;
• develop and incorporate more quickly new technologies, such as AI, machine learning, blockchain, atomic settlement, distributed ledger technology, quantum computing, tokenization, the cloud, and other emerging technologies;
• take greateradvantage of acquisitions, alliances, and other opportunities;
• market, promote, bundle, and sell their products and services more effectively;
• leverage existing relationships with customers and alliance partners more effectively or exploit brand names to market and sell their services; and
• exploit regulatory disparities between traditional, regulated exchanges and alternative markets, including over-the-counter markets, that benefit from a reduced regulatory burden and lower-cost business model.
If our products, markets, services and technology are not competitive or we fail to anticipate or respond adequately to changes in technology, customer preferences and regulatory requirements or we encounter any significant delays in product development efforts, our business, financial condition, and operating results could be materially harmed.
Our business and operations are dependent upon a number of third parties. An interruption, significant increase in fees or cessation or impairment of the services provided by or activities performed by any such third-party could have a material adverse effect on our business, financial condition, and operating results.
Our business and operations are dependent on a number of third parties, including clearing organizations such as OCC, NSCC, the DTCC, the CDS, LCH, ASX Clear Pty Ltd, and SIX x-clear; our wholly-owned subsidiaries, Cboe Clear Europe, and Cboe Clear U.S.; securities information processors such as the CTA, UTP Securities Information Processor and OPRA; regulatory and other service providers such as FINRA and OCC; the hosts of our data and disaster recovery centers; and various vendors of communications and networking products and services. In addition, we also depend on third-party routing and clearing firms that are involved in processing transactions on our behalf. More specifically:
• If OCC, NSCC, DTCC, CDS, LCH, Cboe Clear Europe, Cboe Clear U.S., ASX Clear Pty Ltd, and SIX x-clear were unable to allow or perform clearing services for existing or new products, change the terms of their clearing services, their clearing members were unable or unwilling to clear through them, or OCC's technology migration is not successful, fewer transactions could occur on our markets or transactions could likely not occur on our markets or there may be delays, including until clearing is moved to another clearing agency. In 2025, approximately 69% of our net transaction and clearing fees were generated by options and futures that were cleared through OCC. See other Risk Factors for additional information regarding revenue concentration.
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• OPRA, UTP Securities Information Processor and the CTA consolidate options and equities market information, respectively, such as last sale reports and quotations. If any of them were unable to provide this information for a sustained period of time, we may be unable to offer trading on our options and equities markets.
• We are heavily dependent on technology for our markets, including third-party operation of production and disaster recovery data centers, as well as certain communications and networking products and services. If this technology is unavailable, as a result of a number of potential causes, including technical failure, failure to successfully complete technological migrations, natural disasters, extreme weather events, fraud or security attacks that we cannot predict or prevent, and cannot be replaced in a sufficiently short time period, we may be unable to operate our markets.
• We utilize third-party cloud service providers to maintain secondary offsite backups of our and our customers' data and to distribute real-time data, and we may utilize third-party cloud service providers in the future for additional services. We do not control the operations of third-party cloud service providers or their facilities and may be vulnerable to disruptions in our access to the platform as a result of a number of potential causes, including technical failure, natural disasters, extreme weather events, fraud, or security attacks that we cannot predict or prevent. Additionally, any vulnerability of third-party cloud service providers could expose our or our customers' confidential data, which could result in harm to our business reputation.
• FINRA and OCC provide certain regulatory services and functions for our options, equities and futures exchanges, while we retain regulatory responsibilities for such services. If FINRA or OCC stopped providing services, or provided inadequate services, we may be subject to action by the SEC or CFTC, or may have limitations placed upon our markets.
• We rely on CATLLC, a subsidiary of FINRA, to provide services for the implementation of the CAT. If CATLLC or its third-party service providers stop providing services or provide inadequate services, we and the other SROs may not be able to recover costs related to the implementation of CAT, incur penalties for delays of implementation, incur related litigation and other expenses, or incur regulatory liability including enforcement action by the SEC or limitations placed upon our markets. In addition, if CATLLC is not able to collect fees again from Industry Members as a result of litigation or regulatory developments, the SROs may not be able to collect on the promissory notes related to the funding of the implementation and operation of the CAT and the SROs may continue to incur additional significant costs related to the historical, current, and future funding of the implementation and operation of the CAT. See Note 8 ("Credit Losses"), Note 9 ("Other Assets, Net"), and Note 23 ("Commitments, Contingencies, and Guarantees — Legal Proceedings") for further information.
• Trading in certain of our products is dependent on the operational availability of markets operated by third parties. These intermarket dependencies can necessitate coordinated responses to disruptions across multiple market participants and may impact our ability to maintain orderly markets in dependent products. For example, in November 2025, trading of futures and options on the Chicago Mercantile Exchange was halted by a data-center fault, resulting in disruptions to markets across equities, foreign exchange, bonds, and commodities.
We cannot provide assurance that any of these providers will be able to continue to provide these services in an efficient manner or that they will be able to adequately expand their services to meet our needs. An interruption or malfunction in or the cessation or impairment of an important service by a third-party or disruption of a third-party’s operations could cause us to halt trading in some or all of our products or our services, make us unable to conduct other aspects of our business, cause us to experience the loss of a significant number of market participants, or cause us to experience a significant reduction in trading activity on our options and futures markets, each of which could have a material adverse effect on our business, financial condition, and operating results. In addition, our inability to make alternative arrangements, such as moving clearing to another clearing agency, in a timely manner, or at all, could have a material adverse impact on our business, financial condition, and operating results.
If an index provider from which we have a license or a service provider with respect to proprietary products fails to maintain the quality and integrity of their indices or fails to perform under our agreements with them, if we fail to maintain the quality and integrity of our proprietary indices or indices and other values that we calculate or disseminate for customers, or if customer preferences change, the revenues that are generated from the trading of proprietary products or the calculation and dissemination of index values may suffer.
We are a party to a number of license agreements that permit us to list tradable products related to various indices that are among the most actively traded products on our exchanges. We also enter into agreements pursuant to which we disseminate third-party data or act as an index provider and calculate and disseminate proprietary indices and other values. We believe that demand for our products is based in part on market perception of the quality and integrity of these indices. The quality and integrity of these indices are dependent on the ability of index providers, including us, to properly maintain the indices. Maintenance includes ongoing index calculation and index rebalancing, and depends on data providers for a number of things, including the timely provision of accurate input data. Extended outages or disruptions at these third parties (whether due to technology failures, data center infrastructure issues, such as the cooling system malfunctions that occurred at a third-party exchange in 2025, cyberattacks, or other causes) could impair our ability to calculate indices, provide market data products, or maintain trading operations. We also rely on index providers to enforce intellectual property rights against
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unlicensed uses of the indices and uses of the indices that infringe on our licenses. Some of our agreements concerning our proprietary products obligate the parties to those agreements to provide important services to us. If any of our index providers, including us, are unable to maintain the quality and integrity of indices, or if any of the index providers or service providers, including us, fail to perform their obligations under the agreements, trading in derivative products, and therefore transaction fees we receive, may be materially adversely affected or we may not receive the financial benefits of the agreements that we negotiated.
Differences in the calculations from methodologies described in published materials, incorrect calculations of our indices, errors in the dissemination of data, or the failure to implement any planned remedial changes may result in the loss of perceived quality and integrity of our indices, loss of demand for our products, increased potential for investigations and enforcement proceedings, increased potential for failure to perform our obligations under agreements concerning our products or in our capacity as an index provider, and increased exposure to third-party claims and related litigation expenses, which could have a material adverse effect on our business, financial condition, and operating results.
We may not effectively manage our growth, which could materially harm our business, financial condition, and operating results.
We expect that our business will continue to grow, which may place a significant strain on our management, personnel, systems, and resources. We must continually improve our operational, billing, financial, and regulatory systems and managerial controls and procedures, and may need to continue to expand, train, and manage our workforce. We must also maintain close coordination among our technology, legal, accounting, finance, marketing, sales, regulatory, and compliance functions. If we fail to manage our growth effectively, our business, financial condition, and operating results could be materially harmed. For example, from time to time we discover and remediate billing errors, while we are not aware of any of these errors having a material impact on our business, financial condition, or operating results to date, we cannot assure you that we will not experience future errors or events that may be material or result in additional regulatory scrutiny. Furthermore, failure to successfully expand into new asset classes, such as SFT, U.S. Treasuries, or event prediction markets, or new geographies, or if we fail to effectively manage strategic divestitures or wind downs may materially adversely affect our growth strategy and our future profitability.
Our continued growth will require increased investment by us in technology, facilities, personnel, and financial and management systems and controls. It also will require expansion of our procedures for monitoring and assuring our compliance with applicable regulations, and we will need to integrate, train, and manage a growing employee base. The expansion of our existing businesses, any expansion into new businesses and the resulting growth of our employee base will increase our need for internal audit and monitoring processes, which may be more extensive and broader in scope than those we have historically required. We may not be successful in identifying or implementing all of the processes that are necessary. Further, unless our growth results in an increase in our revenues that is proportionally greater than or equal to the increase in our costs associated with this growth, our business, financial condition, and operating results may be materially adversely affected.
Our global operations are complex and subject us to increased business and economic risks that could adversely affect our financial results.
In addition to our operations in the U.S., we have operations in the UK, continental Europe, Canada, Hong Kong, Australia, Japan, the Philippines, and Singapore. In connection with our expanded global operations, we face certain risks inherent in doing business globally. These risks include:
• fluctuations in currency exchange rates;
• complying with extensive and complex compliance requirements, regulations and oversight by regulators other than our primary functional regulators;
• difficulties in staffing and associated costs in managing multiple international locations;
• general economic, social, and political conditions, including increased political tensions and disagreements, including as a result of tariffs and trade policies, and geopolitical activity;
• protectionist laws and business practices that favor local businesses in some countries;
• reduced protection for intellectual property rights in some countries;
• different technology platforms;
• language and cultural differences;
• potentially adverse tax consequences; and
• natural disasters and extreme weather events that may impact global operations differently.
If we are unable to manage the complexity of our global operations successfully, or if the risks above become substantial for us, our financial performance and operating results could suffer. Further, any measures we may implement to reduce risks of our global operations may not be effective, may increase our expenses, and may require significant management time and effort.
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More specifically, we have exposure to exchange rate movements between the British pound, the Euro, the Canadian dollar, the Hong Kong dollar, the Australian dollar, the Japanese yen, the Philippine peso, and the Singapore dollar against the U.S. dollar. Significant inflation or changes in foreign exchange rates with respect to one or more of these currencies could occur as a result of increased political tensions and disagreements, including in connection with tariffs and trade policies, general economic or political conditions, acts of war or terrorism, changes in governmental monetary or tax policy, or changes in local interest rates. These exchange rate differences would affect the translation of our non-U.S. results of operations and financial condition into U.S. dollars as part of our consolidated financial statements. See Note 16 ("Segment Reporting") for additional information about the Company’s geographic exposure.
Global trade policies, including the assessment of tariffs and other impositions on imported goods, may have a material adverse impact on our business.
Countries have announced new or increased tariffs on imported goods and that additional tariffs or increases in tariffs could be assessed in the future. If any such tariffs were to increase the costs of the products and services we use in our business, in particular the technology, communications, cloud, computer, and networking products and services that we use, and we were unable to mitigate the impacts of any such increased costs, it could have a material adverse impact on our business and our results of operations.
We and our licensors may not be able to protect our respective intellectual property rights.
We rely on patent, trade secret, copyright and trademark laws, the law of the doctrine of misappropriation and contractual provisions to protect our proprietary technology, proprietary products, index methodologies and other proprietary rights. In addition, we rely on the intellectual property rights of our licensors in connection with our listing of exclusively licensed index options and futures products. We and our licensors may not be able to prevent third parties from copying, or otherwise obtaining and using, our intellectual property without authorization, listing our proprietary or exclusively licensed index products without licenses, or otherwise infringing on our rights. We and our licensors may have to rely on litigation to enforce our intellectual property rights, determine the validity and scope of the proprietary rights of others or defendagainstclaims of infringement or invalidity. We and our licensors may not be successful in this regard. Such litigation, whether successful or unsuccessful, could result in substantial costs to us, diversion of our resources or a reduction in our revenues, any of which could materially adversely affect our business.
Our clearinghouse operations expose us to associated risks, including credit, liquidity, market and other risks related to the defaults of clearing members and other counterparties, and risks related to investing of collateral.
We are subject to risks related to operating our European clearinghouse, Cboe Clear Europe, and our U.S. clearinghouse, Cboe Clear U.S. Cboe Clear U.S. facilitates the clearing of financially-settled and continuous Bitcoin and Ether futures listed on CFE and may facilitate the clearing of other product classifications in the future. Cboe Clear Europe clears transactions executed on third-party exchanges and Cboe Clear U.S. may similarly clear transactions executed on third-party exchanges in the future. Operating such clearinghouses subjects us to, among other risks, the risks of failing to meet strict business continuity and financial resources requirements and regulatory oversight, risks of default by clearing members and counterparties, due to bankruptcy, lack of liquidity, operational failure or other reasons, the risks associated with the adequacy of participants’ margin, default and interoperable funds, and risks related to investing of such funds. These risks could subject our business to substantial losses, reputational harm, regulatory consequences, including litigation, fines and enforcement actions, and the inability to operate our business.
To mitigate the credit risks related to defaults of clearing members and other counterparties, including the market risk that we would only be able to close out a defaulting participant’s positions at a loss, there are minimum participation criteria to become a clearing member and clearing members are required to provide collateral to cover the margin requirement and default fund contributions and, in the case of certain clearing members with SFT without margin or default fund obligations, to grant Cboe Clear Europe title to or security over certain assets covering their obligations. Furthermore, Cboe Clear Europe interoperates with two central counterparties and requires its applicable members to make deposits to an interoperability fund, which are pledged to the interoperable central counterparties. No guarantee can be given that the collateral or other assets provided will at all times be sufficient, maintain its value, or provide absolute assurance against our experiencing financial losses from defaults by the members or counterparties on their obligations. In addition, although such collateral is preferably held in European central banks, Cboe Clear Europe also holds collateral in central securities depositories, in particular in the case of other assets for SFT, and commercial banks, which can expose us to risk of default by those institutions, and invests cash collateral in accordance with its investment policy, such as in securities issued by pre-approved sovereign issuers and reverse repurchase agreements with overnight maturities, which expose us to risk of counterparty default which may result in losses and cause its clearing members to lose confidence in our clearinghouse.
Cboe Clear Europe entered into a €1.2 billion committed syndicated multicurrency revolving and swingline credit facility that 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, however we can give no assurance that this facility will be sufficient to meet all such obligations or sufficiently mitigate Cboe Clear Europe’s liquidity risk to meet its payment obligations when due. Substantial amounts of the collateral, and any
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amounts drawn under this facility, may be at risk if a clearing member defaults on its obligations to our clearinghouse and its margin, default and interoperability fund deposits are insufficient to meet its obligations. Additionally, a default of this 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. This facility is expected to terminate on June 26, 2026 and we may not be able to enter into a replacement facility on commercially favorable terms, or at all. Additionally, investment losses in excess of capital set aside by Cboe Clear Europe for counterparty risk are allocated back to clearing members.
Additionally, Cboe Clear U.S. could experience losses in excess of the collateral it holds, which may have an adverse effect on our business, if a clearing member defaults on its obligations to Cboe Clear U.S., and its margin and its guaranty fund deposits are insufficient to meet its obligations.
Although our clearinghouses have rules, policies, and procedures that are reasonably designed to help protect them from the aforementioned risks, such policies and procedures may not succeed in preventinglosses after a member's or counterparty’s default. In addition, although we believe that we have carefully analyzed the process for setting margins and our financial safeguards, it is a complex process and there is no guarantee that our procedures will adequately protect us from the risks related to operating our clearinghouses. For example, we have previously identified and addressed potential procedure enhancementopportunities. We cannot assure you that the mitigating measures, policies, safeguards, and risk management procedures will be sufficient to detect problems or to protect us from a default or that we will not be materially and adversely affected in the event of a significant default.
Computer and communications systems failures and capacity constraints could harm our reputation and our business.
Our business depends on the integrity and performance of our computer and communications systems. If our systems cannot expand to cope with increased demand or otherwise fail to perform, as a result of a number of potential causes, including technical failure, data center infrastructure issues such as cooling system malfunctions or hardware maintenance errors, natural disasters, power demands, extreme weather events, flooding, fraud or security attacks that we cannot predict or prevent, and cannot be replaced in a sufficiently short time period, we could experience unanticipateddisruptions in service, slower response times, and delays in the introduction of new products and services. These consequences could result in trading outages, lower trading and clearing volumes, financial losses, decreased customer service and satisfaction, and regulatory sanctions and could have a material adverse effect on our ability to conduct our business. Although we have a back-up plan with respect to our significant trading and key corporate systems, the back-up systems or disaster recovery plans may prove to be inadequate in the event of a systems failure or cybersecurity breach. Despite having disaster recovery facilities, there can be no guarantees that we will be able to open an efficient, transparent, and liquid marketplace, if we can open at all, nor can we guarantee that clearing organizations will allow clearing services for existing or new products following a systems failure or cybersecurity breach. Moreover, with extended trading hours, we must operate our systems longer and have fewer non-trading hours to address any potential concerns with the systems on which we rely.
Our markets and clearinghouses have experienced occasional systems failures and delays in the past and in the future our systems may fail, in whole or in part, or may operate slowly, causing one or more of the following:
• unanticipateddisruption in trading of our exclusively listed proprietary products or in service to our members and participants;
• failures or delays during peak trading times or times of unusual market volatility;
• slower response times and delays in trade execution, clearing, and processing;
• incomplete or inaccurate accounting, recording, clearing, or processing of trades; and
• distribution of inaccurate or untimely market data to participants who rely on this data in their trading activity.
Any of these events may cause:
• a loss in transaction, clearing, or other fees due to the inability to provide trading in our exclusively listed proprietary products or provide services for a time;
• requests by market participants or others that we reimburse them for financial loss, either within the constraints of the limited liability provisions of our exchanges’ rules or in excess of those amounts;
• trading and clearing volumes to diminish on our markets and clearinghouse due to dissatisfaction with the platforms; and
• one or more of our regulators to investigate or take enforcement action against us.
As a consequence of any of these events, our business, financial condition, and results of operations could suffer materially.
In addition to other measures, we test our systems to confirm whether they will be able to handle anticipated present and future peak trading and clearing activity or times of unusual market volatility. However, we cannot assure you that our
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estimates of future trading or clearing volume will be accurate or that our systems will always be able to accommodate actual trading or clearing volume without failure or degradation of performance.
We anticipate that we will need to continue to make significant investments in hardware, software and telecommunications infrastructure and power supply to accommodate the potential increases in traffic, technology migrations, and system updates. Additionally, disruptions to the supply chain may interfere with the ability of our employees, vendors, technology equipment suppliers, data and disaster recovery centers, and other service providers to provide the requested hardware, software, and telecommunications infrastructure. If we cannot migrate, update, or increase the capacity and capabilities of our systems to accommodate increased trading or clearing activity and to execute our business strategy, our ability to maintain or expand our businesses would be materially adversely affected.
Our use of open source software code may subject our software to general release or require us to re - engineer our software, which could harm our business.
Our technology platform uses open source software code. Companies that incorporate open source software into their products have, from time to time, faced claimschallenging the ownership of open source software. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software. In addition, some open source software licenses require users who distribute open source software as part of their software to publicly disclose all or part of the source code in their software and make any derivative works of the open source code available on unfavorable terms or at no cost. Open source license terms may be ambiguous, and many of the risks associated with usage of open source software cannot be eliminated. We believe that our use of open source software is in compliance with the relevant open source software licenses and does not require disclosure of any of our source code. However, if we were found to have inappropriately used open source software, we may be required to release our proprietary source code, reengineer or discontinue use of our software or take other remedial action, any or all of which could cause disruptions in, or impose significant costs on, our business.
Damage to our reputation could have a material adverse effect on our business, financial condition, and operating results.
We believe one of our competitive strengths is our strong industry reputation. Various issues may give rise to reputational risk, including issues relating to:
• the representation of our business in the media;
• the quality and benefits of using our proprietary products, including the reliability, integrity, and functionality of our transaction-based businesses and index calculations and the accuracy of our market data;
• the ability to execute our business plan, key initiatives or new business ventures, and the ability to keep up with changing customer demands and regulatory initiatives;
• our regulatory compliance and our enforcement of compliance on our customers;
• the accuracy of our customer billing, financial statements, and other financial and statistical information;
• the quality of our corporate governance structure;
• the quality of our disclosure controls and internal controls over financial reporting, including any failures in supervision;
• the integrity and performance of our computer and communications systems;
• the ability to successfully complete technology migrations;
• the failure to successfully expand into new asset classes, such as SFT, or U.S. Treasuries or event prediction markets, or new geographies;
• security breaches, including any unauthorized delivery of proprietary data to third parties;
• management of our outsourcing relationships, including our relationship with FINRA and NFA;
• any misconduct or fraudulent activity by our employees, especially senior management, or other persons formerly or currently associated with us;
• our listings business and our enforcement of our listing rules; and
• any negative publicity surrounding the corporate equities or ETPs that we serve as the listing destination.
Damage to our reputation could cause a reduction in the trading volume of our proprietary products or on our markets or cause us to lose customers. This, in turn, may have a material adverse effect on our business, financial condition, and operating results.
A limited number of customers comprise a material portion of our revenues, and the loss of key customers or a significant reduction in trading or clearing volumes by key customers could adversely affect our operating results.
We generate a substantial portion of our revenues from a limited number of customers, which tend to be market makers, liquidity providers, proprietary traders, and global banks. For example, in 2025, our top ten customers accounted for approximately 57% of our revenues. This revenue was spread across various global regions and business segments and our customers are not subject to agreements that prohibit them from reducing or ceasing their transactions with us with little
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or no warning and without penalty. In addition, from time to time, certain customers may represent a significant portion of the open interest in various of our individual products or business segments, and a substantial decrease in their trading activity could have a negative impact on the liquidity of the particular product or business segment. The loss of, or a significant reduction in trading or clearing volumes by, one or more of our key customers could result in a decrease in our transaction and clearing fees, reduce the revenue we generate from sales of market data and negatively impact the liquidity of certain of our products, which could result in a material impact on our business, financial condition, and operating results.
With respect to options, all contracts traded on our exchanges must be cleared through clearing members of OCC. As of December 31, 2025, there were 113 TPHs that are clearing members of OCC. Three clearing members accounted for approximately 71% of transaction and other fees collected through OCC in 2025. Additionally, these three largest clearing members clear the majority of the market-maker sides of transactions at Cboe Options, C2, BZX, EDGX and at all of the options exchanges. Should one of these clearing members or liquidity providers exit the business or withdraw from our options exchanges, impose additional market-maker financial requirements, or if market-makers were unable to transfer to another clearing member or other liquidity providers were unable to provide additional liquidity, this could create a significant disruption to the options markets, including ours, which could result in lower volumes on our exchanges and thereby have a material impact on our business, financial condition, and operating results.
Financial or other problems experienced by third parties could have an adverse effect on our business.
We are exposed to credit risk from third parties, including customers, clearing agents, and counterparties. For example, we are exposed to credit risk for transaction fees we bill to customers on a monthly basis in arrears. Our customers and other third parties may default on their obligations to us due to a lack of liquidity, operational failure, bankruptcy, or other reasons. For additional credit risks related to our clearinghouse operations, see the Risk Factor “Our clearinghouse operations expose us to associated risks, including credit, liquidity, market and other risks related to the defaults of clearing members and other counterparties and risks related to investing of collateral.”
In addition, with respect to orders Cboe Trading routes to other markets for execution on behalf of our Exchanges, Cboe Trading is exposed to some counterparty credit risk in the case of failure to perform on the part of our routing and clearing firms: Wedbush, Morgan Stanley, Goldman Sachs, Wolverine, and BOA, that are involved in processing equities and options transactions on our behalf, as well as failure on the part of such brokers to pass back any transactional rebates. Wedbush and Morgan Stanley guarantee equity trades until the trade has been submitted to and validated by NSCC, after which time NSCC provides a guarantee until the trade settles (T+1). 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 NSCC on the trade date in the event that Wedbush or Morgan Stanley fails to perform. Additionally, BIDS Trading has counterparty credit risk exposure to BOA related to clearing until the trade has been processed and validated by the NSCC on the trade date. With respect to U.S. listed equity options, we deliver matched trades of our customers to the OCC, which acts as a central counterparty for all transactions occurring on Cboe Options, C2, BZX, and EDGX. OCC also acts as a central counterparty for transactions in CFE products that are cleared by OCC. As such, OCC guarantees clearance and settlement of all of our touched options and all of our matched futures and options on futures trades in CFE products cleared by OCC. With respect to Canadian equities, we deliver reports of matched trades of our customers to CDS, which acts as a central counterparty on all transactions occurring on Cboe Canada Inc. 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, Cboe Clear Europe acts as a central counterparty that, for its clearing members, becomes the buyer to every seller and the seller to every buyer. As a result, Cboe Clear Europe guarantees the timely performance of the settlement obligations of buyers and sellers and takes on the risk of the performance of the transactions that it clears. 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 trades in CFE products cleared by Cboe Clear U.S., we deliver matched trades of our customers to Cboe Clear U.S., which acts as a central counterparty and guarantees clearance and settlement for those transactions.
With respect to routed U.S. equity transactions, Cboe Trading has counterparty credit risk exposure to Wedbush and Morgan Stanley related to clearing until the trade has been processed and validated by the NSCC on the trade date. Cboe Trading uses Wedbush to clear trades routed through affiliates of Bank of America Corporation as well as for trades routed directly to other exchanges and, optionally, dark pools. Morgan Stanley clears trades routed through the Morgan Stanley routing brokers and also clears executions routed to most dark pools.
Our exposure to credit risk may be further impacted by volatile securities markets that may affect the ability of our customers, counterparties, and other third parties to satisfy their obligations to us. Moreover, we may not be successful in managing our credit risk through mitigating measures, policies, safeguards and risk management procedures, reporting and control procedures, or by maintaining credit standards. Any losses arising from such defaults or other credit losses could materially adversely affect our financial condition and operating results.
While neither Cboe FX nor Cboe SEF has direct counterparty risk, Cboe FX or Cboe SEF may suffer a decrease in transaction volume if a bank or prime broker experiences an event that causes other prime brokers to decrease or revoke the credit available to the prime broker experiencing the event. Therefore, Cboe FX and Cboe SEF may have risk that is
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related to the credit of the banks and prime brokers that trade spot FX on the Cboe FX platform, or NDFs on Cboe SEF. In addition, disruptions at third parties may necessitate coordinated responses across multiple market participants and may impact our ability to maintain orderly markets in dependent products.
We may be required to assume ownership of a position in securities in connection with our order routing service, which could subject us to trading losses when our broker-dealer disposes of that position.
We offer a smart-order routing service through our broker-dealer subsidiary, Cboe Trading, which provides its customers with access to other market centers when we route their orders to those market centers for execution. In connection with this service, we may assume ownership of a position in securities. This may occur, for example, when a market center to which we have routed a customer’s order experiences systemic issues and is unable to determine the status of that order. When this happens, we may make a business decision to provide a cancellation notice to our customer, relieving our customer of any liability with respect to the order. We may be informed later, however, that the order was executed at the market center to which we routed it, in which case Cboe Trading would be required to take ownership of that securities position. Our third-party clearing brokers maintain error accounts on behalf of Cboe Trading into which such positions settle, and we require the respective clearing broker to trade out of those positions as expeditiously as possible, which could result in our incurring trading losses.
We selectively explore acquisition opportunities, strategic alliances and divestitures relating to businesses, products, or technologies. We may not be successful in divesting or integrating businesses, products, or technologies. Any such transaction also may not produce the results we anticipate, which could materially adversely affect our business, financial condition, and operating results.
We selectively explore and pursue acquisitions and other opportunities to strengthen our business and grow our Company. We may enter into business combination transactions, make acquisitions, or enter into strategic partnerships, joint ventures or alliances, any of which may be material. The market for acquisition targets and strategic alliances is highly competitive, which could make it more difficult to find appropriate merger or acquisition opportunities. If we are required to raise capital by incurring debt or issuing additional equity for any reason in connection with a strategic acquisition or investment, financing may not be available or the terms of such financing may not be favorable to us and our stockholders, whose interests may be diluted by the issuance of additional stock.
The process of integration, including in new geographies and asset classes with new regulatory regimes, may expose us to a number of unforeseen risks and operating difficulties, including risks relating to information technology migrations, integrations and security, regulatory issues, and other issues, and may divert the attention of management from the ongoing operation of our business and harm our reputation. We may not successfullyachieve the integration objectives, and we may not realize the anticipated cost savings, revenue growth and synergies in full or at all, or it may take longer to realize them than expected, any of which could negatively impact our business, financial condition, and operating results.
Further, the success of acquisitions, integrations, and future operations may also depend in part on our ability to retain key employees following acquisitions or find suitable candidates to replace such key employees who leave. If we are unable to retain such key employees, including management, we could face disruptions in our operations, integrations, loss of customers, loss of key information, expertise or know-how, and unanticipated additional recruitment costs.
In addition to risks associated with acquisitions and integrations, we may also face risks in executing strategic exits, divestitures, or wind downs of businesses. For example, we have announced the wind down of our Japan equities business, initiated sale processes for our Australia and Canada equities businesses and, subsequent to December 31, 2025, announced the wind down of CEDX. These actions may involve transitional disruptions, regulatory complexities, loss of customer relationships, reputational impacts, or challenges in retaining key personnel during the transition. If we are unable to effectively manage these exits or realize the anticipated cost savings and strategic benefits, our business, financial condition, and operating results could be materially adversely affected.
Risks Relating to Legal and Regulatory Matters
We operate in a highly regulated industry and may be subject to censures, fines, and other legal proceedings if we fail to comply with legal and regulatory obligations.
Cboe Options, C2, BZX, BYX, EDGX, and EDGA are registered national securities exchanges and SROs, and, as such, are subject to comprehensive regulation by the SEC. Cboe Fixed Income is a registered broker-dealer also subject to comprehensive regulation by the SEC and a member of FINRA. CFE and Cboe Digital Exchange are each a DCM, Cboe SEF is a SEF, and Cboe Clear U.S. is a DCO, each registered with the CFTC and subject to comprehensive regulation by the CFTC. In addition to its other SRO responsibilities, BZX, as a listing market, also is responsible for evaluating applications submitted by issuers interested in listing their securities on BZX and monitoring each issuer’s compliance with BZX’s continued listing standards. The Exchanges may be subject to additional responsibilities in other international jurisdictions where the Exchanges may be authorized to act as foreign exchanges. Failure to comply with these SRO and other regulatory responsibilities could result in potential sanctions or fines and a negative impact on Cboe’s reputation and/or branding.
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Our European businesses are subject to regulatory oversight in the UK by the FCA and in the Netherlands by the DNB and the AFM, which, through the “passporting” regime, provides authorization to carry on business in other Member States of the EU and the EEA in accordance with the applicable EU legislation and regulation to which our European business is subject. Cboe Canada Inc. is subject to regulatory oversight in Canada by its primary provincial securities authority, the OSC. In addition, Cboe Canada Inc. is a Marketplace Member of, and subject to a regulation services agreement with, CIRO. Cboe Australia is subject to regulatory oversight in Australia by the ASIC. Cboe Japan is subject to regulatory oversight in Japan by the JFSA and the JSDA. BIDS Trading is a registered broker-dealer subject to regulatory oversight in the U.S. by the SEC and FINRA. BIDS Trading operates an ATS that is not registered as a national securities exchange, and there is risk that the BIDS Trading ATS or certain other Cboe entities could be deemed to be a "facility" of our registered national securities exchanges, which could materially affect our ability to operate these businesses under their current regulatory frameworks. If a regulatory authority makes a finding of non-compliance, or if regulatory interpretations change, conditional fines could be imposed, and our licenses could be revoked. Any such fine or revocation of a license could have a material adverse effect on our business, financial condition, and operating results.
In addition to the requirements related to operating our U.S. markets imposed by the SEC and the CFTC, we also have certain responsibilities for regulating the TPHs and members that trade on our Exchanges. While we have entered into agreements under which FINRA, with respect to our options and equities exchanges provides certain regulatory services, and under which OCC, with respect to CFE provides certain financial surveillance and regulatory services, we retain ultimate responsibility for the regulation of our TPHs and members. We have begun to perform internally more of the regulatory services that FINRA used to handle.
Our ability to comply with applicable laws and rules is largely dependent on the establishment and maintenance of appropriate systems and procedures, our ability to attract and retain qualified personnel, the ability of FINRA and OCC to perform under their respective regulatory services agreements, the ability of FINRA and OCC to transition to us any other potential responsibilities under their respective regulatory services agreements, our ability to complete the new additional responsibilities for regulating our TPHs and members and our oversight of the work done by FINRA and OCC. The SEC and CFTC have broad powers to audit, investigate and enforce compliance and to punish noncompliance by, as applicable, SROs, DCOs, DCMs and SEFs pursuant to applicable laws, rules, and regulations.
If a regulatory authority were to find one of our programs of enforcement or compliance to be deficient, our SROs, DCM, or SEF could be the subject of investigations and enforcement proceedings that may result in substantial sanctions, including revocation of registration as a national securities exchange, DCM, or SEF. Any such investigations or proceedings, whether successful or unsuccessful, could result in substantial costs, the diversion of resources, including management time, and potential harm to our reputation, which could have a material adverse effect on our business, financial condition, and operating results. In addition, our SROs, DCM, or SEF may be required to modify or restructure their regulatory functions in response to any changes in the regulatory environment, or they may be required to rely on third parties to perform regulatory and oversight functions, each of which may require us to incur substantial expenses and may harm our reputation if our regulatory services are deemed inadequate.
In addition, SROs are required by federal law to perform a variety of regulatory functions. In light of these responsibilities, some courts have held that SROs are immune to certain private causes of action relating to the performance of these regulatory functions. There is a risk that some courts may not apply this immunity doctrine to all claims. There is also a risk that legislative or regulatory developments may change the application of this immunity doctrine. Limitations on the application of the immunity doctrine could result in an increased exposure to litigation, and increase liability and/or other legal expenses. Further, under the CEA, CFE, Cboe SEF, Cboe Clear U.S., and Cboe Digital Exchange may be subject to litigationalleging that they have acted in bad faith. We also could be exposed to liability to regulators or other governmental authorities even in situations where immunity would bar a civil claim.
Legislative or regulatory changes affecting our markets could have a material adverse effect on our business, financial condition, and operating results.
Changes in regulation by the SEC, CFTC, FCA, DNB, AFM, CIRO, OSC, ASIC, JFSA, JSDA, other domestic and foreign regulators or other government action, including approval by these regulators of rule filings or initiatives by other SROs or entities, including OCC, could materially affect our markets, products and clearinghouse. In recent years, the securities and derivatives industries have been subject to regulatory changes as a result of increasing government and public scrutiny of the securities and derivatives industries. We have also experienced, and we may continue to experience due to changes in administrations in the jurisdictions that we operate and expansion into other asset classes, such as SFT, U.S. Treasuries, or event prediction markets, and geographies, an increase in rulemaking and legislation or changes in regulatory interpretations that could affect our business.
In particular, in December 2022, the SEC released four proposals that could impact equity market structure: (1) Disclosure of Order Execution Information (Rule 605); (2) Regulation NMS Amendments: Tick Size, Access Fees, and Transparency; (3) Regulation Best Execution; and (4) Proposed Rule to Enhance Order Competition. Each of these proposals has been noticed for public comment, and in 2024, Rule 605 and the Tick Size/Access Fee Cap proposals were approved by the SEC and await implementation. Rule 605 and Tick Size/Access Fee Cap rule may result in increased technology and compliance costs to Cboe. The Tick Size/Access Fee Cap rule is also likely to result in increased technology
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and compliance costs to Cboe, as well as potential adverse impact to Cboe’s trading volume and transaction fee revenue. In June 2025, the SEC withdrew the Regulation Best Execution and Order Competition proposals. Additionally, in 2025, the SEC held a roundtable to examine potential amendments to Rule 611 (the Order Protection Rule) under Regulation NMS. While no formal proposal has been released, potential changes to Rule 611 could have serious implications for market structure, order routing practices, and the competitive dynamics among trading venues, which could materially impact our business, financial condition, and operating results. See Note 23 (“Commitments, Contingencies, and Guarantees — Legal Proceedings”) for more information.
Under EU and UK regulations, European and UK banks and other European and UK financial institutions become subject to punitive capital charges if they transact options or futures through a third country central counterparty (“CCP”) that is not recognized in the applicable jurisdiction. OCC is recognized as a third country CCP by the EU and is currently operating under the UK’s temporary recognition regime. Although the UK has not issued any equivalency determination with respect to U.S. CCPs, OCC has submitted its application for permanent recognition in the UK. The current deadline for recognition in the UK is December 31, 2027, and may be extended by His Majesty’s Treasury in the future in increments of 12 months each. As a prerequisite to ultimately achieving recognition in the UK, it is possible that OCC could be required by the UK to contribute capital to its default waterfall applicable in the event of clearing member default. This capital could be required to be drawn before the default fund contributions of non-defaulting clearing members in the event that a defaulting clearing member’s margin and other contributions were to be exhausted. OCC’s stockholders, including Cboe Options, could effectively be required to fund this capital. If the UK does not recognize OCC as a third country CCP, then UK market participants that clear through OCC would become subject to punitive capital charges. As a result, we could experience the loss of a significant number of UK market participants and a significant reduction in trading activity on our options and futures markets, which could have a material adverse effect on our business, financial condition, and operating results.
The implementation of MiFID II and MiFIR in Europe at the beginning of 2018 has encouraged competition among market centers in Europe. MiFID II and MiFIR have introduced a number of new rules, including enhanced internal organizational and compliance monitoring requirements, which apply directly to European trading venues such as our MTF and RM. The impact of MiFID II and MiFIR is significant, and the increased competition among market centers could reduce trading fees, while increasing our costs of operating in Europe. Additionally, European authorities are currently undertaking a review of MiFID as a result of which new rules may come into effect that could have a material impact on our business.
In 2021 the E.C. published proposals for the review of EU market structure, including provisions for a consolidated tape for the EU and changes to the transparency regime for equities. These proposals are expected to be implemented during 2026. In 2025, the E.C. published additional proposals that could impact EU market structure and the consolidated tape. These new rules, if amended during the legislative process, may have a material adverse effect on our business, financial condition, and operating results.
The legislative and regulatory environment in which the spot FX market operates is evolving and has undergone significant changes in the recent past, and there may be future regulatory changes in the spot FX industry. The FX Global Code was published in 2017, and re-affirmed in 2024, and sets forth standards of conduct agreed by market participants and central banks on a global basis to apply to the wholesale FX market, and the effect of its publication on conduct and future regulation continues to evolve. Cboe FX issued a Statement of Commitment declaring its commitment to conduct its FX market activities in a manner consistent with the principles of the FX Global Code. Amendments to the FX Global Code, changes in the interpretation or enforcement of existing laws and regulations by applicable governmental bodies and regulatory organizations, or the adoption of new legal or regulatory requirements, may also adversely affect our spot FX business. Further, our FX NDF business may also be adversely affected by proposed regulatory changes to the rules governing swap execution facilities.
It is also possible that there will be additional legislative, regulatory, and enforcement changes, priorities or efforts in the environment in which we operate, or plan to operate, our businesses. Actions on any of the specific regulatory issues currently under review in the U.S. or internationally and other proposals could have a material impact on our business.
In addition, U.S. and foreign legislatures and regulators could impose legislative or regulatory changes that could materially adversely impact the ability of our market participants to use our markets or participate in the securities industry at all. Any such changes could result in the loss of a significant number of market participants or a reduction in trading activity on our markets, either of which could have a material adverse effect on our business, financial condition, and operating results. Changes or proposed changes in regulation may also result in additional costs of compliance and modification of market participants’ trading activity on our Exchanges and markets.
Any infringement by us on intellectual property rights of others could result in litigation and could have a material adverse effect on our operations.
Our competitors, as well as others, have obtained, or may obtain, patents or may otherwise hold intellectual property rights that are related to our technology or the types of products and services we offer or plan to offer. We may not be aware of all intellectual property that may pose a risk of infringement by our products, services or technologies. In addition, some potential patent applications in the U.S. are confidential until a patent is issued, and therefore we cannot evaluate the extent to which our products, services or technologies may be covered or asserted to be covered in pending patent applications.
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Thus, we cannot be sure that our products, services, or technologies do not infringe on the rights of others or that others will not make claims of infringementagainst us. Claims of infringement are not uncommon in our industry, and even if we believe that such claims are without merit, they can be time-consuming and costly to defend and divert management resources and attention. If one or more of our products, services, or technologies were determined to infringe a patent or other intellectual property right held by another party, we may be required to pay damages, stop using, developing, or marketing those products, services or technologies, obtain a license from the intellectual property rights holders, or redesign those products, services, or technologies to avoid infringement. If we were required to stop using, developing or marketing certain products, services, or technologies, our business, financial condition, and operating results could be materially harmed. Moreover, if we were unable to obtain required licenses, we may not be able to redesign our products, services or technologies to avoid infringement, which could materially adversely affect our business, financial condition, and operating results.
Misconduct by our TPHs, members, participants or others could harm us.
We run the risk that our TPHs, members, participants, other persons who use our markets or our products, other persons for whom we clear transactions, our employees or those with which we have business relationships may engage in fraud, market or product manipulation, or other misconduct, which could result in regulatory and legal sanctions and penalties and seriousharm to our reputation, especially because we are the parent company of SROs and other markets. It is not always possible to determisconduct, or market or product manipulation, and the precautions we take to prevent and detect this activity may not be effective in all cases. In addition, misconduct, or market or product manipulation by, or failures of, participants on our or other markets may discourage trading on our Exchanges, our other markets, or of our products, which could reduce revenues.
Managing our business interests and our regulatory responsibilities may adversely affect our business.
As a competitive business with regulatory responsibilities, we are responsible for disciplining TPHs and members for violating our rules, including by imposing fines and sanctions. This may create competing interests between our business interests and our regulatory responsibilities. Any failure by us to fulfill our regulatory obligations could significantly harm our reputation, increase regulatory scrutiny or cause the SEC or CFTC to take action against us, all of which could materially adversely affect our business, results of operations or financial condition.
If our risk management and compliance methods are not effective, we may sufferadverse consequences, such as investigations and enforcement actions from regulators, our business, financial condition, and operating results may be adversely affected.
We maintain and continually seek to enhance and improve risk management, compliance and monitoring policies, procedures and programs that are reasonably designed to help with our compliance with applicable laws and rules and to prevent, detect, deter, monitor, and manage our risks, including enterprise risk, compliance, regulatory, and internal audit programs, but such policies, procedures and programs may not be fully effective in their operation. Further, we face the risk of intervention by regulatory authorities, including extensive examination and surveillance activity. In the case of actual or alleged non-compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative proceedings that may result in penalties, settlements or civil lawsuits, including by customers, or third parties, for damages, which may be substantial. For example, the SEC has previously brought actions against exchange operators, including us, for failing to fulfill their obligations to have an effective regulatory system. Further, as a result of ongoing risk management and related market surveillance review activities, we have identified, addressed, and continue to address potential market surveillance enhancementopportunities. Any failure to comply with applicable laws and rules could materially adversely affect our business, reputation, financial condition, and operating results and, in extreme cases, our ability to conduct our business or portions thereof. As the parent company for SROs, other markets, and clearinghouses, we are responsible for maintaining markets that comply with securities and futures laws, SEC, FCA, AFM, DNB, CIRO, OSC, ASIC, JFSA, JSDA, ESMA, and CFTC regulations and the rules of the respective exchanges, markets, and clearinghouses.
We have methods to identify, monitor, and manage our risks. Management of legal, compliance, and regulatory risk, among other risks, requires policies and procedures to properly monitor and manage risk. Additionally, as we seek to divest or wind down certain businesses, we may not be able to identify additional risks. Further, the practices we utilize to divest or wind down certain businesses may not be effective at identifying or monitoring and managing risks related to ongoing activities. If our policies, procedures, and compliance systems are not effective or we are not successful in monitoring or evaluating the risks to which we are or may be exposed, our business, reputation, financial condition, and operating results could be materially adversely affected. We cannot provide assurance that our policies and procedures will always be effective, or that our management, compliance department, risk department, regulatory department and related enterprise risk management framework, including the three lines of defense approach, and internal audit department would be able to identify any such ineffectiveness. If these departments or the enterprise risk management framework, and related policies and procedures are not effective, we may be subject to monetary or other penalties by our regulators, and our insurance policies may not provide adequate coverage.
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Our ability to implement or amend rules could be limited or delayed by required regulatory review processes, which could negatively affect our ability to implement needed changes.
Our Exchanges registered with the SEC must submit proposed rule changes to the SEC for its review and, in many cases, its approval. Even where a proposed rule change may be effective upon filing with the SEC, the SEC retains the right to suspend and disapprove such a rule change. Also, the CFTC may stay or disapprove rules that we file with it for Cboe Clear U.S., Cboe Digital Exchange, CFE, or Cboe SEF. The rule review process can be lengthy and can significantly delay the implementation of proposed rule changes that we believe are necessary to the operation of our markets. If the SEC or CFTC delays, including because of a government shutdown, such as the 2025 government shutdown which resulted in delayed rule implementation and product launches, or does not allow one of our Exchanges to implement a rule change, this could negatively affect our ability to make needed changes or implement business activities.
Similarly, the SEC must approve amendments to our exchange subsidiaries’ certificates of incorporation and bylaws as well as certain amendments to the certificate of incorporation and bylaws of Cboe Global Markets. The SEC may decide not to approve a proposed amendment or may delay such approval in a manner that could negatively affect our ability to make a desired change, which could prevent or delay us from improving the operations of our markets or recognizing income from new products.
Changes in the tax laws and regulations affecting us, our offerings and our market participants could have a material adverse effect on our business.
Legislation may be enacted or interpretative guidance issued, both domestically and internationally, that could result in transaction, sales, or value added taxes on our offerings or change the way that our market participants are taxed on the products they trade on our markets. A number of federal, state and local jurisdictions in the U.S. and EU Member States have considered a financial transaction tax, but to date such proposals have not resulted in additional legislation in our principal markets or a pan European level tax. Additionally, legislation has been proposed from time to time on a federal level that would introduce in the U.S. mark-to-market tax treatment for all derivatives contracts and require that gains and losses be taxed at ordinary income tax rates. Further, tax authorities have issued interpretive guidance in the U.S. that, if prevailing, could expand the scope of our offerings that are subject to sales tax. Implementation of such taxes could result in a reduction in volumes and liquidity, which would have a negative impact on our operations.
In addition to proposed tax changes that could affect our market participants, like other corporations, we are subject to taxes at federal, state and local levels, as well as in non-U.S. jurisdictions. More specifically, some jurisdictions where we operate have implemented Pillar 2 laws to effectuate a 15% minimum tax. Changes in tax laws, regulations or policies or successfulclaims by tax authorities could result in our having to pay higher taxes, which would in turn reduce our net income. If this occurs, we may experience a higher effective tax rate.
We are subject to litigation risks and other liabilities.
Many aspects of our business involve substantial risks of litigation and other liabilities. Although under current law we expect to be immune from private suits arising from conduct within our regulatory authority and from acts and forbearances incident to the exercise of our regulatory authority, we expect this immunity will only cover certain of our activities in the U.S., and we could be exposed to liability under foreign, national and local laws, court decisions, and rules and regulations promulgated by regulatory agencies.
Some of our other liability risks arise under the laws and regulations relating to the tax, employment, intellectual property, anti-money laundering, technology export, cybersecurity, foreign asset controls, foreign corrupt practices, employee labor and employment areas, including anti-discrimination and fair-pay laws and regulations, and the businesses of companies listed on any of our exchanges. Liability could also result from disputes over the terms of a trade executed on one of our markets, claims that a system failure or delay cost a customer money, claims we entered into an unauthorized transaction or claims that we provided materially false or misleading statements in connection with a transaction.
For example, we are subject to on-going legal and tax disputes that could result in the payment of fines, interest, penalties or damages and could expose us to additional liability in the future. See Item 3 “Legal Proceedings” in this Annual Report for a general description of our legal proceedings and claims, Note 21 ("Income Taxes"), and Note 23 ("Commitments, Contingencies, and Guarantees") to the consolidated financial statements and related notes, which are included elsewhere in this Annual Report, for a summary of specific legal and tax proceedings.
Further, we could incur significant expenses vigorously defending the claims mentioned above (including those found to be barred due to immunity) and any future claims, even those without merit, which could adversely affect our business, financial condition, and operating results. The outcomes of existing claims and any future claims cannot be determined and an adverse resolution of any lawsuit or claim against us may require us to pay substantial damages or impose restrictions on how we conduct business, either of which could adversely affect our business, financial condition, and operating results. In addition, we may have to establish accruals for those matters in circumstances when a loss contingency is considered probable and the related amount is reasonably estimable. Any such accruals may be adjusted as circumstances change.
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Risks Related to Our Common Stock and Indebtedness
If our goodwill, long-lived assets, investments in non-consolidated subsidiaries, and intangible assets become impaired, the resulting charge to earnings may be significant.
We are required to assess investments in non-consolidated subsidiaries and intangible assets for impairment at least annually. Goodwill impairment testing is performed annually in the fiscal fourth quarter or more frequently if conditions exist that indicate that the asset may be impaired. In the future, we may take charges against earnings resulting from impairment. For example, in 2022, the Company previously recorded goodwill impairment charges of $460.9 million related to Cboe Digital, resulting in decreases in the carrying value of Cboe Digital. Any determination requiring the write-off of a significant portion of our goodwill, long-lived assets, intangible assets, or investments in non-consolidated subsidiaries could materially adversely affect our results of operations and financial condition.
As a result of the Company’s annual impairment analysis, completed in the fourth quarter of 2025, in which all reporting units estimated fair value exceeded their carrying value, we do not consider our goodwill and indefinite-lived intangibles to have a significant risk of impairment.
We have outstanding indebtedness and commitments, which may decrease our business flexibility and adversely affect our business, financial condition, and operating results.
As of December 31, 2025, we had $649.3 million of senior unsecured notes due 2027, $496.3 million of senior unsecured notes due 2030, $297.3 million of senior unsecured notes due 2032, no funds outstanding under our revolving credit facility, and no funds outstanding under the Cboe Clear Europe Credit Facility. The financial and other covenants to which we have agreed and our indebtedness may have the effect of reducing our flexibility to respond to changing business and economic conditions, thereby placing us at a competitive disadvantage compared to competitors that have less indebtedness and making us more vulnerable to general adverse economic and industry conditions. Further, we may default on our obligations or violate the covenants, in which case, we may be required to seek a waiver of such default or the debt obligations may be accelerated. A default under any of our indebtedness with cross default provisions could result in a default on our other indebtedness. Our indebtedness may also increase future borrowing costs, and the covenants pertaining thereto may also limit our ability to repurchase shares of our common stock, issue dividends, increase dividends or obtain additional financing to fund working capital, capital expenditures, acquisitions or general corporate requirements. We are also required to dedicate a larger portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow for other purposes, including working capital, capital expenditures, regulatory capital requirements, and general corporate purposes. Also, our ability to fund capital expenditures and return capital to stockholders may depend on the amount of capital held due to regulatory capital requirements and the amount of capital committed related to lines of credit granted by the Company to our subsidiaries in connection with their regulatory capital requirements.
Our ability to make payments on and to refinance our debt obligations and to fund planned capital expenditures depend on our ability to generate cash from our operations. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.
We may not be able to refinance any of our indebtedness on commercially favorable terms, or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances, any of which could impede the implementation of our business strategy or prevent us from entering into transactions that would otherwise benefit our business. Additionally, we may not be able to effect such actions, if necessary, on commercially favorable terms, or at all. Any of the foregoing consequences could materially adversely affect our business, financial condition, and operating results.
Deterioration in our credit profile may increase our costs of borrowing money.
As of December 31, 2025, we have investment grade credit ratings from S&P Global Ratings (A-) and Moody’s Investors Service (A2). Ratings from credit agencies are not recommendations to buy, sell or hold our securities, and each rating should be evaluated independently of any other rating. There is no assurance that we will maintain such credit ratings, since credit ratings may be lowered or withdrawn entirely by a rating agency if, in its judgment, the circumstances warrant. If a rating agency were to downgrade our rating below investment grade, our borrowing costs could increase.
Any decision to pay dividends on our common stock is at the discretion of our Board of Directors and depends upon the earnings and cash flow of our operating subsidiaries. Accordingly, there can be no guarantee that we will pay dividends to our stockholders.
Any decision to pay dividends on our common stock in the future will be at the discretion of our Board of Directors, which may determine not to declare dividends at all or at a reduced amount. The board’s determination to declare dividends will depend upon our profitability and financial condition, contractual restrictions, restrictions imposed by applicable law and the SEC and other factors that the board deems relevant. As a holding company with no significant business operations of its own, Cboe Global Markets depends entirely on distributions, if any, it may receive from its subsidiaries to meet its
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obligations and pay dividends to its stockholders. If these subsidiaries are not profitable, or even if they are and they determine to retain their profits for use in their businesses, we will be unable to pay dividends to our stockholders.
Certain provisions in our organizational documents and governing law could prevent or delay a change of control.
Our organizational documents contain provisions that could block actions that stockholders might find favorable, including discouraging, delaying, or preventing a change of control or any unsolicited acquisition proposals for us. These include provisions:
• prohibiting stockholders from acting by written consent;
• requiring advance notice of director nominations and of business to be brought before a meeting of stockholders; and
• requiring that stockholders collectively hold at least 25% of the outstanding shares of our capital stock before they may request a special meeting.
In addition, our organizational documents include provisions that:
• restrict any person from voting or causing the voting of shares of stock representing more than 20% of our outstanding voting capital stock; and
• restrict any person from beneficially owning shares of stock representing more than 20% of the outstanding shares of our capital stock.
Furthermore, our Board of Directors has the authority to issue shares of preferred stock in one or more series and to fix the rights and preferences of these shares without stockholder approval. Any series of our preferred stock is likely to be senior to our common stock with respect to dividends, liquidation rights and, possibly, voting rights. The ability of the Board of Directors to issue preferred stock also could have the effect of discouraging unsolicited acquisition proposals, thus materially adversely affecting the market price of our common stock.
Delaware law makes it difficult for stockholders that have recently acquired a large interest in a corporation to cause the merger or acquisition of the corporation against the board’s wishes. Under Section 203 of the Delaware General Corporation Law, a Delaware corporation may not engage in any merger or other business combination with an interested stockholder for a period of three years following the date that the stockholder became an interested stockholder except in limited circumstances, including by approval of the corporation’s Board of Directors.
Furthermore, the European countries where we operate regulated entities, such as the UK and the Netherlands, may require prior governmental approval before an investor acquires 10% or more of the outstanding shares of our common stock.
• 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 .
