UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number: 001-34774

Cboe Global Markets, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-5446972
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

433 West Van Buren Street, Chicago, Illinois	60607
(Address of Principal Executive Offices)	(Zip Code)

(312) 786-5600

(Registrant’s telephone number, including area code)
​

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, par value $0.01 per share	CBOE	CboeBZX

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   ⌧     No   ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes   ☒     No   ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☒	Accelerated Filer	◻	Non-accelerated Filer	◻
Smaller Reporting Company	☐	Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   ☐     No   ⌧

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

Class	April 28, 2023
Common Stock, par value $0.01 per share	105,574,464 shares

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		8
Item 1.	Financial Statements (unaudited)	8
	Condensed Consolidated Balance Sheets—As of March 31, 2023 and December 31, 2022	8
	Condensed Consolidated Statements of Income—Three Months Ended March 31, 2023 and 2022	9
	Condensed Consolidated Statements of Comprehensive Income—Three Months Ended March 31, 2023 and 2022	10
	Condensed Consolidated Statements of Changes in Stockholders’ Equity—Three Ended March 31, 2023 and 2022	11
	Condensed Consolidated Statements of Cash Flows—Three Months Ended March 31, 2023 and 2022	12
	Notes to Condensed Consolidated Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	72
Item 4.	Controls and Procedures	76
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	76
Item 3.	Defaults upon Senior Securities	77
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	78
SIGNATURES		79

2

CERTAIN DEFINED TERMS

Throughout this document, unless otherwise specified or the context so requires:

● “Cboe,” “we,” “us,” “our” or “the Company” refers to Cboe Global Markets, Inc. and its subsidiaries.

● “ADV” means average daily volume.

● “ADNV” means average daily notional value.

● “AFM” refers to the Netherlands Authority for the Financial Markets.

● “ATS” refers to an alternative trading system.

● “Bats Global Markets” and “Bats” refer to our wholly-owned subsidiary Bats Global Markets, Inc., now known as Cboe Bats, LLC, and its subsidiaries.

● “BIDS Trading” refers to BIDS Trading, L.P., a wholly-owned subsidiary of Cboe Global Markets, Inc. The ATS operated by BIDS Trading is not a registered national securities exchange or a facility thereof.

● “BYX” refers to Cboe BYX Exchange, Inc., a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “BZX” refers to Cboe BZX Exchange, Inc., a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “C2” refers to Cboe C2 Exchange, Inc., a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Canadian SRO” refers to the New Self-Regulatory Organization of Canada (“New SRO”), a consolidation of the IIROC and the Mutual Fund Dealers Association of Canada.

● “Cboe Asia Pacific” refers to Cboe Asia Pacific Holdings Limited (formerly known as Chi-X Asia Pacific Holdings Limited), a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Australia” refers to Cboe Australia Pty Ltd. (formerly known as Chi-X Australia Pty. Ltd.), a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Canada” refers to Aequitas Innovations, Inc. (formerly known as “NEO”), a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Chi-X Europe” refers to Cboe Chi-X Europe Limited, a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Clear Digital” refers to Cboe Clear Digital, LLC (formerly known as Eris Clearing, LLC), a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Clear Europe” refers to Cboe Clear Europe N.V. (formerly known as European Central Counterparty N.V., formerly defined as “EuroCCP”), a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Digital” refers to Cboe Digital Intermediate Holdings, LLC (formerly known as Eris Digital Holdings, LLC) and its subsidiaries. Prior to rebranding under the Cboe Digital name, Eris Digital Holdings, LLC and its subsidiaries operated under the “ErisX” name.

● “Cboe Europe Equities and Derivatives” refers to the combined businesses of Cboe Europe and Cboe NL.

● “Cboe Europe” refers to Cboe Europe Limited, a wholly-owned subsidiary of Cboe Global Markets, Inc., the UK operator of our Multilateral Trading Facility (“MTF”), our Regulated Market (“RM”), and our Approved Publication Arrangement (“APA”) under its Recognized Investment Exchange (“RIE”) status.

● “Cboe Fixed Income” refers to Cboe Fixed Income Markets, LLC, a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe FX” refers to Cboe FX Markets, LLC, a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Japan” refers to Cboe Japan Ltd. (formerly known as Chi-X Japan Ltd.), a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe NL” refers to Cboe Europe BV, a wholly-owned subsidiary of Cboe Global Markets, Inc., the Netherlands operator of our MTF, RM, and APA.

● “Cboe Options” refers to Cboe Exchange, Inc., a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe SEF” refers to Cboe SEF, LLC, a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Swiss” refers to Cboe Switzerland GmbH, a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “Cboe Trading” refers to Cboe Trading, Inc., a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “CFE” refers to Cboe Futures Exchange, LLC, a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “CFTC” refers to the U.S. Commodity Futures Trading Commission.

● “CSD Br” refers to CSD Central de Serviços de Registro e Depósito aos Mercados Financeiro e de Capitais S.A., a Brazilian trade repository.

● “Chi-X” refers to Chi-X Holdings Limited, a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “EDGA” refers to Cboe EDGA Exchange, Inc., a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “EDGX” refers to Cboe EDGX Exchange, Inc., a wholly-owned subsidiary of Cboe Global Markets, Inc.

● “ESMA” refers to the European Securities and Markets Authority.

● “Exchanges” refers to Cboe Options, C2, BZX, BYX, EDGX, and EDGA.

● “FASB” refers to the Financial Accounting Standards Board.

● “FCA” refers to the UK Financial Conduct Authority.

3

● “FINRA” refers to the Financial Industry Regulatory Authority.

● “GAAP” refers to Generally Accepted Accounting Principles in the United States.

● “IIROC” refers to the Investment Industry Regulatory Organization of Canada.

● “MATCHNow” refers to TriAct Canada Marketplace LP, a wholly-owned subsidiary of Cboe Global Markets, Inc., the operator of our Canadian ATS called MATCHNow.

● “Merger” refers to our acquisition of Bats Global Markets, completed on February 28, 2017.

● “OCC” refers to The Options Clearing Corporation.

● “OPRA” refers to Options Price Reporting Authority, LLC.

● “SEC” refers to the U.S. Securities and Exchange Commission.

● “SPX” refers to our S&P 500 Index exchange-traded options products.

● “TPH” refers to either a Trading Permit Holder or a Trading Privilege Holder.

● “VIX” refers to our Cboe Volatility Index exchange traded options and futures products.

4

TRADEMARK AND OTHER INFORMATION

Cboe^®, Cboe Global Markets^®, Cboe LIS^®, Bats^®, BIDS Trading^®, BYX^®, BZX^®, Cboe Volatility Index^®, CFE^®, EDGA^®, EDGX^®, ErisX^®, EuroCCP^®, Hybrid^®, LiveVol^®, MATCHNow^®, NANO^®, Options Institute^®, Silexx^®, VIX^®, and XSP^® are registered trademarks, and Cboe Futures Exchange^SM, Cboe BIDS Europe^SM, Cboe Clear^SM, Cboe Digital^SM, C2^SM, f(t)options^SM, Hanweck^SM, NANOs^SM, Nanos by Cboe^SM The Exchange for the World Stage^SM, and Trade Alert^SM are service marks of Cboe Global Markets, Inc. and its subsidiaries. Standard & Poor's^®, S&P^®, S&P 100^®, S&P 500^® and SPX^® are registered trademarks of Standard & Poor's Financial Services LLC and have been licensed for use by Cboe Exchange, Inc. Dow Jones^®, Dow Jones Industrial Average^®, DJIA^® and Dow Jones Indices are registered trademarks or service marks of Dow Jones Trademark Holdings, LLC, used under license. Russell^® and the Russell index names are registered trademarks of Frank Russell Company, used under license. FTSE^® and the FTSE indices are trademarks and service marks of FTSE International Limited, used under license. All other trademarks and service marks are the property of their respective owners.

MSCI and the MSCI index names are service marks of MSCI Inc. (“MSCI”) or its affiliates and have been licensed for use by us. Any derivative indices and any financial products based on the derivative indices (“MCSI-Based Products”) are not sponsored, guaranteed or endorsed by MSCI, its affiliates or any other party involved in, or related to, making or compiling such MSCI index. Neither MSCI, its affiliates nor any other party involved in, or related to, making or compiling any MSCI index makes any representations regarding the advisability of investing in such MSCI-Based Products; makes any warranty, express or implied; or bears any liability as to the results to be obtained by any person or any entity from the use of any such MSCI index or any data included therein. No purchaser, seller or holder of any MSCI-Based Product, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote any security without first contacting MSCI to determine whether MSCI’s permission is required.

This Quarterly Report on Form 10-Q includes market share and industry data that we obtained from industry publications and surveys, reports of governmental agencies and internal company surveys. Industry publications and surveys generally state that the information they contain has been obtained from sources believed to be reliable, but we cannot assure you that this information is accurate or complete. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on the most currently available market data. While we are not aware of any misstatements regarding industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors. Please refer to the “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and our other filings with the SEC.

5

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. You can identify these statements by forward-looking words such as “may,” “might,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements, including statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. In particular, you should consider the risks and uncertainties described under “Risk Factors” in this Quarterly Report and other filings with the SEC.

While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Some factors that could cause actual results to differ include:

● the loss of our right to exclusively list and trade certain index options and futures products;

● economic, political and market conditions;

● compliance with legal and regulatory obligations;

● price competition and consolidation in our industry;

● decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges;

● legislative or regulatory changes or changes in tax regimes;

● our ability to protect our systems and communication networks from security vulnerabilities and breaches;

● our ability to attract and retain skilled management and other personnel, including compensation inflation;

● increasing competition by foreign and domestic entities;

● our dependence on and exposure to risk from third parties;

● global expansion of operations;

● factors that impact the quality and integrity of our indices;

● our ability to manage our growth and strategic acquisitions or alliances effectively;

● our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights;

● our ability to minimize the risks, including our credit and default risks, associated with operating a European clearinghouse;

● our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems;

● misconduct by those who use our markets or our products or for whom we clear transactions;

● challenges to our use of open source software code;

● our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status;

● our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges;

● damage to our reputation;

● the ability of our compliance and risk management methods to effectively monitor and manage our risks;

● restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations;

● our ability to maintain an investment grade credit rating;

● impairment of our goodwill, long-lived assets, investments or intangible assets;

● the impacts of pandemics;

● the accuracy of our estimates and expectations;

6

● litigation risks and other liabilities; and

● operating a digital asset business, and clearinghouse, including the expected benefits of our Cboe Digital acquisition, cybercrime, changes in digital asset regulation, losses due to digital asset custody, and fluctuations in digital asset prices.

For a detailed discussion of these and other factors that might affect our performance, see Part II, Item 1A of this Report. We do not undertake, and expressly disclaim, any duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this filing.

7

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Cboe Global Markets, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)

(in millions, except par value data and share amounts)

	March 31,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	435.6	$	432.7
Financial investments		80.2		91.7
Accounts receivable, net of $2.3 allowance for credit losses at March 31, 2023 and $2.2 at December 31, 2022		393.4		369.8
Margin deposits and clearing funds		1,452.8		543.0
Digital assets - safeguarded assets		42.0		22.9
Income taxes receivable		4.5		48.3
Other current assets		49.6		47.6
Total current assets		2,458.1		1,556.0
Investments		269.7		253.2
Land		2.3		2.3
Property and equipment, net		112.1		108.2
Operating lease right of use assets		110.1		111.7
Goodwill		3,128.4		3,122.8
Intangible assets, net		1,636.5		1,662.8
Other assets, net		186.3		181.9
Total assets	$	7,903.5	$	6,998.9
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	368.2	$	420.2
Section 31 fees payable		75.4		147.1
Deferred revenue		21.7		11.7
Margin deposits and clearing funds		1,452.8		543.0
Digital assets - safeguarded liabilities		42.0		22.9
Income taxes payable		19.4		3.5
Current portion of long-term debt		304.8		304.7
Current portion of contingent consideration liabilities		19.2		24.1
Total current liabilities		2,303.5		1,477.2
Long-term debt		1,437.8		1,437.3
Non-current unrecognized tax benefits		210.5		196.1
Deferred income taxes		211.4		222.9
Non-current operating lease liabilities		126.9		129.3
Non-current portion of contingent consideration liabilities		15.0		15.0
Other non-current liabilities		59.7		55.8
Total liabilities		4,364.8		3,533.6
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value: 20,000,000 shares authorized, no shares issued and outstanding at March 31, 2023 and December 31, 2022		—		—
Common stock, $0.01 par value: 325,000,000 shares authorized, 107,959,078 and 105,574,173 shares issued and outstanding, respectively at March 31, 2023 and 107,670,248 and 105,951,199 shares issued and outstanding, respectively at December 31, 2022		1.1		1.1
Common stock in treasury, at cost, 2,384,905 shares at March 31, 2023 and 1,719,049 shares at December 31, 2022		(213.7)		(131.0)
Additional paid-in capital		1,472.3		1,455.1
Retained earnings		2,291.2		2,171.1
Accumulated other comprehensive loss, net		(12.2)		(31.0)
Total stockholders’ equity		3,538.7		3,465.3
Total liabilities and stockholders’ equity	$	7,903.5	$	6,998.9

See accompanying notes to condensed consolidated financial statements.

8

Cboe Global Markets, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(unaudited)

(in millions, except per share data)

	Three Months Ended
	March 31,
	2023		2022
Revenues:
Cash and spot markets	$	407.0	$	461.9
Data and access solutions		129.4		118.9
Derivatives markets		451.8		393.7
Total revenues		988.2		974.5
Cost of revenues:
Liquidity payments		371.8		467.5
Routing and clearing		24.0		22.3
Section 31 fees		74.9		35.7
Royalty fees and other cost of revenues		46.1		30.9
Total cost of revenues		516.8		556.4
Revenues less cost of revenues		471.4		418.1
Operating expenses:
Compensation and benefits		110.4		81.2
Depreciation and amortization		41.4		40.9
Technology support services		22.2		19.2
Professional fees and outside services		23.9		19.7
Travel and promotional expenses		6.2		2.9
Facilities costs		7.6		6.5
Acquisition-related costs		6.4		2.0
Other expenses		5.4		6.0
Total operating expenses		223.5		178.4
Operating income		247.9		239.7
Non-operating income (expenses):
Interest expense, net		(15.1)		(10.8)
Other income (expense), net		15.4		(4.0)
Income before income tax provision		248.2		224.9
Income tax provision		74.8		115.3
Net income		173.4		109.6
Net income allocated to participating securities		(0.8)		(0.4)
Net income allocated to common stockholders	$	172.6	$	109.2
Basic earnings per share	$	1.63	$	1.02
Diluted earnings per share	$	1.63	$	1.02
Basic weighted average shares outstanding		105.9		106.6
Diluted weighted average shares outstanding		106.2		106.8

See accompanying notes to condensed consolidated financial statements.

9

Cboe Global Markets, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

(in millions)

	Three Months Ended
	March 31,
	2023		2022
Net income	$	173.4	$	109.6
Other comprehensive income (loss), net of income tax:
Foreign currency translation adjustments		19.8		(26.5)
Unrealized holding losses on financial investments		(0.9)		—
Post-retirement benefit obligations		(0.1)		—
Comprehensive income		192.2		83.1
Comprehensive income allocated to participating securities		(0.8)		(0.4)
Comprehensive income allocated to common stockholders, net of income tax	$	191.4	$	82.7

See accompanying notes to condensed consolidated financial statements.

10

Cboe Global Markets, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three months ended March 31, 2023 and March 31, 2022

(unaudited)

(in millions, except per share amounts)

											Accumulated
							Additional				other		Total
	Preferred		Common		Treasury		paid-in		Retained		comprehensive		stockholders’
	Stock		Stock		Stock		capital		earnings		loss, net		equity
Balance at December 31, 2022	$	—	$	1.1	$	(131.0)	$	1,455.1	$	2,171.1	$	(31.0)	$	3,465.3
Cash dividends on common stock of $0.50 per share		—		—		—		—		(53.3)		—		(53.3)
Stock-based compensation		—		—		—		16.9		—		—		16.9
Repurchases of common stock from employee stock plans		—		—		(12.7)		—		—		—		(12.7)
Purchase of common stock		—		—		(70.0)		—		—		—		(70.0)
Shares issued under employee stock purchase plan		—		—		—		0.3		—		—		0.3
Net income		—		—		—		—		173.4		—		173.4
Other comprehensive income		—		—		—		—		—		18.8		18.8
Balance at March 31, 2023	$	—	$	1.1	$	(213.7)	$	1,472.3	$	2,291.2	$	(12.2)	$	3,538.7

											Accumulated
							Additional				other		Total
	Preferred		Common		Treasury		paid-in		Retained		comprehensive		stockholders’
	Stock		Stock		Stock		capital		earnings		income, net		equity
Balance at December 31, 2021	$	—	$	1.1	$	(106.8)	$	1,509.4	$	2,145.5	$	55.6	$	3,604.8
Cash dividends on common stock of $0.48 per share		—		—		—		—		(51.4)		—		(51.4)
Stock-based compensation		—		—		—		9.1		—		—		9.1
Repurchases of common stock from employee stock plans		—		—		(8.4)		—		—		—		(8.4)
Purchase of common stock		—		—		(70.0)		—		—		—		(70.0)
Shares issued under employee stock purchase plan		—		—		—		0.1		—		—		0.1
Net income		—		—		—		—		109.6		—		109.6
Other comprehensive loss		—		—		—		—		—		(26.5)		(26.5)
Balance at March 31, 2022	$	—	$	1.1	$	(185.2)	$	1,518.6	$	2,203.7	$	29.1	$	3,567.3

See accompanying notes to condensed consolidated financial statements.

11

Cboe Global Markets, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in millions)

	Three Months Ended
	March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	173.4	$	109.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		41.4		40.9
Amortization of debt issuance cost and debt discount		0.7		0.5
Realized gain on available-for-sale financial investments		(0.9)		—
Provision for accounts receivable credit losses		0.6		0.2
Benefit for deferred income taxes		(10.6)		(17.8)
Stock-based compensation expense		16.9		9.1
Loss on disposal of property and equipment		—		0.1
Equity (earnings) loss in investments		(14.4)		3.1
Changes in assets and liabilities:
Accounts receivable		(20.2)		(56.2)
Restricted cash and cash equivalents and customer bank deposits (included in margin deposits and clearing funds)		898.2		1,064.4
Income taxes receivable		43.8		42.7
Other current assets		(2.2)		0.3
Other assets		(8.4)		(15.7)
Accounts payable and accrued liabilities		(56.0)		2.8
Section 31 fees payable		(71.7)		(4.6)
Deferred revenue		9.9		11.2
Income taxes payable		15.7		24.5
Unrecognized tax benefits		14.3		56.0
Other liabilities		0.3		(11.3)
Net cash provided by operating activities		1,030.8		1,259.8
Cash flows from investing activities:
Purchases of available-for-sale financial investments		(48.8)		(20.8)
Proceeds from maturities of available-for-sale financial investments		64.4		8.6
Proceeds from sale of intangible assets		0.8		—
Contributions to investments		(2.1)		(1.9)
Purchases of property and equipment and leasehold improvements		(12.4)		(10.8)
Net cash provided by (used in) investing activities		1.9		(24.9)
Cash flows from financing activities:
Proceeds from long-term debt		—		298.6
Debt issuance costs		—		(4.8)
Cash dividends on common stock		(53.3)		(51.4)
Repurchases of common stock from employee stock plans		(12.7)		(8.4)
Payments of contingent consideration related to acquisitions		(4.9)		(17.4)
Shares issued under employee stock purchase plan		(0.3)		(0.1)
Purchase of common stock		(70.0)		(70.0)
Net cash (used in) provided by financing activities		(141.2)		146.5
Effect of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents		21.1		0.7
Increase in cash, cash equivalents, and restricted cash and cash equivalents		912.6		1,382.1
Cash, cash equivalents, and restricted cash and cash equivalents:
Beginning of period		979.9		1,092.2
End of period	$	1,892.5	$	2,474.3
Reconciliation of cash, cash equivalents, and restricted cash and cash equivalents:
Cash and cash equivalents		435.6		659.4
Restricted cash and cash equivalents (included in margin deposits and clearing funds)		1,428.4		1,810.3
Restricted cash and cash equivalents (included in other current assets)		4.1		4.6
Customer bank deposits (included in margin deposits and clearing funds)		24.4		—
Total	$	1,892.5	$	2,474.3
Supplemental disclosure of cash transactions:
Cash paid for income taxes, net of refunds	$	9.3	$	10.3
Cash paid for interest		21.4		8.8

See accompanying notes to condensed consolidated financial statements.

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Cboe Global Markets, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

1.   ORGANIZATION AND BASIS OF PRESENTATION

Cboe Global Markets, Inc. (“Cboe” or “the Company”), 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, Cboe 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 one of the largest stock exchanges by value traded in Europe, and owns Cboe Clear Europe (rebranded from EuroCCP in November 2022), a leading pan-European equities and derivatives clearinghouse, BIDS Trading, a leading block-trading ATS by volume in the U.S., MATCHNow (operating as TriAct Canada Marketplace LP), a leading equities ATS in Canada, Cboe Australia, an operator of trading venues in Australia, and Cboe Japan, an operator of trading venues in Japan. Cboe also is a leading market globally for exchange-traded products (“ETPs”) listings and trading. On May 2, 2022, Cboe completed its acquisition of ErisX, subsequently rebranded to Cboe Digital, an operator of a U.S. based digital asset spot market, a regulated futures exchange and a regulated clearinghouse. On June 1, 2022, Cboe completed its acquisition of NEO, subsequently rebranded to Cboe Canada, which is a recognized Canadian securities exchange.

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.

Basis of Presentation

These interim unaudited condensed consolidated financial statements have been prepared in accordance with GAAP as established by FASB for interim financial information and with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for interim periods are not necessarily indicative of the results of operations for the full year.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenues and expenses. On an ongoing basis, management evaluates its estimates based upon historical experience, observance of trends, information available from outside sources and various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different conditions or assumptions.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included.

Segment Information

The Company previously operated five reportable business segments prior to the quarter ended June 30, 2022. As a result of the Cboe Digital acquisition, as of the quarter ended June 30, 2022, the Company operates six reportable 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. See Note 14 (“Segment Reporting”) for more information.

Update to Significant Accounting Policies

There have been no new or material changes to the significant accounting policies discussed for the Company for the three months ended March 31, 2023, that are of significance, or potential significance, to the Company.

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Recent Accounting Pronouncements - Adopted

On March 31, 2022, the SEC issued SAB 121, which sets out interpretive guidance from the staff of the SEC regarding the accounting for obligations to safeguarded digital assets that an entity holds for its platform users. The guidance requires an entity to recognize a liability for the obligation to safeguard the users’ assets and recognize an associated asset for the digital assets held for users. Both the liability and asset will be measured initially and subsequently at the fair value of the digital assets being safeguarded. The guidance also requires additional disclosures related to the nature and amount of digital assets held on behalf of its platform users, with separate disclosure for each significant digital asset, and the vulnerabilities the entity has due to any concentration in such activities. The guidance, effective for interim or annual periods ending after June 15, 2022, was adopted by the Company as of June 30, 2022. As a result of adopting SAB 121, the Company recorded digital assets – safeguarded assets, with corresponding digital assets – safeguarded liabilities of $22.4 million as of June 30, 2022, with no impact to the condensed consolidated statements of income and cash flows. There were no other recent applicable material accounting pronouncements that have been adopted as of March 31, 2023.

Recent Accounting Pronouncements - Issued, not yet Adopted

There were no applicable material accounting pronouncements that have been issued, but not yet adopted as of March 31, 2023.

2.   REVENUE RECOGNITION

Beginning in the first quarter of 2022, the Company updated the financial statement captions within its condensed consolidated statements of income to better reflect the Company’s diversified products, expansive geographical reach, and overall business strategy. Below is a summary of the changes to the financial statement captions. The changes do not have a financial impact on the Company’s reported revenue, revenues less cost of revenues, reported net income, or cash flows from operations.

Revenues

● 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 Cboe’s North American Equities, Europe and Asia Pacific, Global FX, and Digital segments.

● Data and access solutions – includes access and capacity fees, proprietary market data fees, and associated other revenue across Cboe’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 revenue from Cboe’s Options, Futures, Europe and Asia Pacific, and Digital segments.

Cost of Revenues

● Royalty fees and other cost of revenues – includes royalty fees and other cost of revenues across the Company’s six segments. In prior periods, royalty fees and other cost of revenues were presented as distinct cost of revenues categories.

The Company’s main types of revenue contracts consist of the following, which are disaggregated from the condensed consolidated statements of income.

● Transaction and clearing fees - Transaction fees represent fees charged by the Company for meeting the point-in-time performance obligation of executing a trade on its markets. These fees can be variable based on trade volume tiered discounts; however, as all tiered discounts are calculated monthly, the actual discount is recorded on a monthly basis. Transaction fees are recognized across all segments. Clearing fees, which include settlement fees, represent fees charged by the Company for meeting the point-in-time performance obligation for transactions cleared and settled by Cboe Clear Europe and Cboe Clear Digital, the derivatives clearing organization for Cboe Digital. Clearing fees can be variable based on trade volume tiered discounts; however, as all tiered discounts are calculated monthly, the actual discount is recorded on a monthly basis. Clearing fees are recognized in the Europe and Asia Pacific and Digital segments. Transaction and clearing fees, as well as any

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tiered volume discounts, are calculated and billed monthly in accordance with the Company’s published fee schedules.

● Access and capacity fees - Access and capacity fees represent fees assessed for the opportunity to trade, including fees for trading-related functionality across all segments, terminal and other equipment rights, maintenance services, trading floor space and telecommunications services. Facilities, systems services and other fees are generally monthly fee-based. These fees are billed monthly in accordance with the Company’s published fee schedules and recognized on a monthly basis when the performance obligations are met. All access and capacity fees associated with the trading floor are recognized over time in the Options segment, as the performance obligations are met.

● Market data fees - Market data fees represent the fees received by the Company from the U.S. tape plans and fees charged to customers for proprietary market data. Fees from the U.S. tape plans are collected monthly based on published fee schedules and distributed quarterly to the Exchanges based on a known formula. A contract for proprietary market data is entered into and charged on a monthly basis in accordance with the Company’s published fee schedules as the service is provided. Proprietary market data also includes revenue from various licensing agreements. Both types of market data are satisfied over time, and revenue is recognized on a monthly basis as the customer receives and consumes the benefit as the Company provides the data to meet its performance obligation. U.S. tape plan market data is recognized in the North American Equities and Options segments. Proprietary market data fees are recognized across all segments.

● Regulatory fees - There are two types of regulatory fees that the Company recognizes. The first type represents fees collected by the Company to cover the Section 31 fees charged to the Exchanges by the SEC for meeting the point-in-time performance obligation of executing a trade on its markets. The fees charged to customers are based on the fee set by the SEC per notional value of U.S. Equities exchange transactions and per round turn of Options transactions executed on the Company’s U.S. securities markets. These fees are calculated and billed monthly and are recognized in the North American Equities and Options segments. As the Exchanges are responsible for the ultimate payment to the SEC, the Exchanges are considered the principal in these transactions. Regulatory fees also include the options regulatory fee (“ORF”) which supports the Company’s regulatory oversight function in the Options segment, along with other miscellaneous regulatory fees, and neither can be used for non-regulatory purposes. The ORF and miscellaneous fees are recognized when the performance obligation is fulfilled.

● Other revenue - Other revenue primarily includes interest income from clearing operations, all fees related to the trade reporting facility operated in the Europe and Asia Pacific segment, listing fees, and revenue associated with advertisements through the Company’s websites.

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All revenue recognized in the condensed consolidated statements of income is considered to be revenue from contracts with customers, with the exception of interest income from clearing operations. The following table depicts the disaggregated revenue contract types listed above within each respective financial statement caption in the condensed consolidated statements of income (in millions):

	Cash		Data and
	and Spot		Access		Derivatives
	Markets		Solutions		Markets		Total
Three Months Ended March 31, 2023
Transaction and clearing fees	$	311.9	$	—	$	420.6	$	732.5
Access and capacity fees		—		84.2		—		84.2
Market data fees		17.9		44.5		8.5		70.9
Regulatory fees		62.6		—		21.9		84.5
Other revenue		14.6		0.7		0.8		16.1
	$	407.0	$	129.4	$	451.8	$	988.2
	Cash		Data and