CME GROUP INC. Q1 FY2025 earnings call

Key Points

• Record quarter: Highest volume, revenue, operating income, and diluted earnings per share in CME Group's history. Quarterly revenue >$1.6B, adjusted net income >$1B.
• Product innovation: Recently launched FX SPOT Plus and plans to launch BrokerTec Chicago in Q3 2025.
• International growth: International business averaged 8.8M contracts/day, up 19% y/y, with growth across all asset classes.
• Financial performance: Revenue up 10% y/y, adjusted operating income $1.2B (up 14% y/y), market data revenue $195M (up 11% y/y).

CME Group had a record quarter in the first quarter of 2025. Quarterly revenue crossed $1.6 billion, and adjusted net income exceeded $1 billion. The first quarter average daily volume was 29.8 million contracts, a 13% increase year-over-year. Commodity sector volumes grew by 19% and financial products by 12%. The international business averaged 8.8 million contracts per day, up 19% from the prior year. All six asset classes saw year-over-year volume growth, with record quarterly volumes in interest rates, equities, agricultural commodities, and foreign exchange.

Forward-Looking

• Strong start to Q2: Very strong volumes as market participants hedge exposures to tariff policies and geopolitics.
• Product launches: Plan to launch BrokerTec Chicago in Q3 2025 and FX SPOT Plus launched in April.

Risks

• Market volatility: Potential deleveraging in volatile markets, though open interest remains strong.
• Regulatory uncertainty: For initiatives like cross-margin program expansion with FICC.
• Pricing/market conditions: Uncertainty around geopolitical events impacting market volumes and participant behavior.

Q: Deleveraging in volatile markets and ag open interest decline A: Aggregate ag OI and options up; some futures pullback offset by options growth. No broad deleveraging due to risk management needs in uncertain times.

Q: Historical margin requirement impact on volumes A: Every situation different; current markets differ from historical, but margins managed proactively to maintain safety.

Q: Aastra JV sale proceeds A: Proceeds expected 50-50 split, use of proceeds to be determined post-close.

Q: Retail micro futures and market data growth A: Micro futures growth driven by partnerships/product innovation; market data growth from pricing increase and retail subscriber demand.

Q: International competition and retail proxy A: Strong international growth due to product diversity/liquidity; micro futures not strict proxy but part of diverse retail trading.

Q: Energy market implications of Ukraine resolution A: Uncertain, but customers reconfiguring supply chains follow risk management tools; energy volumes strong with global benchmarks.

Q: Cross-margin program and expense control A: Cross-margin program onboarding new participants; aiming to expand to end-users; expense control via efficient margin offsets.

Q: BrokerTec Chicago launch A: Launch in Q3 2025, for cash US treasuries, providing choice for execution between cash and futures markets.