CME Group(US:CME)2023-05-02 16:00Financial Performance - Total revenues for Q1 2023 were $1,441.6 million, a 7% increase from $1,346.6 million in Q1 2022[86] - Net income rose to $883.8 million in Q1 2023, reflecting a 24% increase compared to $711.0 million in Q1 2022[86] - Total expenses rose by 8% to $527.9 million in Q1 2023 from $487.5 million in Q1 2022, with significant increases in compensation and benefits (10%), technology (12%), and professional fees (21%)[116][117] - Investment income surged to $1,357.7 million in Q1 2023 from $73.1 million in Q1 2022, attributed to higher interest rates and gains on investments[119] - The effective tax rate increased to 23.6% in Q1 2023 from 22.4% in Q1 2022, influenced by a prior year tax audit settlement benefit[122] - Net cash provided by operating activities increased in Q1 2023 due to higher revenue from increased volume and fee hikes[123] - Cash and cash equivalents decreased to $1.6 billion at March 31, 2023, from $2.7 billion at December 31, 2022, reflecting anticipated short-term cash needs[130] Revenue Sources - Clearing and transaction fees increased by 7% to $1,105.6 million in Q1 2023, up from $1,034.3 million in Q1 2022[89] - Market data and information services revenues increased in Q1 2023 compared to Q1 2022, primarily due to price increases for certain products[113] - The two largest resellers accounted for approximately 31% of market data and information services revenue in Q1 2023, with minimal risk of revenue loss if one vendor unsubscribes[114] - Other revenues increased in Q1 2023 compared to Q1 2022, driven by higher custody fees and increased co-location and connectivity fees[115] Trading Volume and Activity - Average daily contract volume increased by 4% to 26,873 thousand contracts in Q1 2023 from 25,920 thousand contracts in Q1 2022[93] - Interest rate products saw a significant increase in volume, particularly SOFR futures and options, which experienced a notable rise due to market transitions[97] - Equity index contract volume decreased, with E-mini Nasdaq 100 futures and options down 20% to 1,896 thousand contracts in Q1 2023[99] - Foreign exchange contract volume increased, particularly for the Japanese Yen, which rose by 29% to 173 thousand contracts in Q1 2023[101] - Agricultural commodity contract volume decreased, with corn contracts down 16% to 409 thousand contracts in Q1 2023[104] Financial Position and Compliance - CME maintains a $2.3 billion multi-currency revolving senior credit facility, with no borrowings outstanding as of March 31, 2023[124][128] - CME is in compliance with all financial requirements as a systemically important financial market utility under CFTC regulations[131] - The company is subject to various market risks, including interest rates, credit, foreign currency exchange rates, and equity prices[135] - There have not been material changes in the company's exposure to market risk since December 31, 2022[135]