- 2Q22 net revenues of $1.8 billion, +6% y/y
- 2Q22 GAAP diluted EPS of $0.99, down 55% y/y, primarily due
to the 2Q21 pre-tax gain of $1.23 billion related to the full
divestment of our stake in Coinbase
- 2Q22 adj. diluted EPS of $1.32, +14% y/y
- 2Q22 operating income of $869 million, +9% y/y; adj.
operating income of $1.1 billion, +12% y/y
- 2Q22 operating margin of 48%; adj. operating margin of
59%
Jeffrey C. Sprecher,ICE Chair & Chief Executive Officer,
said,"We are pleased to report our second quarter results, which
were highlighted by continued revenue and operating profit growth.
Amidst a backdrop of continued volatility and uncertainty, our
strong second quarter performance reflects the value of our
markets, technology and data services. Our strategic
diversification across asset classes and geographies enables us to
better innovate for customers and drive growth across an array of
macro environments. As we look to the second half of the year, we
remain focused on connecting customers to data and technology and
extending our track record of growth."
Intercontinental Exchange (NYSE: ICE), a leading global provider
of data, technology and market infrastructure, today reported
financial results for the second quarter of 2022. For the quarter
ended June 30, 2022, consolidated net income attributable to ICE
was $555 million on $1.8 billion of consolidated revenues, less
transaction-based expenses. Second quarter GAAP diluted earnings
per share (EPS) were $0.99. Adjusted net income attributable to ICE
was $739 million in the second quarter and adjusted diluted EPS
were $1.32. Please refer to the reconciliation of non-GAAP
financial measures included in this press release for more
information on our adjusted operating expenses, adjusted operating
income, adjusted operating margin, adjusted net income, adjusted
diluted EPS and free cash flow.
Warren Gardiner, ICE Chief Financial Officer, added: "Through
the first half of the year, we have grown revenues, operating
income and cash flow. Recurring revenues, which account for roughly
50% of our total revenue, continue to compound alongside growth in
our diverse transaction-based businesses. This performance reflects
the “all-weather” nature of our business model, and as we move into
the second half of 2022, we are well-positioned to benefit from
near-term cyclical tailwinds as well as longer-term secular trends
and remain focused on creating value for stockholders."
Second Quarter 2022 Business Highlights
Second quarter consolidated net revenues were $1.8 billion, up
6% year-over-year including exchange net revenues of $1.0 billion,
fixed income and data services revenues of $512 million and
mortgage technology revenues of $297 million. Consolidated
operating expenses were $945 million for the second quarter of
2022. On an adjusted basis, consolidated operating expenses were
$740 million. Consolidated operating income for the second quarter
was $869 million and the operating margin was 48%. On an adjusted
basis, consolidated operating income for the second quarter was
$1.1 billion and the adjusted operating margin was 59%.
$ (in millions)
Net Revenue
Op Margin
Adj Op Margin
2Q22
Exchanges
$1,005
70%
71%
Fixed Income and Data Services
$512
34%
43%
Mortgage Technology
$297
(2)%
46%
Consolidated
$1,814
48%
59%
2Q22
2Q21
% Chg
Recurring Revenue
$931
$870
7%
Transaction Revenue, net
$883
$837
6%
Exchanges Segment Results
Second quarter exchange net revenues were $1.0 billion. Exchange
operating expenses were $304 million and on an adjusted basis, were
$287 million in the second quarter. Segment operating income for
the second quarter was $701 million and the operating margin was
70%. On an adjusted basis, operating income was $718 million and
the adjusted operating margin was 71%.
$ (in millions)
2Q22
2Q21
% Chg
Revenue, net:
Energy
$265
$274
(3)%
Ags and Metals
61
62
(1)%
Financials(1)
123
83
50%
Cash Equities and Equity Options
99
85
17%
OTC and Other(2)
108
78
39%
Data and Connectivity Services
218
208
4%
Listings
131
119
10%
Segment Revenue
$1,005
$909
11%
Recurring Revenue
$350
$327
7%
Transaction Revenue, net
$655
$582
13%
(1) Financials include interest rates and
other financial futures and options.
(2) OTC & other includes physical
energy, interest income on certain clearing margin deposits,
regulatory penalties and fines, fees for use of our facilities,
regulatory fees charged to member organizations of our U.S.
securities exchanges, designated market maker service fees,
technology development fees, exchange member fees, and agriculture
grading and certification fees.
Fixed Income and Data Services Segment Results
Second quarter fixed income and data services revenues were $512
million. Fixed income and data services operating expenses were
$338 million and adjusted operating expenses were $294 million in
the second quarter. Segment operating income for the second quarter
was $174 million and the operating margin was 34%. On an adjusted
basis, operating income was $218 million and the adjusted operating
margin was 43%.
$ (in millions)
2Q22
2Q21
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$25
$13
84%
85%
CDS Clearing
66
38
72%
76%
Fixed Income Data and Analytics
274
268
3%
4%
Other Data and Network Services
147
139
6%
8%
Segment Revenue
$512
$458
12%
13%
Recurring Revenue
$421
$407
4%
5%
Transaction Revenue
$91
$51
75%
78%
(1) Net revenues in constant currency are
calculated holding both the pound sterling and euro at the average
exchange rate from 2Q21, 1.3985 and 1.2054, respectively.
Mortgage Technology Segment Results
Second quarter mortgage technology revenues were $297 million.
Mortgage technology operating expenses were $303 million and
adjusted operating expenses were $159 million in the second
quarter. Segment operating loss for the second quarter was $6
million and the operating margin was (2)%. On an adjusted basis,
operating income was $138 million and the adjusted operating margin
was 46%.
$ (in millions)
2Q22
2Q21
% Chg
Revenue:
Origination Technology
$196
$241
(19)%
Closing Solutions
64
69
(6)%
Data and Analytics
24
18
37%
Other
13
12
4%
Segment Revenue
$297
$340
(13)%
Recurring Revenue
$160
$136
18%
Transaction Revenue
$137
$204
(33)%
Other Matters
- The effective tax rate for the second quarter of 2022 was
23%.
- Operating cash flow through the second quarter of 2022 was $1.7
billion and free cash flow was $1.4 billion.
- Unrestricted cash was $830 million and outstanding debt was
$18.1 billion as of June 30, 2022.
- Through the second quarter of 2022, ICE repurchased $632
million of its common stock and paid $427 million in dividends. In
connection with our pending acquisition of Black Knight, on May 4,
2022 we suspended share repurchases.
Updated Financial Guidance
- ICE's full year 2022 GAAP operating expenses are expected to be
in a range of $3.599 billion to $3.649 billion. Adjusted operating
expenses(1) are expected to be in a range of $2.97 billion to $2.99
billion.
- ICE's third quarter 2022 GAAP operating expenses are expected
to be in a range of $903 million to $913 million. Adjusted
operating expenses(1) are expected to be in a range of $743 million
to $753 million.
- ICE's third quarter 2022 GAAP non-operating expense(2) is
expected to be in the range of $180 million to $185 million.
Adjusted non-operating expense is expected to be in the range of
$115 million to $120 million.
- ICE's diluted share count for the third quarter is expected to
be in the range of 558 million to 563 million weighted average
shares outstanding.
(1) 2022 and 3Q22 non-GAAP operating
expenses exclude amortization of acquisition-related intangibles
and Ellie Mae transaction and integration costs.
(2) Non-operating income / expense
includes interest income, interest expense and net other income.
Non-GAAP non-operating expense excludes equity earnings from
unconsolidated investees, net interest expense on
pre-acquisition-related debt and costs associated with re-financing
existing debt.
Earnings Conference Call Information
ICE will hold a conference call today, August 4, 2022, at 8:30
a.m. ET to review its second quarter 2022 financial results. A live
audio webcast of the earnings call will be available on the
company's website at www.theice.com in the investor relations
section. Participants may also listen via telephone by dialing
844-200-6205 from the United States or 929-526-1599 from outside of
the United States. Telephone participants are required to
provide the participant entry number 093622 and are recommended to
call 10 minutes prior to the start of the call. The call will
be archived on the company's website for replay.
The conference call for the third quarter 2022 earnings has been
scheduled for November 3rd, 2022 at 8:30 a.m. ET. Please refer to
the Investor Relations website at www.ir.theice.com for additional
information.
Historical futures, options and cash ADV, rate per contract,
open interest data and CDS cleared information can be found at:
https://ir.theice.com/investor-resources/supplemental-information/default.aspx
Consolidated Statements of
Income
(In millions, except per share
amounts)
(Unaudited)
Six Months Ended June
30,
Three Months Ended June
30,
Revenues:
2022
2021
2022
2021
Exchanges
$
3,247
$
2,942
$
1,604
$
1,336
Fixed income and data services
1,021
926
512
458
Mortgage technology
604
695
297
340
Total revenues
4,872
4,563
2,413
2,134
Transaction-based expenses:
Section 31 fees
174
166
123
41
Cash liquidity payments, routing and
clearing
985
893
476
386
Total revenues, less transaction-based
expenses
3,713
3,504
1,814
1,707
Operating expenses:
Compensation and benefits
714
719
355
365
Professional services
69
81
35
37
Acquisition-related transaction and
integration costs
62
28
53
10
Technology and communication
344
327
169
165
Rent and occupancy
41
41
20
20
Selling, general and administrative
112
111
57
60
Depreciation and amortization
510
506
256
251
Total operating expenses
1,852
1,813
945
908
Operating income
1,861
1,691
869
799
Other income/(expense):
Interest income
9
—
8
—
Interest expense
(264
)
(213
)
(161
)
(106
)
Other income/(expense), net
(35
)
1,287
23
1,239
Other income/(expense), net
(290
)
1,074
(130
)
1,133
Income before income tax expense
1,571
2,765
739
1,932
Income tax expense
338
862
173
679
Net income
$
1,233
$
1,903
$
566
$
1,253
Net income attributable to non-controlling
interest
(21
)
(5
)
(11
)
(1
)
Net income attributable to
Intercontinental Exchange, Inc.
$
1,212
$
1,898
$
555
$
1,252
Earnings per share attributable to
Intercontinental Exchange, Inc. common stockholders:
Basic
$
2.17
$
3.38
$
0.99
$
2.23
Diluted
$
2.16
$
3.36
$
0.99
$
2.22
Weighted average common shares
outstanding:
Basic
560
562
558
563
Diluted
562
565
560
565
Consolidated Balance
Sheets
(In millions)
As of
June 30, 2022
As of
(Unaudited)
December 31, 2021
Assets:
Current assets:
Cash and cash equivalents
$
830
$
607
Short-term restricted cash and cash
equivalents
6,045
1,035
Cash and cash equivalent margin deposits
and guaranty funds
164,483
145,936
Invested deposits, delivery contracts
receivable and unsettled variation margin
3,189
4,493
Customer accounts receivable, net
1,371
1,208
Prepaid expenses and other current
assets
457
1,021
Total current assets
176,375
154,300
Property and equipment, net
1,703
1,699
Other non-current assets:
Goodwill
21,106
21,123
Other intangible assets, net
13,397
13,736
Long-term restricted cash and cash
equivalents
405
398
Other non-current assets
2,221
2,246
Total other non-current assets
37,129
37,503
Total assets
$
215,207
$
193,502
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued
liabilities
$
719
$
703
Section 31 fees payable
172
57
Accrued salaries and benefits
220
354
Deferred revenue
473
194
Short-term debt
4
1,521
Margin deposits and guaranty funds
164,483
145,936
Invested deposits, delivery contracts
payable and unsettled variation margin
3,189
4,493
Other current liabilities
162
153
Total current liabilities
169,422
153,411
Non-current liabilities:
Non-current deferred tax liability,
net
3,945
4,100
Long-term debt
18,109
12,397
Accrued employee benefits
191
200
Non-current operating lease liability
267
252
Other non-current liabilities
412
394
Total non-current liabilities
22,924
17,343
Total liabilities
192,346
170,754
Equity:
Intercontinental Exchange, Inc.
stockholders’ equity:
Common stock
6
6
Treasury stock, at cost
(6,223
)
(5,520
)
Additional paid-in capital
14,201
14,069
Retained earnings
15,135
14,350
Accumulated other comprehensive loss
(305
)
(196
)
Total Intercontinental Exchange, Inc.
stockholders’ equity
22,814
22,709
Non-controlling interest in consolidated
subsidiaries
47
39
Total equity
22,861
22,748
Total liabilities and equity
$
215,207
$
193,502
Non-GAAP Financial Measures and Reconciliation
We use non-GAAP measures internally to evaluate our performance
and in making financial and operational decisions. When viewed in
conjunction with our GAAP results and the accompanying
reconciliation, we believe that our presentation of these measures
provides investors with greater transparency and a greater
understanding of factors affecting our financial condition and
results of operations than GAAP measures alone. In addition, we
believe the presentation of these measures is useful to investors
for period-to-period comparison of results because the items
described below as adjustments to GAAP are not reflective of our
core business performance. These financial measures are not in
accordance with, or an alternative to, GAAP financial measures and
may be different from non-GAAP measures used by other companies. We
use these adjusted results because we believe they more clearly
highlight trends in our business that may not otherwise be apparent
when relying solely on GAAP financial measures, since these
measures eliminate from our results specific financial items that
have less bearing on our core operating performance. We strongly
recommend that investors review the GAAP financial measures and
additional non-GAAP information included in our Quarterly Report on
Form 10-Q, including our consolidated financial statements and the
notes thereto.
Adjusted operating expenses, adjusted operating income, adjusted
operating margin, adjusted net income attributable to ICE common
stockholders, adjusted diluted earnings per share and free cash
flow for the periods presented below are calculated by adding or
subtracting the adjustments described below, which are not
reflective of our cash operations and core business performance,
and their related income tax effect and other tax adjustments (in
millions, except for per share amounts):
Adjusted Operating Income,
Operating Margin and Operating Expense Reconciliation
(In millions)
(Unaudited)
Exchanges Segment
Fixed Income and Data Services
Segment
Mortgage Technology
Segment
Consolidated
Six Months Ended June
30,
Six Months Ended June
30,
Six Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
2022
2021
2022
2021
Total revenues, less transaction-based
expenses
$2,088
$1,883
$1,021
$926
$604
$695
$3,713
$3,504
Operating expenses
603
647
692
672
557
494
1,852
1,813
Less: Amortization of acquisition-related
intangibles
33
37
93
91
180
185
306
313
Less: Transaction and integration
costs
—
10
—
—
60
17
60
27
Adjusted operating expenses
$570
$600
$599
$581
$317
$292
$1,486
$1,473
Operating income
$1,485
$1,236
$329
$254
$47
$201
$1,861
$1,691
Adjusted operating income
$1,518
$1,283
$422
$345
$287
$403
$2,227
$2,031
Operating margin
71%
66%
32%
27%
8%
29%
50%
48%
Adjusted operating margin
73%
68%
41%
37%
47%
58%
60%
58%
Adjusted Operating Income,
Operating Margin and Operating Expense Reconciliation
(In millions)
(Unaudited)
Exchanges Segment
Fixed Income and Data Services
Segment
Mortgage Technology
Segment
Consolidated
Three Months Ended June
30,
Three Months Ended June
30,
Three Months Ended June
30,
Three Months Ended June
30,
2022
2021
2022
2021
2022
2021
2022
2021
Total revenues, less transaction-based
expenses
$1,005
$909
$512
$458
$297
$340
$1,814
$1,707
Operating expenses
304
326
338
337
303
245
945
908
Less: Amortization of acquisition-related
intangibles
17
19
44
46
92
90
153
155
Less: Transaction and integration
costs
—
5
—
—
52
4
52
9
Adjusted operating expenses
$287
$302
$294
$291
$159
$151
$740
$744
Operating income/(loss)
$701
$583
$174
$121
$(6)
$95
$869
$799
Adjusted operating income
$718
$607
$218
$167
$138
$189
$1,074
$963
Operating margin
70%
64%
34%
26%
(2)%
28%
48%
47%
Adjusted operating margin
71%
67%
43%
36%
46%
56%
59%
56%
Adjusted Net Income
Attributable to ICE and EPS
(In millions)
(Unaudited)
Six Months Ended June 30,
2022
Six Months Ended June 30,
2021
Net income attributable to ICE
$
1,212
$
1,898
Add: Amortization of acquisition-related
intangibles
306
313
Add: Transaction and integration costs
60
27
Add: Accrual relating to legal
settlement
9
—
Add: Net interest expense on
pre-acquisition-related debt
18
—
Add: Extinguishment of 2022 and 2023
Senior Notes
30
—
Less: Gain on sale of Euroclear equity
investment and dividends received
(41
)
(30
)
Less: Gain on sale of Coinbase equity
investment
—
(1,227
)
Less: Gain related to the settlement of an
acquisition-related indemnification claim
—
(7
)
Add/(Less): Net losses/(income) from
unconsolidated investees
57
(34
)
Add/(Less): Income tax effect for the
above items
(123
)
254
Add: Deferred tax adjustments on
acquisition-related intangibles
15
197
Adjusted net income attributable to
ICE
$
1,543
$
1,391
Basic earnings per share
$
2.17
$
3.38
Diluted earnings per share
$
2.16
$
3.36
Adjusted basic earnings per share
$
2.76
$
2.47
Adjusted diluted earnings per share
$
2.75
$
2.46
Basic weighted average common shares
outstanding
560
562
Diluted weighted average common shares
outstanding
562
565
Adjusted Net Income
Attributable to ICE and EPS
(In millions)
(Unaudited)
Three Months Ended June 30,
2022
Three Months Ended June 30,
2021
Net income attributable to ICE
$
555
$
1,252
Add: Amortization of acquisition-related
intangibles
153
155
Add: Transaction and integration costs
52
9
Add: Net interest expense on
pre-acquisition-related debt
18
—
Add: Extinguishment of 2022 and 2023
Senior Notes
30
—
Less: Gain on sale of Euroclear equity
investment
(41
)
—
Less: Gain on sale of Coinbase equity
investment
—
(1,227
)
Less: Gain related to the settlement of an
acquisition-related indemnification claim
—
(7
)
Add/(Less): Net losses/(income) from
unconsolidated investees
15
(9
)
Add/(Less): Income tax effect for the
above items
(65
)
288
Add: Deferred tax adjustments on
acquisition-related intangibles
22
196
Adjusted net income attributable to
ICE
$
739
$
657
Basic earnings per share
$
0.99
$
2.23
Diluted earnings per share
$
0.99
$
2.22
Adjusted basic earnings per share
$
1.32
$
1.17
Adjusted diluted earnings per share
$
1.32
$
1.16
Basic weighted average common shares
outstanding
558
563
Diluted weighted average common shares
outstanding
560
565
Free Cash Flow
Calculation
(In millions)
(Unaudited)
Six Months Ended June 30,
2022
Six Months Ended June 30,
2021
Cash flow from operations
$
1,725
$
1,607
Less: Capital expenditures and capitalized
software development costs
(204
)
(240
)
Add/(Less): Section 31 fees, net
(115
)
44
Free cash flow
$
1,406
$
1,411
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500
company that designs, builds and operates digital networks to
connect people to opportunity. We provide financial technology and
data services across major asset classes that offer our customers
access to mission-critical workflow tools that increase
transparency and operational efficiencies. We operate exchanges,
including the New York Stock Exchange, and clearing houses that
help people invest, raise capital and manage risk across multiple
asset classes. Our comprehensive fixed income data services and
execution capabilities provide information, analytics and platforms
that help our customers capitalize on opportunities and operate
more efficiently. At ICE Mortgage Technology, we are transforming
and digitizing the U.S. residential mortgage process, from consumer
engagement through loan registration. Together, we transform,
streamline and automate industries to connect our customers to
opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual
property rights of Intercontinental Exchange, Inc. and/or its
affiliates is located at
http://www.intercontinentalexchange.com/terms-of-use. Key
Information Documents for certain products covered by the EU
Packaged Retail and Insurance-based Investment Products Regulation
can be accessed on the relevant exchange website under the heading
“Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 - Statements in this press release regarding
ICE's business that are not historical facts are "forward-looking
statements" that involve risks and uncertainties. For a discussion
of additional risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see ICE's Securities and Exchange Commission (SEC)
filings, including, but not limited to, the risk factors in
Intercontinental Exchange, Inc.’s Annual Report on Form 10-K for
the year ended December 31, 2021, as filed with the SEC on February
3, 2022. We caution you not to place undue reliance on these
forward-looking statements. Any forward-looking statement speaks
only as of the date on which such statement is made, and we
undertake no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of an
unanticipated event. New factors emerge from time to time, and it
is not possible for management to predict all factors that may
affect our business and prospects. Further, management cannot
assess the impact of each factor on the business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements.
SOURCE: Intercontinental Exchange
ICE-CORP
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220804005386/en/
ICE Investor Relations Contact: Mary Caroline O'Neal +1 770 738
2151 marycaroline.oneal@ice.com
investors@ice.com
ICE Media Contact: Josh King +1 212 656 2490
josh.king@ice.com
media@ice.com
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