CME Group Inc. Reports All-Time Record Revenue of $1.5 Billion for Q2 2024

Rhea-AI Summary

CME Group reported record-breaking financial results for Q2 2024, with revenue reaching $1.5 billion and operating income of $1.0 billion. The company achieved net income of $883 million and diluted earnings per share of $2.42. On an adjusted basis, net income was $932 million with diluted EPS of $2.56.

Highlights include:

• Record Q2 average daily volume (ADV) of 26 million contracts
• Year-over-year growth across all asset classes
• Non-U.S. ADV reached a record 7.8 million contracts
• U.S. Treasury products ADV increased 36% to 8.2 million contracts

The company paid dividends of approximately $419 million during Q2 and has returned about $25.2 billion to shareholders since 2012.

Positive

• Record quarterly revenue of $1.5 billion
• Adjusted net income of $932 million
• Adjusted diluted EPS of $2.56
• Record Q2 average daily volume of 26 million contracts
• Year-over-year growth across all asset classes
• Non-U.S. ADV reached a record 7.8 million contracts
• U.S. Treasury products ADV increased 36% to 8.2 million contracts

Negative

• None.

Insights

Financial Analyst

The recent financial performance of CME Group Inc. is indeed impressive and indicative of strong operational execution. The all-time record revenue of $1.5 billion is a significant milestone, signaling robust growth and strong demand across all asset classes. The key driver here is the record-breaking average daily volume (ADV) of 26 million contracts, which is the highest in the company’s history.

From a financial health perspective, the company reported a net income of $883 million, which, on an adjusted basis, rises to $932 million. This adjusted figure is important as it removes one-time items, providing a clearer picture of ongoing profitability. The adjusted EPS of $2.56 also underscores the company's strong earnings potential.

What stands out is the substantial year-over-year growth across every asset class. For example, the significant increase in U.S. Treasury products ADV by 36 to 8.2 million contracts suggests increased market activity and investor confidence in using CME Group’s platforms for risk management.

The company's substantial cash reserves of $2.0 billion and the ongoing return to shareholders, with $25.2 billion paid in dividends since 2012, positions it as a financially robust entity. Going forward, the focus on delivering capital efficiencies and leveraging partnerships, such as with Google Cloud, might further enhance operational efficiency and client value.

Market Research Analyst

CME Group’s performance this quarter highlights its strategic positioning within the global derivatives marketplace. The growth in every asset class and the highest Q2 ADV in company history reflect strong market demand and effective client engagement strategies. The firm’s ability to capture a 16% increase in commodities ADV and a 13% rise in financial markets ADV suggests that investors are increasingly relying on CME Group’s comprehensive product offerings for hedging and speculative purposes.

The company's initiatives, like bringing new products to market and enhancing value through innovation, are pivotal. The mention of a partnership with Google Cloud hints at a forward-thinking approach to technology adoption, which could streamline operations and reduce latency in trade executions, ultimately attracting more participants.

In terms of market data revenue, which totaled $175 million, CME Group demonstrates its capacity to monetize its extensive data assets. This revenue stream is particularly important as it provides a steady, less cyclical income. The overall strategy points towards a balanced approach of leveraging both traditional trading and technological advancements to maintain and grow market leadership.

Tech Expert

The incorporation of technology into CME Group’s operations is worth noting. The partnership with Google Cloud is a strategic move that can enhance the company’s capabilities in data processing, analytics and client services. Cloud infrastructure can significantly reduce processing times for large volumes of transactions, which is critical in a high-frequency trading environment.

The technological advancements also mean better risk management tools and analytics for clients, which can further drive volumes. This collaboration could introduce scalable and reliable services, supporting the company’s goal of bringing new products to market efficiently. Enhanced technology can also improve cybersecurity measures, a important aspect for a marketplace dealing with massive amounts of sensitive data daily.

Additionally, the deployment of advanced data analytics could provide CME Group with deeper insights into trading patterns and client needs, fostering better strategic decisions and customized solutions for market participants. This tech-forward approach demonstrates CME Group’s commitment to staying ahead in an increasingly digital and data-driven financial landscape.

• Record quarterly adjusted net income and earnings per share
• Highest Q2 average daily volume (ADV) in company history (26 million contracts)
• Year-over-year growth across every asset class

CHICAGO, July 24, 2024 /PRNewswire/ -- CME Group Inc. (NASDAQ: CME) today reported financial results for the second quarter of 2024.

The company reported revenue of $1.5 billion and operating income of $1.0 billion for the second quarter of 2024. Net income was $883 million and diluted earnings per common share were $2.42. On an adjusted basis, net income was $932 million and diluted earnings per common share were $2.56. Financial results presented on an adjusted basis for the second quarter of 2024 and 2023 exclude certain items, which are detailed in the reconciliation of non-GAAP results.¹

"As escalating uncertainties drove an increased need for risk management across all asset classes, CME Group achieved record Q2 volume and generated record revenue, adjusted net income and adjusted earnings per share," said CME Group Chairman and Chief Executive Officer Terry Duffy. "During the quarter, and for the first time in more than a decade, our volume and open interest grew in every asset class, with overall ADV up 16% in commodities and 13% in financial markets. We also reached significant records in many of our U.S. Treasury products where ADV increased 36% to 8.2 million contracts."

"As we move through the remainder of 2024, we will continue to focus on delivering capital efficiencies, bringing new products to market and creating additional value for our clients through our partnership with Google Cloud."

Second-quarter 2024 average daily volume (ADV) was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts.

1. A reconciliation of the non-GAAP financial results mentioned to the respective GAAP figures can be found within the Reconciliation of GAAP to non-GAAP Measures chart at the end of the financial statements and earnings presentation materials.

Clearing and transaction fees revenue for second-quarter 2024 totaled $1.2 billion. The total average rate per contract was $0.708. Market data revenue totaled $175 million for second-quarter 2024.

As of June 30, 2024, the company had approximately $2.0 billion in cash (including $225 million deposited with Fixed Income Clearing Corporation, which is included in other current assets) and $3.4 billion of debt. The company paid dividends during the second quarter of approximately $419 million. The company has returned approximately $25.2 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.

CME Group will hold a Q&A conference call to discuss second-quarter 2024 results at 8:30 a.m. Eastern Time today. A live audio webcast of the Q&A call will be available on the Investor Relations section of CME Group's website at investor.cmegroup.com under Events & Presentations. An archived recording will be available for up to two months after the call.

As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, respectively. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.

Statements in this press release that are not historical facts are forward-looking statements.  These statements are not guarantees of future performance and 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 forward-looking statements. We want to caution you not to place undue reliance on any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the factors that might affect our performance are increasing competition by foreign and domestic entities, including increased competition from new entrants into our markets and consolidation of existing entities; our ability to keep pace with rapid technological developments, including our ability to complete the development, implementation and maintenance of the enhanced functionality required by our customers while maintaining reliability and ensuring that such technology is not vulnerable to security risks; our ability to continue introducing competitive new products and services on a timely, cost-effective basis, including through our electronic trading capabilities, and our ability to maintain the competitiveness of our existing products and services; our ability to adjust our fixed costs and expenses if our revenues decline; our ability to maintain existing customers at substantially similar trading levels, develop strategic relationships and attract new customers; our ability to expand and globally offer our products and services; changes in regulations, including the impact of any changes in laws or government policies with respect to our products or services or our industry, such as any changes to regulations and policies that require increased financial and operational resources from us or our customers; the costs associated with protecting our intellectual property rights and our ability to operate our business without violating the intellectual property rights of others; decreases in revenue from our market data as a result of decreased demand or changes to regulations in various jurisdictions; changes in our rate per contract due to shifts in the mix of the products traded, the trading venue and the mix of customers (whether the customer receives member or non-member fees or participates in one of our various incentive programs) and the impact of our tiered pricing structure; the ability of our credit and liquidity risk management practices to adequately protect us from the credit risks of clearing members and other counterparties, and to satisfy the margin and liquidity requirements associated with the BrokerTec matched principal business; the ability of our compliance and risk management programs to effectively monitor and manage our risks, including our ability to prevent errors and misconduct and protect our infrastructure against security breaches and misappropriation of our intellectual property assets; our dependence on third-party providers and exposure to risk through third parties, including risks related to the performance, reliability and security of technology used by our third-party providers and third-party providers that our clients rely on; volatility in commodity, equity and fixed income prices, and price volatility of financial benchmarks and instruments such as interest rates, equity indices, fixed income instruments and foreign exchange rates; economic, social, political and market conditions, including the volatility of the capital and credit markets and the impact of economic conditions on the trading activity of our current and potential customers; our ability to accommodate increases in contract volume and order transaction traffic and to implement enhancements without failure or degradation of the performance of our trading and clearing systems; our ability to execute our growth strategy and maintain our growth effectively; our ability to manage the risks, control the costs and achieve the synergies associated with our strategy for acquisitions, investments and alliances, including those associated with the performance of our joint ventures with S&P Dow Jones (S&P Dow Jones Indices LLC) in index services and in trade processing/post trade services (OSTTRA), our primary business and distribution partners' actions and our partnership with Google Cloud; variances in earnings on cash accounts and collateral that our clearing house holds for its clients; impact of CME Group pricing and incentive changes; impact of aggregation services and internalization on trade flow and volumes; any negative financial impacts from changes to the terms of intellectual property and index rights; our ability to continue to generate funds and/or manage our indebtedness to allow us to continue to invest in our business; industry, channel partner and customer consolidation and/or concentration; decreases in trading and clearing activity; the imposition of a transaction tax or user fee on futures and options transactions and/or repeal of the 60/40 tax treatment of such transactions; increases in effective tax rates, borrowing costs, or changes in tax policy; our ability to maintain our brand and reputation; and the unfavorable resolution of material legal proceedings.  For a detailed discussion and additional information concerning these and other factors that might affect our performance, see our other recent periodic filings, including our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission ("SEC") on February 28, 2024, under the caption "Risk Factors".

CME Group Inc. and Subsidiaries
Consolidated Balance Sheets
(in millions)
		June 30, 2024		December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents		$                 1,789.9		$                2,912.0
Marketable securities		121.7		111.7
Accounts receivable, net of allowance		599.5		535.6
Other current assets (includes $5.2 in restricted cash)		567.5		1,138.4
Performance bonds and guaranty fund contributions		85,670.0		90,192.5
Total current assets		88,748.6		94,890.2
Property, net of accumulated depreciation and amortization		384.5		409.5
Intangible assets—trading products		17,175.3		17,175.3
Intangible assets—other, net		2,932.5		3,050.2
Goodwill		10,488.6		10,495.3
Other assets		3,649.8		3,685.6
Total Assets		$             123,379.3		$             129,706.1
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable		$                      99.9		$                      90.6
Short-term debt		749.5		—
Other current liabilities		454.6		3,133.8
Performance bonds and guaranty fund contributions		85,670.0		90,192.5
Total current liabilities		86,974.0		93,416.9
Long-term debt		2,677.2		3,425.4
Deferred income tax liabilities, net		5,309.1		5,327.7
Other liabilities		783.2		798.2
Total Liabilities		95,743.5		102,968.2
Total CME Group Shareholders' Equity		27,635.8		26,737.9
Total Liabilities and Equity		$             123,379.3		$            129,706.1

 

CME Group Inc. and Subsidiaries
Consolidated Statements of Income
(dollars in millions, except per share amounts; shares in thousands)
		Quarter Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
Revenues
Clearing and transaction fees		$   1,249.9		$   1,118.3		$  2,458.8		$  2,318.5
Market data and information services		175.0		163.1		350.4		328.9
Other		107.6		78.8		211.2		154.4
Total Revenues		1,532.5		1,360.2		3,020.4		2,801.8
Expenses
Compensation and benefits		204.7		205.7		410.7		410.2
Technology		64.1		53.3		123.5		104.6
Professional fees and outside services		34.7		37.8		67.8		76.1
Amortization of purchased intangibles		55.5		57.0		110.7		113.8
Depreciation and amortization		28.7		32.3		58.8		64.2
Licensing and other fee agreements		85.9		78.2		173.8		162.9
Other		58.3		57.3		114.9		117.7
Total Expenses		531.9		521.6		1,060.2		1,049.5
Operating Income		1,000.6		838.6		1,960.2		1,752.3
Non-Operating Income (Expense)
Investment income		1,044.5		1,568.2		2,115.8		2,925.9
Interest and other borrowing costs		(40.1)		(40.2)		(80.0)		(80.1)
Equity in net earnings of unconsolidated subsidiaries		86.4		75.1		173.6		153.3
Other non-operating income (expense)		(936.9)		(1,425.3)		(1,901.7)		(2,578.1)
Total Non-Operating Income (Expense)		153.9		177.8		307.7		421.0
Income before Income Taxes		1,154.5		1,016.4		2,267.9		2,173.3
Income tax provision		271.3		238.8		529.5		511.9
Net Income		$      883.2		$      777.6		$  1,738.4		$  1,661.4
Net Income Attributable to Common Shareholders of CME Group		$      872.1		$      767.8		$  1,716.5		$  1,640.5
Earnings per Share Attributable to Common Shareholders of CME Group:
Basic		$        2.43		$        2.14		$        4.78		$        4.57
Diluted		2.42		2.14		4.77		4.56
Weighted Average Number of Common Shares:
Basic		359,330		358,940		359,294		358,937
Diluted		359,869		359,429		359,852		359,371

 

CME Group Inc. and Subsidiaries
Quarterly Operating Statistics
		2Q 2023		3Q 2023		4Q 2023		1Q 2024		2Q 2024
Trading Days		62		63		63		61		63

 

Quarterly Average Daily Volume (ADV)(1)
CME Group ADV (in thousands)
Product Line		2Q 2023		3Q 2023		4Q 2023		1Q 2024		2Q 2024
Interest rates		11,273		10,967		13,348		13,839		12,894
Equity indexes		6,216		6,353		6,922		6,856		6,779
Foreign exchange		898		942		1,007		984		1,075
Energy		2,104		2,126		2,158		2,412		2,447
Agricultural commodities		1,752		1,433		1,469		1,596		1,877
Metals		612		528		609		675		868
Total		22,855		22,349		25,513		26,360		25,941
Venue
CME Globex		20,907		20,838		23,503		23,985		24,143
Open outcry		1,124		713		1,126		1,333		825
Privately negotiated		825		797		885		1,043		974
Total		22,855		22,349		25,513		26,360		25,941

 

Quarterly Average Rate Per Contract (RPC)(1)
CME Group RPC
Product Line		2Q 2023		3Q 2023		4Q 2023		1Q 2024		2Q 2024
Interest rates		$         0.505		$         0.508		$         0.488		$          0.486		$         0.484
Equity indexes		0.644		0.625		0.616		0.641		0.628
Foreign exchange		0.800		0.791		0.806		0.787		0.754
Energy		1.347		1.324		1.338		1.334		1.297
Agricultural commodities		1.356		1.328		1.361		1.356		1.366
Metals		1.487		1.492		1.502		1.556		1.511
Average RPC		$         0.724		$         0.707		$         0.682		$          0.695		$         0.708

1. ADV and RPC includes futures and options on futures only.

 

CME Group Inc. and Subsidiaries
Reconciliation of GAAP to non-GAAP Measures
(dollars in millions, except per share amounts; shares in thousands)
		Quarter Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
Net Income		$       883.2		$       777.6		$  1,738.4		$  1,661.4
Restructuring and severance		0.8		1.6		3.6		2.3
Amortization of purchased intangibles(1)		68.9		70.5		137.6		140.6
Strategic transaction-related costs (credits)		(1.1)		—		0.8		(2.2)
Real estate-related costs (credits)		(1.0)		—		(1.0)		—
Foreign exchange transaction (gains) losses		(0.3)		1.1		(2.1)		1.8
Unrealized and realized (gains) losses on investments		(9.2)		1.0		(11.7)		(73.8)
Unrealized and realized (gains) losses on assets		—		0.4		0.8		0.4
Income tax effect related to above		(11.0)		(15.0)		(25.0)		(11.0)
Other income tax items		1.9		(0.8)		1.9		(0.8)
Adjusted Net Income		$       932.2		$       836.4		$  1,843.3		$  1,718.7
Adjusted Net Income Attributable to Common Shareholders of CME Group		$       920.4		$       825.9		$  1,820.1		$  1,697.0
Earnings per Share Attributable to Common Shareholders of CME Group:
Basic		$         2.43		$         2.14		$        4.78		$        4.57
Diluted		2.42		2.14		4.77		4.56
Adjusted Earnings per Share Attributable to Common Shareholders of CME Group:
Basic		$         2.56		$         2.30		$        5.07		$        4.73
Diluted		2.56		2.30		5.06		4.72
Weighted Average Number of Common Shares:
Basic		359,330		358,940		359,294		358,937
Diluted		359,869		359,429		359,852		359,371
Preferred shares(2)		4,584		4,584		4,584		4,584

1. Includes $11.1 million of amortization of purchased intangibles (net of tax) at OSTTRA and $2.4 million of amortization of purchased intangibles at S&P Dow Jones Indices LLC, reported in Equity in net earnings of unconsolidated subsidiaries on the Consolidated Statements of Income.

2. Preferred shares have similar rights as common shares without voting rights.

 

CME-G

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SOURCE CME Group

FAQ

What was CME Group's revenue for Q2 2024?

CME Group reported record revenue of $1.5 billion for Q2 2024.

How much was CME's adjusted earnings per share in Q2 2024?

CME Group's adjusted diluted earnings per share were $2.56 in Q2 2024.

What was CME Group's average daily trading volume in Q2 2024?

CME Group achieved a record Q2 average daily volume (ADV) of 26 million contracts.

How did CME's U.S. Treasury products perform in Q2 2024?

CME's U.S. Treasury products ADV increased 36% to 8.2 million contracts in Q2 2024.

How much did CME Group pay in dividends during Q2 2024?

CME Group paid approximately $419 million in dividends during Q2 2024.