CME Group Inc. Q4 FY2025 earnings call

• 2025 was the most successful year in CME Group's history with five consecutive years of record volume, including all-time records in various asset complexes. • International business averaged 8.4 million contracts per day, up 8%. • Customers' average daily margin savings reached $80 billion, up $20 billion from the previous year. • Received SEC approval for CME Securities Clearing, launching in 2026. • Expanded retail footprint with event contracts, over 68 million event contracts traded in six weeks. • Micro products up 59% in Q4 2025 to a record 4.4 million contracts per day; launching 100-ounce silver contract. • Crypto trading up 92% in Q4 2025, expanding crypto offering in 2026 with new futures and 24/7 trading. • 2026 guidance: total adjusted operating expenses (excluding license fees) ~$1.695B, capital expenditures ~$85M, adjusted effective tax rate 23.5%-24.5%.

In 2025, CME Group achieved record results with revenue of $6.5 billion, a 6% increase compared to 2024. The fourth quarter saw revenue of $1.65 billion, an 8% rise from Q4 2024. Market data revenue surpassed $800 million in 2025, up 13%, with Q4 market data reaching a new record of $208 million, up 15%. Average daily volume in 2025 was 28.1 million contracts, a 6% increase, and international business averaged 8.4 million contracts per day, up 8% from 2024. Customers' average daily margin savings reached $80 billion across all six asset classes, an increase of approximately $20 billion over the past year.

• Total adjusted operating expenses, excluding license fees, are expected to be approximately $1.695 billion in 2026. • Total capital expenditures are expected to be approximately $85 million. • Adjusted effective tax rate should come in between 23.5% and 24.5%. • Transaction fee changes effective April 1, expected to increase total revenue by approximately 1% to 1.5% on similar activity to 2025.

• Legal and regulatory risks related to prediction markets, including potential litigation over whether contracts are gaming or swaps. • Potential disruptions from AI in the market data business. • Uncertainties around tokenized collateral acceptance, including risks associated with different entities issuing tokens.

Q: How does the customer base perform through elevated periods of volatility?

A: Terry Duffy and Derek Sammann stated the customer is healthy with all client segments growing, open interest steady/increasing, and volume up across regions and products.

Q: Thoughts on prediction market engagement and regulatory landscape?

A: Tim McCourt said new participants and market makers are reaching out; Terry Duffy discussed legal focus on swaps regulation by CFTC.

Q: Pricing changes by asset class?

A: Julie Winkler talked about market data price increase and growth drivers; Lynne Fitzpatrick mentioned transaction fee changes impact on metals, micro, and crude oil complexes.

Q: Stock buyback and market data AI risk?

A: Lynne Fitzpatrick discussed using Austro proceeds for buybacks; Julie Winkler said AI enhances trading algorithms but core data remains critical.

Q: Google Cloud migration expenses?

A: Sunil Cutinho said migration going well, with $29M spent in Q4, ~$100M total in 2025.

Q: Tokenized collateral?

A: Terry Duffy said tokenized cash initiative with Google, acceptance depends on issuing entity and risk.

Q: Cross-margining and treasury clearing?

A: Sunil Cutinho talked about FICC cross-margining program, Lynne Fitzpatrick discussed treasury clearing's potential impact on collateral balances