Yahoo Finance

Suzanne Sprague

Thanks, Terry. In response to the heightened levels of volatility earlier this month, we proactively increased margin requirements in various products across all asset classes and incremental steps over the course of April to ensure adequate collateral coverage. Liquidity demand due to margin increases are typically a fraction of the size of mark-to-market cycles attributed to daily price moves. We've set a new single day record for moving cash associated with mark-to-market on April 9, collecting $32 million from firms of losses that day and panning out $32 billion to firms with to firms with gains that day. This far exceeded our previous record of $22 billion.
In comparison, increased collateral requirements due to margin increases on April 9 totaled [77]
Sharing members and settlement banks have been performing well given the increased volatility and liquidity. Risk management is of utmost importance to our business, and we are monitoring risk on a real-time basis every day regardless of --

Terrence Duffy

Thanks, Suzanne. I'm going to ask Sunil Cutinho now to comment on the technology and the resiliency of our markets

Sunil Cutinho

Thanks, Terry. Despite the high volatility and record activity in our markets, including 7 straight days, over 40 million contracts, our systems functioned as designed, ensuring market continuity during a period of extreme volatility. During the period -- during the week of April 7, we saw record order entry volumes on Globex exceeding 13 billion messages over the course of the week. The system's ability to handle record volumes underscores its resilience.

Terrence Duffy

Thank you, Sunil. I asked both Sunil and Suzanne comment because I think it's critically important for analysts and investors understand what we do here on a daily basis. Sometimes it doesn't get quite as, but I think during the unprecedented times that we have seen, especially over the last 6 to 8 weeks, I want to give you just a little bit of a flavor of how we are operating at CME Group. I think it's really important for you to understand that. And we look forward to your further questions during the part of the the presentation this morning.
So thank you both to Suzanne and Sunil. Now I'm going to turn the call over to Lynne to review our financial results in more in detail.

Lynne Fitzpatrick

Thanks, Terry, and thank you all for joining us this morning. As Terry mentioned, during the first quarter, CME Group generated revenue over $1.6 billion for the first time, up 10% from the first quarter in 2024. The average rate per contract for the quarter was strong at $0.686, down 1% from the prior year on 13% volume growth, resulting in the highest quarterly clearing and transaction fees in our history of $1.3 billion, up 11% year-over-year. . Market data revenue also reached a record level, up 11% to $195 million.
Continued strong cost discipline led to adjusted expenses of $455 million for the quarter and $378 million, excluding license fees. Our adjusted operating income came in at a record $1.2 billion, up 14% year-over-year. Our adjusted operating margin for the quarter was 71.1%, up from 68.9% in the same period last year.
CME Group had an adjusted effective tax rate of 23.1%. Driven by the strong demand for our risk management products, we delivered the highest quarterly adjusted net income and adjusted diluted earnings per share in our history at $1 billion and $2.80 per share, respectively, both up 12% from the first quarter last year. This represents an adjusted net income margin for the quarter of over 62%. Capital expenditures for the first quarter were approximately $12 million, and cash at the end of the quarter was $1.6 billion. CME Group paid dividends during the quarter of approximately $2.6 billion and $3.8 billion over the past year.
We're very proud to deliver the best quarterly earnings in our history and pleased see a strong start continuing into the second quarter with year-to-date volumes up 20% versus 2024. At CME Group, we continue to focus on providing the risk management products needed by our clients and driving earnings growth for our shareholders.
We'd now like to open the call for your questions.

Question and Answer Session

Operator

(Operator Instructions)
Kyle Voigt with KBW.

Kyle Voigt

Maybe if I could just start by asking 1 on the operating environment. In some prior periods of extreme volatility and increasing margin requirements, we've seen deleveraging occur by market participants. As you kind of just mentioned in your prepared remarks, it doesn't seem like the open interest data really supports that there's any type of significant deleveraging occurring. I think open interest total OI is up since the start of April. However, there does seem to be some pockets with OI down meaningfully in April, particularly in ag's futures.
I was just wondering if you could talk about what you're seeing and hearing from market participants in terms of health, why you think we haven't seen any broad-based deleveraging and what is happening in some of the small pockets where you are seeing OI decline a bit in April.

Terrence Duffy

Thanks, Kyle. So the question is, what are we hearing from clients or why they're not deleveraging during this time period. And what are we seeing with some of the smaller contracts or really on culture products that have some -- seen some open interest drop. Is that a fair way to categorize your question?

Kyle Voigt

Yes.

Derek Sammann

Thanks, Kyle. When you look at the overall ags, it came off a record year of just under $600 million generated in ags last year. When you look at the first quarter of this year, we set another ADV record, not just in futures, but in options overall, the business up 23%. You look at the OI trends overall. We've set multiple records in OI, not just in options, but the aggregate options plus futures.
In fact, we just set a record 5.1 million open interest and options just last week on the 21st of April. So you look at the aggregate story, options plus futures, we're actually seeing record levels of open on track to exceed the record that we set in February with another record, assuming we continue the trends over the next couple of days. . When you look at the pockets that you're talking about, yes, we have seen some trailing off in futures, but we've seen that more than offset the pickup in open interest and options. Hence, to overall record levels.
We did see some pullback in livestock, particularly feeder cattle, in the future side, options grew, but overall in aggregate. This is very much a risk-on environment in ags. And that's the benefit that happen in a market where we've got the grains and oilseeds, we've got the dairy, you've got the lumber and we got the livestock in ag markets overall. We're coming off a record quarter, record OI options record, and we're seeing record levels of non-US activity.
So I would say the deleveraging is not something we're seeing in aggregate across ags, in fact, very much the opposite ensarisk-on environment. They are seeing some shift between products inside the ag market overall.

Terrence Duffy

So Kyle, let me address some of the other questions about the broader markets and just talk about some of the fundamentals that we're seeing that I don't know -- I've been in this business for probably as long as anybody, and I have not seen some of the fundamental factors that we're seeing today. So our open interest, as Derek referenced, is up 7% across the board in total. So I think that's an important factor. You're also looking at the reason why people may not be deleveraging. It's very difficult to take risk off or deleverage your hedges when probably the most uncertain times we've ever seen in our history.
. No one's ever traded through these tariffs in the marketplaces to any extent over the last 30-plus years. We never had $38 trillion of debt on the book. So the United States of America. There's debt on books of countries all around the world.
There is so much risk out there associated with margins being massively thin that if you do not participate, I don't think you have the luxury of not participating in this volatile time. just because if you do not participate, you could be out of a business to next day. That's how quick these markets are moving, and that's the size of the moves associated with them. So I think that's a big part of the reason why we're not seeing deleveraging like you may have seen like I've seen 25, 30 years ago, when the markets got very volatile and people just kind of put their hands in their pocket and try to wait to see when there's some clarity.
You don't have that luxury today because of the fundamentals that are not only here in the United States, but globally. So I think that's a big part of why we're not seeing the deleveraging. And I think that's why our products are critically important for our user base today.

Operator

Dan Fannon with Jefferies

Dan Fannon

Thanks. Good morning. Was hoping for some historical context, can you talk to what happens historically when you guys have raised margin requirements and then ultimately volumes thereafter? I know this period is pretty unique. But we focus on maybe the largest asset classes, is it reasonable to assume some level of slowdown after the raise in margin requirements? And also if you could provide just kind of where those challenges on the collateral side currently?

Terrence Duffy

So Dan, I think it's really important. It's hard to give you 1 answer on that because every situation is different with margins. So if you want to talk about margins during the '08, '09 crisis, that's a fundamental issue why you might move margins up or down. While you're moving margins up or down in 2025 going on with the geopolitical events of boots underground wars in Russia Ukraine, the issues going on in the Middle East and the tariff conversations that have been going on are completely different than what was going on in '08 with the housing crisis. So it's harder to pinpoint what exactly can or cannot happen.
I will say on margins, though, and it's one of the reasons I pay a lot of attention to what Suzanne and Sunil are doing because it's really important that when we talk about margins and when we work with our clients on margins, we want to make sure we do it in a very judicious way that we're not just being reactive on margins because I think that can be disruptive to markets, and that's what puts people on the sidelines when you're disruptive. I think when you're deliberate we have been and proactive like we have been, you lessen the chance of the reactionary activity of people walking away from your marketplace because not understanding what margins mean to it.
So I believe, Dan, there's no 1 simple answer, and I promise you I'm not dodging you know me better than that. I just think that fundamentally, the markets are different today than they were in historical trends. that we've seen when we move margins up or down and Suzanne, if you want to comment, you're happy to.

Suzanne Sprague

Yes, I would agree. I think every situation is different, but in periods of increased volatility, people are looking for central counterparties to be in place to come to manage their risk in a safe manner and relying upon the collateralization that happens in our ecosystem. So we have seen record levels of overall margin requirements in collateral in the system. That seems to be consistent with the activity increases that we've seen over the past couple of weeks as well. So again, we can't speculate what's going to happen in the future, but it seems in this case that people appreciate the level of safety that you got from margin collateralization and the clearing complex CME.

Terrence Duffy

And again, Dan, I think that's one of the reasons why we invested the way we did and expand 2 technology. It helps allow us to make some of these decisions but again, these are -- it's not a science all the time, and we do work with market participants to make sure that everybody is comfortable with a mutualized system, and it's critically important to all market participants that we are doing our job correctly. So we take it very seriously. And as Suzanne said earlier, this is real-time risk management. This is in T1 or T2, this is real-time risk management.
So I appreciate your question, Dan. Hopefully, that answers it for you.

Operator

Patrick Moley with Piper Sandler

Patrick Moley

So you recently announced that you're going to be selling the Ostra JV with S&P Global for $3.1 billion of which I assume you are going to receive about half of. So I was just hoping maybe you could comment on what you plan to do with the proceeds from that sale and how that informs your capital allocation priorities for the rest of this year and into next year?

Terrence Duffy

Thanks, Patrick. Go ahead, Lynne.

Lynne Fitzpatrick

Yes. Thanks, Patrick. So you're right. It is a 50-50 joint venture. So we would be splitting the proceeds of that I would that they expect to close is probably about 6 months out.
We have to go through the regulatory review. So that does take some time. So on the use of proceeds, we're going to hold off on kind of making any statements on that just given the amount of time between now and the close. But certainly, we'll keep you updated as we get closer to that point on those proceeds.

Terrence Duffy

Let me just add 1 thing, Patrick, on the regulatory approval, we are not anticipating, we've not been advised that we -- there's any hurdles that cannot be cost. So we're not anticipating any regulatory hurdles on closing this transaction. It's just a time-consuming process.

Patrick Moley

Okay, great. Thank you.

Operator

Ken Worthington with JPMorgan

Ken Worthington

Hi, good morning. Thanks for the question. I'd actually like to follow up on OSTTRA. Can you talk about the decision why you decided to sell OSTTRA and maybe what your thoughts are on post-trade going forward after the sale.

Terrence Duffy

So Ken, let me just say a couple of things. When we acquired that business back in 2018 the business -- it's an interesting back office business, it's a decent business. It became much more attractive when we were able to do partnerships with then IHS Markit and then ultimately, when the S&P acquired them, have another JV with S&P. So we're -- as Lynne said, we're only 1 side of that trade. So it's a decision process in these JVs about how you want to go about them.
Listen, I think it became very lucrative for CME as we put these properties together, and we thought it was a good opportunity for us to monetize those gains on behalf of our shareholders, and we would not be putting ourselves at any disadvantage whatsoever by not owning them if, in fact, we still wanted to use some of these services. instead of running them. So I think it was a very smart business decision and that's what we did with it.

Operator

Ben Budish with Barclays.

Ben Budish

Hi, good morning and thanks for taking the question. I just wanted to follow up on some of the margin questions. Just curious with the pricing change going into effect at the beginning of April, any early reads on, the sort of shift from cash to non-cash or non-cash to cash collateral, or is it perhaps like too volatile to to really see what the longer term decisions of your clients will be?

Terrence Duffy

Yes. Thanks, Ben. Lynne?

Lynne Fitzpatrick

Yes. So just to give you a few data points, Ben. For the quarter, our average cash balances were $79 billion, and We had average noncash collateral of $173 billion. In April, the month to date, our average cash balance is up to $131 billion and the feasible noncash is $140 billion. Now I would note, as Suzanne talked about the overall level of activity and margin is up in April.
And we're also very early days in terms of the new soft minimum being in place. So this is an item that we do report on, on a monthly basis in our volume tracker. So I would keep an eye on that as we're putting out that data over the next few months because we need to see when people are more used to the cash minimum. And as as we look at levels of activity as we go through the year, we could see some changes there. But to date, we're seeing the vast majority of participants meet that 30% soft minimum in cash.

Ben Budish

Very helpful, thanks so much.

Operator

Bill Katz with TD Cowen

William Katz

Okay, thank you very much for taking the question. Maybe shift gears a little bit, Steve, the non-US opportunities continues to grow rather nicely year-on-year, quarter-on-quarter and across the different regions to which you're participating wondering if you could unpack some of the drivers for that growth, how much of that might be sort of onboarding new users versus maybe penetration of that user base and how to think about the outlook going forward?
Thank you.

Terrence Duffy

Thanks, Bill. It's a great question. And we have been very pleased with our growth internationally, and I'm asked Julie Winkler, who heads up that division to give some color on that way.

Julie Winkler

Yes. Thanks for the question. The certainly, Q1 was another record in terms of average daily volume of 8.8 million contracts. That was -- what was great to see is that we saw double-digit growth across all asset classes, in particular, energy eggs and foreign exchange products were extremely strong. What I also like to see is that the growth came from every international customer segment, which is -- speaks to the growth and also the need for our products and for our clients to be able to risk manage here at CME Group.
That was led by commercial participants that were up almost 30% and so we often speak about the health and diversity of our client base and how critical those hedges are to our marketplace that is a great trend that we've continued to see. I also just point out, it was a record quarter for non-US options growth, contracts in ADV. That was up over 20% year-on-year. So this has been another strategic initiative that we've talked about is increasing that penetration in options.
All APAC was strong. EMEA was strong. I think the other trend that we're seeing is certainly from the buy-side community that was strong in both EMEA as well as APAC. What we're seeing is the quad funds and APAC they're continuing to further expand their trading strategies. And so things like that, we have a lot of resources across the world to really engage with our customers and help to drive that trading activity and work with our customers.
So we have a good outlook going forward and are happy with the performance in Q1.

William Katz

Thanks, Bill.

Operator

Owen Lau with Oppenheimer.

Owen Lau

So on retail, your micro equity index and micro FX ADV went up quite a lot in the first quarter. Could you please talk about how much of it is driven by your partnership with Robin Hood and how much more you can do with them and launch more products through that platform. Thanks a lot.

Terrence Duffy

Yes. Let me just speak a little thanks for the question on about the retail performance, and I'll address to your point on micros and also our new to futures, brokers, partners, which are important. Q1 in general was a record quarter for our Retail segment. we saw growth across a number of key metrics. So certainly, revenue was up -- that's a key metric for us.
But also, we've spoken about the importance of new client acquisition or NCA. This surged by an impressive 44% to over 83,000 new traders in Q1. So this is the fourth consecutive quarter of that double-digit NCA growth. We also saw a 17% increase in total participation. So reaching over 350,000 traders globally.
The good news as well is that we saw that growth across all 3 regions.
And so I think that continues to speak to the global nature of our partnerships and the importance of our micro suite. So total micro volumes, $3.8 billion in average daily volume in Q1. This was up 13%. And we're excited to see that that's happened in the micro equities, as you pointed out. And also, we saw a really robust demand for our micro metal and also our micro cryptocurrencies.
So that continue to speak to the diversity of our product base and also the fact that we're continuing to educate these retail customers and cross-sell across equities into these other more diverse asset classes. Market environment that we talked a lot about on this call was part of creating those opportunities for retail engagement. And we've also talked about the new strategic partners, including Robin Hood plus 500. We've always -- these partners are critical for us to be able to go out and seek new customers. They are educating customers, they are onboarding them quickly.
And also dishing up to them market opportunities, which there were a lot of them in terms of trading opportunities in Q1. So positive about that going forward, and we'll continue to work with them as well as we see a need for product innovation in the future. And lastly, we launched new things like micro ag as well. So this is about combining the partnerships with also the product innovation to continue to fuel this growth going forward.

Owen Lau

Thanks John.

Operator

Alex Kramm with UBS

Alex Kramm

Yes, good morning, everyone. A quick 1 from me on Market Data. Really strong revenue performance. I know you gave the audit numbers already in the prepared remarks, but can you maybe break down the remainder of the growth between some of the price increases, but also core subscription growth and any other onetime as you would point out on the subscription growth, of course, maybe talk about where you see new subscribers come from in particular?
Thank you.

Terrence Duffy

Okay. I'm going to ask both Lynne and Julie to comment. Lynne? .

Lynne Fitzpatrick

Yes. So a reminder, Alex, on the market data front, we did have a 3.5% pricing increase that went into effect in January. So that is going to be part of that. We also saw strong subscriber growth. And maybe, Julie, you can comment on some of those retail participants and how that has been impacting the overall growth as well.

Julie Winkler

Yes. I think to the question, Alex, as Lynne pointed out, the biggest move, I'd say, was among our professional subscribers to our real-time market data. And so that was both -- we see -- we saw an uptick in demand. So we saw more users. And then we also have that price increase of 3.5% that took effect on Jan 1.
The other major trend was outperformance from the nonprofessional. And so these are retail users needing access to our market data and also saw some growth in our drive data instruments as well. And so that was combined with that. I'd say on the nonrecurring revenue side, it was an uptick in increase over Q1 and as 2024 and also up over Q4.
There were about $3.5 million in audit and some other additional true-ups. But as we've stated in the past, those are pretty difficult to predict and are just a timing element from our side based on how we work with our clients on that front. So I'd say the biggest kind of new trend is this continued demand from retail and that nonprofessional subscriber usage, which is tends to grow relatively significantly. And I think coincides with what we're seeing on the volume side with our retail business.

Alex Kramm

Thanks, Julia.

Operator

Craig Siegenthaler with Bank of America

Craig Siegenthaler

Everyone. I hope you're all doing well. I have a big picture question. So in the quarter, you generated about 30% of your ADV from international customers. And we wanted an update on how these businesses compete with the non-US
futures exchanges especially given the emerging trade conflict. So how do you think of the risk of share losses versus the potential for gains from domestic exchanges in these markets?

Terrence Duffy

So, Craig, just want to understand your question. You're saying where do we compare against the foreign exchanges on a percent basis?

Craig Siegenthaler

So it's about 30% of your total EV. But I just wanted to generally on your -- on how you compete with the international futures exchanges. For example, there's 5 in Mainland China. .

Terrence Duffy

Yes, we got it. Thanks, Craig.

Lynne Fitzpatrick

I can start and then others, Juan others can jump in. So thanks, Craig, it's Lynne. I think as we look at it, we have a unique product offering, kind of the breadth of our offering contracts that our customers are able to come to us to risk manage. So not just the places where we have IP protection over those contracts and they are not offered on the local exchange, but also the depth of liquidity that you can get in our market on a 24-hour day basis. So getting access to the major US
indices or trading on the whole treasury curve or the full US rate curve our energy products. These are unique to CME and you have not only that product diversity, but the depth of book, where our customers around the globe can be trading in those markets and have the same trading experiences during our US hours.

Terrence Duffy

Julie, do you want to add to that?

Julie Winkler

Yes. I think just to put some data behind Lynn's point on the the benchmarks, I mean, particularly in equities internationally, we saw outsized volume growth 33% year-on-year, and that was largely driven by the buy side in EMEA, APAC props and retail business and also LatAm on the sell side and buy side. So users are continuing to come to our markets. The depth of liquidity is unparalleled, and they feel as Suzanne correctly pointed out earlier, right, safe in training in this environment and with CME Group. We've just -- I just returned from the Middle East.
My head of sales was just over in Asia over the last week as well. And the sentiment is that even among this market volatility and the tariff turmoil, clients are reiterating the importance of really that trusted partnership they have with CME Group to access our liquidity and manage risk. So we feel strong about the relationships that we've built with our customers and the fact that we have such a diverse product suite that they're able to take advantage of.

Terrence Duffy

And Craig, I would just add that the 1 measuring stick that you have to look at is we as we announced earlier, the record volume coming from outside the US is really the measuring stick how we look at ourselves versus other entities. So at 8.9 million contracts a day, that is a record for CME Group. And I think that's something that we're very proud of, and we're continuing to build on.

Craig Siegenthaler

Thanks Greg.

Operator

Brian Bedell with Deutsche Bank.

Brian Bedell

Oh great, thanks. Good morning. Thanks for taking my question. Maybe just to come back to retail. If we think about the surge that we've been seeing in micro futures. Can you comment on to what extent retail users may use other contracts outside of Micro, like how good of a proxy is micro for retail. And as we think about volume tiers as well, that you called out in the commentary, should we be thinking of that mostly in interest rates? Or is that quite diversified by product line, including equities, of course, since we've seen the volume surge in April there really pick up?

Terrence Duffy

Thanks, Brian. So I'm going to ask Lynne to comment on the volume tiers, and that was if I have the impact on the RPC. And then on the micros, I'll ask Julie to comment is it a proxy as it relates from the retail going forward. And then I have -- and then on that as well. So go ahead.

Lynne Fitzpatrick

Yes. So volume tiering, Brian, you will see in the individual asset classes in the individual products. So those are separate. It's not across the board, where it's the total volume over our complex, you would need to look at the volume within each asset class. And for instance, there will be volume tiers for treasuries.
So you would need to look at the performance of both various sorts of the asset classes. So when we have not only record overall volumes, our highest quarter in history, but we also had our highest quarter for interest rates, equities, ags and FX you will see more of the impact of tiering when you're at those high levels of volume.
That is intentional. We want to make sure in the high periods of volatility that our customers can continue to manage that exposure and make it cost effective for them to do so and continue to trade, and it's obviously highly profitable for us as we see that increase in volume coming across the system. We have very high operating leverage and get high incremental margin on that trade.
So it is something that we've built into the system to make sure that we are capturing a maximum velocity of trade.

Julie Winkler

I think in terms of the micro question, I mean, it was a very deliberate provision on our behalf to introduce those products. And the thinking at the time is the same as it is today, we wanted to find a product that had the correct size for the retail customer. And clearly, there is a spectrum of retail customers in terms of those trading with the smaller account size where Micros very much fit into their portfolio in just the right size. There are also retail accounts that are much larger than that, and people are hedging relatively large stock portfolios where they may be able to get into our E-mini and have actively traded at in the past. So we monitor this and are certainly seen as well that as new to futures brokers come into marketplace and even our existing partners, there is more product diversity in what they are trading.
So I think micros are a good proxy. However, retail traders are not limited to just trading micro equities. And I think that's where -- we do see -- we saw that in Q1, they're training the full-size gold contract. They are in trading full-size cryptocurrency contracts. And so again, I think it speaks to the breadth of our product portfolio but it also is heavily dependent on the size of that individual trader who is accessing our marketplace.

Terrence Duffy

And just to add to that a little bit.
I do think when you look historically at micros and you look back at the equity markets going back 25 years ago when the multiplier of the S&P 500, was cut to 250, that was a smaller contract and the e-Mini came out of that. Now the eMini is the large contract. The value of a contract sometimes determines where the may or may not go to Julie's point. They can go in different sized contracts, and I think that's very important. So to say it's a proxy would be a bit of a stretch, I believe. And right now you're seeing institutions trade micros and you're seeing institutions trade the large contracts depending on what their needs are. And again we're trying to Have a structure to allow all participants to participate at their comfort level, but you've got to remember that a lot of this is depending on the price of the actual product to determine the risk associated with that product. So gold's at $3500 an ounce versus $1000 an ounce, obviously the contract's much more expensive than it was at $1000 an ounce.

Derek Sammann

Yes. I was just going to say, when we look at what the uptake is on the micro gold side that we talked about, that's actually a market to Terry's point, we had some go from (inaudible)
that's a market that has tracked a lot of not just retail but small institutional participation. That is such an important product right now that we've actually exercised on pricing power, increased fees on those starting February 1

Terrence Duffy

And that is a very important point. So on these smaller products that may be larger participants are trading, we are adjusting the pricing associated with them just like we did with the equity market over the last 25 years as the emini became the dominant size contract for the equity market. So we're very aware of that, and we don't price them on notional value like we did when they first came out, we priced them on what we believe the participant is using them for.

Operator

Alex Blostein with Goldman Sachs

Alex Blostein

Hey everybody, good morning. I actually had another quick follow-up on retail for you guys. You talked about retail in the context of just kind of volume contribution in the business. Can you help break down the composition of retail in terms of just revenues were that stands now both on the trading side as well as the market data. And if you look at the market environment in April, obviously, a lot more it sounds like retail continues to be fairly engaged. But as you sort of assess the health of retail and why this time around might be different from other drawdowns.
So I'd love to get your perspective on what's sort of been driving a bit more durability in retail trading so far in April, which again seems to be still engaged.

Terrence Duffy

Yes, Alex, thank you. I appreciate it. First, we don't give up the information of the breakdown of the participants, whether on the revenue of market data or their trade. But let me comment as it relates to why I think the retail is different today than it may have been a year ago or 10 years ago. The retail today has many more tools to allow their participation into our marketplace as much as well as many others that they did not have just a few years back.
. So when you look at retail brokers today offering futures, we didn't see that before. There was a comment earlier about Robin Hood now offering futures contracts of CME. That was not around a few years ago. So the size of the retail market is so much bigger and diverse than it was years ago.
I think that's 1 of the reasons why we're seeing not the take down in retail and why we still see the uptick continuing. And it's just a distribution of that product, the technology that allows people to participate people have access to it. They want access to it. And I think that's the big difference that we're seeing today than we just saw in recent times.
And I don't see that going away. I see that only continuing because of the way technology allows people to participate in different markets around the world, including CMEs.

Operator

Ashish Sabadra with RBC Capital Markets

Ashish Sabadra

Thanks for taking my question.I wanted to drill down further on the energy, similar to other asset classes. We saw some really strong volumes in April. How do you think about the puts and takes going forward. And then maybe just on the same topic of energy, how do you think about any updated thoughts on WTI versus Brent and the same on nat gas?

Terrence Duffy

Derek, do you want to comment on that?

Derek Sammann

Yes. We think you -- looking back in 2024, we put up a record year occurring. I think it generated in excess of $200 million of rent last year. We started strong this quarter. So your first quarter volume up 20%, led by options of 34%.
We're seeing record individual months and for options overall. In terms of open interest overall in the Henry Hub complex. We've seen volume records and options and futures open interest levels, we haven't seen over 10 years.
So we see multiple records over the course of Q1, that is carried over into 39% growth in April as well. When you look at where and how that business is scaling. When you look at the client segment perspective, every single client inside our portfolio or banks buy side, commercial customers all up double digits. When you look at where the business growth is happening, as you heard on care at the top of the call and Julie earlier, energy contributed to record revenues outside the US and non-US
business. That's a new all-time record for energy contributing as it was for ags as well.
When you look at the kind of positioning of both Henry Hub and WTI. I think everything we've been talking about for the last 2 to 3 years has been a structural shift positively positioning both Henry have and WTI as global benchmarks. We see that in our client participation numbers. We see that in the regional growth. question was asked before about regional participation.
We're seeing net new energy customers in Europe and Asia, expand participation into our WTI and Henry Health products as the US continues to produce and export these products at record levels.
So when we look at our position going forward, we think very firmly CME is in the right position with benchmark products. When you look at the growth, it's a risk-on environment right now. When you look at the competitive metrics, I would say that our WTI share relative to Q1 was about static about 73% based on the unchanged from last year. Henry have about the same in the future, 77%, 78%. We did see our share actually grow in WTI options relative to ICE up 91% of and we saw an increase in Henry Hub options share up to 71% from 66%.
So we think to the points made earlier, global benchmarks adopted given the liquidity, given the infrastructure, all the conversations we've been having about the benefits of what CME presents to our customers. That is totally the story of global client adoption, we think a strong positioning going forward through what is an unbelievably difficult challenging environment for our markets where our job is to help customers manage that risk, but the products and tools we give them daily.

Operator

Chris Allen with Citi.

Chris Allen

Most stuff has been covered. But 1 question we've been getting is how to think about the implications for resolution of Ukraine and Russia, specifically in the energy complex. And I also wonder if there are any other implications for other areas at CME, maybe ag as well. So any color there would be helpful.

Terrence Duffy

So the resolution between you say, Russia and Ukraine? .

Chris Allen

If there is a resident obviously.

Terrence Duffy

Yes. And what does that mean for the energy market? Is that what you said, Chris?

Chris Allen

Yes.

Terrence Duffy

Yes. Again, I'll let Derek comment, but I think that the resolution of that is not for anybody in this room to try to figure out. There's a lot of people internationally that work for governments that are trying to deal with that issue. All we can say is we hope that it comes to a resolution soon because we don't like -- no 1 likes to see what's going on, on the blood side in these regions. So as far as the price of the product, I think that it could take some time before the Russian market gets back into the world market, if in fact it does.
I don't know that, but that would be my political take on it that it would take a little bit of time for them to be more accepted back into the world global marketplace. . So what does that mean for the price, I don't know. I guess we have to see what the supply is going to look like and also the demand, and that will help us more with that. I think that there's many parts of the world that are producing energy today, especially the US
can help facilitate what's going on in Russia. And Derek, I'll let you comment more on it, but that is my take on it. I don't know if it's going to have a massive impact on the price of energy once that's resolved, I just hope in (inaudible).

Derek Sammann

Yes. I think, Chris, you raised a good question. I think, to Terry's point, we don't actually know, but it is talking to our customers and seeing how they have basically redeployed supply chains, physical supply chains to physical commodities is something we've seen been reworked over the last 2 years. That's 1 of the reasons why we set an all-time record last year in our commodities complex portfolio of almost $1.7 billion of revenue, and we're seeing the same thing a record first quarter revenue across ags, energy and metals.
I think what we can say is that we've seen customers in this environment of uncertainty, to Terry's point, move to pools of known liquidity and pools where the US has already restructured its export market for both WTI and natural gas using the US just place every other country has now been the largest exporter of these products. So we think as customers have reconfigured their supply chains, they are following their risk management tools along with where they're actually being supplied with the social product from. So our job is to continue to leverage Julie's team globally, mentioned growth in the Middle East and Europe and Asia, the areas where we're seeing fastest growth across energy on almost 30% between both APAC and EMEA, and that's been a trend for the last 2 years.
So I think it's a risk on environment. Customers don't know where this is going to land, and that's why they're actively using our products to risk manage.

Chris Allen

Thanks. Thanks Chris.

Operator

Michael Cyprys with Morgan Stanley.

Hey, good morning. This is Stephanie on for Mike. Maybe just turning to cross margining. Can you just on the benefits you're providing customers today? What further steps can you take to enhance those efficiencies over the next 12 months? And maybe just looking out a few years, which products and asset classes do you think could be -- could these savings be most impactful?
Thank you.

Terrence Duffy

Thanks Stephanie. Suzanne?.

Suzanne Sprague

Yes, happy to take the question, Stephanie. So in our cross margin program with the Fixed Income Clearing Corporation, we continue to onboard new participants. We're up to 15 health accounts now at this point in time. And we also continue working together to be able to expand that to end user customers. So our plan is to be operationally ready to support that by the end of this year.
Of course, we can't opine on regulatory approval time line, but we have heard a decent amount of interest from clients is being able to take advantage of those offsets. We've also seen an increase in clearing membership to be able to take advantage of the current house program. So we continue to deliver upwards of $1 billion in savings for that house program and are committed to being able to expand that to the customer by the end of the year.

Terrence Duffy

Stephanie, just to add to that, it is important for us to remind everybody, and I know you are to say this a lot, but we are at $60 billion a day in total offsets on efficiencies today as it relates to all of our asset classes, $20-some-odd billion in rates alone, I believe, is the number. The fixed income, the FICC number with FICC is probably the smallest of that $60 billion. So we are creating massive efficiencies for our participants and savings on gross margin, and we want to continue to create efficiencies across the board through all of our asset classes. So even though that the relationship with FICC is massively important to CME, we're going to continue to build on it. we are still creating immense savings for our clients so they can manage their risk, the most cost-effective way across all 6 major asset classes or CME.
Thanks.

Operator

Simon Clinch with Redburn Atlantic.

Simon Clinch

Most of my question has been answered, so I'll stick with a housekeeping 1 here. in, could you just walk us through the very good expense control we saw this quarter and how we should expect that to ramp through the year and also break out what the Google spend was and any other factors you think are worth calling out?

Lynne Fitzpatrick

Sure, Simon. Thank you. So if you look at the expenses for the quarter, obviously, quite strong expense discipline. Would you expect over the course of the year that there will be a few factors that will continue to grow. So if you look at the trend last year in technology, we're seeing increases in the technology spend as we migrate more to the Google Cloud environment.
So quarter-over-quarter, we were seeing that increase. We would expect to see that again over the course of this year as we get more applications into that cloud environment. I would also say that the professional fees this quarter were a bit light. Those do tend to follow larger scale projects, and that's just a little bit of the timing on when those kick off. So I would expect to see that ramp up over the course of the year as well.
We also typically have much higher spend in the marketing area in Q4 related to some of our large-scale events. So you will see that towards the tail end of the year. The last thing I would point out is on the merit increases for staff, you get about half of that impact in Q1, and you'll see the full impact running through the remainder of the year. . In terms of Google, the total spend in Q1 was just under $20 million.
We'll see about $19 million of that coming through the technology line and a little under $1 million of that was in professional base.

Simon Clinch

Great. Thanks very much.

Operator

Ben Budish with Barclays

Ben Budish

Hi, thanks for taking my follow up, Terry, I was wondering if you could talk a little bit more about the launch of BrokerTec in Chicago. So what are your ambitions there? What's the anticipated customer type? What are your kind of thoughts on how it improves your competitive positioning? Any color there would be helpful.

Terrence Duffy

Yes. Thanks, Ben. I'll ask Mike Dennis to give a little color on BrokerTec Chicago, and then I'll comment on our time, Mike.

Unidentified Corporate Participant

Yes. Thanks, Garry. Brokers in Chicago, this is a project we're very excited about. It's a second central limit order book that will be uniquely located right next to our core futures and options markets in the Aurora data center where clients have a lot of connectivity already. As the futurization trend has grown over the past several years, clients have come to us looking for solutions to help better manage trading between cash and futures.
So we have received overwhelmingly positive feedback from the dealer community as well as from clients that are very active in relative value strategies, trading both treasury futures and so for futures for US cash treasuries. This new central limit order book will help drive new client acquisition as well as allow us to be more creative on thinking about new trading modalities within our interest rate complex.
So launch is scheduled for Q3 2025 and client testing will be available shortly, probably at the end of April. Our New York Cloud will continue to be the main venue for risk transfer and price discovery One thing to say is that different traders need different execution tools and different execution types offering both access models will allow us to capture a broader set of clients. So if you think about the treasury cash on the run market in 2 segments, you have risk transfer trades, clients seeking larger stacks of liquidity, which the BrokerTec New York Cloud continues to address and then relative value trades, cash resutured trades, which prototypically seek inside prices and transact in smaller size. So we're very excited for it, and I'll turn it over to Terry to have some follow-up comments.

Terrence Duffy

Yes. No, I think you said it all correctly, Mike. I think what's important here is we're trying to make sure, as Mike said, that we can make sure that every client is being having the ability to have the market to where they believe is in their best interest. And the dealer community believes that having -- they're one of the constituents among others, that having it side-by-side against the treasury futures complex is the right place to be. And we've analyzed this every way to Sunday, and we don't disagree.
So I think it's really important that we look at all constituencies and see what's in the best interest of the market. I think what Mike said is really important, and the reason I hesitate because I want to focus on this, the futurization of that marketplace is critically important. And it has been my focus for a number of years, of futurization of some of these cash markets. And I think we're continuing to see that especially in the rates business. So having that set up in Chicago makes a ton of sense for CME going forward, and I'm very excited about the future of our futures franchise, no pun intended to move that and grow that business exponentially.
. We have seen BrokerTec grow a little bit over the last quarter. But again, I think we're looking at this for the long run, and we want to make sure that all participants have access to the marketplace where they feel comfortable in. And that's 1 of the constituent season it does. So Long winded way of saying we want to make sure we have both.

Operator

Brian Bedell with Deutsche Bank.

Brian Bedell

I actually just want to -- on that very last question. If you could just comment around to what extent is this designed for basis trading between treasuries and futures because you mentioned the relative value. So are you attempting to optimize practices around basis trading and maybe just your overall view on how that's trending with very high volumes in April versus sort of what's happened more recently. And then I did have a housekeeping question on just the contribution from OSTTRA in 1Q and then the rates -- the spread that you're keeping on the collateral balances, is that still the $0.35 on the cash, and I think $0.10 on noncash/

Terrence Duffy

Thanks, Brian. So on the base of trade, I wouldn't say that the decision had any bearing of putting BrokerTec Chicago in Aurora at all as it relates to the basis trade. The basis trade, we all know how that works. And having the store Protect Chicago, I don't think that's -- that was not our intent at all. It was more for to give participants the choice of where they want to execute on their cap side versus in their futures, both in Chicago and in New York.
And that was really the genesis of bringing Broker Tech, Chicago to Aurora, nothing to do with the basis trade. As it relates to OSTTRA, I'll let Lynne make your comment.

Lynne Fitzpatrick

Yes. So Brian, the contribution of OSTTRA in 2024 was $89 million in earnings to CME. It's typically in the range of 20 to 22 per quarter, somewhere in that area. S&P doesn't report for a couple more weeks. So I won't give 2 great other specifics on this quarter, but it was -- I think that's a pretty safe range to use looking at last year and kind of the range that we typically see.
And then on the spread on collateral, it was 35 basis points this quarter, similar to Q4. That's on the cash side. .

Brian Bedell

Is it $10 million on the noncash?

Terrence Duffy

Thank you all for participating in our call this quarter. We look forward to following up with any questions you have. Obviously, we'll be reaching out or you can reach out to us. Have a good day. Thank you very much.

Operator

Thank you for participating in today's conference. You may now disconnect.