CME Group Q2 2026 Earnings Call | Revenue Reaches $1.71B Driven by Record Market Data Fees

Thank you, Adam, and thank you all for joining us this morning. I'll make a few comments about our strong quarter and then before I turn it over to Lynn to provide an overview of our financial results. In addition to Lynn, we have other members of our management team present to answer questions after the prepared remarks. The second quarter average daily volume of 29.88 million contracts represented the second highest Q2 in our history, and was within 1% of our record second quarter a year ago, with May and June particularly strong following the tough April comparison. Open interest ended the quarter up 8% over the past year and up 16% since the beginning of this year. Additionally, we delivered record level of capital efficiencies, saving our customers an average of over $95 billion in margin per day.

Recently, this strong business performance has been overshadowed by discussions surrounding perpetual futures. While this product may be dubbed futures, they function much more like leverage spot products. They may appeal to certain retail traders seeking high leverage, but they are not appropriate for the institutional risk managers who comprise the vast majority of our business. Perpetual futures are highly engineered instruments that rely on frequent funding rate adjustments that revert the decision back to the spot price. They are known for high leverage and automated liquidations. They offer limited investor protections and introduce heightened market risk particularly for retail participants. These products do not appeal to our core customers. Through the first half of 2026, 94% of our volume originated from institutional customers. Perpetual futures are in no way substitutes for the institutional hedging tools that these customers rely on. Perpetuals do not provide price or time certainty, two necessary components for hedging exposures. Furthermore, when taking into account both the transaction fee and the daily funding cost, the total cost to trade perpetual futures is typically orders of magnitude more expensive than our highly efficient futures contracts.

We have the full technical and operational capabilities to launch perpetual futures. In fact, we have contract specifications and are prepared to bring these products to market should evolving demand or structural shifts make it appropriate to do so. However, we have not heard demand from our customers for these products. Crypto perpetuals are not new and existed before we even launched our crypto futures complex in 2017. We have built that business over the past nine years because our futures fill a market need that was not met by traditional crypto products including perpetuals. Our crypto futures volume is up over sevenfold in the past three years despite the existence of crypto perpetuals.

We remain deeply 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. In the second quarter, we successfully introduced 24/7 trading of crypto futures. And this weekend, we are launching 24/7 trading of our 1 gold contract. Next week we will be launching single stock futures which will simplify directional trading with exceptional capital efficiency. In the fourth quarter we plan to launch Treasury Link to link our US Treasury futures and cash treasury liquidity pools. We're also partnering with Silicon Data to launch a pioneering compute futures market later this year. We expect our innovative new offerings to further accelerate our growth as we build on our record-breaking performance in the first half of 2026. Our robust product pipeline and ongoing investments in our technology evolution position us well to drive continued value for both clients and shareholders. With that, I will turn the call over to Lynn to review our financials, and I look forward to your questions.

Yeah, Dan, it's a great question. I've spent a lot of time over the last several weeks going to each and every one of our asset classes, talking to the highest levels of those institutions who participate in our business. One of the great benefits of being in my role for the last 30 years is I've built a lot of good relationships and they put me in the right direction with participants. So I'll give you an example. The largest second largest energy participant in the world of commercial participation. So there's been a lot of talk about oil as it relates to perps and other and of course it's in the headlines today as it relates to the Iranian war. I have had conversations with the CEO of this firm and his derivative participants from different parts of the world and they reassured me 19 times that I asked them if they wanted me to list this product. They do not want this product. They do not know how they would possibly risk manage the exposures that they have on their books on it with a perpetual contract. It does not work for them. It made it quite clear to me that this product that we have today and other energy products that are available to them whether it's at ICE or somewhere else are critically important to what they do to manage their business. So that is one example and I've also done the same thing as it relates to our other products such as rates and equities and I've had very similar conversations. So when these products have end dates associated with them on the cash market side and you have a product as I said in my opening comments that trades around a leverage spot price that does absolutely nothing for them in order to risk manage their product. Now, it might do something for the retail participant who wants to just trade back and forth. But it does nothing for the 94% of the business that I outlined earlier in my comments. And I think anybody on this call knows me. I'm a pretty forward straight shooter. And I even mentioned that in my opening comments, if I thought we needed to list these, we would do so. And I said that we were prepared to do it if we needed to do it. But that's not what we are hearing. We are hearing quite the contrary to how business and commerce gets done by the institutional participants. And I want to be careful about the names that I use. But I will tell you that these are significant players. These are not third or fourth tier players. These are top tier players who are the open interest group.

Well, I'm going to ask so the comparison Alex and thank you for the question. The comparison for the retail right now in the United States would be the crypto franchise because that's the only other perps that are out there competing with our products today. So Tim's going to walk through some of the statistics around what the retail is doing in that particular asset class. But I want to make a point and I think this is really important as it relates to perpetuals. I want to ask anybody or it's a rhetorical question. How many people have been talking about the funding rate and the cost of the funding rate as it relates to a perpetual and how many people have been talking about the auto liquidation risk management model on the back end of the market? The answer to that because it was rhetorical is zero. Only thing they're talking about about a perpetual is there is no expiration date associated with it. I will tell you that we are not seeing anybody nor do we hardly ever see anybody in the retail division hold on to these products long enough to ever go to an expiration. So that is not the issue. And I had clearly outlined if they did the cost associated with going to roll the product versus paying the funding rate and the cost to trade the product which is sevenfold higher than CME's execution cost would way overshadow the cost that it would be to roll your position. So that demand is still not there. But just to reinforce that, I'm going to ask Tim to walk through an apples to apples comparison on the crypto side because that's what we've seen to date that's been approved.

Yeah, if I could just add one thing Tim highlighted at the end the launch of the 24/7 crypto. We have those metals products also going live this weekend and we talked about the single stock features going live as well. So we continue to innovate our products and add what we are seeing as demand coming from that retail customer. So we're certainly hearing interest in our products and continuing to expand our suite both in terms of availability and product to meet that need. So, Alex, hopefully that gives you some more color about what we are really seeing versus what is being written upon or potentially propaganda coming out of other entities of what they may or may not be doing.

You know that's a great question Chris, thank you for that. When this was originally introduced, I found it fascinating that this market was really underserved as far as a risk management asset for the growth of not only data centers but just compute in general and working with some of our and this is the beauty of CME Group having the business partners with our FCMs and our clients and working together to bring product together to go forward and serve the interest of many many participants. So, compute futures, you know, whether you're a believer in AI or not or whether you're a believer in the proliferation of data centers or not, some things have just become undeniable and I think this might be one of those scenarios because artificial intelligence serves so many different industries outside of finance and the benefits there it could derive. So, but you need to have the risk because you've seen some of these compute stocks or AI stocks, the volatility that can be inherent in them, the multiples they trade at. So, I think this will give them a massive risk management tool to use going forward. And I am really excited by the growth of this product and we're going to do it and do it properly with our partners. And for me, I think this is another innovative concept idea as the world continues to evolve. We're reintroducing single stock futures as we said in earlier comments. I'm probably the only one that's old enough to remember that when we first introduced them the first time they failed miserably. Sometimes timing is really important when you list products and I will say timing is massively critical right now when we get ready to list compute futures. So just as I do with single stock futures the time is right for that product as well. So, I'm going to ask Derek Salmon who's kind of just falls under his business line a little bit and ask him to make a comment as well. Derek.

Ken, hopefully that gives you a little bit or Chris a little bit of color on the computer futures.

Thanks Ken. Appreciate the question. Derek, you want to address it?

Thanks, Doug.

And thank you for the question.

Yeah, thanks Patrick. I appreciate the question. I think that when you look at the state on our 40.2 is what Patrick is referring to, there's two ways to certify contracts. 40.2 is self-certification. 40.3 is a full review. We actually filed both as everybody may know. But the contract we filed was not novel or complex. It was an existing contract just with a smaller size to it. So we felt you know we announced today the 40.2 was the right approach for us to do which by law we have the ability to file either one. We're not compelled to file a 40.3 or a 40.2 but we did file the two both of them. So my read on that is that they stayed the contract. I guess that that's their priority to do so. You know I guess I don't want to get into too much of the idiosyncrasies of some of the products they have not stayed but it is kind of interesting how some of the 40.2 filings that have gone to the agency and I guess I can go to an example of the ridiculous and others but let's just talk about the Fourth of July contract that they did not stay on 40.2 which was Kelsey's Nathan's hot dog eating contest that was actually a contract that went through and I guess that had an economic interest to somebody I'm not sure who but 24/7 need to be stayed on his existing contract. So you know that to me is a little concerning about readily manipulable susceptible to manipulation under core principle 3 which we have been very adamant about these contracts. So we didn't see anything novel or complex as it relates to our small oil contract. We have talked to as I said earlier in my comments some of the largest producers in the commercial side of the energy. They understood what we were trying to effectuate. We have 24/7 oil being traded today by entities that are supposedly not allowed to have US participants into it. But yet, we've yet to see how the federal government is policing US participants from not participating in these 24/7 markets or how they're not having an influence on the weekends, certain markets. I'm not suggesting they are, but how they're not. So then we also have prediction markets that have prices of oil that trade 24/7. So I was a little surprised by that, but I guess I shouldn't be because there's certain other contracts that take priority, you know, when you're in the hot dog business. So there's a lot of things going on right now. Patrick and surprised by it and I'm not trying to be too flippant about it, but I am trying to point out that we are trying to run contracts here that are meaningful for commerce that we think are critical for commerce and there are other participants that are listening this and we are being held up by the agency but they do are not telling us or the world how they are policing US participants from not participating in 24/7 oil today or how they can square up that predictions on oil prices for down the road that trade 24/7 are any different from our small contract. So little surprised by it but not really.

Brian, great question. A lot in there to unpack. Let me unpack it. First of all, your last comment was the right comment. We still believe and our litigation will show that these are swaps, not futures. Anytime two parties exchange payments as they do in the funding rate under the DoddFrank Act, which I had the distinct pleasure of testifying 20 to 30 times on in 2010, long before anybody at CFTC was there, I know what DoddFrank says. That is a swap contract. So we feel very confident that that is a swap contract. Let's fast forward though. You asked another question. Would we list those contracts on equities? I believe that you said in a separate entity. No, we would never we would not need to list them in a separate entity of clearing. We could list them in our existing clearing because it doesn't mean if you list a per that you have to have an auto liquidation margin methodology in order to have a perpetual. So we would not need to do that if in fact you went down that path but there that's a long way from even having a discussion. Your third question was as it relates to our relationship with S&P Global. Anything that is considered a future and cleared by our agreement is the exclusive right under the index of CME Group. So no one else could be able to list that contract. That is the intellectual property that is owned in partnership with S&P Global. So we would be the only ones that could list a perpetual if we went down that path on equities on the indices of the S&P of the Dow Jones and we have the agreements with NASDAQ and with Russell that they have the understanding that those are intellectual property products. If they're deemed futures, they fall under the scope of our agreement. So, we're the only ones that could participate in that particular asset class on the indices. I don't know if I...

Yeah, Brian, I don't mean to cut you off, but systemic risk of an equity per, if you were to try to list an equity per the way they are designed today and listed today in crypto, I think it could be a systemic issue for the marketplace because no one understands full well how that funding rate would work and how it would be calculated because as we said earlier, it's technically not a future. It's a spot leveraged product. So that right away has a problem for that particular asset class. And secondly, on the auto liquidation of a market the size of the US equity and other equity markets and the participants thereof, it could be very systemically risky as they auto-liquidate on a whole host of mathematical equations and how they liquidate those products. How much percent does each entity want to preserve to liquidate, and what would happen in a cascading market up or down on liquidation on both sides of the market? And would they have to introduce tariffs as their first line of defense, not their last line of defense? And that to me would be a systemic risk not just to the participants, but that would be a systemic risk to the US equity market. If you have a systemic risk to the US equity market, there's a systemic risk to the world.

Thank you.

Yeah, thanks Alex. Interesting question. So, why timing? Now, I've been around, like I said earlier, a long time, and I've seen a lot of products come and go. And I like to tell people that when you've seen a lot of things, you've seen a lot of people make money being wrong, and you've seen a lot of people losing money being right. And it's all about timing. Right now, the world's evolved since 2000 when the single stock futures, one Chicago joint venture was put forward with three separate entities with three separate agendas under two separate regulators being the SEC and the CFTC. It was definitely kind of for failure because of the timing and where we're at in the evolution of finance. That doesn't mean that the project is not a good concept or an idea for risk management protocols as we continue to evolve. And it's not too dissimilar to where T bills were dead forever and all of a sudden when rates started to do what they did, T bills actually became in favor again, you know, throughout a process and we relisted T bills and we did quite well with them, and that can happen in different times in the world of economic finance. I think that single stock futures with the proliferation of the markets itself and I'm not suggesting markets are going higher or lower, but when you see the appreciation in the equity markets today, I think people are now looking for other tools and how to hedge out that product where they may not be looking at that with a valuation of the S&P 500 much lower as it was in 2000 or the Dow where it was at and the Russell and NASDAQ. So now with these different levels, I think people are looking at different tools in order to efficiently hedge certain stocks, and you don't need to read the daily paper to know that people like to talk about the mag seven and mag whatever the mag of the day of what is in vogue. So there are people that are looking to hedge out those risks in a liquid marketplace where they feel comfortable doing so. We think CME is the right place for that. We think that the products that we're going to offer them will be the right products for them to mitigate and manage that risk. And the reason why I feel so compelled about it is because of the participation levels not only of the institutions but all the different cohorts and the valuation of the indexes themselves need to have tools to manage risk, and this is just another tool for them to do so and we think it's efficient. You asked another question which I'm going to ask Tim and then Julie Winkler on the retail partner side or the partner side in general how we're going to move that forward. So Tim, do you want to make a comment? Did I touch it?

Thanks so much, Tim and Julie. Thank you. That was a very good question. We appreciate the opportunity to explain that.

Great. Thanks, guys.

Yeah, thanks Ben. Great question, Joel.

Thanks, J. Thank you.

Yeah, thanks Mike. The prediction markets, interesting. There seems to be a lot of activity, but I want to ask Lynn to talk a little bit about how the revenue kicks out on top of those and the way they are structured. And we'll try to keep the sports out of it because I've been pretty public about this: a lot of these prediction markets on sports are gambling, and I think that that is going to find its way to the Supreme Court, and that is not something that we want to be a part of participating in right now. As I said earlier, I think a lot of these contracts are susceptible to manipulation when they are small parlays and things of that nature, and those are not markets, those are gambling. So we'll talk more about the predictions on economic outcomes and things of that nature and give you some stats on that. We've broken some of those out and we can give you those.

Mike, appreciate the question.

Yeah, thanks Bill. I appreciate you reaching out and congratulating Lynn because that's the right thing to do. So Lynn, tell us all about your strategic vision so we can all have it going forward since you've been working on that.

Yeah, thanks Bill and thanks Lynn for giving us an update. Bill, on the CFTC and the litigation, it is just another process. We filed, the agency has 60 days in order to respond to that filing. So that will come about in August, and then I believe they have the ability to push it a little further before anything else can happen. So that's just when you are in litigation with a government agency, there's a timeline associated with it. It's not like a traditional suit against another party for a car accident or something. You have to go through a process with the government, and again it's 60 days. Then again, that could be continued. There has been a judge assigned to the case. So that will move forward, but I think we'll know more at the end of August as it relates to what the CFTC's responses are to the court and to our case, and then we'll have more to report out. But right now, that's the process that we are aware of to date, Bill, and we don't have much more information than that. But that's just the process that happens when you go with the government.

Interesting, interesting question, my friend Simon, because I do see opportunities as people continue to introduce these products that I believe are swaps. And when they're classified as swaps, as you know, Simon, swaps need to be margined for 5 days. You need to become a swap dealer. This is not something a retail participant is prepared to do. We talked about how retail participants activity normally is, but I also think it lends to an opportunity for them to be looking at our markets and our retail products as it goes forward. So some of these entities that are listing some of these products, whether they're perps or other type of products on retail, I think directly or indirectly could benefit CME greatly as time continues to move forward. So again, it's like an incubator system that I'm not paying for and they are. So we are working our retail business like we have and in a very judicious, educational way to make sure we have sustainable clients going forward. There are other people that I would suggest that maybe are not doing the same. Some are that could potentially be a part of CME Group going forward. I'm a big believer that large commercial institutions drive the marketplace. They drive the price discovery function and then it trickles down from there, and other participants will participate in those products. The question is at what size meets their needs, and we have shown that we have done and catered to the institution by taking, and I mentioned this earlier, an S&P 500 from the year 2001 or 2002 to a multiple 250 to an E-mini to a micro to something smaller than that to meet the needs of different participants. So, I think that some of these new online offerings could feed right into the growth of CME's retail business with the products that we have and the cohort of institutions that we have, the 130 million open positions that we have today, the $95 billion of efficiencies that that 130 million open interest receives on a daily basis, that's very attractive. Now the question is can we create smaller products for those products for the institutions to trade that are potentially trading at another venue right now in an incubator type system. I work with some of our retail partners today and I will mention a few. Ninja being one of them, Topstep being another. These are people that are very committed to bringing their client base into CME in the right way. There are many many others and I maybe should have called out too because there are multiples, but I happen to meet with both of those recently so they're top of mind, and they are looking at new ways and how to bring their client base into our retail products and to me that is very exciting. So I look at the competition and the landscape of this world as it relates to retail and I can actually see a benefit of them coming into our markets ultimately.

Thanks, Simon.

Good question. Well, thank you very much, Joel.

Thank you, guys.

Yeah, you know, Mike, that's a great question. I think when you talk about vertically integrated, that's basically the same as talking about disintermediation of participants in the marketplace today. So we have a whole list of FCMs. We've got our own FCM which we do not compete with our existing FCMs on. We believe in that model. We think that is a good marketplace. I also believe in a neutral facilitator of risk management, which is critically important, and that's what CME provides today. We don't participate in the markets, and I think that lends to the credibility of all participants, whether it's the smallest retail participant or the largest institutional trader. So when they start to look at vertically integrated entities that are maybe participating in the market, managing that risk, and doing other things on behalf of the client, there could be a bit of, I don't want to say confusion, but people might be a little concerned about conflicts is the word I was looking for. And I'm not suggesting there would be, but the appearance of conflicts could be there. So I think that participants are savvy today, they're smart today. I think that they're looking for efficiencies, that's being proven by our offering today. And I think when you look at vertically integrated institutions, you have to see what is vertically integrated. If it's the food chain of creating efficiencies for the marketplace, yes, I think that continues. If it's participation in the markets in of itself, I think that lends to certain credibility issues for that entity. That's kind of how I look at it from a risk perspective. Maybe Suzanne, do you want to comment at all how that could potentially have an effect or no?

Okay. And I don't know if anybody else has anything to reference on that, but you know, Mike, I hear what you're saying and there might be a day where that happens with CME too, right? But that's the reason why when I put forward that we were going to have our own FCM a couple years ago, it was due to, as you recall, at the time FTX and what they were trying to accomplish, and I was not going to be unprepared for whatever the scenario may or may not be in the future and have a structure in place for CME to compete in the world that you outlined. But I assure you I don't want to be a leader in that. But I will be prepared for that.

And before we wrap up, I just, you know, we talked about a lot of different things here today, but one of the largest asset classes we have is rates. And we are continuing to create efficiencies. And I just want to touch real quick on a question that didn't come up, I thought it should, on the Treasury Link. Can you just give a quick explanation on how that's going to work and the benefits for our fund?

Thanks Mike. Appreciate the explanation. It is important. I know we get caught up a little bit on speculation. And I want to thank everybody on this call. This gave us an opportunity to hopefully set the record straight on where our business is at, where we feel from a competitive standpoint, and what exactly are the products that are supposedly competing with our core business and what our core business looks like today. I can't thank each and every one of you enough for your very poignant questions and I think they were all great, and we are excited about the new offerings we have going forward. We're excited about the new cohorts and clients that will be coming into our marketplace. And again, I think that when you look at the $95 billion of efficiencies, when you look at what we are accomplishing here, the 94% of our trade being institutional and how we think that could add and grow to our retail business down the road and do it in a thoughtful educational way that's sustainable for a long time to come, we appreciate your questions and we wish you a good day and thank you very much for your interest in CME Group. Thank you.