Key Highlights

  • Adjusted EPS of USD 3.02 beat the USD 2.98 estimate, up 13% year over year.
  • Revenue of USD 1.74 billion rose 13% and topped the USD 1.71 billion estimate.
  • Average daily volume of 29.4 million contracts set a third-quarter record, up 16%.
  • Market data revenue reached a record USD 243 million, up 20% year over year.

CME Group (NASDAQ:CME) reported third-quarter results on Wednesday, Oct. 21, with adjusted diluted EPS of USD 3.02, above the USD 2.98 estimate and up from USD 2.68 a year earlier. Revenue of USD 1.737 billion rose 13% from USD 1.538 billion and topped the USD 1.71 billion estimate. GAAP diluted EPS was USD 2.89 versus USD 2.49.

CME Group operates derivatives exchanges and clearing services, including the CME Globex, BrokerTec and EBS platforms. Shares were up 0.09% at USD 297.57 in Wednesday trading.

Volume Drives Revenue

Average daily volume reached 29.4 million contracts, a third-quarter record and 16% above last year, with double-digit growth in all six asset classes. Non-U.S. volume averaged 9 million contracts, up 22%. Chairman and Chief Executive Officer Terry Duffy said uncertainty during the quarter pushed clients to use the exchange to manage risk.

Clearing and transaction fees were USD 1.378 billion versus USD 1.228 billion, at an average rate of USD 0.679 per contract. Market data and information services revenue rose 20% to USD 243.1 million, which management described as the 34th straight quarter of year-over-year growth. The equity complex led with volume up 23%, while financial and commodity products each rose 16%.

Expenses and Margin

Total expenses were USD 595.9 million versus USD 565.0 million. On an adjusted basis, expenses rose to USD 531.8 million from USD 486.6 million, with licensing and other fee agreements up to USD 104.2 million from USD 81.6 million as equity activity increased.

GAAP operating income was USD 1.141 billion versus USD 973 million. Adjusted operating income rose 15% to USD 1.206 billion, a 69.4% adjusted margin according to management. Net income was USD 1.037 billion against USD 908 million, and adjusted net income was USD 1.084 billion against USD 978 million.

Capital Return and Product Updates

The company ended September with USD 2.4 billion of cash and USD 3.4 billion of debt. It returned nearly USD 1 billion to shareholders in the quarter, made up of USD 465 million in regular dividends and USD 524 million in share repurchases. Customers saved an average of USD 100 billion a day in margin through capital efficiencies, a record.

Management pointed to new single stock futures and E-nano equity index futures, plus round-the-clock trading in gold and silver contracts. CME Securities Clearing is scheduled to launch on Dec. 7, in step with the SEC Treasury clearing mandate. The company said its cloud performance matched on-premises standards, so livestock markets no longer need to move to Dallas, and the Google Cloud migration of markets is slated to begin in late 2027.

Metrics to Track

Fourth-quarter volume was running 17% above last year's record fourth quarter, and year-to-date volume is 12% ahead, according to management. Open interest by asset class and the pace of market data growth are other gauges, and the Dec. 7 clearing launch is the dated item on the calendar.