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CME Group reports solid Q4, fueled by surge in interest rate volumes

AInvestWednesday, Feb 14, 2024 9:03 am ET
1min read

CME Group, a leading global derivatives marketplace, reported its Q4 2023 earnings on Thursday, which showed a strong performance driven by a 36% increase in interest rate volumes. 

In the fourth quarter, the company reported earnings of $2.37 per share, beating the expected $2.28 by $0.09, with revenues climbing 19.2% year-over-year to $1.44 billion, just above the $1.43 billion forecast. This performance was largely fueled by a 36% surge in interest rate volumes, including a 46% increase in Treasury futures Average Daily Volume (ADV). Overall, the fourth quarter saw an ADV of 25.5 million contracts, a 17% increase from the previous year, with international volumes experiencing a notable 28% rise.

The company's total average rate per contract was $0.682, and market data revenue for the quarter totaled $167 million. CME Group's Q4 2023 average daily volume (ADV) was 25.5 million contracts, up 17% versus Q4 2022, including non-US ADV of 7.2 million contracts, up 28% compared with the same period in 2022. This growth was primarily due to increased investor interest in managing risk across asset classes, which drove a record 24.4 million contracts per day in 2023.

Total expenses saw a moderate rise of 6.8% to $576.1 million. The report also detailed trade volumes across various segments, with interest rates leading the surge at a 36% increase in ADV, equities seeing a slight decline, and other areas like foreign exchange, energy, agricultural commodities, and metals all showing varying degrees of growth.

CME Group's Chairman and CEO, Terry Duffy, expressed confidence in the company's ability to continue delivering strong performance in the future. He highlighted the company's focus on delivering new products and increasing capital efficiencies, including the recent launch of an enhanced FICC cross-margining program.

In conclusion, CME Group's Q4 2023 earnings report demonstrated the company's ability to generate record revenue and adjusted earnings, driven by strong performance in interest rate and non-US markets. The company's focus on innovation and efficiency will be crucial in maintaining its competitive position in the global derivatives marketplace.

$CME(CME)

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