CME Group reports flat rise in Q4 revenue, net income improves

abdelaziz Fathi

CME Group (NASDAQ: CME) has reported its fiscal results for the fourth quarter of 2021, which topped Wall Street expectations for earnings and revenue.

CME Group

The world’s largest financial derivatives exchange reported fourth-quarter earnings of $625 million on revenue of $1.1 billion and operating income of $632 million. Q4 revenue was marginally higher from $1.09 billion compared to the same quarter of 2020. However, the profitability numbers were higher by nearly 50 percent from the year-ago period.

On an adjusted basis, net income was $608 million and diluted earnings per common share were $1.66.

Taking a full-year perspective, total revenue for 2021 was $4.7 billion, down from $4.9 billion in 2020. Adjusted net income was $2.4 billion, and diluted earnings per common share were $6.67.

The upbeat performance came on the back of a rise in clearing and transaction fees, coupled with growth in market data and information services. The clearing and transaction fees rebounded due to higher equity indexes and metals average daily volume, coupled with some improvement in the average rate per contract.

In terms of its operational metrics, the exchange operator disclosed Q4 2021’s ADV at 20.5 million contracts, up from 17.8 million contracts in the prior quarter. Average daily volume also grew 26% from a year earlier, led by double-digit growth in interest rates, energy and options products, as well as strong non-US volumes, which increased to 5.5 million contracts per day.

CME updates in crypto metrics

The parent company of the Chicago Board of Trade and other exchanges posted $949 million in clearing and transaction fees revenue for fourth-quarter. This figure was 5 percent higher from $879 million in the third quarter of 2021.

The total average rate per contract was $0.650, while market data revenue totaled $142 million, the exchange said.

“We announced a 10-year strategic partnership with Google Cloud to transform global derivatives markets through cloud adoption, and introduced several innovative, new micro-sized and ESG-focused products and services. We are pleased 2022 is off to a strong start with our highest January average daily volume on record of 24.6 million contracts, led by strong equity index and interest rate volumes, including numerous SOFR futures and options records, and 10% year-over-year growth in overall open interest,” said CME Group Chairman and Chief Executive Officer Terry Duffy.

Moreover, the CME provided updated metrics about its cryptocurrency products. Bitcoin futures averaged 24,534 contracts in 2021, while micro contracts posted 24,534, including more than 2.5 million total contracts since their launch in May.

Micro Ether futures had an ADV of 9,492 contracts, having traded more than 208,000 total contracts since their December 6 launch.

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