CME (CME) 27 Jul 222022 Q2 Earnings call transcript

Good day and welcome to the CME Group Second Quarter 2022 Earnings Call. At this time, I would like to turn the conference over to John Peschier. Please go ahead.

Thank you and good morning everyone. I hope you're all doing well. with Harbor start to going the language. Safe I'm to John questions. for I'll turn remarks and over it your Then brief Terry followed by Other team Q&A members management participate of the in will session. also our and Statements made our that not are the statements. reference facts forward-looking documents website are in historical on on other call this future are of performance. statements These guarantees not They uncertainties that assumptions and involve are risks, difficult to predict. in outcomes from what or implied materially results is differ any may and Therefore, actual statements. expressed in our Detailed with the information found factors can about on filings affect SEC, website. performance are may which the be that our

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

for growth million Trading per an average XX XX% during day. contracts. the second to Micro asset million E-mini record questions. Sean, John, commentary included -- volume open highest by me of This thank will Thanks morning. said, you futures I the which second details increased daily the the our of Derek, ADV Julie provided call some John the all XX% on before on and John primarily then provide X.X activity year-over-year and extensive our with Lynne, which to morning. Winkler your the were this quarter the quarter will was S&P quarterly record call comments have equity and strong executive up and I today Sunil, of financial earlier XXXX. index products, ADV XXX second start on with us driven John as up contracts joining this classes for we We released

quarter highest with XXX Total XXX XX% activity to by also XX%. US index, X.X interest growing quarterly growth was at million QX, daily volumes and FX with in daily ADV was non-US up daily last equity volume compared average XXX%, was million NASDAQ options total S&P XX% with increased contracts. both options growth Furthermore, options contracts, lines daily year Latin financial million XX% the in grew second compared saw, addition, volume E-mini X.X in XX% Asia, by contracts, non-US last to outside driven XX% XX% the also index options America. metals X.X record options. energy E-mini year-over-year. in increased and part and average product driven In and year. QX in average ADV grew rates options Equity on growth growth In XX% Record XX% in volume up we ADV the Europe, XX%; second robust the

reached industry's X.X Turning open interest to SOFR quarterly X.X CME million our million on ongoing of of contracts. focus SOFR's transition. contracts futures and record to XXth on record LIBOR June ADV

of represents SOFR futures During XX% ADV the quarter, futures. Eurodollar

June skyrocketed addition, and in options In trading number record with a of participants. SOFR

of XXX% market-wide activity Our the high liquidity June, a represented month daily the critical options XX% of a this fee weekly options the XX% also moving reached high for having Eurodollar of into ADV of waiver SOFR market. SOFR of in during options was and instrumental month. activity Eurodollar options

customer products, launch new risk demand products lead in to global of the ever terms across new management In apparent our need opportunities. for continues and product

our existing as voluntary of on Copper to aluminum. carbon carbon one product Intermediate oil build with to Other of physically Micro quarter, offset Within record out Texas well since crude adding two West futures popular additional XQ During of launches options Canadian as launches size are we of portfolio, meeting products the futures A upcoming the the already we continued launch that need our offset suite emission number the futures. traded contracts, include in participants the ESG-focused wheat options suite a micro emission products contract the launch. of a market delivered Micro announced today. significant our having well XX-plus as as

as announced I securities investment use at Google's business. launch later we well mortgage-backed our CME for this contracts grow Additionally, would to opportunities in plans to of event mentioned that the for the futures time TBA year. capital $X look we as market first-ever billion this Group to the our

our included income acquisition During Indices of the venture. of approximately indices Indices million funded S&P the This which invested $XXX we IHS our the leading quarter, Jones fixed joint portion in Markit Dow business, has strengthen joint iBoxx, momentum was CDX. iTraxx to time. in shift The and continued we active and as indexing venture, that the to since from investing such when launched only that growing XXXX

the from the was the formation. index which venture in of $XX XXXX, full million portion than the earnings have from earned post of year year first more joint the Our tripled

Looking the services over addition income investors that innovate continue service to to of venture will and of ahead, fixed Markit across IHS the all with credit even world. an indices, the set wider the well-positioned is products and joint grow and

As we landscape, continue factors to market risk is to the of an accelerating. complex several extremely described quarter, contribute management last importance macroeconomic and

our provide team manage opportunities. to answering forward capture market that, priorities execute it me Look turn questions. let your on empower to John some and continues strategic to risk Our to financial over With to to participants highlights. worldwide

Terry. Thanks

activity. a billion X% driven futures by approximately second versus $X.XX revenue, up in quarter, than CME increase During QX more XX% last trading the year, in generated

Our to X% the up last quarter million. quarter, formed year. ago fourth post-trade to a over we with adjusting Global the S&P data year for formation venture of Market when joint during impacts revenue again $XXX of revenue compared a of the in that up our was XX% was OSTTRA, record the

globally $XXX million see our on excluding expertise. and management quarter our were strong carefully need very were and fees. the We managed product risk for Expenses continue $XXX license adjusted relevant for set an basis to a and million

effective cloud. million costs move that we progress with we objectives quarter cash an of and for an Google of the Year-to-date, resulted up to in to approximately adjusted rate tracking foundation from are our an to $X.XX. internal $XX well-underway million, EPS and continue which XX.X%, attributable CME partnership, net year adjusted the towards tax to effort. common We of last our are spent shareholders building to income our adjusted in the $XXX over XX% had second

billion at approximately dividends In execute CME just the For making continues end adjusted quarter summary, EPS of of Group question, an cash the additional of second far had we'd CME first limit to business, management first covering in paid one the Capital summary, this and yourself the was history. Please highlights analysts of $X.XX, With year, to of in $XX to results last into our refer us, CME out year, call risk $X.X $X feel open valuable you. to half million. jump to of executive at the delivering up this for the the like the for half clients of our quarter six-month the the XXXX short CME questions. the across please Thank were that time approximately the best details. team back number expenditures over so free commentary for to the your tools on then of and Based growing financial page uncertainty. queue. billion.

Piper Please ahead and Thank with And take Repetto ahead. our from go we'll Instructions] go you. Sandler. first Rich question [Operator

John. morning good Terry, morning Good

think tripled and and So use the so Index said, how keep of Terry, in the have, initiation XX% since I volumes investment of you S&P to cash the you the highlighted the the Dow JV JV? or to Jones

tripled. revenue The

Yes, the tripled. has revenue

So, just investment. I guess understand numbers of to trying the bit more little a behind the

that the going analysis, cash bit the of you XX%. annual maybe just And kept John, the at the numbers little the a it variable So would guess, because, be dividend. I balance around to

And Rich, thank it's strategic an investment. you. extremely

my for with partnership remarks, has Dow Jones. this with As an I pointed exceptional out in investment this prepared CME been

bit very details be other able transaction the of Lynne give I'm into it you happy to going are a we to to comment So, the on economically. extend Fitzpatrick to of lines. ask product these little

Terry. Thanks, Sure.

During swap the the like invested fixed Jones the includes of joint and the This quarter, the did noted, income and our Indices default indices. million, iTraxx iBoxx business. $XXX and fund Dow bond purchase Markit leading credit cash venture. IHS indices as credit Indices S&P CDX global into you we indices That

diversifying class XXXX. XX% earnings compound further you scope. The the strategic color the since earnings are at offering rate more We venture on excited A of a and annual of question. little that multi-asset about since grown benefit asked the in joint the have year the products growth full venture joint first

share So, we're business received we portion joint pleased that this purchase expect to this given say be from earnings on using small. of near-term growth I'd of to purchase. proceeds the continue a the relatively impact scale the Google's overall from venture, the investing we in

purchase, the keep $XXX at does does that XX%. stake million towards noted, our you As and ownership it go

Rich. point, other One Yes.

use and we invest variable indicated -- the we we of did time, funds -- that that from to including those calculation. the that going at we were dividend anticipate the when -- the business the Google, annual part As that didn't as to we got had investment in

Right. Thanks Thank you. that for Clarification. Great.

Thanks Rich.

Rich. Thanks

And to from Alex Kramm on question our with and next go Please we'll go ahead move UBS. ahead.

everyone. morning good hey Yes,

of the rather or on a margin the questions Just Fed. couple sheet deposits balance the at

quarter-over-quarter to list know, came those me. long are seems give track, we don't can From down the a of down Hopefully, balances XX%-plus. as So, it that another, you Clearly, data I them numbers. like expected.

you're stand today in there. us the terms where right can you points we that was give of then the in generating, obviously, up that second maybe So, basis just an update if And I'm quarter.

think quarter. the points XX third doing I you're in basis

XX where a us that terms it's on be give be that give we them, kind get of Fed if take we more. net what are. your given -- basis of day, materializes? assumption if to more, little think all but obviously, me please then I hike update points today, use if maybe in that there's would should So, of good a And

Thanks, Alex.

be start? on and don't ahead very you John, clear We you will this. why go with

to Alex. I'll best be my Yes, do clear,

quite number So, of talk some the to of walk through yes, things let about. numbers. There's a me

that cash well. on components put we as there's at we terms up collateral the in is have up, collateral we One and earn then clearinghouse. two put that So, that's of the non-cash also on collateral earn

the part side So, and average balance balances July billion $XXX of we billion, had XXth, terms of the ending our through cash was $XXX.X looking -- at billion. average first billion of $XXX.X end balances in ending $XXX.X July of cash the with balance at QX. were on of cash Through the QX,

So, we for basis the approximately cash earned the points quarter. XX balances on

points the first $XX.X where earned that seven million, that from is in million. So we about up basis $XX.X quarter,

cash the on side. is that So, balance

million. at non-cash On the collateral earn the increase points look in driver put we're recorded revenues. in other five you is up main in sequential you $X approximately increase When the the clearinghouse. other up see revenue, of basis The non-cash, we that's and that at

those basis fees five collateral $XXX non-cash cash earned the at billion. So, through of month that -- where QX. July, on in QX. put non-cash $XX on the points had $XX.X and at non-cash average the billion, billion we The the the billion looking sorry was we at the $XX on non-cash clearinghouse balance the balance billion approximately we non-cash, collateral ending was -- XX the end QX. earned at $XX The average balance to in collateral, in July QX, And of that the non-cash balance increased July end of was through up ending that's XXth ending

basis shift you've move XXX We're collateral. points. made in now So, Fed points. The they cash a from non-cash June, earning a is to where basis basically, it what XX seen to increased collateral

to is back in basis are -- earning in XX clients points We collateral, for XXX July points. rebating basis non-cash Beginning seven points. through and be basis June. that the is our That we'll keeping

points points July, from in beginning be in in revenue. five basis increasing that recorded -- they'll other and basis Alex? of to Is earning seven So, good, that's today

I I That to was was missed, tomorrow? until can going you than to disclose do flavor the course, one on wait you it? The that today? we -- thing have Or little maybe mean, asked more give of us it what's you for. happen a

important a we cash and so of are of not most may or that going so. to mean, what's to have sure us, competing make do. And continue our can to to Terry prejudge is assume clearinghouse for do Fed not are I the all good risk assumptions will what Duffy. the we and may other securities balance we're they kind Listen, we that. management. what in We're that truly

collateral We against competitive. that people into investments remain there's as and money will other their put position. We deliver can understand their

want a sure we balance. to good So, make we have

So, very we're about to it. going be prudent

Sounds good. Thank in I'll queue. hop you back the guys.

Thank you.

Alex. Thanks

go take our from We'll with Fannon question Jefferies. next Dan Please ahead.

Good Thanks. morning.

expenses and the discuss to or kind follow-up outlook. Just wanted of

half second a the guidance -- have You pickup. implies

kind outlook talk with the But how second the to general Google about of so in far levels of the are is this half us going at You gave what in is you've just million. spend where on spent and the maybe conservative ramp point? $XX

question, the guidance. John. this are didn't point. We're Dan. Yes, with our for correct. Thanks comfortable you We is adjust This at guidance our

guys a very for in planned half is year, environment. fees know, a give the of related had the spending manner billion, the you And business expense focused entire license of As heavier at on the $X.XX we historically, higher in the efficient events. half CME's an back improving to did of guidance also, year anticipating excluding second we in-person level had we're When of expense possible. Group ensuring team CME most our

capturing next from You haven't that recently, of seen were because synergies we acquisition. the obviously, the

where half to XX% the includes costs I'm first increase advertising, in-person of half those travel, first increases a the events. half, to related in to That give seeing to customer-facing is versus little color you over as second marketing, the year compared So, activities. increase some of and

-- We sales primarily on focused year impacts of very technology-related, activity, in treatment little and growing in including the depreciation A the will than put additional that and migrated have Globex, systems and be into and an technology half salary service And over first that resources. we've is to US EBS the higher related customer XX% occurred of depreciated. balance the increase was in-person and for Europe. and seen in professional another to in the augmentation the have The September services we're March certain been the work, of is customer-facing project now as especially staff in business. costs and increase

also, range, for million -- track million and the $XX the on that. be cloud, and So, $XX you indicated, on would mentioned, as our the our migration spend we as spend in to we're to

planned. a going it's as we pickup we So, half of back had the anticipated had in and year the

Thank Understood. you.

All right. Thanks Dan.

We're another question. ready for

to like would ask one. Somebody

And our question we'll go Bank. Brian ahead. from next Please take with Bedell Deutsche

hear Great. Thanks. okay? Good Can me you folks. morning

Yes, Brian.

that the been Okay, will fee to more be switch, of volumes -- little do elevated be be SOFR waivers elaborate long to the In a transition want the that migration pretty from how revenue near the to neutral, on as for? great. the SOFR last conversely first revenue that, to LIBOR, revenue I And maybe term, really on expectation strong. all, if rather take-up SOFR -- are guess revenue transition over My the accretive then think you question you the do bit dropped neutral to clients do to in or around after you has long-term? LIBOR obviously might just be on dilutive to or your the for contracts, SOFR expect this this

a Brian, Go the let strategic start. to nature, unpack talk let ahead, to about thank to and lot want it, bit little a talk but you. A I I'll going Sean. lot I'm to him this Sean there, some comments on transition. make also in about

thanks the This Brian, hi question. much for Sean. Yes, is very

very think plans. of with and we've pleased so made we're the it far, is that progress I lines along our the

terms XXX% SOFR they during are Eurodollar around trading In the of of of July. currently futures, month futures

So, we're Eurodollar trading the options for month of options, of July. now during XX%

might FOMC every the terms and If in and we're the overall complex. pleased you we've do, on entire active what the STIRs Reserve that being of Federal complex excited meeting with very at monetary in play with short-end seen with policy our growth look very at they

first interest year-over-year. rate were look XX% at they in you short-term the half, futures If up our

rate are up XX% up If our year-over-year. year-to-date, interest at -- they XX they're you options, look short-term

overall. So, very strong growth

complex, the futures the but entire and in growth SOFR SOFR increased with strong the options in also the very adoption. So,

SOFR the terms significant we In SOFR adoption place the as options well had of RPCs, have adoption. futures in both the incentives for as

In XXX% SOFR futures futures XXX%, terms to are so -- that SOFR the process being futures. the adoption, along in of as mentioned, further Eurodollar relative I the of we

RPC So, futures options to what trade. investors we equal customers right options had the which to as Eurodollar to for to the for SOFR in and for that there Eurodollar both the so it's headed and SOFR we historically direction. product futures are and goal And is our irrelevant the that is their have pleased the RPC us

not strategy. it's do, are there rates. that relative to intend are you placed intend we to mention is what SOFR, That's we strong and we've might That yet. thing is extremely We where term saying our look SOFR we what to Last do. at our an today if been that position relative to I is

XXX SOFR, XX have more X, the of term across In $X.X firms market trillion to used terms worth CME it's cash we now than different And licensed different in across globe. term CME SOFR of countries. being products

are that licensors, So, upon borrowing for the interest our based futures using are they're contracts. rates whose those X,XXX new right,

are, track So, adoption the futures of the of same about meeting up we very to options. We're sometime positive relative in And to the the on are adoption feel we SOFR. term of we pleased RPCs both the strategically needs investors' with and level very at those where not-too-distant SOFR John? in future. getting terms

Yes. Thanks.

August, arrangement Sean the initiative. as has first our two plan SOFR will of highly transition of for fee conclude Just per in options $X.X that that between fee In successful, associated million we license million and plan for benchmark. initiative. we months, indicated, with this the month on have We with license next our X SOFR other outcome line options first where million the in and the the -- of to costs July and quick line for a and pleased be certainly to LIBOR-based $X definitely additional fee It's $X.X off costs million that quarter, $X point. are

we what ago say, order in just we've things so a here transition a from smart look the talked I on done I moment to have a this lot or ago. think And of to the year was numbers standpoint. like that thing was you and going about other it I going Brian, reflected Sean And competitive to really a give

incentive many futures we we when a we to LIBOR the before and program of said One, we put did something that it trading, happening. this we So, Eurodollar of look ahead the we at and transition -- time critically were year most you the able achieved place options year LIBOR, into expiration that's of summer into SOFR it things. both is benefit by would ago. important. or thought a trading SOFR and and what's We which futures that would market, else do also But exactly doing and we futures

So timing was look waiver fee And XXXX. we of our ahead strategically, our to we program this. I good the it what versus did transition exactly be anticipated very and July think on doing, of

color. lot much a great Thanks That’s for the of answer. so comprehensive

Thanks Brian.

Suisse. Credit go We'll our Sawant next question ahead. Gautam on move ahead with go Please and from to

morning more And for coming onboarded so? please how you Canada Good taking new in Europe? new but launch that incremental and trading versus been size products Asia know you help about doing local the you or in products, my much Can to you maybe from opportunities do international international us markets? last talked see thank maybe international existing year the or I clients those in questions. have is clients ADV

don't to It's for Julie a why I'm Derek, answer us, question, going who runs Sammann, let you start? great Winkler question. and the Derek to that international

appreciate the I Gautam, question. Yes,

put XX%. half of continuing first up call, ADV As at on we quarter non-US to are X.X this ADV go record, record to At second the That's strength was contracts, now from million million in the we from our our of year. non-U.S. have up heard of best strength the you our our top half X.X business. and first Terry's comments best on for

market-making both our and we're As then client but you customers, little this. at the the When of and leveraging our business, and net strong customers growth cross-selling we proper also rightly side are A point XX%. up XX%, bringing bank look retail the I'll business on into you our up out, new our our existing seen XX%, regional business. we've them scaling business actually color talk of to growth, products, additional up business the into

should to So, new important retail ties the in product the back to that show That is you participation our us. strong side and particularly development.

Copper put we we're look makeup WTI the a launched Group you on seen before. oil call have up never the as well mentioned options never micro Micro there, of year. our have Micro out. -- contract last new futures in year. the the products those When side, WTI net traded of continue the option CME that as at participation side, You've in half to success Micro before. Terry Micro our our at We crude contract both top contract contract WTI of on this WTI thing Micro we are future at launched roll our of about Micro the seeing about options Same the CME traded the a customers contract another incremental customers third a

a So, our as both becomes opportunity cross-sell which partner distribution as for CME broadening upsell new well time. scaling customers over then into this and net relationships us is bringing Group, and

So, we're bit of Julie continues had talk growth. the upselling, we in. a cross-selling can It's the new for a part Winkler we both client the be and little have bring cross-selling. customers we've probably net framework about success acquisition non-US pleased of can growth a and And big place source there our in with to story, very

Julie?

to I model think with those globe international mentioned, mentioned. what adding opportunities you to around of identify our is client-facing local the work that have power really the our resources customers Derek that regional product we

to step Europe, right, that are is clients. a into that those pointed So, that And Paris. trends destination needs then lot well-versed current appeal then those from locally out opportunities. emerging growth definitely are teams I banks we portfolio the is and that and of But very And obviously, out. you are identifying direct new what something just mean, both if you has we fact our for down product becoming go in as in find of buy-side given Derek look clients there seeing Australia. going are also moving client just also look customers product the a what at buy-side doing most into And on those Micros strong as relevant some [ph] main our you is we're have international Australia, into of what is and

back HRC, options we you launches, Canadian of wheat, on into look QX talked lot say, European pointed carbon those the right, also if those really So, for year. products a that and western voluntary in to as I half products as about. particularly that products and interest, would new helping coming And Europe the Asia is that will we this drive of well be both of in the adoption the innovate second as out,

investment So, that making the of I that the again perspective. in to to it growth continue an we international areas half in expect And resource think second the we're we're year. seeing from speaks

in XXX% So, well over it's of we up person, opportunity in where about throughout been XXXX. and to were great numbers as a those the meet our clients are summer QX with

helping So, meetings, are. those to on what our improve insights think, are needs in-person client I those

me make point don't not of list you Let dedicate just rest a have resources launched other been of of them that apt quick world where for in participate. them need so areas different in. product in again, parts in that in we become to products We said region that to just can parts list everybody contracts, quite successful there's the to particular the to world new world. participate. participated But We to to be be also. that On the for order more might more lot a certain Julie seems the of what

an wheat I want have the participants. not for Canadian So, as example. think don't That's to we Canadian you list only that to case futures

said, what resources, grow our products. So, people to those in the dedicating we to areas more -- those Julie Derek?

Yes.

from I where participant only think seeing the terms additional actually seeing international little of of We're growth. some our biggest just our we're center. bit growth not financial a in color coming

top This our country example, year for up was country for that's of a country moving table. business is course the our XX XX%. over us the year-to-date up Brazil So, this fastest-growing

a fastest growth Emirates. India; second grow. third, came business Arab lot Our seeing Gulf United out of to continue of We're

between South these countries Korea XX%. and are of Taiwan, growing all XX% and

in countries XX. our So, top these are all

speaks investments I products want the customers on business. Customers are product it So, markets customers the the benchmark that think XX/X. trade are breadth That's lit those to. of that to our to scale to set. across screen market technology Those the the are Group, our benchmark are kind in of the that globe reach drawn and to CME driving why they're and

you your for Thank questions.

Very answers. comprehensive you. Thank

And question Goldman to we'll go ahead ahead. and go our move with Alex Please Sachs. Blostein next from on

set. we constructive backdrop the Hey been into morning for of that product I for could It what's thanks feels NEX and pretty question. guys. trends last the everybody. over macro like businesses, good range-bound BrokerTec there dig was couple a hoping EBS. of some legacy the group revenue fairly the have despite quarters obviously been

maybe color in are the surface kind what guys on going you a on working businesses. to and what's on these growth of just little So, underneath reinvigorate

optimization because NEX businesses Well, segments the business. with businesses let's the down trading break this we the legacy two in have and

BrokerTec/EBS. So then others JV. and originally, John And little the Julie and the and with about to about maybe like ask Sean to talk went transition talk can did bit that a IHS into I'd our we

Yes.

you, thank So, and Terry, thank for Alex, the you, question.

If plans two business And Step one are step migrate at migrate to to both completed. Globex. those the to was BrokerTec over Globex. acquisition, over now was of you our the relative to to look EBS

we recently moved May over This year, BrokerTec Globex. So to EBS Globex. in to year, over moved last we just

US to since the up In If at look XX% move at look we Globex. BrokerTec, that are some the treasuries, along are the regard, BrokerTec you benefits process, further in we of starting of volumes you are if to year-over-year. see

BrokerTec If you XX% US is repo at year-over-year. look up

you've If growth year-over-year. talk from? previously. initiatives BrokerTec's is EU us that repo heard you Where this up look is XX% coming at The about

cross-selling. First,

$X.X of trading traditionally sets are worth treasury about that that BrokerTec customers are been this BrokerTec on on of US year have US billion futures customers from We both before treasury seeing products. volume traded that never now new have

new we started additional at trading that the of of coming hope on is pipeline in have clients We a to that a BrokerTec times do get months. large couple

achieved In trading order trading me about relative addition volumes worth quarter, $X to that our record. of trading to of RV has you've to it we curve type all-time number achieved second heard that days continues the the that, It talk offers that the opportunity, a RV and mark, customers, instituted to billion grow. relative the billion in efficiencies around before X.X that an

relative to cross-selling, the are new starting So, clients on see to innovations the we side. to terms and delivering been BrokerTec some the the Globex of in traction having on

the we to the to Globex that and to improve to we now market do in to continue things take the make side, systems the transition time. and But to as microstructure. these invest On to are enhancements EBS looking continue are systems post

of business So, that that think is perspective in clients. created from to a HIS now this venture with and well the terms really positioning strategic that Global, Markit ourselves our we joint S&P and we serve

IHS in We've One QX. businesses and And The we team as management integration from for an business, play And of along QX that from in optimization process our talk operational with through you're sequentially the create financial are perspective businesses, with the million and laid up is you've can has some that clients. MarkitSERV -- MarkitSERV of between optimization to client. for that earnings strategy efficiencies starting developing our statements, about will combination got contributed Terry into venture joint see seeing business. Markit's they're the the out. things that you in and others place, our with we $X the been the the our the efficiency heard

for we most be a tremendous going So, created clients. of value, that our importantly what's amount think we've to

cost going going to the business be to joint for space, most importantly, by in time for shareholders we're through that are of those venture generating to positioning creating which strategically value attractive be leader of in combining in efficiencies clients. creating our very be We processing to that we the time this businesses. the the management, post-trade be by we're is going And think, our this uncertainty,

fundamental the to BrokerTec little our you living now And I that. a that revenue response the has been in times we're Alex, the right think is what that during and suggested stagnant on

else relates response. -- lot of good which futures as I with game think is at And final our a like products. to offsets it to efficiencies. hopefully creating the we're that margin you the Sean about, here referenced about talk But I efficiency John gave end something a

finalized have the applications DTCC to We has -- all of their SEC.

the We between are of futures webinars doing out benefits offsets joint point the BrokerTec. to and together

now are So, the XX-day we they window achieve higher we're presented a benefits once this, -- believe, much will clients. approves which the been SEC they once for our have, have that hopeful apps them, to the are business I that

believe of next one and do at that the strategic the we that we're transaction in the of that's benefits as approval is SEC. So, two those efficiencies. quarter get And where we that, or offsets margin where from from point beginning saw this the we exactly the

So that's as for well. shooting we're something

great. very much. That’s Right. Thanks

Thank you.

Alex. Thanks

ahead. And to our Stanley. on Please with go we'll move from question Cyprys Morgan next Mike

question. broadly I the an so OTC products. question, Thanks just for exchange-traded much to shift the industry bigger morning. just good more to taking on ask from wanted picture, Hey

in we makes penetrate that's sense What of What's How you point think that this at to less this would there? left at point? journey. sense size sort trying the you where versus curious left could you think about make do still whatever OTC? TAM? is most that are Just How what

Sean?

interest had years as quarter cleared providing began our our the billion efficiencies on offering in We're We're mentioned, continuously savings customers. Group at has Terry we second we while rate CME to new rate that to record focused, our interest Actually, an ago $X.X between portfolio swaps that in all-time excited. it of was very customers. and several futures margin

us continue. that, the most the may for think important transition efficiencies But to provide the customers is thing three for I now marketplaces. that bridges So, that all

So, all exchange futures the our and foreign listed cash OTC markets, derivatives treasury and cash of markets, the the market options.

of that in And do enhance futures. of still all relative in great all EBS have taking our community our honestly that not. then analytics, likewise technology talked different foreign technology optimizing lot modalities we particular, does use In that It across particular, early about very trading. terms across to of I extremely Quant a think can the I've expect of exchange in we We the process a benefits risk. before Analytics income do set include we're fixed find And to analytics. of our offer to customers useful that those the to their products.

all the in more -- marketplaces to we going So, in of Group doing efficient. clients, our that terms and I would we're CME awful that to those lot value of add us of still to to say there's make an front

because the add benefit to get use our they is we that to directly of just Michael, the important It do offsets the marketplaces. said. Sean let business what over-the-counter of remember risk in even growth by me

get don't grow, they offset. that's do if even those risk us for bad So, that, think because we thing a

clearing them efficiencies to to efficiencies of transactions, Sean to as pointed forever. laid like and continue But create out, to and of, mechanisms institutions create we the and things Sean that think I'd do offsets and margin they'll the want we going we that certain nature, are that through So, yes, bilateral make out. the do the sure that get

So it's terrible either. not actually for us a thing

Great. you. Thank

you. Thank

take We'll Lau from Oppenheimer. ahead. question with next go Please Owen our

an environment? thank and for data I the on And rate geographic my you or can side, that of give update rising initiatives you. can is please Could along and morning the there side. on you and volatile then more trading add question. benefited you cloud in on color on us into? penetrate But Thank Good product think that this any area market migration. CME for some please CME the your taking expand further your data line,

Julie?

then the for Yes. data you Google market for response. the Sunil question. it and turn question the to answer Thank I'll

record our market counts data strong million see an and and our a need to two market in seeing right, was robust business pipeline that this up of quarter to We for interest in diverse access business. quarter to-date, I data And also saw areas. sure, mean, increase that and different international real-time revenue, continuing a want X%. is, for that in So, in we clients data. very subscriber product net $XXX in and We're a our this have one, derived data.

other continue is and is into we as has And as structured market ETFs are to our I'd of products so and say that being on that continued well within things input nature. that and grow products focused used that be as internationally to what part domestically. of And prices And that where data business.

made I think that comments relate back Sean I'll to earlier. the

participants, I which great goes benchmarks horizon, for towards across term as license when are to representing diverse opportunity with of is net a the completely we and we continuing to think CME. team this are global the This have of things us really work rate. continues -- SOFR our the a one sitting on and to as we're new is set And many of out new globe. do entities is that great the is

using Group. here we're our them to SOFR that converting CME other licensed them introduce so continue up the and for will process and that then rate. work an ourselves services at a through be will into organization cross-selling And sales to get data term as opportunity And them in to products

with And other there. I'd a to opportunity So, partners. say global continuing great we're work

market and a quant and like set distribute standpoint. platform, where looking So, means with to the things data QX, to third-party we're launched other mine. other we channels find data other And from our in Börse announced data crypto we our partnership historical Deutsche on our AX

where looking to over product growth data of then market where going from it And use would to I'll it turn to Sunil both cross-sell kind can talk-- we and So, at a channel we forward. opportunity see be and

a the cloud, little on Give please. update

Terry. you, Thank

the calculator. we we the end it one foundational year. are talked this calculation to margin So, track migration, on We the margin on about, of first cloud services services have is The three deliver towards services. call

to And third our our clients the on trade is look aspect the then trade cloud, it other The a up products easily. is very products, gives market GCP the product actually on a data and of ability dictionary platform. that

We of all year the these services this on to deliver towards track end are as the well. X of

you Got much. very it. Thank

just Yes, to of bit Lynne going color you give is a around the financials. little

Yes.

find expenses to the migration, to spend within you'll In fees expense. our speak migration. total to quarter, the million bringing million to for We related $XX to Just of on saw track the of the to $XX to outside we annual the the and remain related the guidance $X do approximately services. $XX professional million Majority related migration million. year-to-date

Thanks. Okay. it. Appreciate

Please Voigt next from We'll take ahead. our go with Kyle KBW. question

good morning. Hi,

if talk contract transaction of that being revenue you and bit So, over of speaking, total today think then update retail on percentage retail where could earlier more on the an you driven over time? that's maybe in how by could a is drive the international But touched retail call, from you wondering broadly was those perspective. introduction how I your and could event you And the trended announcement about time? contracts much

with, more that disclose don't. to to the the the then going the we Julie do and we on ones about contracts Winkler talk So, Kyle, start versus I'm we'll turn it event to and numbers participation that retail

I and as with. as start to why -- to ahead Julie So, it go turn don't far the

our weeks has plans announced number date to launch year. ago. announced In -- offering QX, Yes. we of Sure. was begin this contract That the event later a

September our futures really, broker make for to ensure presentable that goal is what we our on individual to end is, And that existing with focused be we're XXth partners So, to launch. clients. working user more

packaging instead so products bid a is people trading our a product up more environment and about on. standardized lot a much of existing simple format more offer straightforward a trade in And this yes-no that

would audience perhaps markets and/or than trader appetite have is client our experience say, typical base. less interest in target So, different, that people that. smaller financial perhaps than futures a existing and but It's risk a have doing our in I for commodity

the two US growing self-directed broker across was partners, a So, for trading an there has obviously, identified years. our over last as trend with And working the been, this opportunity.

able retail create the in provide this to So, working customer we've being been traders for US liquidity. them a experience with and also sense to

launch got ramping makers products how we will marketing vein So, And closer in ensure to to some educated these our closely broker that and working as work. these we've about continuing products to with well. market as clients partners are up gets committed be some that for the liquidity supply

you discuss you to can? the retail want way participation, And that the

Yes.

to It overall trading Revenue retail a to looks this our of of attractive. the XX% driven terms be that number our been percentage up suite percentage continuing as of in to same perform by the retail marketplace. record very continues was we this disclose about. that and micro extremely has really don't the we So, of themes And in another see talk quarter year participants be activity. strongly. our we The

story As us. say in I'd is for continues to suite, the in micro there be very equity marketplace, And an other been has education particular, performed volatility strongly. thing the has this

retail with one So, get to our working content that to key is will educators. put a This we with working invest in out third-party working continue to products continue and of our and new out. there, model partners, part broker

micro the yield and things all also crude, attracts going this well the futures, are micro the very suite, attention So, additional the there. and Ether to

Julie, we So, a about how might participant why others categorize real quick versus just some you describe categorize? retail don't

Yes.

For traders. us, it's really see as what active we determine and

month. are those So, more or per people times XX trading

clients. that and traded these are in largely And are equity the AML people partners KYC all broker doing in, Our portfolios. have and on market equity these options other

part take their that portfolio. cornerstone and a have use appetite of and of And to be retail been really qualified, marketplace And to to will retail has our on base. derivatives so and our client continue hedge the they're they

out pointing and for Yes. proliferated is little street grown way the than way in. the kind bit the walking a And because public's retail, by out of the We're pointing just the it's individuals it participated we're you. down not different sake we for

clarify So, And on part then significant business, her that's equation. change. of it's been Derek? asked a to the retail, only reason I our that on options the

participation, up our only client cross-sell -- in of options the case And education retail continuing futures of whole XX%. to one amounts both options just a point great substantially significant grow is is to retail upsell and is that made clients. options investing complex that our a our not than Julie it's and fastest-growing versus as Yes, we're Year-to-date, training was participation. our points has That's XX% and were the here XX% futures. up portfolio up faster the

that and Julie So, think about and we've tools cross-sell capabilities the earlier. I developed to resources talked and speaks capabilities and the it upsell

know, options futures. So, grow trade across other into as the asset we're of asset whole futures bringing time. as and options and classes portfolio over whole and scaling portfolio participation of customers to markets that And well and our tend in you trade the classes

thank Kyle, much questions. very for you Thanks your Derek.

you. Thank

ahead and Please We'll go move with our Raymond on go next question O'Shaughnessy ahead. to James. Patrick from

given Good move volatility events it big more in surprise have that morning. macro not Does a you are natural that particular, the driving gas? energy in robust been volumes outsized energy and,

Derek?

Yes, Patrick. We chains. -- Definitely, saw We lot in a as of dislocations and we What there's since is couple We Yes. we've side. March. future risk-off physical rebuild market of agricultural see months. these war jump in We profile What last Brent. global saw that market. seen since oil What that did in of then. the then Ukraine ICE a That's appreciate saw in our that, a saw we've seen true on then products, we've actually actually I a WTI been supply in the that in the contract more over energy seen in immediately the well. has is a stress under the huge metals products. significant energy, following bump we activity. saw

look X% commodities our on June at portfolio If whole, you April up the ADV and May. was overall XX% up as on a

and interest We've oil rather of both reduction. Ags, between that actually seen up that on put open futures futures camp. of volume then transacting talked earnings and We right really risk this portfolios that call. is We're are that in really are equities seen last put now. in of was customers rebuild. and a form about So, differential violently. increase the makeup complex we're -- high then options. them We've energy down What's interesting in little how actually a and an actually customers' trading markets camp, seeing in between are seeing extremely metals risk proportions a the environment, bit initial moving significant managing in jump activity, that options to engine start in versus in the interesting I'd build this in which of open the and I'd

our our is XX%, XX%. open futures while example, interest open up For interest options down is energy

What energy to our up options some the markets better moves physical X%, options flexibility is now. Our is customers in really telling that is in is finding right up is are that of futures the of our XX%. and challenging suited much us

So open proud is now. option in is flat uncertain side, substantially when the challenging to right it which in and as volumes these as hedging say expect that in we're markets interest growth on you'd both seeing price

zero And an GDP. a China seeing frankly, So, oil. has It's the about price to rebuild. We're of uncertainty we on on supply the is war. are That got likely reload. you've issues. announce already growth impact the seeing had

supply You as shocks well. can have

to manage forward, market the mean the And revert -- becomes little little that a path So, think a is a markets now, proportion the a risk. a as we'll I is certain market more options. using bit. using hard I options start to of defensible right market of larger see But think

benchmark that pleased manage that using we're risk. So, they're our here to markets

let Patrick, comment. make me just another So

under seen how of markets don't policies on China the -- months fundamentals get such marketplace we Derek lot fundamentals inflation, on move is And last you we've a What in think, what think as like the in Ukraine, what's several fundamentals geopolitical sometimes over about much going the Well, certain what's especially what made And the what's going the we're good I product, what's are Derek, free United drive in geopolitical the markets, are. impact of really meaning marketplace. a pointed on investors going around happened interference. spooked and they little don't here I Russia, over thoughts interference, such out. here. States on And are energy, how going and let's in the to as a rebuilding such by geopolitical talk

have that that, try to I have So, think the increase other to we're wouldn't I otherwise, Saudi President He starting over wouldn't product. gone reason And to done our see things take off. say Arabia. this to

the factors. interest So, should get in time. the seen which Derek? trade we're have reason hence whole why the factors that's in we the fundamental seeing rebuild open we're away And think geopolitical I and from see starting to the

XX% When second think look energy I question has portfolio. wrap-up the our up gas. been nat part interest on And quarter X average open year, to on XX%. an up of Nat ADV of XXX,XXX, second million, at last quarter your from gas really shining you of the

So, terms it's where more seeing a great case say, less term a volatility little where is or term very what you're -- a there's in of and the in little is our gas, should I there we're respond strongly. markets clarity, very, demand point seeing for

have we Henry Hub. in So, like we position the

We XX% share continue XX%. options that year-to-date, up to XX%, be up and future XX% are that And said, in market as in our market I market. between is and

So, that for as continuing but growth Europe and challenges right very very, here, year of gas. a expect QX full of to continue natural in demand theme as business we now. the the ongoing well of returns a And given a strong

our everyday we're what it of little So, as Patrick, sense go seeing into that from factors business. this here and all hopefully, gives energy a relates seats the that you to different

Very helpful. Thank you.

you. Thank

We'll of from take question next our Bank go Siegenthaler ahead. with Craig Please America.

everyone. good morning Hey,

morning. Good

Good morning.

really in a LME's evolving as is how focusing marketing March? So, the contracts, CME's participants and on quarter market canceling a in metals And contracts large-scale launched business you the potential competitive we nickel to the also share. in of react campaign take so landscape had to know few metal pretty

way his thank with can give for a bit question. the you little business our team, Yes, it. you Metals of color Craig, we're Derek, who approaching the runs And around

particularly customers March larger appreciate is across What historically done I challenges business reverberated LME. share from are Yes, market. a the LME's the base the and metals out question, we expanded with engagement Craig. on their commercial seeing of Certainly, continued that broader buy-side have have

to significantly versus continued the has differentiated share That have, you go particularly. two from strength-to-strength, in copper LME. particularly where over continue expand our offerings We as with three years, to we copper to last and a gained set market build significant options know, success of in the

a seen there there. doing in off with business of admittedly a customer base nice have proportion us. aluminum significant some their growth we've low And We seen larger interest

So, increasing CME management exactly engagement customer around they jurisdictions for have get I in customers the they know certainty tools markets the the think best best and client the that seeing they've and where Group. we're where operate market where looking how protections, in they the risk got rules solutions

terms we We So, customers impact largest engagement we've Group. had And in like market our really base the that and metals broader in that where seen. to broader their of we business the battery like move leverages more the success CME of cobalt other of battery metals to we've the direction the that growth franchise on lithium, looking metals, we're seeing base globally. and metals of like parts in to continue for be

client that to our we've results. But and teams, And So, sales portions in Julie managed has that, our we're for dialogue and that hopefully, that your we're answers we market that I ways that best now serve team the business in of expanded the client think commercials, think opened has particularly best the built and question. seeing that need. here we're with base client-specific that with global

Thank you, Derek.

Thanks Craig.

with take And from question Alex Kramm ahead ahead. last we'll and Please UBS. go go

guess. Hello again. thanks again Hey I

and generally that. of a comments the rate year maybe the the Terry, quarter, action. more in a missed On in business, little one, also, quick really solid, to obviously in futures, discussed what's don't interest haven't largest which to environment but your it, was think we think terms growth your times, I've unprecedented expect going And relative quick one earlier I one. bit people this not I on belittle I Just want unless

going not you in extending what active far like asking I'm participants, echo wondering, guess this also trading market credit. much we banks as context as we really to are some curious I'm are lighter you capital. as weighed they with maybe of the think terms seems they their it are the down what in Or things think And the when of should talk strategies as has that here? be. Like could change What -- feels are They're watching and just I So, capital And potentially it like activity. not there? are that on path weighing? as wrong

the two Sure. said of your that's But his the company And to largest the of Alex, fruition. with opening two history this what of think seeing about stated think we're combined come in I beginning appreciate at in marketplace. John the I in we when last I our quarters the remarks bolsters unprecedented year question. activity quarters that kind at

the hear good about rest about jump consider when jump just through people it at then you and the meeting ball done ball were potential has on as because know, pretty another, recently, a transition, of when a a SOFR we're you to that that a what business. one going as -- So, massive I job from analysts you said benchmark we've Sean transition talking the for think were

job activity. good really on And that. far I a done we've as think think seen as I activity, the So, unprecedented we've unprecedented

differ I I think at there's other you it events that go numbers. would into our it, but with I look would guess when

than to levels what at that trade that which people we're levels. if said mean to the going don't we activity unprecedented did, more record were or I XX% I misunderstood So, know did we

me So, to talk let John.

Alex. Yes, the for Thanks thoughts. question, and the thanks for

up some things to has said. of Just the that Terry already back

record our rates The all-time first for revenue half was franchise. an

half was an rate for first large holders number The average our all-time record of interest open franchise.

record The for franchise. our first all-time ADV rate half was an

If you year-over-year. is it look at in in our growth, franchise, our XX% listed up recent volumes, the rates year-over-year numbers the most

the references have to previously an made the of was current environment investors XXXX. awful looked lot One that I that like

the up look growth for XXXX, I've it at I XX that fact you looked and was interest and at that at volumes saying what if CBOT if combined been XXXX was you that And the always you XX%. to reference think rate CME XXXX, relative I least in now months.

have like what would So, me the to economic to expected relative this environment. I looks

to at mentioned every addition and -- year-over-year. look alone, interest you the that, options short-term sorry, futures if STIRs meeting play In XX% I FOMC earlier up or our rate with it's in franchise, that STIR futures

up exciting, is left balance actually us, exciting also very the in XX% sheet. look you Fed the result. It's STIR options What's that's a of year-over-year. very at still and If front

much So, very the like have franchise. environment seen XXXX in of an we terms STIRs

are Our but up only are XX% XX% up treasury futures year-over-year, they year-over-year.

to its reduce the So, for started size growth? catalyst sheet what July. Reserve only balance potential Federal further and of is The the during June

the as September, the that in sheet $XX.X of July, During June balance per we billion billion Fed reduction that and is month. a planning we know sheet $XX a know, targeting by only balance month. Starting on is reducing in also Federal Reserve

accumulated we're the short to similarities of FOMC curve Fed we the $X XX on benefit us. get relative the last growth that we're over guess, and years, now, seeing XXXX, end, the balance of it. environment Relative very still of fully that play, economic sheet in year-over-year, in I and this pleased are So, of trillion might yield the XX% end to long from the the that front part the the with

what Rich markets. answering are reflecting that. Alex, and you're I the I the And this know -- an be thought about overall at think the there into I time we when So, referring my I that exactly I active this I could comments, think and numbers guess said what saw year team extremely to the of saw, Repetto's saw in I question going was January I

we So, a records produce coming not to-date, zero. coming basis off of that of when they're with we --

taking records high basis. are very are We that coming on

it's to exactly I said we that happen. going So, was what think

to I But business you credibility. was say, and what create zero you have okay, when So, at record you're we the should saw pipe. get went if I that would have a one, least think down you we and we what acknowledge from that, no of new a you coming

to the growth. the I as said. appreciate Didn't I belittle mean commentary

slacking hearing that's it it. be, we'll keep quieter feels that than keep Just should on on it but --

reflect what that. think the at you're I but And time, different, numbers appreciate and hear saying. the I something No, same I

impressed long last in -- But had the So, CME. again, very at we're with we that have we are continually we this here for the were quarters again, run. two

guys. again Thanks

Thanks Alex.

Alex. Thanks

the hand remarks. closing does session. would for conclude our like that that, With to I additional now to or any back question-and-answer management over call

you. joining for I you want much. healthy. us today. your safe please it to families, and appreciate Again, and stay We very you Thank thank of all

Thank With today's call. your conclude that, you does participation. that for

disconnect. may now You