Financial Data and Key Metrics Changes - CME Group generated revenue of $1,700,000,000, up 10% from the second quarter in 2024 [12] - Adjusted operating income reached a record $1,200,000,000, up 14% year over year [12] - Adjusted net income was $1,100,000,000, with adjusted diluted earnings per share at $2.96, both up 16% from the previous year [13] - Average daily volume exceeded 30,200,000 contracts, representing a 16% increase compared to the same period last year [7][8] - Adjusted operating margin improved to 71%, up from 69.1% in the same period last year [13] Business Line Data and Key Metrics Changes - Financial products volume grew by 17%, while commodity sector volume increased by 15% [8] - Record quarterly volume from international business averaged 9,200,000 contracts per day, up 18% from the prior year [9] - Retail trading saw over 90,000 new participants, a 56% increase year over year, contributing to a record average daily volume of 4,100,000 contracts in Micro products [10][39] Market Data and Key Metrics Changes - EMEA region recorded a 15% increase in average daily volume, while APAC saw a 30% increase [9] - The strong growth in open interest was up by 7% from the end of Q2 2024 and 10% from year-end 2024 [8] Company Strategy and Development Direction - CME Group is focusing on retail traders and expanding partnerships with new online brokers to meet increasing demand [9][39] - The company announced a ten-year extension of its exclusive license to offer futures and options on NASDAQ indexes, ensuring continued access to these products [10][11] - CME Group is exploring tokenization technology in partnership with Google, aiming to enhance market efficiencies [76][78] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of markets amid global uncertainties, including geopolitical tensions and rising debt levels [20][22] - The company anticipates continued demand for risk management products, although predicting specific volume levels remains challenging [19][22] - Management expressed optimism about the retail segment's growth and the potential for further participation across various asset classes [31][32] Other Important Information - CME Group's adjusted effective tax rate was 23.3% for the quarter [13] - Capital expenditures for the second quarter were approximately $19,000,000, with cash at the end of the quarter totaling $2,200,000,000 [13] Q&A Session Summary Question: What are the key drivers that can sustain strong hedging activities going into the second half? - Management noted the difficulty in predicting volumes but emphasized the ongoing global risks that necessitate risk management [19][20] Question: Can you discuss the recent take-up of retail traders and their trading behavior? - Management reported unprecedented growth in retail participation and expressed confidence in continued engagement across various asset classes [30][39] Question: How is the company thinking about capital deployment given the cash balances? - Management indicated a balanced approach to capital deployment, focusing on opportunistic buybacks and maintaining a variable dividend structure [52][54] Question: How have tariffs impacted the physical commodities business? - Management noted that tariffs have led to market dislocations, increasing trading activity and volumes across various client segments [60][61] Question: Can you provide an update on FX Spot Plus and its impact? - Management reported strong initial uptake with significant daily volumes and new participants, enhancing market quality [110] Question: What are the company's views on stablecoins and tokenization? - Management is optimistic about the potential efficiencies from tokenization and is actively working on partnerships to implement these technologies [76][78]

Financial Data and Key Metrics Changes - CME Group generated revenue of $1,700,000,000, up 10% from Q2 2024 [10] - Average rate per contract for the quarter was $0.69, resulting in the highest quarterly clearing and transaction fees of $1,400,000,000, up 11% year over year [10] - Adjusted operating income reached a record $1,200,000,000, up 14% year over year, with an adjusted operating margin of 71%, up from 69.1% in the same period last year [11] - Adjusted net income was $1,100,000,000, and adjusted diluted earnings per share were $2.96, both up 16% from the previous year [11] - Capital expenditures for the quarter were approximately $19,000,000, and cash at the end of the quarter was $2,200,000,000 [11] Business Line Data and Key Metrics Changes - Average daily volume (ADV) for the quarter was 30,200,000 contracts, a 16% increase year over year, with records in interest rates, agricultural commodities, and metals [4][5] - Financial products volume grew by 17%, while commodity sector volume grew by 15% [5] - International business had an ADV of 9,200,000 contracts per day, up 18% from the prior year, with EMEA up 15% and APAC up 30% [6] - Over 90,000 new retail traders participated in CME markets for the first time, a 56% increase compared to the same period last year [6] Market Data and Key Metrics Changes - Open interest increased by 7% from the end of Q2 2024 and 10% from year-end 2024 [5] - Nasdaq 100 futures and options trading volume climbed to more than 2,500,000 contracts per day, up 22% versus last year [7] - Record activity in gold and crypto markets, with gold up over 37% among retail and micro Bitcoin up 94% [40] Company Strategy and Development Direction - CME Group focuses on expanding its retail trader base and enhancing market access through partnerships with new futures brokers [6][39] - The company is optimistic about the growth of its crypto franchise and plans to continue participating in that market [33] - CME Group announced a ten-year extension of its exclusive license to offer futures and options on NASDAQ indexes, ensuring continued access to these products [8][9] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of markets amid global uncertainties, including record levels of debt and geopolitical tensions [18][20] - The company anticipates continued demand for risk management products due to macroeconomic factors [20] - Management expressed optimism about the retail segment's growth and the increasing sophistication of new traders [29][30] Other Important Information - CME Group's adjusted effective tax rate was 23.3% [11] - The company paid dividends of $455,000,000 in Q2 and approximately $3,000,000,000 over the first half of the year [11] - CME Group's total adjusted operating expenses for the year are expected to be approximately $1,635,000,000, which is $15,000,000 below prior guidance [12] Q&A Session Summary Question: What are the key drivers that can sustain strong hedging activities going into the second half? - Management noted the difficulty in predicting volumes but emphasized the need for risk management due to global uncertainties, including high debt levels and geopolitical unrest [17][20] Question: Can you discuss the recent take-up of retail traders and their trading behavior? - Management reported a significant increase in new retail traders and expressed confidence in their continued participation across various asset classes [27][29] Question: How is the company thinking about capital deployment given the cash balances? - Management stated that capital deployment strategies remain opportunistic, balancing buybacks and dividends based on market conditions [51][53] Question: Can you discuss the impact of tariffs on the physical commodities business? - Management indicated that tariffs are leading to market dislocations, creating opportunities for increased trading activity across various client segments [58][60] Question: What is the status of the trial with former floor traders? - Management refrained from commenting on pending litigation but confirmed no accruals have been made for potential damages [90] Question: What are the hurdles for bringing 24/7 trading to the marketplace? - Management acknowledged the costs associated with staffing for 24/7 trading and indicated that demand will dictate the feasibility of such an initiative [96][100] Question: How has the FX Spot Plus product performed since its launch? - Management reported strong initial performance with significant trading volume and participation from new entities, enhancing market quality [107][109]