Cboe Global Markets (BATS:CBOE) reported third-quarter net revenue of $712 million, up 18% from a year earlier, as growth in its derivatives, cash and spot markets, and DataVantage businesses helped drive adjusted diluted earnings per share up 36% to $3.63.
GAAP diluted EPS reached a record $4.08, aided by a $71.5 million net gain from the sale of Cboe Australia to TMX Group, which closed July 31. Adjusted operating EBITDA increased 28% to $522 million, while adjusted operating expenses fell 3% to $204 million. The resulting adjusted operating EBITDA margin expanded 5.8 percentage points to 73.3%.
Derivatives Growth Led by Index Options
CEO Craig Donohue said derivatives net revenue rose 22% year over year to $402 million. Index-options average daily volume increased 24% to 6.1 million contracts, while multi-listed options volume rose 10%.
Trading in same-day-expiration, or 0DTE, SPX options represented a record 65% of total SPX activity during the quarter. Retail volume in SPX 0DTE options increased 46% from a year earlier, outpacing 20% growth among institutional investors. Retail investors accounted for an estimated 58% of SPX 0DTE activity, compared with 53% a year earlier.
Donohue also pointed to growth in Mini-SPX, or XSP, options, where volume more than doubled compared with the third quarter of 2025. He attributed much of the increase to retail activity following the June repeal of the pattern day trader rule. Global trading-hours volume rose more than 130%, led by the Asian session.
VIX options volume was comparatively muted, with average daily volume up 3% amid a stable volatility environment during the quarter. However, Donohue said volatility rose in early October amid higher bond yields and geopolitical uncertainty, with VIX call volume reaching its highest daily level in more than two years.
S&P License Extended Through 2051
Cboe signed a 25-year extension of its exclusive licensing agreement with S&P Dow Jones Indices, extending the relationship through 2051. The agreement preserves Cboe’s exclusive rights to offer SPX options and maintains exclusivity across products including Mini-SPX, VIX and S&P binary options.
The company said the revised agreement will not affect 2026 net revenue. CFO Jill Griebenow said higher royalty fees beginning in 2027 are expected to have a “de minimis” impact on net revenue growth, considering anticipated organic volume gains, pricing opportunities and business execution.
During the question-and-answer session, Head of Enterprise Strategy and Corporate Development Prashant Bhatia said Cboe sees room to optimize pricing in the SPX complex, which he said has not been adjusted in several years. Griebenow added that the 2027 royalty increase would be the largest step-up, with subsequent increases moderating beginning in 2028.
Prediction-Market and Clearing Initiatives
Cboe expects to launch securities-based company KPI event contracts in November after receiving SEC approval to offer contracts on 23 companies. The company also received approval to temporarily clear the contracts through Cboe Clear U.S.
Donohue said Cboe views event contracts tied to securities indices or corporate performance measures, such as earnings and revenue, as securities that should fall under SEC jurisdiction. He said Cboe designed its products to provide investor protections, including safeguards against manipulation and insider trading.
Robinhood has been named as a launch partner, while Cboe said it has seen support from Interactive Brokers and Schwab. Global Head of Derivatives Rob Hocking said Robinhood and Interactive Brokers are expected to support client access on the first day of trading, pending clearing-member, broker and market-maker readiness.
Hocking said Cboe will waive KPI-contract fees through the end of 2026 as it focuses on adoption. The company expects the products to begin with binary, yes-or-no structures and potentially expand over time to cover more companies, metrics, strikes, ranges and payout structures.
Cboe Clear U.S. recently received temporary SEC registration to clear securities, broadening its authority beyond futures, swaps and digital-asset derivatives. Donohue said the clearing house is intended to support new products and emerging asset classes while Cboe continues its longstanding relationship with the Options Clearing Corp. for traditional equity options.
DataVantage, Cash Markets and Updated Outlook
DataVantage net revenue increased 13%, driven by new subscription and unit sales, higher market activity and international demand. Bhatia said most year-to-date sales have come from outside the United States, with Japan, South Korea and Hong Kong among the markets contributing to growth.
Cash and spot markets net revenue rose 12%. North American equities revenue increased 10%, global FX revenue climbed 23%, and Europe and Asia-Pacific revenue rose 6%, or 7% on a constant-currency basis. Futures net revenue declined 5% because of lower VIX futures activity.
Cboe raised its 2026 organic net revenue growth outlook to the high-teens range from its previous mid-to-high-teens forecast. It now expects DataVantage organic revenue growth in the mid-teens, up from a prior low-teens outlook. The company revised its adjusted operating-expense guidance to $830 million to $845 million, primarily reflecting lower compensation and benefits costs.
The company maintained capital-expenditure guidance of $98 million to $108 million and expects annualized savings from its strategic realignment to reach $40 million to $50 million. Cboe held adjusted cash of $2.7 billion at quarter-end and reported a leverage ratio of 0.7 times. During the quarter, it returned $146 million to shareholders through $56 million of repurchases and a $90 million dividend payment.
Cboe also increased its share-repurchase authorization by $550 million, bringing total remaining capacity to approximately $1 billion as of Oct. 28.
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.
