**BETA FINCH PODCAST SCRIPT**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we cut through the noise to bring you what really matters from the latest corporate earnings calls. I'm Alex, and I'm here with my co-host Jordan to dive into CME Group's Q4 2024 earnings.

Before we jump in, I need to share an important disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks Alex. And wow, what a quarter for CME Group! This is a company that just keeps hitting records. We're talking about their fourth consecutive year of record volume with average daily volume up 9% to nearly 27 million contracts. Revenue hit $6.1 billion for the year - that's 10% growth - and they delivered their third straight year of record revenues and earnings.

**ALEX:** It really is impressive. But what caught my attention was CEO Terry Duffy's comment about the blurring lines between retail and institutional trading. He said technology is equalizing access to data and improving information flow, bringing new types of traders into their markets. Jordan, what do you make of this trend?

**JORDAN:** It's fascinating, Alex. They're seeing massive growth in their retail business - Julie Winkler mentioned that two-thirds of the $1 billion in revenue from new clients over the last five years came from retail. And get this - new client acquisition was up 23% year-over-year. They're even rolling out futures to Robinhood's 24 million customers, which could be a game-changer.

**ALEX:** Speaking of game-changers, let's talk about their pricing power. CFO Lynne Fitzpatrick announced some interesting fee adjustments. Can you break that down?

**JORDAN:** Sure thing. They implemented transaction fee adjustments in February that should boost futures and options revenue by 1% to 1.5%. They also raised market data fees by 3.5% and - this is clever - they're adding a 10 basis point surcharge for participants who don't post at least 30% of their margin in cash. In aggregate, these changes could add 2% to 2.5% to pre-tax income.

**ALEX:** That cash requirement is smart risk management, especially given the current market environment. Terry Duffy was pretty candid about the economic headwinds ahead - $36 trillion in U.S. debt, geopolitical tensions, potential tariffs. He sees all of this driving demand for risk management tools.

**JORDAN:** Exactly, and it's showing up in their commodities business, which was their third fastest-growing asset class. Metals volume up 23%, energy up 17%, agriculture up 13%. Derek Sammann pointed out they're seeing significant increases from global multi-strategy hedge funds expanding into commodity-focused strategies. This isn't just cyclical - it looks secular.

**ALEX:** The international growth story is compelling too. Their EMEA commodities volume was up 34% year-over-year. But let's pivot to something that came up in the Q&A that I found intriguing - the regulatory environment under the new administration.

**JORDAN:** Terry Duffy was pretty fired up about this, particularly around Treasury futures clearing. He made a strong case that having U.S. sovereign debt cleared overseas - specifically at LCH in the UK - poses systemic risks because the Bank of England would have resolution authority over a market larger than some countries' entire economies.

**ALEX:** His quote was memorable: "If someone gets sick, we all get cancer" when talking about a $28 trillion market. Pretty stark warning. But shifting gears, what about their capital allocation strategy?

**JORDAN:** They've got a new $3 billion buyback authorization, though Lynne Fitzpatrick described their approach as "opportunistic." They're still prioritizing their dividend - raised it from $1.15 to $1.25 - and they just paid out

This episode includes AI-generated content.

**BETA FINCH PODCAST SCRIPT**

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**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex, and joining me as always is Jordan. Today we're diving into CME Group's Q4 2025 results – and wow, what a quarter to cap off what they're calling their most successful year ever.

Now, before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

Jordan, CME just posted some pretty impressive numbers here. Walk us through the highlights.

**JORDAN**: Absolutely, Alex. This was a record-breaking quarter on multiple fronts. CME hit $1.65 billion in Q4 revenue, up 8% year-over-year, and for the full year they reached $6.5 billion – their fourth consecutive year of record revenues. But here's what really caught my eye: adjusted earnings per share grew 10% in the quarter to $2.77, and 9% for the full year.

**ALEX**: And those volume numbers were pretty staggering too, right?

**JORDAN**: Exactly. They averaged 28.1 million contracts daily for the year – up 6% and marking their fifth consecutive year of record volume. What's particularly interesting is this growth was broad-based across all their major asset classes. Interest rates, energy, metals, agricultural products, and crypto all hit all-time records.

**ALEX**: Speaking of crypto, that seems to be a major growth driver for them. What's happening there?

**JORDAN**: Crypto was absolutely on fire for CME. Q4 average daily volume hit 379,000 contracts – that's up 92% year-over-year, representing over $13 billion in notional value traded per day. And CEO Terry Duffy announced they're launching Cardano, Chainlink, and Stellar futures next week, plus they're rolling out 24/7 crypto trading next quarter.

**ALEX**: That's a big strategic shift. They're essentially saying crypto doesn't sleep, so neither should their platform.

**JORDAN**: Exactly, and Duffy made an interesting comment during the call about potentially expanding 24/7 trading to other asset classes if it makes sense. They're clearly being responsive to how markets are evolving, especially since the underlying crypto cash markets trade through weekends.

**ALEX**: Now, one area that's getting a lot of attention is their push into retail markets. They launched these "event contracts" – basically prediction markets. How's that going?

**JORDAN**: This is fascinating, Alex. They launched in December and have already seen over 68 million event contracts traded in just six weeks, including 7 million on market-related events. They're partnering with FanDuel for distribution, and their micro products – aimed at retail traders – were up 59% in Q4 to 4.4 million contracts daily.

**ALEX**: But there was some interesting commentary about the regulatory landscape here, wasn't there?

**JORDAN**: Yes, and Duffy was pretty direct about this during the Q&A. He emphasized that as long as the CFTC regulates these as swaps – which they currently do – CME will participate. But he was clear they don't want to get bogged down in legal battles with states over whether this constitutes gambling. His position is basically: "We follow federal regulation, and if states have issues, they should take it up with the federal government, not us."

**ALEX**: That's a pretty pragmatic stance. Now, looking at their financials, margins were strong again, right?

**JORDAN**: Very strong. Operating margin for the year was 69.4%, up 110 basis points from 2024. For Q4 specifically, they hit a 67% operating margin. They're also sitting on about $4.6 billion in cash, including $1.3 billion from their Austria sale proceeds, which the board has approved for share buybacks.

**ALEX**: And they're continuing to invest in growth initiatives. What's the 2026 guidance looking like?

**JORDAN**: They're guiding for about

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