CME Spent $533.5 Million On Buybacks In The Third Quarter, Leaving $1.0 Billion Of Its Authorization
CME's 10-Q ties record trading to the Fed's first rate hike in over three years, even as revenue per contract slipped to $0.679.
CME Group, which runs futures and options exchanges and a clearing house, repurchased $533.5 million of its stock in the third quarter, cutting the remaining buyback authorization to $1.0 billion. The company's 10-Q, filed Friday, also credits the Federal Reserve's first rate hike in over three years for part of the surge in trading volume.
Buybacks outrun the dividend's cushion
CME bought back 2,047,234 shares in the quarter at an average of $255.81, according to the 10-Q. The remaining authorization stood at $1.0 billion at September 30, down from $1.5 billion at June 30.
The pace slowed from the second quarter, when it repurchased 2,546,284 shares at $273.14, per the prior quarterly filing. For the first nine months, the company repurchased 6,432,010 shares at an average of $272.89, about $1.8 billion.
Dividends of $3,637.7 million over nine months exceeded net income of $3,233.0 million. Shareholders' equity fell to $26,560.3 million from $28,728.2 million at the end of 2025, while retained earnings rose to $6,028.5 million from $5,457.5 million at June 30.
Rate hike credited for record volume
The 10-Q blames sticky inflation, which it believes pushed the Fed into its first hike in over three years, for boosting volume. It says the resulting jump in Treasury yields to multi-year highs fueled heavy trading in Treasury products. The prior filing did not carry this language.
Average daily volume rose 16% to 29,445 thousand contracts in the quarter. Interest rate volume rose 13%, equity index volume 23%, and E-mini Nasdaq 100 volume 73%, which the company links to skepticism about AI spending. Ether volume fell 70%.
Total revenue rose 13% to $1,737.3 million and net income 14% to $1,036.9 million, or $2.89 a diluted share, as the company's earnings release reported on Wednesday. The average rate per contract fell to $0.679 from $0.702 a year earlier, which the filing attributes to more micro contracts and more member trading.
A collateral pass-through that nets out
The clearing house held $155.2 billion of performance bonds and guaranty fund contributions at September 30, including $139.1 billion in its cash account at the Federal Reserve Bank of Chicago. Earnings on that collateral were $1,391.7 million in the quarter, against $1,269.0 million of interest distributed back to clearing firms.
That is why investment income of $1,418.1 million and other non-operating expense of $1,264.0 million nearly cancel. Operating income rose to $1,141.4 million from $972.6 million.
The plaintiffs in the Class B shareholder suit, who lost a jury verdict in July 2025, have filed a notice of appeal after the court denied their post-trial motions on June 15, 2026.
The $1.0 billion left under the program sets the ceiling on further repurchases, at a pace of $533.5 million last quarter.
Sources
- 10-Q Filing — CME Group (CME) — SEC EDGAR
- 10-Q Filing — CME Group (CME), Q2 FY2026 filed 2026-07-24 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, exhibit9919302026.htm) — CME Group, filed 2026-10-21 — SEC EDGAR
- CME Group Inc. Reports Highest Q3 Revenue on Record for Q3 2026 — Yahoo Finance
- CME Group stock slips as Q3 earnings beat, but expenses disappoint (CME:NASDAQ) | Seeking Alpha — seekingalpha.com
- CME: Q3 Earnings Snapshot | 9news.com — Associated Press
- CME Group (CME) Stock Climbs On Record Q3 Earnings And Margin Strength — Yahoo Finance
- CME Group 3Q Profit, Revenue Rise on Higher Derivatives Volume — MarketWatch
