Intercontinental Exchange (NYSE: ICE):
- Record 1Q24 net revenues of $2.3 billion, +21% y/y
- 1Q24 GAAP diluted earnings per share (EPS) of $1.33, +14%
y/y
- 1Q24 adj. diluted EPS of $1.48, +5% y/y
- Record 1Q24 operating income of $1.1 billion, +10% y/y;
Record adj. operating income of $1.4 billion, +18% y/y
- 1Q24 operating margin of 46%; adj. operating margin of
59%
Jeffrey C. Sprecher,ICE Chair & Chief Executive Officer,
said,"We are pleased to report strong first quarter results that
extend our track record of revenue and earnings per share growth.
Our customers continue to rely on our mission-critical data and
technology to manage risk and capture workflow efficiencies,
reflecting the all-weather nature of our business model. As we look
to the balance of the year and beyond, we remain focused on
innovating for our customers, investing in future growth and
creating value for our stockholders."
Intercontinental Exchange (NYSE: ICE), a leading global provider
of technology and data, today reported financial results for the
first quarter of 2024. For the quarter ended March 31, 2024,
consolidated net income attributable to ICE was $767 million on
$2.3 billion of consolidated revenues, less transaction-based
expenses. First quarter GAAP diluted EPS were $1.33. Adjusted net
income attributable to ICE was $852 million in the first quarter
and adjusted diluted EPS were $1.48. 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 adjusted free cash
flow.
Warren Gardiner, ICE Chief Financial Officer, added: "In the
first quarter, we generated record revenues and record operating
income. This performance not only reflects the strength of our
balanced and diversified business but also the strategic
investments that we have made to drive long-term profitable growth
and to create value for our stockholders."
First Quarter 2024 Business Highlights
First quarter consolidated net revenues were $2.3 billion
including exchange net revenues of $1.2 billion, fixed income and
data services revenues of $568 million and mortgage technology
revenues of $499 million. Consolidated operating expenses were $1.2
billion for the first quarter of 2024. On an adjusted basis,
consolidated operating expenses were $930 million. Consolidated
operating income for the first quarter was $1.1 billion, and the
operating margin was 46%. On an adjusted basis, consolidated
operating income for the first quarter was $1.4 billion, and the
adjusted operating margin was 59%.
$ (in millions)
Net Revenues
Op Margin
Adj Op Margin
1Q24
Exchanges
$
1,223
73
%
75
%
Fixed Income and Data Services
$
568
38
%
46
%
Mortgage Technology
$
499
(10
)%
37
%
Consolidated
$
2,290
46
%
59
%
1Q24
1Q23
% Chg
Recurring Revenues
$
1,196
$
953
25
%
Transaction Revenues, net
$
1,094
$
943
16
%
Exchanges Segment Results
First quarter exchange net revenues were $1.2 billion. Exchange
operating expenses were $326 million and on an adjusted basis, were
$307 million in the first quarter. Segment operating income for the
first quarter was $897 million, and the operating margin was 73%.
On an adjusted basis, operating income was $916 million, and the
adjusted operating margin was 75%.
$ (in millions)
1Q24
1Q23
% Chg
Const Curr(1)
Revenues, net:
Energy
$
457
$
345
33
%
32
%
Ags and Metals
72
70
3
%
2
%
Financials(2)
135
128
6
%
3
%
Cash Equities and Equity Options
99
95
4
%
4
%
OTC and Other(3)
103
101
2
%
2
%
Data and Connectivity Services
235
232
1
%
1
%
Listings
122
126
(4
)%
(4
)%
Segment Revenues
$
1,223
$
1,097
12
%
11
%
Recurring Revenues
$
357
$
358
—
%
—
%
Transaction Revenues, net
$
866
$
739
17
%
16
%
(1) Net revenues in constant currency are
calculated holding both the pound sterling and euro at the average
exchange rate from 1Q23, 1.2150 and 1.0730, respectively.
(2) Financials include interest rates and
other financial futures and options.
(3) OTC & other includes physical
energy, net interest income and other fees 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
First quarter fixed income and data services revenues were $568
million. Fixed income and data services operating expenses were
$354 million, and adjusted operating expenses were $309 million in
the first quarter. Segment operating income for the first quarter
was $214 million, and the operating margin was 38%. On an adjusted
basis, operating income was $259 million, and the adjusted
operating margin was 46%.
$ (in millions)
1Q24
1Q23
% Chg
Const Curr(1)
Revenues:
Fixed Income Execution
$
26
$
32
(15
)%
(15
)%
CDS Clearing
93
101
(8
)%
(8
)%
Fixed Income Data and Analytics
288
276
4
%
4
%
Other Data and Network Services
161
154
4
%
4
%
Segment Revenues
$
568
$
563
1
%
1
%
Recurring Revenues
$
449
$
430
4
%
4
%
Transaction Revenues
$
119
$
133
(10
)%
(10
)%
(1) Net revenues in constant currency are
calculated holding both the pound sterling and euro at the average
exchange rate from 1Q23, 1.2150 and 1.0730, respectively.
Mortgage Technology Segment Results
First quarter mortgage technology revenues were $499 million.
Mortgage technology operating expenses were $547 million, and
adjusted operating expenses were $314 million in the first quarter.
Segment operating loss for the first quarter was $48 million, and
the operating margin was (10)%. On an adjusted basis, operating
income was $185 million, and the adjusted operating margin was
37%.
$ (in millions)
1Q24
1Q23
% Chg
Revenues:
Origination Technology
$
174
$
174
—
%
Closing Solutions
44
41
9
%
Servicing Software
214
—
n/a
Data and Analytics
67
21
210
%
Segment Revenues
$
499
$
236
111
%
Recurring Revenues
$
390
$
165
136
%
Transaction Revenues
$
109
$
71
53
%
Other Matters
- Operating cash flow in the first quarter of 2024 was $1.0
billion and adjusted free cash flow was $877 million.
- Unrestricted cash was $863 million and outstanding debt was
$22.0 billion as of March 31, 2024.
- Through the first quarter of 2024, ICE paid $258 million in
dividends.
Updated Financial Guidance
- ICE's full year 2024 Mortgage Technology pro forma segment
revenue growth is expected to be flat-to-down in the low single
digit range.
- ICE's full year 2024 GAAP operating expenses are expected to be
in a range of $4.87 billion to $4.90 billion. Adjusted operating
expenses(1) are expected to be in a range of $3.79 billion to $3.82
billion.
- ICE's second quarter 2024 GAAP operating expenses are expected
to be in a range of $1.21 billion to $1.22 billion. Adjusted
operating expenses(1) are expected to be in a range of $945 million
to $955 million.
- ICE's second quarter 2024 GAAP non-operating expense(2) is
expected to be in the range of $225 million to $230 million.
Adjusted non-operating expense is expected to be in the range of
$205 million to $210 million.
- ICE's diluted share count for the second quarter is expected to
be in the range of 572 million to 578 million weighted average
shares outstanding.
(1) Full year and 2Q 2024 non-GAAP operating expenses exclude
amortization of acquisition-related intangibles, duplicate rent
expenses and Black Knight integration costs.
(2) Non-operating expense includes interest income, interest
expense and net other income/expense. Non-GAAP non-operating
expense excludes equity earnings/losses from unconsolidated
investees.
Earnings Conference Call Information
ICE will hold a conference call today, May 2, 2024, at 8:30 a.m.
ET to review its first quarter 2024 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 833-470-1428
from the United States or 929-526-1599 from outside of the United
States. Telephone participants are required to provide the
participant entry number 854785 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 second quarter 2024 earnings has
been scheduled for August 1st, 2024 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)
Three Months Ended
March 31,
Revenues:
2024
2023
Exchanges
$
1,734
$
1,673
Fixed income and data services
568
563
Mortgage technology
499
236
Total revenues
2,801
2,472
Transaction-based expenses:
Section 31 fees
67
119
Cash liquidity payments, routing and
clearing
444
457
Total revenues, less transaction-based
expenses
2,290
1,896
Operating expenses:
Compensation and benefits
462
352
Professional services
36
28
Acquisition-related transaction and
integration costs
36
21
Technology and communication
205
172
Rent and occupancy
29
20
Selling, general and administrative
78
74
Depreciation and amortization
381
260
Total operating expenses
1,227
927
Operating income
1,063
969
Other income/(expense):
Interest income
30
91
Interest expense
(241
)
(176
)
Other income/(expense), net
112
(35
)
Total other income/(expense), net
(99
)
(120
)
Income before income tax expense
964
849
Income tax expense
181
175
Net income
$
783
$
674
Net income attributable to non-controlling
interest
(16
)
(19
)
Net income attributable to
Intercontinental Exchange, Inc.
$
767
$
655
Earnings per share attributable to
Intercontinental Exchange, Inc. common stockholders:
Basic
$
1.34
$
1.17
Diluted
$
1.33
$
1.17
Weighted average common shares
outstanding:
Basic
573
559
Diluted
575
561
Consolidated Balance
Sheets
(In millions)
As of
March 31, 2024
As of
(Unaudited)
December 31, 2023
Assets:
Current assets:
Cash and cash equivalents
$
863
$
899
Short-term restricted cash and cash
equivalents
1,227
531
Restricted short-term investments
—
680
Cash and cash equivalent margin deposits
and guaranty funds
74,123
78,980
Invested deposits, delivery contracts
receivable and unsettled variation margin
2,056
1,814
Customer accounts receivable, net
1,645
1,366
Prepaid expenses and other current
assets
628
703
Total current assets
80,542
84,973
Property and equipment, net
1,960
1,923
Other non-current assets:
Goodwill
30,549
30,553
Other intangible assets, net
17,056
17,317
Long-term restricted cash and cash
equivalents
278
340
Long-term restricted investments
62
—
Other non-current assets
950
978
Total other non-current assets
48,895
49,188
Total assets
$
131,397
$
136,084
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued
liabilities
$
967
$
1,003
Section 31 fees payable
66
79
Accrued salaries and benefits
180
459
Deferred revenue
590
200
Short-term debt
1,916
1,954
Margin deposits and guaranty funds
74,123
78,980
Invested deposits, delivery contracts
payable and unsettled variation margin
2,056
1,814
Other current liabilities
150
137
Total current liabilities
80,048
84,626
Non-current liabilities:
Non-current deferred tax liability,
net
4,030
4,080
Long-term debt
20,068
20,659
Accrued employee benefits
183
193
Non-current operating lease liability
325
299
Other non-current liabilities
454
441
Total non-current liabilities
25,060
25,672
Total liabilities
105,108
110,298
Equity:
Intercontinental Exchange, Inc.
stockholders’ equity:
Common stock
7
6
Treasury stock, at cost
(6,375
)
(6,304
)
Additional paid-in capital
16,047
15,953
Retained earnings
16,865
16,356
Accumulated other comprehensive loss
(305
)
(294
)
Total Intercontinental Exchange, Inc.
stockholders’ equity
26,239
25,717
Non-controlling interest in consolidated
subsidiaries
50
69
Total equity
26,289
25,786
Total liabilities and equity
$
131,397
$
136,084
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 adjusted 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
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
2024
2023
2024
2023
2024
2023
2024
2023
Total revenues, less transaction-based
expenses
$
1,223
$
1,097
$
568
$
563
$
499
$
236
$
2,290
$
1,896
Operating expenses
326
320
354
343
547
264
1,227
927
Less: Amortization of acquisition-related
intangibles
19
16
38
42
197
92
254
150
Less: Transaction and integration
costs
—
—
—
—
36
21
36
21
Less: Regulatory matter
—
10
—
—
—
—
—
10
Less: Other
—
6
7
—
—
—
7
6
Adjusted operating expenses
$
307
$
288
$
309
$
301
$
314
$
151
$
930
$
740
Operating income/(loss)
$
897
$
777
$
214
$
220
$
(48
)
$
(28
)
$
1,063
$
969
Adjusted operating income
$
916
$
809
$
259
$
262
$
185
$
85
$
1,360
$
1,156
Operating margin
73
%
71
%
38
%
39
%
(10
)%
(12
)%
46
%
51
%
Adjusted operating margin
75
%
74
%
46
%
47
%
37
%
36
%
59
%
61
%
Adjusted Net Income
Attributable to ICE and Diluted EPS
(In millions)
(Unaudited)
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
Net income attributable to ICE
$
767
$
655
Add: Amortization of acquisition-related
intangibles
254
150
Add: Transaction and integration costs
36
21
(Less)/Add: Litigation and regulatory
matters
(160
)
10
Add: Net losses from unconsolidated
investees
42
35
Add: Fair value adjustment of equity
investments
3
—
Less: Net interest income on
pre-acquisition-related debt
—
(6
)
Add: Other
7
6
Less: Income tax effect for the above
items
(46
)
(57
)
(Less)/Add: Deferred tax adjustments on
acquisition-related intangibles
(51
)
1
Less: Other tax adjustments
—
(24
)
Adjusted net income attributable to
ICE
$
852
$
791
Diluted earnings per share
$
1.33
$
1.17
Adjusted diluted earnings per share
$
1.48
$
1.41
Diluted weighted average common shares
outstanding
575
561
Adjusted Free Cash Flow
Calculation
(In millions)
(Unaudited)
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
Net cash provided by operating
activities
$
1,009
$
653
Less: Capital expenditures
(58
)
(21
)
Less: Capitalized software development
costs
(87
)
(64
)
Free cash flow
864
568
Add: Section 31 fees, net
13
105
Adjusted free cash flow
$
877
$
673
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500
company that designs, builds and operates digital networks that
connect people to opportunity. We provide financial technology and
data services across major asset classes helping our customers
access mission-critical workflow tools that increase transparency
and efficiency. ICE’s futures, equity, and options exchanges –
including the New York Stock Exchange – and clearing houses help
people invest, raise capital and manage risk. We offer some of the
world’s largest markets to trade and clear energy and environmental
products. Our fixed income, data services and execution
capabilities provide information, analytics and platforms that help
our customers streamline processes and capitalize on opportunities.
At ICE Mortgage Technology, we are transforming U.S. housing
finance, from initial consumer engagement through loan production,
closing, registration and the long-term servicing relationship.
Together, ICE transforms, streamlines and automates 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, 2023, as filed with the SEC on February
8, 2024. 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
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ICE Investor Relations Contact: Katia Gonzalez +1 678 981 3882
katia.gonzalez@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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