CME Group Q2 2025 Earnings Report

CME Group EPS Results

• Actual EPS: $2.96
• Consensus EPS: $2.91
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $2.56

CME Group Revenue Results

• Actual Revenue: $1.69 billion
• Expected Revenue: $1.68 billion
• Beat/Miss: Beat by +$8.51 million
• YoY Revenue Growth: +10.40%

CME Group Announcement Details

• Quarter: Q2 2025
• Date: 7/23/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 23, 2025
• Conference Call Time: 8:30AM ET

CME Group (NASDAQ:CME) is a leading global derivatives marketplace that offers a wide range of futures and options products across various asset classes. Headquartered in Chicago, Illinois, the company operates four primary exchanges—the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), the New York Mercantile Exchange (NYMEX) and the Commodity Exchange (COMEX). Through both electronic trading via its CME Globex platform and traditional open-outcry trading floors, CME Group facilitates price discovery, risk management and hedging for participants worldwide.

The company’s product portfolio encompasses interest rate contracts, equity index futures, foreign exchange, agricultural commodities, energy products and metals. Market participants—from institutional investors and commercial hedgers to retail traders—use these instruments to manage exposure and participate in global markets. In addition to trading services, CME Group provides central counterparty clearing through CME Clearing, data and analytics, and post-trade services that support efficient transaction settlement and risk mitigation.

CME Group traces its roots to the Chicago Butter and Egg Board founded in 1898, evolving into the Chicago Mercantile Exchange in the early 20th century. In 2007, it merged with the Chicago Board of Trade, creating one of the world’s largest derivatives exchanges, and further expanded in 2008 with the acquisition of the New York Mercantile Exchange. Over the years, CME Group has broadened its global footprint, establishing regional offices in financial centers such as New York, London, Singapore, Hong Kong and São Paulo to better serve a diverse international clientele.

Under the leadership of Chairman and Chief Executive Officer Terry Duffy, CME Group continues to innovate its technology infrastructure and expand its product offerings. The company adheres to rigorous regulatory standards and collaborates with market participants, regulators and industry bodies to enhance transparency and resilience in the global derivatives markets.

CME Group Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Average daily volume hit a record 30.2 million contracts in Q2 (up 16% year‐over‐year), with all-time highs in each month and broad‐based gains across all six asset classes.
• Positive Sentiment: International volume set a quarterly record of 9.2 million contracts per day, led by EMEA (up 15%) and APAC (up 30%), reflecting strong global client engagement.
• Positive Sentiment: Retail segment surged with 90,000 new traders (up 56% year-over-year), driving a micro‐futures ADV record of 4.1 million contracts, including 1.7 million in Micro E-mini Nasdaq 100.
• Positive Sentiment: Second-quarter revenue rose to $1.7 billion (+10% year-over-year), with clearing and transaction fees at $1.4 billion (+11%), market data at $198 million (+13%), and adjusted operating income of $1.2 billion (+14%).
• Positive Sentiment: Full-year adjusted operating expense guidance (excluding license fees) was reduced by $15 million to $1.635 billion (3% growth over 2024), while all other guidance remains unchanged.

Presentation

[Operator]

Welcome to the CME Group Second 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 - IR at CME Group]

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

[Adam Minick, Executive Director, Head - IR at CME Group]

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. 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 make a few brief comments about our quarter and the overall environment.

[Terrence Duffy, Chairman & CEO at CME Group]

Following that, Lynn will provide an overview of our second quarter results. In addition to Lynn, as usual, have other members of our management team present to answer questions after the prepared remarks. Our record breaking performance in the second quarter demonstrated the growing need for risk management globally. For the first time in CME Group's history, average daily volume exceeded 30,000,000 contracts for this quarter. Second quarter average daily volume of 30,200,000 contracts represented an increase of 16% compared to the same period last year and included all time records in each month of the quarter.

[Terrence Duffy, Chairman & CEO at CME Group]

In an environment of heightened headline risk and macro uncertainties, clients are increasingly choosing the transparency and capital efficiency of our essentially cleared benchmark products as they look to manage and mitigate risk. The strong growth this quarter was broad based with year over year volume growth in all six asset classes, including all time quarterly volume records in interest rates, agricultural commodities, and metals. In aggregate, our financial products volume grew by 17%, and our commodity sector volume grew by 15. This continues to be a risk on environment as evidenced by the continued growth in open interest or positions open on the books at CME, up by 7% from the end of Q2 twenty twenty four and ten percent from year end 2024. We are also seeing strong levels of large open interest holders with new records in both interest rates and crypto futures set earlier this month.

[Terrence Duffy, Chairman & CEO at CME Group]

We had our highest ever quarterly volume from our international business, which averaged 9,200,000 contracts per day, up 18% from the prior year. This was led by record 6,700,000 average daily volume from EMEA, which was up 15%, and a record 2,200,000 contracts per day from APAC were up 30%. This record international volume was driven by growth across all asset classes and customer segments and reflects our deep integration into global markets. In recent quarters, we've talked extensively about our growing focus on retail traders and highlighted some of the large retail broker partners that have joined our multi asset class marketplace to meet the increasing demand from this particular segment. In the second quarter, over 90,000 new retail traders participated in our markets for the first time, a 56% increase versus same period last year.

[Terrence Duffy, Chairman & CEO at CME Group]

These new customers contributed to our Micro's ADV record of 4,100,000 contracts in q two and demonstrated the appeal of our products to a broader base of users. The Micro E mini Nasdaq 100 futures contributed 1,700,000 of those 4,100,000 contracts. Year to date, Nasdaq 100 futures and options trading volume at CME Group has climbed to more than 2,500,000 contracts per day or up 22% versus last year. Also, we're pleased yesterday we were able to announce a ten year extension of CME Group's exclusive license to offer futures and options on futures based on the NASDAQ 100 and other NASDAQ indexes. This license will go through 2,039.

[Terrence Duffy, Chairman & CEO at CME Group]

This extension ensures that our customers will continue to have the ability to trade NASDAQ equity index products alongside our S and P, Dow Jones, and FTSE Russell products and benefit from the related capital and operational efficiencies for years to come. In addition to the impressive volume records, we delivered record financial results for the second consecutive quarter. I'll now turn the call over to Lynn to review our financial results in more detail and look forward to your questions.

[Lynne Fitzpatrick, President & CFO at CME Group]

Thanks, Teri, and thank you all for joining us this morning. During the second quarter, CME Group generated revenue of $1,700,000,000 up 10% from the second quarter in twenty twenty four. The average rate per contract for the quarter was $0.69 resulting in the highest quarterly clearing and transaction fees in our history of 1,400,000,000 up 11% year over year. Market data revenue also reached a record level, up 13% to $198,000,000 Continued strong cost discipline led to adjusted expenses of $491,000,000 for the quarter and $395,000,000 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%, up from 69.1% in the same period last year. DME Group had an adjusted effective tax rate of 23.3%. Driven by the strong demand for our risk management products, we delivered the highest quarterly adjusted net income and adjusted diluted earnings per share in our history at $1,100,000,000 and $2.96 per share, respectively, both up 16% from the second quarter last year. This represents an adjusted net income margin for the quarter of 64%. Capital expenditures for the second quarter were approximately $19,000,000 and cash at the end of the quarter was $2,200,000,000 CME Group paid dividends of $455,000,000 in the second quarter and approximately $3,000,000,000 over the first half of the year.

[Lynne Fitzpatrick, President & CFO at CME Group]

Turning to guidance. We now expect total adjusted operating expenses for the year, excluding license fees, to be approximately $1,635,000,000 That is $15,000,000 below our prior guidance and represents 3% growth from last year's adjusted expense levels. All other guidance remains unchanged. We're very proud to deliver the highest quarterly volume, revenue, operating income and diluted earnings per share in our history. These strong results are the continuation of the growth in demand for our products over the last several years.

[Lynne Fitzpatrick, President & CFO at CME Group]

Following three consecutive years of record annual earnings and double digit earnings growth, the need for our products has driven 14% earnings growth in the first half of twenty twenty five. We'd now like to open the call for your questions. Thank you.

[Operator]

Thank you. We will now begin our question and answer session. Our first question will come from Owen Lau with Oppenheimer. Your line is open.

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

Hi, good morning. Thank you for taking my question. So trading volume and hedging activities were very strong in the first half. CME had a record quarter again. But could you please talk about the macro backdrop for the second half?

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

What are the key drivers that can sustain these strong hedging activities going into the second half? Is it going to be interest rate, commodities, crypto or something else? Thanks a lot.

[Terrence Duffy, Chairman & CEO at CME Group]

So Owen, it's Terry Duffy. Your question is about the second half of the year, I assume, right, in total, not just the quarter?

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

Correct. Second half, correct.

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. And so obviously, it's really hard to predict volumes. We've always said that since the day we took this company public, it's difficult to predict. But we have seen, without a doubt, many things going around globally that need to be managed and mitigated through risk management. The markets have been massively resilient through a lot of the policies that have been going through, whether it's on tariffs or other issues in The United States.

[Terrence Duffy, Chairman & CEO at CME Group]

But it doesn't negate the fact that we're sitting at record levels of debt, not only here in The United States, we're sitting at increasing levels of debt throughout Europe now. You just saw the other day where the U. K. Government had to issue more debt to continue to run its country. It is at levels that I think, they're obviously unprecedented.

[Terrence Duffy, Chairman & CEO at CME Group]

And I think that people are gonna need to manage and mitigate that risk. The question is, well, how does that transition into volume? It's really hard to predict. But I think that unless I miss something in the news, there's still massive unrest between Russia and Ukraine. There's still massive unrest between Israel and Palestine in the West Bank there.

[Terrence Duffy, Chairman & CEO at CME Group]

And so there is so many different things going on right now politically that could have impacts on multiple different asset classes. We feel very strongly that we can be here to help mitigate and manage that risk. Now, we're not hoping for any disasters. I'm only pointing out factual things that are in the news and that are fundamentally math problems such as debt and issuance going on right now. So I don't know how that translates into volume, but I don't know how it does it either.

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

Thanks a lot, Terry.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Owen.

[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. Good morning, folks. Thanks for taking my question. If I can just put bundle two into one, so a two parter, and focus mostly on retail and then the crypto ecosystem.

[Brian Bedell, Director at Deutsche Bank Securities]

So Terry, you've talked a lot about retail emergence and your bullish views on how this is becoming a much bigger client base. Can you just talk about the recent take up? You said 90,000 customers and new traders. How are you measuring that? And are you seeing that from new online brokers new retail traders from online brokers coming in?

[Brian Bedell, Director at Deutsche Bank Securities]

And maybe how you expect them to trade different asset classes within the CME ecosystem, I think mostly equity and crypto? And then the second question is around the crypto ecosystem broadly, how you see that unfolding over the next several years? What would CME's role be in that? Could that include listing perpetual futures or doing some acquisitions potentially on the tokenized front or establishing a tokenized capability at CME if that's something you believe in?

[Terrence Duffy, Chairman & CEO at CME Group]

Brian, thank you for that two part question. Much appreciated. It seemed like a little more parts than two, but that's okay. So let me try to address it. And I'll ask my team to join in where I think they're all vigorously taking some notes on some of your points, so Julie and Tim McCord will both join in as well and the others.

[Terrence Duffy, Chairman & CEO at CME Group]

But let me say a couple things. One, in my prepared remarks I referenced 90,000 new users for the first time, which I think is something that I've been here a long time. It's really it's very unprecedented to see that type of growth. I think it's up 56% is what I referenced. So to me that is very, very exciting from the retail perspective and the growth.

[Terrence Duffy, Chairman & CEO at CME Group]

I don't believe that's going away. I've said this to you, Brian, and the rest of the analysts and others that cover us. These people want access to markets, and we're going to make certain we give it to them. And I'm very, very optimistic about this segment. I'm never trying to predict the direction of markets, so I will never do that.

[Terrence Duffy, Chairman & CEO at CME Group]

But I I will say that people have access to markets they never had before, and I don't see that slowing down. I think it only accelerates for many more years to come as people start to participate in different markets. As far as the different asset classes, I think Brian was part of your question. Do they go from trading crypto to maybe gold or other asset classes here at CME? I think as people evolve, you know, people always seem to evolve into different asset classes.

[Terrence Duffy, Chairman & CEO at CME Group]

And as you know, Brian, very well, when one asset class seems to be getting a lot of attention, you know, a lot of people follow it. Right now, we're seeing a lot of people follow the crypto. We can talk about some of the legislation that has passed and reasons why they're following crypto. So we've seen a massive uptick in the crypto markets as has others. So not a surprise.

[Terrence Duffy, Chairman & CEO at CME Group]

We saw a lot of people attracted to gold when gold hit $3,500 announced just a few months back. So that is not a surprise. When crude oil traded up to $125 a barrel, you see a lot of people, this was several years ago, going after that trade. So I think that there is not any one particular asset class. That's the beauty of CME.

[Terrence Duffy, Chairman & CEO at CME Group]

We have multiple different asset classes that people will follow, but they also follow things that are that have attention to them at that given moment in time. And they have the ability to do that now where maybe ten, twenty years ago they did not. So they can move from asset class to asset class relatively quickly and seamlessly. That was one of your questions. So I think they participate in all of our asset classes depending on what's going on fundamentally.

[Terrence Duffy, Chairman & CEO at CME Group]

Your other question was around crypto, I believe, as it relates to will we continue to accelerate our entry into crypto. You know, from my standpoint, right now, we are hardly a a first mover in crypto. I think that we are a fast follower, to say the least, and we have a lot to offer in our crypto franchise. I think there's a lot of people that like to have the regulated platform on crypto, and it gives them confidence. I think that's one of the reasons you've seen massive growth in people that are more mainstream in today's financial system trading it because they're using CME's reference prices to do that and are based off of our futures contracts.

[Terrence Duffy, Chairman & CEO at CME Group]

So we will continue to participate in that in that venue. As far as perpetuals go, Brian, I think is one of your other questions I thought I heard you say, Perpetuals are something that are illegal in The United States Of America. They do have them in Europe. So the question is we will have to wait and see how the regulations shake out on perpetuals. There are certain products that are not conducive to perpetuals, mainly deliverable products are not conducive to perpetuals.

[Terrence Duffy, Chairman & CEO at CME Group]

So cash settled maybe more so, such as the crypto markets could be more of a perpetual type contract. But there are many products that just would not be efficient as a perpetual as it relates to risk management that are deliverable. So when you look at energy, you look at rates, you look at all these products that are physically delivered, and people are counting on that delivery mechanism in order to manage the risk to take delivery or make delivery, perpetuals do not work. So I think it'll go back and forth, we'll see how the regs shake out. That's about what I heard.

[Terrence Duffy, Chairman & CEO at CME Group]

Maybe the team wants to pick up more, Julie, or

[Julie Winkler, Chief Commercial Officer at CME Group]

Yeah. I mean, Brian, thanks for the call out on the retail business. I think I'll just double click a little bit with some additional stats to support the points that Terry was making earlier. You know, this was another record quarter for the retail segment. We certainly did see a extremely robust entry of new traders to that 90,000 that we talked about earlier.

[Julie Winkler, Chief Commercial Officer at CME Group]

This is now our fifth consecutive quarter of double digit retail client acquisition growth. And what has been fundamental across this is just that three pillar strategy that we've talked about on previous calls, is partnering with those new to futures brokers that you referenced, expanding market access and that is because of our diverse product suite and also enhancing our trader education. So, a few other things. Total participation across our marketplace for retail saw a significant 16% increase this quarter as well. And what was also great to see was overall growth across all major regions.

[Julie Winkler, Chief Commercial Officer at CME Group]

So we saw North American leading that with a 19% increase in total participants, a very healthy growth coming out of EMEA as well as APAC. So those strategic partnerships with those new futures brokers have been driving, I would say instrumental and instrumental in driving growth as well. Yet if we look across our top 25 partners, we are seeing strong performance throughout all those partners. They are a key part of how we are able to continue to grow the complex and reach retail traders. And on the product side, we've mentioned the micro records earlier, certainly 4,100,000.0 across the whole suite, 3.6 of that in ADB was from equities.

[Julie Winkler, Chief Commercial Officer at CME Group]

But I will also call out, you know, gold which was up over 37% among retail, crypto with micro bitcoin up 94%, micro up 212%. So we're seeing that retail traders are accessing far more than just our Micro Equity Suite, which is great. And we also saw a nice jump in our rate per contract. We're up 7% from Q1 to 34.9¢. So, you know, we're happy with where things are at and and clearly highly focused on the educational aspects of what we're doing with our brokers as well.

[Julie Winkler, Chief Commercial Officer at CME Group]

We held over 100 client events just in Q2 to help educate traders. So we feel pretty good about the outlook going forward in the second half of the year.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Joe. I'm going ask Tim real quick to comment on crypto or anything else that Brian referenced and then we're going on to the next question.

[Tim McCourt, Senior Managing Director, Global Head, Equities, FX & Alternative Products at CME Group]

Great. Thanks, Terry. And thanks, Brian, for the question. I think the one thing just add to was about 190,000 contracts traded up over 130% year over year. Just want to point out that momentum continues here in July.

[Tim McCourt, Senior Managing Director, Global Head, Equities, FX & Alternative Products at CME Group]

We're through sort of end of last week, we're doing almost 260,000 contracts per day in our crypto complex, which is over $12,000,000,000 of notional. The complex continues to grow. It's now over $20,000,000,000 of notional, about 232,000 contracts here in July. And just to reinforce Terry's earlier comment, with our new record large open interest holder in the complex of almost 800 large traders, the great momentum is continuing here in July and we look forward to continuing to serve the needs of our clients in the cryptocurrency complex as one of the most trusted exchanges doing so.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Daniel. Thank you, Brian.

[Brian Bedell, Director at Deutsche Bank Securities]

Thank you.

[Operator]

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

[Christopher Allen, MD - Exchanges, Brokers, & Asset Managers at Citi]

Good morning, everyone. Thanks for taking the question. I wanted to ask how you guys are thinking about capital deployment here, just given the level of cash balances sitting on the balance sheet right now and then the closing of Austria in the back half of the year.

[Christopher Allen, MD - Exchanges, Brokers, & Asset Managers at Citi]

How are you thinking about prioritizing buybacks versus dividends just given where the stock is? Any thoughts on inorganic growth opportunities in the current environment?

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Chris. I got a little siren in the background here in Chicago. Sorry about that, but I think we caught your question. I'll ask Lynn if you heard it to go ahead and respond.

[Lynne Fitzpatrick, President & CFO at CME Group]

Yes, of course. Thanks, Chris. Think the way we're thinking about capital deployment has not changed. Really since we announced the buyback program, we've discussed that that's going to be an opportunistic program. So we still have our variable dividend structure and the ability to return cash through that valve.

[Lynne Fitzpatrick, President & CFO at CME Group]

And we have the addition of the share repurchase that we can look to utilize if we see some disconnects in terms of trading versus performance. So I think that's going to be our approach when we think of that mix and it will be dependent on market activity. On the inorganic side, as you know, we always get approached just given our capital structure and our size, kind of ability to participate in those type of activities. It is always difficult in the exchange space particularly in kind of international M and A. I would say we look just as much as we always have.

[Lynne Fitzpatrick, President & CFO at CME Group]

We just tend to be a bit more, choosy in terms of when we pull that trigger, but we may look at other ways to execute on growth initiatives, things like the joint ventures we've executed or things like our commercial agreement and the extension with NASDAQ yesterday that you saw. So we look at growth opportunities, not just in the M and A lens, but all different types of structures.

[Christopher Allen, MD - Exchanges, Brokers, & Asset Managers at Citi]

Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Craig.

[Operator]

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

[Eli Abboud, Equity Research Analyst at Bank of America]

Good morning. This is Eli Aboud on for Craig. Thanks for taking the question. Can you discuss the impact of tariffs on your physical commodities business? Specifically, has the growing basis between your products and some of the European alternatives affected trading, particularly in the commercial channel?

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah, thank you for the question. I'll ask Derek Salmon who heads up that part of our business for us. Hey, what are you seeing in hold there?

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

Yeah, thanks Eli. I appreciate the question. When you look at the uncertainty across the globe right now, whether it's tariff related specific question or geopolitical uncertainties, ongoing Middle East unrest and Ukraine Russia tensions that Terry referenced, trade disputes, all of this is leading to a realignment of a number of the global physical supply chains with the benchmark markets we run and the fact that US is now exporting record amounts of energy, we're seeing that that is leading to the record results not just for the first half of this year across the commodities complex, ags, energy and metals on the volume side, but also record revenues there as well. When you specifically drill down into the tariff impacts themselves, it's leading to two effective impacts. On one side, the tariff impacts are creating both short and long term dislocations in markets. It creates a cost basis differential. That all needs to be risk management. We're seeing our volume and activity increase across all of our client segments, and we're seeing record activity across both APAC up almost 40% and EMEA up over 22% this year. So we're seeing global participation increase. Not only did we see record activity in April when a number of these tariffs were announced, but we actually saw that that's way through into records in metals and energy in June. We're seeing that particularly express itself in options.

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

But specifically to the question of the tariffs themselves, that's leading to a differential in price between our futures markets and the cash market, that's known as a basis. And that we're seeing that reflected in increases levels of what was called the EFPs or exchange of physical. And that means that managing the price between spot fiscally delivered contracts and futures moves around. We've seen volatility in that, and that is what is leading to our record activity, and particularly on the option side across each of our asset classes. So we're seeing that both on the institutional side with commercial business at record levels.

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

We're also seeing that create opportunities for folks that are looking to gain access to that price activity. You heard Julie mention that before, record activity in gold, as Terry mentioned, but record activity in our gold micros through the retail community. So it's a risk for some, and they come to CME Group to manage that basis risk. And it's an opportunity for others, and we see that in activity from the speculative side as well. So to Terry's point, we're here to solve customer risk no matter what side of the trade they're on.

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

And our focus is on lit markets across geographies, across client segments. And in each one of these markets, some physical commodities, that's a risk on environment. And we've seen that in the record activity this quarter and first half of this year.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Derek.

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

Thanks, Gilai.

[Eli Abboud, Equity Research Analyst at Bank of America]

Thank you.

[Operator]

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

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

Thanks. Good morning. So given all the records that you guys have had in the first half of the year, curious what drove the expense guide takedown. So in terms of priorities, Lynn, is this just timing in terms of spend? Or are there other changes in terms of expense outlook that you guys are making proactively?

[Lynne Fitzpatrick, President & CFO at CME Group]

Yeah. Thanks, Dan. I would say there's a couple of things that led to the change in guidance. One was the refinement of our views on the spending on the Google migration. So we have been looking to optimize that spend.

[Lynne Fitzpatrick, President & CFO at CME Group]

As we're getting kind of more applications into that environment, we're finding ways to minimize the incremental spend. So certainly just a refinement on kind of the additional expense load from new applications moving and also a refinement of the model in terms of timing and level of increased spend from new things that we expect to come on over the course of the year. The other area I would point out is we are coming in a bit lighter on the professional services, thus far this year. So we're using a bit less of consulting, help, not just on the migration project, but overall across the firm. So those two items are leading to that 15,000,000 change in guidance.

[Terrence Duffy, Chairman & CEO at CME Group]

Anything else, Dan?

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

Nope, that's it. Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you.

[Operator]

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

[Alex Kramm, MD & Senior Equity Research Analyst at UBS Group]

Yes. Hey, good morning everyone. Two of the, I guess, newer buzzwords or topics over the last few months have been stablecoins and tokenization. I think Brian actually mentioned tokenization in this question. I don't think you really responded to that.

[Alex Kramm, MD & Senior Equity Research Analyst at UBS Group]

But not sure if I have a really smart question on the topics, but just wondering from your perspective, where are you spending your time? Where do you see opportunities on both of those issues? And are there any potential risks as well that you see here? Any efficiencies you could gain as well? Sorry. Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Alex, thank you. The risks and benefits, we'll be cautious not to speculate on those, but I do want to give you an update where we're at. As you know, we put out a press release as it relates to some of the stable coins that we're looking to implement. So I'll ask Suzanne. I'm surprised she's been spearheading that on behalf of the company, where we're at and, how it's progressing. So Suzanne?

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

Yeah. Thanks, Jerry. And thanks for the question, Alex. So we are primarily focused on our partnership with Google. We did announce, as Jerry mentioned earlier this year, the Google Cloud Universal Ledger partnership initiative that we're progressing with Google to be able to bring to market tokenization technology to enable 24x7 movement of value.

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

So for us, we're starting with thinking about tokenizing cash and other non cash assets for our current ecosystem, not really looking at the clearing space to start. And we've now entered the second phase of testing efforts, focusing on our relationship with settlement banks and then eventually extending that to clearing members and clients. So we are very optimistic about our ability to bring to market a solution in 2026. We haven't necessarily refined the use case that we'll launch with at this point in time, but recognize there is a lot of momentum, with tokenization overall and that the movement of value on a 20 fourseven basis, can really bring increased efficiencies into our ecosystem, which we always focus on anyways.

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. And Alex, just to add, and not that I need to because Suzanne said it, but I don't want it to be overlooked. The word efficiency is critical as it relates to our efforts here on stable coins and tokenization. If we go down that path for us to create additional efficiencies. As you know, we've created capital efficiencies, but we also need to create other efficiencies, and we will continue to do so.

[Terrence Duffy, Chairman & CEO at CME Group]

And we believe with our multi asset class exchange with the benefits that we have already, this could increase our value to our clients on a stable coin, especially as it relates to risk management and tokenizing some of the cash. So we're very excited about this. But we will do it in a way that makes sense for the long run, not just to get something pushed out there for the short term.

[Operator]

Our next question comes from Ken Worthington with JPMorgan. Line is open.

[Kenneth Worthington, Financial Analyst at JP Morgan]

Good morning and thanks for taking the question. CME introduced new cash collateral requirements in the quarter or that got implemented early in the quarter. To what extent did the new requirements contribute to results this quarter? And I believe there was an extra 10 basis point charge for noncash collateral if certain minimums weren't maintained. To what extent did the 10 basis points contribute as well?

[Kenneth Worthington, Financial Analyst at JP Morgan]

And then can you just give us average cash and noncash collateral balances for the quarter, please?

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Ken. Lynn and Suzanna, I'll have you go ahead, Susan.

[Lynne Fitzpatrick, President & CFO at CME Group]

Yes. Ken, you're right. The new soft minimum went into effect in April, April 1. One thing to keep in mind, obviously, the April and coming into this quarter, there's also a lot of volatility coming into effect at the same time that this new policy went into place. So we've seen a couple of things.

[Lynne Fitzpatrick, President & CFO at CME Group]

One, the overall level of collateral that's been posted increased pretty significantly between first quarter and second quarter. So our total collateral posted this quarter averaged $316,000,000,000 That was up from about $290,000,000,000 last quarter. Of that, about 133,000,000,000 was in cash and 145,000,000,000 was in non cash collateral. So of the required amount, had almost 48% posted in cash. I would note that the floor or the soft minimum was placed at 30% and we obviously saw a lot higher than that this quarter.

[Lynne Fitzpatrick, President & CFO at CME Group]

In times of high volatility, it's not unusual and Suzanne can comment on this maybe a bit more for us to see more cash posted at the clearinghouse. So some of the shifts that we saw and that increase in cash balance likely was the result of that volatility. And as we progress through the year, as our customers get more accustomed to that soft minimum, we may see more of a rightsizing closer to that 30% target.

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

Yeah. I think it's hard to anticipate for the remainder of the year, given all the variables we've talked about already, that contribute to uncertainty in the environment.

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

But generally in periods of higher volatility and more uncertainty people do stay more liquid. So I think that does explain why we continue to see those elevated levels even now that we've backed off some of the earlier volatility in April.

[Kenneth Worthington, Financial Analyst at JP Morgan]

Great. Thanks Thank for your question. Appreciate it.

[Operator]

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

[Patrick Moley, Director & Senior Research Aanalyst at Piper Sandler Companies]

Yes, good morning. Thanks for taking the question. So I had one on the trial that's currently ongoing with your former floor traders. The damages that the plaintiffs are seeking, at least in the media, seem to be rather large, $1,000,000,000 to $2,000,000,000 plus. So to the extent that you're able to comment on it, how are you thinking about this trial, your ability to win?

[Patrick Moley, Director & Senior Research Aanalyst at Piper Sandler Companies]

And how should investors think about your reserving for any potential damages and whether that's had any impact on your capital return appetite in the near term? Thanks.

[Terrence Duffy, Chairman & CEO at CME Group]

Patrick, thanks for the question. And I don't mean to be short with you, but I'm just going to say we cannot comment on pending litigation. We are, as you just noted, we are in the middle of this trial now. So it's way too early to speculate what we would or would not do. We have said from the beginning that we have not accrued anything to date for this and that's all we can say that we've already said publicly, but I'm not gonna say anything further on the trial.

[Patrick Moley, Director & Senior Research Aanalyst at Piper Sandler Companies]

Okay, understood. Thanks for that.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks Patrick.

[Operator]

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

[Michael Cyprys, Managing Director at Morgan Stanley]

Great, thank you. Good morning. Maybe just a question here on twenty fourseven trading. Just curious to hear your views on what you see as the major hurdles and roadblocks today for bringing that to the marketplace. Maybe talk about some of the steps you might take to overcome that, including even what stablecoins I think you were alluding to before.

[Michael Cyprys, Managing Director at Morgan Stanley]

Maybe elaborate on the role, how you see that perhaps helping catalyze 20 trading? Then what ultimately might be the timeframe that you think that could bring to the marketplace? And then just remind us with extended trading or global trading hours today, just how meaningful that is as we think about maybe thinking about the size and demand that you might ultimately see over time for that. Just curious, any views around how you might see that demand and use cases shaping up for twenty fourseven? Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Michael, it's Terry Duffy. Let me just, again, make a couple of comments. But again, we're speculating a little bit here on the '20 fourseven about what the demand may or not be on the hours that the markets are not open today because you don't know. First of all, there is a cost associated with the firms in order to staff up for these 20 fourseven type of trading that, especially on margin products, have to be staffed up if you don't have a fully funded type of a contract. So I think it's going to be difficult lift for the firms, and so they're going to have to make a decision.

[Terrence Duffy, Chairman & CEO at CME Group]

Is it worth paying their staff for, to your point, is the demand there for it? So I personally believe that 20 fourseven trading will eventually happen globally. I just don't know what asset classes and when. It could be ten years down the road, twenty years down the road, or two years down the road. I don't know.

[Terrence Duffy, Chairman & CEO at CME Group]

I I think the way that you look at the evolution of markets, you would think that it would have to come there. But certain products may not be conducive to certain governments that they oversee that they would allow $24.07 trading on. So you might see more like we do today with the crypto markets being more in that realm. But I don't know about some of the other, like, interest rate products, how central banks would feel about that, foreign exchange, how central banks would feel about that, how certain energy companies would feel about that. There's a whole host of constituents that have to have an input into what they believe is in the best interest going forward.

[Terrence Duffy, Chairman & CEO at CME Group]

So I think it's a difficult question to answer other than I think certain products will, certain ones won't, and the timing is yet to be determined. And anybody on my team, you're not if you have a different viewpoint, I'd be interested in myself to hear That's kind of how we see it, Michael. So I don't know. I think you're right about the demand, but the cost for the demand is going to be something that people are going to have to analyze. If the demand is there, it will support the cost and I assume people will do it.

[Terrence Duffy, Chairman & CEO at CME Group]

If it's not, I assume they will not. But I think it will be asset class by asset class driven more than anything else is the way I see it.

[Michael Cyprys, Managing Director at Morgan Stanley]

Any particular asset classes you think this could be more conducive for? And any other hurdles beyond the demand side?

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. I think I said it already.

[Terrence Duffy, Chairman & CEO at CME Group]

I think crypto will be the asset class that's already basically there today. The question is, do crypto futures, you know, on a regulated platform, do they go there or not? And, you know, again, I don't know the answer to that, but right now, the cash market, as we all know, it goes twenty four seven today. So, again, that would be the asset class that appears headed in that direction.

[Michael Cyprys, Managing Director at Morgan Stanley]

Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you.

[Operator]

Thank you. Our next question comes from Kyle Voigt with KBW. Your line is open.

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

Hey, good morning, everyone. Just curious if you could get an update on FX Spot Plus and how the client uptake has been since it launched in early second quarter. I know early days, but any sizing of how additive it's been to the broader FX franchise thus far and how you'd frame the opportunity from here?

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Kyle. I'll ask Mr. McCord to make a comment on FX Spot Plus too.

[Tim McCourt, Senior Managing Director, Global Head, Equities, FX & Alternative Products at CME Group]

Yes, thanks Terry. And Kyle, thanks for the question. FX SPOT plus is something that we introduced back in April as the combination from a technology perspective of spot and futures FX markets. And it's really gone exceedingly well in the rollout. So when we look at some of the notable metrics of the spot plus offering, it reached a single day volume of $2,700,000,000 which is great for a contract that's only about three months old or an offer only three months old.

[Tim McCourt, Senior Managing Director, Global Head, Equities, FX & Alternative Products at CME Group]

But I think what's more impressively noted is that nearly 50 entities have actively traded on this new marketplace, including a few dozen banks that have not previously interacted with our FX futures market. So that remains a central hypothesis of this offering that we could bring new participants through FX Spot Plus to enjoy the benefits of both liquidity pools on the spot and futures side and avail futures based liquidity. Our CME Group continues to be a leader alongside our primary market designation in the spot market. It's a powerful combination for the marketplace and our clients. It's something that we also think to point out, while still early days, we're very pleased with the market quality this has been able to deliver, where we have been able to improve the competitiveness and the market quality of a few of our spot based currency pairs that historically see me through our EBS and FX spot offerings have not been the leader.

[Tim McCourt, Senior Managing Director, Global Head, Equities, FX & Alternative Products at CME Group]

So we're very pleased and we're seeing new participants, better market quality and significantly additive volume to our complex all as a function of rolling out SPOT plus Thanks,

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

Jeff.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Kyle.

[Operator]

Thank you. Our next question comes from Benjamin Butish with Barclays. Your line is open.

[Ben Budish, Director at Barclays]

Hi, good morning and thank you for taking the question. I was wondering if you could comment on your cash treasury trading business. It looks like your market share of overall treasury trading volume has stepped down a bit in the last couple of months. Curious if this is a function of competitive intensity, if you see more trading moving to voice. Thoughts there on sort of competitive dynamics and what you're seeing in that market? Thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. Thanks, Ben, for your question. I'll ask Mike Dennis to respond to that, Mike.

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

Yeah, Ben, appreciate the question. Just to start off, BrokerTec had an exceptional Q2. Our average daily notional volume of $949,000,000,000 was up 24%. In April, we saw one of the highest volume months since February 22, of ADV about $151,000,000,000 which was up 39% year over year. And furthermore, on April 7, BrokerTec had one of its highest volume days reaching $322,000,000,000 in U.

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

Treasury Actives traded on our platform, which proves our theory that BrokerTec is the primary venue for liquidity, price discovery, and risk transfer. Now, when we compare ourselves to others in the marketplace, we look to compare ourselves to like central limit order books that offer US Treasury on the run actives. There's a lot of different ways to look at, cash government security trading. Our platform, again, only has on the run US Treasury actives. We don't do off the runs.

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

We don't do bills. And so when we look at competitors in that space, we think our market share is flat, you know, from the first half of this year versus last year. It's also important to just understand that BrokerTec is more than just US Treasuries. We have a strong repo offering and we saw another record quarter of $362,900,000,000 ADV. And we also have RVCurve, which had a second consecutive record quarter at $2,700,000,000 So some of the things that we're looking at relating to competition is BrokerTec Chicago. We've obviously announced BrokerTec Chicago, which is the second matching engine. They'll sit next to our futures in the Aurora Data Center. Launch is scheduled for September 15. We're very excited about it.

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

We've had a lot of clients already reach out, to connect to the new API and start testing. And we do think that this can help with new client acquisition, where clients are trading in Sharper tick increments on other platforms. And we do think it will bring new, participants into the cash markets.

[Terrence Duffy, Chairman & CEO at CME Group]

Okay. Great. Thank you very much. Thanks, Ben.

[Operator]

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

[Alex Blostein, Managing Director at Goldman Sachs]

Hey, everybody. Good morning. Thanks for the question. I was wondering if you guys could comment on changes in bank capital requirements following CCAR and potentially other changes related to SLR and a couple of other things that could perhaps allow banks to expand balance sheet size. And just curious how you could see your ecosystem impacted by this, whether it's in the rates business or any other products could potentially benefit from that. Thanks.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Alex. As you know, I'm sure you do know Alex, we've been very vocal that the SLR requirements and some of the other requirements on banks has been onerous, and we believe that the capital that was originally deployed and continues to be deployed for risk management post Dodd Frank is adequate, and to be adding to something on top of that seemed like doubling up on something you didn't need to have done. So actually, I was quite pleased to hear some of the recent announcements coming forward, especially on the supplemental leverage ratio as you commented on. And how does that translate into us? Hopefully it frees up your balance sheet and others so you can continue to do more risk management in a more prudent way and not have as much capital tied up for issues that is probably unnecessary.

[Terrence Duffy, Chairman & CEO at CME Group]

But again, I think what's important is making sure the system is safe and sound, and that is the overriding opinion. But I think that from our standpoint, the way we look at it, if there are changes, I see it as a net positive for us. Mike, do you want to comment any further?

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

Yeah, I think just to add to what Terry said, there's been no formalization yet on SLR. It's currently in public comment period, but we do think that SLR relief could provide some balance sheet flexibility for bank clients, but the actual impact is going to depend on the bank and how the final rule is calibrated.

[Alex Blostein, Managing Director at Goldman Sachs]

Great, thank you.

[Terrence Duffy, Chairman & CEO at CME Group]

Thanks, Alex.

[Operator]

Thank you. Our next question comes from Simon Klintch with Rothschild and Co. Your line is open.

[Simon Clinch, MD - Financials Research at Rothschild & Co Redburn]

Hi, everyone. Thanks for taking my question. I wanted to jump back to the retail investors that you're retail traders that you're signing on. And perhaps, Terry, you could just give us a sense of how big the base of retail traders you have on the platform. And as you bring on like these 90,000 new traders this quarter, do you typically see those traders come on and trade very, very actively straight away?

[Simon Clinch, MD - Financials Research at Rothschild & Co Redburn]

Or is there some level of graduation before these kind of retail traders reach some level of maturity and activity? Thanks.

[Terrence Duffy, Chairman & CEO at CME Group]

Yeah. Thanks, Simon. It's a great question. It's almost unanswerable, though, because when you look participant to say that they have hit their stride or their peak in the first week of trading is kind of that that's not possible. Right?

[Terrence Duffy, Chairman & CEO at CME Group]

I mean, you do there is a curve for everybody that's new into any market, whether it's your foray into equity, equity options, futures, ETFs, whatever you're participating in, you're not gonna go all in to begin with. So when we talk about 90,000 new participants, we want to make certain that we participate with our clients, have a very good educational system so they understand and we wanna preserve and help them grow into whatever they're going to eventually be. But to say that they're mature enough on day one to maximize their value, it'd be a bit of a stretch. From someone who participated in the markets, and when I started in 1981, I assure you I was trading a lot smaller in '81 than I was in 2001 before I became chairman of CME. So it's just that it's just an attrition of a trader and how they go forward and depending on what they are used to trading.

[Terrence Duffy, Chairman & CEO at CME Group]

So I think that's really important to have longevity in this client base. It's a massive client base, but I wanna make sure they're educated and they have a good understanding of what they're getting into. So I would hope they're not going all in to begin with because I don't think that's a good thing for the future. I think what's good is they continue to participate for a longer period of time, which will be beneficial for them and will be beneficial for CME. So I'll ask Julie Wincker to comment further.

[Julie Winkler, Chief Commercial Officer at CME Group]

I think Terry said it well. Think traders come to us with different journeys. A critical part for us as well as our retail broker partners is that education point. I think what we've seen in the last five years is that the traders that do come to our doorstep are far more sophisticated and educated on products in general than what they were pre COVID. And some of that has come from the growth of simulation environment, the use of better technology within those environments, trading simulators like the one that we just launched, a new one on July 12.

[Julie Winkler, Chief Commercial Officer at CME Group]

All of these tools are just equipping these retail traders with more data and more analytics so that when they do start and fund their accounts, they are more ready to trade. And as Terry pointed out, we also are highly focused on client retention. And and for us, that means making sure they continue to get exposure to new products. They understand the content. We have an extensive client education event process that I talked about earlier, as well as we work with like 85 different external traders in, you know, that speak 13 different languages so that we make sure we're meeting these retail traders where they are and helping to bring them along in that journey.

[Julie Winkler, Chief Commercial Officer at CME Group]

I think you can also say like with those things, you know, the traders that are the largest, you know, that is probably the eightytwenty rule where they are making up, you know, a large percentage of that day to day activity. And yet again, I think the goal is to, you know, help those traders mature along their journey. And for us, a lot of that is about product introduction. And I think you're already seeing that in the Q2 results where they may come to us first from a micro equity perspective, but our partners in CME have been highly effective at getting them and cross selling them into other products like crypto and metals.

[Terrence Duffy, Chairman & CEO at CME Group]

Simon, hopefully that gives you a little flavor and color about how we're looking at the retail today and going forward.

[Simon Clinch, MD - Financials Research at Rothschild & Co Redburn]

That's great. Thanks very much.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you.

[Operator]

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

[William (Bill) katz, Senior Equity Analyst at TD Cowen]

Thank you for taking the question this morning. Just maybe a bit tough question to answer, but I'm sort of curious just given the interplay of sort of a rising non U. S, rising retail opportunity set relative to base business, and sort of the volume growth, how are thinking about maybe the projection for RPC looking ahead? Thank you.

[Lynne Fitzpatrick, President & CFO at CME Group]

Yes. So those are, I would say kind of two competing factors there, Bill. So I think you need to think about as we continue to expand our international presence, that does tend to be non member activity. So that does tend to be at a bit higher RPC. On the flip side, when you're talking about the retail activity, they may be participating in more of the smaller contracts, some of the micro, which does have a dampening effect on the average rate per contract.

[Lynne Fitzpatrick, President & CFO at CME Group]

So for us, we are not focused on growing RPC. We're focused on growing that revenue base and growing the opportunities that our clients have to trade. So I would focus more on that overall revenue picture than the RPC growth per se.

[Terrence Duffy, Chairman & CEO at CME Group]

Okay, Bill. You.

[Operator]

Next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.

[William Qi, Equity Research Senior Associate at RBC Capital Markets]

Hey, good morning, guys. This is Will Chi on for Ashish Sabadra. I appreciate you taking our questions today. Maybe just wanted to double click on the international markets there. We continue to see great momentum.

[William Qi, Equity Research Senior Associate at RBC Capital Markets]

Wondering if you guys could provide a little bit more color on the drivers from geographic segments, maybe also how that sales coverage and efforts are progressing on those major geographies as well?

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you for that question. Julie, you wanna talk a little bit about the sales in the international business real quick?

[Julie Winkler, Chief Commercial Officer at CME Group]

Sure. Yeah, I mean, think the record quarter of 9,200,000 contracts, 18% increase as Terry mentioned earlier. And what was great was the fact that we saw international records really across nearly every single asset class. Rates up 14%, equity indices up 38%, energy 23%, ags 3% and metals 14%. So, I would say solid performance across all of the diverse asset classes and across our key customer segments as well.

[Julie Winkler, Chief Commercial Officer at CME Group]

So, you know, we saw EMEA leading the charge there, you know, with with that, ADV up up 15%. And what we saw similar to q one is significant growth from all of those those tier one countries. So those areas where we have our sales resources most focused on sales execution, so countries such as France, The UK, Switzerland, UAE, and The Netherlands. But also, I think in APAC, a great second quarter of volume up 30% and significant increases there from Singapore, India and China. In terms of what are the drivers behind some of that, Derek mentioned it a little bit earlier in his answer.

[Julie Winkler, Chief Commercial Officer at CME Group]

Definitely, as commercial participants continuing to diversify their commodities hedging, we're seeing the sell side that are seeking global benchmarks, the ones that we offer and the liquidity that we are able to provide around the clock and also really some strong performance from the buy side who I think are seeking the capital efficiency offering that we have here particularly after the tariff announcement. So we see a lot of growth initiatives still on the horizon. Certainly, is a key aspect of our international volume but also just the investments that we're making in other key strategic markets and leveraging things like other incentive programs to acquire new clients and continuing to offer regionally relevant products and expanding our data services. A continued focus on that going forward and we believe that that will help to continue to fuel that international growth.

[Terrence Duffy, Chairman & CEO at CME Group]

And just to add to what Julie said, what Julie and her team do is no different than what they do here in The US as far as doing the sales, getting out there. She has a sales team that's global. This is not a US based sales team. The education is critically important, especially internationally. And when you look at when you go out there with your teams on sales and education and you show them the deep pools of liquidity, that's very attractive for any participant anywhere in the world.

[Terrence Duffy, Chairman & CEO at CME Group]

And, what we talk about all the time is people see the market efficiencies that they can achieve by trading CME's products is again a very attractive component for our international clients, and they're seeing more and more of it on a daily basis because of Julie and her team. So thank you for your question.

[William Qi, Equity Research Senior Associate at RBC Capital Markets]

Thank you. Appreciate it.

[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]

Hi. Thanks for taking the follow-up. I was wondering if you could elaborate on, the Nasdaq licensing agreement. Do the economics of the agreement change after yesterday's renewal?

[Lynne Fitzpatrick, President & CFO at CME Group]

There's no change to the economic structure, Eli, just the extension.

[Terrence Duffy, Chairman & CEO at CME Group]

That's correct.

[Lynne Fitzpatrick, President & CFO at CME Group]

Just out to 2039 but at the same economics.

[Craig Siegenthaler, Managing Director at Bank of America]

Got it. Thanks.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you.

[Operator]

Thank you. And our last question comes from Benjamin Butish with Barclays. Your line is open.

[Ben Budish, Director at Barclays]

Hi. Thanks for taking my follow-up as well. I just wanted to circle back on the collateral balances. I'm curious if you could unpack a little bit how cash versus noncash traded month over month. I think you mentioned in the prepared remarks or perhaps earlier in the Q and A that given the higher volatility in April, you saw a bigger influx of cash.

[Ben Budish, Director at Barclays]

What does the exit rate sort of look like into Q3 just as we're trying to calibrate our models for the next quarter? Thank you.

[Lynne Fitzpatrick, President & CFO at CME Group]

Yes. So it's still early, Ben. But so far in July, the average cash balance has held relatively steady. It's at about $132,000,000,000 versus the 133,000,000,000 I mentioned for Q2. We have seen a bit of an increase in the noncash collateral.

[Lynne Fitzpatrick, President & CFO at CME Group]

That's up to $153,000,000,000 so far in July, and the total collateral average is at $321,000,000,000

[Terrence Duffy, Chairman & CEO at CME Group]

Very helpful. Thank you so much. Thanks, Ben.

[Operator]

Thank you. We have no further questions. I would like to hand the call back to management for closing remarks.

[Terrence Duffy, Chairman & CEO at CME Group]

Thank you all again for joining us this quarter. We appreciate it very much. We're very excited by the results we were able to produce again. Record a quarter. We will continue to stay focused on creating efficiencies, bringing new clients to our marketplace and all the other initiatives that we discussed today.

[Terrence Duffy, Chairman & CEO at CME Group]

So thank you again. Have a great day. Be safe.

[Operator]

Thank you for participating in today's conference. You may disconnect at this time.

Participants

Executives

• Adam Minick, Executive Director, Head - IR
• Terrence Duffy, Chairman & CEO
• Lynne Fitzpatrick, President & CFO
• Julie Winkler, Chief Commercial Officer
• Tim McCourt, Senior Managing Director, Global Head, Equities, FX & Alternative Products
• Derek Sammann, Senior MD & Global Head of Commodities Markets
• Suzanne Sprague, COO & Global Head of Clearing
• Mike Dennis, Senior MD & Global Head - Fixed Income

Analysts

• Owen Lau, Executive Director at Oppenheimer & Co. Inc.
• Brian Bedell, Director at Deutsche Bank Securities
• Christopher Allen, MD - Exchanges, Brokers, & Asset Managers at Citi
• Eli Abboud, Equity Research Analyst at Bank of America
• Dan Fannon, MD - Research Analyst at Jefferies & Company Inc
• Alex Kramm, MD & Senior Equity Research Analyst at UBS Group
• Kenneth Worthington, Financial Analyst at JP Morgan
• Patrick Moley, Director & Senior Research Aanalyst at Piper Sandler Companies
• Michael Cyprys, Managing Director at Morgan Stanley
• Kyle Voigt, Managing Director at Keefe, Bruyette & Woods (KBW)
• Ben Budish, Director at Barclays
• Alex Blostein, Managing Director at Goldman Sachs
• Simon Clinch, MD - Financials Research at Rothschild & Co Redburn
• William (Bill) katz, Senior Equity Analyst at TD Cowen
• William Qi, Equity Research Senior Associate at RBC Capital Markets
• Craig Siegenthaler, Managing Director at Bank of America