Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is provided as a supplement to, and should be read in conjunction with, the accompanying unaudited consolidated financial statements and notes in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025.

References in this discussion and analysis to “we” and “our” are to CME Group Inc. (CME Group) and its consolidated subsidiaries, collectively. References to “exchange” are to Chicago Mercantile Exchange Inc. (CME), the Board of Trade of the City of Chicago, Inc. (CBOT), New York Mercantile Exchange, Inc. (NYMEX), and Commodity Exchange, Inc. (COMEX), collectively, unless otherwise noted.

RESULTS OF OPERATIONS

Financial Highlights

The following summarizes significant changes in our financial performance for the periods presented.

																		Quarter Ended March 31,
(dollars in millions, except per share data)																								2025						2024						Change
Total revenues																								$	1,642.3					$	1,487.9					10		%
Total expenses																								534.3						528.3						1
Operating margin																								67.5		%				64.5		%
Non-operating income (expense)																								$	136.8					$	153.8					(11)
Effective tax rate																								23.2		%				23.2		%
Net income																								$	956.2					$	855.2					12
Diluted earnings per common share																								2.62						2.35						11
Cash flows from operating activities																								1,116.6						892.7						25

Revenues

																		Quarter Ended March 31,
(dollars in millions)																								2025						2024						Change
Clearing and transaction fees																								$	1,337.3					$	1,208.9					11		%
Market data and information services																								194.5						175.4						11
Other																								110.5						103.6						7
Total Revenues																								$	1,642.3					$	1,487.9					10

Clearing and Transaction Fees

Futures and Options Contracts

The following table summarizes our total contract volume, revenue and average rate per contract for futures and options. Total contract volume includes contracts that are traded on our exchange and cleared through our clearing house and certain cleared-only contracts. Volume is measured in round turns, which is considered a completed transaction that involves a purchase and an offsetting sale of a contract. Average rate per contract is determined by dividing total clearing and transaction fees by total contract volume. Contract volume and average rate per contract disclosures exclude trading volume for the cash markets business and interest rate swaps volume.

																		Quarter Ended March 31,
																								2025						2024						Change
Total contract volume (in millions)																								1,815.8						1,608.0						13		%
Clearing and transaction fees (in millions)																								$	1,245.5					$	1,117.8					11
Average rate per contract																								$	0.686					$	0.695					(1)

We estimate the following net change in clearing and transaction fees based on the change in total contract volume and the change in average rate per contract for futures and options during the first quarter of 2025 when compared with the same period in 2024.

(in millions)												Quarter Ended
Increase due to change in total contract volume												$	142.5
Decrease due to change in average rate per contract												(14.8)
Net increase in clearing and transaction fees												$	127.7

Average rate per contract is impacted by our rate structure, including volume-based incentives; product mix; trading venue; and the percentage of volume executed by customers who are members compared with non-member customers. Due to the relationship between average rate per contract and contract volume, the change in clearing and transaction fees attributable to changes in each is only an approximation.

Contract Volume

The following table summarizes average daily contract volume. Contract volume can be influenced by many factors, including political and economic conditions, the regulatory environment and market competition.

																		Quarter Ended March 31,
(amounts in thousands)																								2025						2024						Change
Average Daily Volume by Product Line:
Interest rates																								15,029						13,839						9		%
Equity indexes																								7,997						6,856						17
Foreign exchange																								1,149						984						17
Agricultural commodities																								1,958						1,595						23
Energy																								2,903						2,411						20
Metals																								732						675						8
Aggregate average daily volume																								29,768						26,360						13
Average Daily Volume by Venue:
CME Globex																								27,733						23,986						16
Open outcry																								881						1,332						(34)
Privately negotiated																								1,154						1,042						11
Aggregate average daily volume																								29,768						26,360						13
Electronic Volume as a Percentage of Total Volume																								93		%				91		%

Market uncertainty remained high through the first quarter of 2025. Interest rate, equity and foreign exchange markets experienced significant uncertainty surrounding the potential economic impacts of anticipated and implemented tariffs and the effect they may have on the United States Federal Reserve’s (Federal Reserve) interest rate policy decision. The Federal Open Markets Committee (FOMC) had initially signaled the potential for several future rate cuts throughout 2025, but has since indicated a more cautious approach as a result of tariffs and the impact they may have on inflation. Market uncertainty also remained high within the energy, metals and agricultural commodities markets in the first quarter of 2025. mainly as a result of geopolitical events, including the anticipation and implementation of tariffs, as well as uncertain weather conditions in 2025. We believe these factors contributed to the increase in total volumes in the first quarter of 2025 when compared with the same period in 2024.

Interest Rate Products

The following table summarizes average daily contract volume for our key interest rate products.

																		Quarter Ended March 31,
(amounts in thousands)																								2025						2024						Change
SOFR futures and options:
Futures expiring within two years																								2,929						2,661						10		%
Options																								1,340						2,004						(33)
Futures expiring beyond two years																								1,152						926						24
U.S. Treasury futures and options:
10-Year																								3,772						3,138						20
5-Year																								2,195						1,954						12
2-Year																								1,142						967						18
Treasury Bond																								803						671						20
Ultra T-Bond																								436						403						8
Federal Funds futures and options																								401						414						(3)

In the first quarter of 2025, overall interest rate contract volume increased when compared with the same period in 2024, due to an increase in market volatility. We believe the higher volatility was a result of market uncertainty surrounding the Federal Reserve's interest rate policy decision as well as the potential economic impacts of anticipated and implemented tariffs. We believe these factors contributed to higher overall interest rate volume in the first quarter of 2025 when compared with the same period in 2024.

Equity Index and Cryptocurrency Products

The following table summarizes average daily contract volume for our key equity index and cryptocurrency products.

																		Quarter Ended March 31,
(amounts in thousands)																								2025						2024						Change
E-mini S&P 500 futures and options																								4,522						4,075						11		%
E-mini Nasdaq 100 futures and options																								2,592						2,036						27
E-mini Russell 2000 futures and options																								300						337						(11)
Bitcoin futures and options																								104						53						95
Ether futures and options																								94						29						n.m.

Equity index contract volume increased in the first quarter of 2025 when compared with the same period in 2024, due to higher overall equity market volatility. We believe higher market volatility was a result of economic uncertainty due to anticipated and implemented tariffs. In addition, we believe volume for our cryptocurrency products was higher as a result of the broader acceptance of cryptocurrency products across the globe. We believe these factors contributed to higher overall equity volume in the first quarter of 2025 when compared with the same period in 2024.

Foreign Exchange Products

The following table summarizes average daily contract volume for our key foreign exchange products.

																		Quarter Ended March 31,
(amounts in thousands)																								2025						2024						Change
Euro																								301						257						17		%
Japanese Yen																								208						184						13
Canadian dollar																								132						91						46
British Pound																								128						114						12
Australian dollar																								114						110						4

In the first quarter of 2025, overall foreign exchange volume increased when compared with the same period in 2024 due to higher market volatility. We believe the volatility is the result of economic uncertainty surrounding the potential economic impacts of anticipated and implemented tariffs has led to an overall increase in foreign exchange contract volume. We believe these factors contributed to higher overall foreign exchange contract volume in the first quarter of 2025 when compared with the same period in 2024.

Agricultural Commodity Products

The following table summarizes average daily contract volume for our key agricultural commodity products.

																		Quarter Ended March 31,
(amounts in thousands)																								2025						2024						Change
Corn																								669						473						42		%
Soybean																								383						351						9
Wheat																								266						214						24

Overall commodity contract volumes increased in the first quarter of 2025 when compared with the same period in 2024. We believe these increases were due to higher overall market volatility as a result of uncertainty surrounding the potential economic impacts of anticipated and implemented tariffs as well as continued uncertainty regarding the conflict between Russia and Ukraine. In addition, a change in market expectations regarding grain supplies as well as uncertain weather conditions in 2025 also led to an increase in market volatility. We believe these factors contributed to higher overall commodity volume in the first quarter of 2025 compared with the same period in 2024.

Energy Products

The following table summarizes average daily contract volume for our key energy products.

																		Quarter Ended March 31,
(amounts in thousands)																								2025						2024						Change
WTI crude oil																								1,224						1,084						13		%
Natural gas																								1,072						848						26
Refined products																								424						376						13

Energy contract volume increased in the first quarter of 2025 when compared with the same period in 2024, which we believe was due to higher overall market volatility. Natural gas volatility was higher as a result of uncertain weather conditions in the United States in 2025, which impacted prices throughout the quarter. In addition, crude oil volatility was higher due to ongoing geopolitical issues with Canada and Mexico resulting from the potential implementation of anticipated tariffs as well economic uncertainty between the United States and China. We believe these factors contributed to higher overall energy volume in the first quarter of 2025 compared with the same period in 2024.

Metal Products

The following table summarizes average daily volume for our key metal products.

																		Quarter Ended March 31,
(amounts in thousands)																								2025						2024						Change
Gold																								469						394						19		%
Copper																								112						137						(18)
Silver																								102						95						8

In the first quarter of 2025, overall metal contract volume increased when compared with the same period in 2024. We believe gold and silver volumes increased as a result of continued economic uncertainty surrounding the Federal Reserve's monetary policy decisions as well as the potential economic impacts of anticipated and implemented tariffs.

Average Rate per Contract

The average rate per contract decreased in the first quarter of 2025 when compared with the same period in 2024. The decrease in the average rate per contract was primarily due to higher volume tier-based incentives and higher micro equity contract volume. This was partially offset by a change in product mix. In the first quarter of 2025, interest rate contract volume decreased by 2 percentage points as a percent of total volume, while all other products collectively increased by 2 percentage points. In general, interest rate contracts have a lower rate per contract compared with other contracts. The overall decrease was also partially offset by an increase in our fee structure, which went into effect on February 1, 2025.

Cash Markets Business

Total clearing and transaction fees revenues in the first quarter of 2025 include $71.0 million of transaction fees attributable to the cash markets business, compared with $69.1 million in the first quarter of 2024. This revenue includes BrokerTec Americas LLC's fixed income volume and EBS's foreign exchange volume.

																		Quarter Ended March 31,
(amounts in millions)																								2025						2024						Change
BrokerTec fixed income transaction fees																								$	35.9					$	37.8					(5)		%
EBS foreign exchange transaction fees																								35.1						31.3						12		%

The related average daily notional value for the first quarter of 2025 and 2024 were as follows:

																		Quarter Ended March 31,
(amounts in billions)																								2025						2024						Change
U.S. Repos																								331.5						290.8						14		%
European Repo (in euros)																								325.8						282.3						15		%
U.S. Treasury																								111.7						102.2						9
Spot FX																								70.9						51.9						37

Overall average daily notional values for the cash markets business were higher in the first quarter of 2025 when compared with the same period in 2024 due to higher overall volatility. We believe the higher volatility was a result of market uncertainty surrounding the Federal Reserve's interest rate policy decision as well as the potential economic impacts of anticipated and implemented tariffs.

Concentration of Revenue

We bill a substantial portion of our clearing and transaction fees directly to our clearing firms. The majority of clearing and transaction fees received from clearing firms represent charges for trades executed and cleared on behalf of their customers. One individual firm represented at least approximately 10% of our clearing and transaction fees in the first quarter of 2025. Should a clearing firm withdraw, we believe that the customer portion of the firm’s trading activity would likely transfer to another clearing firm of the exchange. Therefore, we do not believe we are exposed to significant risk from the ongoing loss of revenue received from or through a particular clearing firm.

Other Sources of Revenue

Market data and information services. During the first quarter of 2025, overall market data and information services revenue increased when compared with the same period in 2024, largely due to price increases for certain products.

The two largest resellers of our market data represented approximately 38% of our market data and information services revenue in the first quarter of 2025. Despite this concentration, we consider exposure to significant risk of revenue loss to be minimal. In the event that one of these vendors no longer subscribes to our market data, we believe the majority of that vendor’s customers would likely subscribe to our market data through another reseller. Additionally, several of our largest institutional customers that utilize services from our two largest resellers report usage and remit payment of their fees directly to us.

Other revenues. In the first quarter of 2025, the increase in other revenues when compared with the same period in 2024 was largely attributable to higher custody fees due to an increase in non-cash collateral. Other revenues also increased mainly due to higher co-location fees.

Expenses

																		Quarter Ended March 31,
(dollars in millions)																								2025						2024						Change
Compensation and benefits																								$	206.7					$	206.0					—		%
Technology																								65.7						59.4						11
Professional fees and outside services																								28.5						33.1						(14)
Amortization of purchased intangibles																								55.2						55.2						—
Depreciation and amortization																								27.3						30.1						(9)
Licensing and other fee agreements																								96.6						87.9						10
Other																								54.3						56.6						(4)
Total Expenses																								$	534.3					$	528.3					1		%

Operating expenses increased by $6.0 million in the first quarter of 2025 when compared with the same period in 2024. The following table shows the estimated impacts of key factors resulting in the changes in operating expenses:

												Quarter Ended March 31, 2025
																		Amount of Change						Change as a Percentage of Total Expenses
(dollars in millions)
License fees																		$	8.7					2		%
Salaries, benefits and employer taxes																		7.5						1
Technology support services																		6.5						1
Bonus																		4.8						1
Occupancy and building operations																		(3.9)						(1)
Professional fees and outside services																		(4.6)						(1)
Non-qualified deferred compensation																		(9.3)						(2)
Other expenses, net																		(3.7)						—
Total increase																		$	6.0					1		%

Increases in operating expenses in the first quarter of 2025 when compared with the same period in 2024 were as follows:

• License fees expense was higher during the first quarter of 2025 when compared to the same period in 2024 primarily due to an increase in volume for certain equity products.

• Salaries, benefits and employer taxes expense was higher as a result of salary increases that went into effect during the first quarter of 2025 as well as an increase in headcount during the quarter, which was primarily attributable to additional headcount in the company's international locations.

• The increase in technology support services expense was primarily driven by higher software license fees and third party services to support the ongoing Google Cloud transformation project.

• Bonus expense increased largely due to our performance relative to our 2025 cash earnings target when compared with the same period in 2024.

Decreases in operating expense in the first quarter of 2025 when compared with the same period in 2024 were as follows:

• Occupancy and building operations expense decreased during the first quarter of 2025 compared with the first quarter of 2024 due to a reduction in office space.

• The decrease in professional fees and outside services was largely due to a decrease in consulting costs associated with the Google Cloud Migration, which began in late 2021, as well as lower professional services fees during the period.

• A decrease in our non-qualified deferred compensation liability during the first quarter of 2025, the impact of which does not affect net income because of an equal and offsetting change in investment income, contributed to a decrease in compensation and benefits expense.

Non-Operating Income (Expense)

																		Quarter Ended March 31,
(dollars in millions)																								2025						2024						Change
Investment income																								$	892.7					$	1,071.3					(17)		%
Interest and other borrowing costs																								(41.7)						(39.9)						4		%
Equity in net earnings of unconsolidated subsidiaries																								88.2						87.2						1
Other non-operating income (expense)																								(802.4)						(964.8)						(17)
Total Non-Operating																								$	136.8					$	153.8					(11)

Investment income. Earnings from cash performance bond and guaranty fund contributions that are reinvested decreased in the first quarter of 2025 when compared with the same period in 2024 due to a lower rate of return on the investment balances. In the first quarter of 2025 and 2024, earnings from cash performance bond and guaranty fund contributions were $873.6 million and $1,036.7 million, respectively.

Other non-operating income (expense)**. We recognized lower expense related to the distribution of interest earned on performance bond collateral reinvestments to the clearing firms in conjunction with lower interest income earned on our reinvestment during the first quarter of 2025 when compared with the same period in 2024. In the first quarter of 2025 and 2024, expenses related to the distribution of interest earned on collateral reinvestments were $804.8 million and $967.4 million, respectively.

Income Tax Provision

The following table summarizes the effective tax rates for the periods presented:

						2025						2024
Quarter ended March 31						23.2		%				23.2		%

The overall effective tax rate remained relatively consistent in the first quarter of 2025 when compared with the same period in 2024.

Liquidity and Capital Resources

Sources and Uses of Cash*.* Net cash provided by operating activities increased in the first quarter of 2025 when compared with the same period in 2024, which was largely due to an increase in trading volume. Cash used in investing activities remained relatively consistent in the first quarter of 2025 when compared with the same period in 2024. Cash provided by financing activities was higher during the first quarter of 2025 when compared with the same period in 2024 due to an increase in cash performance bonds and guaranty fund contributions.

Debt Instruments*.* The following table summarizes our debt outstanding at March 31, 2025:

(in millions)			Par Value
Fixed rate notes due June 2028, stated rate of 3.75%			$	500.0
Fixed rate notes due March 2030, stated rate of 4.40%			750.0
Fixed rate notes due March 2032, stated rate of 2.65%			750.0
Fixed rate notes due September 2043, stated rate of 5.30% (1)			750.0
Fixed rate notes due June 2048, stated rate of 4.15%			700.0

---

(1)We maintained a forward-starting interest rate swap agreement that modified the interest obligation associated with these notes so that the interest payable effectively became fixed at a rate of 4.73%.

We maintain a $2.3 billion multi-currency revolving senior credit facility with various financial institutions, which matures in April 2030. The proceeds from this facility can be used for general corporate purposes, which includes providing liquidity for our clearing house in certain circumstances at CME Group's discretion and, if necessary, for maturities of commercial paper. As long as we are not in default under this facility, we have the option to increase it up to $3.3 billion with the consent of the agent and lenders providing the additional funds. This facility is voluntarily pre-payable from time to time without premium or penalty. Under this facility, we are required to remain in compliance with a consolidated net worth test, which is defined as our consolidated shareholders' equity at December 31, 2024, giving effect to share repurchases made and special dividends paid during the term of the agreements (and in no event greater than $2.0 billion in aggregate), multiplied by 0.65. We currently do not have any borrowings outstanding under this facility, but any commercial paper balance if or when outstanding can be backstopped against this facility.

We maintain a 364-day multi-currency revolving secured credit facility with a consortium of domestic and international banks to be used in certain situations by the clearing house. The facility provides for borrowings of up to $7.0 billion. We may use the proceeds to provide temporary liquidity in the unlikely event a clearing firm fails to promptly discharge an obligation to the clearing house operated by CME, in the event of a liquidity constraint or default by a depositary (custodian for our collateral), in the event of a temporary disruption with the domestic payments system that would delay payment of settlement variation between us and our clearing firms, or in other cases as provided by the CME rulebook. Clearing firm guaranty fund contributions received in the form of cash or U.S. Treasury securities as well as the performance bond assets (pursuant to the CME rulebook) can be used to collateralize the facility. At March 31, 2025, guaranty fund contributions available to collateralize the facility totaled $9.8 billion. We have the option to request an increase in the line from $7.0 billion to $10.0 billion. Our 364-day facility contains a requirement that CME remain in compliance with a consolidated tangible net worth test, defined as CME's consolidated shareholder's equity less intangible assets (as defined in the agreement), of not less than $800.0 million. We currently do not have any borrowings outstanding under this facility.

The indentures governing our fixed rate notes, our $2.3 billion multi-currency revolving senior credit facility and our 364-day multi-currency revolving secured credit facility for $7.0 billion do not contain specific covenants that restrict the ability to pay dividends. These documents, however, do contain other customary financial and operating covenants that place restrictions on the operations of the company that could indirectly affect the ability to pay dividends.

At March 31, 2025, we have excess borrowing capacity for general corporate purposes of approximately $2.3 billion under our multi-currency revolving senior credit facility.

We maintain committed repurchase facility agreements amounting to a total of $1.0 billion. The committed repurchase facilities provide access to cash, secured by non-cash collateral, in the event that one or more of our clearing firms fails to promptly discharge an obligation to the clearing house. The facilities are subject to annual renewal. We currently do not have any borrowings outstanding under these facilities.

We maintain a committed facility of up to $750.0 million for foreign currency conversions. The committed foreign currency facility allows the clearing house to convert cash to another currency within generally accepted local market timeframes in the event that one or more of our clearing firms fails to promptly discharge an obligation to the clearing house. The facility is subject to annual renewal. We currently do not have any foreign currency trades outstanding under this facility.

At March 31, 2025, we were in compliance with the various covenant requirements of all our debt facilities.

CME Group, as a holding company, has no operations of its own. Instead, it relies on dividends declared and paid to it by its subsidiaries in order to provide the funds which it uses to pay dividends to its shareholders.

To satisfy our performance bond obligation with Singapore Exchange Limited, we may pledge irrevocable standby letters of credit. At March 31, 2025, the letters of credit totaled $400.0 million. We also maintain a $350.0 million line of credit to meet our obligations under this agreement.

The following table summarizes our credit ratings at March 31, 2025:

						Short-Term						Long-Term
Rating Agency						Debt Rating						Debt Rating						Outlook
Standard & Poor’s Global Ratings						A1+						AA-						Stable
Moody’s Investors Service, Inc.						P1						Aa3						Stable

Given our cash flow generation, our ability to pay down debt levels and our ability to refinance existing debt facilities if necessary, we expect to maintain an investment grade rating. If our ratings are downgraded below investment grade within certain specified time periods due to a change of control, we are required to make an offer to repurchase our fixed rate notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest. No report of any rating agency is incorporated by reference herein.

Liquidity and Cash Management. Cash and cash equivalents totaled $1.4 billion and $2.9 billion at March 31, 2025 and December 31, 2024, respectively. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our corporate investment policy and alternative investment choices. A majority of our cash and cash equivalents balance is invested in money market mutual funds that invest only in U.S. Treasury securities, U.S. government agency securities and U.S. Treasury security reverse repurchase agreements and short-term bank deposits. Our exposure to credit and liquidity risk is minimal given the nature of the investments. Cash that is not available for general corporate purposes because of regulatory requirements or other restrictions is classified as restricted cash and is included in cash performance bonds and guaranty fund contributions, other current assets or other assets in the consolidated balance sheets.

On December 5, 2024, we announced that our board of directors has approved a share repurchase program under which we are authorized to repurchase up to $3 billion of our outstanding Class A Common Stock, par value $.01 per share (the common stock), from time to time through open market transactions, block trades, privately negotiated purchase transactions or other purchase techniques and may include purchases effected pursuant to one or more trading plans established pursuant to Rule 10b5-1 under the Exchange Act. The timing of any repurchases and the number of shares repurchased under the share repurchase program are within our discretion and may be affected by various factors, including general market and economic conditions; the market price of the common stock; CME Group’s earnings, financial condition, capital requirements and levels of indebtedness; legal requirements; and other considerations. The share repurchase program has no expiration date, does not obligate us to acquire any particular amount of common stock and may be modified, suspended or terminated at any time.

Regulatory Requirements*.* CME is regulated by the CFTC as a Derivatives Clearing Organization (DCO). DCOs are required to maintain capital, as defined by the CFTC, in an amount at least equal to one year of projected operating expenses as well as cash, liquid securities, or a line of credit at least equal to six months of projected operating expenses. CME was designated by the Financial Stability Oversight Council as a systemically important financial market utility under Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As a result, CME must comply with CFTC regulations applicable to a systemically important DCO for financial resources and liquidity resources. CME is in compliance with all DCO financial requirements.

CME, CBOT, NYMEX and COMEX are regulated by the CFTC as Designated Contract Markets (DCM). DCMs are required to maintain capital, as defined by the CFTC, in an amount at least equal to one year of projected operating expenses as well as cash, liquid securities or a line of credit at least equal to six months of projected operating expenses. Our DCMs are in compliance with all DCM financial requirements.

BrokerTec Americas LLC is required to maintain sufficient net capital under Securities Exchange Act of 1934, as amended (Exchange Act), Rule 15c3-1 (the Net Capital Rule). The Net Capital Rule focuses on liquidity and is designed to protect securities customers, counterparties, and creditors by requiring that broker-dealers have sufficient liquid resources on hand at all times to satisfy claims promptly. Rule 15c3-3, or the customer protection rule, which complements Rule 15c3-1, is designed to ensure that customer property (securities and funds) in the custody of broker-dealers is adequately safeguarded. By law, both of these rules apply to the activities of registered broker-dealers, but not to unregistered affiliates. The firm began operating as a (k)(2)(i) broker dealer in November 2017 following notification to the Financial Industry Regulatory Authority and the SEC. A company operating under the (k)(2)(i) exemption is not required to lock up customer funds as would otherwise be required under Exchange Act Rule 15c3-3.