CME Group Inc. (CME) Q3 2026 Earnings Call Transcript

Operator: Welcome to the CME Group third 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 will now 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 third quarter 2026, 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 websites 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: Thanks, Adam, and thank you all for joining us this morning. I'll make a few comments about our exceptional third quarter performance before turning it over to Lynne to provide an overview of our financial results. In addition to Lynne, we have other members of our management team present to answer questions after the prepared remarks. Against a backdrop of shifting central bank policies, geopolitical uncertainty, and persistent market volatility, global participants continue to turn to CME Group in record numbers. The third quarter average daily volume of 29.4 million contracts was the highest third-quarter average daily volume in CME Group's history and increased 16% compared to the same period last year. This strong growth was broad-based as we achieved double-digit year-over-year volume growth in all 6 asset classes. Our financial and commodity products volume each grew by 16%. Beyond the strong volume growth, the underlying health of the business is perhaps best reflected in the strength of our open interest and the significant capital efficiencies we provide to our customers. Quarter end open interest reached 128 million contracts, and today it is over 133, the highest open interest at the end of September in our history. As I said, this open interest continues to grow in October. We also set a record for a number of large open interest holders in both our interest rates and foreign exchange complexes in September. Additionally, we delivered record levels of capital efficiency in the third quarter, saving our customers an average of over $100 billion a day in margin savings. This was a record third quarter for our international business as well, where average daily volume reached 9 million contracts, up 22% versus last year. This was led by 6.5 million average daily volume from EMEA, which was up 20%, and 2.1 million contracts per day from APAC, up 28%. The record international volume was driven by growth in energy products, up 40%, agricultural products were up 28%, and equity index products were up 24%. To support our customers, product innovation remains central to our strategy. During the quarter, we launched several new products, including Single Stock futures and E-nano Equity Index futures. We also expanded 24/7 trading to both our 1-Ounce Gold and 100-Ounce Silver contracts, building on the strong traction of our 24/7 cryptocurrency products launched earlier this year. Looking ahead, we are on track for our December 7 launch of CME Securities Clearing in advance of the SEC's Treasury clearing mandate. Innovation will continue to be a key driver of our performance and our ability to serve our clients effectively. However, true innovations must always be anchored in market integrity, financial safeguards, and client protection. Innovation without real risk management is not progress. It has the potential to create systemic risk. CME Group remains committed to ensuring market integrity and will never sacrifice core protections in the name of innovation. Instead, we continue to launch innovative products while preserving the safety and soundness of our marketplace. Technology innovation must also be responsive to client needs. As part of our ongoing cloud migration with Google Cloud, we opened the Dallas disaster recovery facility for client testing in June. The performance of that infrastructure has been positive, with latency and consistency as good or better than our on-premises offering. The primary Chicago region continues to progress to plan, and we expect to begin this cloud migration of our markets in late 2027. Given this timeline and the positive testing to date, we have determined that in the interim, relocation of our livestock markets to Dallas is no longer necessary. Next-generation market participants require premier technology optionality. CME Group is uniquely positioned as the only global exchange offering clients the dual advantage of Google Cloud managed services alongside ultra-low latency co-location. It is clear that market participants continue to turn to CME Group to navigate a complex and rapidly evolving global economy. I am incredibly proud of what we achieved this quarter, and I am highly confident in the opportunities ahead of us. With that, I will hand the call over to Lynne to discuss our financial performance in more detail.

Lynne Fitzpatrick: Thanks, Terry, and thank you all for joining us this morning. As Terry mentioned, CME Group generated impressive third quarter financial growth. Revenue of $1.7 billion was up 13% from the third quarter in 2025. This marks a record for third quarter revenue in aggregate and included a new all-time quarterly record for market data at $243 million. Market data revenues were up 20% and delivered the 34th consecutive quarter of year-over-year revenue growth. Adjusted expenses were $532 million for the quarter and $428 million excluding license fees. The strong growth in volume this quarter, led by our equity complex, up 23%, resulted in an increase in license fees, which are primarily related to equity activity. Our revenue growth and operating leverage resulted in an adjusted operating income of $1.2 billion, up 15% year-over-year, or 69.4% adjusted operating margin. Adjusted net income was $1.1 billion, resulting in adjusted diluted earnings per share of $3.02, up 13% from Q3 2025. Our adjusted net income margin for the quarter was 62.4%. Reinforcing our commitment to disciplined capital returns, we returned nearly $1 billion to shareholders during the quarter, with $465 million in regular quarterly dividends and $524 million in share repurchases. The third quarter results underscore CME Group's position as the primary destination for global risk management, delivering double-digit volume growth across every single asset class through double-digit gains in both revenue and earnings, resulting in the second highest revenue, adjusted net income and earnings per share of any quarter in our history. Through the first 3 quarters this year, our revenues have grown by 9% and our adjusted earnings per share by 11%. Our strong year-to-date momentum reflects robust client demand across our global benchmark products and continued innovation to best serve our clients. As we enter the fourth quarter, volume is surpassing last year's record fourth quarter by 17%, and we are tracking 12% ahead of last year's record volume year-to-date. As we remain firmly on track to deliver another record year, our focus remains on delivering deep liquid markets and maximizing capital efficiencies for our clients and strong earnings for our shareholders. We would 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, press star 2. The first question in the queue is from Chris Allen with KBW. Your line is now open.

Chris Allen: Yeah. Morning, everyone. I wanted to ask on Compute Futures. I know the CFTC extended the comment period. Just wondering if you see any hurdle to launching this product. Judging by our review of the comments, it doesn't seem like any real pushback there. Maybe any update on client feedback, appetite for Compute Futures, and then whether you are seeing any incremental impact from hyperscalers and data centers within the energy product complex.

Terry Duffy: Thanks, Chris. Chris, it's Terry Duffy. I'm going to start, and I'll let Derek make some comments as well. On the client development, Derek can touch on, because Derek and I and PV all have been working with clients on the street as it relates to Compute Futures and what they mean for their portfolios and their businesses. As far as the timing of the agency goes, that is still unknown. As you know, they extended the comment period another 45 days, which ends, I believe, on November 9. Then they have to make a decision on what they want to do. We think this is a product that needs to get out. When you look at all the conversation around data centers, AI, hyperscalers, chips, we have people contacting us that are looking, and Julie Winkler can reference it, about how they need to manage this risk in this ever-changing landscape that they're in. I would hope that the government would allow this product to move forward sooner rather than later. But again, it's in their hands right now, and there's not much more we can do until we get the approval from the government. As you know, this was filed under a 40.3, which is a full review of the process, and we respect the processes. We'll look forward to that going forward. Again, I think we're playing the long game as it relates to Compute Futures, but we want to make sure we get this product up, launched so that people can manage their risk. Derek, I'll let you talk a little bit more about the client space.

Derek Sammann: Yeah. Thanks, Chris. I think this has been a tremendous source of client engagement. If you think about how we've been working on this, we've seen this opportunity talking to our customers. We've been working on Compute for almost 2 years now. Given the nature and the scale of our energy franchise, where this sits so nicely in connection to our Nat Gas franchise and the rest of our hedging tools, we're the natural partner for customers to partner with to develop new products. So, looking at this over the last 2 years, we've spent a lot of time looking at different indexers and PRAs and providers. We landed on Silicon Data as what we think the most robust provider of data. We see them providing data observation at huge scale across dozens of platforms and thousands of data points and all types of transactions. We also see them having a robust data set out across the forward curve, and that's crucial for developing an index that is going to be the basis for a futures contract. Another important point is the Silicon Data index is already IOSCO compliant, meaning it's globally ready to be adopted by the community for the benchmark product itself. In terms of the client participation base, we're seeing really early adoption coming from the neocloud players, data center operators, banks. If you think about the banks, they're significantly exposed to the AI infrastructure on their leverage portfolios and where they're lending for the growth there. So their exposure to the AI sector creates an unhedgable risk. This is a solution for that. We've also seen a lot of interest from funds and props, and as it relates to potential cross-sell opportunities, much like we saw when we built out Battery Metals. This is bringing new commercial customers into our orbit that previously haven't used our products to manage the risk in their portfolios. So this is opening new opportunities with chip providers and different kinds of participants that we can actually cross-sell opportunities into. I think it's early days. As Terry said, we're ready to go. We're waiting for regulatory review. But I can say definitively this product has a significant amount of client demand, and the Street is eager to be able to access these.

Chris Allen: Thanks, Gus.

Terry Duffy: Thanks, Gus.

Operator: The next question is from Patrick Moley with Piper Sandler. Your line is open.

Patrick Moley: Good morning. Thanks for taking the question. I had one on 24/7 trading. Gold and silver are now trading around the clock, and I think in the deck you said weekend volumes were at about 20%-30% of those contracts ADV, so there's clearly demand there. You did withdraw the 10-Barrel WTI filing after the CFTC stay and the industry pushback that you cited. Could you just walk us through maybe what the key constituents' concerns actually were there and what the path and timeline is to maybe bringing 24/7 energy back? Then maybe more broadly, just how are you thinking about which asset classes you could potentially bring 24/7 next? Thanks.

Terry Duffy: Thanks, Patrick, and you highlighted the success we've had with both the gold, silver, and the cryptocurrencies trading 24/7. As we move forward and listed our put forth an application for our 24/7 small 10-barrel oil contract, we're trying to give the marketplace an opportunity to hedge over the weekend as they are doing today, even though participants are trading on what is called a VPN, and they're trading overseas on markets that our U.S. participants are not supposed to be participating on. Yet we have not seen any evidence of any policing of that activity. I'm very surprised by that, to be honest with you. I'm surprised our 24/7 oil got held up. Let's talk about that for a second, why, from the commercial side. Commercials are looking to make sure that they have the big contract where they want it, and we support that. They did not want to staff up another desk. We respect that. We respect that there's cost to moving to 24/7 on any product, and this one in particular as well. We wanted to be mindful, respectful of the commercial participants and what they're hearing today. I think the bigger question is: What is the agency doing and what are others doing to make certain that U.S. participants are adhering to U.S. law? For now, we heed the advice of the commercial participants, and we will hold off on listing that contract till people are more comfortable. As far as other products go, did you say, Patrick?

Patrick Moley: Yeah, just how do you think about which asset classes to bring 24/7 next? What makes sense?

Terry Duffy: I'm a big believer, and I've said this publicly, too, Patrick, as you know. When you go to 24/7, I think the market's ultimately going to 24/7 on all products, but you need to have the infrastructure to support 24/7. As I've said, the U.S. equity market alone is $76 trillion. Nobody can prefund that on a Friday. It's really important that we have an infrastructure in the United States that's set up to handle 24/7 markets, not just for crypto, not just for maybe a small silver, gold, or oil contract, but for our primary products. It's going to be harder and harder for anybody to list a primary product until the infrastructure of the banking system goes 24/7, because that's what lends credibility to the participant and makes certain that we have the liquidity and the back office support in order to run those markets.

Patrick Moley: Okay, great. Thanks, Terry.

Terry Duffy: Thanks, Patrick.

Operator: The next question is from Alex Kramm with UBS. Your line is open.

Alex Kramm: Yes. Hey, good morning, everyone. Actually, just a quick numbers question, if I can. On the below the line items, the interest income, on a net basis kind of surprised me a bit. I think the clearing house assets went down, I think a couple of percent quarter-over-quarter, but I think the net interest went down 8%. I know there's a few other things that go in there in terms of your own cash and obviously rates environment. Just maybe you can just give us a detailed view quarter-over-quarter, what exactly happened there, so we can maybe model it a little bit better. Thanks.

Terry Duffy: Yep. Lynne?

Lynne Fitzpatrick: Sure, Alex. So if you look at the cash at the clearing house, the average balances for the quarter were $147 billion in Q3. That was down from about $150 billion in Q2, with a similar return of about 33 basis points that we earned. We did have an increase in our corporate cash. We had about $27 million in earnings on that in the quarter. You obviously then have the JV income that is rolling through that line. Interest expense was relatively flat, so it was really the balance changes that you're seeing roll through there.

Alex Kramm: Easy enough. Thank you.

Operator: The next question is from Dan Fannon with Jefferies. Your line is open.

Dan Fannon: Thanks. Good morning. I was hoping to talk about pricing. If you could talk to the changes that went into effect here in early October in more detail, as well as the potential implications to you from the changes in the Cboe S&P licensing deal through your JV ownership.

Terry Duffy: Yeah. Thanks, Dan. Good question. I will let Lynne go ahead and start on the pricing, and I might touch on the Cboe one as well.

Lynne Fitzpatrick: Okay. On the pricing side, we did have some impacts that were implemented here on October 1. We are expecting, if you look at an annualized basis, those to have an impact of somewhere in the range of 0.5%-1% of the clearing and transaction fees. I would say the lines where you are seeing those changes, they are going to be in crypto, some in our grains complex. We did adjust some of the tiers in interest rates and then the micro equities as well. Just to keep in mind, we did have some pricing changes in April. We are moving away from having that annual pricing freeze, and we are looking at doing it more spread out over the course of the year when we see changes in marketplaces, when we see value creation at that point. That is what this is reflective of.

Terry Duffy: Dan, on the Cboe licensing agreement, obviously, we all know it's a 25-year extension they put forward. There's a couple of interesting points in that. As you know, we're a partner in the JV, so we benefit from that licensing agreement with Cboe. What's really interesting about that is we benefit starting in 2027 on potential increases, not 2032 because their agreement, the escalation of the pricing starts in 2027. What those are exactly is yet to be disclosed from both Cboe and S&P Global. But we know that we've been working with our partner at S&P Global, and we know that they do escalate. So whatever they are, we'll wait to see like everybody else. But we know we're in a much better situation economically with the S&P deal going forward, and we're there actually 5 years ahead of time and getting paid at a higher rate. We'll wait and see till they report on what exactly the nuance of the numbers are, but from our seat, it's very much a winning proposal from CME's perspective and our shareholders.

Dan Fannon: Thank you.

Terry Duffy: Thanks, Dan.

Operator: The next question is from Michael Cyprys with Morgan Stanley. Your line is open.

Michael Cyprys: Hey, good morning. Thanks for taking the question. I wanted to ask about Single Stock futures. I was hoping you could talk about the distribution strategy as you're working with retail brokers on the product, what the feedback has been. And then related to that, given you already have a prediction market today, I guess what's the scope to potentially introduce prediction markets on single stocks, kind of equivalent to maybe a Single Stock future, but more of a prediction market contract? Do you think there might be appetite for that? And what might be the required build there?

Terry Duffy: So 3 questions that you asked there, Michael, and I'm going to ask Tim McCourt and maybe Julie Winkler to chime in as far as the distribution, the clients, and then I'll talk a little bit about the prediction side of your question. So Tim, I'll start with you.

Tim McCourt: Yeah, Michael, appreciate the question. So we launched Single Stock futures and off to a good and strong start for that product. We've done a little bit over 350,000 contracts since launch with about $3.5 billion of notional. And I think what's important to note when we look at the distribution, we have 2 sized products. We have the 100-share multiplier across 55 of the largest names in the U.S., and we have the 10-share multiplier across 22 names of a subset of the 55. When we look at the distribution strategy, it's really a continuation of making sure that all market participants, whether they're institutional or individual traders, have the products they need to access these markets and manage their risk. When we look at the distribution, I think the one thing that we're encouraged by is we do have global participation in these products. When we look at the European and APAC market, we've also seen strong uptake where they are more familiar with the product regionally, and this is something that is relatively reintroduced in the U.S. perspective. When we look at the partnerships, the tapping into the 130-plus retail firms that we work with, alongside the several dozen FCMs that we have on the institutional side, we're encouraged by the growth we've seen. With any new product, we're reintroducing an interesting new market structure for that financially settled Single Stock future. It does take time to work with our FCMs, to work with our vendors. As we head into the last quarter here of 2026, we're encouraged by what we see. Then we look forward to continuing to have it grow from here, but strong performance on this product out of the gate.

Terry Duffy: Thanks, Tim. Julie, you want to add a little bit?

Julie Winkler: Yeah. As Tim pointed out, we've had commercial momentum across over 50 countries globally, so the interest is definitely there. Just from a perspective of what's most interesting to clients, certainly on the institutional side, this is a capital and margin efficiency play. We have said this is a core tenet of our strategy across all of our asset classes. I think particularly for this product, the ability to cross-margin Single Stock futures against the robust CME equity index products, it's helping them unlock additional equity financing capacity. The buy side firms that we are speaking with are also actively embedding Single Stock futures into their QIS strategies and long-short equity models, so that's certainly positive. When we look on the retail side, we've got distribution to 25 of our top retail broker partners today. The value proposition for them is really it's an options alternative. We're looking at it, as are our clients and brokers, as a key differentiator across Leverage, static deltas, 0 option Greeks, it doesn't have any time decay. For us, the focus has very much been on building out that liquidity, Tim pointed out, we have some additional FCMs that are coming live here in Q4. We think we've got some great momentum going into the end of the year.

Terry Duffy: Michael, on your question as it relates to predictions on Single Stock futures, you got to remember, we listed Single Stock futures going way back in 2000. The product did not get off the ground very well because of a whole host of reasons, I don't need to go through them right now. We've been working hard, Tim and his team have been working hard, Julie and her team have been working hard to make sure that we can have a successful Single Stock futures contract moving forward, because we do believe it's an important instrument for participants from the retail to the largest institutions to use. I don't think you can draw the conclusion that every single market has to have a prediction market associated with it. I think that you're getting a narrative right now where people believe that every market should have a prediction market associated with it. It doesn't make it right to do that. I'm not suggesting that we would not want to go down and have a prediction market on Single Stock futures. What I think is critically important is Single Stock futures get off the ground the way they've been doing, methodically working, looking at this as the long game. Then if we want to introduce another version of it with a prediction market, we will do so at that time once we get a better sample of the client base and how they are participating. Right now, this is really important for this product, which has been duly regulated. There's been a whole host of concerns going forward that we need to analyze and make a decision how we're going to do that going forward. This contract will go forward without predictions to start with, for sure.

Michael Cyprys: Great. Thank you.

Operator: The next question in the queue is from Craig Siegenthaler with Bank of America. Your line is open.

Craig Siegenthaler: Thanks. Good morning, everyone, and thanks for taking my question. Our question is on the CFTC perpetual suit. How should we weigh the perpetuals lawsuit against your earlier comments that clients aren't asking for perpetuals? If the case is dismissed and perps are deemed futures in the U.S., would CME list its own perpetuals given its exclusivity in equity index futures?

Terry Duffy: Yeah, Craig, thank you for the question. Our new General Counsel, John Marchese, is on the line. John, I'll let you go ahead and start, then I'll go from there.

John Marchese: Yeah. In terms of the lawsuit itself, as you know, a motion to dismiss has been filed. We've opposed it. We are very confident in our position, and we are also going to brief the substance of the case and expect it to be fully before the judge in December. We are confident in our position, and we are awaiting the court's decision and are eager to get a decision. We think it will fall in our favor. I'll kick it back to you, Terry, on the sort of question strategically about what that means going forward.

Terry Duffy: Craig, your question is if we're not being harmed, did you say something to that effect? Can you repeat that last part?

Craig Siegenthaler: Yeah. If the case is dismissed or essentially if you guys lose it, and the perp is deemed as future in the U.S., I believe you have exclusivity with equity index. You could have a monopoly in that business. Would you then turn around and launch perpetuals in that category where there might be strong demand, and you could sort of own it?

Terry Duffy: Yeah. Again, Craig, I think I'll go back to my earlier answer around prediction markets. We'll make that decision if and when the time comes. Whatever the court decides, we will abide by the court's decisions, and we will move forward. The question is, would we list perps or not? That question has yet to be asked and answered yet publicly. I will tell you that for now, the question of is it a perp or is it a future, is it a swap, all you have to do is Google the definition of a swap, and it's no different than a fixed versus floating rate, when you look at a swap today and when you look at a swap on perpetuals under Dodd-Frank, it suggests that a swap is designed as 2 people exchanging payments for that similar product. That is called the funding rate of the perp, and that is deemed a swap. We are fairly confident in our position on that. But again, we will cross that bridge when we get to it and not until. I would not make a decision one way or another if we would go forward with perps or not. But again, we feel very strongly about our case, as our general counsel said.

Craig Siegenthaler: Thank you, Terry.

Terry Duffy: Thanks, Craig.

Operator: The next question is from Simon Clinch with Rothschild & Co Redburn, your line is open.

Simon Clinch: Hi. Thanks for taking my question. I was wondering if we could just jump to the market data business. Obviously, it's been a couple of quarters now of 20% growth, if not more. I was wondering if you could just walk through again the kind of secular drivers here and how we should think about the normal kind of growth rate from this business going forward. Thanks.

Julie Winkler: Yeah. Thanks for the question, Simon. It was another record quarter, 20%, $243 million. How I'll break that down for you is that we're really seeing an incredibly diverse mix of drivers across the entire ecosystem, and the growth is really broken down into 3 main buckets. One-third has been from our expanding professional subscriber base, and that's for our real-time market data. One-third coming from our retail and sim platforms, so that's our non-professional subscribers. The remainder in that last category is really driven by a combination of increased data feed demand, the term software, some of the pricing adjustments that we've made, and a few more policy changes. Really what we're seeing is that this demand for CME data has been increasing as clients need access to our prices for trading, for research, and product creation. That's really right in the midst of a really dynamic macroeconomic environment and characterized by a lot of sustained global volatility. I heard this firsthand when I attended the Global Market Data Conference in Copenhagen last week and was engaging with many of our market data partners and our clients. The last part, we had $4.7 million in audits this quarter and some catch-up payments for prior period use. That was a little below what we saw in Q2. I would just say, data continues to be a critical input, and it is a leading indicator for our markets. We're continuing to invest in this growing business. Also keep in mind that a lot of our market data business is driven outside the U.S., and so that demand over 50% comes from outside the U.S. Data business is almost always a first-to-customer asset for us and solution for them. We're continuing to listen to our customers, improve the client experience, but we don't share specific expectations about future growth.

Simon Clinch: Great. Thanks so much.

Terry Duffy: Thanks, Julie.

Julie Winkler: Thank you.

Operator: The next question is from Dan Welden with Wells Fargo. Your line is open.

Dan Welden: Hi, good morning. I have a question about innovation speed. If I look at slide 8 from this morning, you've got 15 new announcements or launches. I go back a few quarters and that was more like single digits. Am I right to think that the cadence is increasing here? You've historically framed roughly 2% of your growth algorithm coming from new products. With the things like Compute, Single Stock futures, other things we've talked about today, does that 2% feel conservative at this moment? Thanks.

Terry Duffy: Yeah, thank you, Dan. Appreciate it.

Julie Winkler: Yeah, I'll start out and then can chat with Lynne. Certainly, it has been a busy year for product launches. You're correct in that. We've had 368 new products year to date. That is in addition to advances that we're making in our execution technology, where we're looking to introduce things like Treasury Link. These are things where we've proven we have the technology to be able to do this work. We also have the throughput from being able to quickly launch these new products on both the institutional as well as the retail side. That means a lot of partnership with our distribution networks as well as with our market data network to make that successful. I think it proves that we can move quickly as well as we're the only exchange that is offering 24 by 7 products. That doesn't just happen because we will it to be done. It takes a lot of work and technical agility on our part, and we've proven we can do that. Lynne, can I kick it up?

Lynne Fitzpatrick: Yeah. Thanks, Julie. Dan, to your question, I don't know if there's a fundamental change in the outlook. We typically don't break down a percent of what's coming from new products going forward. I think we're in an environment now where there are many new risks that are coming forward that we are looking to address for our client base. I think the beauty of having the broad product set that we have is that when we do go to launch new products, it's typically in a space where those clients are already connected, so we're meeting that need and that additional risk for clients that are already connected to CME. So we'll continue to look at areas that new risks are evolving and look to meet that need with new products. It's hard to forecast what the years ahead will bring, but we certainly feel that we are in a good position to continue to grow and to be product as those needs arise.

Terry Duffy: Dan, thank you for your question. I think I referred to you as Tom, so I apologize. I know it's Dan, so welcome. I know you're a newer analyst to CME, so thank you for your question. Appreciate it.

Dan Welden: Thank you.

Operator: The next question comes from Bill Katz with TD Cowen. Your line is open.

Bill Katz: Okay, thank you. Good morning, everybody. Thank you for taking the question. Maybe to mix up the topics a little bit, I was wondering if you could talk a little about capital priorities from here. It is great to see the continued buyback, if you will. There has been a fair amount of industry consolidation, maybe more in the cash markets than the futures market. How are you thinking about priorities from here, maybe buyback versus anything on inorganic side? Thank you.

Terry Duffy: Yeah. Thanks, Bill, and it is a great question. I will let Lynne Fitzpatrick start, and then I will chime in as well.

Lynne Fitzpatrick: Yeah. So Bill, I would point out, obviously, we had the OSTTRA funds that we were looking to return through the repurchase program, and we have now completed the redeploy of that, so I want to make sure that was noted. What we like about our capital return policy is the flexibility. So whether that is our variable dividend structure or the repurchase, we have the ability to be flexible. So if opportunities were to come up on the inorganic side, we have that ability to flex. We also have a very low debt load. So we set up our capital structure in a way that gives us a lot of optionality. That being said, we have tended over time to be a lot more choosy when it comes to M&A. We are not active in that market at all times. What we tend to look for are things where we're bringing additional clients or additional products. We're driving additional capital efficiencies for our customer base. We tend to be a bit more focused within our lane when it comes to M&A. I think we've got a unique capital structure that gives us a lot of ability to pivot as needed.

Terry Duffy: Just to add to what Lynne said, Bill, we have been very disciplined. Our debt load is probably the lowest in our sector for sure, and other companies of our size. That does put us in a very advantageous situation if we were to do something. Also, I think when you look at our mixture of return of capital going as a dividend-paying stock since 2002 through today and returning capital that way and now with the share repurchase, I just want to emphasize how important that is to different constituents of people who own CME and how they like to have that capital return to them, whether it's through buybacks, whether it's through the special or whether it's through the quarterly dividend. We are in a very strong position to do a lot of different things if we so choose. Again, I think what Lynne said is right. We just don't go out kicking and shopping for things that we don't think we need just to buy. We're very focused, and I think the reason why we stay focused is because when you look at that $100 billion of efficiencies that Lynne referenced a moment ago, that was just $40 billion not too long ago. These are things that we have been able to accomplish not only with the growth of our business, but some of the plug-and-play technology and other things that we have to enhance the volume of our business. That, to us, is how we grow the business.

Bill Katz: Thank you.

Terry Duffy: Thanks, Bill.

Operator: The next question is from Ken Worthington with J.P. Morgan. Your line is open.

Ken Worthington: Hi, good morning, everybody. I wanted to ask about the trends in open interest and how you see the relative importance of the data as you think about the volume outlook. As of September 30, 2026 versus September 30, 2025, equity open interest was up 0.2%, interest rate OI was up 1.2%, and energy OI was down 3.6%. It appeared to be a very strong environment for all 3 asset classes, and volumes were up low to mid-teens across the board in 3Q, as you highlighted, but it is velocity that is driving volume, not OI. The question is, why didn't OI really grow in the quarter in these products, and how big a factor is this in the outlook for volumes as we start to think about 2027?

Terry Duffy: I am very much of the mindset, Ken, that we talk about open interest because it shows the people that are parking their positions on CME's books to manage risk. I referenced a number of 133 million open positions as of this morning. Our open interest has been sitting at very lofty levels for a long time, and the reason why I think that is more impressive today than it was as little as 5 years ago is because we didn't have some of these option products that expire in short-term basis like we do today. We didn't have weekly options expirations. We had quarterly options expirations, semi-quarterlies, and we had different types of products with different instruments where you would see the open interest build up significantly. So as impressive as the open interest is, and I will talk about it all the time, I think you have to look at it in the light that we do have many different expirations that we did not have just a couple of years ago. That is why you are seeing the numbers that you recited a moment ago. But again, I think that is a good problem to have to maintain levels in these single digits when you are having expirations on a weekly basis versus either a monthly or a quarterly basis. That is the big difference.

Ken Worthington: Great. Thank you.

Terry Duffy: Thanks, Ken.

Operator: The next question is from Ben Budish with Barclays. Your line is open.

Ben Budish: Hi. Good morning. Thanks for taking my question. I was wondering if you could spend a minute on Treasury Link. It looks like that's now live in testing. Could you maybe talk about any kind of early reads or feedback, and then maybe remind us about how you're thinking about the market opportunity, the potential size of the market that you're thinking about going after and the economic model? Is this simply collateral balances and BrokerTec revenues, or what else should we be thinking about there? Thank you.

Terry Duffy: Yeah. Thanks, Ben. I'll let Mike go ahead and talk a little bit about that. It's been a little bonkers going on as it relates to some of the Treasury Link stuff, so I'll let Mike go ahead and touch on it.

Mike Dennis: Yeah, no, thanks, Terry. It has been an interesting time in the rates landscape. Obviously, no shortage of things going on in the interest rate complex. But to get to your question, Ben, on Treasury Link, it's an industry-first Treasury functionality that will enable transparent, centralized spread trading between Treasury futures and BrokerTec cash Treasuries on CME Globex. This new offering really connects the 2 leading U.S. Treasury liquidity pools, bringing unique innovation, and it will enable guaranteed execution of anybody trading cash versus future spread transactions, and it'll eliminate legging risk in the process. Happy to say that over the weekend, Treasury Link is live now in our new release environment, and clients have been testing the functionality this week. And we've seen a lot of strong demand from both existing and prospective new participants who are interested in realizing execution efficiencies between cash and futures. And Treasury Link really just represents the next stage in an initiative to bring our cash and futures markets closer together. We're looking at, aside from Treasuries, futures versus cash, what are some other things that we can do to link products together? This is an evolving time in the Treasury landscape. We have a new Fed Chair who's committed to overhauling their communication strategy. We continue to see record debt levels. We see Treasury intervention in our markets, and we're fastly approaching the Treasury and repo clearing mandate. So it's just another example of how the CME Group continues to evolve and innovate, deliver efficiency to our clients alongside the $30 billion in margin savings across futures, options, swaps, and cash. So appreciate the question. More to come, but thanks, Ben.

Terry Duffy: Thanks, Ben. Thanks, Mike.

Operator: The next question is from Brian Bedell with Deutsche Bank. Your line is open.

Brian Bedell: Great. Thanks. Good morning, folks. Thanks for taking my question. Terry, one for you, just to maybe come back to perpetuals and retail more broadly. You did talk about systemic risk. Just maybe if you can just update us on your view on, if equity index perpetual futures were to be approved in the U.S., how are you viewing that as a systemic risk potential? And I guess, do you see that potential approval ever coming to fruition, or do you think there'd be enough industry resistance? Then combined with that, you've seen obviously very good growth in the equity index micros, so maybe just talk about how you view retail being able to trade equity indices and single stocks, of course. Do you think there's literally enough tools for them to do that now without the need for perpetuals?

Terry Duffy: Yeah. Brian, again, as I said earlier, I don't want to expand too much further on the argument of perpetuals if they're swaps or futures. Again, as I said earlier, I'll let the courts make that decision. As far as systemic risk that you're referring to, and I made that comment, I made that comment in reference to the leverage part of perpetuals that have been traded overseas. I made the comment when the amount of leverage was anywhere from 25, 50 to 250% leverage that are being traded on some of these overseas platforms, not here in the U.S. That's what I said is a systemic risk. I think that's what you're referring to. As far as Single Stock futures, what was your question on that one, Brian?

Brian Bedell: Just as a, I guess, two-parter there. Just another tool, obviously, for retail to trade this, and that is good to see. But also there, I guess, do you have the same view on perpetuals for Single Stock futures? I guess, just since you mentioned leverage, if the leverage was contained dramatically, say, less than 10 times or, I am just making that number up, but something very low, would that change your view on the systemic riskiness of the product?

Terry Duffy: Yeah, Brian, I do not ever give an opinion on changing my view until I actually see something in writing that suggests what it is going to be. A lot of people can make a lot of comments about what they think it is going to be, so why do not you just agree to it? I do not operate that way, I never have. I will wait until I see what they are proposing, if they propose something as it relates to leverage caps or things of that nature. But I have not seen anything, so it is really difficult for me to make a comment to you on that product. As it relates to the opportunity for retail on Single Stock futures, I said it earlier, and I truly believe it, I think this is a product that is going to be widely accepted from the retail participant to the institutional participants, and I think it is going to be something that is well overdue and needed. I think our client base is looking for it. When you have the last, say, 5 to 7 years with the Mag 7, Mag 9, whatever you want to call it, any single day, for people that have Single Stock futures on some of these products that trade a big portion of some of these indices, I think will be very attractive for both constituents of retail and institutional. Julie or Tim, you want to comment further?

Julie Winkler: Yeah, I will just add, Brian, it is certainly we are highly focused on just evolving our product suite to be positioned to capture retail demand. We have delivered on the retail business the 10th consecutive quarter of double digit retail client acquisition growth. We welcomed well over 100,000 new retail traders into our markets in this past quarter, and that was a 40% increase of where we were a year ago. We are doing that through this product innovation that we have talked about on this call. We had a new record in our E-nano suite yesterday of over 121,000 contracts traded. We spoke to the Single Stock future success earlier being available 24 by 7. This is what our clients are demanding and working closely with our retail partner to continue to ramp those education and those marketing efforts through the remainder of the year. We believe this growth is going to be achieved by upholding our rigorous risk management frameworks and that structural integrity that we've talked about on this call, and that is what's helping to define and really grow our retail business here.

Terry Duffy: Thanks, Jill. Brian, hopefully that addresses some of your questions. I don't duck any questions, so hopefully that gave you some-

Brian Bedell: Absolutely. Yeah, absolutely. Great color. Thank you very much. Yep.

Terry Duffy: Thanks, Brian. Appreciate your question.

Operator: The next question is from Ashish Sabadra with RBC Capital Markets. Your line is open.

Will Qi: Hey, good morning, guys. This is Will Qi on for Ashish Sabadra. Appreciate you guys squeezing us in. Maybe a quick question on the newly launched NHL FutureSports indices and their corresponding futures instruments. Seems to be kind of an interesting position to step away from kind of the sports betting that you guys don't want to get involved in. It's in kind of aligned with the IOSCO framework for benchmarks. With the early days, about a month in, what's the kind of early traction you've seen with that product? Is it coming from institutional demand? Is there any retail demand? What's the kind of, I guess, runway you expect for that?

Terry Duffy: That's a good question, Will. Thank you. It is a new product, so we don't want to judge it too early in the season. I'll let Tim go ahead and make a comment as it relates to it. He oversees those businesses.

Tim McCourt: Thanks, Terry, and thanks, Will, for the question. I think what's interesting about this opportunity and partnering with FutureSports and trying to bring risk management and access to National sports industry and economy in the U.S. is that this is different in the sense this is based on the statistical performance of the teams that, as you pointed out, are indexed in accordance with IOSCO principles and guidelines. When we look at building new risk management capabilities, one of the first things to do is work with the market to ascribe that transparent, trusted, real-time price of what that risk is valued at any given moment, and then build the product ecosystem around it. That's why we're excited about the opportunity. When we look at how this can be used, it is very attractive on the institutional-grade front when you think about the if you read some of the reports, the $650 billion U.S. sports value per year, that that community largely has an unmet need to manage those associated risks, to hedge that related to the operation of venues, to the performance of that team. So it's really interesting to be able to introduce these products. But like a lot of products, it's really about bringing that diversified participant mix to it. So we are also working on the individual-sized contracts and working with our retail partners to make sure that those smaller-sized individuals can access these markets and also hedge their needs. So we're excited about the opportunity. It's early days, just a few weeks in, but we're excited and look forward to continuing to work with FutureSports to bring risk management to the sports industry here in the U.S.

Terry Duffy: William, thank you for the question. Tim, thanks for the response.

Operator: The next question is from Michael Cyprys with Morgan Stanley. Your line is open.

Michael Cyprys: Thanks for taking the follow-up. I just wanted to ask about the $100 billion of margin efficiencies that you mentioned that seems to be up quite a bit from a year or even 2 years ago. I was hoping you could elaborate on the drivers of that expansion over the past year, how much of that relates to simply more activity on the platform versus the impact of newer initiatives like the FICC cross margining. As you look out over the next couple of years, what new or initiatives do you think could be most meaningful to take that higher at, say, flat volumes? Thank you.

Terry Duffy: To get higher, I like that one, Mike. Go ahead, Lynne.

Lynne Fitzpatrick: Yeah. So it's really broad-based, Mike, which is, which is what's important. So you're going to have the increased level of activity, the increased level of interest rate OI. You're seeing growth across all the different asset classes. You did mention some of the specific extensions to cross margining, which, you know, Mike can touch on. We're definitely seeing good success on the FICC cross margining as well as the swap offsets in rates. But we're seeing growth in the equities complex, we're seeing growth in the energy offsets as well as the rates component, so it's really across the base. But Mike, why don't you comment on the specific rates?

Mike Dennis: Yeah, it's appreciated, Lynne, and Michael, thanks for the question. I'm going to touch a little bit on portfolio margining as it relates to our swap business, and then I'll also talk about some growth trends that we're seeing in our CME FICC Cross Margin program, now that FCM partners are taking advantage of the savings with cascading that down to client accounts. So if you look at portfolio margining in our swaps business, Q3 resulted in a new record. We saw new daily savings of $14 billion occurring on September 30. That was a record. I would say, if we look at savings in September, that averaged $13.2 billion, and that was up 58% versus September of 2025. New clients joining our portfolio margining program have really contributed to that savings. Just to put that into perspective, in 2024, that swap savings number was around $7.2 billion, $7.3 billion per day. It is closer to $14 billion, so we have seen a lot of growth there. If we look at our CME FICC cross margining program, we have about 24 clearing members currently registered for the program, and we expect there to be a ramp-up period as FCMs complete operational readiness. Firms are very engaged. They are meeting with us. Many of them are targeting Q4 to be fully up and running for that cross margining program prior to the Treasury and repo clearing mandate, but we are seeing strong growth there. September average daily savings in the program was $2.3 billion a day, and we saw a record day in Q3 of $2.7 billion. So that is kind of come off that one and a half number that we talked about in the beginning of the year. Just want to highlight where we have seen growth, particularly in the rates environment.

Terry Duffy: Let me just touch for a second because I think we talk a lot about the rates, but I think the equities is such a huge part of that $100 billion. Tim, maybe you can give a little color on that as well.

Tim McCourt: Thanks, Terry, and Michael, thanks for the question. I think when we look at the equity savings almost coming in just under $47 billion for Q3, that is up substantially versus the levels put up in prior quarters and in 2025. That comes from 2 main things. One is the base offset that we have in our base F&O at CME Group, which is just under $42 billion. Then we also have the CME OCC cross margin agreement, which delivered a little over $5 billion this quarter. I think what's interesting, and Michael, to your question, is when we look at in the equity complex where some of those savings are coming from, if we look at all of 2026, about 60% of the increase is coming from new positions established at CME Group and about 40% from rising index levels or rising asset levels and margin being posted at CME. It's really encouraging to see that coming from that organic new activity and risk being moved to CME Group to capture and take advantage of these capital efficiencies. To give a little bit more color on that, one prime example of how the clients in the marketplace is taking advantage is we look at the growth of our OTC swap alternative products at CME Group that average daily open interest in Q3 of products like our dividend futures, dividend options, and our adjusted interest rate total return futures, that OI grew 30% year-over-year to 2.6 million contracts worth about just under $500 billion of additional open interest value or contract value in open interest being moved to CME. This is a continuation of a long-standing trend at CME Group of futurizing the swap market and bringing new flow and new participants to the equity complex at CME Group to take advantage of these capital efficiencies.

Terry Duffy: Thanks, Tim. Mike, appreciate the question.

Michael Cyprys: Great. Thank you.

Operator: The last question in the queue is from Simon Clinch with Rothschild & Co Redburn, your line is open.

Simon Clinch: Hi. Thanks for squeezing me in for a follow-up again. Terry, a bit of a broader question here. As we think about the retail platforms and perhaps some FCMs eventually moving to explore launching products in their own right, be it prediction markets, perps or even other options perhaps, as that happens, how do you expect the relationship between CME and those partners develop where the economic incentive becomes more prevalent for them to steer volume towards their in-house products where they earn more of the economics? Just kind of curious as to your view on that. Thanks.

Terry Duffy: Yeah. Thanks, Simon, for the question. I would be speculating at best, but when we just got done speaking about $100 billion plus of efficiencies, that is really difficult to replicate with a lot of the things that we have done. Retail traditionally does not carry much open interest. As you know, we have said this historically, 94% of CME's business is institutionally driven. Again, I think when you are looking at what you are suggesting as platforms listing their own products, is that more attractive to coming to CME? You need to have an ecosystem of liquidity from the biggest institutions in the world that are at CME. We have cited that through our open interest that retail needs to participate with. Retail trading with just retail and props is not a long-term solution for any particular product. So you need to have all the different participants coming in. I think our value proposition is strong, and those same participants that you are referring to are very large clients of CME, and I think they benefit immensely by being here at CME, participating in those liquidity pools, generating those efficiencies, and for themselves, benefiting their own bottom line. Again, I think what we are doing is a value-added proposition. Again, very difficult to replicate, and it is moves that we have made historically. But again, I think you cannot stress enough the ecosystem, how important it is. Just to think that retail trading against retail with a prop is a long-term proposition for a successful market, I have not seen one in my 46 years in the business.

Simon Clinch: That's great. Thank you very much.

Terry Duffy: Thanks, Simon. Appreciate it.

Operator: Showing no further questions, I will now turn the call back over to management for closing remarks.

Terry Duffy: Thank you very much. We appreciate everyone participating in the call. We are very proud of our record quarter today. It's a very dangerous world out there. We see risk management continuing to be a big part of it. I hope everyone stays safe and healthy, and thank you very much for participating in today's call.

Operator: This concludes today's call. Thank you for your participation. You may disconnect at this time.