Cboe Global's Q4 Earnings Beat Estimates on Higher Revenues

Core Insights - Cboe Global Markets, Inc. (CBOE) reported fourth-quarter 2025 adjusted earnings of $3.06 per share, exceeding the Zacks Consensus Estimate by 4.4% and reflecting a 46% year-over-year increase [1][8] - The company achieved record total adjusted revenues of $671.1 million, up 28% year over year, surpassing the consensus mark by 6% [2] - CBOE's strong performance was driven by higher volumes across its derivatives platform and solid cash and spot markets, despite increased expenses [1][8] Operational Details - Options revenues rose 34% year over year to $433.1 million, fueled by growth in net transaction and clearing fees as well as access and capacity fees [2] - North American Equities revenues totaled $110.7 million, up 17% year over year, driven by higher net transaction and clearing fees, access and capacity fees, and market data fees [3] - Revenues from Europe and Asia Pacific increased 24% year over year to $69.9 million, reflecting growth in net transaction and clearing fees and non-transaction revenues [3] - Futures net revenues grew 12% year over year to $33.7 million, supported by a 13% increase in net transaction and clearing fees [3] - Global FX net revenues rose 22% year over year to $23.7 million, attributed to higher net transaction and clearing fees [4] Financial Performance - Adjusted operating expenses were $220.6 million, a 7.7% increase year over year, primarily due to higher compensation and benefits [4] - Adjusted operating income grew 41% year over year to $450.5 million, with an adjusted operating margin of 67.1%, expanding 610 basis points year over year [5][4] - Adjusted EBITDA margin was 69.2%, also expanding 600 basis points year over year [5] Full-Year Highlights - For the full year, adjusted earnings were $10.67 per share, up 24% from 2024, although slightly missing the consensus estimate by 1.1% [6] - Net revenues reached $2.4 billion, a 17.3% increase from 2024, beating the consensus estimate by 1.6% [6] - The adjusted EBITDA margin for the full year was 67.7%, expanding 250 basis points year over year [6] Financial Update - CBOE ended 2025 with cash and cash equivalents of $2.2 billion, more than doubling from the end of 2024 [7] - Total assets as of December 31, 2025, were $9.3 billion, a 19.5% increase from the previous year [9] - Long-term debt was $1.4 billion, a slight increase of 0.1% from the end of 2024 [9] - Total shareholders' equity rose to $5.1 billion, up 20% from December 31, 2024 [10] Share Repurchase and Dividend Update - In Q4, CBOE paid out cash dividends totaling $75.8 million, or 72 cents per share [11] - As of December 31, 2025, CBOE had $614.5 million remaining under its current share repurchase authorization [11] 2026 Guidance - CBOE expects total organic net revenue growth in the mid single-digit range for 2026 [12] - Data Vantage organic net revenue growth is anticipated to be in the mid to high single-digit range [12] - Projected adjusted operating expenses are expected to be between $864 million and $879 million [12] - Capital expenditures are forecasted to be in the range of $73 million to $83 million [12]