Greetings, welcome to the CME Group First Quarter 2023 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you would like to register for a question, please press the 1 followed by the 4 on your telephone. If you require operator assistance, please press star 0. As a reminder, this conference is being recorded today, Wednesday, April 26th, 2023. It is now my pleasure to turn the conference over to Adam Minick, Senior Director, Investor Relations. Please go ahead, sir. Good morning. I hope you're all doing well today. We will be discussing CME Group's first quarter 2023 financial results. I will start with the safe harbor language. Then I'll turn it over to Terry. Statements made on this call 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. Actual outcomes and results may differ materially from what is expressed or implied in any statement. Detailed information about factors that may affect our performance can be found in the filings with the SEC, which are on our website. On the final page of the earnings release, you will see a reconciliation between GAAP and non-GAAP measures. With that, I'll turn the call over to Terry. Thank you, Adam. Thank you all for joining us this morning. We released our executive commentary earlier today, which provides details on the first quarter of 23. I'll make a few brief comments on the quarter and current outlook, and Lynne will summarize our financial results. In addition to Lynne, we have other members of our management team present to answer questions after the prepared remarks. John Pietrowicz is also on the call with us this morning. John will be staying on with CME through at least the end of the year as a special advisor to the company. Among other things, John's responsibilities will continue to be to work with investor relations activities. This is the first for John to be on a call not in the CFO role. John, please don't jump in when Lynne is speaking. I'd like to thank you, John, for your over 8 years as CFO, as well as your important work at CME prior to that. John has been a key part of every major milestone our company has achieved over the last 20 years. We thank him for his many contributions to our business. We look forward to continually working with John throughout the balance of the year. With that, I will turn to a few comments regarding the first quarter, which was continued evidence of this new era of uncertainty. As I said in my Financial Times op-ed from February, risk management has been elevated from a supporting player to the star attraction as investors are managing portfolios with near constant market challenges. Following the best year in CME Group's history, first quarter 2023 average daily volume increased 4% from an extremely strong first quarter 2022 to 26.9 million contracts and was just short of our all-time quarterly record average daily volume in the first quarter of 2020 of 27 million contracts. This quarter included our all-time highest single-day volume of 66.3 million contracts on March 13th. All of this and other things have led us to the highest adjusted diluted EPS in the history of CME Group. Throughout the entire quarter, there were shifting perceptions about the Fed's near-term rate path, as well as significant banking concerns in March, and the continued development of the SOFR market led to the increasing need for the management of interest rate risk. This drove 16% growth in our interest rate ADV to the record 14.5 million contracts. Record March SOFR futures ADV of 5.2 million contracts exceeded previous records seen in Eurodollar futures. Since quarter end, we successfully completed the migration of our Eurodollar open interest to SOFR without issue on April 15th. In addition, our past investments in building out our options franchises are paying off. With such turbulent macroeconomic backdrop, options are an increasingly important risk management tool. First quarter options ADV grew 26% year-over-year to a record 5.8 million contracts, including double-digit growth across interest rates, equities, and metals, and 30% growth in non-U.S. trading activity. First quarter options revenue grew 12% to a record $218 million. The first quarter was a great example of CME Group seamlessly doing what we are designed to do. The significant volatility spikes and associated turmoil affecting the banking sector in March further highlighted the systemic importance of sound risk management practices by institutional participants. There are no guarantees, but hedging can provide certainty, and the significant first quarter activity highlighted that some of today's most important trades are to manage risk. The future is more uncertain than ever, but we know we can expect a whirlwind of geopolitical and economic hurdles to persist, and we will continue to focus on innovating and offering market participants meaningful capital and operational efficiencies across a diverse and global relevant product set to manage their risk. With that, I will turn the call over to our new CFO, Lynne Fitzpatrick, to cover the first quarter financial results. Thanks, Terry. CME had the best quarterly results in our history. During the first quarter, CME generated over $1.4 billion in revenue, up 7% compared with a strong first quarter in 2022. Overall revenue growth outpaced volume growth of 4%. Market data had a record revenue quarter up 9% versus Q1 2022 to $166 million. The need for our products and data to manage risks in an uncertain market environment continued to build on the strength seen last year. Expenses on an adjusted basis were $459 million for the quarter and $362 million excluding license fees and approximately $12 million towards our cloud migration. CME had an adjusted effective tax rate of 23.4%, which resulted in an adjusted net income of $882 million, up 15% from the first quarter last year. An adjusted diluted earnings per share to common shareholders of $2.42, the highest adjusted quarterly net income and EPS in our history. Capital expenditures for the first quarter were approximately $16 million. CME paid dividends during the quarter of over $2 billion, and our ending cash balance was approximately $1.7 billion. The team at CME Group remains focused on providing the risk management products needed by our clients and driving earnings growth for our shareholders. Before we open up the call for your questions, I'm going to briefly hand it back to Terry. Thanks, Lynne. Before we get to your questions, as Lynne said, I wanna take just a moment to acknowledge Sean Tully, who announced his decision to retire from CME Group in June of this year. Since joining us in 2012, Sean has been a strong leader for our financial products business and continuing to grow that through the period of tremendous growth and transformation. Especially when I recognize Sean for his outstanding job that he and his team did in the interest rates to facilitate the successful transition from LIBOR to SOFR. This was no small feat, as many people on this call remember. We had many a conversations prior to the transition about were we going to be able to transition or were others gonna do it. Sean and Agha and others did an amazing job of bringing 99.99% of the SOFR business here to CME Group. Now it's the largest contract in the world, supplanting what Eurodollar futures used to be. It's really an amazing accomplishment. Following Sean's retirement in June, Tim McCourt, who has been overseeing our equity index and foreign exchange cryptocurrency businesses, will assume Sean's responsibilities and lead the organization covering our financial and OTC products as well. I have the utmost confidence in Tim's ability to manage this broader portfolio. Sean, on behalf of everybody here, we'll have more accolades with you off the call, but thank you for everything you've done, and maybe you could say a few words to the people that you've been talking to for so many years. Yeah. Thank you so much, Terry. It has been an honor to work at CME Group these past 11 years, to work with you, Terry, and the entire outstanding team at CME. With all of our customers, with our investors, with our analysts, and with our regulators. Together, we delivered enormous value to market participants, including several billion per day in margin efficiencies and many new products, including many new options, many new currencies in OTC swap clearing, ultra ten-year futures, SOFR futures and options, and CME Term SOFR. For investors, in the first quarter of 2023, we delivered all-time record revenue for our rates business, with SOFR futures and options ADV exceeding the best ever quarter for Eurodollar futures and options ADV historically. As well as delivering a 9.8% compounded annual growth rate in revenue for the rates business since the first quarter of 2012. Last, having worked closely with Tim McCourt and Agha Mirza over the last several years, I am very confident that the financials business is in extremely capable hands going forward. Thank you to all of our customers, thank you to all of my colleagues, and thank you again, Terry. Thank you, Sean. Appreciate it very much. With that being said, we're gonna get into your questions now, and Sean will be participating in that, so I'm sure you will enjoy his answers as always. With that, we'll turn it over to you for your questions. Thank you. If you would like to register for a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one and the three. Our first question is from the line of Rich Repetto with Piper Sandler. Please go ahead. Yeah. Good morning, Terry and team. First, I'd just like to echo your comments and congrats, John P. and Sean as well on their transitions. Anyway, Terry, you brought up that risk management focus that you, that you, in your editorial pretty timely with, you know, a banking crisis 2 weeks afterwards. Down at the FIA, we talked about sort of the longer-term impacts that it could have on risk management and utilization of the CME product. I was just trying to get an update, you know, after more time has passed, and just get some insight, I guess, from Terry and Sean about the conversations you have, with risk management, you know, focus on these mid-tier banks, what might change, and what might it mean to the CME going forward? You know, it's hard to predict the future, Rich, but we did say down at the conference you're referring to in Boca, because of what's gone on and because of, if you look at history, some of the things that have gone on, and then return, you've seen our business grow because people understand that they need to manage risk in order to, you know, continue to stay in business for themselves. Some of these second and third-tier banks who did not hedge some of their portfolios, this is a big push by not only Sean and Tim McCourt and their teams, but also by Julie Winkler and her sales team to cross-sell. Again, I think what's important here, as we talked about, some of these second and third-tier banks mostly will be doing swaps, which we think is actually fine for us because they're normally gonna be doing a swap against a larger bank, and that larger bank will be doing the layoff with CME Group. We see that as a net positive, and that's kinda how we've been going through this internally, with our own folks here, Rich, since we saw each other probably down in Boca and putting more work into that. Julie and her team have been doing that along with Sean and Tim, and I'll let them comment, but that is a big push that we're looking at to show people the benefits, even if you're doing a swap. You know, we think there's a benefit to the liquidity that we provide for the banks that lay out their risk from the swap. John or Tim or Julie, you want to talk about it? I'll just say that, you know, we have initiated a sales campaign specifically focused on regional banks across the firm. We are very focused on providing them with the interest rate swaps and other products that they need in order to better manage their risk. You know, we are very excited about offering them that, especially with our OTC interest rate swap clearing. As Terry said, whatever swaps they do, in addition to potentially increasing our OTC swap clearing business, the backside of those swaps will be hedged by larger banks, either using our futures or the BrokerTec U.S. Treasury platform. You know, the better people manage risk, the better it is for themselves and the better it is for CME and CME shareholders. Tim or Julie, anything else to add? Oh, I would just add, I think the relationships with a lot of these regional banks has definitely been, you know, something we've been working on as we've got the Term SOFR benchmark here at CME Group. This was a key, you know, asset of which these individuals, these firms needed access to this rate. Getting out, licensing those firms up, was an activity that we've been doing over the last 1.5 years. Those relationships are not, I mean, are still relatively new, but the fact that we have them, you know, within our client outreach, is a key part of this. A lot of it is education, and this is something that CME Group has a very long history of doing, very well and something that we'll continue to do with these firms. Rich, does that give you a little bit of color where we're at? Yeah, definitely. You know, the focus on risk management couldn't have been more timely. It's been great working with both Sean and John. Thanks. Thanks a lot, Rich. Really appreciate it. Thank you, Rich. Our next question is from Dan Fannon with Jefferies. Please go ahead. Thanks. Good morning. Congrats to both Sean and John as well. The question is on market data. Obviously, the price increase that went into effect, you know, drove some of the sequential growth and I guess record revenue. You talk about also increasing subscribers. Just curious about if this is a good starting off or jumping off point here for revenue, and then ultimately, where these subscribers are coming from. Is it mostly retail? You know, how we can think about momentum in the market data business? Why don't we have Lynne start and then we'll go to Julie. Sure. Thanks, Dan. If you look at that market data revenue this year, we did grow 9% off of the first quarter last year. You do have the impact of the price increase, which went into effect in January. As a reminder, that was about a 4% increase for market data. Also within this line, you do have about $4 million in audit fees and catch-up payments for prior period activity. These do tend to be more episodic. For comparison, there was about $1 million in these type of fees in Q4. It's a combination of that pricing increase as well as the increased subscriber count, which I can turn to Julie to talk about what she's seeing there. Thanks for the question, Dan. You know, certainly last year, you know, throughout 2022, we also saw a continued strong demand for our professional devices and our real-time data. You know, we offer the largest suite of proprietary data of anyone. I think people, especially post-pandemic, have seen the value in that and the fact that we've continued to invest in the datasets that we offer and the technology and how they are receiving that data. Q1, we saw just a continuation of that trend. Also, you know, there's other aspects of the business, you know, particularly as we think about organic growth under our non-display licensing. This is where, you know, people have needs to utilize our data and other algorithms and trading applications. This is, you know, another part of the business up almost 9%. Alongside all of this, we've set up in the last 2 years, you know, this dedicated sales team. I'd be remiss without saying, you know, that is having an impact on the results, right. We are in a position where, you know, we historically, we had not been out there, selling market data and explaining to people what was actually available, and I think we're starting to see some uplift from that as well. It is institutional users to your question. You know, this is not coming from new retail participants. Great. Thank you. Our next question is from Alex Kramm with UBS. Please go ahead. Yeah. Hey, good morning, everyone. I feel like this is a throwaway question that we ask every time after we have a big quarter like we had in the first quarter, but I guess it has to be asked every time. Obviously with April off to a slow start, I know we see this again, time and time again, you have a lot of volatility, a lot of changes in the environment, and then things get a little bit quiet when people have to lick their wounds a little bit. Curious, Terry, if there's anything you would point to that speak to, you know, the underlying fundamentals of the market, any particular slowdown in any particular client types or anything that would make you think differently around what you're seeing so far this quarter. I know it's hard to predict, but it's got to be asked. No, I appreciate that, Alex, and it does need to be asked. I think a couple of different things here are play in April. April is historically one of the slowest months in the industry and for whatever reason, it's been that way for a number of years. Don't have the reason why that is the case. One of them, I guess, would be that we don't have a roll in April, so that's one thing of interest. One, you know, one of the things I look at is really not just only our company. I look at, you know, the broader industry across the board. If I thought that we were the only ones suffering in a lower volume environment in the month of April while everybody else was gaining, I'd be a little bit more concerned. I'm talking apples to apples in the futures world. That is not the case. Everybody's kind of on the same pace in April as they've been historically. This is nothing new, and it's a phenomenon that's gone on for years. When, you know, when I was younger, we saw the months of August being traditionally a slower one because of European holidays shutting down and things of that nature. You know, things just kind of move around a bit, and for whatever reason, this happens to be the slower month that we've seen over the last several years. You know, what's interesting about April is we've had our metals complex has been up, you know, our ag complex is up, and our energy, you know, say 33% of metals ag, right around 15%, and energy up, you know, just over 3% for the month of April. That is a bright sign. The beauty of CME Group, Alex, as you know, we're not just one asset class. We're a multi-asset class organization. When we do see slowdowns, we have said historically, we see pickups in others, and I think this is an example of that. Maybe not to the volume that of 66.3 million, but we are definitely seeing an uptick in other asset classes when others are down. All right. Fair enough. I'll jump back in the queue. Thank you, Alex. Our next question is from Brian Bedell with Deutsche Bank. Please go ahead. Great. Thanks. Good morning, also congrats to John and Sean and Lynne as well. Question on two-part question, but mostly focused on the debt ceiling negotiations. The two-parters are, you know, number one, how do you see the negotiations as well as just the continued debate on the Fed cycle and the volatility that could occur in the tenure and along into the curve, you know, impacting volumes? Maybe just some commentary around that. I guess and maybe that's for Sean. Then on the debt ceiling negotiations, maybe Terry, just your view of, you know, whether this time is similar to past negotiations, and you think things will be, you know, reconciled well, or is this time different? Then I guess if we do have a default scenario, you know, what, how would that impact, you know, the Treasury futures? This is purely a speculation question at best, as you can imagine, Brian. Yep. you know, I've been around long enough to watch the 2011 debt negotiation literally go down to the last hour before the clock ran out on government spending, and there was a negotiation between then Speaker Boehner and then President Barack Obama. You never know what's going to happen. I can only tell you a few things, and one of the things I'm saying to my folks here in the organization is, when you look at the setup today in Congress, one of the things I look at as far as where this may or may not go, you can only see so much, right? The Speaker is going to propose a piece of legislation that's got, you know, massive cuts associated with it over the next 10 years. The President is not going to like that. In return, the Speaker is offering up $1.5 trillion in lifting to the debt ceiling. That's gonna be the legislation. May pass the House, but if they lose five votes, then it doesn't pass the House. You know, pretty interesting dynamic right now. That probably won't go anywhere in the Senate, or it probably won't go anywhere with the administration. Then we go on to the next round of negotiations. Let's think a little bit about how the negotiations are working in Washington right now. As you recall, if anybody's a student of politics, you saw that there was 15 rounds of votes going for the Speaker of the House. In those 15 rounds, there was a handful of people that were trying to extract certain things for their benefit, maybe holding the Speaker's feet to the fire on certain things. I was not part of it, you can only assume what was going on because the votes finally got to a place, which means there was a negotiation going on. I'm assuming that negotiation will continue on, the difference this time is you're dealing with a much different Congress, with Republicans holding the majority, obviously, in the House side, and them looking to extract a lot of cuts. Whether you agree with it or not is not for me to make that decision. I'm just telling you what I see. I wouldn't be surprised if they don't get something passed out of the, out of the gate. We'll have to see where it goes. Historically, people never wanted to go back to their districts and be the person who did not vote for a debt ceiling lift, which could hurt the U.S. economy or hurt the U.S. chance. We had a downgrade in this country before. I'm not saying it's happening again, but there are people that, you know, they have firm beliefs that you have to look at the long picture and with the government spending is out of control. These are not my words. These are others. I just wanna make sure I say that. I think it's gonna be a little bit more tricky than historical debt ceiling that we've seen. As far as the Fed cycle goes, I'll let Sean comment on that, what it means to it, and then maybe Sunil can comment about the Treasuries and what it means, if anything, to us. Yeah. Thanks very much for the question. Thank you, Terry. You know, in terms of the Fed, you know, just looking at our futures markets, it's expected that the Fed will tighten by 25 basis points at the upcoming FOMC meeting, likely, and then over the next year and a half, reduce rates by 200 basis points. Obviously, there's huge uncertainty built into that yield curve, you know, that people are going to need to manage. You know, going from this extraordinary cycle, tightening cycle, excuse me, to a very quick, large easing cycle and the exact timing of that, you know, it creates an incredibly uncertain environment where people are gonna need to hedge risk. I think that cycle will continue to be positive for us. Bigger picture in terms of Treasury issuance, in regards to the debt ceiling, in the first quarter of this year, the U.S. Treasury only issued $64 billion net of coupons. With a $1.4 trillion deficit, the Treasury is not issuing a lot of coupons, and obviously a $64 billion in new issuance is unsustainable. They've been driving down the Treasury General Account in order to be able to do that. I would expect a very large increase going forward in U.S. Treasury issuance in order to cover that very large deficit, and that would, you know, at some point provide a very nice tailwind for our business. With that, I'll hand it over to Sunil. I'll cover two areas. One is operational, and the other is risk. From an operational perspective, the Treasury Market Practitioners Group has put out a document on best practices on handling, you know, maturing securities and coupons. CME works with SIFMA and other industry bodies to actually align itself on the operational side. On the risk side, we have handled these scenarios, similar scenarios in the past. We don't take it lightly, and as Terry pointed out, we are also taking into account a different environment, a political environment. Taking all of those into account, we manage risk with respect to our collateral and as well as our interest rate market, both long end and the short end. You know, as an example, you can see, that in March, was one of the most stressful periods for rates and, you know, the clearinghouse, the CME clearinghouse and its clearing members really managed that very well. I have no doubt they'll do the same. Brian, I think your question is very relevant and deserves a lot of attention. We can only do what we can do here. We're here to manage risk for people who are analyzing these situations day in and day out. My comments as it relates to the 15 rounds to elect a speaker, could that play into the debt ceiling? People might say, "Well, that has nothing, one has nothing to do with the other." You can only analyze what the amount of information you have, and that's the limited amount of information we have right now. We are preparing, as Sunil and Sean have said, to make sure that we are prepared for our clients to manage risk. I agree with Sean, I think it creates a tailwind for us irrespectively on the outcome of how the government settles this one way or another. But thank you for your question. Yeah, that's a lot of great color. Thanks, thanks so much, everyone. Thanks, Brian. Our next question is from Kyle Voigt with KBW. Please go ahead. Hey, good morning. I just wanna make sure I'm understanding the dynamics around the LIBOR transition correctly, because as you noted earlier in April, we did see a material step-down in Eurodollar futures open interest as the product transitioned. We didn't really see a commensurate step-up in SOFR futures open interest at that time. If we look at aggregate futures OI for the rates complex, it's now down year-over-year. I'm just trying to understand whether to interpret that change in OI trend over the past couple of months as more related to a short-term dynamic around the LIBOR transition or whether this is a result of the extreme interest rate volatility we saw in March, and if that caused any de-leveraging more broadly across your user base. Any additional color, helping us understand what's kind of driving some of the OI changes in rates specifically, given the moving pieces here, would be very helpful. Thanks, Kyle. Sean, you wanna start. Yeah, it's a Very good question. Thank you, Kyle. The interest rate business just went through what is arguably the single largest transition in its entire history. Kyle, I'm very glad to say that if you look at the year-over-year open interest for the interest rate futures and options complex is up 2%. Yes, it's only up 2%, but it is up 2% having gone through that transition. You are correct. We saw a small uplift in the overall open interest, only small. If you look at what we did, on April 15th, is we converted each and every Eurodollar future and each and every Eurodollar option into its respective SOFR future and SOFR options. As you can imagine, there are participants who would have had offsetting positions between those two different instruments, therefore those trades would have compressed. If you look at the first quarter, another question we've gotten a lot historically is what was the basis trading or the spread trading between SOFR futures and Eurodollar futures? That was in the first quarter, about 150,000 contracts a day. We saw a compression. You know, it was very uncertain from my perspective, and at my level, we do not see the individual accounts and the individual account positions. They are confidential inside the FCMs. We would not have known what level of compression we would have gotten through that process, and you can see the results. Again, I am heartened that overall, open interest in listed futures and options is up year-over-year. Kyle, I think some of the things you got to look at is also, you know, if you had a concern, did anybody else pick up open interest in a listed product such as SOFR and while we didn't get it? As I said in my earlier comments, 99.99% of all open interest is here, excuse me, at CME Group. You know, we didn't see that. For whatever reason, people, you know, take down risk or add risk, that is their decision. As we said earlier, we're here to manage it. Open interest fluctuations up and down are something that we've all seen historically in this business forever. Very helpful. Thank you. Thanks, Kyle. Our next question is from Owen Lau with Oppenheimer. Please go ahead. Good morning, and thank you for taking my question. CME has a strong balance sheet. Could you please give us an update on your M&A strategy and any gaps that you would like to fill both locally and internationally, given that the valuation of many companies have come down quite a bit? Thank you. Sure. Thanks, Owen. Certainly M&A is something that we are comfortable with, and we've used a number of different tools over the years from large scale M&A to creation of joint ventures to our most recent investment in the index joint venture with S&P last year. You know, we're always looking at what is out in the market and looking for opportunities for us to create value for our shareholders. We do feel that we are coming from a position of strength, though, given some of our past transactions. We don't feel a pressure to act unless we see something where we really can create that value. I would say that nothing has changed in that regard. It's something that is part of our tool chest that we are happy to use when we see the right opportunity come up. Got it. Okay. Thank you very much. Our next question is from the line of Alex Blostein with Goldman Sachs. Please go ahead. Hi. Good morning, guys. Thanks for the question. I was hoping you could spend a minute on competitive dynamics in the equity derivative space. Obviously SPX options at Cboe have seen a really nice growth and a lot of it came from the dailies. Understanding that it's a different product set than E-mini and Micro E-mini futures for you guys. Are you seeing any evidence of substitution away from your complex? If so, what sort of customer group is that mostly prevalent in? Thanks. Thanks, Alex. Tim, you wanna go ahead and address that? Yeah. Thanks, Alex, for the question. I think when we look at the option growth in the equity complex, it's certainly a growth versus growth story, and we're seeing very strong growth here at CME. When we look at the equity options complex at CME for options on futures, we've had a record Q1 ADV of over 1.3 million contracts, which is up 7% versus 2022 full year and up 11% versus Q1 of 2022. When we look at some of this growth, you can't ignore the multi-year trend of increasingly short-dated options coming to market as a result of the market wanting more precise risk management. The same day expiring options or 0DTEs is the latest step in that trend, where CME also has 0DTEs every day of the week from the S&P out for 5 weeks. We continue to introduce products that are important to our customers, and we've seen very strong growth in those same-day expiring options. They're up over 41% in Q1 versus the 2022 full year volume. When we look at these expirations, it's important to note at CME that we also have over 50% growth in Q1 versus 2022 full year in our options that are longer than 1 week in expiration. The story at CME is not just the same-day expiring option. We have very strong growth and growing open interest in our complex with the Q1 average open interest for equity options being 5.2 million contracts, up about 8% year-over-year. Also let's look more broadly at CME. This is not just an equity option story. We have very strong options offering at CME with a record Q1 ADV of 5.8 million contracts with 26% growth versus Q1 of 2022 across all of our options, and also set quarterly records not only in equity, but also interest rate options at CME. We've also had very strong growth in our metal complex options, up about 24%, and our non-U.S. option ADV is up about 30% over the same period last year. Not only are we growing, we're not certainly not seeing our participants turn to other markets because they can manage all of their option-related risk here at CME. Derek? Yeah. I'd just add, Tim, talking more broadly, I mean, this is such a differentiating factor for CME Group, where we've got core benchmark liquidity in every major asset class, not just in the futures, but more importantly, in the options. Options are critical because options actually create a stickier futures environment for customers because of the capital and operational efficiencies of the offsets in our clearinghouse. Tim mentioned the success that we've had across the franchise as a whole. Just to repeat what Terry said at the top of the call, we set a record revenue quarter of $218 million in Q1 of this year. That was broad growth across the entire franchise. As it relates to the, you know, the sticky value proposition, customers are using the story, particularly as it relates to options as a broader part of their overall set of risk management tools. Yes, we're seeing the shift to short-dated options. We ourselves set a record in our weekly options across the franchise as a whole of 1.4 million contracts, but that actually was not what drove that record 5.8 million. That actually represented about 25% of our options complex, down from 30% last quarter. Our growth is in term risk management tools out across the curve. End users, open interest holders, our biggest client segment growth driver for the entire franchise was buy side. That tells you who's using our products. Particularly, we saw that true ring true particularly strongly in our energy complex in Henry Hub natural gas franchise. Not only did we see our natural gas options business up 16% against really difficult comps of last year, but we're seeing that business up again in April, as Terry referenced energy up as a whole about 3% this year, in large part due to what we're seeing in Henry Hub gas options and futures. It's a broad-based story. It's one that differentiates us from our competitors. It's term open interest, and you know what open interest means to transactional revenues and volume and client capture. We're excited about that. We've had great success in building our front end. We'll continue to serve the needs of customers globally. I think the data points we shared today speak to a strong strengthening franchise for futures and options. Okay, thanks for all the detail. Just to be clear, you're not seeing substitution with competitive products in equity options? That is correct. Right. Thanks. Thanks, Alex. Our next question is from Chris Allen with Citi. Please go ahead. Morning, everyone. Maybe you could just talk a little bit about pricing and rate per contract. I was wondering if you give any color, what the price would look like on a full quarter basis, if the price increases had been there. On the member mix shifting, is this just something that you're seeing in the first quarter of this year, or has it been a longer-term trend? I know you've had new sales efforts in different asset classes too, whether it's regional banks or other players on FX and things like that. Just trying to get a better sense of pricing trajectory moving forward. Sure. Chris, this is Lynne. I'll start on that. If you look at the pricing increases overall, we saw a $0.013 increase on 23% increase in volume sequentially. We saw a real strong capture there. What we're seeing if we look year-over-year, where volume levels are a bit more similar, going from about 26 million contracts a day last Q1 to nearly 27 contracts a day this year, we saw a 3% uplift in RPC. If we take a step back and look overall, we still feel comfortable with that guidance we provided of the 4%-5% increase based on the full year, assuming similar volume to 2022. We feel like that has really pulled through. What we're most excited about is we are seeing continued strong liquidity and tight bid-ask spreads across the products. We're not seeing an impact to our markets based on these changes. In terms of the changes on the member mix, that is gonna ebb and flow. It depends on the product and it depends on the time. I don't see an overall long-term trend on that. Great. Thank you. Chris, it's you only saw two months out of a full quarter impact. You'll see a full quarter impact in Q2. Understood. Thanks. Yep. Thanks, Chris. Our next question is from Ken Worthington with J.P. Morgan. Please go ahead. Hi, good morning. I wanted to follow up on Alex's question, on zero-day options. We're hearing more market makers are using them to delta hedge. Is there any pricing advantage that you see in zero-day options versus futures? If so, why wouldn't this trend sort of continue? Do you have an estimate of how much of the E-mini business is really used to delta hedge by your institutional investors? Yeah. Thanks, Ken. I think it's an interesting question, right? One, I don't necessarily agree with the concept that 0DTE options are a replacement for futures. I mean, fundamentally, options are nonlinear products that have very dramatically different risk profiles intraday that do not line up with the one foreign movements of the index that a future does. I don't think it's replacing because I think that is not necessarily a fit for purpose hedge in replace of E-mini options. The one thing that I will say that's great is when we look at the totality of the equity ecosystem, our E-mini complex at CME is the leading price formation for equity index products across the globe. As such, we're also the preferred hedge vehicle for the totality of index trading that goes on, whether that's hedging SPX options, whether that's hedging OTC swaps, whether that's hedging ETF activity. These are things that we all see that risk recycling into our market as the primary venue for equities. When we look, though, also at the market maker activity with relating to your question from just what's publicly available as a function of RPC, trading those options in lieu of E-minis is not a cost-effective strategy for market makers or members at CME, and I don't necessarily think that is happening from the fundamental economics available at CME versus other venues. Ken, we appreciate your question, appreciate your hearing, but I think there's some talking in your book. I think Tim gave a pretty specific example about true risk management and what it is. Thank you for that question, though. Great. Thank you. Our next question is from Michael Cyprys with Morgan Stanley. Please go ahead. Great. Thank you. Good morning. Continuing with the options theme, but a different question here, coming back to the strong and record options activity that you guys are seeing. Can you just talk about the sustainability of this level of activity? How broad-based is that across your customer set? What would you say is the opportunity for continued options usage across your customer set? Maybe you could talk about some of the steps that you're planning to take over the next 12 to 18 months around product development to drive continued growth in options from here. Derek Yeah, great question. The reality is, you know, the growth of our options is accelerating growth in our futures. As we mentioned before, it's a sticky value proposition for customers that are using options in their portfolio hedging and the cross-margin efficiencies they can't get anywhere else. To your question on the kind of spread of participation across our client segments, this is a broad set of participants that's driving growth. As I mentioned before, buy side, in a record quarter for us, our buy-side participation in options was up over 40%. Props are up in kind of the mid-20%. We saw growth in retail, we saw commercials and banks participate. This is broad-based participation. As I mentioned before, can't stress enough that the reason that customers are using options here is because they're adding increasing amounts of that to their portfolios out across the curve. Tim mentioned the position that we have in open interest in the equity side of the business. We're seeing that growth across all our asset classes as well. What I think was mentioned briefly before that with the overall franchise being up at record levels, our non-U.S. growth is even faster than our growth inside the U.S., growing at 30%. We see growth across client segments, we see growth across geographies. When you actually look at the rates of growth out across the board, we saw our EMEA options business up 41%, our LatAm options customer business up 29%, and our Asia Pacific business up to 16%. As it relates to the sustainability, relates to the client efforts, relates to the front-end work we've done in CME Direct, which is our own front end, we've got record participation and record revenue generation through our own front end, which is expanding access to clients, whether it's either directly through our connection to us or through our partners as well. On top of that, we've been continuing to build option-specific sales assets in our regions in Europe and Asia. We're seeing the fruits of that. Julie can speak to the sales campaigns that we execute in any given year, and the staff that we have that's out, not only training customers on how to access our front end, but with a significant amount of educational resources that we're putting in place in Europe and Asia to draw more customers U.S. to increase their participation in options across the board. Hopefully, that addresses the kind of the growth and scale and the opportunity set. We continue to see outsized growth outside the U.S., and we'll continue to grow and develop, those products that suit customer needs. Thanks, Derek. Appreciate it. Thank you, Michael. Our next question is from the line of Simon Clinch with Atlantic Equities. Please go ahead. Hi, everyone. Thanks for taking my question. I was wondering if I could just get some housekeeping numbers for you from in terms of the cash collateral versus non-cash, and sort of what the earned rate was on the cash collateral as well, please. Lynne? Yeah, sure. If we look at the cash collateral for this quarter, we earned $93 million on those balances. The average balances were down a bit from last quarter, our return did increase from 32 basis points to 33 basis points. If we look at the averages, if we look at Q1, we were at $109.6 in average balances in cash. That compares to $117.6 that we saw in Q4. On the non-cash collateral side, which may be helpful as well, we had average balances for Q1 of $99.2. That's up from $89.7 billion that we saw in Q4. A reminder that the earnings on the non-cash collateral comes through in our other revenue line. Okay, great. Thank you. Thanks, Simon. Sure. Our next question is from Craig Siegenthaler with Bank of America. Please go ahead. Thanks. Good morning, everyone. Good morning. I have a follow-up to Chris's question, wanted to really focus in on the rates business. The rates RPC was down 1% quarter-on-quarter despite the 1Q hike. I'm wondering if you can comment on the underlying organic trends which impacted the blended RPC and explain why revenues per contract trended lower despite the hikes. Sean? Yeah, sure. Very happy to do that. If you look at the first quarter, and actually if you look at the year to date, you know, our Treasury futures overall, year to date are only up 1% in terms of their volumes. The huge growth that we saw in the first quarter was driven by the short-term interest rate futures. As you know, and as we have reported many times, the RPC on our STIRS complex is about $0.10 below our SOFR complex. That massive increase that we saw on the short end driven by the SOFR futures and options, as well as the huge growth, you know, where we do have some volume tiers, right, has led to a somewhat lower RPC. If you look at the RPC for SOFR futures and options, post the February 1st increase, SOFR futures and options RPC are now matching the historic levels of Eurodollar futures and options. We have delivered, you know, the volumes and the RPCs for those products. You know, that drop in RPC relative to the much stronger growth in STIRS is not a surprise. It's as expected. If I could just take it to the higher level, Craig. If you look at the growth in volume versus Q4, our rates business was up 47%. That 1% decrease that you're seeing in RPC really shows that the changes in pricing, including the roll-off of some of the SOFR incentives, all of that is offsetting higher volume tiers that you would see with that really strong growth in volume. That RPC result was particularly strong in rates. Great. Thank you. There we go. Thanks, Craig. Appreciate it. Our next question is a follow-up question from Rich Repetto with Piper Sandler. Please go ahead. Yeah, just a follow-up for my friend Derek in energy, and you got to be breathing a little sigh of relief as the year-over-year comps dramatically go down from 1Q to 2Q. You know, I think last year, energy, after the Ukraine crisis settled out or didn't settle out, but the impact sort of settled out, the volumes went down 23%. I guess the question is, Derek, is can you just give us an update on energy overall, the health of the energy complex? You've seen 2 million or so ADV, but again, it'll be much easier comps 2Q going forward. Thanks, Rich. That's a great point. If you look at actually the first quarter energy ADV, it's just below 2.1 million. When you compare that to the full year of 2022 that had that huge bump and that tough comp that we're facing in Q1 of this year, that's actually up 3% versus full year 2022, it's up 14% sequentially versus Q4. The trend is very much what we expected to see. Not only, and this is actually more important, if you look at the rebuild and restacking of our open interest, we're up at about 1.9 million contracts open interest in our WTI futures. Brent followed that same trend. It kind of drifted down over the course of the year. It came back up. We're seeing a nice resumption of participation from financial players, ETFs, hedge funds, asset managers, and we're seeing that reflected in the open interest trend. Once we saw the kind of the de-leveraging impact of higher margins begin to recede, that brought some financial players back in. We're seeing more ETF participation, broadening the complex as a whole. I think two of the things we're most excited about in our energy business, you've heard us talk a lot about the centrality of WTI as the global benchmark for the crude oil market. We've seen that certainly in the record levels of exports. I think Q4, U.S. exported just over 4 million barrels a day. That puts WTI squarely in the middle of global energy markets. What are we doing about that? Not only are we seeing a resumption of activity in WTI, but we have, about 5 years ago, seen the structural shift in the energy market. We recognized that WTI, being a global benchmark, needed to be explicitly connected to the export community. Back in 2018, we built a suite of products we call our crude grades contracts that are basis contracts that trade primarily in Houston and Permian, the Midland contract, as a basis to our WTI contract. Customers that are involved in either domestic or, more importantly, the export market, are increasing their activity in those grades contracts. The reason I mention that is because we just hit a recent record of open interest in those contracts of 490,000 contracts open. Those trade as a basis to our WTI contract. It both reinforces WTI and explicitly connects WTI to the global export market. We set an individual day of volume trading record on the 8th of February at 57,000 contracts. The last point that I'd make on that is the significant participation is coming from commercial and physical players. The last point that I think we'd wanna be remiss in not speaking to is the Henry Hub franchise. Similar story there with LNG facilities coming online in the U.S. and the success that we're seeing in the low price gas development here in the U.S. Our Henry Hub franchise actually saw an increase on the future side in market share back up above 80% in a competitive market, and we're seeing that serve as the primary basis point for trading and the pricing of LNG cargoes leaving the U.S. and increasingly replacing lost Russian gas to Europe and Asia. We think the volume trends are solid. Terry mentioned a little bit earlier in answering a separate question that our volumes in the commodity side generally are up in the second quarter, and we're seeing energy follow that trend as well. With energy volume so far year, month-to-date Q2 in April up 3%, really led by Henry Hub. A lot to like in what's going on. Happy to take more of those questions offline. There's a lot of detail there, but we like the global basis position we have in both the natural gas market and crude oil market. thank you. Thank you, Rich. Thanks, Derek. Our next question is also a follow-up from Alex Kramm with UBS. Please go ahead. Yeah. Hey, thanks again, guys. Just wanted to squeeze in a couple of follow-ups on the SOFR-LIBOR, LIBOR transition. One, I know this was a huge lift for both you guys, but then also the industry, so a lot of resources went into that. Now that it's basically behind us, just wondering what's next, I guess, when it comes to SOFR. I mean, do you think SOFR is being used like LIBOR in the past? What's different? Is there still a lot of education that you maybe need to do to fully educate about how SOFR is different? Or do you think it's all done? I guess the question is, you know, can the SOFR flourish even more in the future? Secondly, just a quick one. I think the OTC transition went on Friday. I think huge clearing volumes that we observed. I think you actually were charging for that. Maybe you can just clarify, 'cause just wondering if we need to expect a huge OTC revenue number in the second quarter. Maybe you can compare to maybe what we saw in the first quarter in terms of run rates, so we're not too surprised there. Seems like it may have been a good revenue day for you. Yes, Alex. Really good questions. Really appreciate your pointing those out. Two questions there. In terms of answering the first one in SOFR replacing Eurodollars or LIBOR, you know, it's very clear from the first quarter with SOFR futures and options beating the all-time best quarter in the 40-year history of Eurodollar futures and options, that SOFR futures and options are being used just as intensively and just as extensively as Eurodollar futures and options ever were. That's a very positive sign. In addition to that, in terms of the long-term strategic positioning of the business, the interest rates business is better positioned today than it ever has been before, I would argue, in its entire history. A part of the reason there is the global banking system has turned to CME Term SOFR for lending. There are now more than $3.7 trillion worth of loans across the world in, I think now nearly 90 different countries, that are based on CME Term SOFR, that are based on CME's SOFR futures. $3.7 trillion worth of loans, more than 2,400 individual institutions that have been licensed, which Julie mentioned earlier, gives us a huge opportunity relative to cross-selling opportunities and to increase our penetration of folks like regional banks, where they have had to license our CME Term SOFR and create that relationship with us through that. I think that that's been a very positive for us, especially again, you know, everyone knows, U.S. dollar LIBOR owned by ICE Benchmark Administration, and, you know, under U.S. law, under the LIBOR Act, and recently selected by the FCA in the U.K., CME Term SOFR is the safe harbor. CME Term SOFR will be used by ICE Benchmark Administration starting on July first, in their U.S. dollar synthetic LIBOR in order to manage tough legacy contracts. We have replaced U.S. dollar LIBOR. That's a huge opportunity for us, and again, strategically better positioned. In terms of future growth, I'm hugely excited, as I always am, as you've heard me on many years on this call. You know, we redesigned when we launched SOFR Futures and Options, in particular, we redesigned the way packs and bundles, it's a technical issue, but we redesigned how packs and bundles are quoted in the market and traded. That's gonna make it much easier for us to launch, hopefully later this year, options on SOFR packs and bundles. Those options on SOFR packs and bundles, you've heard me say this before so many times, we love to have listed, cleared, standardized contracts that are lower total cost than the OTC equivalent. Well, options on packs and bundles are gonna be a listed, cleared, standardized, lower total cost alternative to the swaptions market. The swaptions market isn't cleared. I'm massively excited about that opportunity for the SOFR business that we didn't have with Eurodollars, 'cause Eurodollars weren't originally designed with that in mind. When we designed the SOFR futures and options, you know, we had that in mind from day one. In addition to that, we're very excited about €STR. Our €STR futures is the most liquid European short-term risk-free rate contract in the world. We're very excited about our TBA futures and other futures that we've launched. The pipeline that we have in front of us for further development is very strong and I would say it's the strongest it's ever been. Just to put a finishing up on Sean's points, and I would never try to repeat them because. Oh. Go ahead. Sorry. OTC conversion and fees, I did miss that question. Yes. Sorry. We did charge. You are correct. We did charge for that conversion. It was a much lower charge than we normally charge, and I think we posted $10. It was $10 per swap. That is the published fee. Yes, we did charge for that event. You know, Alex, you were right to point out about the conversion into our futures market and the growth thereof. As you just heard from Sean, we believe that this is obviously an ongoing marathon, and we will continue to build onto this franchise. We are excited for the future and the distraction of moving Eurodollar to SOFR is over, which allows us to do the other things that Sean referenced. That's the exciting part from my standpoint, where I look at this. The growth is a very exciting perspective going forward. Thank you for your question. Excellent. Thanks again. Thank you. It appears we have no further questions at this time. I'll turn the call back to management for closing remarks. Well, I wanna thank all of you for participating in today's call, and I especially wanna thank my entire team at CME Group. The global employee base all throughout the world has been able to deliver the results that we were able to present to you today. I think it's massively important to continue to drive opportunities and efficiencies to your customers, because as we do that, we will drive value to our shareholders. That's the equation we live by. We thank you all very much. I wanna thank again my entire team. Thank you. That does conclude the conference call for today. We thank you all for your participation and kindly ask that you please disconnect your lines. Have a great day, everyone.