Cboe Global Markets (BATS:CBOE) reported what executives described as another record quarter, fueled by broad-based strength across its core derivatives, cash and spot markets, and market data businesses, while also outlining additional strategic realignment actions expected to reduce headcount and lower its 2026 expense outlook.
Record first-quarter results driven by derivatives and cash markets
CEO Fred Tomczyk said the company “delivered another quarter of record net revenue and adjusted earnings,” with first-quarter net revenue up 29% year over year to a record $729 million and adjusted diluted EPS rising 48% to a record $3.70. He said the quarter featured record net revenue “in every major category” and double-digit net revenue growth in four of five segments.
Tomczyk said the mix of demand shifted during the quarter. He said 0DTE options helped drive growth in January and February, while in March, “as the macro outlook shifted abruptly with the Iran war,” investors moved toward non-0DTE options. He said non-0DTE volume “jumped over 26%” in March, contributing to a monthly record 5.4 million SPX options contracts ADV.
He also cited quarterly ADV records in Mini-SPX options, Russell 2000 index options, and the VIX options complex. On global access, Tomczyk said “global trading hours volumes rose more than 32% to a record high,” driven by growth during Asian hours as the company onboards local brokers.
SPX ecosystem and trading floor highlighted amid competitive questions
During Q&A, executives were asked about Cboe’s competitive position in SPX amid discussion of other exchanges potentially competing for the contract later in the decade. Management pointed to the breadth of participation across electronic and floor trading and emphasized the trading floor’s role in complex risk management.
Management said first-quarter SPX volume averaged just under 5 million contracts per day, and March averaged nearly 5.4 million. They said volume was about 84% electronic and 16% open outcry, but added that 58% of notional value traded in SPX options occurred on the floor.
Executives also provided data points on participation:
- 11 floor broker groups, with the largest representing about 23% of floor volume
- 20 market-making groups supporting the floor broker flow
- 34 retail broker platforms connected electronically, with the largest representing about 30% of electronic volume
- Flow mix described as about 50% complex/multi-leg spreads and 50% single-leg trades
- Management said roughly 60% of SPX volume is 0DTE
Executives characterized the activity as “an entire ecosystem with balanced flow, balanced risk, balanced participation.”
Event contracts and prediction markets: securities-based approach
Tomczyk said Cboe plans, “subject to regulatory approval,” to bring securities-based event contracts to market. He described an initial product based on the Mini-SPX contract that is designed to mirror a vertical call spread and allow investors to take a “simple yes or no view” with defined risk and a capped payout range. He said the company views this as the “first step” in a broader event contract strategy that could expand beyond index-based outcomes into economic and financial indicators, leveraging capabilities across securities and futures.
In response to analyst questions about longer-term opportunities, Tomczyk said he views event and prediction markets as “a really significant new market segment” that is still in early stages despite rapid growth. He said the company is “super keen” to develop company-specific contracts over time, pointing to Cboe’s experience in market integrity, surveillance, contract design, and distribution across retail and institutional audiences.
Global Head of Derivatives Rob Hocking said the decision to start with securities “isn’t philosophical, it’s a practical reason,” citing customer distribution, existing OCC-cleared infrastructure, and investor protections. Hocking said the company expects broader day-one distribution by leading with “XSP Binary Options” on retail broker platforms already built for index-based products.
On potential contracts tied to earnings and corporate KPIs, Hocking said Cboe is focused on “clear resolution” and “disclosure-based settlement” with low likelihood of revisions or restatements, and said securities-market surveillance controls could add trust for users.
Asked about pricing and competitive dynamics, Hocking said Cboe is working with retail broker platforms and is evaluating the exchange fee, clearing fee, and regulatory fees such as ORF, adding that the company has flexibility to be competitive but has not finalized the fee structure.
Strategic realignment expands, including workforce reduction and return to office
COO Scott Johnston, who joined in February, said the company is continuing a strategic realignment that began in the second half of 2025. He recapped previously announced actions, including plans to sell the Cboe Canada and Cboe Australia businesses and to exit or wind down corporate listings, European derivatives, FX, and Japanese equities businesses, while reducing costs in U.S. and European ETP listings and certain analytics businesses.
Johnston said the company is now realigning the organization “from the ground up” after reviewing workforce growth since 2020. He said the earlier actions combined with the additional changes announced on the call are expected to reduce Cboe’s workforce by approximately 20%. Johnston also said Cboe will transition back to in-person work to support faster decision-making and collaboration.
Margin expansion and lower 2026 expense outlook
CFO Jill Griebenow said adjusted operating expenses were $201 million, up 4% year over year, which she attributed largely to higher compensation and benefits tied to strong revenue performance and higher short-term incentive compensation. Adjusted operating EBITDA rose 41% to $541 million, and the adjusted operating EBITDA margin expanded by 6.1 percentage points to 74.2%.
By segment, Griebenow highlighted:
- Options: net revenue up 33%, driven by a 34% increase in net transaction and clearing fees; total options ADV up 10% (index options up 29%, multi-listed up 4%); rate per contract up 19%
- North American Equities: net revenue up 18%; net transaction and clearing fees up 40%; market data fees up 5%; access and capacity fees up 12%
- Europe and APAC: net revenue up 32%; net transaction and clearing fees up 43%; non-transaction revenues up 21%
- Futures: net revenue up 9%, driven by a 14% increase in ADV due to stronger VIX activity
- Global FX: net revenue up 38%, driven by a 36% increase in average daily notional value and a 4% increase in net capture
For DataVantage, Griebenow said net revenue increased 19%, with approximately 85% of growth from new subscription and unit sales and the remainder from pricing. In Q&A, management said about half of the growth was driven by higher access-related revenue linked to demand for connectivity to options exchanges, and about 40% came from market data sales. They also said two new options dataset products contributed to one-time revenue from historic datasets.
On the 2026 outlook, Griebenow said the company expects the strategic realignment to deliver an estimated 12%–14% annualized reduction in adjusted operating expenses versus 2025, translating to $100 million–$120 million of savings. She said incremental actions announced on the call are expected to contribute $40 million–$50 million in annualized savings, with $20 million–$25 million expected to be realized in 2026.
The company lowered its 2026 adjusted operating expense guidance range to $838 million–$853 million from $864 million–$879 million. It reiterated 2026 CapEx guidance of $73 million–$83 million and depreciation and amortization of $56 million–$60 million, and said it expects an adjusted effective tax rate of 27.5%–29.5%.
Griebenow said Cboe continues to operate the Canada and Australia businesses until the transactions close and that their revenue and expense contributions remain in 2026 guidance. She estimated 2026 total net revenue contribution from those businesses at $60 million–$70 million on an annualized basis, with $40 million–$50 million in adjusted operating expenses expected to leave the cost base following a sale.
On capital returns, Griebenow said Cboe repurchased $45 million of shares through the first quarter and paid $76 million in dividends, totaling $121 million returned to shareholders in the quarter. She said the company had an adjusted cash position of $2.1 billion and a leverage ratio of 0.8x.
In closing remarks, Tomczyk said the company intends to “move faster, sharpen our focus, and deploy our resources with even greater discipline,” while targeting investments in areas including financial and economic event markets, tokenization, and expanded clearing services in Europe and the U.S.
About Cboe Global Markets (BATS:CBOE)
Cboe Global Markets, Inc, through its subsidiaries, operates as an options exchange worldwide. It operates through six segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital. The Options segment trades in listed market indices. The North American Equities segment trades in listed U.S. and Canadian equities. This segment also offers exchange-traded products (ETP) transaction and listing services. The Europe and Asia Pacific segment provides pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts, as well as ETP listings and clearing services.
