CHICAGO, April 24,
2024 /PRNewswire/ -- CME Group Inc. (NASDAQ: CME)
today reported financial results for the first quarter of 2024.
The company reported revenue of $1.5
billion and operating income of $960
million for the first quarter of 2024. Net income was
$855 million and diluted earnings per
common share were $2.35. On an
adjusted basis, net income was $911
million and diluted earnings per common share were
$2.50. Financial results presented on
an adjusted basis for the first quarter of 2024 and 2023 exclude
certain items, which are detailed in the reconciliation of non-GAAP
results.1
"CME Group adjusted net income and earnings per share reached
new records in Q1 as investors turned to our markets to manage
through the ongoing economic and geopolitical uncertainty in
today's marketplace," said Terry
Duffy, CME Group Chairman and Chief Executive Officer.
"Average daily volume in our U.S. Treasury futures and options grew
12% year over year, reaching a new all-time high of 7.8 million
contracts per day. Additionally, ADV in our commodities markets
increased 14% to 4.7 million contracts. Looking ahead, we remain
committed to providing the deep liquidity and unparalleled capital
efficiencies our clients rely on as they continue to navigate a
wide range of risks across asset classes."
First-quarter 2024 average daily volume (ADV) was 26.4 million
contracts, including non-U.S. ADV, which reached a record 7.4
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 first-quarter 2024
totaled $1.2 billion. The total
average rate per contract was $0.695.
Market data revenue totaled $175
million for first-quarter 2024.
As of March 31, 2024, the company
had approximately $1.7 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 first
quarter of approximately $2.3
billion. The company has returned approximately $24.8 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
first-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 www.cmegroup.com. 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)
|
|
|
|
March 31,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,436.9
|
|
$
2,912.0
|
Marketable
securities
|
|
121.0
|
|
111.7
|
Accounts receivable,
net of allowance
|
|
628.2
|
|
535.6
|
Other current assets
(includes $5.2 in restricted cash)
|
|
647.7
|
|
1,138.4
|
Performance bonds and
guaranty fund contributions
|
|
94,473.9
|
|
90,192.5
|
Total current
assets
|
|
97,307.7
|
|
94,890.2
|
Property, net of
accumulated depreciation and amortization
|
|
396.0
|
|
409.5
|
Intangible
assets—trading products
|
|
17,175.3
|
|
17,175.3
|
Intangible
assets—other, net
|
|
2,990.0
|
|
3,050.2
|
Goodwill
|
|
10,489.6
|
|
10,495.3
|
Other assets
|
|
3,695.1
|
|
3,685.6
|
Total Assets
|
|
$
132,053.7
|
|
$
129,706.1
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
111.0
|
|
$
90.6
|
Short-term
debt
|
|
749.3
|
|
—
|
Other current
liabilities
|
|
767.2
|
|
3,133.8
|
Performance bonds and
guaranty fund contributions
|
|
94,473.9
|
|
90,192.5
|
Total current
liabilities
|
|
96,101.4
|
|
93,416.9
|
Long-term
debt
|
|
2,676.7
|
|
3,425.4
|
Deferred income tax
liabilities, net
|
|
5,317.2
|
|
5,327.7
|
Other
liabilities
|
|
804.2
|
|
798.2
|
Total
Liabilities
|
|
104,899.5
|
|
102,968.2
|
Total CME Group
Shareholders' Equity
|
|
27,154.2
|
|
26,737.9
|
Total Liabilities and
Equity
|
|
$
132,053.7
|
|
$
129,706.1
|
CME Group Inc. and
Subsidiaries
Consolidated
Statements of Income
(dollars in millions,
except per share amounts; shares in thousands)
|
|
|
|
Quarter
Ended
March
31,
|
|
|
2024
|
|
2023
|
Revenues
|
|
|
|
|
Clearing and
transaction fees
|
|
$
1,208.9
|
|
$
1,200.2
|
Market data and
information services
|
|
175.4
|
|
165.8
|
Other
|
|
103.6
|
|
75.6
|
Total
Revenues
|
|
1,487.9
|
|
1,441.6
|
Expenses
|
|
|
|
|
Compensation and
benefits
|
|
206.0
|
|
204.5
|
Technology
|
|
59.4
|
|
51.3
|
Professional fees and
outside services
|
|
33.1
|
|
38.3
|
Amortization of
purchased intangibles
|
|
55.2
|
|
56.8
|
Depreciation and
amortization
|
|
30.1
|
|
31.9
|
Licensing and other
fee agreements
|
|
87.9
|
|
84.7
|
Other
|
|
56.6
|
|
60.4
|
Total
Expenses
|
|
528.3
|
|
527.9
|
Operating
Income
|
|
959.6
|
|
913.7
|
Non-Operating Income
(Expense)
|
|
|
|
|
Investment
income
|
|
1,071.3
|
|
1,357.7
|
Interest and other
borrowing costs
|
|
(39.9)
|
|
(39.9)
|
Equity in net earnings
of unconsolidated subsidiaries
|
|
87.2
|
|
78.2
|
Other non-operating
income (expense)
|
|
(964.8)
|
|
(1,152.8)
|
Total Non-Operating
Income (Expense)
|
|
153.8
|
|
243.2
|
Income before Income
Taxes
|
|
1,113.4
|
|
1,156.9
|
Income tax
provision
|
|
258.2
|
|
273.1
|
Net
Income
|
|
$ 855.2
|
|
$ 883.8
|
Net Income
Attributable to Common Shareholders of CME Group
|
|
$ 844.4
|
|
$ 872.7
|
|
|
|
|
|
Earnings per Share
Attributable to Common Shareholders of CME Group:
|
|
|
|
|
Basic
|
|
$
2.35
|
|
$
2.43
|
Diluted
|
|
2.35
|
|
2.43
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
Basic
|
|
359,258
|
|
358,933
|
Diluted
|
|
359,833
|
|
359,313
|
CME Group Inc. and
Subsidiaries Quarterly Operating
Statistics
|
|
|
|
1Q
2023
|
|
2Q
2023
|
|
3Q
2023
|
|
4Q
2023
|
|
1Q
2024
|
Trading
Days
|
|
62
|
|
62
|
|
63
|
|
63
|
|
61
|
Quarterly Average
Daily Volume (ADV)(1) CME Group ADV (in
thousands)
|
|
Product
Line
|
|
1Q
2023
|
|
2Q
2023
|
|
3Q
2023
|
|
4Q
2023
|
|
1Q
2024
|
Interest
rates
|
|
14,490
|
|
11,273
|
|
10,967
|
|
13,348
|
|
13,839
|
Equity
indexes
|
|
7,303
|
|
6,216
|
|
6,353
|
|
6,922
|
|
6,856
|
Foreign
exchange
|
|
969
|
|
898
|
|
942
|
|
1,007
|
|
984
|
Energy
|
|
2,083
|
|
2,104
|
|
2,126
|
|
2,158
|
|
2,412
|
Agricultural
commodities
|
|
1,379
|
|
1,752
|
|
1,433
|
|
1,469
|
|
1,596
|
Metals
|
|
649
|
|
612
|
|
528
|
|
609
|
|
675
|
Total
|
|
26,873
|
|
22,855
|
|
22,349
|
|
25,513
|
|
26,360
|
Venue
|
|
|
|
|
|
|
|
|
|
|
CME Globex
|
|
24,171
|
|
20,907
|
|
20,838
|
|
23,503
|
|
23,985
|
Open outcry
|
|
1,623
|
|
1,124
|
|
713
|
|
1,126
|
|
1,333
|
Privately
negotiated
|
|
1,080
|
|
825
|
|
797
|
|
885
|
|
1,043
|
Total
|
|
26,873
|
|
22,855
|
|
22,349
|
|
25,513
|
|
26,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Average
Rate Per Contract (RPC)(1) CME Group
RPC
|
|
Product
Line
|
|
1Q
2023
|
|
2Q
2023
|
|
3Q
2023
|
|
4Q
2023
|
|
1Q
2024
|
Interest
rates
|
|
$
0.495
|
|
$
0.505
|
|
$
0.508
|
|
$
0.488
|
|
$
0.486
|
Equity
indexes
|
|
0.595
|
|
0.644
|
|
0.625
|
|
0.616
|
|
0.641
|
Foreign
exchange
|
|
0.790
|
|
0.800
|
|
0.791
|
|
0.806
|
|
0.787
|
Energy
|
|
1.300
|
|
1.347
|
|
1.324
|
|
1.338
|
|
1.334
|
Agricultural
commodities
|
|
1.349
|
|
1.356
|
|
1.328
|
|
1.361
|
|
1.356
|
Metals
|
|
1.517
|
|
1.487
|
|
1.492
|
|
1.502
|
|
1.556
|
Average RPC
|
|
$
0.664
|
|
$
0.724
|
|
$
0.707
|
|
$
0.682
|
|
$
0.695
|
|
|
|
|
|
|
|
|
|
|
|
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
March
31,
|
|
|
2024
|
|
2023
|
Net
Income
|
|
$ 855.2
|
|
$ 883.8
|
Restructuring and
severance
|
|
2.8
|
|
0.7
|
Amortization of
purchased intangibles(1)
|
|
68.7
|
|
70.1
|
Strategic
transaction-related costs (credits)
|
|
1.9
|
|
(2.2)
|
Foreign exchange
transaction (gains) losses
|
|
(1.8)
|
|
0.7
|
Unrealized and realized
(gains) losses on investments
|
|
(2.5)
|
|
(74.8)
|
Unrealized and realized
(gains) losses on assets
|
|
0.8
|
|
—
|
Income tax effect
related to above
|
|
(14.0)
|
|
4.0
|
Adjusted Net
Income
|
|
$ 911.1
|
|
$ 882.3
|
|
|
|
|
|
Adjusted Net Income
Attributable to Common Shareholders of CME Group
|
|
$ 899.7
|
|
$ 871.1
|
|
|
|
|
|
Earnings per Share
Attributable to Common Shareholders of CME Group:
|
|
|
|
Basic
|
|
$
2.35
|
|
$
2.43
|
Diluted
|
|
2.35
|
|
2.43
|
|
|
|
|
|
Adjusted Earnings
per Share Attributable to Common Shareholders of CME
Group:
|
|
|
|
Basic
|
|
$
2.50
|
|
$
2.43
|
Diluted
|
|
2.50
|
|
2.42
|
|
|
|
|
|
Weighted Average
Number of Common Shares:
|
|
|
|
|
Basic
|
|
359,258
|
|
358,933
|
Diluted
|
|
359,833
|
|
359,313
|
Preferred
shares(2)
|
|
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