Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the notes thereto, included in Item 1 in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and as contained in that report, the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” This discussion contains forward-looking information. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Overview

Cboe Global Markets, Inc., the world’s leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across North America, Europe, and Asia Pacific. Above all, the Company is committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future.

Cboe’s subsidiaries include the largest options exchange and the third largest stock exchange operator in the U.S. In addition, the Company operates Cboe Europe, one of the largest stock exchanges by value traded in Europe, and owns Cboe Clear Europe, a leading pan-European equities and derivatives clearinghouse, BIDS Holdings, which owns a leading block-trading ATS by volume in the U.S., and provides block-trading services with Cboe market operators in Europe, Canada, Australia, and Japan, Cboe Australia, an operator of trading venues in Australia, Cboe Japan, an operator of trading venues in Japan, Cboe Digital, an operator of a U.S. based digital asset spot market and a regulated futures exchange, Cboe Clear Digital, an operator of a regulated clearinghouse, and Cboe Canada Inc., a recognized Canadian securities exchange. Cboe subsidiaries also serve collectively as a leading market globally for exchange-traded products (“ETPs”) listings and trading.

The Company is headquartered in Chicago with offices in Amsterdam, Belfast, Hong Kong, Kansas City, London, Manila, New York, San Francisco, Sarasota Springs, Singapore, Sydney, Tokyo, and Toronto.

Business Segments

The Company operates six reportable business segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital, which is reflective of how the Company's chief operating decision-maker reviews and operates the business, as discussed in Note 1 (“Organization and Basis of Presentation”). Segment performance is primarily evaluated based on operating income (loss). The Company’s chief operating decision-maker does not use segment-level assets or income and expenses below operating income (loss) as key performance metrics; therefore, such information is not presented below. The Company has aggregated all of its corporate costs, as well as other business ventures, within the Corporate Items and Eliminations totals based on the decision that those activities should not be used to evaluate the operating performance of the segments; however, operating expenses that relate to activities of a specific segment have been allocated to that segment.

Options. The Options segment includes options on market indices (“index options”), as well as on the stocks of individual corporations (“equity options”) and on ETPs such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”), which are “multi-listed” options and listed on a non-exclusive basis. These options are eligible to trade, as applicable, on Cboe Options, C2, BZX, EDGX, and/or other U.S. national security exchanges. Cboe Options is the Company’s primary options market and offers trading in listed options through a single system that integrates electronic trading and traditional open outcry trading on the Cboe Options trading floor in Chicago. C2 Options, BZX Options, and EDGX Options are all-electronic options exchanges, and typically operate with different market models and fee structures than Cboe Options. The Options segment also includes applicable market data fees revenues generated from the consolidated tape plans, the licensing of proprietary options market data, index licensing, routing services, and access and capacity services.

North American Equities. The North American Equities segment includes U.S. equities and ETP transaction services that occur on fully electronic exchanges owned and operated by BZX, BYX, EDGX, and EDGA, equities transactions that occur on the BIDS Trading platform in the U.S. and Canada, and Canadian equities and other transaction services that occur on or through Cboe Canada Inc.’s order books. The North American Equities segment also includes listing services on Cboe Canada Inc., corporate and ETP listings on BZX, applicable market data fees revenues

generated from the consolidated tape plans, the licensing of proprietary equities market data, routing services, and access and capacity services.

Europe and Asia Pacific. The Europe and Asia Pacific segment includes the pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and Cboe Europe Derivatives (“CEDX”). It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities transaction services of Cboe Australia and Cboe Japan, operators of trading venues in Australia and Japan, respectively, along with equities transactions that occur on the BIDS Trading platform in Australia and Japan. Cboe Europe operates lit and dark books, a periodic auctions book, and Cboe BIDS Europe, a Large-in-Scale (“LIS”) trading negotiation facility for UK symbols. Cboe NL, based in Amsterdam, operates similar business functionality to that offered by Cboe Europe, and provides for trading only in European Economic Area (“EEA”) symbols. Cboe Europe Derivatives, a pan-European derivatives platform, offers futures and options based on Cboe Europe equity indices, and single stock options. This segment also includes Cboe Europe, Cboe NL, CEDX, Cboe Australia and Cboe Japan revenue generated from the licensing of proprietary market data and from access and capacity services.

Futures. The Futures segment includes transaction services provided by CFE, a fully electronic futures exchange, which includes offerings for trading of VIX futures and other futures products, the licensing of proprietary market data, as well as access and capacity services.

Global FX. The Global FX segment includes institutional FX trading services that occur on the Cboe FX fully electronic trading platform, non-deliverable forward FX transactions (“NDFs”) offered for execution on Cboe SEF, as well as revenue generated from the licensing of proprietary market data and from access and capacity services. The segment includes transaction services for U.S. government securities executed on the Cboe Fixed Income fully electronic trading platform.

Digital. The Digital segment includes a U.S. based digital asset spot market, a regulated futures exchange, and a regulated clearinghouse, as well as revenue generated from the licensing of proprietary market data and from access and capacity services. Cboe Digital launched trading and clearing in margin futures on Bitcoin and Ether on January 11, 2024.

On April 25, 2024, the Company announced plans to wind down the spot crypto market currently offered by Cboe Digital and transition its cash-settled Bitcoin and Ether futures contracts to CFE, pending regulatory review and certain corporate approvals. The Company expects to maintain the derivatives clearing services currently operated by Cboe Clear Digital, integrating these functions and teams into the existing organizational structure. In connection with shutting down the spot crypto exchange, the Company also plans to unwind the minority ownership structure in Cboe Digital.

For the three months ended March 31, 2024, Cboe Digital net revenue was $(0.9) million and is included in the Digital reportable segment. The Company expects to record an estimated pre-tax charge of $39 million to $82 million, which is expected to be recorded in the quarter ending June 30, 2024, primarily related to non-cash impairment of long-lived and indefinite-lived intangible assets.

General Factors Affecting Results of Operations

In broad terms, our business performance is impacted by a number of drivers, including macroeconomic events affecting the risk and return of financial assets, investor sentiment, the regulatory environment for capital markets, geopolitical events, tax policies, central bank policies and changing technology, particularly in the financial services industry. We believe our future revenues and net income will continue to be influenced by a number of domestic and international economic trends, including:

	●	trading volumes on our proprietary products such as VIX options and futures and SPX options;

	●	trading volumes in listed equity securities, options, futures, and ETPs in North America, Europe, and Asia Pacific, clearing volumes in listed equity securities and ETPs in Europe, volumes in listed equity options, volumes in digital assets, and volumes in institutional FX trading;

	●	the demand for and pricing structure of the U.S. tape plan market data distributed by the Securities Information Processors (“SIPs”), which determines the pool size of the industry market data fees we receive based on our market share;

	●	consolidation and expansion of our customers and competitors in the industry;

	●	the demand for information about, or access to, our markets and products, which is dependent on the products we trade, our importance as a liquidity center, quality and integrity of our proprietary indices, and the quality and pricing of our data and access and capacity services;

	●	continuing pressure in transaction fee pricing due to intense competition in the North American, European, and Asia Pacific markets;

	●	significant fluctuations in foreign currency translation rates or weakened value of currencies; and

	●	regulatory changes and obligations relating to market structure, digital assets and increased capital requirements, and those which affect certain types of instruments, transactions, products, pricing structures, capital market participants or reporting or compliance requirements.

A number of significant structural, political and monetary issues, global conflicts continue to confront the global economy, and instability could continue, resulting in an increased or subdued level of inflation, market volatility, potential recessions, supply chain constraints and costs, changes in trading volumes, greater uncertainty, inflationary increases in our expenses, and increased costs and uncertainties related to CAT and the ability to collect on the promissory notes related to the funding of CAT may have an adverse effect on our financial results.

Components of Revenues

Cash and Spot Markets

Revenue aggregated into cash and spot markets includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other revenue from the Company’s North American Equities, Europe and Asia Pacific, Global FX, and Digital segments.

Data and Access Solutions

Revenue aggregated into data and access solutions includes access and capacity fees, proprietary market data fees, and associated other revenue across the Company’s six segments.

Derivatives Markets

Includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other fees from the Company’s Options, Futures, Europe and Asia Pacific, and Digital segments.

Components of Cost of Revenues

Liquidity Payments

Liquidity payments are primarily correlated to the volume of securities traded on our markets. As stated above, we record the liquidity rebates paid to market participants providing liquidity, in the case of Cboe Options, C2, BZX, EDGX, and Cboe Europe Equities and Derivatives, and Cboe Digital, as cost of revenue. BYX and EDGA offer a pricing model where we rebate liquidity takers for executing against an order resting on our book, which is also recorded as a cost of revenues.

Routing and Clearing

Various rules require that U.S. options and equities trade executions occur at the National Best Bid and Offer displayed by any exchange. Linkage order routing consists of the cost incurred to provide a service whereby Cboe equities and options exchanges deliver orders to other execution venues when there is a potential for obtaining a better execution price or when instructed to directly route an order to another venue by the order provider. The service affords exchange order flow providers an opportunity to obtain the best available execution price and may also result in cost benefits to those clients. Such an offering improves our competitive position and provides an opportunity to attract orders which would otherwise bypass our exchanges. We utilize third-party brokers or our broker-dealer, Cboe Trading, to facilitate such delivery. Also included within routing and clearing are the Order Management System and Execution Management System (“OMS” and “EMS”, respectively) fees incurred for U.S. Equities Off-Exchange order execution, as well as settlement costs incurred for the settlement process executed by Cboe Clear Europe and Cboe Clear Digital.

Section 31 Fees

Exchanges under the authority of the SEC (Cboe Options, C2, BZX, BYX, EDGX, and EDGA as well as CFE to the extent that CFE offers trading in security futures products) are assessed fees pursuant to the Exchange Act designed to recover the costs to the U.S. government of supervision and regulation of securities markets and securities professionals. We treat these fees as a pass-through charge to customers executing eligible listed equities and listed equity options trades. Accordingly, we recognize the amount that we are charged under Section 31 as a cost of revenues and the corresponding amount that we charge our customers as regulatory transaction fees revenue. Since the regulatory transaction fees recorded in revenues are equal to the Section 31 fees recorded in cost of revenues, there is no impact on our operating income. Cboe Trading, Cboe Europe, Cboe NL, BIDS, Cboe FX, Cboe Australia, Cboe Japan, Cboe Digital, and Cboe Canada Inc. are not U.S. national securities exchanges, and accordingly are not charged Section 31 fees.

Royalty Fees and Other Cost of Revenues

Royalty fees primarily consist of license fees paid by us for the use of underlying indices in our proprietary products usually based on contracts traded. The Company has licenses with the owners of the S&P 500 Index, S&P 100 Index and certain other S&P indices, FTSE Russell indices, the DJIA, MSCI, and certain other index products. This category also includes fees related to the dissemination of market data related to S&P indices and other products through Cboe Global Indices Feed (“CGIF”).

Other cost of revenues primarily consists of interest expense from clearing operations, electronic access permit fees and other miscellaneous costs associated with other revenue.

Components of Operating Expenses

Compensation and Benefits

Compensation and benefits represent our largest expense category and tend to be driven by our staffing requirements, financial performance, and the general dynamics of the employment market. Stock-based compensation is a non-cash expense related to employee equity awards. Stock-based compensation can vary depending on the quantity and fair value of the award on the date of grant and the related service period.

Depreciation and Amortization

Depreciation and amortization expense results from the depreciation of long-lived assets purchased, the amortization of purchased and internally developed software, and the amortization of intangible assets.

Technology Support Services

Technology support services consists primarily of costs related to the maintenance of computer equipment supporting our system architecture, circuits supporting our wide area network, support for production software, operating system license and support fees, fees paid to information vendors for displaying data and off-site system hosting fees.

Professional Fees and Outside Services

Professional fees and outside services consist primarily of consulting services, which include supplemental staff activities primarily related to systems development and maintenance, legal, regulatory and audit, and tax advisory services, as well as compensation paid to non-employee directors, including stock-based compensation and deferred compensation.

Travel and Promotional Expenses

Travel and promotional expenses primarily consist of advertising, costs for special events, sponsorship of industry conferences, options education seminars and travel-related expenses.

Facilities Costs

Facilities costs primarily consist of expenses related to owned and leased properties including rent, maintenance, utilities, real estate taxes and telecommunications costs.

Acquisition-Related Costs

Acquisition-related costs relate to acquisitions and other strategic opportunities. The acquisition-related costs include fees for investment banking advisors, lawyers, accountants, tax advisors, public relations firms, severance and retention costs, and other external costs directly related to mergers and acquisitions.

Other Expenses

Other expenses represent costs necessary to support our operations that are not already included in the above categories, including, but not limited to the impairment of digital assets held presented in intangible assets, net as part of the ordinary operations of the Digital segment, and changes in contingent consideration.

Non-Operating Income (Expenses)

Income and expenses incurred through activities outside of our core operations are considered non-operating and are classified as other income (expense). These activities primarily include interest earned on the investing of excess cash, commitment fees and interest expense related to outstanding debt facilities, income and unrealized gains and losses related to investments held in a trust for the Company’s non-qualified retirement and benefit plans, including non-employee director deferred compensation, realized gains and losses related to the Company’s previously held minority investments, income earned related to the Company’s minority investments, equity earnings or losses from our investments in other business ventures, impairment of the Company’s investments, and investment establishment costs associated with new business ventures.

Financial Summary

The following are summaries of changes in financial performance and include certain non-GAAP financial measures. Management uses these non-GAAP measures internally in conjunction with GAAP measures to help evaluate our performance and to help make financial and operational decisions. These non-GAAP financial measures assist management in comparing our performance on a consistent basis for purposes of business decision making by removing the impact of certain items management believes do not reflect our underlying operations.

We believe our presentation of these measures provides investors with greater transparency into financial measures used by management and is useful to investors for period-to-period comparisons of our ongoing operating performance.

These non-GAAP financial measures are not presented in accordance with, or as an alternative to, GAAP financial measures and may be calculated differently from non-GAAP measures used by other companies, which reduces their usefulness as comparative measures. We encourage analysts, investors and other interested parties to use these non-GAAP measures as supplemental information to the GAAP financial measures included herein, including our condensed consolidated financial statements, to enhance their analysis and understanding of our performance and in making comparisons. Please see the footnotes below for definitions, additional information, and reconciliations from the closest GAAP measure.

The following summarizes changes in financial performance for the three months ended March 31, 2024, compared to the three months ended March 31, 2023:

	(1)	These are Non-GAAP figures for which reconciliations are provided below (in millions, except percentages, earnings per share, and as noted below).


	Three Months Ended March 31,						Increase/			Percent
	2024			2023			(Decrease)			Change
Total revenues	$	957.2		$	988.2		$	(31.0)		(3)	%
Total cost of revenues		455.1			516.8			(61.7)		(12)	%
Revenues less cost of revenues		502.1			471.4			30.7		7	%
Total operating expenses		219.7			223.5			(3.8)		(2)	%
Operating income		282.4			247.9			34.5		14	%
Income before income tax provision		292.1			248.2			43.9		18	%
Income tax provision		82.6			74.8			7.8		10	%
Net income	$	209.5		$	173.4		$	36.1		21	%
Basic earnings per share	$	1.97		$	1.63		$	0.34		21	%
Diluted earnings per share		1.96			1.63			0.33		20	%
EBITDA (1)		337.1			303.9			33.2		11	%
EBITDA margin (2)		67.1	%		64.5	%		2.6	%	*
Adjusted EBITDA (1)	$	337.3		$	310.3		$	27.0		9	%
Adjusted EBITDA margin (3)		67.2	%		65.8	%		1.4	%	*
Adjusted earnings (4)	$	227.7		$	201.8		$	25.9		13	%
Adjusted earnings margin (4)		45.3	%		42.8	%		2.5	%	*
Diluted weighted average shares outstanding		106.1			106.2			(0.1)		(0)	%
Adjusted Diluted earnings per share (5)	$	2.15		$	1.90		$	0.25		13	%

*	Not meaningful

(1)

EBITDA is defined as income before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before acquisition-related costs and gains or losses on the revaluation of Digital non-recourse notes and warrants. EBITDA and adjusted EBITDA do not represent, and should not be considered as, alternatives to net income as determined in accordance with GAAP. We have presented EBITDA and adjusted EBITDA because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors and other interested parties in the evaluation of companies. In addition, we use adjusted EBITDA as a measure of operating performance for preparation of our forecasts and evaluating our leverage ratio for the debt to earnings covenant included in our outstanding credit facility. Other companies may calculate EBITDA and adjusted EBITDA differently than we do. EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

(2)	EBITDA margin represents EBITDA divided by revenues less cost of revenues.

(3)	Adjusted EBITDA margin represents adjusted EBITDA divided by revenues less cost of revenues.

(4)

Adjusted earnings is defined as net income adjusted for amortization of acquired intangible assets, acquisition-related costs, certain tax reserve changes, gains or losses on the revaluation of Digital non-recourse notes and warrants, and net income or loss allocated to participating securities, net of the income tax effects of these adjustments. Adjusted earnings does not represent, and should not be considered as, an alternative to net income or loss, as determined in accordance with GAAP. We have presented adjusted earnings because we consider it an important supplemental measure of our performance and we use it as the basis for monitoring our own core operating financial performance relative to other operators of exchanges. We also believe that it is frequently used by analysts, investors and other interested parties in the evaluation of companies. We believe that investors may find this non-GAAP measure useful in evaluating our performance compared to that of peer companies in our industry. Other companies may calculate adjusted earnings differently than we do. Adjusted earnings has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

(5)	Adjusted diluted earnings per share represents adjusted earnings divided by diluted weighted average shares outstanding.

The following is a reconciliation of net income allocated to common stockholders to EBITDA and adjusted EBITDA (in millions) for the three months ended March 31, 2024 and 2023, respectively:


	Three Months Ended March 31,
	2024
	Options		North American Equities		Europe and Asia Pacific		Futures		Global FX		Digital		Corporate		Total
Net income (loss) allocated to common stockholders	$	215.5	$	37.3	$	8.5	$	22.0	$	6.5	$	(8.6)	$	(72.9)	$	208.3
Interest expense (income), net		(0.1)		(0.3)		1.2		—		—		(1.1)		9.2		8.9
Income tax provision		—		0.8		0.3		—		—		—		81.5		82.6
Depreciation and amortization		7.1		15.8		7.9		0.6		4.1		1.8		—		37.3
EBITDA		222.5		53.6		17.9		22.6		10.6		(7.9)		17.8		337.1
Acquisition-related costs		—		0.2		0.2		—		—		0.1		0.1		0.6
Gain on revaluation of Digital non-recourse notes and warrants		—		—		—		—		—		(0.4)		—		(0.4)
Adjusted EBITDA	$	222.5	$	53.8	$	18.1	$	22.6	$	10.6	$	(8.2)	$	17.9	$	337.3

	Three Months Ended March 31,
	2023
	Options		North American Equities		Europe and Asia Pacific		Futures		Global FX		Digital		Corporate		Total
Net income (loss) allocated to common stockholders	$	200.0	$	26.9	$	9.6	$	20.8	$	4.4	$	(10.2)	$	(78.9)	$	172.6
Interest expense (income), net		—		(0.3)		1.5		—		—		(0.2)		14.1		15.1
Income tax provision (benefit)		—		1.7		0.2		—		0.3		(1.0)		73.6		74.8
Depreciation and amortization		6.8		18.6		8.4		0.6		5.2		1.8		—		41.4
EBITDA		206.8		46.9		19.7		21.4		9.9		(9.6)		8.8		303.9
Acquisition-related costs		—		0.4		0.7		—		—		0.6		4.7		6.4
Adjusted EBITDA	$	206.8	$	47.3	$	20.4	$	21.4	$	9.9	$	(9.0)	$	13.5	$	310.3

The following is a reconciliation of net income allocated to common stockholders to adjusted earnings (in millions):


	Three Months Ended
	March 31,
	2024		2023
Net income allocated to common stockholders	$	208.3	$	172.6
Amortization of acquired intangible assets		26.2		30.9
Acquisition-related costs		0.6		6.4
Gain on revaluation of Digital non-recourse notes and warrants		(0.4)		—
Tax effect of adjustments		(6.9)		(9.5)
Increase of tax reserves		—		1.5
Net income allocated to participating securities		(0.1)		(0.1)
Adjusted earnings	$	227.7	$	201.8

The following summarizes changes in certain operational and financial metrics for the three months ended March 31, 2024, compared to the three months ended March 31, 2023:

The following summarizes changes in certain operational and financial metrics for the three months ended March 31, 2024, compared to the three months ended March 31, 2023 (continued from previous page):

The following table includes operational and financial metrics for our Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX segments. The following summarizes changes in certain operational and financial metrics for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:


	Three Months Ended March 31,						Increase/			Percent
	2024			2023			(Decrease)			Change

	(in millions, except percentages, trading days, and as noted below)
Options:
Average daily volume (ADV) (in millions of contracts):
Market ADV		47.5			46.1			1.4		3	%
Total touched contracts (1)		14.8			14.7			0.1		1	%
Multi-listed contract ADV		10.7			11.1			(0.4)		(3)	%
Index contract ADV		4.1			3.6			0.5		14	%
Number of trading days		61			62			(1)		(2)	%
Total Options revenue per contract (RPC) (2)	$	0.299		$	0.267		$	0.032		12	%
Multi-listed options RPC (2)	$	0.064		$	0.064		$	—		0	%
Index options RPC (2)	$	0.915		$	0.889		$	0.026		3	%
Total Options market share		31.3	%		31.8	%		(0.5)	%	*
Multi-listed options market share		24.8	%		26.1	%		(1.3)	%	*
North American Equities:
U.S. Equities:
U.S. Equities - Exchange:
ADV:
Total touched shares (in billions) (1)		1.6			1.6			—		(0)	%
Market ADV (in billions)		11.8			11.8			—		(0)	%
Market share		12.8	%		12.7	%		0.1	%	*
U.S. Equities - Exchange (net capture per one hundred touched shares) (3)	$	0.019		$	0.019		$	—		(0)	%
U.S. ETPs: launches (number of launches)		49			16			33		206	%
U.S. ETPs: listings (number of listings)		703			603			100		17	%
U.S. Equities - Off-Exchange:
ADV:
Total touched shares (in millions) (1)		77.1			89.4			(12.3)		(14)	%
U.S. Equities - Off-Exchange (net capture per one hundred touched shares) (4)	$	0.141		$	0.113		$	0.028		24	%
Trading days		61			62			(1)		(2)	%
Canadian Equities:
ADV (matched shares, in millions) (5)		146.3			150.8			(4.5)		(3)	%
Trading days		62			63			(1)		(2)	%
Net capture (per 10,000 touched shares, in Canadian dollars) (6)	$	3.997		$	4.039		$	(0.042)		(1)	%
Europe and Asia Pacific:
European Equities:
ADNV:
Matched ADNV (Euros - in billions) (7)	€	9.9		€	11.4		€	(1.5)		(13)	%
Market ADNV (in billions)	€	41.8		€	45.8		€	(4.0)		(9)	%
Trading days		63			65			(2)		(3)	%
Market share		23.7	%		24.9	%		(1.2)	%	*
Net capture (per matched notional value (bps), in Euros) (8)	€	0.249		€	0.215		€	0.034		16	%
Cboe Clear Europe:
Trades cleared (9)		294.3			359.4			(65.1)		(18)	%
Fee per trade cleared (10)	€	0.008		€	0.008		€	—		(3)	%
European equities market share cleared (11)		34.8	%		34.1	%		0.7	%	*
Net settlement volume (12)		2.5			2.7			(0.2)		(5)	%
Net fee per settlement (13)	€	1.072		€	0.953		€	0.119		12	%
Australian Equities:
ADNV (AUD - in billions)	$	0.8		$	0.8		$	—		0	%
Trading days		62			63			(1)		(2)	%
Market share - Continuous		20.4	%		18.5	%		1.9	%	*
Net capture (per matched notional value (bps), in Australian Dollars) (14)	$	0.156		$	0.160		$	(0.004)		(3)	%
Japanese Equities:
ADNV (JPY - in billions)	¥	315.9		¥	183.3		¥	132.6		72	%
Trading days		58			60			(2)		(3)	%
Market share - Lit Continuous		5.0	%		4.8	%		0.2	%	*
Net capture (per matched notional value (bps), in Yen) (15)	¥	0.227		¥	0.243		¥	(0.016)		(7)	%
Futures:
ADV (in thousands)		220.0			231.8			(11.8)		(5)	%
Trading days		61			62			(1)		(2)	%
Revenue per contract	$	1.749		$	1.725		$	0.024		1	%
Global FX:
ADNV ($ - in billions)	$	45.3		$	45.0		$	0.3		1	%
Market share		20.3	%		19.0	%		1.3	%	*
Trading days		64			65			(1)		(2)	%
Net capture (per one million dollars traded) (16)	$	2.62		$	2.64		$	(0.02)		(1)	%

Average British pound/U.S. dollar exchange rate	$	1.268		$	1.214		$	0.054		4	%
Average Canadian dollar/U.S. dollar exchange rate	$	0.742		$	0.740		$	0.002		0	%
Average Euro/U.S. dollar exchange rate	$	1.086		$	1.073		$	0.013		1	%
Average Euro/British pound exchange rate	£	0.856		£	0.883		£	(0.027)		(3)	%
Average Australian dollar/U.S. dollar exchange rate	$	0.658		$	0.684		$	(0.026)		(4)	%
Average Japanese Yen/U.S. dollar exchange rate	$	0.007		$	0.008		$	(0.001)		(16)	%

*Not meaningful

Note, the percent change listed represents the change in the unrounded metrics figures.

(1)	Touched volume represents the total number of shares of equity securities and ETFs internally matched on our exchanges or routed to and executed on an external market center.

(2)	Average revenue per contract, for options and futures represents total net transaction fees recognized for the period divided by total contracts traded during the period.

(3)	Net capture per one hundred touched shares refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX, and EDGA and the number of trading days.

(4)	Net capture per one hundred touched shares refers to transaction fees less order and execution management system (OMS/EMS) fees and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period.

(5)	Matched volume represents the total number of shares of equity securities and ETFs activity executed on our exchanges.

(6)	Net capture per 10,000 touched shares refers to transaction fees divided by the product of one-ten thousandth ADV of shares for Cboe Canada Inc. and the number of trading days.

(7)	Matched ADNV represents the average daily notional value of shares or contracts executed on our exchanges.

(8)	Net capture per matched notional value refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Cboe Europe Equities and the number of trading days.

(9)	Trades cleared refers to the total number of non-interoperable trades cleared.

(10)	Fee per trade cleared refers to clearing fees divided by number of non-interoperable trades cleared.

(11)	European Equities market share cleared represents Cboe Clear Europe’s client volume cleared divided by the total volume of the publicly reported European venues.

(12)	Net settlement volume refers to the total number of settlements executed after netting.

(13)	Net fee per settlement refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting.

(14)	Net capture per matched notional value refers to transaction fees less liquidity payments in Australian dollars divided by the product of ADNV in Australian dollars of shares matched on Cboe Australia and the number of Australian Equities trading days.

(15)	Net capture per matched notional value refers to transaction fees less liquidity payments in Japanese Yen divided by the product of ADNV in Japanese Yen of shares matched on Cboe Japan and the number of Japanese Equities trading days.

(16)	Net capture per one million dollars traded refers to net transaction fees less liquidity payments, if any, divided by the Spot and SEF products of one-thousandth of ADNV traded on the Cboe FX Markets and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction.

Revenues

Total revenues for the three months ended March 31, 2024 decreased $31.0 million, or 3%, compared to the same period in 2023 primarily due to a decrease in cash and spot markets and derivatives markets revenue, driven by a decrease in the Section 31 fee rate following a rate change in February 2023, coupled with a decline in volumes traded on the Options, European Equities, and U.S. Equities exchanges, partially offset by an increase in access and capacity fees and proprietary market data across segments.

The following summarizes changes in revenues for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 (in millions, except percentages):


	Three Months Ended
	March 31,				Increase/		Percent
	2024		2023		(Decrease)		Change
Cash and spot markets	$	380.9	$	407.0	$	(26.1)	(6)	%
Data and access solutions		140.2		129.4		10.8	8	%
Derivatives markets		436.1		451.8		(15.7)	(3)	%
Total revenues	$	957.2	$	988.2	$	(31.0)	(3)	%

Cash and Spot Markets

Cash and spot markets revenue decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to decreases in regulatory fees and transaction and clearing fees, partially offset by an increase in other revenue. Regulatory fees decreased primarily due to a 54% decrease in the Section 31 fee rate, from an average rate of $17.41 per million dollars of covered sales for the three months ended March 31, 2023 to an average rate of $8.00 per million dollars of covered sales for the three months ended March 31, 2024. Transaction and clearing fees decreased primarily due to a 13% decrease in European Equities matched ADNV, a slight decline in total touched shares on the U.S. Equities exchanges, and a decrease in the number of trading days on the European and U.S. Equities exchanges. Other revenue increased primarily due to an increase in interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned in accordance with its investment policy. See Note 12 (“Clearing Operations”) for additional information.

Data and Access Solutions

Data and access solutions revenue increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased physical port fees in the North American Equities, Options, and Europe and Asia Pacific segments and increased logical port fees in the Options, Europe and Asia Pacific and Futures segments, both driven by increases in pricing and subscribers. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, Europe and Asia Pacific, and North American Equities segments.

Derivatives Markets

Derivatives markets revenue decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to decreases in transaction and clearing fees and regulatory fees. Transaction and clearing fees decreased primarily due to a 1% decline in multi-listed options market share, a 3% decrease in multi-listed options ADV, a decrease in routed trades on the Options exchanges, and a decrease in the number of trading days on the Options exchanges, partially offset by a 14% increase in index options ADV. Regulatory fees decreased primarily due to a 54% decrease in the Section 31 fee rate, from an average rate of $17.41 per million dollars of covered sales for the three months ended March 31, 2023 to an average rate of $8.00 per million dollars of covered sales for the three months ended March 31, 2024.

Cost of Revenues

The following tables reconcile the disaggregated cost of revenues captions presented on the condensed consolidated statements of income to the net revenue captions presented on the condensed consolidated statements of income for the three months ended March 31, 2024 and 2023, respectively (in millions):


	Three Months Ended March 31,
	2024
	Cash andSpot Markets		Data andAccess Solutions		DerivativesMarkets		Total
Liquidity payments	$	222.9	$	—	$	115.9	$	338.8
Routing and clearing fees		11.8		—		4.2		16.0
Section 31 fees		34.7		—		7.4		42.1
Royalty fees and other cost of revenues		14.2		2.5		41.5		58.2
Total cost of revenues	$	283.6	$	2.5	$	169.0	$	455.1

	Three Months Ended March 31,
	2023
	Cash andSpot Markets		Data andAccess Solutions		DerivativesMarkets		Total
Liquidity payments	$	227.0	$	—	$	144.8	$	371.8
Routing and clearing fees		14.3		—		9.7		24.0
Section 31 fees		61.4		—		13.5		74.9
Royalty fees and other cost of revenues		7.1		2.2		36.8		46.1
Total cost of revenues	$	309.8	$	2.2	$	204.8	$	516.8

Total cost of revenues decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to decreased derivatives markets and cash and spot markets costs of revenues, driven by a decrease in liquidity payments as a result of multi-listed options declining market share and a decrease in the number of trading days, coupled with a decrease in Section 31 fees as a result of a decrease in the Section 31 fee rate, partially offset by an increase in operating interest expense attributable to Cboe Clear Europe.

The following summarizes changes in the disaggregated cost of revenues for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 (in millions, except percentages):


	Three Months Ended
	March 31,				Increase/		Percent
	2024		2023		(Decrease)		Change
Liquidity payments	$	338.8	$	371.8	$	(33.0)	(9)	%
Routing and clearing		16.0		24.0		(8.0)	(33)	%
Section 31 fees		42.1		74.9		(32.8)	(44)	%
Royalty fees and other cost of revenues		58.2		46.1		12.1	26	%
Total cost of revenues	$	455.1	$	516.8	$	(61.7)	(12)	%

Liquidity Payments

Liquidity payments decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a decline in multi-listed options market share, a decrease in multi-listed options ADV, and a decrease in the number of trading days on the Options exchanges.

Routing and Clearing

Routing and clearing fees decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a decrease in routed trades on the Options exchanges, coupled with a decrease in routed shares on the U.S. Equities exchanges.

Section 31 Fees

Section 31 fees decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a 54% decrease in the Section 31 fee rate, from an average rate of $17.41 per million dollars of covered sales for the three months ended March 31, 2023 to an average rate of $8.00 per million dollars of covered sales for the three months ended March 31, 2024.

Royalty Fees and Other Cost of Revenues

Royalty fees and other cost of revenues increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to an increase in operating interest expense attributable to Cboe Clear Europe as a result of the changing interest rate environment and additional interest expense in accordance with its investment policy, coupled with an increase in trading volumes of licensed products in the Options segment. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy.

Revenues Less Cost of Revenues

Revenues less cost of revenues increased $30.7 million, or 7% for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to increases in derivatives markets revenues less cost of revenues driven by an increase in volumes traded on the Options exchanges, coupled with an increase in access and capacity fees and proprietary market data across segments, partially offset by an increase in royalty fees in the Options segment.

The following summarizes the components of revenues less cost of revenues for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 (in millions, except percentages):


	Three Months Ended
	March 31,				Increase/		Percent
	2024		2023		(Decrease)		Change
Cash and spot markets	$	97.3	$	97.2	$	0.1	0	%
Data and access solutions		137.7		127.2		10.5	8	%
Derivatives markets		267.1		247.0		20.1	8	%
Total revenues less cost of revenues	$	502.1	$	471.4	$	30.7	7	%

Cash and Spot Markets

Cash and spot markets revenues less cost of revenues was relatively flat for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to an increase in net other revenue, partially offset by decreases in industry market data fees and net regulatory fees. Net other revenue increased primarily due to an increase in interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned in accordance with its investment policy. Industry market data fees decreased primarily due to a decrease in U.S. tape plan revenue driven by a decrease in audit recoveries. Net regulatory fees decreased primarily due to a decrease in regulatory assessments and fines within the North American Equities segment. See Note 12 (“Clearing Operations”) for additional information on Cboe Clear Europe’s investment policy.

Data and Access Solutions

Data and access solutions revenues less cost of revenues increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to increases in access and capacity fees and proprietary market data fees. Access and capacity fees increased primarily due to increased physical port fees in the North American Equities, Options, and Europe and Asia Pacific segments and increased logical port fees in the Options, Europe and Asia Pacific and Futures segments, both driven by increases in pricing and subscribers. Proprietary market data fees increased primarily due to increases in proprietary market data fees in the Options, Europe and Asia Pacific, and North American Equities segments.

Derivatives Markets

Derivatives markets revenues less cost of revenues increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to increases in net transaction and clearing fees driven by a 14% increase in

index options ADV, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products in the Options segment.

Operating Expenses

Total operating expenses for the three months ended March 31, 2024 compared to the same period in 2023 decreased $3.8 million, or 2%, primarily due to decreases in acquisition-related costs and depreciation and amortization, partially offset by increases in compensation and benefits.

The following summarizes changes in operating expenses for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 (in millions, except percentages):


	Three Months Ended
	March 31,				Increase/		Percent
	2024		2023		(Decrease)		Change
Compensation and benefits	$	115.3	$	110.4	$	4.9	4	%
Depreciation and amortization		37.3		41.4		(4.1)	(10)	%
Technology support services		24.2		22.2		2.0	9	%
Professional fees and outside services		21.5		23.9		(2.4)	(10)	%
Travel and promotional expenses		7.5		6.2		1.3	21	%
Facilities costs		6.5		7.6		(1.1)	(14)	%
Acquisition-related costs		0.6		6.4		(5.8)	(91)	%
Other expenses		6.8		5.4		1.4	26	%
Total operating expenses	$	219.7	$	223.5	$	(3.8)	(2)	%

Compensation and Benefits

Compensation and benefits increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a $8.1 million increase in salaries and bonuses driven by increased headcount, partially offset by a $5.2 million decrease in equity compensation due to a change in the vesting requirements for new equity award agreements, which provide for additional vesting requirements after an applicable retirement date. See Note 17 (“Stock-Based Compensation”) for additional information.

Depreciation and Amortization

Depreciation and amortization decreased for the three months ended March 31, 2024 compared to the same period in 2023 due to a decline in amortization under the discounted cash flow method for the intangibles acquired in the Merger.

Technology Support Services

Technology support services increased for the three months ended March 31, 2024 compared to the same period in 2023 due to increases in software maintenance, market data technology support, and primary data center hosting expenses, partially offset by decreases in hardware maintenance.

Professional Fees and Outside Services

Professional fees and outside services decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to decreases in regulatory costs associated with CAT expenses, and consulting fees, partially offset by increases in legal fees and contract services.

Travel and Promotional Expenses

Travel and promotional expenses increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to increases in marketing and advertising expenses driven by advertising campaigns and sponsorships.

Facilities Costs

Facilities costs decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a decrease in real estate taxes.

Acquisition-Related Costs

Acquisition-related costs decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a decrease in professional fees and retention-related compensation costs associated with prior acquisitions.

Other Expenses

Other expenses increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to an increase in bad debt expense related to provisions for expected credit losses.

Operating Income

As a result of the items above, operating income for the three months ended March 31, 2024 was $282.4 million, compared to operating income of $247.9 million for the three months ended March 31, 2023, an increase of $34.5 million.

Interest Expense

Interest expense decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to repayments on the Term Loan in 2023, which was paid off in the fourth quarter of 2023.

Interest Income

Interest income increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to increases in interest rates in 2024.

Earnings in Investments

Earnings in investments decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to a $1.6 million decrease in the equity earnings on the Company’s investment in 7Ridge Fund (which owns Trading Technologies) recorded in the first quarter of 2024 compared to the same period in 2023, partially offset by a decrease in non-qualified deferred compensation.

Other Income, Net

Net other income increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to $4.1 million in dividend income from the Company’s minority ownership of Vest Financial Group, Inc. recorded in the first quarter of 2024.

Income Before Income Tax Provision

As a result of the above, income before income tax provision for the three months ended March 31, 2024 was $292.1 million, compared to income before income tax provision of $248.2 million for the three months ended March 31, 2023, an increase of $43.9 million.

Income Tax Provision

The effective tax rate from continuing operations was 28.3% and 30.1% for the three months ended March 31, 2024 and 2023, respectively. The lower effective tax rate for the three months ended March 31, 2024 compared to the same period in 2023 is primarily due to excess tax benefits from the vesting of equity awards during the first quarter of 2024.

Net Income

As a result of the items above, net income for the three months ended March 31, 2024 was $209.5 million, compared to net income of $173.4 million for the three months ended March 31, 2023, an increase of $36.1 million.

Segment Operating Results

We report results from our six segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital. Segment performance is primarily based on operating income. We have aggregated all corporate costs, as well as other business ventures, within Corporate Items and Eliminations as those activities should not be used to evaluate a segment’s operating performance. All operating expenses that relate to activities of a specific segment have been allocated to that segment. Operating expenses increased or decreased in certain segments for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to changes in the allocation of shared-service expenses.

The following summarizes our total revenues by segment (in millions, except percentages):

Note, the chart excludes Digital revenues of $(0.7) million and $(0.9) million for the three months ended March 31, 2024 and 2023, respectively.


							Percentage
							of Total
							Revenues
	Three Months Ended						Three Months Ended
	March 31,				Percent		March 31,
	2024		2023		Change		2024		2023
Options	$	477.4	$	486.1	(2)	%	50	%	49	%
North American Equities		349.6		379.8	(8)	%	37	%	39	%
Europe and Asia Pacific		80.7		72.3	12	%	8	%	7	%
Futures		31.4		32.1	(2)	%	3	%	3	%
Global FX		18.8		18.8	—	%	2	%	2	%
Digital		(0.7)		(0.9)	22	%	*	%	*	%
Total revenues	$	957.2	$	988.2	(3)	%	100	%	100	%

*	Not meaningful

The following summarizes our revenues less cost of revenues by segment (in millions, except percentages):

Note, the chart excludes Digital revenues less cost of revenues of $(0.9) million and $(1.3) million for the three months ended March 31, 2024 and 2023, respectively.


							Percentage of
							Total Revenues
							Less Cost of Revenues
	Three Months Ended						Three Months Ended
	March 31,				Percent		March 31,
	2024		2023		Change		2024		2023
Options	$	307.4	$	280.7	10	%	61	%	59	%
North American Equities		92.6		93.1	(1)	%	18	%	20	%
Europe and Asia Pacific		54.1		49.3	10	%	11	%	10	%
Futures		30.5		31.1	(2)	%	6	%	7	%
Global FX		18.4		18.5	(1)	%	4	%	4	%
Digital		(0.9)		(1.3)	31	%	*	%	*	%
Total revenues less cost of revenues	$	502.1	$	471.4	7	%	100	%	100	%

*	Not meaningful

Options

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA, and EBITDA margin for our Options segment (in millions, except percentages):


									Percentage
									of Total
									Revenues
	Three Months Ended								Three Months Ended
	March 31,						Percent		March 31,
	2024			2023			Change		2024		2023
Revenues less cost of revenues	$	307.4		$	280.7		10	%	64	%	58	%
Operating expenses		90.6			79.7		14	%	19	%	16	%
Operating income	$	216.8		$	201.0		8	%	45	%	41	%
EBITDA (1)	$	222.5		$	206.8		8	%	47	%	43	%
EBITDA margin (2)		72.4	%		73.7	%	*		*		*

*	Not meaningful

(1)	See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2)	EBITDA margin represents EBITDA divided by revenues less cost of revenues.

Revenues less cost of revenues increased $26.7 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to an increase in net transaction and clearing fees driven by a 14% increase in index options ADV, and an increase in physical and logical port fees, partially offset by an increase in royalty fees due to an increase in trading volumes of licensed products. For the three months ended March 31, 2024, operating income for the Options segment increased $15.8 million compared to the three months ended March 31, 2023 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses. Operating expenses increased $10.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to increases in compensation and benefits, technology support services, and travel and promotional expenses.

North American Equities

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA, and EBITDA margin for our North American Equities segment (in millions, except percentages):


									Percentage
									of Total
									Revenues
	Three Months Ended								Three Months Ended
	March 31,						Percent		March 31,
	2024			2023			Change		2024		2023
Revenues less cost of revenues	$	92.6		$	93.1		(1)	%	26	%	25	%
Operating expenses		54.6			64.7		(16)	%	16	%	17	%
Operating income	$	38.0		$	28.4		34	%	11	%	7	%
EBITDA (1)	$	53.6		$	46.9		14	%	15	%	12	%
EBITDA margin (2)		57.9	%		50.4	%	*		*		*

*	Not meaningful

(1)	See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2)	EBITDA margin represents EBITDA divided by revenues less cost of revenues.

Revenues less cost of revenues decreased $0.5 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to a decrease in industry market data fees primarily due to a decrease in U.S. tape plan revenue, coupled with a decrease in regulatory assessments and fines on the U.S. Equities exchanges, partially offset by an increase in physical port fees and an increase in listing fees. For the three months ended March 31, 2024, operating income for the North American Equities segment increased $9.6 million compared to the three months ended March 31, 2023 due to a decrease in operating expenses, partially offset by a decrease in revenues less cost of revenues. Operating expenses decreased $10.1 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to decreases in compensation and benefits, depreciation and amortization, professional fees and outside services, and technology support services.

Europe and Asia Pacific

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA, and EBITDA margin for our Europe and Asia Pacific segment (in millions, except percentages):


									Percentage
									of Total
									Revenues
	Three Months Ended								Three Months Ended
	March 31,						Percent		March 31,
	2024			2023			Change		2024		2023
Revenues less cost of revenues	$	54.1		$	49.3		10	%	67	%	68	%
Operating expenses		43.9			38.0		16	%	54	%	53	%
Operating income	$	10.2		$	11.3		(10)	%	13	%	16	%
EBITDA (1)	$	17.9		$	19.7		(9)	%	22	%	27	%
EBITDA margin (2)		33.1	%		40.0	%	*		*		*

*Not meaningful

(1)	See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2)	EBITDA margin represents EBITDA divided by revenues less cost of revenues.

Revenues less cost of revenues increased $4.8 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to an increase in operating interest income attributable to Cboe Clear Europe, an increase in proprietary market data fees, and an increase in logical and physical port fees. For the three months ended March 31, 2024, operating income for the Europe and Asia Pacific segment decreased $1.1 million compared to the three months ended March 31, 2023 primarily due to an increase in operating expenses, partially offset by an increase in revenues less cost of revenues. Operating expenses increased $5.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to increases in compensation and benefits, professional fees and outside services, and technology support services.

Futures

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA, and EBITDA margin for our Futures segment (in millions, except percentages):


									Percentage
									of Total
									Revenues
	Three Months Ended								Three Months Ended
	March 31,						Percent		March 31,
	2024			2023			Change		2024		2023
Revenues less cost of revenues	$	30.5		$	31.1		(2)	%	97	%	97	%
Operating expenses		8.4			10.2		(18)	%	27	%	32	%
Operating income	$	22.1		$	20.9		6	%	70	%	65	%
EBITDA (1)	$	22.6		$	21.4		6	%	72	%	67	%
EBITDA margin (2)		74.1	%		68.8	%	*		*		*

*	Not meaningful

(1)	See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2)	EBITDA margin represents EBITDA divided by revenues less cost of revenues.

Revenues less cost of revenues decreased $0.6 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to an increase in net transaction and clearing fees as a result of a 5% decrease in ADV, partially offset by a 1% increase in net capture. For the three months ended March 31, 2024, operating income for the Futures segment increased $1.2 million compared to the three months ended March 31, 2023 primarily due to a decrease in operating expenses, partially offset by a decrease in revenues less cost of revenues. Operating expenses decreased $1.8 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to decreases in professional fees and outside services and compensation and benefits.

Global FX

The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA, and EBITDA margin for our Global FX segment (in millions, except percentages):


									Percentage
									of Total
									Revenues
	Three Months Ended								Three Months Ended
	March 31,						Percent		March 31,
	2024			2023			Change		2024		2023
Revenues less cost of revenues	$	18.4		$	18.5		(1)	%	98	%	98	%
Operating expenses		11.8			13.8		(14)	%	63	%	73	%
Operating income	$	6.6		$	4.7		40	%	35	%	25	%
EBITDA (1)	$	10.6		$	9.9		7	%	56	%	53	%
EBITDA margin (2)		57.6	%		53.5	%	*		*		*

*	Not meaningful

(1)	See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2)	EBITDA margin represents EBITDA divided by revenues less cost of revenues.

Revenues less cost of revenues were relatively flat for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to a decrease in net transaction and clearing fees driven by an 1% decrease in net capture, partially offset by a 1% increase in ADNV and an increase in logical port fees. For the three months ended March 31, 2024, operating income for the Global FX segment increased $1.9 million compared to the three months ended March 31, 2023 due to a decrease in operating expenses. Operating expenses decreased $2.0 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to decreases in depreciation and amortization, compensation and benefits, and technology support services.

Digital

The following summarizes revenues less cost of revenues, operating expenses, operating loss, EBITDA, and EBITDA margin for our Digital segment (in millions, except percentages):


									Percentage
									of Total
									Revenues
	Three Months Ended								Three Months Ended
	March 31,						Percent		March 31,
	2024			2023			Change		2024		2023
Revenues less cost of revenues	$	(0.9)		$	(1.3)		31	%	*	%	*	%
Operating expenses		9.3			10.1		(8)	%	*	%	*	%
Operating loss	$	(10.2)		$	(11.4)		11	%	*	%	*	%
EBITDA (1)	$	(7.9)		$	(9.6)		18	%	*	%	*	%
EBITDA margin (2)		*	%		*	%	*		*		*

*	Not meaningful

(1) See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.

Revenues less cost of revenues increased $0.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to an increase in net transaction and clearing fees driven by an increase in Digital spot ADNV and net capture. For the three months ended March 31, 2024, operating loss for the Digital segment decreased $1.2 million compared to the three months ended March 31, 2023 primarily due to a decrease in operating expenses and an increase in revenues less cost of revenues. Operating expenses decreased $0.8 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to decreases in acquisition-related costs and professional fees and outside services, partially offset by an increase in technology support services.

Liquidity and Capital Resources

Below are charts that reflect elements of our capital allocation:

We expect our cash on hand at March 31, 2024 and other available resources, including cash generated from operations, to be sufficient to continue to meet our cash requirements for the foreseeable future. In the near term, we expect that our cash from operations and availability under the Revolving Credit Facility and potentially participating in future financing transactions to obtain additional capital will meet our cash needs to fund our operations, capital expenditures, interest payments on debt, any dividends, potential strategic acquisitions, and opportunities for common stock repurchases under the previously announced program. See Note 10 (“Debt”) of the condensed consolidated financial statements for further information.

Cboe Clear Europe also has a €1.25 billion committed syndicated multicurrency revolving and swingline credit facility agreement with Cboe Clear Europe as borrower and the Company as guarantor of scheduled interest and fees on borrowings (but not the principal amount of any borrowings) (the “Facility”). The Facility is available to be drawn by Cboe Clear Europe towards (a) financing unsettled amounts in connection with the settlement of transactions in securities and other items processed through Cboe Clear Europe’s clearing system and (b) financing any other liability or liquidity requirement of Cboe Clear Europe incurred in the operation of its clearing system. Borrowings under the Facility are secured by cash, eligible bonds and eligible equity assets deposited by Cboe Clear Europe into secured accounts. As a result, should the Facility be drawn by Cboe Clear Europe it could potentially impact Cboe Clear Europe’s liquidity, and we can give no assurance that this Facility will be sufficient to meet all of such obligations or sufficiently mitigate Cboe Clear Europe’s liquidity risk to meet its payment obligations when due. Additionally, a default of the Facility may allow lenders, under certain circumstances, to accelerate any related drawn amounts and may result in the acceleration of the Company’s other outstanding debt to which a cross-acceleration or cross-default provision applies, which may limit the Company’s liquidity, business and financing activities. The facility is expected to terminate on June 28, 2024 and we may not be able to enter into a replacement facility on commercially reasonable terms, or at all. Please refer to Note 10 ("Debt") for further information.

Our long-term cash needs will depend on many factors, including an introduction of new products, enhancements of current products, capital needs of our subsidiaries, the geographic mix of our business and any potential acquisitions. We believe our cash from operations and the availability under our Revolving Credit Facility will meet any long-term needs unless a significant acquisition or acquisitions are identified, in which case we expect that we would be able to borrow the necessary funds and/or issue additional shares of our common stock to complete such acquisition(s).

Cash and cash equivalents include cash in banks and all non-restricted, highly liquid investments, including short-term repurchase agreements, with original maturities of three months or less at the time of purchase. Cash and cash equivalents as of March 31, 2024 decreased $6.9 million from December 31, 2023 primarily due to outflows from the change in accounts payable and accrued liabilities, share repurchases, cash dividends, repurchases of common stock from employee stock plans, and purchases of available-for-sale financial investments, partially offset by the results of operations. See “Cash Flow” below for further discussion.

Our cash and cash equivalents held outside of the United States in various foreign subsidiaries totaled $240.3 million as of March 31, 2024. The remaining balance was held in the United States and totaled $296.0 million as of March 31, 2024. The majority of cash held outside the United States is available for repatriation, but under current law, could subject us to additional United States income taxes, less applicable foreign tax credits.

Our financial investments include deferred compensation plan assets, as well as investments with original or acquired maturities longer than three months, but that mature in less than one year from the balance sheet date and are recorded at fair value. As of March 31, 2024 and December 31, 2023, financial investments primarily consisted of U.S. Treasury securities and deferred compensation plan assets.

Cash Flow

The following table summarizes our cash flow data for the three months ended March 31, 2024 and 2023, respectively (in millions):


	Three Months Ended
	March 31,
	2024		2023
Net cash provided by operating activities	$	895.6	$	1,030.8
Net cash (used in) provided by investing activities		(13.3)		1.9
Net cash used in financing activities		(168.6)		(141.2)
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents		(25.0)		21.1
Increase in cash, cash equivalents, and restricted cash and cash equivalents	$	688.7	$	912.6


	As of March 31,
	2024		2023
Reconciliation of cash, cash equivalents, and restricted cash and cash equivalents:
Cash and cash equivalents	$	536.3	$	435.6
Restricted cash and cash equivalents (included in margin deposits, clearing funds, and interoperability funds)		1,524.9		1,428.4
Restricted cash and cash equivalents (included in other current assets)		4.9		4.1
Customer bank deposits (included in margin deposits, clearing funds, and interoperability funds)		19.7		24.4
Total	$	2,085.8	$	1,892.5

Net Cash Flows Provided by Operating Activities

During the three months ended March 31, 2024, net cash provided by operating activities was $686.1 million higher than net income. The variance is primarily attributable to the change in restricted cash and cash equivalents, driven by margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe of $730.0 million, income taxes receivable of $67.7 million, and depreciation and amortization of $37.3 million, partially offset by the change in accounts payable and accrued liabilities of $113.5 million and the change in accounts receivable of $40.7 million for the three months ended March 31, 2024.

Net cash flows provided by operating activities were $895.6 million and $1,030.8 million for the three months ended March 31, 2024 and 2023, respectively. The change in net cash flows provided by operating activities was primarily due to the change in restricted cash and cash equivalents and customer bank deposits driven by margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe and the change in accounts payable and accrued liabilities,

partially offset by the change in Section 31 fees payable and the change in net income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Net Cash Flows (Used in) Provided by Investing Activities

Net cash flows (used in) provided by investing activities were $(13.3) million and $1.9 million for the three months ended March 31, 2024 and 2023, respectively. The variance is primarily due to the change in proceeds from maturities of available-for-sale financial investments, partially offset by the change in purchases of available-for-sale financial investments for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Net Cash Flows Used in Financing Activities

Net cash flows used in financing activities were $168.6 million and $141.2 million for the three months ended March 31, 2024 and 2023, respectively. The variance is primarily attributable to the change in repurchases of common stock from employee stock plans, the change in purchase of common stock, and the change in cash dividends on common stock for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Financial Assets

The following summarizes our financial assets, excluding margin deposits, clearing funds, and interoperability funds as of March 31, 2024 and December 31, 2023 (in millions):


	March 31,		December 31,
	2024		2023
Cash and cash equivalents	$	536.3	$	543.2
Financial investments		58.8		57.5
Less deferred compensation plan assets		(35.2)		(36.7)
Less cash collected for Section 31 fees		(23.1)		(30.5)
Adjusted cash (1)	$	536.8	$	533.5

(1)

Adjusted cash is a non-GAAP measure and represents cash and cash equivalents plus financial investments, minus deferred compensation plan assets and cash collected for Section 31 fees. We have presented adjusted cash because we consider it an important supplemental measure of our liquidity and believe that it is frequently used by analysts, investors and other interested parties in the evaluation of companies.

Debt

The following summarizes our debt obligations as of March 31, 2024 and December 31, 2023 (in millions):


	March 31,		December 31,
	2024		2023
3.650% Senior Notes	$	650.0	$	650.0
1.625% Senior Notes		500.0		500.0
3.000% Senior Notes		300.0		300.0
Revolving Credit Agreement		—		—
EuroCCP Credit Facility		—		—
Less unamortized discount and debt issuance costs		(10.4)		(10.8)
Total debt	$	1,439.6	$	1,439.2

As of March 31, 2024 and December 31, 2023, we were in compliance with the covenants of our debt agreements.

In addition to the debt outstanding, as of March 31, 2024, we had an additional $400.0 million available through our revolving credit facility, with the ability to borrow another $200.0 million by increasing the commitments under the facility, subject to the agreement of the applicable lenders. Together with adjusted cash, we had $989.5 million available to fund our operations, capital expenditures, potential acquisitions, debt repayments and any dividends, net of minimum regulatory capital requirements of $147.3 million as of March 31, 2024, which are subject to potential applicable regulatory restrictions and approvals and potential associated tax costs.

Dividends

The Company’s expectation is to continue to pay dividends. The decision to pay a dividend, however, remains within the discretion of the Company's Board of Directors and may be affected by various factors, including our earnings, financial condition, capital requirements, level of indebtedness and other considerations our Board of Directors deems relevant. Future debt obligations and statutory provisions, among other things, may limit, or in some cases prohibit, our ability to pay dividends.

Share Repurchase Program

In 2011, the Board of Directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and subsequently approved additional authorizations for a total authorization of $1.8 billion. The program permits the Company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the Company to make any repurchases at any specific time or situation. Share repurchases are repurchased to the Company’s Treasury stock and ultimately retired or they are available to be redistributed.

The Company repurchased 489,686 shares of its common stock under its share repurchase program during the three months ended March 31, 2024 at an average cost per share of $182.26, for a total value of $89.3 million.

As of March 31, 2024, the Company had $294.8 million of availability remaining under its existing share repurchase authorizations.

Commercial Commitments and Contractual Obligations

As of March 31, 2024, our commercial commitments and contractual obligations included operating leases, data and telecommunications agreements, equipment leases, our long-term debt outstanding, contingent considerations, software development activities and other obligations. See Note 21 (“Commitments, Contingencies, and Guarantees”) to the condensed consolidated financial statements for a discussion of commitments and contingencies, Note 10 (“Debt”) for a discussion of the outstanding debt, Note 12 (“Clearing Operations”) for information on Cboe Clear Europe and Cboe Digital’s clearinghouse exposure guarantees, and Note 22 (“Leases”) for discussion on operating leases and equipment leases.

Guarantees

We use Wedbush and Morgan Stanley to clear our routed equities transactions for our U.S. Equities exchanges. Wedbush and Morgan Stanley guarantee the trade until one day after the trade date, after which time the National Securities Clearing Corporation (“NSCC”) provides a guarantee. The BIDS Trading ATS platform delivers matched trades to BofA Securities, Inc. (“BOA”), which delivers the matched trades to the NSCC. BOA guarantees the trade until one day after the trade date, after which time the NSCC provides a guarantee. In the case of failure to perform on the part of Wedbush or Morgan Stanley on routed transactions for our U.S. Equities exchanges, we provide the guarantee to the counterparty to the trader. In the case of failure to perform on the part of BOA on transactions for the BIDS Trading ATS platform, BIDS has obligations to the counterparties to satisfy the trades. OCC acts as a central counterparty on all transactions in listed equity options in our Options segment, and as such, guarantees clearance and settlement of all of our options transactions. We believe that any potential requirement for us to make payments under these guarantees is remote and accordingly, have not recorded any liability in the condensed consolidated financial statements for these guarantees. Similarly, with respect to trades in U.S. listed equity options and futures occurring on Cboe Options, C2, BZX, EDGX, and CFE, we deliver matched trades of our customers to the OCC, which acts as a central counterparty on all transactions occurring on these exchanges and, as such, guarantees clearance and settlement of all of those matched options and futures trades. With respect to U.S. government securities transactions executed on Cboe Fixed Income, we use Mirae Asset Securities (USA) Inc. to deliver matched trades to the Fixed Income Clearing Corporation (FICC) Government Securities Division (GSD), which acts as a central counterparty on all transactions occurring on Cboe Fixed Income and, as such, guarantees clearance and settlement of all of those matched trades. With respect to Canadian equities, we deliver matched trades of our customers to The Canadian Depository for Securities, which acts as a central counterparty on all transactions occurring on Cboe Canada Inc. and, as such, guarantees clearance and settlement of all of our matched Canadian equities trades. With respect to trades in options and futures occurring on Cboe Europe Derivatives, we deliver matched trades of our customers to Cboe Clear Europe, which acts as a central counterparty on all transactions occurring on Cboe Europe Derivatives and, as such, guarantees clearance and settlement of all of those matched options and futures trades. With respect to Australian equities and derivatives, we deliver matched trades of our

customers to ASX Clear Pty Ltd and ASX Settlement Pty Ltd. ASX Clear Pty Ltd acts as a central counterparty on all transactions occurring on Cboe Australia and, as such, guarantees clearance and settlement on all of our matched trades in Australia. With respect to Japanese equities, we deliver matched trades of our customers to the Japanese Securities Clearing Corporation, which acts as a central counterparty on all transactions occurring on Cboe Japan and, as such, guarantees clearance and settlement on all of our matched trades in Japan. With respect to trades in digital assets occurring on Cboe Digital Exchange, we deliver matched trades of our customers to Cboe Clear Digital, which acts as a central counterparty on all transactions occurring on Cboe Digital Exchange and, as such, guarantees clearance and settlement of all of those matched spot and futures trades.

Critical Accounting Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of the amounts of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty. The Company bases its estimates on historical experience, observance of trends in particular areas, information available from outside sources and various other assumptions that are believed to be reasonable under the circumstances. Information from these sources form the basis for making judgments about the carrying values of assets and liabilities that may not be readily apparent from other sources.

In the three months ended March 31, 2024, there were no significant changes to our critical accounting estimates from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K.

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