CME (CME) 23 Oct 242024 Q3 Earnings call transcript

Welcome to the CME Group Third Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Adam Minick. Please go ahead.

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

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

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

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

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

record-breaking growing management need demonstrated globally. in for the continued the Our risk third quarter performance

growth incremental period million year. average and record XX% every XX.X and was same fees by volume our trading to in to of introducing CME on operating lowering our our and in and commodity increased consecutive the and broad-based. was driven both XX.X across increased volume RPC these volume growth year-over-year was incentive achieved was growth third treasuries. lower XX% financial quarter tiering with the levels new quarterly The Group's futures are achieved both complex allowed without highest for growth, leverage for and strong the in daily by earnings grew open history volume given model. million focused rate by aided This this by We We all-time contracts of tiers, compared XX% day. our ADV effectiveness a last sector This asset any volume second products interest record XX%. for class volume interest the quarter. In year-over-year grew including contracts volume programs products. The aggregate, the sulfur, growth or a any our our volumes

day X.X complex per September, SOFR customer traded network high contracts over September. holders while and new with per interest million record million seeing in the all day X.X quarter in broaden reaching in large open a Our the

know, for we best you volumes. that rising hear rate CME's rate As often view environment the a interest fed is

year, continue been our levels had Opposing geopolitical by record quarter which $X.X hikes a up EMEA hikes U.S. Fed around our over million led in average record million growth should This last The day rates contribute by X.X to around interest coming volume APAC and classes with and world the of cut, the XX% and rates over and volume highest volumes daily both all for up per volume international XX% issuance versus products. actual Fed tailwinds also with was million have XX%. reached and year. record asset The X.X from for and or XX% prior also average equity grew APAC and markets provide asset interest X in up the classes. QX business. rate our across no daily contracts manage ongoing the election financing international of and in last was EMEA, a all where contracts, was combined year complex to efficient driven rate and of there trading. was potential risks the need and totaling uncertainty red a rate to interest However, X which growing these views changes, interest X.XX%. for liquid deficit events rate and rate X for

we results results, the record more review volume that these In the delivered over to detail. now short call will results to turn Lynne consecutive the for in summary, to financial impressive quarter. With I second addition

Thanks, quarterly revenue, Sherry, immediately highest income this you and this share net the the each nearly starting earnings revenue XXXX. Clearing and our last and Market year surpassed the same with fee revenue this XX% from morning. set per other revenue of $X.X X% quarter XX% at increased in $XXX volume. in for to those thank transaction records all increased over second on us billion, CME million, quarter data million. quarterly all-time quarterly quarter, records up year third XX% Group for record and and increased revenue ever of the from $XXX joining quarter

resulting Our of billion expenses strong record. $X.X the million, for license million and cost discipline operating excluding set The income fees. quarterly approximately adjusted new $XXX a led of quarter $XXX to

Our coming of growth of points The our an Group the business. CME U.S. lower had XX.X% period international strength about adjusted rate. has basis a XXX tax up the strong operating XX.X% of from rate in resulted tax margin talked XX.X%. Terry in was year. last the from same outside effective effective adjusted

respectively, share, last expenditures were XX.X%. Capital the quarter history quarter end was $X.X million per for the QX, XX% to adjusted income XX.X% represents and to to earnings as of a third XX% This delivered and the the rate range and our quarter in guidance result, billion. driven a $X.XX operating net margin $XXX per level, share net year. this we tax million both the revenue from we're of approximately highest $XX for margin for third income the and our of continue at in and period lowering an cash expect growth by We trend quarterly strong the the up at approximately adjusted year

technology of XXXX. daily surpassed liquid innovation, has million trading X the and versus led of were period on customer asset each the this days of proud volume the helping volumes Our months records, financial a the Group's us higher by their were team major continued same of quarterly efforts CME products. for the of to shareholders. We'd management for Also, contracts trading our our classes with markets for our the XXXX while like XX% for for and the in provide in your deliver driving XX the quarters level products X very product risk X first questions. which to across days they call results clients QX, quarter. We're XX% monthly of new last in earnings of deep now open new acquisition need immediately to our consistent surpassed best demand growth records the

[Operator is Fannon Instructions] first Jefferies. question from with Dan Our

highlighted had quarter valuation and get on you thoughts that to your capital compress CME quarter also Terry, Wanted you've long-standing versus to M&A. policy. both record And continues But after has a some updated those as a just around return thoughts given peers. of

policy about as as of the buyback a curious potential the around context So things other X well in those M&A. dividend

Thanks, Dan.

I little soft correctly, think but heard potential I coming you in, buybacks you asked a about M&A. and

asked that's for. you I think what

we to in So any shareholders, shareholders see said that will time. in interest have is of what I always the this given our capital monitoring on return to point at be the best

dividend several rate years suited over the policy the environment. ] a Our company has last in extremely [ well X

doing just its other we monitor We're constantly so With world, with things Board do we're upcoming throughout at It continue meetings. the and continuing mean will dramatically the happening to it. anything. again doesn't rates to monitor we my always changing and

M&A. globe, transactions position to M&A -- already be As the to a very far same all But around makes think that there's at I'll strong now, done. the something it. competitive look about to as time, afraid the very not put if a say goes, sense there that's at we take ourselves been right we're but be activity fortunate Dan, in we've But we've

a as efficiencies last just, customers. then quarter, that provided around And guess, us I you updates to gave follow-up, Great. you your the

the on of amounts update as that and as customers both with can DTCC there number the around think more today. the broadly, that's ultimately, the well out and I how the those increased potential as dollar backdrop evolving as are competitive just well conversations you given us

Yes, great. that give it you Sprague, -- question, Well, the appreciate to Suzanne who over to those Suzanne? Dan, I'm data. will and turn that's going I

question. thanks Yes, for the

futures offsets from Most between And is cross about number program U.S. options in activity. members swaps, daily interest members we of rate through participating that in with and continue savings participants delivering as increasing upwards where program. We interest in average that $X against program our in clearing swap of the FICC, So margining you billion, program. mentioned, that program. we XX margining achieved of program terms savings for daily we clearing well. portfolio dollar have X of then have and average the of $X offer that in that that continue rate billion currently

well. it margining expand to both working focused are still and program be engaging continue we do So to on and of we cross those that with customers with to the as regulators programs, able growing

billion close make to and just Dan, averages day. a perfectly still margin efficiencies, we're our $XX portfolio F&O clear, So sure between to

or we So make way I sure that want another. one to just changed think don't that's

Our next question Allen Chris with from is Citi.

to wanted Any are about in from? seeing And ask deck of called terms from first which these just new customer new clients new customer we time. out impact color you're acquisition, the how the acquisition? of terms for much I in coming volumes where

acquisition it give Thanks, highlight Ms. things really big that part Chris. to Winkler volume of that U.S. Julie able of and her our of I think to numbers you going you. it question. to record team turn We to drive I do outside client some the I'll from that. is important of color over But Julie, one came that to globally. just new a But I'm the want been have with to the the some appreciate is the on is

question, for Chris. Thanks the Yes.

been strong base are our different those a of client about in us of And we over last an think client base. few our for One really our really New efforts certainly one model We're core institutional of that area this X excited years. kind has investment client buckets. retail and and acquisition yielding the results. is is pillar commercial

by growth, great. which our the XXXX XX% And in this We are average, client we're X-year our over institutional versus X%. that performance seeing almost year is up new outpacing

outreach. a and a new doing us that out inside low-touch that. sales that sales qualification dedicated our we've lead model this things scale and they're automation focusing So leveraging they're to in I'd couple growth sales say and lot behind of a accounts. is efficiency prospecting, medium-sized is high Certainly, team and around also on really greater data, there's and They're build team potential done to drive really really helping a

also funds really attract the seen of activities focused option a new of lot of to base. CME That have and are significant our XX% quarter. continues new record We a commodity client strategies number of launch hedge was up Direct traders. some this that helping create rise across

today, call model we I'm or bring institutional the to ecosystem. of them sure to well that are as for whether and products And powerful talk into TBAs, credit new reach opportunities the as a it's the that so really clients see those really lot about CME all us we'll critical as the on new

what focused QX, we over new really On retail accounts through and about into the our side, QX new and ADV channels. alone. how and bringing we're more on, In really less channels. we're about retail retail XX,XXX in many through how opening traders sorry, CME our we're many welcomed XXX,XXX traders year-to-date

as of And consistent -- in in and data pretty XX% time the so our is we released a we that's you the see what across previous of within XX% regions saw XX% XX% kind APAC -- growth that from increase really EMEA. and the among quarters, U.S. spread coming That this is year-over-year. that where you

products have, them focused so there and we're in CME. really where NCA so critical partners, to too, that by content, futures this successful, bringing and also into expect a new continuing brokers our to And existing the part the have drive that's this attracted really and what's on on our how space, bringing new we partners we are They're is traders that we marketing we on the and and continue to is seen ecosystem in those our distribution ahead. are success year to with that education, where working of

just And follow-up. quick a

launched just ] trading. that [ And plus on week last -- obviously, we noted surpassed XXX futures expectations. You Robinhood [indiscernible]

right any out frame how have to think volumes? I So growth, how it's may Robinhood's would you now when into we of, is think they way they there and XX about like account million expect translate -- penetration accounts

in one -- I the a own -- these openings content. to on think right? they have with this, going up launch on last these are they're week, the Robinhood open some those basis, all targets the And say the Yes. of internal of they account still they're I'd products with measured we're mean out, firms. about I making of are all working access sure their and working testing in

we're we them immediately. clients million to them So see want XX futures I be that sure, the make work trading we to But ready accounts that trading and futures. with products really right, are to those to don't think going introducing to are

can plus than what so what XXX predicted. is with and see has ] adoption rate And [ that ] even we have both faster those [ firms weeble happened

so so information as say their us in can as they're support them we and and providing I'd that's analytics, And well very customer advanced on their active trader in journey journey. all kind of how

just future Chris, we public to difficult I is very have that since to historically, of me things let it's So took add something said in predict CME the one volume. [indiscernible]

do the could see pinpoint open I what what think close or company, their you you're to can behavior not referenced of when look it's may a up that into. the the interest to really business customers XX-plus at comments. holders when transition growing as our be, years new into So acquisition in But by difficult you over that trajectory, my looking may client public new at I us and right, last being and large earlier

So acquisitions. future predict new for can't these But we are volumes. again, all factors client good

Our Budish is next with from question Ben Barclays.

trading from follow we products. minis about some up a implications it's predict Can as would it's interpreting I see like kind how the just about per the trading what but thinking implications. volumes Presumably, more hard know are able the what P&L to should of are the you like to about lower but wanted pick expect of activity RPC sort themselves, be there? hard sort volumes, you to contract we I an smaller retail do see think might as to the volume talk and and of like there. we people like. bigger But just about retail. think look What to rate of may know just Again, results we contribution from I how start new perspective.

very So comments. is Ben, a And here make couple difficult of is let we different. to it completely that constituency predict. me guess have I every

drops a I tiered a good volume So and That's tiers. know those that for my earlier I still incremental about to in don't is of higher the take pricing, RPC bottom thing, little down when comments a us that thing the good the with the talked volume. does line bit because increased

assume general, you talking on we them. you're value it's don't of to them when some of rate retail off So you not have price a going lower as products, in to about contract notional be in automatically recall, we per because a didn't may pricing changed pricing our based the

Group. from or price the are did when getting the on -- is mini value take they're that didn't what notional the Bitcoin they we priced the added We or CME So look. the the for base and receiving how and micro we E-mini should decide of constituency their value contract, the it client

look contract constituency it size contract. have pricing client or and of institutional the size or in we the at or doesn't of just be the the to lenses the retail So many the different

contract. balance So a strike I continue really client hard it think say business. say be hard to it's our per higher will it important keep contract, it's it's lower to rate be per with build a will we rate that to the to base But that that

this over year it's -- have constituency X. retail last think on are I million I again, depends it So that new or it the we a the attracting. And all said business times

intelligence, technologies, do. really as what we what it's is proliferation other very and to in to in Lynne? to with and other I revenues. of going into accessibility type institutional is it's artificial become time a think more again, to be that's marketplace move the with retail going But more the predict exciting can this going blurred hard forward rating, return to

I just spend RPC. not Yes. is on focus would in our add, growth

Our in focus revenue growth is and growth earnings. in on

focusing really on focused we're of acquisition bottom levels. It's line type any not growth and top picture we new the RPC that it's overall in on and that drive line, client if we're So and how particular.

a format you have is don't because I'd as the different to would guess we tell we And you like So to us formula, grow. continues everybody want Ben, market but I that I to think don't. special have special a

exciting And the as think truly at is we it's that's we to point the notional for one constituency. the going pricing thing a us. So based from I we're can again, the that micros do not trajectory look And I change did on basis.

a nitpicky, makes the curious, you exclude core OpEx guidance sense. quarter the those but of for we know sort of up the this your kind what one the Maybe kind that and more any licensing of sequential should the bit the That think on follow-up, about year, it. line looks just I how quarters? from little should what over Got we color fees a item, step-up just but lot of of that from couple picked something just drivers expect of like next

Lynne?

Yes.

licensing see phase, volume the the not step-up did levels we So and in surprising given a there. growth high

As portion complex, from comes quarter-over-quarter majority you our good a which equity of XX% nice growth, and had X% year-over-year. the that, know, up

year, that other that business we existing you're in some given is of have this off-cycle years, programs seeing that measurement period. have place a been the growth OTC strong it for clearing number item has over quarter do the in an last The

now was SOFR related no of There So in a because QX. I did our that in new we morning. complex. programs of this license couple the were fee would treasury get seen impact questions or

place in OTC side? for add Mike, main growth to you related the business have which to overall programs anything on those that be going So many OTC items have to are in been do and the the the again X clearing, years.

Yes.

continues business. to on thing growth U.S. OTC overall Just to growth year-over-year saw double-digit in We our and swap option bolster IRS one both LatAm futures volume add activity. dollar and

important highlight the swaps. to billion think that complex, we that Suzanne billion the that of is X% of to U.S. in with $X in is $X I see figure already dollar swap the out overall margin over savings in today mentioned portfolio

about $XX attributed and dollar in being for billion We have that swaps. margin activity is collateral to U.S. swap of XX%

of highlight true portfolio important over think CCPs buy-side CME bank in day and clients So swaps, the the some collateral highlighted material considerable we've mind not the had hence, put keep and with to SOFR also CCPs to dollar any collateral and that other have I that or $X all a would billion savings. in clients U.S. other and is enjoy at margin specific products. important that margin the It's to risk and levels. swaps margin currencies treasury it's savings

Some swaps and Canada, to Swiss related of are sterling those Yen, euro.

And for great our that's franchise. who of he's hell Dennis, new you Head wondering the were who of Mike those -- that was,

So you, Mike. thank

Thanks, Terry.

The next question JPMorgan. Ken is Worthington from with

the about bit I you CME? and further of digital launch appear to opportunity still have Can digital grow than wanted bigger for platform, the the to And amount. business, seems you perpetual the interferon about ask market growth to the a they've the good impact about had as market. at be on your market present to a quite an Bitcoin talk that think the opportunity business. perpetual futures would ETFs helped Does further the they calendar

TIm?

products, center to Ether, futures-based contracts. And the almost the highly at And Ken, in CME. asset only when Certainly, are developed XXX% complex market. they're our opportunity crypto XX ETFs, more and or but using at provide futures rates we in Terry. when ETF This classes, Like ETF Bitcoin provide CME the Micro for index up a loan an be Bitcoin Thanks, ADV the these not lot futures for XXX% redeem or underlie a the of our often those source Ether ETF ecosystem the both thanks and future to record in enable our against inventory And further Bitcoin see complex, strategies, futures such have up these It's rate for X spot-based [ grow not for related a and was our is the and versus to reference of ability way because XXX,XXX common also in seen reference the Bitcoin the XXX%, also development futures also look the even for as ecosystem. the Great. ETF up more better, trading to efficient spot the futures question. ETF. only structure -- micro, of interrelated at CF we transact a close with is underlying futures ] up more to volumes our of respectively. stock the we've Ether the

growing a is ecosystem. this So

that's And at CME, space, at the certainly are of are exists we're market, of custom those it that's with with ] in the futures trusted them design they for more offering it important to because working the in it's [ the regulated, and with we an continue times, U.S. a these need outside make do perpetual at crypto-native offer to center manner, they regulated to not transparent engage necessarily CME product But perpetual a market. it's whether all and all sure our and uncertain to platforms risk to sure they we products, could be We here that easy continue going continue other the that leader what comparison in here. not regulated a them here the to we critically customers transparent and on tools manage that engage or they make Ken, trusted, to to cryptocurrencies marketplace, need. in have tools and

some That give color you Ken, good? you are on that,

great. Yes. Thank That was you.

Patrick Our Moley next from Piper with Sandler. question is

FMX the one landscape since rates say today the launched anniversary X-month Volumes had have marks modest on futures its SOFR So competitive the to contract. least. been in

a maybe your exchange competitive since competitor and this of get just feelings to hoping the union updated just the landscape state on was I Terry, So launch.

the you're it's volumes have but been I again, think And early. Patrick. Thanks, modest, right,

any any -- relates to as not I'm drawing So it conclusions to competitor.

several the doing us people in. compete We create which to will lot and which trying months and is highlighted been able stay we clients continue today, we've today, you've for classes Patrick over efficiencies a with to last are that that are us focused things those again highlight heard asset in that our years, the of we on to

So think incentive I about plans our clearly there We -- stated we we the that again, I had performance some had strong about that rate we was products in. very did our not feel a growth good put and of that's think question to still growth. interest

I that goes the the you CME's go expensive end when The to we to also still think wider. fact users. it fee. cheapest cost to So that value the extremely the show products of will its And to is is offer transaction any bid gets participant

some are possibly can you color dramatically back end to competitors pay transaction be and some than program Mike offering, If wider cost look or could lot would of at of spreads our than add any CMEs, their the higher on this. the incentive which maybe to a with associated a their that that. more be

So back up. finish Mike, a come little color, give and I'll then you

see our referencing, for contracts as is thanks What Patrick. spreads move half early out days, tighter what a average SOFR quarter are is it's a and almost Terry the in the SOFR tick curve. you front month we still And Sure. bid-ask but question, Yes. tick tighter on

$XX.XX all towards tick we futures fee. equates in per size ] half contract the SOFR know, the of was to transaction As [

market. that incentive is potentially trade whatever to the Or

the signed program. that anyway, we can achieving to grow a very want We build were So $X continue efficiencies sure to Suzanne I FICC. lot firms referenced got beneficial. make place. focused we're billion We on think up. We've more it, keeping with There's and to we're close think bringing get it's we but a a and on firm's that on watch day business on the staying Patrick, that our really

up and be billion they're plus that, hopeful to basis a want signed with on they daily see starting that we're to arrangement. So don't of that they the $X potential that out FICC for get left

but So won't like again, that's a position I comment than think any further I I that. there, our

said If about. to are as to have to were referring some just it relates that's referring know been I there SOFR, put media local of Or out about you treasuries? I talking so what you're you the

but hear on be that that. SOFR, Just say to there's you have happy thoughts anything to I'd treasuries, on if your

clear are loud publicly I rebuttals is which And could getting this. pretty irrelevant and in keep [indiscernible] I monies held that held how it said know from wouldn't about that U.S. I've matter. feel participants that I be U.S. banks, about

and decisions contracts the We resolution the not cleared that to authority United be of England a default, fact, over to make there. the the who Bank gets are talking if, States authority of those would and of be about and were America, the FCA, the in

has know it. I duly clearing that that's keep dodging our that argument a people our been regulated, and So nothing arguments. they're entity with do got to

about I overseas treasuries, at and not same overseen government. authority having So the the could foreign having people have that I continue not only time, of to but resolution make being to as been and a the cleared U.S. as States think I loud many can be effect by people to this. possibly detrimental United sure understand being regulator what be the

from under that, out to see move I as America pull they many I'll but to to So my of the we'll us compete laws, States down people, case. here on because if and wait want back our the with is said very and chair that's I've over, United think my a not it's but that backing walk argument I'm And argument because legitimate. into not

on FMX potentially you That's value and people great just you talking to could pricing, about response this about in Okay. you the speculation on launching, specifically rates. lot of given that in cutting feel been then on color. There's what what about call follow-up rates. But a possibly recently do a you're And spoken consecutive you've rate increases to possible you're off is misguided price rate I or -- us table that is the our is, coming for rates complex that at you've the your question year ADV. provided interest the guess of or assume point? to third off customers, record it track in for this

a think run going we're about business we're what how going know forward the to anyone it's I assume for to on they misguided thinking pricing.

all anything competition. tiers to our whole throughout got host do all the have with As It We we time. said, different the doesn't of to It's years. adjust the marketplace. with things do a I've do

I quarter stated any did that incentive incremental put in earlier, we growth as we've a had Patrick, record So that's and for not SOFR plans treasury. an I said new place clearly and both this in

that where volumes think at speaks I So today. we're to

comes The with Alex question Kramm UBS. from next

clearly my the the acquisition lot Maybe you class Energy of can go going lot, frankly, context perspective, in in focus years, a more there everything next on I most energy here? macro couple maybe into and be changes, are to we seem the a structural interesting mean business of customer in detail that, transition, new that's of the from quite on. asset given changes what

U.S.-focused these So you are obviously, have of business, a global. very changes some but

So what you're that your what new world capture customer doing customers of And you're terms in around maybe generation and just positioned? what excitement? are some structural you're how doing seeing wondering already different to of and maybe the

mean top as for turn next this point transition continue couple but it it could asset we really question. raised the the it. what good Thanks I'm class think or of either going of over a of on to to build to years you I about Derek, out

yet to there's So a lot I yet. verdicts be think of read

this class. interesting asset So with it's

So I to point Derek. it right out, you're think

Alex. Thanks, Yes.

that things We options about our new across a together are XX%. I complex quarter we revenues of business XX%. year-to-date think our whole. up in another us one, up as now. quarter And lot a with And for That's record the put you're our strong right Energy extremely business. seeing record seeing we're a number energy the actually, volumes a putting for up

business, hitting of business color great from. time the outsized talked of and year-to-date commercial is at that is boots that, new market. When of first previous the look seeing shores talked provide customers XX% some about results customers engaging time business as physical into at bringing Europe so our We client business, you new this look Henry question. record year. and outside up you When coming the the on this WTI We Julie is growth the I'll a that that underlie acquisition we're for calls. look asked excited You new digging that buy-side at where we on coming, our business That's And I have at and ground, about. what coming the the Hub lot into of story with we're from Asia, U.S. flows look the buy-side of growth the you that's about a growth the numbers spent

is this view, coming this up Our When is commercial customer our bank business you up point a XX%. business geographical the is our up year. from, LATAM XX% this XX% year growth at year, our of from look business up XX%, where European business,

U.S. well. hitting we're growth, that's Asia metals So surprise facing they're not the import side the us. They're shores you for see and that there Europe products, acquisition as the as customers or are flows priced on energy risk shouldn't global is Those at necessarily recently and customer physical when now flows Asian benchmarks on new physical ags and driving when to that of looking traded of true they that European this now. it NYMEX new are is customers adding have right complex benchmark but only the our

the results to business, at we're of that are participation. driving seeing you when the flows physical So global look the

exporting natural a a year, Henry WTI, market that into business is of European CME flowing from Henry seeing amounts nat pieces to exposure markets gas So Hub, is been driver now to not perspective, this a is across that portfolios. in growth contracts XXX,XXX business. own almost we're record overall at roughly their Hub of When business. the market gas record other gas as options our we're growth seeing U.S. to at customers, gas level the you activity a this flat the extremely pricing XX% and business we're which these adding our hedge on priced where back of we in a market of of That's basis. XX% big share faster year. difficult as of is growth price are even record on the natural This side look nat well up That's on couple significant just the producing the the and I'd point is in

seeing on side. we're So increased activity option the

the product hopefully, gives from perspective the client from regional underlying perspective. So perspective. some the you and from that color

Lynne?

being Hub. the and to our to drawn, Henry saying, bit And in lines add seen Derek business we was both what strong just little new a with Yes. supply these Asia crude have in and growth Europe

come seeing natural trend, see These to online meant are Henry multiple is multiyear the are there that and limiters I liquefy it couple think in the of facilities we're of but what the also a on next a in longer-term side years. are internationally. then export one that number are as we ability the to build-out ongoing. the projects, Hub gas do liquefaction to do We expect

to business customers back that more to also capacity that be point. our for So export tailwind export increasing that would to a then could hedge look and ability as international

your did Thanks, to question. Lynne. get Derek. Alex, Thanks, that

I is I'll a one. been you're on X mean color. did. trend. really squeeze tax And helping it that's the that suggesting international rate. I quick one growth think here multiyear Clearly, really Great the

around we think is plans? if for that XX% in So to your this continue tax use? you -- rate this do better XXXX, Is a

again, referring you're assuming to I'm this... energy, Alex, on

Sorry, tax rate.

I'm we sorry, a here. hear. to sorry. It's thought you -- connection hard have bad I

Yes.

So based the the part we and guidance did will growth seeing internationally. tax years. we Alex, for Certainly, on outlook our guidance that it provide as of lower coming we're outsized

noted. political that We of going the factors growth have dynamic be what's be are impact seen to changes Obviously, and play, will you potentially there for number that taxes. administration, in years, in several like things outsized on a including as

go-forward rate to a it's this little point, that. at we'll position on a tax take for follow us So premature but on up that certainly

Thanks, Alex.

the couldn't properly tax -- Sorry you on hear issue. for the

is Voigt KBW. next with from Kyle Our question

broader to back going a just on discussion Maybe pricing.

go quarter you've past the years, changes the that pricing Over fourth effective in XQ. in few announced

XXXX, pricing you that to change you medium I levels change effective assuming on not Can us changes XXXX? For future that give a X%, are update about to was term? guess any pricing considered over went of X%. that how in just think XXXX for 'XX, volumes guided reason I you're as to X.X% to pricing X% think the And I think there in an is thinking assumption good baseline and

I if we X. year goes increase there's a that that can just Kyle, or it pricing next by the for year, into than and X% we see it throughout -- the lot think entire other evaluate

sure the there's heard heavily be associated means you've of One to change add say a that. value with this excited for of clients. going I've We transition. to the invested We're our is good things and future about What me our always Google I'm said it clients when pricing. we

impact able that benefit, maybe just could way were that to suggest before a increases, that's something again, at the an we one board. obviously. But period, what marketplace it's year But of pricing do another, comment we price we you to you but deliver And have again, on their when pricing So that were becoming I evaluate and was over further? entire decisions we to to think to my do. increases. we to time blanket the know do it throughout make want pricing able or that because bring Lynne, any some that any look pattern, I not

on to would transaction I add that thing only the you The Yes. Clarion X%, quoted the was that fee. X.X% is Kyle,

include so changes. schedule fees. cash to component is different include look things there. also we're or about Just There keep pricing other the data on as changes and things we incentive agreements levers in thinking noncash and like the fee could at collateral could do it Those that mind programs collateral,

of clearing to some of those throughout So total lines, revenue we've X% year. transaction other the towards said fee we fee. to been X.X% did and tracking on this We we X.X% made and course X% changes given that guide the on to this on year the

follow-up then for the on Lynne, And a trajectory. Great. expense maybe

by should that cloud confirm had address you of still that interplay migration remind year. can trajectory about guess, spend expenses I $XX time Will years? in too. 'XX million then how those of of of us spend frame, was you we maybe whether migration this is think I level be $XX the expenses think And cloud incremental and track? in XXXX, migration each that that 'XX, you needed And million expected on over can grow the into DNA there the and to of

Yes, sure.

the year, on for the $XX is for spend if migration million. So at this spend guidance look total our you target of

between and of have $XX as difference million do we've cloud. to expenses as the the Now on that been increase, roll-off business usual migrating existing you kind the some

are in or million that about to you million of which off So differential costs rolling that would increase see that $XX you year-over-year. $XX get

on that are we So our expenditure. guidance on track with

said the expect migration our years. related we've we think first what that for X to also I costs is would incremental

We in year are X.

next to included to that migration. expenses guidance. in we would So see the year note incremental costs do expense Google-related expect that I overall related still our

our expense So that include by guidance that implied X.X% Google a spend. did

starting off been So that operating of as expense. see on-premises some down has we trending to of rolling benefits are that the

Bank. question next Our from is Deutsche Brian with Bedell

very and Maybe just on much the back competitor to detailed. very, on the SOFR, very X thanks very very, commentary. quick They're one -- good and Terry, for

I mean, you pricing and something that, in incentives bid-ask is it size of compared any to tiering, contracts the of do [indiscernible] the certain use in that -- that? the wideness and is the the could members the that could that using the future? of something from On is like the should market of you SOFR you But tick that do obviously terms future wouldn't spread in seem competitor? need pricing would to that. increase the share with on

Yes, this so the because not to Brian, now. or And right here predetermine clients I you I'm to question. to comment what levers bring going appreciate that I can imagine, value do as call I'm going to have should on should not as that to different we on I not continue and many our say, there's

value-add. theoretical we certain and incentives a quarter. -- things -- put look team planning had look to But on on record game have I as We increase said, and here we -- pricing, any we lot not last things for of certain my a in at at did do at we the we

date. we're way pleased anticipated our So offering market pretty the has to the with

it'd to be we me this different to of So foolish do moment. suggest try would at that anything

exiting I the totally quarter the September rates cut had could Yes, then, in clear. you collateral balances paid the guess, given month? for then and the we Lynne, review And and rate maybe the just,

Sure.

the $XX quarter. prior So in average was QX, the billion. were billion cash which $XX we our saw balances in to similar

earned points. consistent basis rates on at Our we that XX remained

to points a that collateral noncash the continue the XX billion to slight noncash on and for billion versus $XXX increase basis $XXX earn quarter On we side, last collateral. quarter, saw we

So increases is collateral in those both to months we've balances far in of $XXX averaging the billion noncash billion. seen in are $XX slight cash And U.S. October, date. averaging elements. The

different that into Okay. And same is Or given is the XQ? spread the coming rate cuts? the

earning to 'XX on the Continue been the have other is XX between ability the vehicles. difference our The cash our returns XX clients. return to some optimize the we've collateral, using points in you that basis

was the overall If So been hikes. that to rates rate points get that at Yes. not not quarter. those XX changed, and since the be same continue few to change did but [ returns IRB pressured, it's paying the during ability rate at been outsized we're basis for X.XX%. It's decrease, and that might quite ] rate has a

it. Got

Okay. I'm sorry.

points. that XX still is Is spread the right? So basis

The is able spread we're returns. to optimize earning still We're those more XX. because

see saying, yes. what I you're Yes,

it. Got Okay.

You Thanks, Brian. good? else? Anything

good. Totally Yes.

of is America. next Our Craig from Bank Siegenthaler question with

questions in my try ask to wanted to I them way. were, of different a Most

think expect also, its competition, I future do to this, largest was We're you core if SPY, first was WTI? repetition. are follow-up including any its index Levo's on curious, a we clientele? the quarter. will how And we apologize have SPX uptick able curious tax launch Robinhood's [ differentiated one, and Robinhood's demand. in thinking But compete options products given inform launched And efficiency. on this do So see I given insight which against you to you just what ]

All the Craig. right. I question. appreciate Thanks,

about I'm product, on [indiscernible] this in On versus going talk that a SPX Julie that let to I'll moment. Robinhood the and the take Tim let the

you So start? Julie, why don't

Yes.

trade trading cash the Craig, portfolios. is first traders through existing new are entry have cash what the up coming have is this our suite and and hedge products micro typical options. seen to point the active question, They stock CME typically think equity within in retail experience to using I we clients equity

equities as follow part that first. our on we to And space you so a an diversification derivative is the are overlay of natural What mentioned, in is up quickly have we then move to this the important able into as is, product seen then with well growth, retail with we see suite has metals them offer gold. where continued too, our things to distribution are energy to complex WTI to of our our as work partners a and like lot micro able for

talk turn things. things I'll to the of to competition bit over through a little Tim So side of

coming ETF online to my excited partners, it years CME in against their retail if are That I'm how is Great. QX, a provide to tax fact XXX factor also [ Thanks, of versus CME other important to that our at at trading we a the be we at CV a we risk, an perspective. on tool when here associated products but will contracts at are that very the important out by the tracking look the ETFs also interrelated, efficient the that to able That is when more S&P ] to products it are distributed an determination. had third at at ] for futures Craig, to and only product when highest in it even as XXX are our question. manage terms an our [ not for When clarify be strong way we I of look appreciate that something that ecosystem not. And Section futures Group S&P that look S&P with the our XX:X tax. XX we've at they index-based ] the Robinhood futures ], ETFs, looking we're gain also multiple note are at distribution continues are highly XX-XX capital at we access XXXX futures we're the and doing is contract through and performance at all when look index looking choice. And enjoy traders And just quarter. the [ blended market. are that, that enjoys Group, ETF these by a of partners options from we're because [ They

we Group. the advantage offer market platforms it a will for capital distribution to advantage at opportunity the more efficiencies, even of what alongside here about cash efficiencies the be and markets not optimistic we So CME the our products think take only offering all great but tax

great. was Very that No, comprehensive.

follow-up, event my have a for question we on contracts. Just

So a a in of I'm sure States. for upcoming And for been election to large a contract, example political a is the if the there as you're vertical and an contract this wondering media is an It's launched some this election. and large given think election opportunity CMA I'm weather a integration lot broker offering online event platform recently. aware, TAM and if contracts United bigger role political you of play getting a attention broker in business there's so U.S.

for And start ahead or thanks will go as comment and well as make and X that. Tim Craig, So it to let I then a question. the relates

the an going don't and time? enough [ question at not until in dissembler No, for sure We at for but CME to I asked, mature not are it that was that been the that mineable some watch but readily know a list it something forgo we've political make core this participate know your answer many, is any like that. as is jump moment So it if that we event And we product thought But the ] us today load opportunity CFTC. I'm did not into to given contracts? to see years the in never being product do to that that we many partake in. to I the about not too way, asked Bitcoin. in suggesting different see list moment this we decide see cycles and need in being the that's before avenue more that wants in under is, to don't we principles listed of time, might future. we we was

or know question going your to not. we get are was, So if I don't into that

for they're sure my me team. in timing is if opportunities and always at to everything that no, was we this want think we So forgo moment perfectly that I make potential clear. but that but right, time, never

see So works how out. that we'll

On I'll let Tim the other address. part,

Terry. Thanks, Sure.

other offering contract products offer I I of the to those say to our here would market thing futures in us that Group CME. have respect ] at think [ contracts for the way leverage with we that it's one at to event is a CME the important

our future products product key a So [indiscernible] we on holds also our are key should that they indices. the us new to Group, look at have I have part right event said with focus work longer-dated asset engage are continue underlying sort event want that contracts contracts older also at CME all associated We'll we'll else be types transposing year-end an contracts, approach figure those market is true for markets, offering equity a that ways of marketplace. Like of which offering our the their if continue in in what of additional out participants there to for to trades the to on we they now classes, contracts the to sibling to to but trade form, in more to but see earlier, it's rent liquidity to market same with

did Craig, Tim. Thanks, questions? that your address

No, that great. was

is Lau next Owen from question with Our Oppenheimer.

XX.X% expense XX% year, was last only the based is X This I the guidance. my X on first year. revenue much If for comp about quarters have ratio is year look average. your math. on a your But question than first this comp of quarters, your at So your last year, about stronger I ratio on

we expense comp last on full any the quarter? big fourth year the there year? is comp in change incentive true-up year So expect this should a versus And of the

Thanks, Lynne? Owen.

Yes.

will incentive or So Owen, we through the for throughout based at incentive as compensation, do look comp year quarters. have in the various that performance-based true-ups we flow

of would business. seeing the I in say operating leverage what is So you're our some

not So to direct drive head it's revenue, relation that additional adding count. a to us

year. just this So of I through the model that you're think seeing benefits rolling

expect bigger in the think we we that about quarter. what Is from like So margin fourth true-up should should perspective. a

No. No.

of over happens the true-up the the year. course So

the is respective each underperformance, will any outperformance you or of quarters. see if in there that So

And incentive a are So of expectations built guidance our into in the on for our it's the an compensation year. fourth true-up comp quarter. expense not

with operating in same with We're we the model we the have the of leverage expense same people that growing have. amount we that place cost that have because revenue of

the years [indiscernible] why is up math that's on So to

is Cyprus next Morgan The Stanley. from question Mike with

treasury on Maybe abroad. just earlier you, one clearing comments for your to Terry, coming back futures

what arguments we are in your features see, And regulators, And any, then abroad? with of hearing to not might treasury of clearinghouse here you cleared receptivity your to conversations that should Just curious taken? it level benefits what if sort actions to had set U.S. be order related what in from the a would the access clear in them netting up a U.S., clearinghouse scope treasury for London? futures be to

That's of an going the one of I is people I the to traction on question, market cash is think a mean on that things larger getting some basis it than which about talking realize trade. derivatives today, is, am than notional great XX% futures is Mike. I and of clearing treasury annual and the size the market don't I'm

that treasuries clearing of new a not of guidance the particular law have exclusivity joint of on treasury under guidance. any on cleared the law but cash you SEC, and So being the regulation cash

the cash, futures, make these a I to are think work. market ETFs treasury treasury products, part potentially that of people that huge start realize ecosystem that

understands. that now. of the So there people I and don't the realize it, market. of Again, are importance I think size realizing the everybody derivatives think I think people

are as Hill to And it outcome of people relates a cannot that that the either. cross-border the the been they're means will regulators. have seriously. futures. it tell how potentially under there's from very foreign So the which been for to take back be analyze to one been or which clearinghouse today, what responses know predict way sovereign notice nobody I are have starting talking there's that are amended, I work the this trying about inquiries going the to taking is clearing from regulator I they is another. But in And does debt what MOUs that it. be they think hill you to I coming to to

different no know, laws not U.K. may The the longer or they of under may laws Bank of is now the they bankruptcy both participants you from bankruptcy the U.K. -- important Bank what is institutions. their the and -- U.K. related no of is for registered the longer have systemically CFTC default MOU the and the original in bankruptcies all As with in the England that to have protection England changed was became And as U.S. when U.S.

changes. a I So there's lot think of

importance if it. a the mean up U.S. explaining it they And clearinghouse them in question, We're were the your which to did and of to -- LSE had any are ] people what come that. U.S. don't they understanding believe The U.S. offsets believe, does I as [ to under clearinghouse that. that open and be suspect And they LCH they part a So in in of I the up have London second in it's fact, they reconstitute dormy. decided that would if, clearing entity, the for running would products. now all be at is not here what London.

against the they lose the offsets So portfolio. would

have the do of benefit the costs the clearing would So reconstitute it to what's associated House to the the States so. ask and I house guess United I Clearing for to doing London in them

So colleague, said it to that anything I [indiscernible]. Suzanne I'll to Sprague, turn up my clean

Yes.

past the to to hard in but second on the to today, very regulators how so. our is that do part Just at it clearinghouses own speculate in expensive to of has experience geographies, look between on question the offset that ability your the it's achieve the different shown would

savings the clearing hold the to basically the give houses regulators margin you your amount to in capital had So participants. required the equal

the the be in has to to still the Terry's each offsets that So back would to capitalized overseeing that clearinghouse. spite regulators give The recognize the margin resolution resolution fully given efficiencies of the any regulator reason able of have one margin clearinghouses. fully to point, really you're that regime, be customers. And you of jurisdiction benefit been between domestic in even be the give for each that basically wanted clearing domestic the have on to capitalized the houses to

able hurdle would hold that as to been well. true that get anticipate hadn't the I future past. we would in So the in over

Super.

if heard I could, swap interest I collateral. clearing, reference thought on a margin follow-up, billion a Just rate I $XX to swap of

house over. their you of business How could that contributing you're side? reduce for clearing seamless your rate move interest business? What how convince the rate a be and you curious to given on that And to much might of customers clearing to overall that's of How seeing you? like to activity maybe swap the interest overseas. swap be steps U.S. that appeal move take frictions able customers elaborate make just growth Just larger what opportunity to you more it more was Seems sort some increase on across a clearing for might much bit today? growth over this could

address Suzzane that? and you to Mike, guys want

for Thanks Yes, sure. question. the

coming of percentage terms I are point of of a that that just terms I fluctuate, efficiencies margin requirement the That to the the that So of dollar reemphasize total of we in gained portfolio XX% between the tends U.S. have as in activity again, total, and will swap from the it the of margin swap think, majority. amount the is program. in amount XX% about margin

in especially of X-day point offering, since risk level of for I margin space products. clearing the focal to a activity the in we been the efficiencies require mandate a primary think driver because large period really swaps of that a clearing, have regulations that capital that swap for see our the those is onset

is focus offer class complex options. on and even there within swaps being rate other futures more or the efficiencies like interest able asset other complexes So across asset the classes to within and

the I'll wanted So to anything landscape. for you on pass Mike add competitive to it over else there

thanks the Mike, for Yes, question.

sheet. kind our SOFR to short meet Basel being of first and treasury margin game about all talk of theme of is going the me, time, futures period what end liquidity and futures, business our dealers exactly efficiencies this is with how the III here swap a my you're is all was capital, For of order between tightness portfolio. Obviously, right a and impact to on street now the with balance general challenges highlighting

do interest and calculations. what-if proposition. definitely We're of little us. clients. scenarios seen sending portfolios bit of front value to in a definitely explaining some portfolio we're this renewed to in So some We've

your do it us. good So area a think, we to that is point, growth of for

is Our question Cowen. TD Bill Katz next from with

on Just maybe expenses.

seasonal Just quarter. assume your well fourth year, the guide instead you $X.XXX for pick billion reiterated some of up of would which

of the would that do is versus how that XX% margin at about high forward? line? of about So to business the structural? seasonal a bottom Is you a as think level much operating there going natural drop very And margin. conceptually, that we you more you're How the profitability, then governor to let think

Yes, is Lynne. Bill, this

mind have of our to events marketing quarter. one in question, in So first the on is we larger your typically thing some keep fourth

not for unusual related it's see spend. an us to that that So to quarter in increase

you So by million. our look is implied XXXX, see, expense the would be will QX to to if that That growth $XX back you at QX guidance the same QX QX. of growth was this

So to majority that spend. of going that is marketing be the outsized

retail like joint will new the some also support that online. go it things to of FCMs Some for come the of have

opportunity capitalizing you on continue of migration some growth. And some line. cloud our of will in So the growth see of to expense, that kind then that technology in revenue for that up ramp

and anticipated move on grow, the that offsetting in continue more rolling to that our will the through. you we of up. was cloud, see see migration depreciation But moved we've seen that you applications amount declines path guidance in would as some we've all of that As

be. terms on In do If to We're focusing new margin operating driving drive in margin kind of would of our are new don't focusing certainly there on we operating us invest what how or growth going an opportunities that, growth. initiatives, target on instead for not we We're are to on opportunities the before. we target that margin, to similar earnings question growth. RPC focused

nature cash-generative enjoyed we we mind a to of where to it's something beauty obviously, target of return level. have and -- in but of specific to margin and of relates for the us So the cash shareholders. is our part that's model our that very nice lot not it of a the but ability margins, a have business, the

kind the an or tend seasoning a you is for volume broadly, percentage would point that so Okay. there of about just may be terms opportunity you on think to total How is whatever sort be, rise think appropriate or what the just sort a the let's opportunity. what those clients as growth? do already, of And the way to -- given just your any back about of And do as in of platform of uplift that that follow-up, that to a see ADV. year the retail say, of going quick ongoing

can just I'll And maybe bit little I let talk more. think Bill. already, a you add Julie bit a little Thanks, on you of but did growth. a the it lot retail

as Yes. again, I distribution our they And slightly have different predict So Terry partners, difficult our that you've also of got to partners distribution have revenue. are earlier, mean, of right? mentioned remember, kind to firms. some businesses, we across futures-only

broad us are a to We as that coming others product portfolio have providers. have existing and initially CFD

these well players as of some account size different each that that Europe example, partners in targeting as these just we're For well. as working the of distribution with are

so of sweeping traders education content across bringing more And that or well into as net highly the ADV can marketplace we're growth to difficult really new give our which what as that. opportunities on it's focused and is why our a view kind generalized into be,

with work these of distribution we So partners. each

most great And around appealing hosting XXX each are doing in are bring third-party also strategies them continues online try content other also with else talk of people be help about really that have their of still with way space. We them, terms well just in them, how influencers and to them we acceleration what them revenue to the both the person. This joint trading events globe. in of some over of of to what see is what is and a we fine-tune growth that and can their of be to in educate

into to volume about much that order sure that's trade right, time, which micro our our product to clearly, volatility. And right? where product very equity contracts volume. switch those their that So moving, multifaceted point and to about them it often in in are gold partners making talking provide again, in we so already. equity if seeing vol XX% I'd earlier bring right, initial is that, what year-on-year interest down, to diverse really, to is plays a spoke with Micro we where, say, information I with really up, portfolio also when what really is are at can going higher And is working that WTI we are to they're saw we And approach

at is this to part really next other new some partners opportunities the for with of So in product retail and year, space too. our look continuing strong our offering

So we're excited that. about

was our were beauty again, Bill. one one, X this moving. of the It Julie. which just X in us. for just up. All up Julie amazing And what the same the Thanks, classes of add really asset wasn't time, at Thanks quarter, to to that last were said, is all as

Bill. So thanks question, for your

was now back call that And our remarks. for the over I'll turn last question. any to closing management

for this throughout with you to thank quarter. forward next communicating the I to you and again you talking look very us all you We morning. quarter I joining much. appreciate

safe. you So be thank all

does all Thank conference. That for you. conclude Thank you participating. today's

this at time. disconnect may You