CME (CME) 24 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

Adam Minick	executive
Terrence Duffy	executive
Lynne Fitzpatrick	executive
Christopher Allen	analyst
Suzanne Sprague	executive
Tim McCourt	executive
Daniel Fannon	analyst
Derek Sammann	executive
Patrick Moley	analyst
Alex Kramm	analyst
Julie Winkler	executive
Sunil Cutinho	executive
Craig Siegenthaler	analyst
Kyle Voigt	analyst
Brian Bedell	analyst
Alexander Blostein	analyst
Kenneth Worthington	analyst
Kwun Sum Lau	analyst
Michael Cyprys	analyst
Simon Alistair Clinch	analyst
Benjamin Budish	analyst
Elias Abboud	analyst

Call transcript

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Operator

Welcome to the CME Group First Quarter 2024 Earnings Call. [Operator Instructions] I'll now turn the conference over to Adam Minick. Please go ahead.

Adam Minick

Good morning, and I hope you're all doing well today. We released our executive commentary earlier this morning, which provides extensive details on the first quarter 2024, which we will be discussing on this call. safe Terry. and the it I'll with to over start harbor then language, turn I'll on call historical made our statements. Statements this website documents other that on reference are not facts forward-looking and are in the statements These not future guarantees performance. are of [indiscernible]. that risks, are involve They uncertainties Therefore, differ from expressed results what may any implied in statement. and actual is outcomes materially or

information factors that our be filings the in SEC about may on can Detailed with website. found affect our the performance

and GAAP measures. Lastly to release final a I'll on the With page earnings turn between the that, the Terry. of reconciliation non-GAAP call over

Terrence Duffy

Thanks, Adam, a us going and and few thank morning. make environment. joining overall you quarter all to the the this for brief about comments I'm

will of an overview Lynne financial our that, results. provide quarter Following first

management remarks. answer after In addition to Lynne, we our present the questions team have prepared of other to members

performance first the need risk management of was evidence for strong in Our globally. the ever-growing quarter

quarter a First ADV last million year, was of the quarter and onset for quarterly the in in impacted volume the comparison highest quarters XXXX higher at March XXXX. the third from Group's only first XX.X average bank created the the which turmoil daily tougher pandemic, significant The of March by quarter first CME much contracts in of of was history.

reached index of We overall options contracts and X.X the Both million energy all-time change history in of for high XX.X February that quarterly specific included ADV macro million date, occurring and no we in million X.X or year-over-year. of rate highest Federal QX, both had contracts interest our in the up Despite X%. equity the event in or XX% rates treasuries records achieved Reserve options levels. monthly ADV contracts. to January up ADV highest

for million quarterly record energy, growth in products delivered our in moment. In our a record ag This we XX% ADV contracts. total, metals. Lynne in average largely products, generate XX% which driven detail which also products. activity X.X non-U.S. million by results, across volume, daily both to physical strong adjusted ADV ag energy XX% commodity first and Our financial included a in XX% year-over-year helps X.X growth across This X% lines of level is reached just will quarter growth and business

has XX%, date far so classes. million X.X volume on of strong in contracts following on highest daily build April as April quarter Metals in physical asset are these and continued of many reached complex April to up Activity at ADV the its the of our to XX% They April XX. is history first commodity up specifically XX. in trends

financial is CPI example XX On the the of risk. the every the side business, released for data important great how positions adjust point to manage to April was market on of a

reached views the the indicators continues. XX economy related the nearly of that interpreting nuance to million day and of health range We around wide and contracts many the traded the global different economic

As market dynamics, April result asset our growth strong in year-over-year X ADV classes. of of is XX, up a including our X%, all year-to-date through

demand market Lynne to to the markets the Group CME to review offering, to operational going CME is across financial participants. provide benchmarks capital turn in global results. our to call multi-asset efficiencies ever. to and today I'm deliver continues liquid over Group's deep than most now higher class

Lynne Fitzpatrick

for you Thanks, Terry, morning. and thank joining this us

quarter generated from in X% During very in revenue, XXXX. the a CME up billion first $X.X quarter, nearly first strong

January. fees increased to of X/X was transaction noncash to represented a classes, revenue largely XX% up in clearing implemented Within revenue Market quarter. approximately Other to of level in fees million. X% year-over-year commodities the increased due record million, Data quarterly revenue physical $XXX XX% asset reached and the the collateral $XXX

an adjusted excluding licenses. quarter, the and $XXX for of cost strong expenses led million Continued discipline million, to $XXX

last period XX.X%, products, we quarterly was operating the postponement strong tax quarter same adjusted the adjusted had our adjusted last income rate earnings for for X% of an the XX%. This quarter in the and driven up highest Group Our quarter demand XX%, margin from by year. represents net [indiscernible] year. up CME in effective first delivered for the net per adjusted income of margin share our an the at over from history both XX.X%

very in dividend for are variable approximately expenditures paid the period quarter the cash policy approximately and to our $XX of the earnings strong turned $X.X the billion Capital to quarter. CME of share the We're second billion start quarterly quarter were Group and deliver first proud $XX early of during dividends history the and [indiscernible] billion. pleased in nearly end dividends at million $X.X see

Year-to-date, to million XX the At Group, management trading driving to the We'd call for higher questions. our and your more last or days clients over our for days products. have to consistent earnings shares. CME than needed more XX contracts by been we [indiscernible] and focus we're demand demonstrating up now able like half XX our providing year continue versus for risk products our open of growth

Operator

with first The Instructions] Chris is queue the [Operator question Citi. from in Allen

Christopher Allen

DTCC structural cash clearing, cross Any also the was about opportunities U.S. chatter Treasury [ from record any where Turner there maybe the out maybe on if a lot quarter. U.S. activity impact CME somewhere impact revenue but peak then How a be the ] case. applied complex? there's about the that you focus But U.S. how not you're the treasury. Treasury margining? thinking driving U.S. to activity of to complex wanted seem you it? which that. rate in are I also to And color around What's perspective, thinking Obviously, from does there on the clear

the question. So sorry for multipart

Terrence Duffy

we'll of little will ask and to all X that probably Again, of a different I'm problem, Tim going bit, Suzanne myself the unpack it. Chris. and No answer kind parts

lieu the in think peak United going would around So in was and I the around conclusion what's States. to part first fundamentally it your difficult draw let's that just around be I treasuries your think of the talk -- is about activity on question that really world

see the so cut just that conclusion need can as up peak that So if, just more should would generate the this order anybody generate that does doesn't don't of Activity a activity, activity. know, you Fed to draw in activity. go in Chris. I It generate more is to fact,

far that So the it's market. I not a a relates we are treasury in of would peak say saying near activity away that as it to

as the far let As and respond I'll Tim that, the respectively. DTCC and clearing, to Suzanne

Suzanne Sprague

and increased between thank the for very in fixed seeing question. Yes. We continue income program Thank do you ourselves you much, corporations. cross participations the margin clearing Terry, the and

delivering portfolio addition are swaps, our to daily within XX% of seeing billion. program Some the of of of And to margin we in average between offer margining rate that which in futures, members the XX% XXXX, about options savings upwards interest savings. CME those quarter that's clearing $X in first continue and

So in market quarter capital solutions, the achieving consistent continued think, been holistically, those of savings year. first efficiency participants over and time savings great story this I have record for a for

Terrence Duffy

Tim, do you have anything add? to

Tim McCourt

it double out XX has roughly the And years, treasuries. maybe to think to just treasury forecasting is to long-term one the complex with at the thing I And look of treasury over on XX stock when the also continue that complex, and the is grow look think the Chris, open outstanding growth we we add the that next doubled. congressional when last over budget entries years. office stock I volume of of the

complex currently in from look the while issuance, little was we issuance QX where to when was the issue total in bonds the to net the treasury we of occurring QX, we net it at than is ramps notes it more coupon quarters, up finance very the terms and budget So growing heavy changed and the look plays of into much previous when that the deficits, offer. products that well these

backdrop seen the QX said treasury of across growth complex a that tailwind for furthering and million continue be that to we to we've futures expect in and And where X.X record had as remarks, general [indiscernible] Terry the options contracts the his a issuance

Terrence Duffy

over out Chris, opinions And is related to been say there absolutely add to everybody amount the say of all treasury know wrong. to the But has for me on different what or that most map. on everybody the was do that it is the to peaked, the let is the going the to not complex part as do that's Fed And and beginning. that knows one call at going I thing just you

So was advertised rate that to anywhere cuts the X by from into coming you predicted X had 'XX X months Fed. ago

which Now none a going between people in idea I but generate of are of out activity. tremendous also happen, no have a had opinions X anywhere somewhere to between what's there, big difference that. in amount there's going

you have make about, this. watching going longer about haven't manage the we think duration failed this others to I'm the that duration. not of [indiscernible] and they need on we into that And things to are was don't since sure rates that higher, One and But their suggesting others are talk risk. fall are to talked risk

an that think that not I equation ago. that's was people as these X on for, X little just put say, So to as accounting treasuries are most months sitting

Lynne Fitzpatrick

the clearing? Treasury on Appreciate Anything color. U.S.

Terrence Duffy

I Treasury we an going -- will the we that to say clearing, are the made U.S. that application. On I file announcement

it As this. relates to

way think We are publicly probably in being the sometime kick we standpoint, then and go fourth think in it's have from from be the quarter that SEC, that we've and we'll either application look and with that sometime of the we'll participants. in there. our viewed CME to we'll will -- go the in interest its before of forward by until said But best it the completing can again, I if it in doesn't in very prepared I early stages 'XX mandate

Operator

Fannon queue in Dan is The with next the question Jefferies. from

Daniel Fannon

increase of given little Maybe the the activity activity any in I of on change volumes, commodities in markets. talk limits was other the robust happening? in that's customer, or things a been has and some hoping position of the the health to that potentially about some curtail been get color might the there more metals

Terrence Duffy

Derek?

Derek Sammann

quiet. up seen is expectations side quarter spectacular the playing change metal precious it's a know, Yes, seen What And the was it you we've in and I both in in -- little significant a a activity. QX our metals our really activity bit and X%. gold with side. rise base the the as made the is first Volumes is metal role around for metals you've move and then, think were market.

sort of I the a below few our scratched think stuck X,XXX. gold last why was heads years of the about over lot

that in it's very well. market and increase participation segments. kind healthy a spread significant activity activity and at and as When that very side each of participation and of accelerate. And of activity market, just buy not that our healthy but has you actually we've you've across growth, in saw run-up across seen commercial seen participants the We look the client a participation

there questions about records we business, saw growth, of China in up the QX, generally nice There's on markets we're globally questions of lot early really our really around In global the electrification grid aluminum, growth where for copper of the the side stages that's XX%. like of seeing there. and growth typically aluminum metal good a and base

of across regions healthy growth So segments, but growth when records, full at we set and you said as just our the see the look complex we're Terry for in across earlier, client the significant not business, options, it seeing activity, options April.

growth, the happy So and growth across regions client the very very across product classes asset as happy well. with with

Terrence Duffy

about thought a run-up talked me of back levels price but X Dan, prepared I've I are anymore because said We the marketplace classes that asset doing. it's talked remarks to our has are recently all what let are the ago just metals in Derek people in moment really happened, traded I because who add now. the they just as And action, to achieving the important. think never how several metals

the is about customer healthy. So you specifically asked, customer think the I

humming asset quiet know a have bigger to XX a of big don't all the you participate part are another I X tell when divergence used gone fascinating continue you this down, see. seeing go one into it's is story classes how is that that might been for and places. telling years that to to they people picture asset it, I the these other really is along. from one. phrased to We're we've will but amazing, metals But us for that class That's

it's So healthy I for CME. really client a across think

Operator

Sandler. Piper next The with queue question, Moley the is Patrick from

Patrick Moley

So growth. you've now, an Terry, to for future potential few an as of expressed openness a avenue quarters M&A

updated classes M&A potential focused to asset and So comes we're and opportunities? of thoughts hoping your the on kind on it areas that when to you're get M&A just

Terrence Duffy

been I've if know don't I Patrick. that. Thanks, to discussing open

our with is I position, to think clients. for I a strong the in along, right in shareholders and that and have if, said CME our transaction fact, made that sense come was

just I said for so And we out particular if that it not to are do strong were looking a to arise. I'm position deals. in so

not And mindset has that again, changed.

see X are just if relates we opportunities is that up activity said, open things M&A not about out the part I open always we at going that's are as something. that we Patrick? and question, is moment same other what our at what But different of again, shopping something classes some but the all at of And may value anything, we're your obviously excited to the to the time of One for clients it potential was to asset looking shareholders.

Patrick Moley

No, them. you hit That on all of great. was

Operator

Kramm question The with the in Alex UBS. next is queue from

Alex Kramm

Just data. one market a on quick

number. I was out onetime-ish episodic some audit, on kind pointed You the was data, think that was that revenue like I derived and one and one of other bigger [indiscernible] get a but

years then revenue. us picture, derived was data I few why a comes just big can a sometimes episodic But with you think new bigger maybe initiative. ago, So that remind

there's would point. we a source more at bit that maybe a stable of little hope revenue And this

give So in it update we the can particular, data market what you're Google also to you on maybe as just where an us doing with side. pertains stand

Terrence Duffy

Winkler don't if Thanks, chime I know Alex. and what to relates Julie. to in to go over to it wants as I'll it turn Julie Sunil

Julie Winkler

of data Yes. X%. million year. core is delivering $XXX that the that with a in had mean up part for quarter, that revenue, professional the question, certainly the XX% And coming subscriber of is another the from Thanks revenue. Alex. base growth I This last key business, and That a of is over services is obviously, revenue. great year our revenue record back our general, on

as As And pieces data of an if typically that back of component. that Certainly, nature derived X sporadic lot right? episodic derive think more as a that the the of it you and those relates variable component to talked a revenues well there's quarter, annual unpredictable about we've audit. revenue about

up, these there were And say, that I'd we revenue for up saw that consistent so true-ups some and does contracts renewal. it are bring are

the in think those our I I'd that and to -- some this see different as agreements subscription So nature and components, see repeatability we some is happen do clear them business it did relates we commercialization of And there particular we our say certainly the deliver think spikes of new occasionally, back ways in initiatives data onset because definitely those some and X for with new with the but them. our a to trying to continuing been is to Google broadly, with work as more quarter. solutions We've that in very there. data priority about

tied And that quarter. work the has throughout

And as a this we're the so broker coming make think size specifically having with better of change decisions, weeks being the X-year in that analysis to and used business production is transaction we've developed in business up particular just tech the in with leverage able about tool. a teams of work. couple one being and result and TTA clients is today That our our I cost in right, talked to example, by

clients. at to directly for that driving share now, that think to of we're able Sunil. that we're Over to So innovation But example Google. good with is working I a our with the partners be

Sunil Cutinho

The we sets only as becomes out. I'll add has more to thing plans as pointed risk have a available add data priority, is Terry management

clients we'll scenarios, that So use scenarios. our with Historical on so could they [indiscernible] be stress working

Terrence Duffy

Sunil. Thanks, Julie. Thanks, Thanks.

Operator

the there of at side there? trouble having can next listed in. speaker. Any Craig, little other you or We're hearing we a any us the out have you come us. Are hear

line hearing one So Difficulty] us is [Technical minute. we're for with open. not Craig anything. Bear

Craig Siegenthaler

me? Can hear you

Terrence Duffy

now I delay. Craig. you. Thank the for can I apologize

Craig Siegenthaler

nobody me. No trying but was hear worries. could I before,

an rate you guys, futures quickly given in with the plan up margin segment? attractive credit this ramp listen, new efficiency to for with TAM participants? There capital key volumes do June. against is here How expect how to just launch especially offsets, know product. component the your you do you I So the And size conversations

Terrence Duffy

the answer say. haven't that's Tim it know we don't are bit with for over about correlated only she that it I dollar today. little out we but a might it turn Craig. me market got the if mean But the not multimillion because yet, let opportunity market, talk Tim? has associated question, always credit merely what the the Good to and to I And question, for but for and that can contract Yes. potential fully it markets as

Tim McCourt

Thanks. Great. really Craig, I And appreciate question. the

but I on Ourselves a XX, and intersection markets, and is the our recent that think the daily excited CDx, CME market rate tends the both bond of at where you launch nice income also addressable indices futures are growth about an notional clients unique in credit classes, and to the those be cash index corporate when volume of distinct futures the of look asset our the equity about billion be across at June XX ETFs, will strength terms market uniquely in offers in average interest a has which complex. other of positioned given Credit on bond. credit fixed the Bloomberg

becoming and And even market the more underlying electronic. is more

CME we futures offset think margin and a yield. high XX% for something and risk to So of efficiencies manage needs our to risk the clients hedge to their increasingly credit and to tried there early credit capital point, this Treasury that is market continue their benchmarks introducing investment-grade against future subject is velocity offer the Craig, true margin are as equity continue enable the we the offsets people XX% efficiencies, our to be your and of will we will always aware this indications, expect between think at here will and which U.S. E-mini managing market that to become change,

of offerings we was margin successful. and key of believe from the a some become something we're what other hearing offerings and customers that efficiencies hurdle products to for Lack the in prior is prior

point, the can't while the things FNO Terry's we to to necessarily and base optimistic fund offsets ability our we're classes against asset are hearing given clients great we our in So future from predict contract offer our do goes [ unique associated of can asset that classes to this what low. leadership when come the with positions in certainly we the see ] price we like formation June

Terrence Duffy

Thanks, the Thanks, Appreciate Craig, it. question. Tim. for

Operator

Our from Kyle with is KBW. Voigt next question

Kyle Voigt

for Maybe into of in that XXXX. the to Lynne. due I the coming expiration quarter million short-term early in this noticed moved $XXX a bucket question debt

additional that issue even levels include you you You're part And below your and level upcoming gross would annual still guess, I as threshold. I variable target below levels leverage consider of increasing Xx. to of be of historical from could billion $X current think refinancing next year? with debt the that debt cash

Or debt simply you to sorry the could in the if a leverage -- And us opportunity levels? should also current of squeeze we think you part question refinanced present about the think second remind this being but itself? right to were maximum about at in, M&A how

Lynne Fitzpatrick

Yes. Kyle. Thanks,

next maturity our So coming we up XXXX. March in do have of

So the it's certainly at over this course looking we year. something of will be

strong As in and in investors and some financing, work we front for keep keep name do you need the know, out just don't bonds the of fresh. try but our keep to have a market debt we that credit

So our through issuance. did go be when we'll that the year. rates evaluating the bonds for we now those course Certainly are than of higher certainly as approach we

account, haven't will made point. So but that do or at that we will this we on any decisions take of level refinancing we how into

investment-grade M&A, terms our value In we for rating. do target maximum the strong of

an flex to that's relatively quickly. of we in Xx that able up context, the would lot fact target. and out generate there be M&A a given down do with cash is debt So pay came Certainly, that we where that

leverage. transaction and far think I we how on execute the go depend were all we on would circumstance to would it the the if

that do in you've use I you, something don't we historically. for have balance equity seen target and an but try of as our transactions it's and debt So the exact

Operator

Our next question Brian Bedell with Deutsche Bank.

Brian Bedell

a it to with the back more it's gross other potentially would the the DTC? I to growth? dynamics. complex. appreciate treasury of in just come [indiscernible] is just To to early with extent the very the share margining relative Or what this treasury then side contributing portfolio margining agreement agreement for strong futures change Maybe is from market volume that -- base the DTC And but

And I squeeze if know and can I quarterly could if I summary. for BrokerTec XQ. one on didn't for just the more. don't comment in and for EBS those see revenue you

Terrence Duffy

we said tapped to to going Yes. few I heard going a know some of what's that a every the of little on Brian, out we're reason. you about third bit in I line, kind you wing times X this word have but different for don't there. because think kind

So this just down. can I break

our correct? give about the about you asked asked and treasury -- the about And just You things. Is the you me offsets. DTCC business, headline that of asked other and

Brian Bedell

is portfolio my this clear. Maybe from the your contribution Basically headset. Yes. on the treasury I in was Yes. volumes. margining

it Or does application more sort dynamics? it it's question, agreement. the of to treasury complicate And clearing the days, to back the Just your DTC helping? categorically is is market maybe but really early then really the of with things

Terrence Duffy

the That's I got missed. We part That's missed. I it. part the

going going the to our your Suzanne? couple, of I'm question. deal those. and have risk up who Sprague, clearing first to let So to I'm last I'm going heads take Suzanne But

Julie Winkler

question. Yes. much for very Thanks the

currently So just take Income take accounts program Fixed members seen margin the programs, is direct to participation some between on ourselves of new in health be existing Clearing we able to place clearing cross Corporation. the the for the that membership and advantage have in

to clearing I have that of that quantify think through versus much to as would that. may be numbers been new hard prior it's cleared activity existing activity how clients

to in growing generally, be thoughts in to be little able customers. in the with our may chime McCourt a to extending that his focus participation But that DTCC as the bit the about on that well Tim program program as growth there activity. continues

efficiencies very be been market to those closely and thinking mandate more current mandate the could for to that clearing we've well. us and the clients as and by that it's partners important as about something on end So still impacted it's working bringing

Terrence Duffy

add? Okay. Tim, you anything have to

Tim McCourt

I think mean, I

Terrence Duffy

DTCC. with relationship the about talk I'll

Tim McCourt

draw relationship that, the Suzanne not is think year. is this portfolio to swaps of the it's significantly we CME the I last against over one the margin when grown year where the options the day against at day, the futures strict exactly billion billion as savings of to margin $X years $X and thing per have billion have to while look that grown we value futures has those hard about a $X add I per additive would said,

Along to complex that, capital manage the have interest hard their of enabling options in that savings, rate we coefficient focus unlocking similar is futures interest. it further more more we but clients, we what doubled to a and to and loss capital think complex has our to tailwind growth the do better sort can be open expect for of those for for sort at say and will efficiently transaction volume any on to do might believe efficiencies of our the here but effects, them we that the if CME. testament side is And on unlock risk we would savings our

Terrence Duffy

Tim. Thanks,

relates our that important. Brian, really just me and And I clearing most relationship of is with said those as I spoken clearing offering we that to products on have add, And I folks efficient to today. DTCC do when before said it the publicly about this. also publicly has that's think the these anything treasury DTCC announced I believe in this let I application, what

mandate the XXXX. coming create didn't We at us in that's

application. the this market know like? change? We file going the in application. when XXXX an the structure in, my is kicks told obligation, what couldn't to same? mandate to an friends at with I've We we what's But DTCC it through don't go going It can't be XXXX Is to going have until I wait have happen look to as that to

now. we're why that's it So doing

and to for prepared. DTCC. use out it with use comes are offering we are stay not the of We if we'll it's with necessary the And being going the if clients, we will better it, because DTCC, efficiencies

really the to application on you. we and the relationship makes if that's where sense So stand that

Brian Bedell

answer. It's a great

Lynne Fitzpatrick

similar $XX And market. total then markets, Brian, quarter for the the million, QX also connectivity million. on and just the from cash The on some the $XX revenue trading revenue data point the including consistent was Yes. to data total QX you at and asked with was cash of

Brian Bedell

Right.

EBS and Okay. QX? And to between similar BrokerTec were

Julie Winkler

Yes.

BrokerTec now break was and just Goldman with QX That's with that Sachs. out, from XX%. at SPXXXXXXXXX is was $XX if So EBS Our at next you in question creating million Alex Blostein line

Alexander Blostein

looks picking the it Question markets Definitely the like and between on over bit the sticky. share kind little towards been see here course to trends guys share those in volumes in good first you market of have move to guys WTI up again. of gains but the and energy and overall or April momentum ICE ICE quarter, a for continue relatively you more

You gave I composition bit that. been last us a of quarter kind underlying the like think, on what's driving mix of an update, the of

core user of CME's there? and whether that consumers, kind underlying update call seeing base more can back. us sense kind the you And anything some of kind if the hoping a of give So of to or share working you're of not in on producers, any market shift

Terrence Duffy

from relates did market quarter, the to And QX relates Thanks, QX point market QX or me to it first touch as on Alex. the the into share. shift into share. The not -- first especially on it let on share just as energy market

supposedly continuing take So share. market to they're I'm not

And is don't way see over referring again, clearly that the our count did the Coast we I so the not our all we is share products contracts QX. share you're market have, that out in including several last point maybe to of market different years, we Gulf that

to I'm of ask to the other answer. going to Derek relates your it question, As part

Derek Sammann

Alex. Appreciate the question, Yes.

top biostatic we fastest options at the to delivered participant and quarter the the of multiple saw up providing is, customers strong as you I record first ways results So yielding growth as where level commercial the business certainly Terry breadth diversity and year, that customers, the Energy mentioned our risk. that think, well. benefits is the the saw manage franchise XX%. When growing, call, in for of of at shareholders at here the of the this we scale, look the significant use and level us overall

$X.XX QX a our options RPC being drive to XX% made, QX key business. Terry our share energy a I'll was up non-U.S. as point almost energy as that's When ISTI When this back at and XX%. come non-U.S. strong contributor core in you over to to RWTI in up when a little year the in compare benchmark growth of contracts was with well volume you XX% growth, helping flat to contracts, record our the look energy at market just look our the and you about products,

actually you market look from options, WTI saw share XX%. When in at increase an our to ISIS we options WTI XX% against

where compete share. are directly that maintaining we So or growing we ICE, with either market

little but bit that a flow. U.S. going exposure that me record record of So And mean? exporting crude let degree. and means what's and crude U.S. actually that at the physical about to have also That actually follow When Hub we levels, to is Henry what same producing the new does and non-U.S. oil have on. amounts talk customers

in up our So that's complex, the look growth our particularly, participants an XX% happening, growth non-U.S. when that is not WTI where you increasing set is before, and XX%. WTI of we're our why up is seen commercial customer customer seeing which have at we of

the the the commercial that for the So or CBWTI customers, are to for exposure and open to buy looking for risk. the are it's markets manage customers best very interest looking that whether side that energy coming

holding isn't contracts, which actually our to customers interest of year-on-year of U.S. open WTI a XX% our almost into parts futures record. the XX% Europe out our exceeding WTI that export global up market important open just It's and because grades our options. contracts of franchise just And to franchise to interest to continues Asia. other commercial is We exceeded in grow. and grades that Terry talked exposure and The that's contracts our the Alex, new with the XXX,XXX have that's about,

we have you first year, set So I'll side rest we Hub that Henry that volume think we've when about flows actually and options our a Henry regional about. physical underlying the we of Terry Pivoting record When franchise, the what the Hub to but growth of it's of and world. similar also into not options Henry futures well. talked see the that total out reflective this at going just quarter to records look Hub market, segments of of say for in IC's benchmark only over in Henry Hub the franchise, growth, client hit things as to the the compare

a and actually versus competitive we last XX% from as options our was XX% And well. XXXX. actually market up From grew year, XX% our to share perspective, business up that's in

up think share, share I XX% market we're XX% last year. at up from market

have think sphere. out Hub to markets clear, I in listed contracts the where against the laid We're contracts where growing competitive we we Henry share be maintaining dynamics, we RWT So want have and elsewhere, listed and our against OI. well, Terry this stable we're

So to pass you. with it I'll that, back

Terrence Duffy

you that hopefully Alex, Again, gives clarity. some Derek. Thanks,

Operator

now from next Our with question Ken Worthington JPMC.

Kenneth Worthington

is I to and and customer do have later so, in to FMX question positioned merits FMX rates that which competitive landscape to need to launching rates the pursue different? be proposition? conclude wanted with would past have you segments and the tried failed, what this FMX given summer, might to compete to see the CME all that be to FMX extend best might you see If value

Terrence Duffy

answer let Ken, this this way. me in

and First for as of years all, of I public, we sat here went CEO my since Chairman XX career. but competition nothing entire in this company and I've have seen the

every others continue different. of our this I'm as do So competition single as we CME about is sure to forward. no bit I business move take seriously

offering pop say billion We our their their additional is. don't And is have I that as Tim everybody information $X what I offering which as party, saves just billion else a is, margining $X day. X. about won't does but an that X to what referenced much and the know

offset FIC, have multiple an got using which efficiencies we have we using XX% which approved are exceeding that that today today. also with additional we clients just that We service offer

So we a strong whoever we asset think wants classes. of offering in our compete going product any or have other against forward this really to

that. have a get them. again, we like you very if strategy, the think do game want efficiencies It's good will they to We hard hard me-too billion to from that of And people I a that a attractive business. have It's we're capital believe accomplished with that just So to walk and billion receiving offering do several have in I in months. plus and to capital the feel name just in position. you then it. a last are are from we FIC to efficiencies, have the $X additional the our efficiencies. away $X new away and day walk it's to you associated now But

So I they're and that's very powerful, think doing. that's say all I'll what about

Operator

with question Our Lau next from Oppenheimer. Owen

Kwun Sum Lau

one expense a quick on just So the guidance.

guidance. than quarter that quarters? Or any Is here. to paused the you expectation but lower over few the there you full year quarter adjusted some conservatism next in you expect that was investment there the first First picking is maintained incur our expense

Julie Winkler

question. Thanks, for the Owen,

the the securities we So we've migration, call we of year course over like project-based work that to expect mentioned do previously. the for some Google the do on clearing ramp that up have things

You'll a the see terms of consumption. also in ramp-up

more the So the the course in grow will that the cloud, see moving we're of technology year. into over we line as

And we see the we in we of to then move marketing do events fourth higher quarter. some items spend see So that as those forward. typically growing related do

So there timing us still our year, project-based particular think to we the in of that wasn't a it's just of making come these spend course the some with comfortable on guidance. I pause. expect through

Operator

Cyprys Stanley. question next Michael from Morgan Our

Michael Cyprys

could that drivers seeing And Both here margining have could a to bit touch from uplift ask there question benefits you that on you was you cash the how evolving? business you're those we see rate BrokerTec have rate unpack the competitive on Just the could hoping a swaps and rate, of some and seen growth. swaps. you limited wanted business more broker interest the interest see moving sort pieces tech cross noted I of the of the landscape, maybe to just that what potential business call. upon

could maybe can over help out some initiatives speak then the look that or. And as to other you year next accelerate growth you

Terrence Duffy

to where I'm goes. might Tim. I as Michael. well ask he in to going start, see and join and Tim Thanks,

Tim McCourt

Certainly, of our since start seen in volatility internalization the Thanks, business, has come at look sent of And the that's to favor being tends less with flow we've Great. what our to club. QX. in Thanks, BrokerTec we Terry. when Michael. the year. that and

not surprising regard. in that So necessarily

of the and layoff some recycling into risk the cloud. get do risk still the We

year-to-date of And U.S. just repo had prop that That's we backdrop, strong only the at quarter the it's ADV but where note for BrokerTec to X about X% is BrokerTec. remains part year-over-year. the surprising we story that's the the important a are, that where extraordinary. platform look not club, given also $XXX when U.S. day. of billion So up Active per value

up here management the we story, totality of the the quote, in totality at of in to team with managing in repo the of you quarter of how rate currencies look focus showcase needs complex CMU, having important our and business interest our parts Latin to at American approach growth near risk per engaging so we and the It's earlier look of we a these comments, $XX for really of still day. pieces billion important interest BrokerTec but risk Terry's that understand When better and the it's are myself other capabilities, seeing is now is strong $XX all clients. a business rate and the impressive all here the major sort things clear. very record on of which levels all to -- that to forward we billion the to swap an like That

It's able treasury management. and futurization to continued OTC at of we've in BrokerTec, discovery markets, risk able record for where futures CME These what options in risk that's achieve when alongside things the we The go look remain do our complex at important and that the to together. been price leading in management center what providing we've been

XXX% now at every record is in terms market traded value the day. of future cash treasury being the a of

puzzle of of pieces [indiscernible] the at CME here look understand to at to have really you breadth offering So together the all of the the

Terrence Duffy

Tim. Thanks,

to said I what say. was You going

So was hopefully, with addressed where your from and I doing all. good. Michael, BrokerTec to percentages it didn't we're that question Not the relates at and but as that all, very have we others. what look

Operator

Simon Clinch now question next is Atlantic. Our from Redburn with

Simon Alistair Clinch

of I to curious you progress coming of are where already, my sort sort that with cloud, if as And been you most I aims questions with talk to to things with in sort of of the migration. the the migration up rest mean deal could Google and I'm are clients the of the we but back-end terms dealing like was -- answered Google that. with partnership Cloud walk of if in moving long-term the that about business just innovations in co-location you with wondering of your could have the through

but quite interesting stuff, it's longer-term So numbers.

Terrence Duffy

going? of are beginning, the said to completed. So in Is this that on into is going I've where question, Sunil, Simon, the it end I'm the until cloud. assuming the work we the turn and wait we back end, the markets referring back to but from to you obviously your you're going I'm were will

Simon Alistair Clinch

Yes, that's right.

Terrence Duffy

into things. CME again, So data very CME's the centers finalized. with working and today from it's more this what is said to those the unless platform than again, will that I've other better be beginning be efficient transaction, offers put of not as markets on to all finalized than I yet But the are cloud clients. yet We're any or

get we'll when and decision. that we But seen that, not final product make yet. -- that have So we

on Sunil it. his working they're So team it. And and working it's on are --

answer the can the part. can't Sunil of just question yet. we that So But back beginning part answer

Sunil Cutinho

subject to services clearing we approval, is I'll little up intelligence done to bit We the answer we And intend progress. about course. of the our data are stood to data related X migrate services aspects question. that regulatory very workloads. it year migration a our there, business good the of One What it. nonmarket is making and We regulatory we've And platform. this of second is of platform. then aspect spoke

have information rich our includes of instantaneous data, petabytes We historical market XX over book. that order

for this So in be information future. monetization the will available

the information in risk we information risk to And as far as as to adding that will I scenarios. are and risk later be cycles. are it future clearing We those of our monetization workloads migrating spoke

Terrence Duffy

Does that Okay. your answer Simon? question,

thank we you for lost very Simon. think Simon, much question. I But your

Operator

Our next question Barclays. with Benjamin from is Budish

Benjamin Budish

offering. Maybe about just of about that you point the talk on you following think longer-term the on growth Can up last the data how market maybe side.

to you add kind potential what adding? of there. other to the What plenty do base? kind opportunities the there's opportunities about enhance of you're of like think of sounds it penetration package the terms So subscribers to of client increasingly in about value versus How

Terrence Duffy

I'll Ben. to Ms. Good Winkler question. turn it response. over Thanks, for

Julie Winkler

to it I think I data have for cloud as was sets I will consolidated start think I relates talking. able system. our mean to being our where Sunil for

the interest I So These think this customers guys. to or as that otherwise a well did are customers more and tools model market and supports as facilities, about explainability more data. seeing not to able those onboarding have. offer of We're new business. think our out lot in And analytics, access ability we facilitate to opportunities to easing to really we

still we're those we're and subscriber onetime data, a activity professional customers drive additive talked manage plan provide discovery able that and to our be [indiscernible] risk here from about that continue benchmark [indiscernible] that faster, believe match off basis. side, but our and and help our to aside putting [ data we strong We're to the to earlier, ability is we ] to [indiscernible] data be we to We demand business, see our also insight on really price as and strong product them much seeing

offering couple package. as I'd existing cross-sell say selling [indiscernible] data to sure and we are years of been our set data that across last extremely leveraging our we that participation that regionally also of continue of selectively, is access And and I sales it [indiscernible] to part the think, [indiscernible] has result how we our products had services but strong. making provide We record attractive the those really relatable we not the more just have to alongside to filed, are

Operator

Kramm UBS. question Alex from now a We have with

Alex Kramm

that it, anyways. realized, to missed Can back just in pop and give for ask you model noncash stuff on I cleanup. cash rates less I an wanted a I us collateral often update et -- cetera, Just you've

Sunil Cutinho

Lynne?

Lynne Fitzpatrick

Alex. Sure,

$XX averaged basis quarter, XX the about on cash we U.S. earned balances of for we and cash. So points about billion, that

the basis points. for were $XXX billion, quarter balances the On earning XX noncash, about average the

Alex Kramm

it's think trending? only a bit softer, been cash I I know X seems a trending maybe Any little update. update be how but to that's quick weeks.

Lynne Fitzpatrick

Yes.

what billion So far excuse $XXX similar U.S. billion, billion -- balance me. is QX $XX the cash and in so dollar April, about we QX, our saw is averaging average -- $XXX to in noncash

Operator

next Bank Eli of question Abboud from America. with Our

Elias Abboud

is This Eli Craig's from team.

proportion of you maybe prospect could hoping rates of of the to daily specifically, for? speak I handful network accounting new rate on And was in a firms are liquidity futures size and the how interest market what basis? liquidity And unique many at makers, more competition, the top your provision futures. you Given providing of when are look they

Terrence Duffy

Yes. go it, Thanks, jump -- Tim and I'll We ahead answer I don't let in and Eli. as well.

Tim McCourt

Yes. Eli. Thanks,

of discovery doing. the can an understand, the comment efficiency and you in our transfer given a you price of here might strong important of market we for exact futures. on don't anonymity The providing given number certain efficacy a firms is and is As participants time. cloud what of network is that can or program interest rate at what of who's or subset I tell risk CME liquidity what at or the process be in but part provision

the are not only And they are an part liquidity important to question, of your while this ecosystem, part. providers

our record-setting our and or the of almost look the interest topped and interest sorry, most. earlier said, mix traders of per X,XXX ADVs open to and XX options, a our open a of with the futures levels million customers Sonus futures market holders for have we large trading new [ different to of needs management efficient participants combined have complex needed futures just transfer contracts complex we ] X We daily risk large record leads risk over and nearly our treasury when growing record this that as in day, in Terry complex rate combined million month. -- If

participants manage to length global say to network nature at efficiencies is capital these immensely our the to all When strong vital things, and their you risk. of allow again, And fair combine continue we've is on about our talked in this to call. it's

Terrence Duffy

appreciate Thanks, Tim. question. Thanks, Eli. I your

Operator

Deutsche from question Bedell with next Our Bank. Brian

Brian Bedell

if through if that collateral, you but value on your the acquisition the trade progress you I want continue name just year. on can in has cash a there's in view on is rates component comment a if rates, may the can. more of -- trading The how one on trading, My I will in. basis to an lot Tradeweb Clearly, of course, there. systematic to made of process of And arbitrage squeeze

that activity see as other basis or you around? the trading in Do way expanding the

Terrence Duffy

Thanks, Brian. continue? do Tim, to want you

Tim McCourt

Sure, Brian.

be a trading, cash, When in combination look trade the something at the that we years. alongside trading that's persisted when CME it note be for facilitate does trading use. to help size at our characteristics the important uniquely in ability of positioned may certainly, trading look they several is basis they partitions of some in futures modalities it's and market to certainly the of is But the think may that trading has different change now I or we the how that. basis

funds, us all we of make that they're me combine connecting see working for that marketplace on transaction banks, a we're to important CME, these hard BrokerTec the assets future participants, very for that's the together to for when makers it's or So as Tradeweb with mentioned, side to replicate. sure the even and providers such other that's thing market all they're of something the whether so you hedge

continue rate do to grow will to we here. So from something to hard shrink it's it trade. expect continue, it's environment if an but it we're the important It's with say and continuing, in, or

at we to is CME up. part manage clients that need both important for them be when have The tools to to keep risk, able here

Terrence Duffy

Brian. question. Tim. Appreciate Thanks, Thanks, the

Operator

from with Oppenheimer. question next Owen Our Lau

Kwun Sum Lau

the it's would it? I defer much how security, but material FCC financials, to it's your were to to attention not getting know respond recently. If CME

Terrence Duffy

Thanks, Owen. Yes.

Tim? crypto, the On

Tim McCourt

whether Thanks, Owen. about either or not heard will It's markets security. talk certainly become customers something we've that

Group. will we here with SEC have and take path listed to not learn be it's on contract, regulator, exclusive we ether The CDC's under when the options is said we clarity, Based as that the years CFTC a However, listed otherwise this note we has that the forward unequivocally primary the either [indiscernible] important for did our have to jurisdiction. but our commodity. that product futures at CME until respect

Terrence Duffy

way material to correct. your This you asked not CME. question the But is that is

are asset are but on class, all we in this asset We not this class. in

I think in that's important. We're [indiscernible] the

Kwun Sum Lau

I got it.

Operator

last Our with question Stanley. Michael today from Morgan Cyprys

Michael Cyprys

cloud. Google back and on your migration and of to market circle to services the the migration clearing wanted data I Cloud

provide about guess how business that to curious time. as the opportunities of as you if your do XX new customers how services monetization over think over cloud? you X look moving years, could you you well out it of time new over to see evolution more will revenue as Just time the I And be

Sunil Cutinho

about I the commercialization will Winkler little answer capabilities Julie will a and of the bit them. talk then

what actually last available allowed services made be was So current cloud. types. over is calculation the calculations. X on following that done calculate that the your to calculation One are margin is to we've margin released years There the we've we X clients historical first

real in way progressing we increased visibility scalable Now we far margin so are clients give risk can in actually highly more to compute intraday allowing our a clients as you see, are time. to into

The And We're get going between about multiple these give we we about the are the ability clients introduce with to that thing risk fee provide the is portfolio houses move pools. are treatment. of positions that the margin speaking is tools optimization. clients talked services. next best We've pools to to clearing a lot way. for to in one We've margining margining. lot Optimization our a talked portfolio risk

of in on we FedWatch gives markets now by So we are towards releasing can migrate that, that end making APIs year to as ability clients, Following actions our [indiscernible] clients anticipate Google is that our available. well which a available the this our Cloud are accessed services as few that our we Fed some of be API,

advantage that. clients We have taking of

about a bit to that now So to Julie forward little [indiscernible] I'm to talk going

Julie Winkler

than today We also what few to think a and we that. avenue I data mean cloud large allows this, to in today. items of it on an to packaging Sunil offer extremely the in a do have to market the us being data There's I distribution certainly do distribution data another able process. do have network touched gives different And that component our us right? we

provide can we -- Our more customization. much

with crypto offering of one been [indiscernible] that we a have data years say example. number come for us Google. to For Customers they example, if today just live particular with want in the as can

that the consumable us So in it's offering clients. allows that say, would it's also to data much more a more data lot it distribution in the a I the our and and flexibility, packaging way package to

our for with where taking we're environments create customers are many ways also where sources. And find working to technology data can we the cloud different

their where So say, can they opportunities alongside can we data some use CME among environments existing and there's we in create, well. that bring and believe commercialization data, as it secure

I as And earlier, be commercial mentioned APIs, if will about there analytics there. and opportunities think you

Some analytics of offer, a already also things that that we're bit that new to build time. to little building on but how of look going take going is we to

think of slow as up think so set those opportunities. would burn we I more commercialization And that I about a

customers both data how transaction-based And have ultimately, our to our providing right, and and we're this we the risk businesses. about it's that reinforce also

Terrence Duffy

add? want you do Lynne, to

Lynne Fitzpatrick

Yes.

we as to to as we people be might overall still thing that and we growth commercialize opportunities be to many to there, of opportunities market. add to in Michael. trading can because one just Just hands and These our is How lead may of want get they the scalability these access determined. more tools

of trading that monetize incremental will want that through where and revenue. to coming through products see So we see fees. that's we could clearing type We you be subscription could benefits see fees. to specific But this determined

Terrence Duffy

even That some gives [indiscernible] clarity you

Operator

the for Thank operator. for technical apologize is This much your difficulties patience. you experienced. I the very

management hand it I'll for closing back remarks. Now to

Terrence Duffy

talked X about all And that. that about on QX. you. to asset we We've before of sign. client. at is close want with a to health one that Thank up class communicating thing great those of the say, I got interesting appreciate let can't, really everybody participated I I we've it's forward a question the to look continually me think you. look just I in our CME, we appreciate That being say

exactly expansion one sales also what [indiscernible] risk. saying points and that managing health X client I are And of year-to-date and asset of Winkler the out her to client are because there is open the classes. new the up we're think the that the team and across years again is to creating each across today, and all This every That the needing interest people we've They're Julie manage said, being be new been board about the of last about risk. in a doing to very participating risk and over you that talk and thank participants CME safe. for group. want I and talking as X.X it we -- expect and that's

Operator

we As thank are at participation. time. concluded, this again, for disconnect Please your you

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