Financial derivatives exchange CME Group (NASDAQ: CME) met Wall Street’s revenue expectations in Q3 CY2025, but sales fell by 3% year on year to $1.54 billion. Its non-GAAP profit of $2.68 per share was 2% above analysts’ consensus estimates.

Is now the time to buy CME? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

CME Group’s third quarter performance received a positive market response, reflecting resilience despite a year-over-year revenue decrease. Management pointed to record open interest in key asset classes and robust growth in cryptocurrency and market data revenues as key factors. CEO Terrence Duffy highlighted, “Our crypto complex traded a record 340,000 contracts per day in the third quarter…up over 225% relative to a year ago,” while also noting strength in new product launches and international customer engagement. The quarter’s results were also supported by ongoing cost discipline and operational efficiency.

Looking ahead, CME Group’s forward strategy is anchored in expanding product offerings, deepening its retail reach, and enabling 24/7 trading for cryptocurrency futures and options. Management cited partnerships, such as the upcoming event-based contracts with FanDuel and technological advancements with Google, as pivotal to future growth. CFO Lynne Fitzpatrick emphasized plans to “drive earnings growth for our shareholders by expanding our customer base…and providing unmatched capital efficiencies.” The company is preparing to leverage tokenization initiatives and broaden access to its markets, while remaining attentive to regulatory and operational risks tied to new ventures.

Key Insights from Management’s Remarks

Management attributed third quarter trends to rising demand for risk management tools, new product adoption, and strong international momentum, while highlighting disciplined cost controls as a key support for profitability.

• Crypto trading volume surge: The company’s cryptocurrency futures and options set new records, fueled by the success of recently launched Solana and XRP futures. This segment’s rapid growth was attributed to increased institutional and retail participation, as well as a broader acceptance of crypto as an asset class among CME’s traditional clients.

• Market data revenue strength: CME achieved its highest-ever quarterly market data revenue, driven by a 14% increase. This was linked to expanding global demand, especially in the Asia-Pacific and Europe, Middle East, and Africa regions, signaling greater international reliance on CME’s data services for risk and trading decisions.

• Product innovation and launches: Several new products—including credit futures, one-ounce gold futures, agricultural weekly options, and FX Spot+—achieved record volumes, underscoring the company’s focus on meeting evolving client needs and facilitating stronger links between cash and futures markets.

• Retail distribution initiatives: Management highlighted the partnership with FanDuel, which will provide access to approximately 13 million potential new retail accounts. This effort is expected to significantly improve CME’s retail distribution and support its strategy to grow retail participation organically, without relying on acquisitions.

• Disciplined expense management: Cost-saving efforts, particularly in technology spend through the Google partnership, enabled CME to lower expense guidance. Reductions in professional fees and increased use of internal support contributed to lower-than-expected operating costs.

Drivers of Future Performance

CME Group’s outlook is driven by ongoing product innovation, retail expansion, and technology investments, but faces operational and regulatory uncertainties as it pursues growth.

• 24/7 crypto trading rollout: Management plans to introduce round-the-clock trading for cryptocurrency futures and options in early 2026, enabled by digital transformation efforts with Google. CEO Terrence Duffy explained this addresses client demand for continuous access, but acknowledged operational and risk management complexities, especially as they consider expanding this model beyond crypto.

• Event-based contracts and retail focus: The upcoming launch of event-based contracts through FanDuel aims to tap into a large retail audience. While this could drive volume growth, management noted the need for regulatory clarity—particularly for sports-related contracts—and signaled that new product types may require adjustments in marketing and operational infrastructure.

• Expense discipline and margin management: The company’s ongoing focus on cost control, especially in technology and professional services, is expected to support margins as new initiatives scale. However, management cautioned that the cost savings achieved in 2025 may not be recurring, and that further investments will be necessary as new products and markets develop.

Catalysts in Upcoming Quarters

Over the coming quarters, the StockStory team will closely watch (1) the adoption and trading volumes of new products like event-based contracts and 24/7 crypto futures, (2) the impact of global market data pricing changes and international subscriber growth, and (3) progress on integration and client uptake of FX Spot+ and BrokerTec Chicago. Outcomes in these areas will signal whether CME’s product and retail strategies are translating into sustainable growth.

CME Group currently trades at $270.87, in line with $268.61 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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