Cboe shares climb 1.5% after record Q4, options revenue surges 34%
Exchange operator beats earnings estimates by 21% as derivatives boom drives full-year EPS up 45%
Cboe Global Markets shares rose 1.5% on Friday after the exchange operator delivered an exceptional fourth quarter that capped a year of record growth, powered by surging demand for options trading and volatility products.
The Chicago-based company reported adjusted earnings per share of $3.06 for the fourth quarter, beating analyst estimates by 21% and jumping 46% from the prior year. Net revenue climbed 28% to $671.1 million, well above the $592.4 million consensus forecast, with options revenue leading the charge.
Options net revenue increased 34% to $433.1 million, driven by a 24% surge in average daily volume and favorable pricing dynamics. The strength in options—particularly index options—helped lift Cboe's derivatives business revenue by 38% year-over-year. Total options average daily volume climbed 24% in the quarter, with index options ADV jumping 35% and multi-listed options ADV rising 20%.
"Cboe delivered an exceptional fourth quarter, marking the culmination of a year characterized by record growth—including 17 percent net revenue growth, 45 percent diluted EPS growth, and 24 percent adjusted diluted EPS growth," said Craig Donohue, chief executive officer. "Our recent strategic realignment is enabling us to allocate more resources toward growth and value creation in our core businesses, while also better positioning Cboe to capitalize on emerging opportunities."
For the full year 2025, diluted earnings per share surged 45% to $10.42, while adjusted diluted EPS increased 24% to $10.67. Full-year revenue reached $2.4 billion, up 17% from 2024. The company ended the year with $2.22 billion in cash and equivalents and $1.44 billion in total debt.
The earnings beat marks Cboe's fourth consecutive quarter of surprising to the upside, according to analyst data. Despite the strong performance, analysts maintain a cautious stance, with the stock rated a "Hold" by 10 of 16 analysts surveyed. Three analysts recommend a "Strong Buy," while one rates the shares a "Strong Sell." The stock is currently trading at $275.28, slightly above the mean price target of $273.
Cboe's options exchanges captured 29.2% total market share in the quarter, down from 30.4% in the prior year, suggesting increased competitive pressure even as overall volumes surge. The company noted that revenue per contract increased 13%, benefiting from a shift toward higher-margin index options and improved pricing in multi-listed options.
Looking ahead to 2026, Cboe provided guidance for organic total net revenue growth in the "mid single-digit" range, with Data Vantage expected to deliver "mid to high single-digit" organic revenue growth. The company forecast adjusted operating expenses of $864 million to $879 million and a tax rate between 27.5% and 29.5% on adjusted earnings.
"We are starting 2026 with a very strong foundation—a focused growth strategy, a highly seasoned and impressive leadership team, and continued strong secular trends in our core businesses," Donohue said.
The exchange operator has been expanding its product offerings, including Bitcoin U.S. ETF Index Options, Magnificent 10 Options and Futures, and its flagship VIX volatility products. Cboe positions itself as "The Home of the VIX® Index & SPX," touting the world's widest array of volatility products.
With the options trading boom showing little sign of slowing, investors will be watching whether Cboe can maintain its market share momentum while delivering on the more modest growth expectations for 2026. The company's ability to leverage its dominant position in index options and volatility products could be key to sustaining its impressive earnings trajectory.