Management Quality -- 7/10
~89% guidance hit rate across 4 verifiable quarters (8 hit/beat, 1 favorable capex
under-spend), a genuine beat-and-raise pattern, zero withdrawn guidance, and on-schedule
execution of a multi-quarter realignment. Deducted 1 point for the one confirmed red flag:
CEO Craig Donohue has been in the role only ~14 months, with COO Scott Johnston (an external
hire) also new as of Q1 2026 -- two of three senior operating seats have turned over inside
the trailing 14 months.
Weight: 20%
CEO Tenure
~14 mo.
Craig Donohue, since May 2025
Guidance Hit Rate
~89%
8 hit/beat, 1 favorable miss (n=9)
Red Flags Confirmed
1
CEO change within last 2 years
Debt / EBITDA
0.8x
Declining from 1.0x -- flat debt, growing revenue
Promise-tracking table
| Promise | Timeframe | Actual Result | Status |
|---|---|---|---|
| Net revenue growth raised to "high single digits" (Q2'25) | FY2025 | +17.2% YoY actual -- ~2x guided rate | BEAT |
| Net revenue growth raised to "low double digit to mid-teens" (Q3'25) | FY2025 | +17.2% YoY, above the "mid-teens" upper bound | BEAT |
| DataVantage growth raised to "high single to low double digit" (Q3'25) | FY2025 | DataVantage net revenue +10% full year | HIT |
| Adj. opex lowered to $827M-$842M (Q3'25 final revision) | FY2025 | Actual $836.5M | HIT |
| CapEx lowered to $73M-$83M (Q3'25 final revision) | FY2025 | Actual $71.0M -- below guided range | MISS (favorable) |
| D&A lowered to $50M-$54M (Q3'25 final revision) | FY2025 | Actual $52.5M | HIT |
| Effective tax rate 28.5%-30.5% (unchanged Q2/Q3'25) | FY2025 | Actual 29.3% ex-Sec.199 items | HIT |
| Japan equities closure effective Aug 29 2025, $10M-$12M savings | Aug 2025 | Closure executed on schedule; savings folded into $100-120M realignment target | HIT |
| Heidi Fisher / Scott Johnston (COO) leadership transition announced (Q4'25) | ~Feb 2026 | Johnston joined Feb 2026, first call as COO Q1'26 -- cleanly sequential with Isaacson's last call | HIT |
| FY2026 net revenue growth "mid-single-digit" (initial guide, Q4'25) | FY2026 | Q1'26 +29.0% YoY; guide already raised to low-double/mid-teens next quarter | TOO EARLY |
Hit rate (fully-resolved, gradeable, n=9): 8 Hit/Beat, 1 Miss = ~89%. Every
revenue, Data Vantage, expense, tax-rate, and leadership-transition commitment that ran its
full course was hit or beaten; the one "miss" is capex spending less than guided.
Source: verbatim FMP earnings-call transcripts (Q2 2025-Q1 2026), Daloopa.
Guidance revision pattern
Every FY2025 revision moved shareholder-favorably (revenue raised every time; expense/D&A
lowered every time); no guidance cut or withdrawal in any of the four transcripts. The
initial FY2026 guide was a sharp step-down from trailing momentum
("mid-single-digit" net revenue growth, Q4'25 call) then raised to "low double-digit to
mid-teens" just one quarter later (Q1'26 call) -- a "reset-then-raise" pattern repeating
across two consecutive annual guidance cycles.
C-suite turnover
Two of three senior operating seats have turned over
CEO Craig Donohue assumed the role early May 2025 (~14 months before this review --
red flag). COO Christopher Isaacson (a founding BATS employee since 2005) stepped down;
Scott Johnston (external hire, ex-CME colleague of Donohue's) and Heidi Fisher were
announced together on the Q4 2025 call, with Johnston's first COO earnings call being
Q1 2026 -- an externally-recruited hire, a change from how the prior Cathy Clay/Isaacson
succession was handled. CFO Jill Griebenow unchanged throughout. Net: two of three senior
operating roles have turned over within the trailing 14 months, even though guidance
execution has, if anything, improved.
Red-flag checklist
| Red Flag | Present? | Note |
|---|---|---|
| CEO/CFO change in last 2 years | YES | Craig Donohue became CEO May 2025; CFO Jill Griebenow unchanged |
| Guidance withdrawn / substantially lowered | NO | Every FY2025 revision was a raise or favorable expense cut |
| Restatement / material weakness | NO | None disclosed |
| Insider selling >$10M, no buying | N/V | No insider-transaction data source connected in this environment |
| Revenue growing, FCF declining 3+ quarters | NO | Adj. Operating EBITDA margin expanded every quarter: 65.8% → 67.5% → 69.2% → 74.2% |
| Failed / value-destroying M&A | NO | Divestitures/wind-downs (Japan, FedEx, corporate listings, Australia/Canada sale), not value-destroying acquisitions |
| Debt growing faster than revenue 3+ quarters | NO | Total debt flat at $1,450M for all four quarters while revenue grew 14-29% YoY; Debt/EBITDA declined 1.0x → 0.8x |
Red flags confirmed: 1 (CEO change within last 2 years).
Score rationale
Hit rate ~89% (>80% band) combined with a genuine beat-and-raise pattern places the initial score at 8; applying the one confirmed red flag deducts 1 point → 7/10. Only four quarters of verbatim guidance history exist, CEO tenure is ~14 months, and the COO transitioned mid-window -- strong execution (~89% hit rate) but not a multi-year track record.
Composite gate -- managementTrackRecord: NO. This is the one quality-gate leg Cboe fails: a 3+ year track record under the current leadership team does not yet exist, even though the available evidence points to strong, disciplined execution.
Data sourced from Daloopa and verbatim FMP earnings-call transcripts. Full detail: tickers/CBOE/data/review_workspaces/2026-07-24/final_score.md.