CME · Q3 2025 Earnings
CautiousCME Group
Reported October 22, 2025
30-second summary
Revenue fell 3% YoY to $1.54B as clearing & transaction fees dropped 5.3% — the first negative print after the multi-quarter macro-volatility tailwind, with ADV at 25.3M sliding back from Q2 FY2025's record 30.2M and rate-per-contract holding at $0.702. Management pivoted the narrative away from "structural demand" toward product launches (FanDuel partnership, 24/7 crypto, tokenized cash with Google) while lowering the FY2025 adjusted opex guide (ex-license fees) by $10M to ~$1.625B — a small but real cost win that provides margin cushion against the softer top line. The Q3 print is not a thesis-break, but it ends the "volatility is the product" story arc and forces investors to underwrite execution on the new growth vectors.
Headline numbers
EPS
Q3 FY2025
$2.68
Revenue
Q3 FY2025
$1.54B
-3.0% YoY
Operating margin
Q3 FY2025
63.3%
Key financials
Q3 FY2025| Metric | Q3 FY2025 | YoY | Q2 FY2025 | QoQ |
|---|---|---|---|---|
| Revenue | $1.54B | -3.0% | $1.69B | -9.1% |
| EPS | $2.68 | — | $2.96 | -9.5% |
| Operating margin | 63.3% | — | 66.7% | -340bps |
Guidance
Management reaffirmed full-year adjusted operating expense guidance while providing no forward revenue or EPS guidance for Q4 FY2025.
Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.
Reaffirmed unchanged this quarter: Adjusted operating expenses (excluding license fees) ($1.635 billion)
Segment performance
Q3 FY2025| Segment | Q3 FY2025 | YoY |
|---|---|---|
| Clearing and transaction fees | $1.228B | -5.3% |
| Market data and information services | $0.203B | +13.7% |
| Other | $0.107B | -1.7% |
| Market Data Revenue | $202.5 million (record Q3) | — |
Capital & returns
Q3 FY2025| Segment | Q3 FY2025 |
|---|---|
| Cash and cash equivalents | $2,446.8 million |
| Total Debt | $3,421.3 million |
Other KPIs
Q3 FY2025| Segment | Q3 FY2025 |
|---|---|
| Average Daily Volume (ADV) | 25,322 thousand contracts |
| Average Rate Per Contract (RPC) | $0.702 |
| Interest Rates ADV | 13,378 thousand contracts |
| Equity Indexes ADV | 6,278 thousand contracts |
| Adjusted Operating Income | $1,051.0 million |
Management tone
Q1 macro tailwind → Q2 FY2025 "structural demand" peak → Q3 FY2025 product-pivot.
The dominant shift this quarter is that management stopped talking about clients needing CME's products and started talking about CME building new ones. Last quarter's anchor framing — "in an environment of heightened headline risk and macro uncertainties, clients are increasingly choosing the transparency and capital efficiency of our essentially cleared benchmark products" — is gone. The Q3 FY2025 forward sentence is "we remain focused on delivering efficiencies, new products and expanded access for market users, including through our new partnership with FanDuel and 24/7 trading in our cryptocurrency futures and options." That is a meaningful retreat from demand-side claims toward supply-side execution — appropriate given ADV stepped down 16% sequentially, but a re-rating of the narrative nonetheless.
Retail strategy hardened from "experiment" (pre-Q2 FY2025) to "operating priority" (Q2 FY2025, +57% new retail traders) to "distribution play" (Q3 FY2025, FanDuel = 13M potential accounts). Terry Duffy in Q&A: "we would prefer organic growth over M&A at this time." The progression suggests management believes the retail TAM is now large enough to justify distribution-led capture rather than the slow funnel-building of prior quarters — but it also raises execution risk because FanDuel's value depends on sports-event-contract regulatory approval that management could not put a timeline on.
The Google-partnership cost trajectory tells a quieter story. Initial FY guide $115M → revised to ~$100M, with professional fees down from $4-5M/quarter to ~$1M. Lynn Martin cautioned in Q&A that 2026 cost growth must be measured off this lower base and that "one-time savings opportunities may not repeat." That hedge — placed in Q&A, not prepared remarks — is the most cautious forward statement on the call.
24/7 trading went from "10, 20, or 2 years — I don't know" (Q2 FY2025) to a concrete 2026 launch for crypto only (Q3 FY2025), with management explicitly declining to extend the timeline to other asset classes. Disciplined, but it also signals management does not see broad client demand for round-the-clock products outside crypto — directly contradicting the narrative some bulls had constructed around it.
Q&A highlights
Dan Fannin · Jefferies
Can you discuss your long-term retail strategy, including the FanDuel partnership and micro complex? Do you think you can scale this organically or might M&A be necessary?
Terry explained that CME's retail strategy focuses on distribution and efficiencies rather than M&A. The FanDuel partnership provides access to 13 million potential accounts. CME is working with retail brokers and sees strong valuations in the retail space (e.g., Ninja Trader's sale to Kraken). CME's institutional credibility is a key advantage for participating in new asset classes with retail. Management stated they would prefer organic growth over M&A at this time.
Patrick Mully · Piper Sandler
Regarding sports event contracts with FanDuel, are sports contracts in the cards? What are the regulatory and operational considerations?
Terry clarified that CME is operationally ready to list sports event contracts but is waiting for U.S. government approval on whether these should be classified as swaps or gaming. CME is not opposed to listing sports events on their DCM if allowed. The decision involves the FanDuel JV partners and regulatory clarity. Management expressed concerns about smaller political events that could be manipulative, but acknowledged sports events represent most current prediction market activity.
Ben Budish · Barclays
Do prediction markets, particularly event contracts with higher frequency, require different operational structures, higher spend on advertising, or lower operating margins compared to traditional products?
Tim explained that CME's existing operational and technological scale allows efficient listing of event contracts (including hourly contracts). CME has 130+ retail distribution partners handling customer acquisition and KYC. Julie noted that CME's marketing spend is not expected to increase materially because retail partners handle the primary customer acquisition costs. CME leverages its existing infrastructure rather than requiring new structural changes.
Michael Cypress · Morgan Stanley
What hurdles exist for 24-7 crypto trading starting early next year? What other products might eventually support 24-7 trading? How does tokenization support this?
Suzanne Sprague outlined that CME is partnering with Google on tokenized cash, targeting go-live in 2026. This enables collateral settlement outside traditional banking hours. For 24-7 crypto trading in 2026, CME is implementing additional weekend sessions leveraging its Google Cloud infrastructure transformation. Terry stated 24-7 makes sense for crypto (which already trades 7 days/week) but other asset classes haven't demanded it yet due to cost-benefit concerns and alignment challenges with cash markets and industry associations. No timeline set for other asset classes.
Kyle Voigt · KBW
What is the expected Google-related investment spend trajectory for 2025 and into 2026? What other expense trends should we consider for 2026?
Lynn reported Q3 Google expenses were $27 million ($26M technology, $1M professional fees). Year-to-date 2025 running at $71 million with full-year guidance of ~$100 million (down from initial $115 million guidance). Professional fees reduced from $4-5M/quarter to ~$1M through increased internal support. Depreciation and occupancy expenses have declined meaningfully. Lynn cautioned that 2026 cost growth should be measured off this lower baseline, and the one-time savings opportunities may not repeat, but specific 2026 guidance will be provided in February.
Answers to last quarter's watch list
What to watch into next quarter
Q4 FY2025 ADV trajectory vs the Q3 FY2025 25.3M baseline — if ADV stabilizes or rebuilds, the Q3 FY2025 step-down was tariff-cycle reversion; if it slips toward 23-24M, the franchise is in a more pronounced cyclical downturn and the "new products" pivot needs to deliver faster.
Sports event contract regulatory resolution — the single largest binary catalyst for FanDuel partnership economics. Watch for any CFTC or Treasury commentary on swap-vs-gaming classification, and management's willingness to put a probability or timeline on listing.
Clearing & transaction fee YoY — Q3 FY2025 at -5.3% YoY is the first decline of the cycle. A second consecutive negative print would confirm the volatility-driven revenue tailwind has fully unwound.
2026 opex guide in February — Lynn Martin pre-flagged that 2026 should be modeled off a normalized base, not the depressed H2 FY2025 Google spend, and that the $10M FY2025 cut reflects "opportunities" that won't necessarily repeat. Watch whether the February guide implies opex growth materially above the FY2025 trajectory, which would compress operating leverage just as revenue softens.
Market data pricing durability — $202.5M record Q3 (+13.7% YoY) is doing real work offsetting clearing weakness. Pricing actions typically reset annually in January; watch whether the FY2026 pricing notice sustains the double-digit growth rate.
24/7 crypto launch metrics in early 2026 — first quantifiable test of whether the product pivot generates incremental revenue or simply redistributes existing crypto-complex volume.
Sources
- CME Group Q3 FY2025 Press Release (Exhibit 99.1), SEC filing, October 22, 2025: https://www.sec.gov/Archives/edgar/data/1156375/000115637525000204/exhibit9919302025.htm
- CME Group Q3 FY2025 earnings call Q&A (as provided in extraction inputs)
- CME Group Q2 FY2025 brief (Tapebrief, July 23, 2025) for trend comparison
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