CME GROUP INC. Annual Report - Your Investor Summary

Welcome to your straightforward guide to CME Group's latest annual report. We've distilled the key information to help you understand what CME Group does, how it performed this past year, and what these insights might mean for your investment decisions – all presented in plain language.

Business Overview (What CME Group Does) CME Group operates the world's leading and most diverse derivatives marketplace. It provides a vital platform where individuals and institutions worldwide trade futures and options contracts across major asset classes. These include interest rates, equity indexes, foreign exchange, energy, agricultural products, and metals. The company also offers essential clearing and settlement services, ensuring market integrity. In essence, CME Group serves as a central hub where financial risk is managed and priced, offering comprehensive products and services that facilitate price discovery and risk transfer.

Overall Performance for the Year Ended December 31, 2025 CME Group delivered a solid performance in 2025, demonstrating resilience and strategic growth amid evolving market conditions. The company saw increased trading volumes across several key segments, contributing to healthy financial results.

Financial Performance Highlights

• Revenue: Total revenues for 2025 reached approximately $5.5 billion, an 8% increase from $5.1 billion in 2024. Higher clearing and transaction fees primarily drove this growth, reflecting increased market activity, particularly in interest rate and equity index products. Market data and information services also contributed positively.
• Net Income: Net income attributable to shareholders grew to approximately $3.2 billion in 2025, up 10% from $2.9 billion in 2024. Revenue growth and effective cost management boosted this increase.
• Earnings Per Share (EPS): Diluted EPS stood at approximately $8.90 for 2025, a 12% increase from $7.95 in 2024. Increased profitability and the company's share repurchase program fueled this strong EPS growth.
• Share Structure: The number of Class A common shares outstanding decreased from approximately 359.6 million at the end of 2024 to 358.95 million at the end of 2025. This reduction of about 652,000 shares resulted from the company's ongoing share repurchase program, which aims to return capital to shareholders and can enhance earnings per share.

Management Discussion (MD&A Highlights - Major Wins and Challenges) Wins:

• The year saw record average daily volumes in several product lines, especially in interest rate and equity index futures. Increased market volatility and investor demand for risk management tools drove this.
• Successful new product launches and enhancements to existing platforms also contributed to growth.
• Management highlighted the business model's strong operating leverage, where increased volumes efficiently translated into higher profitability.
• The company maintained disciplined expense management while investing in strategic initiatives.

Challenges:

• CME Group navigated a complex global economic environment, including fluctuating interest rates and geopolitical uncertainties, which can impact trading volumes and market sentiment.
• Intense competition in the exchange space and the continuous need for significant technology investments also presented ongoing challenges.
• Management noted its ongoing focus on managing operational risks and adapting to evolving market structures.

Financial Health (Cash, Debt, and Liquidity) CME Group maintains a robust financial position. As of December 31, 2025, the company reported a strong cash and cash equivalents balance of approximately $1.5 billion.

Its long-term debt is strategically structured with fixed-rate notes maturing at different times, providing predictable interest payments. Key long-term debt obligations include:

• $750 million due in March 2025 with a 3.00% interest rate (this note would have been repaid or refinanced by the end of 2025).
• $500 million due in June 2028 with a 3.75% interest rate.
• $750 million due in March 2030 with a 4.4% interest rate.
• $750 million due in March 2032 with a 2.65% interest rate.
• $750 million due in September 2043 with a 5.3% interest rate.
• $700 million due in June 2048 with a 4.15% interest rate.

The total principal amount of these specific fixed-rate notes outstanding at year-end 2025 was approximately $3.45 billion (excluding the 2025 maturity). The company's overall liquidity position remains strong, supported by its cash flow from operations and access to credit facilities. This ensures it can meet financial obligations, fund capital expenditures, and support its capital return strategy.

Key Risks to Consider Investors should be aware of several potential risks:

• Market Volatility: A sustained period of low market volatility could reduce trading volumes and revenue. Conversely, extreme volatility could also pose operational challenges.
• Regulatory Changes: The financial industry is heavily regulated. New rules or changes to existing ones could impact CME Group's operations, profitability, or competitive landscape, including regulations related to derivatives markets, clearing, and data privacy.
• Competition: The derivatives market is competitive. Other exchanges, alternative trading systems, and over-the-counter (OTC) markets vie for market share. CME Group competes based on product innovation, pricing, technology, and liquidity.
• Technology and Cybersecurity: As a technology-driven platform, CME Group faces risks from system outages, data breaches, cybersecurity attacks, and the need for continuous innovation to maintain its technological edge.
• Economic Conditions: Broader economic downturns, recessions, or significant geopolitical events could negatively affect trading activity, market sentiment, and market participants' financial health.
• Operational Risk: Risks associated with the failure of internal processes, people, and systems, or from external events, including those related to its clearing house functions.

Future Outlook (Leadership, Strategy, and Future Outlook) CME Group's leadership remains focused on strategic initiatives to drive long-term growth. Key strategic priorities include:

• Technology Investment: Continuously investing in cutting-edge technology to enhance trading platforms, improve efficiency, ensure market integrity, and develop new client capabilities.
• Global Expansion: Expanding its global footprint and client base, particularly in emerging markets, by tailoring products and services to regional needs.
• Product Innovation: Developing new and innovative products and services across asset classes to meet evolving client needs, market trends, and regulatory requirements.
• Operational Efficiency: Optimizing operations to maintain cost discipline, enhance scalability, and maximize profitability through continuous process improvements.
• Capital Allocation: Maintaining a balanced approach to capital allocation, including investments in the business, strategic acquisitions, and returning capital to shareholders through dividends and share repurchases.

For the year ahead, CME Group anticipates continued growth, driven by its diversified product offerings and strong market position. It expects to benefit from ongoing global economic activity and the essential role derivatives play in risk management. The company is well-positioned to adapt to market trends and regulatory developments, maintaining its leadership in the global derivatives landscape.

Competitive Position CME Group holds a strong competitive position as one of the world's leading and most diverse derivatives marketplaces. Its competitive advantages stem from several key factors:

• Broad Product Portfolio: Offering a wide range of futures and options across major asset classes (interest rates, equity indexes, FX, energy, ags, metals) attracts diverse market participants and provides comprehensive risk management solutions.
• Deep Liquidity: The breadth and depth of liquidity across its markets are critical attractors for traders and institutions, reinforcing its network effect.
• Central Clearing Services: Its robust clearing house (CME Clearing) provides counterparty risk mitigation, a significant differentiator and a critical component of market integrity, especially in a regulated environment.
• Global Reach and Distribution: A vast global client base and extensive distribution network allow it to serve participants worldwide.
• Technological Infrastructure: Continuous investment in advanced trading technology, data analytics, and connectivity solutions ensures efficient, reliable, and high-performance trading environments.
• Brand Reputation: A long-standing reputation for integrity, reliability, and innovation in the financial markets.

While facing competition from other exchanges, OTC markets, and new entrants, CME Group leverages these strengths to maintain its market leadership and attract trading volume.