How does Cboe envision the prediction market industry evolving, particularly for company-specific financial KPI contracts? Would these be options-structured or on a different platform, and what is the potential demand?

Craig Donohue sees prediction markets as a significant new market segment, still in early stages, with long-term growth potential focused on well-designed contracts tied to financial instruments and economic indicators. He highlighted Cboe's strong position due to its 0 DTE ecosystem, securities and futures presence, and reputation for integrity. Rob Hocking added that starting with securities is practical due to existing infrastructure and investor protections, with plans to expand to other proprietary products and then KPI-based contracts in both securities and futures, focusing on clear, disclosure-based settlement. “I mean, I view this as like a really significant new market segment that is likely to continue to develop... we're super keen on coming to market with company-specific contracts, we see lots of opportunities for doing that. ... I would argue in securities and futures because some will, I would say, fall into more of a futures category, but really leading more on the securities side as we feel A lot of these outcome-based contracts tied to things like earnings and corporate KPIs are directly tied to the financial performance of the individual company and therefore, land in that securities bucket.”

Given competition for SPX contracts, what unique capabilities does Cboe bring that others can't replicate? Can you provide data on the depth of your SPX network, including the number of introducing brokers and volume concentration?

Craig Donohue highlighted the "hard to replicate" proprietary product ecosystem, starting with the foundational SPX product and its 43-year history, showing over 300% growth in 5 years. He detailed that 58% of SPX notional value trades on the floor (16% of volume), with 11 floor broker groups and 20 market-making groups. Electronically, 34 retail broker platforms are connected, with the largest representing only 30% of volume, indicating broad-based participation. He emphasized the balanced flow, risk, and participation across the ecosystem. “First, it starts with foundational product in the SPX and then yet in a generational relationship with a great partner in S&P. ... volume in the first quarter was made up of, call it, about 84% electronic, 16% open [indiscernible]. And what's important to note on this is that 58% of the notional value traded in SPX options is trading on the floor, and really only 40% -- or call it, 42% is being traded electronically.”

Clarify the total $100M-$120M expense savings from strategic realignment, what's included in 2026 guidance, and what remains for 2027 or later.

Jill Griebenow confirmed the $100M-$120M is the aggregate annualized benefit. She broke it down: $40M-$50M from Canada/Australia sales (not yet in 2026 guidance as sales are pending); $40M-$50M from additional strategic realignment actions (majority, $20M-$25M, expected in 2026, remainder in 2027); and about $20M from previously actioned realignment pieces already reflected in 2026 guidance. “we expect to save approximately $40 million to $50 million in expenses once both the Canada and Australia transactions are fully complete and transitioned. ... All of that expense remains to be realized at a later date. ... the additional actions related to the strategic realignment that we did later on today, that piece is also expected to be $40 million to $50 million in annualized savings ... we expect the 2026 savings, from that, the additional strategic realignment efforts to be in that $20 million to $25 million range.”

CBOE

Cboe (CBOE) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 1, 2026

Source: earnings call transcript

Executive summary

Cboe Q1 FY26 — Record Revenue and EPS Driven by Derivatives and Strategic Realignment

Cboe Global Markets delivered a record first quarter, driven by strong performance across its derivatives, cash and spot markets, and Data Vantage segments. The company is undergoing a significant strategic realignment, including divestitures and a 20% workforce reduction, to sharpen focus on core businesses and invest in new growth areas like prediction markets and tokenization, aiming for enhanced efficiency and long-term value creation.

Highlights

Net revenue grew 29% year-over-year to a record $729 million.
Adjusted diluted EPS increased 48% year-over-year to a record $3.70.
Derivatives net revenue increased 32% year-over-year, with proprietary SPX options average daily volume (ADV) up 34% to 4.9 million contracts.
Cash and Spot Markets net revenue was up 34% year-over-year, with Global FX growing 38%.
Data Vantage net revenue increased 19% year-over-year, with 85% of growth from new units and sales.

Concerns

Workforce reduction of approximately 20% due to strategic realignment actions.
Expected annualized reduction in net revenue of approximately 3% compared to 2025 from business divestitures and wind-downs.

Guidance & targets

Category	Target	Timeline	Confidence
Data Vantage organic net revenue growth	low double-digit range medium materiality	Full Year 2026 · FY26	High
Total organic net revenue growth	low double-digit to mid-teens range high materiality	Full Year 2026 · FY26	High
Adjusted operating expense	$838 million to $853 million high materiality	Full Year 2026 · FY26	High
Capital expenditure (CapEx)	$73 million to $83 million medium materiality	Full Year 2026 · FY26	High
Depreciation and amortization	$56 million to $60 million medium materiality	Full Year 2026 · FY26	High
Effective tax rate on adjusted earnings	27.5% to 29.5% medium materiality	Full Year 2026 · FY26	High
Interest income, net of interest expense	$3.5 million to $4.5 million positive contributor low materiality	Q2 · FY26	High
Strategic realignment expense savings (annualized)	approximately 12% to 14% high materiality	Annualized compared to 2025	High
Incremental strategic realignment savings in 2026	$20 million to $25 million medium materiality	Full Year 2026 · FY26	High
Cboe Canada and Cboe Australia total net revenue contribution	$60 million to $70 million medium materiality	Annualized 2026 · FY26	High
Cboe Canada and Cboe Australia adjusted operating expenses	$40 million to $50 million medium materiality	Annualized	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Options Growth driven by net transaction and clearing fees, positive contributions from multi-list products and index complex. Net transaction and clearing fees growth: 34%Total options ADV growth: 10%Index options volume growth: 29%Multi-listed options volume growth: 4%Rate per contract increase: 19%	record	33%	—	—
North American Equities Strong industry volumes drove net transaction and clearing fees. Net transaction and clearing fees growth: 40%Market data fees growth: 5%Access and capacity fees growth: 12%	—	18%	—	—
Europe and APAC Driven by stronger industry volumes, market share, and net capture dynamics, with record trading days in Cboe Europe. Net transaction and clearing fees growth: 43%Non-transaction revenues growth: 21%	—	32%	—	—
Futures Increase primarily due to stronger VIX activity. Total ADV uptick: 14%	—	9%	—	—
Global FX Strongest net revenue growth of any segment in Q1. Average daily notional value increase: 36%Net capture increase: 4%	record contribution	38%	—	—
Data Vantage Revenue growth underpinned by healthy new subscription and unit sales, with pronounced growth from one-time data sales associated with newly launched products. Growth from new subscription and unit sales: 85%Growth from pricing changes: 15% (remainder)Market data and access services growth: double digitsGlobal indices growth: double digitsRisk and market analytics growth: double digits	—	19%	—	—

Product announcements

Product	Type	Timeline	Details
securities-based event contracts	launch	—

Deals & partnerships

Not stated Sale of Cboe Canada and Cboe Australia businesses as part of strategic realignment.

Part of a strategic decision to exit or scale back noncore and lower-return businesses.

CNBC New multiyear collaboration to bring Cboe's trading floor expertise to a global audience. multiyear

Leveraging the trading floor to deliver live market insight and investor education, elevate the Cboe brand, and reinforce leadership in global markets. Inaugural televised bell ringing on April 6.

Risks & headwinds

Workforce reduction

approximately 20%

Mitigation:Designed to build more agile teams, place clear ownership of outcomes, and direct resources to work that will drive future success.

Annualized reduction in net revenue from strategic realignment actions (sales and wind-downs of non-core businesses) annualized

approximate 3% annualized reduction in net revenue compared to 2025

Mitigation:Strategic decision to exit or scale back noncore and lower-return businesses to allow for more deliberate investment in core and new growth areas.

Uncertainty regarding timing and completion of Cboe Canada and Cboe Australia sales

Not quantified

Mitigation:Company will update guidance as regulatory approvals progress and transaction timing becomes more certain.

Market continues to evolve at an unprecedented pace ongoing

Not quantified

Mitigation:Company must move faster, sharpen focus, and deploy resources with greater discipline; strategic realignment to position for future success and invest in emerging areas like financial/economic event markets and tokenization.

Regulatory clarity on binary options on broad-based stock indices

Not quantified

Mitigation:Active discussions with regulators; hopeful and optimistic that regulatory clarity will ultimately result in no impact to licensed products.

What to watch in Q2 FY26

Data Vantage organic net revenue growth

Next quarter (Q2 FY26 results)

Current 19% (Q1 FY26)

Target Low double-digit range (full year 2026 guidance)

Why it matters

To assess if the strong Q1 growth, partly driven by one-time sales, can be sustained towards the full-year guidance, indicating underlying demand for data products.

As you heard Jill say, we are taking our guidance up this quarter to low double digits for the year. I wouldn't say that's a new baseline, but we continue to see some pretty strong growth. So we'll continue to update as the quarters go on.

Find out whether CBOE delivers this. Inve re-checks your case every morning.

Q&A highlights

How sustainable is the 19% Data Vantage growth, especially with 85% from new sales? Is low double-digit growth the new baseline for full-year guidance?

Craig Donohue explained that about half the growth was from higher access-related revenue due to client demand for options exchange connectivity, and 40% from market data sales, particularly in Europe, US, and Asia. He noted that new product launches triggered significant one-time revenue from historic data sets, contributing to the 19% growth. While guidance was raised to low double-digits for the year, he wouldn't call it a new baseline but expects strong growth.

“About half of the growth year-over-year was driven by higher access-related revenue, and the driver of that was really client demand for increased connectivity to our options exchanges. ... About 40% of the growth came from increased market data sales. ... we launched 2 new products related to options data sets this quarter. And while we started off strong on subscription sales, those 2 new launches also triggered quite a bit of onetime revenue related to historic data sets to combine with those new products. So that's where you see some of the relative outperformance in that 19% year-over-year growth rate.”

asked by Patrick Moley · answered by Craig Donohue

2 min read 7 chapters

Detailed narrative

Record Q1 Performance and Broad-Based Growth

Cboe achieved record net revenue of $729 million, up 29% year-over-year, and record adjusted diluted EPS of $3.70, up 48%. This robust performance was broad-based, with double-digit net revenue growth in four of five segments and record results across all major categories, underscoring the strong foundation for future strategic advancements.

Derivatives Strength and Evolving Market Dynamics

The derivatives business saw a 32% increase in net revenue, driven by a 35% rise in Index options net transaction and clearing fees. Proprietary SPX options set a quarterly record with 4.9 million ADV, up 34% year-over-year. Growth drivers evolved, with 0 DTE options powering growth in stable markets, while non-0 DTE options surged in March due to shifting macro outlooks, highlighting the utility of Cboe's volatility toolkit across diverse market environments.

Strategic Realignment and Workforce Optimization

Cboe announced further strategic realignment actions, including a workforce reduction of approximately 20% across the organization. These actions, combined with prior divestitures (Canada, Australia) and wind-downs (European derivatives, Japanese equities), aim to eliminate lower-return work, strengthen core businesses, and invest more deliberately in new growth areas like prediction markets and tokenization, enhancing efficiency and accountability.

Event Contracts and Prediction Markets Strategy

Cboe plans to launch securities-based event contracts, starting with a Mini SPX-based product mirroring vertical call spreads, designed for defined risk and capped payouts. The company sees significant long-term growth in event and prediction markets, intending to expand beyond index-based outcomes to economic and financial indicators, leveraging its expertise in product design, regulatory integrity, and market infrastructure.

Cash and Spot Markets Momentum

Net revenue in Cash and Spot Markets increased 34%, with record results across Europe and Asia Pacific (up 32%), North American Equities (net transaction and clearing fees up 40%), and Global FX (up 38%). This growth was fueled by stronger industry volumes, market share gains, and increased net capture, with Cboe Europe experiencing five of its ten highest trading days during the quarter.

Data Vantage Growth and Product Innovation

Data Vantage net revenue grew 19% year-over-year, with approximately 85% of this growth attributed to new units and sales, rather than pricing. The segment saw strong contributions from new product sales and continued demand for market access, particularly from local brokers in Asia seeking U.S. market data, with onetime data sales from newly launched products contributing to the pronounced growth.

Capital Allocation and Balance Sheet Strength

Cboe maintains a strong balance sheet with $2.1 billion in adjusted cash and a leverage ratio of 0.8x, providing flexibility for organic and inorganic investments. The company resumed opportunistic share repurchases, buying back $45 million in Q1, and returned $76 million through dividends, totaling $121 million in capital returned to shareholders for the quarter.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.