Cboe Global Markets, Inc.CBOE
Cboe Global Markets, Inc. Income Taxes Disclosure
INCOME TAXES
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Net deferred tax assets and liabilities consist of the following as of December 31, 2025 and 2024 (in millions):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accrued compensation and benefits | $ | 23.3 | $ | 20.2 | |||||||
| Property, equipment and technology, net | 7.3 | 14.6 | |||||||||
| Operating leases | 40.3 | 40.4 | |||||||||
| Other | 99.9 | 88.7 | |||||||||
| Subtotal | 170.8 | 163.9 | |||||||||
| Valuation allowances | (23.1) | (17.0) | |||||||||
| Total deferred tax assets | 147.7 | 146.9 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Intangibles | (256.4) | (240.2) | |||||||||
| Property, equipment and technology, net | (30.9) | (19.0) | |||||||||
| Investments | (4.7) | (33.8) | |||||||||
| Prepaid expenses or assets | (5.1) | (4.5) | |||||||||
| Operating leases | (30.4) | (31.9) | |||||||||
| Total deferred tax liabilities | (327.5) | (329.4) | |||||||||
| Net deferred tax liabilities | $ | (179.8) | $ | (182.5) | |||||||
The Company provides a valuation allowance against deferred tax assets if, based on management’s assessment of historical and projected future operating results and other available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. A valuation allowance of $23.1 million and $17.0 million was recorded against gross deferred tax assets for certain investments and net operating losses as of December 31, 2025 and 2024, respectively.
As of December 31, 2025, the Company no longer has capital loss carryforwards as amounts either expired in 2025 or were utilized against capital gains generated in the current year. The Company has net operating loss carryforwards of $15.6 million, most of which have an indefinite carryforward period.
The Company considers its non-U.S. earnings to be indefinitely reinvested outside of the U.S. to the extent these earnings are not subject to U.S. income tax under an anti-deferral tax regime. As of December 31, 2025, the cumulative amount of undistributed earnings in these subsidiaries is $163.4 million. Given our intent to reinvest these earnings for an indefinite period of time, the Company has not accrued a deferred tax liability on these earnings. A determination of an unrecognized deferred tax liability related to these earnings is not practicable.
For the years ended December 31, 2025, 2024, and 2023, income before taxes consists of the following (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. operations | $ | 1,520.4 | $ | 1,060.2 | $ | 1,010.5 | |||||||||||
| Foreign operations | 46.2 | 23.6 | 37.1 | ||||||||||||||
| Total | $ | 1,566.6 | $ | 1,083.8 | $ | 1,047.6 | |||||||||||
The provision for income taxes for the years ended December 31, 2025, 2024, and 2023 consists of the following (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current tax expense: | |||||||||||||||||
| Federal | $ | 287.6 | $ | 208.8 | $ | 188.1 | |||||||||||
| State | 162.9 | 117.7 | 97.8 | ||||||||||||||
| Foreign | 24.5 | 16.0 | 15.5 | ||||||||||||||
| Total current tax expense | 475.0 | 342.5 | 301.4 | ||||||||||||||
| Deferred income tax (benefit) expense: | |||||||||||||||||
| Federal | (7.9) | (19.5) | (3.4) | ||||||||||||||
| State | 8.4 | (2.4) | 1.5 | ||||||||||||||
| Foreign | (8.9) | (1.7) | (13.3) | ||||||||||||||
| Total deferred income tax benefit | (8.4) | (23.6) | (15.2) | ||||||||||||||
| Total | $ | 466.6 | $ | 318.9 | $ | 286.2 | |||||||||||
Cash paid for income taxes, net for the years ended December 31, 2025, 2024, and 2023 were as follows (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Federal | $ | 284.1 | $ | 276.4 | $ | 211.0 | |||||||||||
| State | 81.2 | 72.8 | 60.5 | ||||||||||||||
| Foreign | 26.3 | 13.2 | 14.9 | ||||||||||||||
| Total cash paid for income taxes, net | $ | 391.6 | $ | 362.4 | $ | 286.4 | |||||||||||
Cash paid for state and foreign income taxes, net for the years ended December 31, 2025, 2024, and 2023 are disaggregated by jurisdiction as follows (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| State | |||||||||||||||||
| Illinois | $ | 45.0 | $ | 40.9 | $ | 36.1 | |||||||||||
| Foreign | |||||||||||||||||
| United Kingdom | $ | 23.7 | * | * | |||||||||||||
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* Jurisdiction is immaterial for the period presented
A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31, 2025, 2024, and 2023 is as follows:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Statutory U.S. federal income tax rate | $ | 329.0 | 21.0 | % | $ | 227.6 | 21.0 | % | $ | 220.0 | 21.0 | % | |||||||||||||||||||||||
| Impact of federal, state, and local tax law and rate changes, net (a) | 105.6 | 6.7 | % | 48.7 | 4.5 | % | 45.2 | 4.3 | % | ||||||||||||||||||||||||||
| Foreign tax effects | 0.2 | — | % | 1.2 | 0.1 | % | — | — | % | ||||||||||||||||||||||||||
| Effect of changes in tax laws or rates | 12.6 | 0.8 | % | 1.0 | 0.1 | % | — | — | % | ||||||||||||||||||||||||||
| Effect of cross-border tax laws | (6.9) | (0.4) | % | (4.9) | (0.4) | % | (4.7) | (0.4) | % | ||||||||||||||||||||||||||
| Tax credits | (1.1) | (0.1) | % | (1.0) | (0.1) | % | (1.6) | (0.2) | % | ||||||||||||||||||||||||||
| Valuation allowances | 5.1 | 0.3 | % | 4.8 | 0.4 | % | (5.1) | (0.5) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | 7.6 | 0.5 | % | 8.1 | 0.7 | % | 0.9 | 0.1 | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | 21.1 | 1.3 | % | 42.4 | 3.9 | % | 30.8 | 2.9 | % | ||||||||||||||||||||||||||
| Other adjustments | (6.6) | (0.3) | % | (9.0) | (0.8) | % | 0.7 | 0.1 | % | ||||||||||||||||||||||||||
| Effective tax rate | $ | 466.6 | 29.8 | % | $ | 318.9 | 29.4 | % | $ | 286.2 | 27.3 | % | |||||||||||||||||||||||
(a) State taxes in Illinois, New York State, and New York City made up the majority of the tax effect of this category.
A reconciliation of the beginning and ending unrecognized tax benefits, excluding interest and penalties, is as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance as of January 1 | $ | 219.1 | $ | 237.5 | $ | 212.1 | |||||||||||
| Gross increases related to prior year tax positions | 13.5 | 0.2 | — | ||||||||||||||
| Gross decreases related to prior year tax positions | (12.4) | (3.1) | (1.5) | ||||||||||||||
| Gross increases related to current year tax positions | 1.7 | 34.4 | 31.1 | ||||||||||||||
| Settlements | (0.6) | (49.9) | (2.5) | ||||||||||||||
| Lapse of statute of limitations | — | — | (1.7) | ||||||||||||||
| Balance as of December 31 | $ | 221.3 | $ | 219.1 | $ | 237.5 | |||||||||||
As of December 31, 2025, 2024 and 2023, the Company had $174.9 million, $173.1 million, and $196.6 million, respectively, of unrecognized tax benefits, net of federal benefit, which, if recognized in the future, would affect the effective income tax rate. No reductions to unrecognized tax benefits, other than those classified as current liabilities as discussed below, from the lapse of the applicable statutes of limitations and potential audit settlements are expected during the next twelve months.
Estimated interest costs (income) and penalties (benefits) are classified as part of the provision for income taxes in the Company's consolidated statements of income and were $25.8 million, $(2.5) million, and $14.3 million, for the periods ended December 31, 2025, 2024, and 2023, respectively. Accrued interest and penalties were $111.8 million, $86.0 million, and $88.5 million as of December 31, 2025, 2024 and 2023, respectively.
The following table summarizes the tax years that are either currently under audit or remain open and subject to examination by the tax authorities in the most significant jurisdictions in which Cboe operates:
| U.S. Federal | 2022-2025 | ||||
| California | 2017-2025 | ||||
| Illinois | 2022-2025 | ||||
| New York | 2015-2025 | ||||
| New York City | 2015-2025 | ||||
| Pennsylvania | 2021-2024 | ||||
| United Kingdom | 2022-2025 | ||||
| Netherlands | 2019-2025 | ||||
The Company is currently undergoing audit examinations by various taxing jurisdictions in the ordinary course. It is reasonably possible that these audits will be concluded with agreed upon adjustments which would result in additional tax payments for prior periods within the next twelve months. The Company believes that sufficient reserves have been established to cover any adjustments arising from tax examinations. However, the outcomes of these examinations remain uncertain. The Company has classified a portion of these amounts as accounts payable and accrued liabilities on its consolidated balance sheet as of December 31, 2025. This classification and the associated amount may change over the next twelve months, depending on when the Company finalizes agreements.
On July 4, 2025, President Trump signed into law “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14,” commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA extends many of the Tax Cuts and Jobs Act provisions beyond 2025. The corporate provisions impacting the Company include repealing the phase out of bonus depreciation and reverting to 100% expensing of fixed asset additions, making the 33.34% deduction against foreign-derived eligible income permanent and repealing the requirement to capitalize and amortize U.S. research and development costs. The legislation has several effective dates, with some provisions taking effect in 2025 and others being implemented by 2027. These changes resulted in current year cash tax savings while having no significant impact to the effective tax rate for the year ended December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 19, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.