Please stand by. We are about to begin. Good day, and welcome to the CME Group second quarter 2022 earnings call. At this time, I would like to turn the conference over to John Fisher. Please go ahead. Thank you, and good morning, everyone. I hope you're all doing well. I'm gonna start with the safe harbor language. Then I'll turn it over to Terry and John for brief remarks followed by your questions. Other members of our management team will also participate in the Q&A session. Statements made on this call and in the other reference documents on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance. They involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. Detailed information about factors that may affect our performance can be found in the filings with the SEC, which are on our website. Lastly, on the final page of the earnings release, you will see a reconciliation between GAAP and non-GAAP measures. With that, I will turn the call over to Terry. Thanks, John, and thank you all for joining us this morning. We released our executive commentary earlier today, as John said, which provided extensive details on the second quarter of 2022. I have John Pietrowicz, Sean Tully, Sunil Cutinho, and Julie Winkler on the call with me this morning. I will start, and then John will provide some comments before we open up the call to your questions. Trading activity during the second quarter increased 25% to an average daily volume of 23 million contracts per day. This strong growth was driven primarily by the financial asset classes, with the second highest quarterly ADV on record for our equity index products, which were up 57% year-over-year and included record Micro E-mini S&P 500 futures ADV of 1.4 million contracts. In addition, both interest rates and FX daily volumes increased 24% compared with the second quarter last year. Total options average daily volume increased 23% compared with Q2 last year to 3.9 million contracts, driven in part by 92% growth in equity index options. Record E-mini Nasdaq-100 options average daily volume grew 136% and E-mini S&P 500 options ADV was the second highest quarterly ADV on record at 1.1 million contracts. Furthermore, options activity outside the U.S. was also robust with non-U.S. options ADV in metals growing 60% year-over-year. Equity index up 44% and energy was up 28%. In Q2, total non-U.S. average daily volume grew 21% to 6.3 million contracts. Also driven by the financial product lines, we saw 15% growth in Europe, 36% growth in Asia, and 40% growth in Latin America. Turning to our ongoing focus on the industry's LIBOR to SOFR transition, CME SOFR's futures reached record quarterly ADV of 1.6 million contracts and record open interest on June 30th of 6.4 million contracts. During the quarter, SOFR futures ADV represents 99% of Eurodollar futures. In addition, trading in SOFR options skyrocketed in June with a record number of participants. Our market-wide fee waiver was instrumental in moving this critical liquidity into the SOFR options market. SOFR options ADV represented 46% of Eurodollar options activity for the month of June, having also reached a weekly high of 68% and a daily high of 111% of Eurodollar options activity during the month. In terms of new products, customer demand and the ever-apparent need for risk management across our global products continues to lead in new product launch opportunities. During the quarter, we continued to build out our micro-sized contract suite with the launches of Micro Copper futures as well as options on the popular Micro WTI Crude Oil futures. Within our ESG focus portfolio, we announced the upcoming launch of two additional voluntary carbon emission offset contracts, adding to a suite of products that are already meeting a significant market need today. A record 90+ number of participants having traded one of the existing carbon emission offset products since launch. Other 2Q product launches include the Canadian Wheat futures as well as options on our physically delivered aluminum. Additionally, we announced our plans to launch the first-ever TBA futures for the mortgage-backed securities market as well as event contracts later this year. I mentioned at the time of Google's $1 billion investment in CME Group that we would look for opportunities to use this capital to grow our business. During the quarter, we invested approximately $410 million in our S&P Dow Jones Indices joint venture. This funded our portion of the acquisition of the IHS Markit indices business, which included leading fixed income and credit indices such as iBoxx, iTraxx, and CDX. The shift from active investing to indexing was growing in 2012 when we launched a joint venture, and that momentum has only continued to strengthen since that time. Our portion of the earnings from the index joint venture have more than tripled from the $75 million earned in the full year of 2013, which was the first year post-formation. Looking ahead, with the addition of the IHS Markit fixed income and credit indices, the joint venture is well positioned to continue to innovate and grow across an even wider set of products and services that will service investors all over the world. As we described last quarter, several macroeconomic factors continue to contribute to an extremely complex market landscape, and the importance of risk management is accelerating. Our team continues to execute on our strategic priorities to empower market participants worldwide to manage risk and capture opportunities. Look forward to answering your questions. With that, let me turn it over to John to provide some financial highlights. Thanks, Terry. During the second quarter, CME generated approximately $1.24 billion in revenue, up more than 5% versus Q2 last year, driven by a 25% increase in futures trading activity. Our revenue was up over 11% when adjusting for the impacts of the formation of OSTTRA, our post-trade joint venture with S&P Global that we formed in the fourth quarter of last year. Market data revenue was again a record during the quarter, up 4% compared to a year ago to $152 million. We continue to see a strong need for our globally relevant product set and our risk management expertise. Expenses were very carefully managed on an adjusted basis, were $442 million for the quarter and $359 million excluding license fees. We continue to progress with our Google partnership. We are on track to our internal objectives and are well underway to building the foundation for our move to the cloud. Year to date, we've spent approximately $14 million in cash costs towards that effort. CME had an adjusted effective tax rate of 23.3%, which resulted in an adjusted net income of $717 million, up over 22% from the second quarter last year, and an adjusted EPS attributable to common shareholders of $1.97. For the first half of the year, CME had an adjusted EPS of $4.08, making the first half of 2022 the best six-month results in CME history. Capital expenditures for the second quarter were approximately $21 million. CME paid out just over $1.9 billion of dividends so far this year, and cash at the end of the quarter was approximately $2 billion. In summary, the team at CME Group continues to execute across the business, delivering to our clients valuable risk management tools in this time of growing uncertainty. Please refer to the last page of our executive commentary for additional financial highlights and details. With that short summary, we'd like to open up the call for your questions. Based on the number of analysts covering us, please limit yourself to one question, then feel free to jump back into the queue. Thank you. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure mute function is turned off to allow your signal to reach our equipment. If your question has been answered, please press star two. Again, it is star one if you would like to ask a question. We'll go ahead and take our first question from Rich Repetto with Piper Sandler. Please go ahead. Yeah. Good morning, Terry. Good morning, John. Good morning. Good morning. Terry, you highlighted the investment in the S&P Dow Jones Indices JV and the use of cash to keep to 27% and how the volumes have, I think you said, tripled or so since the initiation of JV. The revenue tripled. Yes, the revenue has tripled. I guess trying to understand just you know just a little bit more of the numbers behind the investment. It kept you at the 27% and maybe just a little bit of the analysis, John, around the numbers because it I guess the balance would be you know that cash going to the annual variable dividend. Rich, thank you. It's an extremely strategic investment. As I pointed out in my prepared remarks, this has been an exceptional investment for CME with this partnership with Dow Jones. We are very happy to be able to extend it into these other product lines. I'm gonna ask Lynne Fitzpatrick to give you a little bit of comment on the details of the transaction, economically. Sure. Thanks, Terry. During the quarter, we invested $410 million, as you noted, into our S&P Dow Jones Indices joint venture. This did fund the purchase of the IHS Markit indices business. That includes leading fixed income and credit indices like the iBoxx global cash, global cash bond indices and the CDX and iTraxx credit default swap indices. We are excited about the strategic benefit of offering multi-asset class products and further diversifying the joint venture scope. A little more color on the earnings since you asked that question. The earnings of the joint venture have grown at a 14% compound annual growth rate since the first full year in 2013. We're pleased to continue investing in this growth business using a portion of the proceeds we received from Google's share purchase. I'd say that given the overall scale of the joint venture, we expect the near term impact on earnings from this purchase to be relatively small. As you noted that $410 million does go towards the purchase, and it does keep our ownership stake at 27%. Yeah. One other point, Rich. You know, when we got the investment from Google, we had indicated that we were going to use those funds to invest in the business and that at the time, we didn't anticipate including that as part of the annual variable dividend calculation. Yeah. Right. Thanks for that clarification. Great. Thank you. Thanks, Rich. We'll go ahead and move on to our next question from Alex Kramm with UBS. Please go ahead. Yeah. Hey, good morning, everyone. Just a couple of questions on the balance sheet or rather the margin deposits at the Fed. A long list of numbers. Hopefully, you can give them to me. Clearly, balances came down quarter-over-quarter as expected. From the data that we track, it seems like those are down another, I don't know, 13%+. Maybe you can just give us an update where we stand today if I'm right there. Then in terms of the basis points that you're generating, obviously that was up in the second quarter. I think you're doing 25 basis points in the third quarter. Maybe give us a little update where we are. Obviously, given that it's Fed day, if we get 75 basis points today, what would be a good assumption to use in terms of your kind of net take on if that hike materializes? I think that should be all of them, but if there's more, please give me more. Thanks, Alex. We will be very clear with you on this. John, why don't you go ahead and start? Yeah, I'll do my best to be clear, Alex. Why don't we walk through some of the numbers. You know, there's quite a number of things to talk about. You know, there's two components that we earn on in terms of collateral put up at the clearinghouse. One is the cash collateral that's put up, and then we also have, you know, non-cash collateral that we earn on as well. Looking at Q2, we had average cash balances of $145 billion in terms of cash, with ending balance of $136.4 billion at the end of Q2. Through the first part of July, through July 25th, our average balances on the cash side were $118.8 billion, and the ending balance was $113.3 billion. We earned approximately, pardon me, 20 basis points on the cash balances for the quarter. That's $72.2 million. That is up from seven basis points in the first quarter, where we earned about $25.3 million. That is on the cash balance side. On the non-cash, we earn five basis points, and that's recorded in other revenues. When you look at the sequential increase in other revenue, you see we're up approximately $4 million. The main driver of that is the increase in non-cash collateral put up at the clearinghouse. Looking at the non-cash collateral, we had $59.2 billion that we earned five basis points on in Q1. That increased to approximately $81 billion average cash balance in Q2. The non-cash balance in Q2. The ending non-cash balance, where we earn fees on those, on the non-cash collateral that's put up at the clearinghouse was $86 billion at the end of Q2. The average non-cash collateral through the month of July through July 25th was $95 billion, and the ending balance at the end of July 25th was $103 billion. Basically what you've seen is a shift from cash collateral to non-cash collateral. We're earning now 25 basis points. The Fed made a move in June, where they increased it to 165 basis points. We are rebating 140 basis points back to our clients and keeping 25 basis points. That is through June. Beginning in July for non-cash collateral, we'll be earning seven basis points. That'll be increasing from five basis points that we're earning today to seven basis points beginning in July, and that's recorded another revenue. Is that good, Alex? Was that- That was more than I asked for. The one thing that you missed, of course, was what's gonna happen today. I mean, do we have to wait until you disclose it maybe tomorrow, or can you give us a little flavor? I don't- Yeah. Alex. Terry Duffy, we're not gonna prejudge what the Fed may or may not do. I mean, the assumptions are all what they are, so we can kind of assume that. Listen, we're competing to make sure that we have a good balance of cash and other securities in our clearinghouse for risk management. And that is truly what's most important to us, and we will continue to do so. We'll remain competitive. We understand there's other investments that people can put their money into and to deliver as collateral against their position. We wanna make sure we have a good balance, so we're gonna be very prudent about it. Sounds good. I'll hop back in the queue. Thank you, guys. Thank you. Thanks, Alex. We'll take our next question from Dan Fannon with Jefferies. Please go ahead. Thanks. Good morning. Just wanted to follow up or discuss expenses and kind of the outlook. You know, you have the guidance implies a second half pickup. You kind of gave us what you've spent so far on Google with $14 million, but maybe just talk in general about where the levels of spend in the second half are gonna ramp and how conservative, you know, the outlook is at this point. Thanks for the question, Dan. This is John. Yeah, you are correct. We didn't adjust our guidance. We're comfortable with our guidance at this point. As you guys know, the entire team at CME Group is very focused on ensuring we're spending in the most efficient manner possible. When we did give our expense guidance, excluding license fees of $1.45 billion, we had planned for a heavier second half of the year, anticipating an improving business environment. Also, historically, CME's had a higher level of expense in the back half of the year related to in-person events. You haven't seen that recently, obviously, because of the synergies we were capturing from the NEX acquisition. To give you some color as to where I'm seeing those costs increase second half versus first half, a little over 40% of the increase compared to the first half of the year is related to customer-facing activities. That includes increases in travel, marketing, advertising, and in-person events. We have seen an increase in in-person customer sales activity, especially in the U.S. and in Europe, and we're very focused on growing the business. A little over another 40% is primarily technology-related, including professional services for staff augmentation and project work, higher technology costs than the first half of the year, and depreciation as we've migrated EBS to Globex, and certain systems have now been put into service and will be depreciated. The balance of the increase is related to the impacts of the salary treatment that occurred in March and in September and additional customer-facing resources. As you mentioned, our spend on the migration to the cloud, as we indicated, would be in the $25 million-$30 million range, and we're on track for that. You know, we had anticipated a pickup in the back half of the year, and it's going as we had planned. Understood. Thank you. All right. Thanks, Dan. We're ready for another question, if somebody would like to ask one. Ellie. We lose connection. We'll take our next question from Brian Bedell with Deutsche Bank. Please go ahead. Great. Thanks. Good morning, folks. Can you hear me okay? Yeah. Thanks, Brian. Okay, great. My question will be on the SOFR-LIBOR transition, if you wanna just elaborate a little bit more on that, really around the you know, first of all, the take-up in SOFR has been obviously pretty strong. In the near term, I guess your expectation for volumes to be elevated as clients do that migration from LIBOR to SOFR, maybe how long you think that might last for. Then, after the fee waivers are dropped on the SOFR contracts, do you expect this to be revenue neutral, this transition to be revenue neutral or dilutive to revenue or conversely accretive to revenue over the long term? Brian, thank you. Lots to unpack there, lots to talk about in this transition. I'm gonna let Sean make some comments on it, but I also want to talk a little bit about the strategic nature, and I'll let him start. Go ahead, Sean. Yeah. Hi, Brian. Thanks very much for the question. This is Sean. You know what? I think we're very pleased with the progress that we've made so far, and it is along the lines of our plans. In terms of, you know, SOFR futures, they're currently trading around 134% of Eurodollar futures during the month of July. SOFR options are now trading 74% of Eurodollar options during the month of July. If you look at our overall STIRS complex, with the Federal Reserve being very active in monetary policy and with every FOMC meeting at play in terms of what they might do, we're very excited and pleased with the growth that we've seen on the entire short-end complex. If you look at our short-term interest rate futures, in the first half, they are up 48% year-over-year. If you look at our short-term interest rate options, year to date, they are up 26% year-over-year. Very strong growth overall. Very strong growth in the entire complex, but also in the SOFR futures and the SOFR options with the increased adoption. In terms of the RPCs, we have had significant incentives in place for both the SOFR futures adoption as well as the SOFR options adoption. In terms of the SOFR futures adoption, we are further along in that process, relative to you know, as I mentioned, the 134%, so SOFR futures being 134% of Eurodollar futures. So we're pleased that the RPC there is headed in the right direction, and the goal for both the SOFR futures and the SOFR options is for their RPC to equal what we have had historically for Eurodollar futures and Eurodollar options, so that it's irrelevant to us and to our investors as to which product customers trade. We are not there yet. That is our strategy. That's what we've been saying that we intend to do, and that is what we intend to do. Last thing I might mention is, if you look at where we are placed today relative to SOFR, it's an extremely strong position relative to our Term SOFR rates. In terms of CME Term SOFR, we have now licensed CME Term SOFR to 1,300 different firms across 74 different countries, and it's being used in more than $1.6 trillion worth of cash market products across the globe. Those are, you know, the 1,300 new licensors, right, whose interest rates that they're using for borrowing are based upon our futures contract. We feel very positive about strategically where we are both in terms of the adoption of the SOFR futures and options. We're very pleased with the adoption of term SOFR, and we are on track relative to meeting investors' needs to getting those RPCs up at the same level sometime in the not too distant future. John? Yes, thanks. Just a quick point. You know, in our license fee line, this quarter, we have between $3 million and $3.5 million of costs associated with the SOFR futures and options initiative. We plan on $3-$3.5 million per month in additional costs that are in that license fee and other fee arrangement line for the next two months. That'd be July and August, where we plan to conclude the SOFR futures and options initiative. It's definitely highly successful as Sean has indicated, and certainly pleased with the outcome of our transition off of the LIBOR-based benchmark. The other thing I was gonna say, Brian, you know, we talked about this transition a year or so ago, and what was it gonna look like from a competitive standpoint? I think we've done a lot of really smart things here in order to give you the numbers that Sean and I have reflected on just a moment ago. When you look at the incentive program that we put into place this summer and doing it a year ahead of time before the expiration of LIBOR, we achieved many things. One, we were able to transition most of it into the LIBOR futures or SOFR futures and options market, which is critically important, but we also did something else that we said we would do a year ago. We thought we would benefit by both Eurodollar trading and SOFR futures trading, and that's exactly what's happening. Strategically, I think our timing was very good on this, and the fee waiver program did exactly what we anticipated it doing, and we look to be ahead of the transition versus July of 2023. That's a lot of great color. Thanks so much for the comprehensive answer. Thanks, Brian. Thanks, Brian. We'll go ahead and move on to our next question from Gautam Sawant with Credit Suisse. Please go ahead. Good morning, and thank you for taking my question. Can you please help us size how much international ADV is coming from existing international clients doing more trading versus maybe new international clients that have been onboarded, in the last year or so? Do you see incremental opportunities to launch new products in those local markets? I know you talked about the Canada products, but maybe in Asia or Europe. That's a great question. I'm gonna let Derek Sammann, who runs the international for us, excuse me, and Julie Winkler to answer that question. Derek, why don't you start? Yeah, Gautam, appreciate the question. As you heard from Terry's comments at the top of the call, we are continuing to go from strength to strength in our non-U.S. business. At 6.3 million contracts, our non-US ADV was our best second quarter on record, and we have now put up our best first half on record of 6.8 million ADV for the first half of this year. That's up 20%. As you rightly point out, we are both scaling and leveraging our existing customers, cross-selling them into additional products, but we're also bringing net new customers into our business. A little color on the regional growth, and then I'll talk to the client side of this. When you look at the strong growth of the business, we've actually seen our bank business up 31%, our retail business up 43%, and our proprietary market-making business up 15%. That should show you the participation in the retail side is particularly strong and important to us. That ties back to our new product development. You've seen the success that we put up in our micro contract products. We do continue to roll out. Terry mentioned at the top of the call both our Micro WTI Crude Oil options as well as our Micro WTI futures contract launched last year. We launched a Micro Copper contract this year. When you look at the makeup of the participation there on the micro side, we're seeing those are net to about half of the micro WTI options customers have never traded another option contract at CME Group before. Same thing on the futures side. About a third of our incremental new customers in micro WTI have never traded a CME contract before. This is both scaling and broadening our distribution partner relationships, as well as net bringing new customers into CME Group, which then becomes a cross-sell and upsell opportunity for us over time. We're very pleased with the non-U.S. growth. It's a big part of our growth story. It continues to be both a source of net new client acquisition and cross-selling. Julie Winkler can probably talk a little bit about the success we've had there and the framework we have in place for upselling and cross-selling customers we can bring in. Julie. Yeah. I think adding to what Derek mentioned, you know, the power of our international model is really that we have regional client-facing resources around the globe to work with our local customers, identify those product opportunities that you mentioned. You know, obviously, micros is something that we find has a lot of international appeal, as Derek just pointed out. If you also just look into some of the trends going on in Europe, right? Our customers, you know, are moving into Paris, and that is definitely emerging as a main destination for both banks and buy-side clients. Then you go down to Australia, and you look at what we're seeing is strong growth from buy-side clients out of Australia. The fact that we have those teams there locally are becoming very well-versed in what those client needs are and are doing that direct sell into what is most relevant given our current product portfolio, and then also identifying those new product opportunities. If we look back into Q2 launches, right options on European HRC, the Canadian Wheat, as you pointed out, and also a lot of interest, I would say, particularly in Europe and Asia, for those voluntary carbon products that we talked about. That is really helping to drive both the adoption of those products as well as you know innovate the new products that will be coming in the second half of this year. I think it again speaks to the investment that we're making from an international resource perspective, and we're seeing growth in areas that you know we expect to continue in the second half of the year. It's been a great opportunity as well throughout the summer to meet with our clients in person. Those numbers are up about 377% over where we were in Q2 of 2021. Those in-person meetings, I think, are helping to improve our insights on what those client needs are. Let me just make a quick point for you also. On new contracts, you know, we don't need to list them in certain areas in order for the rest of the world not to participate. We list them so everybody can participate. We just might dedicate more resources to what Julie said to that particular region where that product seems to be more apt to be participated in. Again, there's a lot of products that have been launched in different parts of the world that become quite successful in other parts of the world. I don't want you to think that we have to list Canadian Wheat futures for only Canadian participants. That's not the case, as an example. More to what Julie said, dedicating our resources to the people in those areas to grow those products. Derek? Yeah. I think just a little bit just of color in terms of where we're actually seeing some of the participant growth. We're not seeing our international growth coming only from our biggest financial centers. For example, our fastest-growing country over the course of this year to date, is our Brazil business up 96%. This is a top 10 country for us that's moving up the country table. Our second fastest growth came out of India. Third, the United Arab Emirates. We're seeing a lot of Gulf business continue to grow. South Korea and Taiwan, all of these countries are growing between 50%-90%. These are countries all in our top 10. I think it speaks to the breadth and the scale of our product set. Customers want to trade benchmark products that are lit on screen 24/7. Those are the markets that customers are drawn to. That's why they come to the benchmark markets at CME Group, and the investments in our technology to reach those customers across the globe are driving that business. Thank you for your question. Thank you. Very comprehensive answers. We'll go ahead and move on to our next question from Alex Blostein with Goldman Sachs. Please go ahead. Hey, guys. Good morning, everybody. Thanks for the question. I was hoping we could dig into some of the legacy NEX Group businesses, BrokerTec and EBS. It feels like the revenue trends have been fairly range-bound over the last couple of quarters, despite what's been obviously a pretty constructive macro backdrop for that product set. Maybe just a little color on kind of what's going on underneath the surface and what are you guys working on to reinvigorate growth in these businesses. Let's break this down in two segments with the legacy NEX businesses, because we have the optimization businesses and the trading business. I'd like to ask Sean to talk a little bit about the BrokerTec/EBS, and then maybe Julie and John and others can talk about the transition we did with IHS and originally that went into our JV. Yes. Thank you, Terry, and thank you, Alex, for the question. If you look at, you know, our plans relative to the acquisition, step one was to migrate the BrokerTec business over to Globex. Step two was to migrate EBS over to Globex. Both of those are now completed. Last year we moved BrokerTec over to Globex. This year we just recently moved in May EBS over to Globex. If you look at BrokerTec, since we are further along in the process, we are, you know, starting to see some of the benefits of the move to Globex. In that regard, if you look at BrokerTec U.S. Treasuries, volumes are up 14% year-over-year. If you look at BrokerTec U.S. Repo, it's up 25% year-over-year. If you look at BrokerTec EU Repo, it's up 14% year-over-year. Where is this growth coming from? The initiatives that you've heard us talk about previously. First, cross-selling. We are seeing about $4.5 billion worth of U.S. Treasury volume on BrokerTec this year from new customers that have never traded on BrokerTec before, that have traditionally been U.S. Treasury futures customers that are now trading both sets of product. We have a pipeline of additional new clients that is a couple of times as large that we do hope to get started trading on BrokerTec in the coming months. In addition to that, the RV trading opportunity, the RV trading order type that we instituted relative to curve trading that you've heard me talk about before relative to the efficiencies that it offers our customers, it achieved $2.4 billion worth of volumes in the second quarter, an all-time record. It has achieved a number of days around the $5 billion mark, and that continues to grow. In terms of delivering new innovations to the clients relative to having been on Globex and the cross-selling, we are starting to see some traction on the BrokerTec side. On the EBS side, we are now post that transition to Globex to make enhancements to the systems and to continue to invest in the systems and to continue to improve the market microstructure. These things do take time. In terms of the joint venture that we created with IHS Markit, and now S&P Global, you know, we really think that this is from a strategic perspective, positioning ourselves, you know, in that business well to serve our clients. One of the things that you've heard, Terry and others, talk about is developing efficiencies for the client. You know, the strategy has been laid out. We've got the management team in place, and we are starting the integration process with, you know, between the optimization businesses that we contributed into the joint venture and the MarkitSERV business. You're seeing some of that play through in our earnings as you can see in our financial statements. They're up $2 million sequentially from Q1 to Q2. You know, we think that we think that we've created what's gonna be a tremendous amount of value, most importantly for our clients. We are gonna be creating value for our shareholders by creating the joint venture through the efficiencies that we're gonna be generating by combining those businesses. Most importantly, we're positioning that business strategically to be the leader in the post-trade processing space, which in this time of uncertainty, in this time of cost management, we think is gonna be very attractive for our clients. Alex, I think you suggested that the revenue on the BrokerTec has been a little stagnant during the fundamental times that we're living in right now, and what is the response to that? I think Sean gave you a good response. You know, John referenced something else that I like to talk about a lot, which is efficiencies. We're hopefully at the final end game here of creating the efficiency as it relates to margin offsets with our futures products. DTCC has finalized all of their applications to the SEC. We are doing joint webinars together to point out the benefits of the offsets between futures and BrokerTec. We're hopeful that once the SEC approves this, they have, I believe, a 60-day window once the business, the apps have been presented to them, which they are now, that we will achieve much higher benefits for our clients. That's one of the strategic benefits that we saw from the beginning of this transaction, were those margin offsets and efficiencies, and we do believe that is exactly where the point we're at in the next quarter or two as we get approval from the SEC. That's something we're shooting for as well. Right. That's great. Thanks very much. Thank you. Thanks, Alex. We'll move on to our next question from Michael Cyprys with Morgan Stanley. Please go ahead. Hey, good morning. Thanks so much for taking the question. I just wanted to ask more broadly an industry question, bigger picture, just on the shift from OTC to exchange traded products. Just curious where you think we are in that journey. What's left at this point that's still OTC? How would you sort of size that TAM? How do you think about trying to penetrate whatever's left at this point? What could make the most sense versus what makes less sense there? John? Yeah, we're continuously focused, as Terry has mentioned, on providing new efficiencies to our customers. We're very excited, actually, while it was several years ago that we began offering a portfolio margin between cleared interest rate swaps with CME Group and our interest rate futures, that we had an all-time record in the second quarter of $7.2 billion in savings for our customers. I think that transition may continue, but the most important thing for us is to provide the efficiencies for the customers that bridges now all three marketplaces. The OTC derivatives markets, the cash Treasury markets, the cash foreign exchange markets, and all of our listed futures and options. I think, honestly, that we're very early in the process relative to the benefits that we can offer the community across all of those different modalities of taking risk. In particular, I've talked a lot before about our analytics. We do have a great set of analytics, EBS Quant Analytics in particular, customers find extremely useful in terms of optimizing their foreign exchange trading. We do expect to enhance that technology to include our futures, it still does not, and then to use that technology likewise across all of our fixed income products. In terms of CME Group and the value that we're gonna add to our clients, I would say there's still an awful lot in front of us to doing that to make all of those marketplaces more efficient. Mike, let me just add to what Sean said. It is important to remember that we do get direct benefit by the growth, even of the over-the-counter business because of the risk offsets they use in our marketplaces. Even if they grow, they don't think that that's a bad thing for us because we do get those risk offsets. I like to think of, yes, we create efficiencies through the clearing mechanisms and things of that nature, as Sean pointed out, and the margin efficiencies, but there'll be certain people and certain institutions that are going to do bilateral transactions, and they will do them forever. We wanna make sure that we continue to get the offsets and create the efficiencies that Sean laid out. It's not actually a terrible thing for us either. Great. Thank you. Thank you. We'll take our next question from Owen Lau with Oppenheimer. Please go ahead. Good morning, and thank you for taking my question. Could you please add more color on some of the initiatives, for your market data in this rising rate and volatile environment? I think CME benefited on the trading side, but on the data side, is there any product or geographic area that, CME can penetrate and expand further into? Along that line, can you please give us an update on your, cloud migration? Thank you. Thank you. Julie? Yeah, thank you for the question. I'll answer the market data question then turn it to, Sunil Sunil for the Google response. To date, right, our market data business is for sure an international business. This was a record quarter of $152 million in revenue, up 4%. You know, we're seeing that in two different areas. I mean, one, we have a very robust and diverse product pipeline, and our clients need and want access to that real-time market data. We saw a net increase in subscriber counts for that data in this quarter, and also continuing to see strong interest in our derived data. That is where our products and prices are being used as input into other structured products and ETFs and things of that nature. I'd say, you know, that has continued to grow internationally as well as domestically, and that is part of what we continue to be focused on within that market data business. I think I'll relate back to the comments that Sean made earlier. I think one of the great things that is sitting on the horizon, and we're continuing to work towards, is when we have new benchmarks as we do with the Term SOFR rate. This is representing a great global opportunity for us as our team goes out and continues to license entities really across the globe. This is a diverse set of participants, many of which are completely net new to CME, and so we're using data as an opportunity to introduce ourselves, to get them licensed up for the Term SOFR rate. Then that will be a process that our sales organization will continue to work through in converting them and cross-selling them into other products and services here at CME Group. A great global opportunity there. I'd say, you know, we're continuing to work with other partners. You know, we announced our partnership with Deutsche Börse and the A7 platform, where we're looking to find other means and other channels to distribute our market data from a historical standpoint. In Q2, you know, we launched other things like our third-party crypto quant data set on DataMine. Looking at it both from a product, and channel opportunity and where we can use market data to cross-sell would be kind of where we see growth going forward. I'll turn it over to Sunil to talk about. Sunil, a little update on the cloud, please. Thank you, Terry. On the cloud migration, we are on track to deliver foundational services towards the end of this year. The three services we have talked about, first one is margin calculation services. We call it the margin calculator. The other is a product dictionary that gives clients the ability to actually trade our products, look up and trade our products very easily. Then the third aspect of it is market data on the cloud on a GCP platform. We are on track to deliver all the three of these services towards the end of this year as we- Got it. Thank you very much. Yeah. Lynn's gonna give you just a little bit of color around the financials. Yeah, just to speak to the expenses related to the migration. In the quarter, we saw $8 million related to the migration, bringing the year-to-date total to approximately $14 million. Majority of the spend you'll find within professional fees and outside services. We do remain on track for our annual guidance of $25 million-$30 million related to the migration expense. Okay. Thanks, Mike, appreciate it. We'll take our next question from Kyle Voigt with KBW. Please go ahead. Hi, good morning. Earlier in the call, you touched on retail a bit from an international perspective. More broadly speaking, I was wondering if you could give us an update on how much of your total transaction revenue is being driven by retail today and how that's trended over time. Could you maybe talk about the event contract announcement and where you think the introduction of those contracts could drive that retail percentage over time? Kyle, I'm gonna turn it to Julie Winkler on the event contracts to start with, and then we'll talk more about the retail participation and the numbers that we do disclose versus the ones that we don't. Why don't I go ahead and turn to Julie as far as the start with. Sure. Yeah. In Q1, you know, we announced our plans to begin offering the event contract later this year. That launch date was announced a number of weeks ago, so we're focused on September nineteenth for that launch. Really what our goal is to be working with our existing broker partners to ensure that, you know, we make futures more presentable to individual end user clients. This is a lot about packaging up a product in a much more simple and straightforward yes, no format instead of a more standardized, you know, bid offer trading environment that people trade our existing products on. Our target audience is different, I would say, than our existing client base. It's people that have interest in, you know, financial and commodity markets but have a smaller appetite for risk, perhaps than a typical futures trader and/or, you know, perhaps less experienced in doing that. You know, there has been obviously a growing trend for self-directed trading across the U.S. over the last few years. Working with our broker partners, this was identified as an opportunity. We've been working with them to create, you know, a customer experience for the U.S. retail traders in this sense, and also being able to provide liquidity. We've got some committed market makers to supply liquidity for these products as well. You know, we will, you know, continuing to be ramping up some marketing in that vein as the launch gets closer and working closely with our broker partners to ensure that the clients are educated about how these products work. The retail participation, you wanna discuss that to what you can? We don't disclose the percentage of our retail trading, you know, as a percentage of our overall activity. Revenue was up 26% this quarter and continuing to really perform very strongly. You know, it looks to be another record year in terms of the number of retail participants that we see in our marketplace. You know, this continues to be driven by these same themes that we talk about. The micro suite has been extremely attractive. As there has been volatility in the marketplace, you know, micro equity suite in particular has performed very strongly. I'd say the other thing is this continues to be an education story for us. Working to get content out there, working with our broker partners, working with third-party educators, this is a key part of our retail model and one that, you know, we will continue to invest in and continue to, you know, put new products out. The micro crude, the micro yield, and also the Ether futures. You know, this all attracts additional attention, you know, to this suite, and, you know, things are going very well there. Julie, why don't you just describe real quick about how we categorize a retail participant versus the way some others might categorize them? Yeah. For us, it's really what we determine and see as active traders. Those are people, you know, trading 10 or more times per month. You know, our broker partners are, you know, doing all the KYC and AML on these clients. These are people that have, you know, largely traded in other equity options market and equity portfolios. They're qualified, and they Right They have the appetite to take on and use derivatives to hedge part of their retail portfolio. That has been really a cornerstone of our retail marketplace and will continue to be our client base. Yeah. We're not pointing it out for you. We're just pointing it out for the public's sake because the retail, the way it's grown and proliferated by individuals walking down the street is a little bit different than the way we participate in it. That's the only reason I asked her to clarify that part of the equation. On our options business on retail, it's been a significant change. Derek? Yeah. It's one of the points that Julie's made is we're investing significant amounts of education and training to both upsell and cross-sell our retail clients. Just a great case in point here was that not only is our options portfolio as a whole continuing to grow faster than futures. Year to date, our options are up 28% versus futures up 21%. Retail participation in our options complex is up 62%. That's substantially the fastest-growing client participation. I think it speaks to the resources and tools and capabilities we've developed and the upsell and cross-sell capabilities that Julie talked about earlier. We're bringing and scaling participation in our markets across the whole portfolio of asset classes and the whole portfolio of options and futures. As you know, customers that trade options tend to trade futures and grow into other asset classes as well over time. Thanks, Derek. Kyle, thank you very much for your time. Thank you. We'll go ahead and move on to our next question from Patrick O'Shaughnessy with Raymond James. Please go ahead. Good morning. Does it surprise you that energy volumes have not been more robust given the macro events that are driving outsized energy volatility and, in particular, a big move in natural gas? Derek? Yeah. I appreciate that, Patrick. Yeah. The energy market has been under a lot of stress over these last couple of months. What we've actually seen is the significant dislocations in physical supply chains. That's true in energy, agricultural products, and metals products. We saw a huge bump immediately following the Ukraine war in March. What we've seen since then, we saw then a jump in activity. We did see more of a risk off profile on the futures side. Definitely, we saw that in the global oil market. We saw that in ICE Brent. We saw that in our WTI contract as well. What we've actually seen is a rebuild since then. If you look at the overall commodities portfolio as a whole, our June ADV was 7% up on April and 18% up on May. We're seeing that initial jump in activity, which was really a risk off, high volume, and then open interest reduction. We've seen them then start to rebuild. What's really interesting is the makeup of actually how customers are managing risk in this extremely complex environment, ags, energy, and metals right now. We talked a little bit about this on the last earnings call. We've actually seen a significant increase in proportions of customers' portfolios that are traded and transacting in the form of options versus futures. In markets that are moving, both up and down rather violently, I put equities in that camp, I put oil in that camp, we're actually seeing an interesting differential between this and the open interest build in between futures and options. For example, while our energy futures open interest is down 23%. Our options open interest is up 10%. Our futures in energy is up 1%, and our options is up 11%. What that is telling us is customers are finding that the flexibility of options is much better suited to some of the really challenging moves in our physical markets right now. Proud to say that we're seeing growth substantially in both open interest and in volumes on the option side, which you'd expect when flat price hedging in these uncertain markets is as challenging as it is right now. We are seeing a rebuild, we're seeing a reload. It's, you know, the uncertainty around the war, and frankly, you've got supply issues. China is likely about to announce zero growth GDP. That has already had an impact on the price of oil. You could have supply shocks as well. The market is using a larger proportion of options to manage that risk. I think as the market becomes a little more certain of a path forward, we'll start to see markets mean revert a little bit. Right now, I think the market is defensively using options. We're pleased that they're using our benchmark markets here to manage that risk. Patrick, let me just make another comment. I think Derek, you know, made really good thoughts around how we're rebuilding the marketplace. Let's talk about what's happened over the last several months here. Fundamentals are what drive free markets, and they move on fundamentals such as what's going on in Russia, Ukraine, such as what's going on in inflation, such as what's going on over in China, as Derek pointed out. Markets don't like are geopolitical interference. We've seen a lot of geopolitical interference, especially here in the United States, under a certain product, meaning energy and what the policies are. I think sometimes investors get a little spooked by how much the geopolitical is going to impact the fundamentals of the marketplace. I think we're starting to see that shake off, and the reason I say that, otherwise our president wouldn't have gone over to Saudi Arabia, he wouldn't have done other things to try to increase this product. I think we're starting to see the geopolitical factors get away from the fundamental factors, and that's hence the reason why we're seeing the rebuild and open interest in trading, which we should have seen the whole time. Derek. I think to wrap up on your question on nat gas. You know, nat gas has really been the shining part of the energy portfolio. When you look at our second quarter ADV of 554,000, up 19% from second quarter last year, an average open interest of 6.9, up 17%. It's a great case in point where you're seeing, you know, where there is term volatility, there's a little less or a little more clarity, I should say, in terms of, you know, what the term demand is for gas. We're seeing our markets respond very strongly. We like the position we have in Henry Hub. We continue to be between 75% and 80% market share in that market. as I said, in that market, our year to date, our futures are up 10% and options are up 16%. Continuing a theme here, but very, very strong returns and growth of the business for a full year as well as Q2 in natural gas, and we expect that to continue given the ongoing challenges and demand in Europe right now. Patrick, hopefully that gives you a little sense of what we're seeing from our everyday seats here as it relates to energy and all the different factors that go into this business. Very helpful. Thank you. Thank you. We'll take our next question from Craig Siegenthaler with Bank of America. Please go ahead. Hey, good morning, everyone. Morning, Craig. How is the competitive landscape in the metals business evolving as participants react to the LME's canceling of nickel contracts in March? You know, we know you had a pretty large scale marketing campaign in the quarter and also launched a few metal contracts. Really focusing on CME's potential to take market share. Yeah, Craig, thank you for the question. Derek, who runs our metals business with his team, can give you a little bit of color around the way we're approaching it. Yeah, I appreciate the question, Craig. You know, certainly the LME's challenges from March have reverberated out across the broader market. What we are seeing is continued expanded engagement with particularly buy-side and commercial customers that have historically done a larger share of their base metals business on LME. We have, as you know, continued to significantly build and expand success in our copper market with a differentiated set of offerings versus the LME. That has continued to go from strength to strength, particularly in copper options, where we've gained significant share over the last two to three years, particularly. We have seen significant customer interest in doing a larger proportion of their aluminum business with us, and we've seen some nice growth there, off admittedly a low base there. I think we're seeing client engagement, customers looking for best solutions in jurisdictions where they have the customer protections, where they've got the market certainty, and where they know exactly the rules around how markets operate and where they've got the best risk management tools, increasing in that CME Group. We like the broader engagement we've seen. We like the direction in terms of a broader impact of customers looking to move more of their base metals business to CME Group. That really leverages on the success that we've had in other parts of our franchise, like battery metals, cobalt and lithium, where we continue to be the largest market for battery metals, and the growth that we're seeing in base metals globally. Hopefully that answers your question, but I think that the global client base that we've built and the team that Julie has managed with client-specific sales teams, particularly with commercials, has opened that dialogue and now expanded portions of our business in ways that we're here to best serve client need, and we think we're the best market for that, and we're seeing that in our results. Thank you, Derek. Thanks, Craig. We'll go ahead and take our last question from Alex Kramm with UBS. Please go ahead. Hey, thanks again. Hello, again, I guess. Just one quick one, maybe not quick one, on your largest business, interest rate futures, unless I've missed it, we haven't really discussed that. I don't wanna belittle the growth in the quarter, which was obviously solid, but I think relative to, you know, what's going on in the environment and also Terry, your comments earlier this year in terms of unprecedented times, I think people generally expected a little bit more action. Really curious in terms of what you think has potentially weighed on activity, and I'm asking this in the context of when we talk to market participants, they also echo that it feels lighter and maybe some trading strategies are not as active as they should be. I guess I'm wondering, like, with... It just seems like capital is sparse, banks are watching their capital, they're not extending as much credit. Like, what are the things that you think are weighing what could change there? Or, are we going down the wrong path here? Thank you. Alex, I appreciate your question, but I think when John stated in his opening remarks that the last two quarters, combined with the two largest quarters in the history of the company, kinda bolsters what we said the beginning of this year about unprecedented activity that we're seeing in our marketplace, and I think that's come to fruition. When you hear what Sean has said about the transition, as we're going through a massive transition from one benchmark to another, I think that we've done a pretty good job when people considered it a jump ball just recently, as you know, 'cause you were at that meeting on Rest of the Yams, we're talking about a potential jump ball for the SOFR business. I think we've done a really good job in that. As far as the unprecedented activity, I think we've seen unprecedented activity. I think there's other events that go into it, but I would guess would differ with you when I look at our numbers. I don't know if people misunderstood what I said unprecedented activity to mean that we're gonna trade, you know, 20% more than we did or, you know, on the levels that we did, which were record levels. Let me talk to John Pietrowicz. Yeah, Alex, thanks for the question, and thanks for the thoughts. Just to back up some of the things that Terry's already said, the first half was an all-time record revenue for our rates franchise. The first half was an all-time record average number of large open interest holders for our rates franchise. The first half was an all-time record ADV for our rates franchise. If you look at the year-over-year growth, the most recent numbers in our volumes, in our listed rates franchise, it is up 21% year-over-year. One of the references that I have made to investors previously was that the current environment looked an awful lot like 1994. I think I've been saying that now for at least 18 months. If you look at 1994, what I always reference was the fact that if you combined CME and CBOT interest rate volumes, and you looked at the growth in 1994 relative to 1993, that it was up 20%. This looks to me like what I would have expected relative to the economic environment. In addition to that, I mentioned earlier, with every FOMC meeting in play, that our short-term interest rate franchise, if you look at the STIR futures alone, it's up 48% year-over-year. If you look at the STIR options, up 26% year-over-year. It's a very exciting result. What's still left in front of us, and that's actually also very exciting, is the Fed balance sheet. We have seen an environment very much like 1994 in terms of the STIRS franchise. Our Treasury futures are only up 10% year-over-year, but they are up 10% year-over-year. What is a potential catalyst for further growth? The Federal Reserve only started to reduce the size of its balance sheet during June and July. During June and July, as we know, the Fed is only targeting a reduction in balance sheet of $47.5 billion per month. Starting in September, we also know the Federal Reserve is planning on reducing that balance sheet by $95 billion a month. On the short end, relative to the similarities with 1994, we're seeing the FOMC fully in play, 48% growth year-over-year, and we're very pleased with it. Relative to the long end of the yield curve and the $9 trillion balance sheet that the Fed accumulated over the last now, I guess, 12 years, you know, that part of the benefits that we might get from this economic environment are still in front of us. Alex, I guess my comments, and I know exactly who you're referring to there in January of this year, when I said I thought that this could be an extremely active. I think I was answering Rich Repetto's question at the time about the overall markets. I think the numbers are reflecting what we saw, what I saw and the team saw going into that. You know, coming with records that we produce today, they're not coming off of a basis of zero. We are taking records that are coming out very high bases. I think that it's exactly what we said was going to happen. If you're a new business and you went from zero to one, I would say, okay, you get no credibility. When you have what we have and we create a record off that, I think you should at least acknowledge that we saw what was coming down the pipe. Appreciate the commentary. As I said, didn't mean to belittle the growth. Just, No, no, I appreciate it. Keep on hearing that it feels quieter than it should be. We'll keep on tracking it. No, I appreciate that. I think, you know, the numbers reflect something different, but at the same time, I hear what you're saying. Again, we're in this for the long run. Again, we were very impressed with the last two quarters that we have had here at CME. Thanks again, guys. Thanks, Alex. Thanks, Alex. With that does conclude our question and answer session. I would now like to hand the call back over to management for any closing or additional remarks. I wanna thank all of you for joining us today. We appreciate it very much. Again, you and your families, please stay safe and healthy. Thank you. With that does conclude today's call. Thank you for your participation. You may now disconnect.