CME Group Inc. Reports Third-Quarter 2023 Financial Results

CME Group Inc. (NASDAQ: CME) today reported financial results for the third quarter of 2023.

The company reported revenue of $1.3 billion and operating income of $820 million for the third quarter of 2023. Net income was $750 million and diluted earnings per common share were $2.06. On an adjusted basis, net income was $818 million and diluted earnings per common share were $2.25. Financial results presented on an adjusted basis for the third quarter of 2023 and 2022 exclude certain items, which are detailed in the reconciliation of non-GAAP results.¹

"CME Group delivered its ninth consecutive quarter of double-digit growth in adjusted earnings per share and a 9% increase in revenue as market participants continued turning to our markets to mitigate their business risks amid accelerating geopolitical uncertainty," said CME Group Chairman and Chief Executive Officer Terry Duffy. "This was a particularly strong quarter, with interest rate volume increasing 6%, driven by an 18% rise in Treasury futures ADV and records in our Ultra 10-Year and Ultra T-Bond futures. We also generated significant growth across agricultural, energy and options products."

Third-quarter 2023 average daily volume (ADV) was 22.3 million contracts. Non-U.S. ADV reached 6.5 million contracts, up 7% from third-quarter 2022, including 16% growth in interest rates and double-digit growth across agricultural, energy and metals products.

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 third-quarter 2023 totaled $1.1 billion. The total average rate per contract was $0.707. Market data revenue totaled $168 million for third-quarter 2023.

As of September 30, 2023, the company had approximately $2.5 billion in cash (including $150 million deposited with Fixed Income Clearing Corporation, which is included in other current assets) and $3.4 billion of debt. The company paid dividends of approximately $400 million during the third quarter of 2023. The company has returned over $22 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 third-quarter 2023 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 www.cmegroup.com. An archived recording will be available for up to two months after the call.

CME Group Inc. and Subsidiaries
Consolidated Balance Sheets
(in millions)

	September 30, 2023	December 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$ 2,300.2	$ 2,720.1
Marketable securities	104.1	96.0
Accounts receivable, net of allowance	558.4	483.2
Other current assets (includes $5.1 and $4.9 in restricted cash)	622.0	529.8
Performance bonds and guaranty fund contributions	87,192.1	135,249.2
Total current assets	90,776.8	139,078.3
Property, net of accumulated depreciation and amortization	417.3	455.5
Intangible assets—trading products	17,175.3	17,175.3
Intangible assets—other, net	3,095.4	3,269.7
Goodwill	10,477.6	10,482.5
Other assets (includes $0.0 and $0.1 in restricted cash)	3,655.8	3,714.4
Total Assets	$ 125,598.2	$ 174,175.7
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$ 53.8	$ 121.4
Short-term debt	—	16.0
Other current liabilities	634.6	2,300.9
Performance bonds and guaranty fund contributions	87,192.1	135,249.2
Total current liabilities	87,880.5	137,687.5
Long-term debt	3,424.7	3,422.4
Deferred income tax liabilities, net	5,332.7	5,361.1
Other liabilities	808.7	826.0
Total Liabilities	97,446.6	147,297.0
Total CME Group Shareholders' Equity	28,151.6	26,878.7
Total Liabilities and Equity	$ 125,598.2	$ 174,175.7

CME Group Inc. and Subsidiaries
Consolidated Statements of Income
(dollars in millions, except per share amounts; shares in thousands)

	Quarter Ended September 30,		Nine Months Ended, September 30,
	2023	2022	2023	2022
Revenues
Clearing and transaction fees	$ 1,085.5	$ 998.6	$ 3,404.0	$ 3,161.3
Market data and information services	167.6	154.3	496.5	457.7
Other	84.7	74.9	239.1	192.6
Total Revenues	1,337.8	1,227.8	4,139.6	3,811.6
Expenses
Compensation and benefits	205.5	189.6	615.7	560.1
Technology	55.6	46.8	160.2	138.6
Professional fees and outside services	32.2	35.1	108.3	98.9
Amortization of purchased intangibles	57.2	55.5	171.0	171.0
Depreciation and amortization	31.1	34.5	95.3	101.0
Licensing and other fee agreements	79.5	83.6	242.4	247.6
Other	56.5	43.9	174.2	146.8
Total Expenses	517.6	489.0	1,567.1	1,464.0
Operating Income	820.2	738.8	2,572.5	2,347.6
Non-Operating Income (Expense)
Investment income	1,272.5	686.2	4,198.4	1,046.2
Interest and other borrowing costs	(39.6)	(40.4)	(119.7)	(122.8)
Equity in net earnings of unconsolidated subsidiaries	76.8	76.5	230.1	237.1
Other non-operating income (expense)	(1,155.6)	(581.1)	(3,733.7)	(845.1)
Total Non-Operating Income (Expense)	154.1	141.2	575.1	315.4
Income before Income Taxes	974.3	880.0	3,147.6	2,663.0
Income tax provision	224.1	200.4	736.0	609.9
Net Income	$ 750.2	$ 679.6	$ 2,411.6	$ 2,053.1
Net Income Attributable to Common Shareholders of CME Group	$ 740.8	$ 671.1	$ 2,381.3	$ 2,027.2

Earnings per Share Attributable to Common Shareholders of CME Group:
Basic	$ 2.06	$ 1.87	$ 6.63	$ 5.65
Diluted	2.06	1.87	6.62	5.64
Weighted Average Number of Common Shares:
Basic	359,020	358,715	358,965	358,655
Diluted	359,619	359,288	359,448	359,206

CME Group Inc. and Subsidiaries
Quarterly Operating Statistics

	3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023
Trading Days	64	63	62	62	63

Quarterly Average Daily Volume (ADV)¹
CME Group ADV (in thousands)

Product Line	3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023
Interest rates	10,357	9,832	14,490	11,273	10,967
Equity indexes	7,445	7,465	7,303	6,216	6,353
Foreign exchange	1,091	1,000	969	898	942
Energy	1,837	1,829	2,083	2,104	2,126
Agricultural commodities	1,208	1,171	1,379	1,752	1,433
Metals	498	508	649	612	528
Total	22,437	21,803	26,873	22,855	22,349
Venue
CME Globex	21,021	20,279	24,171	20,907	20,838
Open outcry	704	746	1,623	1,124	713
Privately negotiated	711	778	1,080	825	797
Total	22,437	21,803	26,873	22,855	22,349

Quarterly Average Rate Per Contract (RPC)¹
CME Group RPC

Product Line	3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023
Interest rates	$ 0.479	$ 0.500	$ 0.495	$ 0.505	$ 0.508
Equity indexes	0.524	0.535	0.595	0.644	0.625
Foreign exchange	0.729	0.756	0.790	0.800	0.791
Energy	1.140	1.181	1.300	1.347	1.324
Agricultural commodities	1.351	1.356	1.349	1.356	1.328
Metals	1.520	1.519	1.517	1.487	1.492
Average RPC	$ 0.631	$ 0.651	$ 0.664	$ 0.724	$ 0.707

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 September 30,		Nine Months Ended, September 30,
	2023	2022	2023	2022
Net Income	$ 750.2	$ 679.6	$ 2,411.6	$ 2,053.1
Restructuring and severance	12.6	—	14.9	10.2
Amortization of purchased intangibles¹	70.7	68.5	211.3	206.4
Strategic transaction-related costs (credits)	—	1.2	(2.2)	3.4
Foreign exchange transaction (gains) losses	(1.9)	(10.5)	(0.1)	(23.6)
Unrealized and realized (gains) losses on investments	2.0	(1.1)	(71.8)	(4.6)
Unrealized and realized (gains) losses on assets	—	0.7	0.4	0.7
Debt costs related to refinancing	—	—	—	7.7
Trading floor enhancements	—	—	—	4.8
Litigation Matters or Settlements	2.0	—	2.0	—
Income tax effect related to above	(17.6)	(11.3)	(28.6)	(40.1)
Other income tax items	—	(8.0)	(0.8)	(16.2)
Adjusted Net Income	$ 818.0	$ 719.1	$ 2,536.7	$ 2,201.8
Adjusted Net Income Attributable to Common Shareholders of CME Group	$ 807.8	$ 710.0	$ 2,504.8	$ 2,174.1

Earnings per Share Attributable to Common Shareholders of CME Group:
Basic	$ 2.06	$ 1.87	$ 6.63	$ 5.65
Diluted	2.06	1.87	6.62	5.64

Adjusted Earnings per Share Attributable to Common Shareholders of CME Group:
Basic	$ 2.25	$ 1.98	$ 6.98	$ 6.06
Diluted	2.25	1.98	6.97	6.05

Weighted Average Number of Common Shares:
Basic	359,020	358,715	358,965	358,655
Diluted	359,619	359,288	359,448	359,206
Preferred shares²	4,584	4,584	4,584	4,584

1. Includes $11.1 million of amortization of purchased intangibles (net of tax) at OSTTRA and $2.5 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.