Sign in

You're signed outSign in or to get full access.

CG

CME GROUP INC. (CME)·Q2 2025 Earnings Summary

Executive Summary

  • CME delivered all-time records in revenue ($1.69B), adjusted operating income, adjusted net income, and adjusted EPS ($2.96), with broad-based ADV strength (30.2M, +16% YoY), modestly beating Wall Street EPS and revenue consensus for Q2 2025 . Results vs consensus: EPS $2.96 vs $2.94*, revenue $1.689B vs $1.682B*; prior quarter Q1 2025 modestly missed both EPS and revenue .
  • Management lowered full-year adjusted operating expense guidance (ex-license fees) to ~$1.635B from ~$1.65B, citing Google Cloud migration optimization and lighter professional services; tax rate guidance unchanged (22.5%-23.5%) .
  • Strategic catalysts: 10-year extension of the exclusive Nasdaq-100 futures license through 2039, strengthening CME’s equity index complex; retail trader growth (+57% YoY new traders) and crypto momentum (record complex metrics) broaden demand .
  • Macro drivers (tariffs, geopolitical tensions, elevated debt levels) sustained hedging demand across rates, energy, metals, and ags; options-led activity and basis dislocations featured prominently in commodity channels .

What Went Well and What Went Wrong

  • What Went Well

    • Record ADV of 30.2M (+16% YoY) with record quarterly volume in interest rates, agriculture, and metals; SOFR futures ADV reached a record 4.6M in Q2 .
    • Retail expansion: 90,000+ new retail traders in Q2 (+56% YoY), driving record Micros ADV of 4.1M; management emphasized growing sophistication and cross-selling into metals and crypto .
    • Cost discipline: adjusted operating margin reached ~71% with guidance reduced ~$15M (ex-license fees) for FY 2025 due to cloud migration optimization and lower consulting spend .

  • What Went Wrong

    • Energy RPC pressure: energy RPC fell to $1.138 from $1.222 in Q1 and $1.237 in Q4 2024, reflecting product and customer mix; overall average RPC ticked to $0.690 vs $0.686 in Q1 but below $0.701 in Q4 2024 .
    • Prior quarter prints: Q1 2025 modestly missed consensus (EPS $2.80 vs $2.81*, revenue $1.639B vs $1.661B*), underscoring sensitivity to mix and tiering effects .
    • BrokerTec share questions: management acknowledged mixed comparative metrics in recent months, though Q2 notional was strong; competitive intensity persists in U.S. cash treasuries .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenues ($USD Millions)$1,532.5 $1,642.3 $1,692.0
Operating Income ($USD Millions)$1,000.6 $1,108.0 $1,129.3
Net Income - (IS) ($USD Millions)$883.2 $956.2 $1,025.1
Diluted EPS - Continuing Operations ($)$2.42 $2.62 $2.81
Adjusted Net Income ($USD Millions)$932.2 $1,019.9 $1,079.4
Adjusted EPS ($)$2.56 $2.80 $2.96
Adjusted Operating Margin (%)69.1% 71.1% 71%

Segment Revenue Breakdown

Segment ($USD Millions)Q2 2024Q1 2025Q2 2025
Clearing & Transaction Fees$1,249.9 $1,337.3 $1,388.0
Market Data & Information Services$175.0 $194.5 $198.1
Other$107.6 $110.5 $105.9
Total Revenues$1,532.5 $1,642.3 $1,692.0

Key Operating KPIs

KPIQ2 2024Q1 2025Q2 2025
Total ADV (000s)25,941 29,768 30,217
Interest Rates ADV (000s)12,894 15,029 15,472
Equity Index ADV (000s)6,779 7,997 7,661
Energy ADV (000s)2,447 2,903 3,082
Metals ADV (000s)868 732 943
Average RPC ($)0.708 0.686 0.690

Consensus vs Actual (S&P Global)

MetricQ2 2024Q1 2025Q2 2025
EPS Consensus Mean ($)2.53367*2.80865*2.94105*
EPS Actual ($)2.56 2.80 2.96
Revenue Consensus Mean ($USD Millions)1,528.98*1,661.94*1,681.77*
Revenue Actual ($USD Millions)1,532.5 1,642.3 1,692.0
EBITDA Consensus Mean ($USD Millions)1,074.02*1,190.65*1,204.17*
EBITDA Actual ($USD Millions)1,084.80*1,190.50*1,212.70*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Operating Expenses (ex-license fees)FY 2025~$1.65B ~$1.635B Lowered by ~$15M
Adjusted Effective Tax RateFY 202522.5%–23.5% 22.5%–23.5% (unchanged) Maintained
Capital ExpendituresFY 2025~$90M ~$90M (no update in Q2) Maintained
Non-cash Collateral Surcharge & Fee Changes (aggregate pretax impact)FY 2025+2% to +2.5% pretax (incl. cash minimum policy) +2% to +2.5% pretax (no Q2 update) Maintained
DividendsOngoingQuarterly dividend increased to $1.25 in Q1 ; $2.6B paid in Q1 ~$455M dividends paid in Q2; ~$3.0B in H1 Ongoing return of capital

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
Retail/ MicrosEmphasized retail as NCA “bedrock”; Robinhood rollout; Micro suites growth; 2/3 of $1B NCA from retail over 5 years Record retail quarter; 83k NCA (+44%); total participation 350k; micros ADV 3.8M 90k new retail (+56% YoY); micros ADV 4.1M; strong multi-asset uptake; education priority Accelerating growth and breadth
InternationalRecord non-U.S. ADV; EMEA strongest across commodities International ADV 8.8M (+19%); records in EMEA/APAC; options penetration rising Record international ADV 9.2M; EMEA 6.7M, APAC 2.2M Broad-based strength
Google Cloud migration~$85M spend in 2024; 2025 plan $115M Adjusted expense control; tech spend rising with migration Guidance reduction driven by migration optimization; lower consulting More efficient execution
Tariffs/ Macro riskCommodity complex record revenue; hedging demand; secular buy-side interest Elevated margins/ OI; deleveraging not evident; tariff uncertainty driving FX/commodity hedging Basis dislocations; higher EFPs; options-led activity in commodities Risk-on hedging persists
CryptoRegulatory clarity focus; expand in BTC/ETH; record day; new products (Bitcoin Friday futures/options) Complex momentum into Q2; large traders and notional growth Complex ADVs up; perpetuals illegal in US; momentum continuing in July Strong growth; regulatory-first stance
Cash/collateral policyAnnounced 30% soft minimum; potential +2–2.5% pretax impact April shift: cash avg $131B vs $79B Q1; majority meeting soft minimum Q2 avg collateral $316B; cash ~$133B; July cash steady ~$132B Higher cash levels amid volatility
BrokerTecRepo records; RV Curve traction; Chicago matching engine to launch Q3 Ongoing momentum; clearing mandate benefits Q2 ADNV strong; Chicago launch Sept 15 for co-location with futures Positioning for basis/ RV clients
Tokenization/ StablecoinsNFA FCM approval (optionality); securities clearing application; efficiencies emphasis Client efficiencies via cross margining; $60B/day offsets across complex Universal Ledger effort with Google; 24x7 value movement; aim for 2026 launch Building future infrastructure

Management Commentary

  • “For the first time in CME Group's history, average daily volume exceeded 30 million contracts… broad-based growth in all six asset classes” — Terry Duffy (prepared remarks) .
  • “Adjusted operating margin for the quarter was 71%… lowered FY adjusted operating expenses (ex-license fees) to ~$1.635B” — Lynne Fitzpatrick .
  • “90,000 new retail traders participated… record Micros ADV of 4.1 million… crypto complex momentum continuing” — Julie Winkler, Tim McCourt .
  • “Tariffs creating basis dislocations… increased EFPs… record options activity across commodities” — Derek Sammann .
  • “Ten-year extension of Nasdaq-100 exclusive license through 2039” — CME press release .

Q&A Highlights

  • Retail and crypto: CME cited 90k new retail traders and strong crypto complex growth; perpetuals remain illegal in the U.S., reinforcing CME’s regulated futures approach .
  • Capital deployment: Opportunistic buybacks complement variable and quarterly dividends; inorganic growth pursued selectively (e.g., JVs, commercial agreements) .
  • Expense guide takedown: ~$15M reduction driven by cloud migration spend optimization and lower consulting usage; adjusted FY OpEx ex-license ~$1.635B .
  • Collateral soft minimum: Q2 collateral averaged $316B (cash ~$133B); July cash steady ~$132B while non-cash rose to ~$153B; majority posting ≥30% cash .
  • BrokerTec Chicago: Launch set for Sept 15 to co-locate with futures in Aurora, targeting relative value and new client acquisition .

Estimates Context

  • Q2 2025 results modestly beat consensus: EPS $2.96 vs $2.94*, revenue $1,692.0M vs $1,681.8M*. Q1 2025 modestly missed (EPS $2.80 vs $2.81*, revenue $1,642.3M vs $1,661.9M*) .
  • Consensus breadth: 15 EPS estimates and 10 revenue estimates for Q2 2025, indicating robust coverage*.
  • Given sustained ADV strength, options-led commodity activity, and reduced expense guidance, FY earnings estimates may bias upward; watch energy RPC and mix effects, and collateral balances sensitivity amid volatility .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • CME’s Q2 beat was volume-driven and margin-accretive, with record ADV and a 71% adjusted operating margin underpinning earnings durability .
  • Retail growth and crypto momentum are broadening the customer base, supporting micros and options across equities, metals, and crypto .
  • Expense guidance reduction (ex-license) provides near-term EPS support; monitor further cloud migration optimization and consulting spend trajectory .
  • Commodity options activity and tariff-related basis dislocations are catalysts for continued revenue growth in energy, metals, and ags .
  • BrokerTec Chicago co-location could enhance relative value/basis strategies and deepen integration with the rates complex ahead of potential clearing mandate developments .
  • Strategic tailwind: NasDAQ-100 license extension through 2039 strengthens CME’s equity index franchise and supports retail/institutional flows .
  • Near-term trading: Expect continued risk-on hedging across rates/energy/metals; watch RPC mix, collateral cash share, and international options penetration for incremental upside or drag .