CME Group (CME) Q3 2026 earnings review
CME Group volumes climb 16%, but each contract pays less
CME Group had its busiest third quarter ever as traders hedged a shift in interest rates and a tech rally. Revenue rose 13% to $1.7 billion, and profit per share excluding one-offs climbed at the same pace. Chief executive Terry Duffy said clients came "in record numbers to manage risk", while the steadier market data business kept growing a fifth a year.
| Revenue | $1,737.3M +13% from a year ago |
|---|---|
| Average daily volume | 29.4M contracts +16% from a year ago |
| Profit per share, excluding one-offs | $3.02 +13% from a year ago |
| Full-year cost outlook, excluding license fees | Unchanged about $1.695 billion |
⚖️ Verdict: 🟢 Bullish
The story got better because trading demand returned in every asset class and costs grew more slowly than revenue, the reverse of last quarter. The bad news: each contract pays less as smaller contracts take a bigger share, and the move of CME's markets to the cloud now ends in late 2027, a year beyond the earlier plan.
The question now is whether this volume came from one summer of policy news or from a larger base of users. If new retail and non-US customers keep trading, next year's calm quarters look like this one; if not, revenue swings back with volatility, as metals volume does now. Fourth-quarter volume will tell.
🐂 Bull Case
Trading Volume Rose in All Six Asset Classes
CME Group runs the exchanges where banks, funds and companies trade futures on interest rates, stock indexes, oil and crops. Chief executive Terry Duffy said clients came "in record numbers to manage risk", and the quarter was the busiest third quarter in its history.
Average daily volume reached 29.4 million contracts, up 16% from a year ago, with double-digit growth in all six asset classes. The company credited a "shift in monetary policy" and "a resurgence in technology strength", so traders hedged rates and bought Nasdaq exposure.
- Equity index volume: up 23%, with the micro Nasdaq 100 contract more than doubling
- Treasury futures: up 25% to 9.4 million contracts a day
- Volume outside the US: up 22% to 9 million contracts a day
This matters because most revenue comes from a fee on each trade, so volume decides the quarter. The gains were broad rather than concentrated in one market, which argues against the idea that volume depends on a single shock. But the fourth-quarter lead so far rests mostly on interest rate contracts.
What to watch: fourth-quarter average daily volume, published in early January. A quarter above 29 million contracts with metals trading weak would show the new rate and equity users are staying rather than passing through.
Market Data Grew 20% Without Audit Windfalls
CME Group sells price feeds and data subscriptions to banks, trading firms and software vendors. The fees arrive monthly whatever the trading volume, and the line reached a record $243 million this quarter.
Growth was 20% for a second quarter, which the exchange operator credited to "a growing subscriber count, new products and tools, and the price increase that took effect in January 2026". One-off audit and catch-up payments fell to $4.7 million from $7.4 million. By our math underlying growth was also 20%.
The line is now 14% of revenue, up about a point from a year ago, but fees on trades are almost six times larger, so market data cushions a quiet quarter without offsetting one.
What to watch: fourth-quarter market data revenue, due in February. Growth near 20% without a new January price increase would mean subscriber gains, not pricing, carry the line.
Pay Costs Lagged Revenue and Widened the Margin
Last quarter costs outran revenue at CME Group and the margin narrowed. This quarter revenue rose 13% while expenses excluding one-offs grew 9%, so the operating margin excluding one-offs widened by about a point.
- Pay and benefits, excluding one-offs: 13.2% of revenue, down 1.5 percentage points from a year ago
- License fees paid to index owners such as S&P: 6.0% of revenue, up 0.7 points, because equity index volume rose
- Expenses excluding license fees: $428 million, up 5.6%
The gain came from pay, which barely moved while revenue climbed. Part of it is temporary: the exchange operator warned that "continued outperformance in 4Q26 would impact performance-linked variable costs", so bonuses rise with a strong fourth quarter.
What to watch: the fourth-quarter operating margin excluding one-offs, due in February. A margin below this quarter's 69.4% on higher volume would mean bonus costs took part of the gain.
Positives this quarter didn't test
Four standing strengths of the business produced new activity numbers this quarter but no revenue figures, so none of them can be scored yet.
- Capital efficiency: average daily margin savings for clients passed $100 billion, up from $95 billion last quarter; the savings are a reason to clear at CME, not a revenue line, so only a volume share gain would prove them.
- New products: Single Stock futures traded nearly 350,000 contracts since the July 27 launch and E-nano index futures averaged 37,000 a day in September; a fee per contract for either would make them readable.
- Weekend trading: the exchange operator calls its 1-ounce gold and 100-ounce silver contracts "the largest pool of regulated weekend trading volumes", yet the crypto contract averages about 20,000 contracts a weekend; weekend volume by product would show whether it is taking share.
- Open positions: contracts clients held open at quarter-end reached 128.2 million, up 16% since year-end; fourth-quarter volume will show whether that stock turns into trades.
🐻 Bear Case
Volume Grew 16%, but Fees Grew 12%
CME Group charges a fee on every contract, and small micro contracts "designed for active individual traders" carry a lower fee than the standard version. Micro volume rose 50% to 4.8 million contracts a day.
But the average fee per contract fell 3% from a year ago, to 67.9 cents. Fee revenue from trading therefore grew about four percentage points more slowly than volume, despite the price increases that took effect in January and April.
- Micro share of equity index volume: 52%, up from 44% a year ago
- Equity index fee per contract: 60.5 cents, down 7%
- Metals fee per contract: down 12%, with micro contracts now over half of metals volume
The mix moves faster than the price list, so a quarter of this size yields less revenue than the same volume a year ago would have. The company said the small rise from last quarter came from "lower volume tiering and lower proportion of micro products", confirming that micros pull the rate down.
What to watch: the average fee per contract in the fourth quarter, after the October 1 fee increase. A rate still below 70 cents with the new prices in place would mean mix erosion is outrunning pricing.
Cloud Migration Slips to Late 2027
CME Group is moving its trading systems to Google Cloud, paying for old and new data centres until it finishes. Chief executive Terry Duffy said the company "made strong progress in our cloud migration", and its presentation reports "Completed initial performance testing for CME Globex in the cloud".
The dates moved the other way. In April management said two agricultural products would move by year-end. Now the "Livestock market migration to the cloud will take place out of the new Aurora Region in late 2027"; the "Interim relocation to Dallas is no longer necessary".
A year's delay matters because the double running costs last a year longer, and client testing at the new Aurora site starts only in mid-2027. This quarter's volume growth kept that cost from showing in the margin.
What to watch: the 2027 expense plan, due in February. Cost growth above this year's would mean the extra year of two environments shows up in the numbers.
Metals Show What a Calm Market Costs
About four-fifths of CME Group's revenue is a fee on each trade, so revenue follows how much the world needs to hedge. This quarter it needed a lot, and the exchange operator credited a policy shift and a tech rally.
Metals show the other side. Metals volume rose 13% in the quarter, but through October 20 it runs 55% below a year ago, when gold and silver trading more than doubled.
Interest rate volume is up 37% so far this quarter on the rate shift, and nothing in the business model stops it falling as fast once policy settles. The company issues no volume outlook, so there is no plan to test this against.
What to watch: fourth-quarter total volume against the 29.7 million a day reported through October 20. A finish well below that would mean the rate hedging faded within the quarter.
Risks this quarter didn't answer
Five standing concerns got no decisive reading from this quarter's materials, which contain the results release and a presentation but no transcript of the call with analysts.
- Perpetual futures and rival venues: no new statement from management; micro crypto volume fell 46% from a year ago to 160,000 contracts a day. A transcript or a court ruling on how perpetuals are classified would move this.
- Regulatory approvals: Treasury Link, planned for the fourth quarter, now starts production trading in the first quarter of 2027 "pending regulatory review"; compute futures and the December 7 securities clearing launch wait on the same channel.
- Cost growth: expenses excluding license fees grew more slowly than revenue this quarter, but the full-year plan still steps spending up in the fourth quarter and bonus costs rise with results; the fourth-quarter expense figure settles it.
- Collateral income: client collateral fell to $155.2 billion from $158.1 billion, a second straight decline, and the cash portion that earns CME a spread averaged $147 billion. Operations rather than this income carried earnings this quarter, the reverse of last quarter, but another decline would make the line a drag.
- Customer concentration: one clearing firm above a tenth of trading fees and two resellers about a quarter of market data revenue; only the annual filing updates this.
👓 Other Themes
CME Securities Clearing Opens December 7
CME Group will open a second clearing house, CME Securities Clearing, on December 7, pending approvals. US regulators will soon require most Treasury trades to go through a clearing house, so the unit offers "a new, capital-efficient option to clear U.S. Treasury cash and repo transactions". It has no revenue yet, and the exchange operator has disclosed no pricing.
💲 Other KPIs
Buybacks slowed to $524 million from $695 million last quarter. The exchange operator has finished returning the proceeds of the OSTTRA sale, the post-trade business it sold, so the pool behind three quarters of rising purchases is spent. By our math the quarter's buyback equalled 48% of profit excluding one-offs; future purchases come from ordinary cash flow.
Money owed by customers rose 23% from a year ago, against revenue up 13%. Receivables stood at $753 million in June and $639 million at year-end, so most of the gap opened this year. A record September for volume likely left more fees uncollected at quarter-end, but the line has outgrown revenue for two quarters.
Down 0.5% from a year ago and 0.7% from last quarter. Buybacks now outrun the preferred shares converted in March, which added about 4.6 million shares. The lower count turned a 12% rise in profit excluding one-offs into a 13% rise per share, a small help that grows as the count falls.
🔮 Guidance
Unchanged. The plan still caps this year's costs, excluding one-offs and license fees paid to index owners, at about $1.695 billion. By our math that leaves about $450 million for the fourth quarter, 5% above this quarter. That is only 1% above last year's fourth quarter, when spending jumped. The exchange operator added that a strong fourth quarter would lift bonus-linked costs, so an overshoot would have a good cause.
Unchanged. Capital spending, net of allowances from landlords, stays at about $85 million for the year. This quarter's spending was about $15 million, so either the first half was heavy or the fourth quarter carries most of the plan; the nine-month total is not in these materials.
Unchanged, narrowed to the low end. The company now expects its tax rate, excluding one-offs, near 23.5% for the year. This quarter's rate was 23.8%, above the 22.6% of a year ago, and that gap trimmed profit growth.
New. Fee changes that took effect October 1 add about 0.5–1% to trading fee revenue over a full year at this year's activity. With the January market data increase and the April trading fee changes, the exchange operator puts this year's pricing at about 1.0–1.5% of revenue. Pricing adds less than the shift to smaller contracts takes away, so the fee per contract still fell this quarter.
❓ Key Questions
What does CME earn on each event contract?
Volume statistics exclude event contracts, and the presentation gives no revenue or fee per contract for them. Without a price, the most promoted new line cannot be valued, and this is the fourth quarter the figure is missing.
What will the extra year of cloud migration cost?
The first market migration moved from end-2026 to late 2027 and Aurora client testing to mid-2027. How much duplicate data-centre cost does that add to 2027 expenses, and does the new Aurora site change capital spending?
Where does the perpetual futures lawsuit stand?
The CFTC's response to CME's filing was due at the end of August. The materials say nothing about the case, the swap classification, or whether the ready contract specifications become a filing.
How much would a strong fourth quarter add to bonus costs?
The company says continued outperformance would raise performance-linked costs, but gives no size. A range for the overshoot would show whether the $1.695 billion envelope is a cap or a floor.
What spread does CME keep on client cash collateral?
Average fee-eligible cash balances were $147 billion and non-cash $167 billion, both down from the spring. The retained rate on each decides whether non-operating income holds near $217 million as balances fall.