CME Group (NASDAQ:CME) reported record third-quarter activity and financial results, citing broad-based demand for risk-management products amid shifting central-bank policies, geopolitical uncertainty and market volatility.
Chairman and CEO Terry Duffy said average daily volume reached 29.4 million contracts in the third quarter, the company’s highest third-quarter level on record and a 16% increase from a year earlier. Volume grew by double digits across all six asset classes, with financial and commodity product volumes each rising 16%.
“Global participants continue to turn to CME Group in record numbers,” Duffy said.
Record revenue, earnings and market data
President and CFO Lynne Fitzpatrick said third-quarter revenue rose 13% year over year to $1.7 billion, representing a record for third-quarter revenue. Market data revenue reached an all-time quarterly high of $243 million, up 20% from the prior-year period and marking the company’s 34th consecutive quarter of year-over-year growth in that business.
Adjusted expenses totaled $532 million, including $428 million excluding license fees. Fitzpatrick said higher license fees reflected strong volume growth, particularly in the equity complex, where volume increased 23%.
Adjusted operating income rose 15% to $1.2 billion, producing a 69.4% adjusted operating margin. Adjusted net income was $1.1 billion, while adjusted diluted earnings per share increased 13% to $3.02. CME Group’s adjusted net income margin was 62.4%.
The company returned nearly $1 billion to shareholders during the quarter through $465 million in regular quarterly dividends and $524 million in share repurchases. Fitzpatrick said revenue has increased 9% and adjusted earnings per share has risen 11% through the first nine months of the year.
Entering the fourth quarter, CME said volume was running 17% above the prior year’s record fourth-quarter pace and was 12% ahead of the prior year on a year-to-date basis.
Open interest and international growth
Quarter-end open interest reached 128 million contracts and stood above 133 million contracts at the time of the call, according to Duffy. He said that represented the company’s highest September-ending open interest on record. CME also recorded a high number of large open-interest holders in its interest-rate and foreign-exchange complexes during September.
The company said it provided customers with average daily margin savings of more than $100 billion during the third quarter. Management attributed the figure to broad-based activity and cross-margining programs across asset classes.
In equities, Senior Managing Director Tim McCourt said margin savings totaled nearly $47 billion in the third quarter, including nearly $42 billion from CME’s core futures-and-options offsets and more than $5 billion from its cross-margin arrangement with the Options Clearing Corp.
In fixed income, Senior Managing Director Mike Dennis said daily portfolio-margining savings in swaps reached a record $14 billion on Sept. 30. Average September savings were $13.2 billion, up 58% from a year earlier. CME-FICC cross-margining generated average daily savings of $2.3 billion in September, with a quarterly record of $2.7 billion on one day.
International average daily volume rose 22% to a record 9 million contracts. EMEA volume increased 20% to 6.5 million contracts per day, while APAC volume gained 28% to 2.1 million contracts per day. International growth was led by energy products, up 40%, agricultural products, up 28%, and equity index products, up 24%.
Product launches and technology plans
CME introduced several products during the quarter, including Single Stock futures and E-nano Equity Index futures. It also expanded 24/7 trading to its 1-Ounce Gold and 100-Ounce Silver contracts, following the earlier launch of around-the-clock cryptocurrency products.
McCourt said Single Stock futures had traded more than 350,000 contracts and represented approximately $3.5 billion in notional value since launch. The products cover 55 large U.S. companies in 100-share contracts, with 10-share versions available for 22 of those names. Chief Commercial Officer Julie Winkler said the products have gained participation across more than 50 countries and are distributed through 25 of CME’s top retail broker partners.
Duffy said CME withdrew its filing for a 24/7, 10-barrel WTI crude-oil contract after commercial participants raised concerns about staffing another desk to support continuous trading. While he said he expects markets ultimately to move toward 24/7 availability, he added that broader adoption of around-the-clock trading in major products will require banking, liquidity and back-office infrastructure capable of supporting it.
The company remains on track to launch CME Securities Clearing on Dec. 7 ahead of the SEC’s Treasury clearing mandate. It also said Treasury Link, a system intended to enable centralized spread trading between Treasury futures and BrokerTec cash Treasuries on CME Globex, is live in its new-release environment for client testing.
On technology, Duffy said CME’s Dallas disaster-recovery facility, developed as part of its Google Cloud migration, opened for client testing in June. He said performance has shown latency and consistency equal to or better than the company’s on-premises offering. CME expects to begin migrating its primary Chicago market region to the cloud in late 2027 and determined that relocating livestock markets to Dallas is no longer necessary in the interim.
Compute futures, pricing and capital allocation
Management said it is awaiting regulatory review of proposed Compute futures after the Commodity Futures Trading Commission extended its comment period by 45 days. Duffy said the company believes the product would help market participants manage risks associated with data centers, artificial intelligence infrastructure, hyperscalers and related investments.
Derek Sammann, senior managing director and global head of commodities markets, said CME has worked on the product for nearly two years and has seen interest from neocloud companies, data-center operators, banks, funds, proprietary trading firms and chip providers. He said the proposed benchmark from Silicon Data is IOSCO compliant and supported by data across multiple platforms and transaction types.
Fitzpatrick said pricing changes implemented Oct. 1 are expected to contribute an annualized 0.5% to 1% increase in clearing and transaction fees. The adjustments affect cryptocurrency products, grains, certain interest-rate tiers and micro equity products. CME has moved away from an annual pricing freeze and plans to make changes throughout the year as market conditions and value creation warrant, she said.
Regarding capital priorities, Fitzpatrick said CME had completed the repurchase deployment of proceeds from the OSTTRA transaction. She said the company’s dividend structure, repurchase capacity and low debt load provide flexibility for potential acquisitions, though CME remains selective and focuses on opportunities that add customers, products or capital efficiencies.
About CME Group (NASDAQ:CME)
CME Group Inc operates global derivatives marketplaces that provide trading, clearing and settlement services for futures and options contracts. Its products cover major asset classes, including interest rates, equity indexes, foreign currencies, agricultural commodities, energy and metals. The company also provides market data, benchmark information and related services used by financial institutions, corporations, producers, investors and other market participants.
CME Group’s exchange portfolio includes CME, the Chicago Board of Trade, the New York Mercantile Exchange and COMEX.
