Cboe Global Markets delivered record financial results for the fourth quarter and full year of 2025, driven by double-digit growth across all segments. Q4 net revenue surged 28% year-over-year to $671 million, with adjusted diluted EPS jumping 46% to a record $3.06. For the full year, revenue reached $2.4 billion (up 17%) and EPS hit $10.67 (up 24%), fueled by a 38% increase in derivatives revenue and a 27% rise in cash and spot markets. Performance was underpinned by record volumes in Zero DTE options, which now comprise over 61% of SPX volume, and robust international demand. Looking to 2026, management guided for mid-single-digit organic revenue growth and operating expenses of $864-$879 million, reflecting the impact of strategic realignments including the sale of Canadian and Australian units and the wind-down of its European derivatives exchange.
| Metric | Value | Change |
|---|---|---|
| Q4 Net Revenue | $671 million | +28% year-over-year |
| Q4 Adjusted Diluted EPS | $3.06 | +46% year-over-year |
| Full Year 2025 Net Revenue | $2.4 billion | +17% year-over-year |
| Full Year 2025 Adjusted Diluted EPS | $10.67 | +24% year-over-year |
| Q4 Adjusted Operating EBITDA Margin | 69.2% | +610 basis points year-over-year |
| Q4 Derivatives Net Revenue Growth | N/A | +38% year-over-year |
| SPX Zero DTE ADV Growth | N/A | +66% year-over-year |
| Total Capital Returned (2025) | $350 million | N/A |
Cboe is doubling down on its dominance in the derivatives market, specifically the Zero Days to Expiration (Zero DTE) sector, which has become a massive volume driver. SPX Zero DTE ADV grew 66% year-over-year and now accounts for 61% of SPX volume. Management views the recent launch of single-stock Zero DTE options (Monday/Wednesday expirations) as additive rather than cannibalistic to their index business, citing structural differences like cash settlement for SPX versus physical settlement for single names. This focus on high-frequency, short-term trading products aligns with retail demand and secures their leadership position.
The company is actively reshaping its portfolio by exiting non-core or underperforming assets to focus resources on high-growth areas. They announced the sale of Cboe Australia and Cboe Canada, the closure of the European derivatives exchange (FedEx), and the cessation of corporate listing businesses. This streamlining is expected to reduce revenue by approximately 3% but lower expenses by 8-10%, aiming for a leaner, more profitable operation. The balance sheet remains robust with $2.2 billion in adjusted cash, allowing for continued dividends and opportunistic buybacks.
Cboe is preparing to launch 'event prediction markets' or binary options in Q2 2026, targeting financial and economic events initially. This move leverages their existing SPX ecosystem—where 200,000+ daily contracts already trade with binary-like payout structures—and their status as a regulated securities exchange. This initiative is a direct response to retail demand for 'yes-or-no' payout profiles and differentiates Cboe from unregulated crypto-based prediction platforms by offering regulatory certainty and OCC clearing.
International growth is a key pillar, evidenced by a 34% increase in Global Trading Hours (GTH) volume and significant broker onboarding in Asia Pacific (e.g., Korea, Taiwan). DataVantage revenue grew 9%, driven largely by new unit sales (90% of growth) rather than price increases, indicating healthy demand for market data. The company is investing in new data products like 'dedicated cores' and timestamping services to monetize the global trading ecosystem further.
While the pivot to core businesses is logical, the execution carries risks. The closure of FedEx (European derivatives) and the sale of Canadian and Australian units will result in a 3% reduction in net revenue. Management noted that FedEx was 'unlikely to meet targeted revenue and profitability metrics,' signaling a prior misallocation of capital. The success of this strategy depends on the core businesses continuing to outperform to offset these deliberate revenue reductions.
Management guided 2026 total organic revenue growth to 'mid-single-digit' and DataVantage to 'mid to high single-digit.' This conservative outlook contrasts sharply with the recent 17% full-year revenue growth and 28% Q4 growth. Analysts pressed on whether this implies a slowdown, and while management cited 'timing of sales,' the significant deceleration in guidance compared to current run rates could indicate headwinds or a normalization of the exceptional trading volumes seen in 2025.
The multi-list options space is becoming increasingly crowded, with 20 exchanges expected by early 2026. Cboe holds a 22% market share but faces intense competition on pricing and rebates. Management mentioned they are 'always actively evaluating' pricing enhancements to balance market share and revenue capture. This environment could pressure margins if a 'race to the bottom' on fees occurs, particularly as they launch extended trading hours which may fragment liquidity.
Overall: Management exhibited a highly confident and assured demeanor throughout the call, celebrating record-breaking performance across all business segments. There was a distinct shift from highlighting past successes to a disciplined, execution-focused tone regarding the strategic realignment and the conservative 2026 guidance. The leadership transition involving the outgoing COO was handled with gratitude and smooth language, reinforcing organizational stability.
Confidence: HIGH - Management used definitive language regarding record results and expressed strong conviction in their strategic shifts. The specificity of the 2026 guidance and the detailed explanation of the realignment actions further underscored their confidence in the outlook.
Management expects growth in the mid-single-digit range. This guidance incorporates the impact of strategic realignment, including the wind-down of FedEx and the sale of Cboe Canada and Australia, which are expected to reduce net revenue by approximately 3%.
Anticipated to be in the mid to high single-digit range, driven by new unit sales and international expansion.
Guided to be between $864 million and $879 million, representing growth of 3.3% to 5.1%. This includes savings from the strategic realignment but also investments in new products like prediction markets.
Expected to be between 27.5% and 29.5%.
Hedging & Uncertainty: Management generally used strong, declarative language ('record results,' 'robust growth'), but employed hedging primarily around the 2026 guidance and new product launches. Phrases like 'we anticipate,' 'expected to be,' and 'assuming regulatory approval' were used for forward-looking items. When discussing the cannibalization risk of single-stock Zero DTE, they used qualifiers like 'we don't think,' 'believe,' and 'less suited,' acknowledging the uncertainty of new market dynamics. They also softened the revenue impact of divestitures by focusing on the 'strategic rationale' rather than just the financial loss.
Cboe Global Markets, Inc. delivered record net revenue and adjusted earnings for the quarter and year, powered by continued strength across our core businesses. - Craig Donohue, CEO
We remain bullish on the outlook for our core derivatives franchise, anchored around strong retail demand, continued international growth, and further product innovation. - Craig Donohue, CEO
We enter 2026 with a great deal of balance sheet flexibility. As evidenced by our adjusted cash position of $2.2 billion and a leverage ratio of 0.9 times. - Jill Griebenow, CFO
We're excited about the continued growth in the event prediction markets. Really view this as a logical extension of Cboe's existing strengths. - Robert Hocking, Global Head of Derivatives
We really are laser-focused on continuously looking at all of our core business lines to see what further enhancements or optimization we can make to generate that long-term revenue flow. - Jill Griebenow, CFO
Analyst Sentiment: Analysts were generally inquisitive and focused on the sustainability of growth rates, specifically probing the conservative 2026 guidance relative to 2025 performance. Questions from Piper Sandler and Jefferies focused on growth drivers and cannibalization risks, indicating a need to verify the longevity of the 'Zero DTE' boom. There was also significant interest in the new prediction markets product pipeline.
Management Responses: Management was direct and detailed, particularly Rob Hocking on product mechanics. They pushed back gently against the notion that guidance was too conservative, framing it as a 'full-year view' rather than a quarterly extrapolation. They were transparent about the strategic realignment impacts, explicitly detailing what was in/out of the guidance numbers.
Zero DTE & Cannibalization: Analysts asked if single-stock Zero DTE would eat into SPX volume. Management argued they are distinct tools due to settlement differences (cash vs. physical) and risk profiles, predicting additive volume rather than substitution.
2026 Guidance Conservatism: Multiple analysts questioned the drop from high-teens growth to mid-single-digit guidance. Management attributed this to the strategic realignment (divestitures) and the difficulty of predicting a repeat of 2025's record volatility/volumes.
Prediction Markets: Significant interest in the upcoming binary/event contracts. Management clarified the Q2 launch target, the focus on 'financial/economic' events, and the regulatory advantage of being a securities exchange.
Capital Allocation: Questions focused on the use of the strong balance sheet ($2.2B cash). Management emphasized organic investment in core areas (SFT, prediction markets) and maintaining dividends/buybacks.
Cboe Global Markets is executing at a high level, leveraging structural shifts in the market toward short-term options trading and international retail participation. The company's Q4 and FY 2025 results were exceptional, with broad-based growth across derivatives (up 38%) and cash equities (up 27%). The core thesis rests on the durability of the Zero DTE trend, where Cboe holds a dominant position with SPX options, and the successful monetization of this volume through data products and efficient clearing. The strategic realignment—exiting Europe and smaller units—sharpens the focus on these high-margin core franchises and should improve overall capital efficiency. Key success factors include the successful launch of event prediction markets in Q2 2026 and maintaining market share in the increasingly competitive multi-list options landscape. Risks involve a normalization of trading volumes in 2026 (hence the conservative guidance) and execution risks associated with the business unit sales. However, with a robust balance sheet ($2.2B cash), a 69% operating margin, and a clear product roadmap, Cboe is well-positioned to deliver shareholder value.
The transcript highlights a structural shift in retail and institutional trading behavior towards 'Zero DTE' (Days to Expiration) options. This is no longer a niche phenomenon but a dominant volume driver, with Zero DTE making up 61% of SPX volume. This indicates a broader macro trend of shorter investment horizons, increased use of options for income generation rather than just long-term protection, and a preference for capital efficiency. The surge in international demand (APAC brokers adopting US options) further suggests a globalization of these specific trading strategies.