Cboe Global Markets (CBOE) Q3 2026 earnings review
Cboe locks in S&P rights through 2051 and raises outlook
Cboe Global Markets, the operator of options and stock exchanges, grew profits twice as fast as revenue while locking in its most important product partnership. Sales from businesses owned a year ago rose 19%, and profit per share excluding one-offs jumped 36% as job cuts lowered pay costs. Finance chief Jill Griebenow raised the full-year sales outlook for a sixth straight quarter and lowered the cost plan, though by our math the new target leaves only about 3% underlying growth for the fourth quarter.
| Sales from businesses owned a year ago | $709.3M +18.6% from a year ago (excludes Cboe Australia) |
|---|---|
| Profit per share, excluding one-offs | $3.63 +36% from a year ago |
| Operating margin, excluding one-offs | 71.4% +6.1 percentage points from a year ago |
| Full-year underlying sales outlook | Raised to 'high teens' from 'mid to high teens' |
⚖️ Verdict: 🟢 Bullish
The story got better because chief executive Craig Donohue extended Cboe's exclusive S&P index license through 2051 and won regulatory approval to launch company event contracts in November. That 25-year renewal removes the single largest long-term risk over the S&P and VIX options business that generates two-thirds of net revenue. The bad news: Cboe lost market share in US and European stock exchanges as well as standard options, where its fee per contract fell 19% from last quarter, and it took a $14 million charge on loans to the industry's regulatory trade-tracking system.
The question now is whether index options volume can keep climbing after dipping 3% from the second quarter, and whether November's event contracts will bring meaningful revenue. One view is that new retail trading rules and overseas brokers will keep lifting daily S&P options volume; the other is that trading activity is peaking as the exchange enters prediction markets behind established rivals. Fourth-quarter index options volume and the first fee disclosures for Cboe Predicts will tell.
🐂 Bull Case
Exclusive S&P Options Drive Sixth Straight Outlook Raise
Cboe Global Markets runs financial exchanges and earns about two-thirds of its net revenue from options trading, led by contracts tied to S&P stock indexes. A major risk was when that exclusive agreement would expire. Chief executive Craig Donohue removed that worry: "First, we extended our exclusive S&P license through 2051, providing certainty and continuity for our SPX and VIX franchises."
Meanwhile, traders kept piling into those proprietary contracts. Finance chief Jill Griebenow said index options volume grew 24% from a year ago, "supported by record 0DTE activity", which are options that expire on the same day they trade. Because the exchange operator charges 95 cents per index contract versus 5 cents on standard options, Options net revenue rose 23% to $469.5 million.
- Index options daily volume: 6.05 million contracts, up 24.4% from a year ago, though down 2.5% from last quarter
- Index options fee per contract: $0.952, up 2.8% from a year ago
- Sales from businesses owned a year ago: up 18.6% to $709.3 million by our math
That performance prompted Griebenow to lift the full-year outlook for sales from businesses owned a year ago to the "high teens" from "mid to high teens", marking a sixth straight quarterly raise. What to watch: daily index options volume in the fourth quarter. A drop from the current 6.1 million pace would show that the summer retail trading boost is cooling.
Job Cuts Lower Pay Costs and Lift Margin
Earlier this year, the Chicago-based exchange group began shutting or selling smaller foreign and listing units, a programme that cuts its workforce by about 20%. Those savings showed up directly in third-quarter overhead.
Operating expenses excluding one-offs fell 3.0% from a year ago to $204.0 million, driven by a "decrease in salaries and wages in connection with the company's previously announced strategic realignment" and lower travel spending. By our math, employee pay and benefits excluding one-offs dropped by 4.1 percentage points of net revenue to 16.7%, while travel and promotion costs fell 0.8 percentage points to 1.2%.
Because net revenue rose 17.6% while overhead shrank, operating margin excluding one-offs expanded by 6.1 percentage points to 71.4%. Griebenow also cut the full-year operating expense plan by $8 million, to a range of $830 million to $845 million.
What to watch: fourth-quarter operating expenses excluding one-offs, which the full-year outlook puts at about $216 million at the middle of the range by our math. Staying near $204 million instead would mean the workforce reductions are delivering larger permanent savings than planned.
SEC Approves Company Event Contracts for November
Cboe is building an event-prediction business called Cboe Predicts, where traders place yes-or-no bets on financial outcomes, alongside Data Vantage, its unit selling market data and exchange connectivity. Management previously aimed to launch contracts tied to individual company results in late September or early October, depending on regulators.
Donohue confirmed that the group "recently received the SEC approvals needed to list and clear our company-KPI event contracts, in anticipation of a November launch". While that launch slipped by about a month, clearing the regulatory hurdle lets Cboe offer and clear these contracts itself. Separately, Data Vantage underlying sales rose 15.9% from a year ago to $176.7 million by our math, and Griebenow raised its full-year growth target to "mid teens" from "low teens".
What to watch: any disclosure of trading volumes or fee rates for Cboe Predicts after the November rollout. Without fee and volume numbers, investors cannot tell if prediction contracts will add meaningful revenue.
🐻 Bear Case
Standard Options and Stock Exchanges Lose Share
Outside its exclusive S&P contracts, Cboe competes with nearly 20 other venues in multi-listed options (options on individual stocks that trade on many exchanges) and runs stock exchanges in the US and Europe. Griebenow highlighted that total Options net revenue rose 22% and Cash and Spot Markets grew 12%.
Beneath those totals, Cboe lost market share across its competitive exchanges and earned less per standard option trade, though higher per-share fees on US stock exchanges and growth in off-exchange block trading cushioned the revenue impact.
- Multi-listed options fee per contract: $0.052, down 5.5% from a year ago and down 18.8% from last quarter by our math
- Multi-listed options market share: 24.0%, down 0.9 percentage points from a year ago
- US stock exchange market share: 8.9%, down 0.9 percentage points from a year ago and 0.5 points from last quarter
- European stock exchange market share: 23.0%, down 2.4 percentage points from a year ago
What to watch: multi-listed options fee per contract in the fourth quarter. Another drop below 5.2 cents would show that rival exchanges are forcing deeper price cuts to defend volume.
Audit Trail Write-Down and Unanswered Risks
US exchanges have funded the Consolidated Audit Trail (CAT), a regulatory trade-tracking system whose fee rules face court challenges, via loans that may not be repaid. This quarter Cboe booked a $14.0 million "incremental reserve recorded related to the company's notes receivable in connection with the funding of the Consolidated Audit Trail", proving that collection risk remains active. Meanwhile, four other standing concerns got no update in the release.
- Cboe Canada sale timing: still included in the 2026 outlook as business-as-usual, with $169.6 million of assets held for sale on the balance sheet; closing date will show when its revenue leaves.
- European clearing credit line: Cboe Clear Europe's €1.2 billion liquidity facility expires within a year; the quarterly filing will show if a replacement was signed.
- Retail trading substitutes: whether single-stock daily options or perpetual futures are taking retail traders away from S&P options; conference call remarks will test this.
- Regulatory fee rules: pending SEC proposals on stock access fee caps and options regulatory fees; the quarterly filing's legal note will update the timeline.
What to watch: the remaining balance of CAT notes receivable in the third-quarter 10-Q filing. Further write-downs would confirm that exchanges will absorb more of the tracking system's past costs.
👓 Other Themes
Cboe Australia Sale Closes, Canada Still Pending
Cboe completed the sale of Cboe Australia to TMX Group on July 31, recording a $71.5 million net gain that lifted reported earnings to $4.08 per share and lowered the reported tax rate to 22.8%. Management removed Australia ($20.3 million of net revenue in the first nine months) from its underlying growth figures, while Cboe Canada remains on the balance sheet as held for sale and stays inside the full-year outlook.
💲 Other KPIs
Cash excluding customer and deferred-pay funds rose 22.7% from year-end to $2.72 billion, sitting $1.28 billion above total debt of $1.44 billion by our math ($649.8 million is due within a year). Cboe spent $56.1 million on buybacks, raised its quarterly dividend paid to $0.86 per share, and added $550 million to its buyback plan in October.
Foreign-exchange net revenue jumped 23.1% from a year ago as daily currency trading value grew 22% to $61.1 billion and fees per million dollars traded ticked up 1% to $2.91. In Europe, Cboe Clear Europe settled 4.23 million shares after netting, up 19.5% from a year ago, lifting regional revenue 6.1% to $73.3 million.
Futures was the only business segment to shrink this quarter, with net revenue falling 4.7% from a year ago after growing 9.1% in the first quarter and 1.7% in the second. Daily trading volume dropped 6.7% from a year ago to 187.3 thousand contracts, while the average fee per contract slipped 1.9% to $1.712.
🔮 Guidance
Raised. Management lifted its growth plan for sales from businesses owned a year ago to the high teens. Because those sales grew 23.9% in the first nine months, an 18% full-year rate leaves only about 3% growth for the fourth quarter by our math, against a tough 28% comparison a year ago. This is the sixth straight quarterly raise (+7.5 points, +4.5 points, +1.0 point this year).
Raised. The full-year underlying sales growth target for the market data and connectivity unit moved up to the mid teens, matching the 16.4% pace delivered across the first nine months of 2026 (after stripping out Cboe Australia). It is the third raise this year: +3.5 points in the first quarter, +2.0 points in the second, and +2.0 points now.
Lowered by $8 million (a positive revision for profit). At the $837.5 million middle of the range, full-year overhead grows less than 1% from 2025. With $621.6 million spent in the first nine months, the plan leaves $215.9 million for the fourth quarter by our math — up from $204.0 million in the third quarter, but unchanged from a year ago.
Unchanged. The full-year forecast stays at $54 million to $58 million after a $2 million reduction last quarter. This figure excludes $59 million of expected amortization on intangible assets from past acquisitions, which the company strips out of its adjusted operating expenses.
Unchanged. The third-quarter adjusted tax rate came in at 27.6%, down 2.8 percentage points from a year ago due to state and local tax filing changes, and sits at the bottom of the full-year band. Nine-month adjusted taxes stand at 27.9%.
Unchanged. Management kept its capital spending plan at $98 million to $108 million after raising it by $25 million last quarter to fund clearinghouse technology and early hardware purchases.
❓ Key Questions
What are the economics of the new S&P contract?
Extending the exclusive S&P license through 2051 removes a major long-term risk, but royalty fees and other cost of revenues rose 27% this quarter to $79.7 million. Did the renewal change the royalty rate Cboe pays per S&P contract?
How will Cboe price and report November's event contracts?
With SEC approval in hand to list and clear company-KPI prediction contracts in November, management has still not shared the fee per contract, clearing cost, or whether Cboe Predicts volumes will appear in the monthly statistics table.
When does the Cboe Canada sale to TMX close?
Cboe Australia closed on July 31, but Cboe Canada remains in assets held for sale ($169.6 million) and inside the 2026 outlook. What regulatory approvals remain, and how much revenue and expense leaves when it closes?
How much CAT loan exposure remains after the write-down?
Cboe added $14.0 million to its reserve against Consolidated Audit Trail notes receivable this quarter, on top of a $30.1 million allowance at mid-year. What is the remaining net receivable balance, and what triggered the third-quarter charge?
Will Cboe deploy its $2.7 billion cash pile faster?
The board added $550 million to the buyback plan in October, bringing total capacity to $1.0 billion, while cash exceeds total debt by $1.28 billion. Will quarterly buybacks step up from the third quarter's $56.1 million pace?