On Wednesday, CME Group (NASDAQ:CME) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
CME Group Inc reported a record-breaking first quarter in 2026 with the highest average daily volume of 36.2 million contracts, marking a 22% increase year-over-year.
The company achieved record volume across all six asset classes and significant growth in international markets, with a 30% increase in international average daily volume.
CME Group Inc announced several strategic initiatives, including the expansion of cross-margining agreements and the upcoming launch of 24/7 crypto trading.
The company returned $3.2 billion to shareholders, including $2.7 billion in dividends and $536 million in share repurchases.
Management highlighted ongoing investments in technology, including the migration of some operations to the cloud with Google and exploring tokenization of cash and the potential issuance of a stablecoin.
Full Transcript
OPERATOR
Welcome to the CME Group first quarter 2026 earnings call. At this time I would like to inform all participants that your lines have been placed on a listen only mode until the question answer session of today’s conference. I would now like to turn the call over to Adam Minick. Please go ahead.
Adam Minick
Good morning and I hope you’re all doing well today. Earlier this morning we released our earnings commentary which provides extensive details on the first quarter 2026 which we will be discussing on this call. I’ll start with the safe harbor language, 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. 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 our Chairman and CEO Terry Duffy.
Terry Duffy (Chairman and CEO)
Thanks Adam and thank you all for joining us this morning. I’ll make a few brief comments about our record quarter before turning it over to Lynn to provide an overview of our financial results. In addition to Lynn, we have other members of our management team present to answer questions after our prepared remarks. I’m proud to announce that CME Group has achieved a record breaking start to 2026. Our outstanding performance in the first quarter reflects the essential role we play in the global economy and the trust our clients place in our markets to manage risk during periods of significant economic transition. The first quarter average daily volume of 36.2 million contracts was the highest quarterly average daily volume in CME Group’s history and represented an increase of 22% compared to the same period last year and 6 million contracts a day higher than any previous quarter. For the first time in our history, we achieved simultaneously record volume across every one of our six asset classes, rates, equities, energy, agricultural products, metals and foreign exchange. In aggregate, our commodity sector volume grew by 38% and our financial products volume grew by 18%. Building on the momentum of our record 2025, our global expansion continues to accelerate. International average daily volume reached a record 11.4 million contracts, a stunning 30% increase in 2025. The EMEA, APAC and Latin American regions all posted record highs. Remarkably, our international Business also saw record volume in all six asset classes simultaneously, proving that our value proposition is resonating globally. We aren’t just growing volume, we’re growing client value. We delivered record levels of capital efficiency, saving our customers an average of over $85 billion in margin per day. Additionally, open interest ended the quarter up 11% over the past year and up 19% since the beginning of 2026. During the quarter, U.S. treasury open interest reached an all time high of 36.3 million contracts driven by unprecedented demand for U.S. treasury futures and options. This growth reinforces CME Group’s role in as the deepest and most efficient liquidity pool in the world. We continue to innovate and provide the tools our clients need in an environment that is always risk on. These include last week’s CME FICC or Fixed Income Clearing Corporation Cross Margining Agreements received approval from both the SEC and CFTC to expand to our end user clients beginning with on 4-30-24, seven crypto trading scheduled to go live on May 29th. Also, we’re excited to announce that we will be filing to change our Micro Equity Index options to be financially settled to better serve the users of those products. Our new environment in Dallas is on track to open this summer and we will provide a critical testing ground for our clients in advance of two of our agricultural products migrating to the cloud by the end of the year. As we look to the rest of 2026, we are confident in our ability to continue to deliver value to our clients and shareholders. Our strong performance, coupled with our ongoing investments in technology and product innovation provides a solid foundation for future growth. With that, I’ll now turn the call over to Lynn to review our financial results in more detail.
Lynn
Thanks Terry and thank you all for joining us this morning. As Terry mentioned, the first quarter was record breaking across the board. This included growth in our clearing and transaction fee revenue of 15% year over year. The average rate per contract for the quarter was 65.2 cents. Our pricing strategy includes volume tiering which results in decreasing rate per contract at higher levels of volume. With volume records in every single asset class this quarter, this volume tiering encouraged incremental trading, providing risk management benefits to our customers and driving highly profitable incremental volume to the exchange. The combination of our volume growth and pricing structure resulted in an increase of 205 million in clearing and transaction fees for the quarter. Market data revenue also reached a record level, up 15% to $224 million, marking 32 consecutive quarters of year over year Market Data Revenue Growth in aggregate, CME Group generated record revenue of $1.9 billion, up $238 million, or 14%, from the first quarter of 2025. Adjusted expenses were $512 million for the quarter and $405 million excluding license fees. Our adjusted operating income was $1.4 billion, or a 72.8% adjusted operating margin, the highest in our history. Adjusted net income and adjusted diluted earnings per share came in at a record setting $1.2 billion and $3.36 per share, 20% higher than Q1 2025. This represents an adjusted net income margin for the quarter of 64.9%, with 200 million of the $238 million increase in revenue accruing to adjusted net income. We returned 3.2 billion to shareholders during the quarter, with $2.7 billion in variable and regular quarterly dividends and $536 million in shares repurchased this quarter delivered the highest volume revenue, operating income, adjusted net income and diluted earnings per share in the history of CME Group. These results are a reflection of our position as the world’s premier risk management destination. As our clients continue to navigate uncertain times, we remain fully committed to meeting their evolving needs through continued innovation and deep liquidity. We’d now like to open up the call for your questions.
OPERATOR
The phone lines are now open for questions. If you would like to ask a question over the phone, please press Star one and record your name. To withdraw your question and press Star two. The first question in the queue is from Patrick Moley with Piper Sandler. Your line is now open.
Patrick Moley (Equity Analyst)
Yes, good morning. Thanks for taking the question. Terry. You mentioned that you’ve received regulatory approval to expand the DTCC cross margining agreement to end user clients. At the same time, the DTCC has been running a pilot program to tokenize U.S. treasuries as collateral. So as you think about the intersection of these two initiatives, I’m curious how you see enhanced collateral mobility impacting CME’s clearing business and then more specifically with customers having the ability to move tokenized treasury collateral in real time. Just what that could mean for the industry writ large?.
Terry Duffy (Chairman and CEO)
Thanks, Patrick. Suzanne Sprague is here and she’s been working very closely with both FIC and all the folks at DTCC and the regulator. So I’m going to ask her to opine on that question to start and then I’ll go.
Suzanne Sprague
Yeah, thanks Patrick. We are continuing to work with FIC as well as internally on various tokenization efforts. So we think that there is a benefit for the industry to be able to reduce friction in moving collateral, especially for collateral that does not settle naturally same day. Treasury’s is a good example of that. So we will continue to explore what we could do together with FICC, as well as other initiatives that we’re pursuing at cme, including the tokenization of cash and our partnership with Google, as well as looking at other assets that might be of interest in the ecosystem today to be able to reduce some of those frictions and free up liquidity by moving those assets on digital technology.
Terry Duffy (Chairman and CEO)
You know, Patrick, just to add on to that, I have said, and the team has said, we’re looking at potentially our own stablecoincoin here. We’re looking at multiple different ways to make that $85 billion a day in margin efficiencies continue to grow. And not only just the margin efficiencies, but the capital efficiencies about how we move money back and forth each and every day and what’s the best interest of every single client. So whether it’s through tokenization, stablecoin, using cash and Treasuries, other forms of margin that they use with us today, we want to make it effectively for them and efficiently for them. So I think it’s an exciting time for us and we look forward to informing you more as we continue to roll out these proposals.
Patrick Moley (Equity Analyst)
Okay, that’s great color. And then as a quick follow up, we’ve seen some pretty interesting developments in the perpetual futures space this year. The S and p Dow Jones JV recently granted an exclusive license for the S&P 500 perpetual futures to a relatively lesser known company on the hyper liquid blockchain. And on that platform we’ve seen volumes explode and commodity perps. So just with your goal to try and attract more and more retail eyeballs to CME’s product suite, I’m curious how you’re thinking about perpetual futures as a product structure that could eventually become a more meaningful driver of retail engagement. And then just if you could maybe talk about some of the regulatory or market structure hurdles that I guess would need to be cleared before we get there.
Terry Duffy (Chairman and CEO)
Thanks. So thanks Patrick, and I’m glad you raised that. There’s a couple things I want to unpack there. First we’ll talk about the JV venture, then I want to talk about some of the commodities and Derek can address that and what the true volumes are associated with that. It looks very large in the way they’re trading it. But remember, those are in notional value, not in Contract terms, the way we calculate our business. So, and who’s on those platforms, how those platforms work, what’s the risk management associated with it, and why would that institution potentially want to participate in something of the way those are structured? First of all, perpetuals are against the law in the United States of America. That’s first and foremost. That is where it’s at today. They are not allowed under the Commodity Exchange act of 2000. The centerpiece of that act was how do you define what a futures contract is? It wasn’t a bunch of other things in the act. The centerpiece was what is a futures contract? And it was defined as a contract for future delivery. It was not designed as a contract that never ended. So I really believe that for perpetuals, I think convergence is massively important to the commercial producers and other participants that these contracts are designed for. Contracts are not designed not, I repeat, not designed for speculators or hedgers, are not designed for speculators or just a pure retail. They’re designed for hedgers, commercials and producers. That’s the way you have to have a natural buyer and natural seller. And they need to have convergence between cash and futures in order to run their business, which benefits the participants, not only United States, but globally. You need to have these markets. As a great Dr. Milton Friedman said to me in 2002, if we did not have futures contracts today, we would need to invent them in order to move forward with progress. But the way the market works between cash and futures is critically important. So the decisions that people want on perpetuals seem to me more of they’re trying to create a contract for the speculator. That’s not the mission of the Commodity Exchange Act. That’s not the definition of it. So that’s something that I’m very much involved with as it relates to perpetuals. Your other part about the volume going into some of these products, I assume you’re referring to some on silver, some on oil. And so let’s talk about that for a second. When they listed those on xyz, on HyperLiquid, as you know, the way that market works, if in fact they were to have a tip over in the auto liquidation, they’ve been very fortunate to have an orderly market for the most part. But if, in fact you had an auto liquidation, the money from the losers comes from the winners. It’s a very difficult proposal for any institutional hedger to use a product such as that where if they’re due a dollar and they get 45 cents back, because the other side of the trade just got beat up and so that’s where they got the money from. So I am concerned about some of those rules and those are done on perpetual basis. I think the agricultural communities, the energy communities and others are not completely pleased with some of the pricing of those products. But I’ll let Derek talk about that. But what’s important, before he mentions it, we have to think about the timing of when those products were listed. You got to remember silver went from $50 to 1 18, I believe. Derek, is that about right? To a high and then back to 86. Oil went from $50 a barrel for almost four years to north of 100 and then back down 86. So that was where that activity kind of caught. Now the question will be, is that sustainable? So I’ll let Derek comment on those.
Derek
Yeah, I appreciate it Terry. I think if you looked at the results of this last Q1 and even continuing into Q2 of this year, you’re seeing exactly what Terry talked about. The purpose of futures contracts or to enable hedgers to be able to know that they can identify a forward curve. These products then converge to physical delivery and physical markets, whether it’s corn, whether it’s livestock, whether it’s oil, whether it’s gold, all come to physical use. So we look at the end user commercial need of these customers. When you look at the growth and record activity in our commodities portfolio as a whole, you’ll see that every single portion of our client segments grew in double digit growth in every single group led by commercials, corporates, banks, buy side and prop firms. So retail is a part of that. But financial customers will follow where the end user manages and hedges their underlying risk. And that’s in our futures market.
Terry Duffy (Chairman and CEO)
And so on the first part of your question with the S and P listing on that, we were not made aware of that. Even though we own 27% of the index business, we were not made aware of that decision. We got made aware once they listed it, whether literally several hours before their press release went out, their press release went out and which coincided with the opening of that market. We’ve been engaged with conversations, as you can imagine, with our partners. We both have a deep respect for intellectual property. We’ve made our points very aggressively on that and I think they understand that now. And so we are continuing to work with our partners at S and P to make certain that as we go forward we’re all on the same page.
Patrick Moley (Equity Analyst)
Great. Very, very helpful. That’s it for me.
Terry Duffy (Chairman and CEO)
Thanks, Patrick.
OPERATOR
The next question in the queue is from Dan Fannin with Jefferies. Your line is now open.
Dan Fannin (Equity Analyst)
Thanks. Good morning. So Terry, wanted to follow up on your comments about the micro equity index option change. I think the filing that you’re making to be more financially settled. So just wanted to talk about why now and what you see as the opportunity going forward with that.
Terry Duffy (Chairman and CEO)
I’ll let Tim chime in, but I will tell you why now is, you know, maybe we should have done it a little bit sooner. But why now is because the client base continues to go across multiple different versions of the equity complex. Whether it’s the larger E Mini, whether it’s the micro or something smaller and how they participate. This client base in the micros seems to be more of a retail focus. They really don’t want to deliver their options into a future where the people that are trading the larger clients do want to to deliver their options into a future. So we felt very strongly that the micro contract would make more sense for that constituency. But at the same breath, we didn’t think it made sense to change all of our equity contracts to deliver into cash settled. Basically we’ll keep them as deliverable into a future. But Tim, you can add to that. Thanks Terry and thanks Dan.
Tim
And I think part of it is, as Terry said, CME Group is the comprehensive leader in risk transfer for the S&P 500 and the NASDAQ complexes. It’s important for us to continue to evolve our products to meet the risk management and market access needs of our customers. And that’s the feedback that we’re receiving when we look at the micro sized products and how those strategies are deployed to hedge other parts of their either stock portfolios or ETF portfolios or looking to access the market that they prefer the financially settled mechanisms where they could have the options expire against the futures daily settlement price and that is the change we’re looking to file. It will then as Terry said, be different than the institutional grade E Mini offerings and options on those products which serve a very specific and highly utilized function of the market of delivering the underlying futures which is a benefit to the institutional community and the hedges out there. Particularly when they’re looking to access the almost $40 billion per day of capital efficiencies in our equity complex. At CME Group we’ve actually seen continued adoption of our E Mini products by clients. We’ve where several large buy side clients are also switching some of their structured product strategies to utilize the efficiencies and the benefits of trading futures based options. At CME Group on the S&P 500. So we think this will further grow the complex as we remove some of the barriers to entry for clients and give them a better tool that serves the risk management needs of their portfolio.
Terry Duffy (Chairman and CEO)
And just so you’re not thinking I’m talking out of both sides of my mouth in this particular contract, we didn’t design it as a financially settled in the micro because it’s just for retail or speculation. It’s not. You have to look at the value of the S&P 500 and who uses that contract today for you historians that may or may not know this. We started with an S&P 500 and then we cut the multiplier to 250.. As the contract continues to go up in value, participants, even the large ones, need to trade a smaller contract or they need to trade a bigger country, depending on what their needs are. So we are trying to take these pools of liquidity for the constituents to go across the entire spectrum of CME’s equity products. And it’s basically the decisions are being made for the value …
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