Earnings call transcript: Cboe Global Markets beats Q1 2026 earnings expectations

Cboe Global Markets Inc. reported impressive financial results for the first quarter of 2026, exceeding both earnings and revenue forecasts. The company posted an earnings per share (EPS) of $3.70, surpassing the anticipated $3.25, marking a 13.85% surprise. Revenue reached $729 million, above the expected $693.75 million, a 5.07% increase over forecasts. These results have driven Cboe’s stock price up by 5.64% in pre-market trading, reaching $317.

Cboe Global Markets demonstrated strong performance in Q1 2026, achieving record revenue and earnings levels. The company saw significant growth across its core segments, with derivatives and options segments leading the way. This performance is consistent with Cboe’s historical trend of strong quarterly results, marking the fourth record quarter in the last five. The company’s financial strength is reflected in its return on equity of 23% and an InvestingPro Financial Health Score rated as "GREAT," underscoring operational efficiency and profitability.

Cboe’s actual EPS of $3.70 exceeded the forecasted $3.25, resulting in a 13.85% earnings surprise. This substantial beat is notable compared to previous quarters and reflects the company’s robust operational performance. Revenue also surpassed expectations, coming in at $729 million against a forecast of $693.75 million, a 5.07% surprise.

Following the earnings announcement, Cboe’s stock price rose by 5.64% in pre-market trading, reaching $317. This increase reflects positive investor sentiment, driven by the company’s strong financial performance. The stock’s movement is notable as it approaches its 52-week high of $325.96, indicating investor confidence in Cboe’s continued growth. According to InvestingPro data, the stock is trading near its 52-week high with a year-to-date return of 11.3% and a one-year return exceeding 20%. Notably, 13 analysts have revised their earnings upwards for the upcoming period, reinforcing the positive sentiment. However, InvestingPro’s Fair Value analysis suggests the stock may be overvalued at current levels. For investors seeking comprehensive valuation insights, InvestingPro offers access to over 10 additional ProTips for CBOE, along with detailed financial health scores and peer comparisons.

Cboe has provided forward guidance indicating continued growth, with EPS forecasts for the upcoming quarters ranging from $3.02 to $3.28. Revenue projections for FY 2026 and FY 2027 are set at $2.69 billion and $2.80 billion, respectively, suggesting a positive outlook for sustained financial performance.

Cboe executives highlighted the company’s strategic focus on expanding its product offerings and enhancing market infrastructure. "Our record-breaking quarter is a testament to our commitment to innovation and operational excellence," said the CEO. The leadership team emphasized their confidence in achieving further growth through strategic initiatives.

During the earnings call, analysts inquired about Cboe’s strategies for sustaining growth amid market volatility. Executives addressed concerns by outlining plans for technological advancements and expanding into new markets, reinforcing their commitment to long-term growth. For investors seeking deeper analysis, CBOE is among the 1,400+ US equities covered by InvestingPro’s comprehensive Pro Research Reports, which transform complex Wall Street data into clear, actionable intelligence through intuitive visuals and expert analysis.

Kelvin, Conference Operator: Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cboe Global Markets 1st quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Ken Hill, Head of Investor Relations. Please go ahead.

Ken Hill, Head of Investor Relations, Cboe Global Markets: Good morning, and thank you for joining us for our first quarter earnings conference call. On the call today, Fred Tomczyk, our CEO, will discuss our performance for the quarter and provide an update on our strategic initiatives. Scott Johnston, our Chief Operating Officer, will provide an update on the additional strategic realignment actions announced today. Jill Griebenow, our Chief Financial Officer, will provide an overview of our financial results for the quarter, as well as discuss our 2026 financial outlook. Following their comments, we will open the call to Q&A. Also joining us for Q&A will be Prashant Bhatia, our Head of Enterprise Strategy and Corporate Development, and Rob Hocking, our Global Head of Derivatives. I would like to point out that this presentation will include the use of slides. We will be showing the slides and providing commentary on each.

A downloadable copy of the slide presentation is available on the investor relations portion of our website. During our remarks, we’ll make some forward-looking statements which represent current judgment on what the future may hold. While we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions, risks, and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise after this conference call. During the call this morning, we’ll be referring to non-GAAP measures as identified and reconciled in our earnings materials.

Now, I’d like to turn the call over to Fred Tomczyk.

Fred Tomczyk, Chief Executive Officer, Cboe Global Markets: Good morning. Thank you for joining us to review our first quarter results. Cboe delivered another quarter of record net revenue and adjusted earnings powered by continued strength across all of our core businesses. The results underscore the strong foundation we have in place as we take the next steps in advancing our strategy. I will provide some high-level comments before turning the call over to Scott Johnston to talk through the additional strategic realignment changes announced this morning, and then to Jill for a financial update. During the first quarter, Cboe grew net revenue 29% year-over-year to a record $729 million, and adjusted diluted EPS increased an exceptional 48% to a record $3.70.

The robust results in the first quarter were again broad-based, driven by record net revenue in every major category at Cboe and double-digit net revenue growth in four of our five company segments. Taking a closer look at the first quarter trends in our derivatives business, we delivered another record quarter with net revenue increasing 32% year-over-year. Index options net transaction and clearing fees revenue drove the upside, increasing a robust 35% as our proprietary SPX options set another quarterly record with average daily volume increasing 34% year-over-year to 4.9 million contracts. Interestingly, the drivers of that growth evolved as market conditions changed throughout the quarter. When things were steady, as they were in January and February, the 0DTE options continued to power the growth of the overall SPX franchise on the back of deeper retail and institutional engagement.

In March, as the macro outlook shifted abruptly with the Iran war, investors turned to non-0DTE options to help manage their portfolios as longer-term risks over inflation and growth increased. Zero DTE options still grew, but at a more steady 6% rate month-over-month in March, while non-0DTE options jumped over 26%, helping to drive a new monthly ADV record of 5.4 million SPX options contracts. Outside of SPX, we saw multiple quarterly ADV records across our Mini-SPX options, Russell 2000 index options, as well as our VIX options complex, speaking to the utility of Cboe’s volatility toolkit across market environments. Overall, we see a supportive macro environment for our derivatives business while we continue to expand global access and retail engagement.

Last quarter, global trading hours volumes rose more than 32% to a record high, driven by strong growth during Asian hours as we continue onboarding local brokers. We are also investing at home. Our trading floor helps traders to efficiently manage complex multi-leg risk capabilities that can’t be replicated electronically and supports broader market liquidity through both direct execution and related hedging activity. On April 6, we were pleased to be joined by our long-term partner, S&P Dow Jones Indices, for the inaugural televised bell ringing on the Cboe floor as part of our new multi-year collaboration with CNBC. Through our new partnership with CNBC, we are bringing the power and expertise of Cboe’s iconic trading floor to a global audience, leveraging a differentiated asset within our market ecosystem to deliver live market insight and investor education, elevate the Cboe brand, and reinforce our leadership in global markets.

Turning to event contracts, subject to regulatory approval, we plan to bring our securities-based event contracts to market. Based on our Mini-SPX contract and leveraging our existing options infrastructure, the product is designed to mirror the risk-reward profile of a widely used options strategy, the vertical call spread, allowing investors to take a simple yes or no view on an outcome with defined downside risk and a capped payout range. By incorporating a broader