CME Group Q1 2025 Earnings Report

CME Group EPS Results

• Actual EPS: $2.80
• Consensus EPS: $2.61
• Beat/Miss: Beat by +$0.19
• One Year Ago EPS: $2.50

CME Group Revenue Results

• Actual Revenue: $1.64 billion
• Expected Revenue: $1.56 billion
• Beat/Miss: Beat by +$84.08 million
• YoY Revenue Growth: +10.40%

CME Group Announcement Details

• Quarter: Q1 2025
• Date: 4/23/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 23, 2025
• Conference Call Time: 8:30AM ET

CME Group (NASDAQ:CME), together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. It offers futures and options products based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals, as well as fixed income and foreign currency trading services. The company also provides clearing house services, including clearing, settling, and guaranteeing futures and options contracts, and cleared swaps products traded through its exchanges; and trade processing and risk mitigation services. In addition, the company offers a range of market data services, including real-time and historical data services. It serves professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments, and central banks. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. The company was founded in 1898 and is headquartered in Chicago, Illinois.

CME Group Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Welcome to the CME Group First Quarter twenty twenty five Earnings Call. I would now like to turn the call over to Adam Minnick. Please go ahead.

[Adam Minick, Executive Director, Head of Investor Relations at CME Group]

Good morning. I hope you're all doing well today. We released our executive commentary earlier this morning, which provides extensive details on the first quarter twenty twenty five, we will be discussing on this call. I'll start with the Safe Harbor language, and then I'll turn it over to Teri. Statements made on this call and in the other reference documents on our website that are not historical facts are forward looking statements.

[Adam Minick, Executive Director, Head of Investor Relations at CME Group]

These statements are not guarantees of future performance. They involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statement. Detailed information about factors that may affect our performance can be found in the filings with the SEC, which are on our website. Lastly, in the earnings release, you will see a reconciliation between GAAP and non GAAP measures following the financial statements.

[Adam Minick, Executive Director, Head of Investor Relations at CME Group]

With that, I'll turn the call over to Terry.

[Terrence Duffy, Chairman & CEO at CME Group]

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

[Terrence Duffy, Chairman & CEO at CME Group]

and then I'm going to

[Terrence Duffy, Chairman & CEO at CME Group]

ask Suzanne and Sunil to comment on our market operations during this high volatility environment. Following that, Lynn will provide an overview of our first quarter results. In addition to Suzanne, Sunil and Lynn, we have other members of our management team present to answer questions after the prepared remarks. This quarter represented the highest volume, revenue, operating income and diluted earnings per share in the history of CME Group. Our quarterly revenue crossed $1,600,000,000 for the first time and we also exceeded $1,000,000,000 in adjusted net income.

[Terrence Duffy, Chairman & CEO at CME Group]

Our record breaking performance in the first quarter demonstrated the growing need for risk management globally. The first quarter average daily volume of 29,800,000 contracts not only was the highest quarterly ADV and CME Group's history, it also increased 13% compared to the same period last year. This strong growth was broad based with year over year volume growth in all six asset classes, including all time quarterly volume records in interest rates, equities, agricultural commodities and foreign exchange. In aggregate, our commodity sector volumes grew by 19% and our financial products grew by 12%. This quarter highlighted the strength of our product diversity and the ability to customers for customers to manage risk in times of uncertainty.

[Terrence Duffy, Chairman & CEO at CME Group]

It also reinforces our past comments about the importance of deep liquidity, especially in times of market stress. This was also a record quarter for our international business, which averaged 8,800,000 contracts per day, up 19% from the prior year. This strength was driven by growth across all asset classes and including quarterly volume records in both EMEA and APAC. We also continue to innovate and evolve our product offerings to meet risk management needs for our clients. We recently announced several new offerings that will create opportunities for stronger links between cash and futures markets.

[Terrence Duffy, Chairman & CEO at CME Group]

Later this year, we plan to launch BrokerTec Chicago, a central limit order book for cash U. S. Treasuries that will be located co located next to our U. S. Treasury futures and options markets.

[Terrence Duffy, Chairman & CEO at CME Group]

Thus last week, we launched FX Spot Plus, which enables Spot FX participants to tap in the CME FX futures liquidity and gives FX futures users broader access to OTC liquidity. Looking forward, we continue to see very strong volumes to start the second quarter as market participants look to hedge exposures to tariff policies and geopolitical dynamics. Our open interest today is 7% higher than at the same point last year with strong open interest growth in our interest rate energy and agricultural complexes. The strong open interest trends tend to indicate that despite the high level of volatility market participants are not leaving the market but rather continuing to use our products to manage their risk exposures. Risk management and resiliency is paramount at CME Group.

[Terrence Duffy, Chairman & CEO at CME Group]

With record activity this past quarter leading into April, I'm going to ask Suzanne Sprague to give you an update on margins and Sunil Katino to give you some color on our resiliency during some of the most unprecedented times that we have seen. With that, I'm going turn the call over to Suzanne.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

Thanks, Harry. In response to the heightened levels of volatility earlier this month, we proactively increased margin requirements in various products across all asset classes and incremental steps over the course of April to ensure adequate collateral coverage. Liquidity demand due to margin increases are typically a fraction of the size of mark to market cycles attributed to daily price moves. We set a new single day record for moving cash associated with mark to market on April 9, collecting $32,000,000,000 from firms with losses that day and paying out $32,000,000,000 to firms with gains that day. This far exceeded our previous record of $22,000,000,000 In comparison, increased collateral requirements due to margin increases on April 9 totaled seven months ago.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

Current numbers and settlement banks have been performing well given the increased volatility and liquidity. Risk management is of utmost importance to our business, and we are monitoring risk on a real time basis every day regardless of market conditions.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Suzanne. I'm going ask Sunil Coutinho now to comment on the technology and the resiliency of our markets.

[Sunil Cutinho, Chief Information Officer at CME Group]

Thanks, Terry. Despite the high volatility and record activity in our markets, including seven straight days, over 40,000,000 contracts, our systems functioned as designed, Ensuring market continuity during a period of extreme volatility. During the period, during the week of April 7, we saw record order entry volumes on Globex exceeding 13,000,000,000 messages over the course of the week. The system's ability to handle record volumes underscores its resilience.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you Sunil. I asked both Sunil and Suzanne to comment. So I think it's critically important for analysts and investors to understand what we do here on a daily basis. Sometimes it doesn't get quite as, but I think during the unprecedented times that we have seen, especially over the last six to eight weeks, I want to give you just a little bit of a flavor of how we are operating at CME, which I think is really important for you to understand that. And we look forward to your further questions during the part of presentation this morning.

[Terrence Duffy, Chairman & CEO at CME Group]

So thank you both to Suzanne and Sunil. Now I'm going to turn the call over to Lynn to review our financial results in more detail.

[Lynne Fitzpatrick, President & CFO at CME Group]

Thanks, Terry, and thank you

[Lynne Fitzpatrick, President & CFO at CME Group]

all for joining us this morning. As Terry mentioned, during the first quarter, CME Group generated revenue over $1,600,000,000 for the first time, up 10% from the first quarter in 2024. The average rate per contract for the quarter was strong at $0.06 $86 down 1% from the prior year on 13% volume growth, resulting in the highest quarterly clearing and transaction fees in our history of $1,300,000,000 up 11% year over year. Market data revenue also reached a record level of 11% to $195,000,000 Continued strong cost discipline led to adjusted expenses of $475,000,000 for the quarter and $378,000,000 excluding license fees. Our adjusted operating income came in at a record $1,200,000,000 up 14% year over year.

[Lynne Fitzpatrick, President & CFO at CME Group]

Our adjusted operating margin for the quarter was 71.1%, up from 68.9% in the same period last year. CME Group had an adjusted effective tax rate of 23.1%. Driven by the strong demand for our risk management products, we delivered the highest quarterly adjusted net income and adjusted diluted earnings per share history at $1,000,000,000 and $2.8 per share respectively, both up 12% from the first quarter last year. This represents an adjusted net income margin for the quarter of over 62%. Capital expenditures for the first quarter were approximately $12,000,000 and cash at the end of the quarter was $1,600,000,000 CME Group paid dividends during the quarter of approximately $2,600,000,000 and 3,800,000,000 over the past year.

[Lynne Fitzpatrick, President & CFO at CME Group]

We're very proud to deliver the best quarterly earnings in our history and pleased to see the strong start continue into the second quarter with year to date volumes up 20% versus 2024. At CME Group, we continue to focus on providing the risk management products needed by our clients and driving earnings growth for our shareholders. We'd now like to open the call for your questions. Thanks.

[Operator]

Thank you. We will now begin our question and answer Our first question will come from Kyle Voigt with KBW. Your line is open.

[Kyle Voigt, Managing Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Hey, good morning everyone. Maybe if I could just start by asking one on the operating environment. In some prior periods of extreme volatility and increasing margin requirements, we've seen deleveraging occur by market participants. As you kind of just mentioned in your prepared remarks, it doesn't seem like the open interest data really supports that there's any type of significant deleveraging occurring. I think open interest total OI is up since the April.

[Kyle Voigt, Managing Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

However, there does seem to be some pockets with OI down meaningfully in April, particularly in ag's futures. I was just wondering if you could talk about what you're seeing and hearing from market participants in terms of health, why you think we haven't seen any broad based deleveraging, And what is happening in some of the small pockets where you are seeing OI decline a bit in April?

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Kyle. So the question is, what are we hearing from clients of why they're not deleveraging during this time period? And what are we seeing with some of the smaller contracts that really have seen some open interest drop? Is that a fair way to categorize your question?

[Kyle Voigt, Managing Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Yes.

[Terrence Duffy, Chairman & CEO at CME Group]

So Derek, why don't you address the commodity issue and I'll address the broader issue? Yeah. I'll let Suzanne and others.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

So thanks, Kyle. When you look at the overall Ag business, we came off a record year of just under $600,000,000 generated in Ags last year.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

When you look at the first quarter of this year, we set another ADV record not just in futures but in options overall. The business up 23%. You look at the OI trends overall, we've set multiple records in OI not just in options but the aggregate options plus futures. In fact, we just set a record $5,100,000 open interest in options just last week on the April 21. So you look at the aggregate story, options plus futures, we're actually seeing record levels of open interest.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

We're on track to exceed the record that we set in February with another record, assuming we continue the trends over the next couple of days. When you look at the pockets that you're talking about, yes, we have seen some trailing off in futures, but we've seen that more than offset in the pickup in open interest and options, hence, the overall record levels. We did see some pullback particularly feeder cattle. In the future side, options grew, but overall in aggregate, this is very much a risk on environment in Ag. And that's the benefit that's having a market where we've got the grains and oilseeds, we've got the dairy, we've got the lumber and we've got the livestock.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

In Ag markets overall, we're coming off a record quarter, record OI, options record and we're seeing record levels of non U. S. Activity. So I would say the deleveraging is not something we're seeing in aggregate across Ag. In fact, very much the opposite.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

It's a risk on environment. We are seeing some shifts between products inside the ags market overall.

[Terrence Duffy, Chairman & CEO at CME Group]

So Kyle, let me address some of the other questions about the broader markets and just talk about some of the fundamentals that we're seeing that I don't know. I've been in this business for probably as long as anybody and I have not seen some of the fundamental factors that we're seeing today. So our open interest, as Derek referenced, is up 7% across the board in total.

[Terrence Duffy, Chairman & CEO at CME Group]

So I think that's an important factor. You're also looking at reason why people may not be deleveraging. It's very difficult to take risk off or deleverage your hedges when probably the most uncertain times we've ever seen in our history. No one's ever traded through these tariffs in the marketplaces to any extent over the last thirty plus years. We've never had $38,000,000,000,000 of debt on the books of The United States Of America.

[Terrence Duffy, Chairman & CEO at CME Group]

There's debt on books of countries all around the world. There is so much risk out there associated with margins being massively thin that if you do not participate, I don't think you have the luxury of not participating in this volatile time just because if you do not participate, you could be out of business the next day. That's how quick these markets are moving, and that's the size of the moves associated with them. So I think that's a big part of the reason why we're not seeing deleveraging like you may have seen, like I've seen twenty five, thirty years ago when the markets got very volatile and people just kind of put their hands in their pocket and tried to wait to see when there's some clarity. You don't have that luxury today because of the fundamentals that are not only here in The United States but globally.

[Terrence Duffy, Chairman & CEO at CME Group]

So I think that's a big part of why we're not seeing the deleveraging and I think that's why our products are critically important for our user base today.

[Kyle Voigt, Managing Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Thanks, Terry.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Kyle. Thank

[Operator]

you. Our next question comes from Dan Fannon with Jefferies. Your line is open.

[Dan Fannon, Managing Director - Research Analyst at Jefferies & Company Inc]

Thanks. Good morning. I was hoping for some historical context. Can you talk to what happens historically when you guys have raised margin requirements and then ultimately volumes thereafter? I know this period is pretty unique, but if we focus on maybe the largest asset classes, is it reasonable to assume some level of slowdown after the raise in margin requirements?

[Dan Fannon, Managing Director - Research Analyst at Jefferies & Company Inc]

And then also if you could provide just kind of where those balances on the collateral side sit currently.

[Terrence Duffy, Chairman & CEO at CME Group]

So Dan, I think it's really important. It's hard to give you a one answer on that because every situation is different with margins. So if you wanna talk about margins during the 'eight, 'nine crisis, that's a fundamental issue why you might move margins up or down. Why you're moving margins up or down in 2025 going on with the geopolitical events of boots on the ground wars in Russia, Ukraine, the issues going on in The Middle East, and the tariff conversations that have been going on are completely different than what was going on in 'eight with the housing crisis.

[Terrence Duffy, Chairman & CEO at CME Group]

So it's hard to pinpoint what exactly can or cannot happen. I will say on margins though, and that's one of the reasons I pay a lot of attention to what Suzanne and Sunil are doing because it's really important that when we talk about margins and when we work with our clients on margins, we want to make sure we do it in a very judicious way that we're not just being reactive on margins because I think that can be disruptive to markets. And that's what puts people on the sidelines when you're disruptive. I think when you're deliberate like we have been and proactive like we have been, you lessen the chance of the reactionary activity of people walking away from your marketplace because not understanding what margins mean to it. So I believe, Dan, there's no one simple answer, and I promise you I'm not dodging it.

[Terrence Duffy, Chairman & CEO at CME Group]

You know me better than that. I just think that fundamentally, the markets are different today than they were in historical trends that we've seen when we've moved margins up or down. And Suzanne, if you want to comment, you're happy to.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

Yes, I would agree. I think every situation is different. But in periods of increased volatility, people are looking for central counterparties to be in place to come to manage their risk in a safe manner and relying upon the collateralization that happens in our ecosystem. So we have seen record levels of overall margin requirements and collateral in the system. That seems to be consistent with the activity increases that we've seen over the past couple of weeks as well.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

So again, we can't speculate what's going to happen in the future, but it seems in this case that people appreciate the level of safety that you got from margin collateralization and clearinghouse like CME.

[Terrence Duffy, Chairman & CEO at CME Group]

And again, Dan, think that's one of the reasons why we invested the way we did in Span2 technology. It helps allow us to make some of these decisions. But again, it's an art not a science all the time. And we do work with market participants to make sure that everybody's comfortable. It's a mutualized system.

[Terrence Duffy, Chairman & CEO at CME Group]

And it's critically important to all market participants that we are doing our job correctly. So we take it very seriously. And as Suzanne said earlier, this is real time risk management. This isn't T1 or T2. This is real time risk management.

[Terrence Duffy, Chairman & CEO at CME Group]

So appreciate your question, Dan. Hopefully that answered it for you.

[Dan Fannon, Managing Director - Research Analyst at Jefferies & Company Inc]

Yep, thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you.

[Operator]

Thank you. Our next question comes from Patrick Molley with Piper Sandler. Excuse me. Your line is open.

[Patrick Moley, Sr. Research Analyst at Piper Sandler Companies]

Yes, good morning. Thanks for taking the question. So you recently announced that you're going to be selling the Ostrach JV with S and P Global for $3,100,000,000 of which I assume you are going to receive about half of. So I was just hoping maybe you could comment on what you plan to do with the proceeds from that sale and how that informs your capital allocation priorities for the rest of this year and into next year? Thanks.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Patrick. Go ahead, Lynn.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

Yes. Thanks, Patrick. So you're right. It is a fifty-fifty joint venture, so we would be splitting the proceeds of that. I would note that the expected close is probably about six months out.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

We have to go through the regulatory review. So that does take some time. So on the use of proceeds, we're going to hold off on kind of making any statements on that just given the amount of time between now and the close. But certainly, we'll keep you updated as we get closer to that point on those use of proceeds.

[Terrence Duffy, Chairman & CEO at CME Group]

And let me just add one thing, Patrick. On the regulatory approval, we are not anticipating we've not been advised that there's any hurdles that cannot be crossed. So we're not anticipating any regulatory hurdles on closing this transaction. It's just a time consuming process.

[Patrick Moley, Sr. Research Analyst at Piper Sandler Companies]

Okay, great. Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Patrick.

[Operator]

Thank you. Our next question comes from Ken Worthington with JPMorgan. Your line is open.

[Ken Worthington, Financial Analyst at JP Morgan]

Hi, good morning. Thanks for taking the question. I'd actually like to follow-up on Ostrap. Can you talk about the decision, why you decided to sell Ostrap and maybe what your thoughts are on post trade going forward after the sale?

[Terrence Duffy, Chairman & CEO at CME Group]

So Ken, let me just say a couple of things. When we acquired that business back 2018, the business it's an interesting back office business and it's a decent business. It became much more attractive when we were able to do partnerships with then IHS Markit and then ultimately when S acquired them, have another JV with SMP. So we're, as Lynn said, we're only one side of that trade. So it's a decision process in these JVs about how you want to go about them.

[Terrence Duffy, Chairman & CEO at CME Group]

Listen, I think it became very lucrative for CME as we put these properties together. And we thought it was a good opportunity for us to monetize those gains on behalf of our shareholders. And we would not be putting ourselves at any disadvantage whatsoever by not owning them if in fact we still wanted to use some of these services instead of running them. So I think it was a very smart business decision and that's what we did with it.

[Ken Worthington, Financial Analyst at JP Morgan]

Great, thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Ken.

[Operator]

Thank you. Our next question comes from Ben Budish with Barclays. Your line is open.

[Benjamin Budish, Director at Barclays]

Hi, good morning and thanks for taking the question. Just wanted to follow-up on some of the margin questions. Just curious with the pricing change going into effect at the April, any early reads on the sort of shift from cash to non cash or non cash to cash collateral? Or is it perhaps like too volatile to really see what the longer term decisions of your clients will be?

[Terrence Duffy, Chairman & CEO at CME Group]

Yes. Thanks, Ben. Lynn?

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

Yes. So just to give you a few data points, Ben. For the quarter, our average cash balances were $79,000,000,000 and we had average noncash collateral of 173,000,000,000 In April, the month to date, our average cash balance is up to $131,000,000,000 and the fee eligible non cash is $140,000,000,000 Now I would note, as Suzanne talked about, the overall level of activity and margin is up in April. And we're also very early days in terms of the new soft minimum being in place. So this is an item that we do report on, on a monthly basis in our volume tracker.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

So I would keep an eye on that as we're putting out that data over the next few months because we need to see when people are more used to the cash minimum and as we look at levels of activity as we go through the year, we could see some changes there. But to date we're seeing the vast majority of participants meet that 30% soft minimum in cash.

[Benjamin Budish, Director at Barclays]

Very helpful. Thanks so much.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Ben.

[Operator]

Thank you. Our next question comes from Bill Katz with TD Cowen. Your line is open.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

Okay, thank you very much for

[William Katz, Senior Equity Analyst at TD Cowen]

taking the question. Maybe shift gears a little bit. Steve, the non U. S. Opportunities continues to grow rather nicely year on year, quarter on quarter and across the different regions to which you're participating.

[William Katz, Senior Equity Analyst at TD Cowen]

I was wondering if you could unpack some of the drivers for that growth, how much of that might be sort of onboarding new users versus maybe penetration of that user base and how to think about the outlook going forward? Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Bill. It's a great question. And we have been very pleased with our growth internationally. And I'm actually Winkler, who heads up that division, to give some color on that for you. Julie?

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

Yes. Thanks for the question. Certainly Q1 was another record in terms of average daily volume of 8,800,000 contracts. That was up 19%. What was great to see is

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

that we saw double digit growth across

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

all asset classes, in particular energy, ag and foreign exchange products were extremely strong. What I also like to see is that the growth came from every international customer segment which speaks to the growth and also the need for our products and for our clients to be able to risk manage here at CME Group. That was led by commercial participants that were up almost 30. And so we often speak about the health and diversity of our client base and how critical those hedges are to our marketplace. And so that is a great trend that we've continued to see.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

Also just point out, it was a record quarter for non U. S. Options growth, 1,500,000 contracts in ADB. That was up over 20% year on year. So this has been another strategic initiative that we've talked about is increasing that penetration in options.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

You know, APAC was strong, EMEA was strong. I think the other trend that we're seeing is certainly from the buy side community. That was strong in both EMEA as well as APAC. You know, what we're seeing is, you know, the quant funds in APAC, they're continuing to further expand their trading strategies and so things like that. You know, we have a lot of sales resources across the world to really engage with our customers and help to drive that trading activity and work with our customers.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

So we have good outlook going forward and are happy with the performance in Q1.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Hillary.

[William Katz, Senior Equity Analyst at TD Cowen]

Thanks.

[Lynne Fitzpatrick, President & CFO at CME Group]

Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Bill, thank you.

[Operator]

Thank you. Our next question comes from Owen Lau with Oppenheimer. Your line is open.

[Owen Lau, Executive Director & Senior Analyst at Oppenheimer & Co. Inc.]

Hi, good morning. Thank you for taking my question. So on retail, your micro equity index and micro FX ADV went up quite a lot in the first quarter. Could you please talk about how much of it is driven by your partnership with Robinhood and how much more you can do with them and launch more products through their platform? Thanks a lot.

[Terrence Duffy, Chairman & CEO at CME Group]

Joe?

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

Yes. Let me just speak a little. Thanks for the question, Owen, about the retail performance, and I'll address your point on micros and also our new to futures brokers partners, which are important. Q1 in general was a record quarter for our retail segment. We saw growth across a number of key metrics.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

Certainly revenue was up 10%. That's a key metric for us. But also we've spoken about the importance of new client acquisition or NCA. This surged by an impressive 44% to over 83,000 new traders in Q1. So this is the fourth consecutive quarter of that double digit NCA growth.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

We also saw a 17% increase in total participation, so reaching over 350,000 traders globally. The good news as well is that we saw that growth across all three regions. And so I think that continues to speak to the global nature of our partnerships and the importance of our micro suite. So total micro volume, dollars 3,800,000.0 in average daily volume in Q1. This was up 13%.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

And we're excited to see that that's happened in the micro equities that you pointed out. And also, we saw a really robust demand for our micro metals and also our micro cryptocurrencies. So that continues to speak to the diversity of our product base and also the fact that we're continuing to educate these retail customers and cross sell across equities into these other more diverse asset classes. The market environment that we've talked a lot about on this call was a key part of creating those opportunities for retail engagement. And we've also talked about the new strategic partners including Robinhood, Plus500, Weebull and eToro.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

These partners are critical for us to be able to go out and and seek new customers. They are educating customers. They are, you know, onboarding them quickly. And also, know, pushing up to them market opportunities, which there were a lot of them in terms of trading opportunities in q one. So we feel positive about that going forward, and we'll continue to work with them as well as we see a need for product innovation in the future.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

And lastly, we launched new things like micro ags as well. So this is about combining the partnerships with also the product innovation to continue to fuel this growth going forward.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Gary.

[Owen Lau, Executive Director & Senior Analyst at Oppenheimer & Co. Inc.]

Thanks a lot.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Owen.

[Operator]

Thank you. Our next question comes from Alex Kramm with UBS. Your line is open.

[Alex Kramm, Managing Director - Equity Research at UBS Group]

Yes. Good morning, everyone. A quick one from me on Market Data. Really strong revenue performance. I know you gave the audit numbers already in the prepared remarks, but can you maybe break down the remainder of the growth between some of the price increases, but also core subscription growth and any other one timers you would point out?

[Alex Kramm, Managing Director - Equity Research at UBS Group]

And on the subscription growth, of course, maybe talk about where you see new subscribers come from in particular? Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Okay. I'm going to ask both Lynn and Julie to comment. Lynn?

[Lynne Fitzpatrick, President & CFO at CME Group]

Yes. So a reminder, Alex, on the market data front, we did have a 3.5% pricing increase that went into effect in January. So that is going to be part of that. We also saw strong subscriber growth. And maybe Julie, you can comment on some of the retail participants and how that has been impacting the overall growth as well.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

Yeah, I think to the question Alex, as Lynn pointed out, the biggest move I'd say was among our professional subscribers to our real time market data. And so that was both, we saw an uptick in demand, so we saw more users. Then we also had that price increase of 3.5% that took effect on Jan one. The other major trend was outperformance from the non professional. And so these are retail users needing access to our market data, and also saw some growth in our derived data instruments as well.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

And so that was combined with that. I'd say, you know, on the non recurring revenue side, you know, it was an uptick, an increase over Q1 and 2024 and also up over Q4. There were about $3,500,000 in audits and some other additional true ups. But as we've stated in the past, those, you know, are pretty difficult to predict and are just a timing element from our side based on how we work with our clients on that front. So I'd say the biggest, you know, kind of new trend is is this continued demand from retail and that non professional subscriber usage, which tends to grow relatively significantly and I think coincides with what we're seeing on the volume side with our retail business.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Julie. Thank you, Alex.

[Alex Kramm, Managing Director - Equity Research at UBS Group]

Very good. Thanks.

[Operator]

Thank you. Our next question comes from Craig Siegenthaler with Bank of America. Your line is open.

[Craig Siegenthaler, Managing Director at Bank of America]

Hey, good morning, everyone. Hope you're doing well. I have a big picture question. So in the quarter, you generated about 30% of your ADV from international customers. And we wanted an update on how these businesses compete with the non U.

[Craig Siegenthaler, Managing Director at Bank of America]

S. Futures exchanges, especially given the emerging trade conflict. So how do you think of the risk of share losses versus the potential for gains from domestic exchanges in these markets?

[Terrence Duffy, Chairman & CEO at CME Group]

Craig, this is understanding question. You're saying where do we compare against the foreign exchanges on a percent basis?

[Craig Siegenthaler, Managing Director at Bank of America]

So it's about 30% of your total ADV, but I just want a general big question on on how you compete with international futures exchanges. For example, there's there's five in Mainland China.

[Terrence Duffy, Chairman & CEO at CME Group]

Yes, got it. Thanks, Craig.

[Lynne Fitzpatrick, President & CFO at CME Group]

I can start and then others, Julian, others can jump in. So thanks, Craig. It's Lynn. I think as we look at it, we have a unique product offering, kind of the breadth of our offering, contracts that our customers are able to come to us to risk manage. Not just the places where we have IP protection over those contracts and they are not offered on the local exchange, but also the depth of liquidity that you can get in our market on a twenty four hour day basis.

[Lynne Fitzpatrick, President & CFO at CME Group]

So getting access to the major U. S. Indices or trading on the whole treasury curve or the whole U. S. Rate curve, our energy products, these are unique to CME and you have not only that product diversity but the depth of both where our customers around the globe can be trading in those markets and have the same trading experiences during our U.

[Lynne Fitzpatrick, President & CFO at CME Group]

S. Hours.

[Terrence Duffy, Chairman & CEO at CME Group]

Bill, do want to open up?

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

Yes. I think just to put some data behind Lynne's point on the benchmarks, particularly in equities internationally, we saw outsized volume growth of up 33% year on year. And that was largely driven by the buy side in EMEA, APAC props in retail business and also LatAm on the sell side and buy side. So users are continuing to come to our markets. The depth of liquidity is unparallel and they feel, as Suzanne correctly pointed out earlier, right, safe in trading in this environment and with CME Group.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

We've just I just returned from The Middle East. My head of sales was just over in Asia over the last week as well. And the sentiment is that even among this market volatility and the tariff turmoil, clients are reiterating the importance of really that trusted partnership they have with CME Group to access our liquidity and manage risk. So we feel strong about the relationships that we've built with our customers and the fact that we have such a diverse product suite that they're able to take advantage of.

[Terrence Duffy, Chairman & CEO at CME Group]

And Craig, I would just add that the one measuring stick that you have to look at as we announced earlier, the record volume coming from outside The U. S. Is really the measuring stick how we look at ourselves versus other entities. At 8,900,000 contracts a day that is a record for CME Group. And I think that's something that we're very proud of and we're continuing to build on.

[Craig Siegenthaler, Managing Director at Bank of America]

Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks Greg.

[Operator]

Thank you. Our next question comes from Brian Bedell with Deutsche Bank. Your line is open.

[Brian Bedell, Director at Deutsche Bank Securities]

Great. Thanks. Thanks. Good morning. Thanks for taking my question.

[Brian Bedell, Director at Deutsche Bank Securities]

Maybe just to come back to retail, if we think about the surge that we've been seeing in micro futures, can you comment on to what extent retail users may use other contracts outside of micro, like how good of a proxy is micro for retail? And, as we think about volume tiers as well that you called out in the commentary, should we be thinking of that mostly in interest rates? Or is that quite diversified by product line, including equities, of course, since we've seen the volume surge in April there really pick up?

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Brian. So I'm going ask Lynn to comment on the volume tiers, and that would have the impact on the RPC, as you saw. And then on the micros, I'll ask Julie to comment, is it a proxy as it relates from the retail going forward? And then I have opinion on that as well. So go ahead.

[Lynne Fitzpatrick, President & CFO at CME Group]

Yes. So volume tiering, Brian, you will see in the individual asset classes in the individual products. So those are separate. It's not across the board where it's the total volume over our complex. You would need to look at the volume within each asset class.

[Lynne Fitzpatrick, President & CFO at CME Group]

And for instance, there will be volume tiers for treasuries. So you would need to look at the performance of those various parts of the asset classes. So when we have not only record overall volume, our highest quarter in history, but we also had our highest quarter for interest rates, equities, ags and FX, you will see more of the impact of tiering when you're at those high levels of volume. That is intentional. We want to make sure in these high periods of volatility that our customers can continue to manage that risk and that exposure.

[Lynne Fitzpatrick, President & CFO at CME Group]

And make it cost effective for them to do so and continue to trade. And it's obviously highly profitable for us as we see that increase in volume coming across the system. We have very high operating leverage and get high incremental margin on that trade. So it is something that we've built into the system to make sure that we are capturing a maximum velocity of trade.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

I think in terms of the micro question, I mean, it was a very deliberate decision on our behalf to introduce those products.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

And, you know, the thinking at the time is the same as it is today. We wanted to find a product that had the correct size for the retail customer. And clearly, there is a spectrum of retail customers in terms of those trading with the smaller account size where micros very much fit into their portfolio in just the right size. There are also retail accounts that are much larger than that and people are hedging relatively large stock portfolios where they may be able to get into our e mini and have actively traded that in the past. So we monitor this and are certainly seeing as well that as new to futures brokers come into the marketplace and even our existing partners, there is more product diversity in what they are trading.

[Julie Winkler, Senior MD & Chief Commercial Officer at CME Group]

So I think micros are a good proxy. However, retail traders are not limited to just trading micro equities. And I think that's where we do see, you know, and saw that in Q1, they're trading the full size gold contract. They are in trading the full size cryptocurrency contracts. And so, again, I think it speaks to the breadth of our product portfolio, but it also is heavily dependent on the size of that individual trader who is accessing our marketplace.

[Terrence Duffy, Chairman & CEO at CME Group]

And just to add to that a little bit, I do think when you look historically at micros and you look back at the equity markets going back twenty five years ago when the multiplier of the S and P 500 was cut to two fifty, that was a smaller contract, and the e mini came out of that. Now the e mini is the large contract. The value of a contract sometimes determines where the participant may or may not go, to Julie's point. They can go in different size contracts. And I think that's very important.

[Terrence Duffy, Chairman & CEO at CME Group]

So to say it's a proxy would be a bit of a stretch, I believe. And right now, you're seeing institutions trade micros and you're seeing institutions trade the large contracts depending on what their needs are. And again, we're trying to have a structure to allow all participants to participate at their comfort level. But you've got to remember that a lot

[Terrence Duffy, Chairman & CEO at CME Group]

of this is depending on

[Terrence Duffy, Chairman & CEO at CME Group]

the price of the actual product to determine the risk associated with that product. So gold's at $3,500 an ounce versus $1,000 an ounce, obviously the contract is much more expensive than it was at $1,000 an ounce.

[Terrence Duffy, Chairman & CEO at CME Group]

That's great.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

I was just going say, when we look at what the uptake is on the micro gold side that Julie talked about, that's actually a market, to Terry's point, we had to sell gold go from $2,000 to $3,500 That's a market that has tracked a lot of not just retail but small institutional participation. That is such an important product right now that we've actually exercised some pricing power, increased fees on those starting February 1.

[Terrence Duffy, Chairman & CEO at CME Group]

And that is a very important point. So on these smaller products that maybe larger participants are trading, we are adjusting the pricing associated with them just like we did with the equity market over the last twenty five years as the e mini became the dominant size contract for the equity market. So we're very aware of that.

[Terrence Duffy, Chairman & CEO at CME Group]

And we don't price them on notional value like we did when they first came out. We price them on what we believe the participant is using them for.

[Brian Bedell, Director at Deutsche Bank Securities]

Right. That's all great color. Thank you so much.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you.

[Operator]

Thank you. Our next question comes from Alex Blostein with Goldman Sachs. Your line is open.

[Alexander Blostein, Managing Director at Goldman Sachs]

Hey, everybody. Good morning. I actually had another quick follow-up on retail for you guys. You talked about retail in the context of just kind of volume contribution in the business. Can you help break down the composition of retail in terms of just the revenues where that stands now, both on the trading side as well as the market data?

[Alexander Blostein, Managing Director at Goldman Sachs]

If you look at the market environment in April, obviously, lot more volatility. It sounds like retail continues to be fairly engaged. But as you sort of assess the health of retail and why this time around might be different from other drawdowns, so I'd love to get your perspective on what sort of been driving a bit more durability in retail trading so far in April, which again seems to be still relatively Yes.

[Terrence Duffy, Chairman & CEO at CME Group]

Alex, thank you. I appreciate it. First of we don't give out the information of the breakdown of the participants, whether on the revenue and market data or their trade. But let me comment as it relates to why I think the retail is different today than it may have been a year ago or ten years ago. The retail today has many more tools to allow their participation into our marketplace as well as many others that they did not have just a few years back.

[Terrence Duffy, Chairman & CEO at CME Group]

So when you look at retail brokers today offering futures, we didn't see that before. There was a comment earlier about Robinhood now offering futures contracts of CME. That was not around a few years ago. So the size of the retail market is so much bigger and diverse than it was years ago. I think that's one of the reasons why we're seeing not the takedown in retail, why we still see the uptick continuing.

[Terrence Duffy, Chairman & CEO at CME Group]

And it's just the distribution of that product, the technology that allows people to participate, people have access to it, they want access to it. And I think that's the big difference that we're seeing today than we just saw in recent times. And I don't see that going away. I see that only continuing because of the way technology allows people to participate in different markets around the world, including CMEs.

[Alexander Blostein, Managing Director at Goldman Sachs]

Great, thanks.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you.

[Operator]

Thank you. Our next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

Thanks for taking my question. I wanted to drill down further on the energy similar to other asset classes. We saw some really strong volumes in April. How do you think about the puts and takes going forward? And then maybe just on the same topic of energy, how do you think about any updated thoughts on WTI versus Brent and the same on nat gas?

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Dirk, do want to comment on that?

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

Yes. We think you looking back at 2024,

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

we put up a

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

record year occurring. I think we generated in excess of $800,000,000 of revenue last year. We started strong this quarter. To your point, we've put up first quarter volume up 20% led by options up 34%. We're seeing record individual months and for options overall.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

In terms of open interest overall in the Henry Hub complex, We've seen volume records in options and futures open interest levels we haven't seen in over ten years. So we're seeing multiple records over the course of Q1 that has carried over into 39% growth in April as well. When you look at where and how that business is scaling, when you look at the client segment perspective, every single client inside our portfolio, which are props, banks, buy side, commercial customers, up double digits. When you look at where that business growth is happening, as you heard concerning the top of the call and truly earlier, energy contributed to record revenues outside The U. S.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

And non U. S. Business. That's a

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

new all time record for energy contributing as it was for Ags as well. When you look at the kind of positioning of both Henry Hub and WTI, I think everything we've been talking about for the last two to three years has been a structural shift positively positioning both Henry Hub and WTI as global benchmarks. We see that in our client participation numbers. We see that in the regional growth. A question was asked before about regional participation.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

We're seeing net new energy customers in Europe and Asia expand participation into our WTI and Henry Hub products as continues to produce and export these products at record levels. So when we look at our position going forward, we think very firmly C and E is in the right position with benchmark products. When you look at the growth, it's a risk on environment right now. When you look at the competitive metrics, would say that our WTI share relative to ICE in Q1 was about static, about 73%, basically unchanged from last year. Henry Hub about the same in future 77%, seventy eight %.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

We did see our share actually grow in WTI options relative to ISO up to 91% and we saw an increase in Henry Hub option share up to 71% from 66. So we think to the points made earlier, global benchmarks adopted given the liquidity, given the infrastructure, all the conversations we've been having about the benefits of what CME Group presents to our customers. That is totally the story of global client adoption. We think a strong positioning going forward through what is an unbelievably difficult challenging environment for our markets where our job is to help customers manage that risk with the products and tools we give them daily.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

Thanks, Derek.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

Thank you, Ashish.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

Thanks.

[Operator]

Thank you. Our next question comes from Chris Allen with Citi. Your line is open.

[Christopher Allen, Managing Director at Citi]

Yeah. Good morning, everyone. Thanks for taking the question. Most of it's been covered. But one question we've been getting is how to think about the implications for resolution of Ukraine, Russia, specifically in the energy complex?

[Christopher Allen, Managing Director at Citi]

And I'm also wondering if there's any other implications for other other areas, let's say, maybe as well. So any color there would be helpful.

[Terrence Duffy, Chairman & CEO at CME Group]

So the resolution between did you say Russia and Russian Ukraine?

[Christopher Allen, Managing Director at Citi]

If there is a resolution, obviously.

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. And and what does that mean for the energy market? Is that what you said, Chris?

[Christopher Allen, Managing Director at Citi]

Yep.

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah, again, I'll let Derek comment. But I think that the resolution of that is not for anybody in this room to try to figure out. There's a lot of people internationally that work for governments that are trying to deal with that issue. All we can say is we hope that it comes to a resolution soon because no one likes to see what's going on with all the bloodshed in these regions. So as far as the price of the product, I think that it could take some time before the Russian market gets back into the world market, if in fact it does.

[Terrence Duffy, Chairman & CEO at CME Group]

I don't know that, but that would be my political take on it, that it would take a little bit of time for them to be more accepted back into the world global marketplace. So what does that mean for the price? I don't know. I guess we have to see what the supply is going to look like and also the demand, and that will help us more with that. I think that there's many parts of the world that are producing energy today, especially The US, that help facilitate what's going on in Russia.

[Terrence Duffy, Chairman & CEO at CME Group]

And Derek, I'll let you comment more on it. But that is my take on it. I don't know if it's going to have a massive impact on the price of energy once that's resolved. I just hope it gets resolved.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

Yes.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

I think, Chris, you raised a good question. Think to Terry's point, we don't actually know, but it is talking to our customers and seeing how they have basically redeployed supply chains, fiscal supply chains and fiscal commodities is something we've seen and reworked over the last two years. That's one of the reasons why we set an all time record last year in our commodities complex portfolio of almost $1,700,000,000 of revenue. And we're seeing the same thing, a record first quarter revenue across Ag's energy and metals. I think what we can say is that we've seen customers in this environment of uncertainty to Terry's point move to pools of known liquidity and pools where The U.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

S. Has already restructured its export market for both WTI and natural gas using The U. S. Displace every other country has now been the largest export of these products. So we think as customers have reconfigured their supply chains, they are following the risk management tools along with where they're actually being supplied with the physical product from.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

So our job is to continue to leverage Julie's team globally, mentioned growth in The Middle East and Europe and Asia, the areas where we're seeing fastest growth across energy, up almost 30% between both APAC and EMEA. And that's been a trend for the last two years. So I think it's a risk on environment. Customers don't know where this is going to land and that's why they're actively using our products to risk manage.

[Christopher Allen, Managing Director at Citi]

Thanks, Eric.

[Derek Sammann, Senior MD & Global Head of Commodities Markets at CME Group]

Thanks, Chris.

[Operator]

Thank you. Our next question comes from Michael Cyprys with Morgan Stanley. Your line is open.

[Stephanie Ma, Analyst at Morgan Stanley]

Hey, good morning. This is Stephanie on for Mike. Maybe just turning to cross margining. Can you just update us on the benefits you're providing customers today? What further steps can you take to enhance those efficiencies over the next twelve months?

[Stephanie Ma, Analyst at Morgan Stanley]

And maybe just looking out a few years, which products and asset classes do you think could savings be most impactful? Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks Stephanie. Suzanne?

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

Yes, happy to take the question Stephanie. Thank you. So in our cross margin program with the fixed income clearing corporations, we continue to onboard new participants. We're up to 15 house accounts now at this point in time. And we also continue working together to be able to expand that to end user customers.

[Suzanne Sprague, COO & Global Head of Clearing at CME Group]

So our plan is to be operationally ready to support that by the end of this year. Of course, we can't opine on regulatory approval timelines, but we have heard a decent amount of interest from clients in being able to take advantage of those offsets. We've also seen an increase in clearing membership to be able to take advantage of the current house program. So we continue to deliver upwards of a billion dollars in savings for that house program and are committed to being able to expand that to the customer by the end of the year.

[Terrence Duffy, Chairman & CEO at CME Group]

And Stephanie, just to add to that, it is important for us to remind everybody, and I know you say this a lot, but we are at $60,000,000,000 a day in total offsets on efficiencies today as it relates to all of our asset classes. $20 some odd billion in rates alone I believe is the number. The fixed income the FICC number with FICC is probably the smallest of that $60,000,000,000 So we are creating massive efficiencies for our participants and savings on gross margin and we want to continue to create efficiencies across the board to all of our asset classes. So even though that the relationship with Vic is massively important to CME and we're going to continue to build on it, we are still creating immense savings for our clients so they can manage their risk the most cost effective way across all six major asset classes here at CME.

[Stephanie Ma, Analyst at Morgan Stanley]

Thanks, Deb.

[Operator]

Thank you.

[Operator]

Our next question comes from Simon Klintch with Redburn Atlantic. Your line is open.

[Simon Clinch, Partner at Redburn Atlantic]

Hi, everyone. Thanks for taking my question. Most of my questions have been answered, so I'll stick with a housekeeping one here. Lynn, could you just walk us through the very good expense control we saw this quarter and how we should expect that to ramp through the year and also break out what the Google spend was and any other factors you think are worth calling out? Thanks.

[Lynne Fitzpatrick, President & CFO at CME Group]

Sure Simon. Thank you. So if you look at the expenses for the quarter, obviously quite strong expense discipline. We do expect over the course of the year that there will be a few factors that will continue to grow. So if you look at the trend last year in technology, we're seeing increases in the technology spend as we migrated more to the Google Cloud environment.

[Lynne Fitzpatrick, President & CFO at CME Group]

So quarter over quarter we were seeing that increase. We would expect to see that again over the course of this year as we get more applications into that cloud environment. I would also say that the professional fees this quarter were a bit light. Those do tend to follow larger scale projects and that's just a little bit of the timing on when those kick off. So I would expect to see that ramp up over the course of the year as well.

[Lynne Fitzpatrick, President & CFO at CME Group]

We also typically have much higher spend in the marketing area in Q4 related to some of our large scale events. So you will see that towards the tail end of the year. And the last thing I would point out is on the merit increases for staff, you get about half of that impact in Q1 and you'll see the full impact running through the remainder of the year. So in terms of Google, the total spend in Q1 was just under $20,000,000 We'll see about $19,000,000 of that coming through the technology line and a little under $1,000,000 of that was in professional fees.

[Simon Clinch, Partner at Redburn Atlantic]

Great. Thanks very much.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Simon.

[Operator]

Thank you. Our next question comes from Ben Budish with Barclays. Your line is open.

[Benjamin Budish, Director at Barclays]

Hi. Thanks for taking my follow-up. Terry, I was wondering if you could talk a little bit more about the launch of BrokerTec in Chicago. So what are your ambitions there? What's the anticipated customer type?

[Benjamin Budish, Director at Barclays]

What are your kind of thoughts on how it improves your competitive positioning? Any color there would be helpful. Thanks.

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. Thanks, Ben. I'll ask Mike Dennis to give a little color on BrokerTec Chicago, then I'll comment when he's done. Mike?

[Mike Dennis, Senior MD, Global Head of Fixed Income at CME Group]

Yeah.

[Mike Dennis, Senior MD, Global Head of Fixed Income at CME Group]

Thanks, Terry. And Ben, good morning. BrokerTec Chicago, this is a project we're very excited about. It's the second central limit order book that will be uniquely located right next to our core futures and options markets in the Aurora Data Center where clients have a lot of connectivity already. As the futurization trend has grown over the past several years, clients have come to us looking for solutions to help better manage trading between cash and futures.

[Mike Dennis, Senior MD, Global Head of Fixed Income at CME Group]

So we have received overwhelmingly positive feedback from the dealer community as well as from clients that are very active in relative value strategies trading both treasury futures and SOFR futures for US Cash Treasuries. This new central limit order book will help drive new client acquisition as well as allow us to be more creative on thinking about new trading modalities within our interest rate complex. So launch is scheduled for Q3 twenty twenty five and client testing will be available shortly, probably at the April. Our New York club will continue to be the main venue for risk transfer and price discovery. One thing to say is that different traders need different execution tools and different execution types.

[Mike Dennis, Senior MD, Global Head of Fixed Income at CME Group]

Offering both access models will allow us to capture a broader set of clients. If you think about the treasury cash and on the run market in two segments, you have risk transfer trades, clients seeking larger stacks of liquidity, which the BrokerTec New York Club continues to address, and then relative value trades, cash for future trades, which clients typically seek inside prices and transact in smaller size. So we're very excited for it. And I'll turn it over to Terry to have some

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. No, I think you said

[Terrence Duffy, Chairman & CEO at CME Group]

it all correctly, Mike. I think what's important here is we're trying to make sure, as Mike said, that we can make certain every client is being having the ability to have the market to where they believe is in their best interest. And the dealer community believes that having they're one of the constituents among others that having it side by side against the Treasury futures complex is the right place to be. And we've analyzed this every way to Sunday and we don't disagree. So I think it's really important that we look at all constituencies and see what's in the best interest of the market.

[Terrence Duffy, Chairman & CEO at CME Group]

I think what Mike said is really important. And the reason I hesitate I want to focus on this. The futurization of that marketplace is critically important. And it has been my focus for a number of years, the futurization of some of these cash markets. And I think we're continuing to see that especially in the rates business.

[Terrence Duffy, Chairman & CEO at CME Group]

So having that set up in Chicago makes a ton of sense for CME going forward. And I'm very excited about the future of our futures franchise, no pun intended, to move that and grow that business exponentially. We have seen BrokerTec grow a little bit over the last quarter. But again, I think we're looking at this for the long run and we want to make sure that all participants have access to the marketplace where they feel comfortable in. And that's one of the constituencies that does.

[Terrence Duffy, Chairman & CEO at CME Group]

Long winded way of saying we want to make sure we have both.

[Benjamin Budish, Director at Barclays]

Great. Thank you very much.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Ben.

[Operator]

Thank you. Our last question comes from Brian Bedell with Deutsche Bank. Your line is open.

[Brian Bedell, Director at Deutsche Bank Securities]

Great. Thanks for taking my follow-up. I actually just want to on that very last question, if you could just comment around to what extent is this designed for basis trading between treasuries and futures because you mentioned the relative value. So are you attempting to optimize practices around basis trading and maybe just your overall view on how that's trending with the very high volumes in April versus sort of what's happened more recently. And then I did have a housekeeping question on just the contribution from OSTRA in 1Q and the rates, the spread that you're keeping on the collateral balances, is that still the $0.35 on the cash and I think $0.10 on non cash?

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah, thanks Brian. So on the basis trade, wouldn't say that the decision had any bearing of putting BrokerTec Chicago in Aurora at all as it relates to the basis trade. The basis trade, we all know how that works. And having Shore Protect Chicago, I don't think that was not our intent at all. It was more for to give participants the choice of where they want to execute on their cash side versus in their futures both in Chicago and in New York.

[Terrence Duffy, Chairman & CEO at CME Group]

And that was really the genesis of bringing BrokerTec Chicago to Aurora. Nothing to do with the basis trade. As it relates to OSTRA, I'll let Lynn make a comment.

[Lynne Fitzpatrick, President & CFO at CME Group]

Yes. So Brian, the contribution of OSTRA in 2024 was $89,000,000 in earnings to CME. It's typically in the range of $20 to $22 per quarter, somewhere in that area. S and P doesn't report for a couple more weeks, so I won't give too granular specifics on this quarter. But it was, I think that's a pretty safe range to use looking at last year and kind of the range that we typically see.

[Lynne Fitzpatrick, President & CFO at CME Group]

And then on the spread on collateral, it was the 35 basis points this quarter similar to Q4. That's on the cash side.

[Brian Bedell, Director at Deutsche Bank Securities]

On the cash side. Okay. And is it 10 basis on the non cash Yes.

[Brian Bedell, Director at Deutsche Bank Securities]

Yes.

[Brian Bedell, Director at Deutsche Bank Securities]

Perfect.

[Brian Bedell, Director at Deutsche Bank Securities]

Okay. Great. Thank you so much.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Brian.

[Brian Bedell, Director at Deutsche Bank Securities]

Thank you.

[Operator]

Thank you. And at this time, I'll hand the call back over to management for closing remarks.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you all for participating in our call this quarter. We look forward to following up on any questions you have. Obviously, we'll be reaching out or you can reach out to us. Have a good day. Thank you very kindly.

[Operator]

Thank you for participating in today's conference. You may now disconnect.

Participants

Executives

• Adam Minick, Executive Director, Head of Investor Relations
• Terrence Duffy, Chairman & CEO
• Suzanne Sprague, COO & Global Head of Clearing
• Sunil Cutinho, Chief Information Officer
• Lynne Fitzpatrick, President & CFO
• Derek Sammann, Senior MD & Global Head of Commodities Markets
• Julie Winkler, Senior MD & Chief Commercial Officer
• Mike Dennis, Senior MD, Global Head of Fixed Income

Analysts

• Kyle Voigt, Managing Director - Equity Research at Keefe, Bruyette & Woods (KBW)
• Dan Fannon, Managing Director - Research Analyst at Jefferies & Company Inc
• Patrick Moley, Sr. Research Analyst at Piper Sandler Companies
• Ken Worthington, Financial Analyst at JP Morgan
• Benjamin Budish, Director at Barclays
• William Katz, Senior Equity Analyst at TD Cowen
• Owen Lau, Executive Director & Senior Analyst at Oppenheimer & Co. Inc.
• Alex Kramm, Managing Director - Equity Research at UBS Group
• Craig Siegenthaler, Managing Director at Bank of America
• Brian Bedell, Director at Deutsche Bank Securities
• Alexander Blostein, Managing Director at Goldman Sachs
• Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets
• Christopher Allen, Managing Director at Citi
• Stephanie Ma, Analyst at Morgan Stanley
• Simon Clinch, Partner at Redburn Atlantic