Q3 profits of CME Group saw a remarkable escalation, a result of traders utilizing the company’s products to shield themselves against market instability. Their reported earnings were a substantial $1.3 billion in revenue and $820 million in operating income.
Net income for CME Group amounted to an impressive $807.8 million, which translates to $2.25 per share at the end of the quarter on September 30, according to the company’s financial disclosure. It reveals a massive 13.7% increase from the previous year’s $710 million, or $1.98 per share, during the same timeframe.
The CME Group’s CEO, Terry Duffy, said the company had successfully achieved its ninth consecutive quarter of double-digit growth in adjusted earnings per share and a 9% rise in revenue. It was driven by market participants’ increased reliance on their markets to alleviate their business risks in the face of growing geopolitical instability.
He highlighted the third quarter as incredibly buoyant, with a 6% increase in interest rate volume. It was spurred by a significant 18% surge in Treasury futures average daily volume (ADV) and record highs in their Ultra 10-Year and Ultra T-Bond futures. The company also experienced considerable growth across agricultural, energy, and options products.
In the third quarter of 2023, the company notched an ADV of 22.3 million contracts. Interestingly, the company’s non-US ADV saw a substantial uptick, hitting 6.5 million contracts, a 7% increase from the same quarter in 2022.
In comparison, the company logged an ADV of 24.2 million contracts in August, an impressive 14% surge from the previous year. It stands as the second-highest-ever ADV for August.
Roughly $400 Million in Dividends Paid
During this timeframe, the company disbursed dividends nearing $400 million. After launching the flexible dividend policy in early 2012, CME Group has given back over $22 billion to its shareholders. CME Group focuses on diversifying its income sources to continue providing stability in a market marked by mild volatility.
The third quarter’s clearing and transaction fees generated $1.1 billion in revenue for CME Group, with an average rate per contract standing at $0.707. Additionally, market data contributed $168 million in revenue. A recent study demonstrated that transactions account for over 80% of the company’s revenue. CME is working towards decreasing this percentage by branching into alternative revenue streams.
