Cboe(CBOE) - 2025 Q4 - Annual Report

Revenue and Currency Impact - For the year ended December 31, 2025, foreign-denominated revenues less cost of revenues were 6.6% in Euros, 3.1% in British Pounds, and 1.4% in Canadian Dollars[483]. - A 10% adverse currency fluctuation would impact revenues less cost of revenues by $16.0 million in Euros, $7.6 million in British Pounds, and $3.3 million in Canadian Dollars[483]. Operating Expenses - Operating expenses for the same period were 8.4% in Euros, 9.6% in British Pounds, and 4.8% in Canadian Dollars[483]. Equity and Investment - The net equity investment as of December 31, 2025, was $222.5 million in Euros, $596.3 million in British Pounds, and $214.7 million in Canadian Dollars[485]. - A 10% adverse currency fluctuation would affect consolidated equity by $22.2 million in Euros, $59.6 million in British Pounds, and $21.5 million in Canadian Dollars[485]. Credit Risk Management - The company is exposed to credit risk from third parties, including customers and counterparties, which may default on obligations due to various reasons[486]. - Cboe Clear Europe holds significant amounts of clearing member collateral to mitigate credit risk, including cash and non-cash deposits[493]. - The company does not have counterparty credit risk for trades matched on its exchanges in the U.S., Canada, and Europe due to central counterparty arrangements[488]. Liquidity and Financial Management - As of December 31, 2025, Cboe Clear Europe held €1.2 billion in a committed syndicated multicurrency revolving and swingline credit facility to finance unsettled amounts and liquidity requirements[494]. - Cash and cash equivalents and financial investments were $2,252.6 million as of December 31, 2025, with $424.4 million held outside the United States[497]. - Cboe Clear Europe monitors liquidity requirements closely to mitigate liquidity risk and maintain access to funds[494]. - Cboe Clear U.S. may not meet payment obligations in a timely manner if there is a delay in payment or default by a clearing member[494]. Market Risk Management - The company has implemented policies to measure, manage, monitor, and report market risks, including foreign currency exchange rate risk, equity risk, credit risk, interest rate risk, and liquidity risk[481]. - Cboe Clear Europe is exposed to market risk if a clearing member defaults and market prices move adversely, necessitating collateral collection[496]. Debt and Interest Rate Exposure - As of December 31, 2025, Cboe Clear U.S. had $1,442.9 million in outstanding debt related to Senior Notes with fixed interest rates[498]. - Interest rate changes will not impact the interest paid on fixed-rate obligations, but the company is exposed to fluctuating rates under its credit facilities[498]. - A default under the Revolving Credit Agreement may limit the company's liquidity and financing activities due to cross-acceleration provisions[499].