Intercontinental Exchange (NYSE: ICE):
- Record 3Q24 net revenues of $2.3 billion, +17% y/y
- 3Q24 GAAP diluted earnings per share (EPS) of $1.14, +19%
y/y
- 3Q24 adj. diluted EPS of $1.55, +6% y/y
- Record 3Q24 operating income of $1.1 billion, +31% y/y;
record adj. operating income of $1.4 billion, +17% y/y
- 3Q24 operating margin of 47%; adj. operating margin of
59%
Jeffrey C. Sprecher,ICE Chair & Chief Executive Officer,
said,"We are pleased to report our third 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 their risk and capture workflow efficiencies
amid a dynamic macroeconomic environment. As we look to the balance
of the year and beyond, our focus remains on capitalizing on our
world class technology, innovative culture and operating expertise
to better serve our customers and create value for our
stockholders."
Intercontinental Exchange (NYSE: ICE), a leading global provider
of technology and data, today reported financial results for the
third quarter of 2024. For the quarter ended September 30, 2024,
consolidated net income attributable to ICE was $657 million on
$2.3 billion of consolidated revenues, less transaction-based
expenses. Third quarter GAAP diluted EPS were $1.14. Adjusted net
income attributable to ICE was $894 million in the third quarter
and adjusted diluted EPS were $1.55. 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: "Our record
third quarter revenue and operating income reflect the power of our
balanced and diverse business model, which through an array of
macroeconomic environments, continues to deliver consistent and
compounding growth. Combined with our strong cash flows, we
continue to make progress executing on our deleveraging plan while
also investing in future growth."
Third Quarter 2024 Business Highlights
Third quarter consolidated net revenues were $2.3 billion
including exchange net revenues of $1.3 billion, fixed income and
data services revenues of $586 million and mortgage technology
revenues of $509 million. Consolidated operating expenses were $1.2
billion for the third quarter of 2024. On an adjusted basis,
consolidated operating expenses were $960 million. Consolidated
operating income for the third quarter was $1.1 billion, and the
operating margin was 47%. On an adjusted basis, consolidated
operating income for the third quarter was $1.4 billion, and the
adjusted operating margin was 59%.
$ (in
millions)
Net
Revenues
Op
Margin
Adj
Op Margin
3Q24
Exchanges
$1,254
76%
75%
Fixed Income and Data Services
$586
36%
45%
Mortgage Technology
$509
(11)%
35%
Consolidated
$2,349
47%
59%
3Q24
3Q23
% Chg
Recurring Revenues
$1,212
$1,031
18%
Transaction Revenues, net
$1,137
$972
17%
Exchanges Segment Results
Third quarter exchange net revenues were $1.3 billion. Exchange
operating expenses were $307 million and on an adjusted basis, were
$309 million in the third quarter. Segment operating income for the
third quarter was $947 million, and the operating margin was 76%.
On an adjusted basis, operating income was $945 million, and the
adjusted operating margin was 75%.
$ (in millions)
3Q24
3Q23
% Chg
Const Curr(1)
Revenues, net:
Energy
$473
$384
23%
23%
Ags and Metals
60
61
(3)%
(3)%
Financials(2)
141
112
26%
23%
Cash Equities and Equity Options, net
107
93
15%
15%
OTC and Other(3)
109
104
5%
5%
Data and Connectivity Services
242
236
3%
3%
Listings
122
124
(1)%
(1)%
Segment Revenues
$1,254
$1,114
13%
12%
Recurring Revenues
$364
$360
1%
1%
Transaction Revenues, net
$890
$754
18%
17%
(1) Net revenues in constant currency are
calculated holding both the pound sterling and euro at the average
exchange rate from 3Q23, 1.2660 and 1.0881, respectively.
(2) Financials include interest rates and
other financial futures and options.
(3) OTC & other includes net interest
income and 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, exchange member
fees, and agriculture grading and certification fees.
Fixed Income and Data Services Segment Results
Third quarter fixed income and data services revenues were $586
million. Fixed income and data services operating expenses were
$376 million, and adjusted operating expenses were $323 million in
the third quarter. Segment operating income for the third quarter
was $210 million, and the operating margin was 36%. On an adjusted
basis, operating income was $263 million, and the adjusted
operating margin was 45%.
$ (in millions)
3Q24
3Q23
% Chg
Const Curr(1)
Revenues:
Fixed Income Execution
$28
$29
(2)%
(2)%
CDS Clearing
97
94
3%
3%
Fixed Income Data and Analytics
295
279
6%
6%
Other Data and Network Services
166
157
6%
5%
Segment Revenues
$586
$559
5%
5%
Recurring Revenues
$461
$436
6%
6%
Transaction Revenues
$125
$123
2%
2%
(1) Net revenues in constant currency are
calculated holding both the pound sterling and euro at the average
exchange rate from 3Q23, 1.2660 and 1.0881, respectively.
Mortgage Technology Segment Results
Third quarter mortgage technology revenues were $509 million.
Mortgage technology operating expenses were $563 million, and
adjusted operating expenses were $328 million in the third quarter.
Segment operating loss for the third quarter was $54 million, and
the operating margin was (11)%. On an adjusted basis, operating
income was $181 million, and the adjusted operating margin was
35%.
$ (in millions)
3Q24
3Q23
% Chg
Revenues:
Origination Technology
$182
$172
6%
Closing Solutions
54
48
12%
Servicing Software
209
69
n/a
Data and Analytics
64
41
55%
Segment Revenues
$509
$330
54%
Recurring Revenues
$387
$235
64%
Transaction Revenues
$122
$95
29%
Other Matters
- Operating cash flow through the third quarter of 2024 was $3.1
billion and adjusted free cash flow was $2.6 billion.
- Unrestricted cash was $755 million and outstanding debt was
$21.2 billion as of September 30, 2024.
- Through the third quarter of 2024, ICE paid $780 million in
dividends.
Updated Financial Guidance
- ICE's fourth quarter 2024 GAAP operating expenses are expected
to be in a range of $1.23 billion to $1.24 billion. Adjusted
operating expenses(1) are expected to be in a range of $977 million
to $987 million.
- ICE's fourth quarter 2024 GAAP and adjusted non-operating
expense(2) are both expected to be in the range of $180 million to
$185 million.
- ICE's diluted share count for the fourth quarter is expected to
be in the range of 574 million to 580 million weighted average
shares outstanding.
- ICE's full year 2024 capital expenditures are now expected to
be in a range of $700 million to $740 million.
(1) 4Q 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, October 31, 2024, at 8:30
a.m. ET to review its third quarter 2024 financial results. A live
audio webcast of the earnings call will be available on the
company's website at www.ice.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 821839 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 fourth quarter 2024 earnings has
been scheduled for February 6th, 2025 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)
Nine Months Ended September
30,
Three Months Ended September
30,
Revenues:
2024
2023
2024
2023
Exchanges
$
5,498
$
4,754
$
1,938
$
1,540
Fixed income and data services
1,719
1,668
586
559
Mortgage technology
1,514
815
509
330
Total revenues
8,731
7,237
3,033
2,429
Transaction-based expenses:
Section 31 fees
437
231
232
56
Cash liquidity payments, routing and
clearing
1,338
1,219
452
370
Total revenues, less transaction-based
expenses
6,956
5,787
2,349
2,003
Operating expenses:
Compensation and benefits
1,422
1,103
487
400
Professional services
114
88
40
31
Acquisition-related transaction and
integration costs
88
201
37
155
Technology and communication
631
529
212
184
Rent and occupancy
89
65
30
20
Selling, general and administrative
232
196
54
59
Depreciation and amortization
1,148
836
386
309
Total operating expenses
3,724
3,018
1,246
1,158
Operating income
3,232
2,769
1,103
845
Other income/(expense):
Interest income
105
287
39
94
Interest expense
(697
)
(557
)
(223
)
(206
)
Other income/(expense), net
83
(121
)
(21
)
(51
)
Total other income/(expense), net
(509
)
(391
)
(205
)
(163
)
Income before income tax expense
2,723
2,378
898
682
Income tax expense
630
330
227
123
Net income
$
2,093
$
2,048
$
671
$
559
Net income attributable to non-controlling
interest
(37
)
(53
)
(14
)
(18
)
Net income attributable to
Intercontinental Exchange, Inc.
$
2,056
$
1,995
$
657
$
541
Earnings per share attributable to
Intercontinental Exchange, Inc. common stockholders:
Basic
$
3.59
$
3.56
$
1.15
$
0.96
Diluted
$
3.57
$
3.55
$
1.14
$
0.96
Weighted average common shares
outstanding:
Basic
573
561
574
563
Diluted
576
562
577
565
Consolidated Balance
Sheets
(In millions)
As of
September 30, 2024
As of
(Unaudited)
December 31, 2023
Assets:
Current assets:
Cash and cash equivalents
$
755
$
899
Short-term restricted cash and cash
equivalents
1,243
531
Short-term restricted investments
500
680
Cash and cash equivalent margin deposits
and guaranty funds
78,774
78,980
Invested deposits, delivery contracts
receivable and unsettled variation margin
1,119
1,814
Customer accounts receivable, net
1,565
1,366
Prepaid expenses and other current
assets
739
703
Total current assets
84,695
84,973
Property and equipment, net
2,029
1,923
Other non-current assets:
Goodwill
30,598
30,553
Other intangible assets, net
16,573
17,317
Long-term restricted cash and cash
equivalents
370
340
Other non-current assets
936
978
Total other non-current assets
48,477
49,188
Total assets
$
135,201
$
136,084
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued
liabilities
$
1,045
$
1,003
Section 31 fees payable
76
79
Accrued salaries and benefits
353
459
Deferred revenue
375
200
Short-term debt
2,619
1,954
Margin deposits and guaranty funds
78,774
78,980
Invested deposits, delivery contracts
payable and unsettled variation margin
1,119
1,814
Other current liabilities
201
137
Total current liabilities
84,562
84,626
Non-current liabilities:
Non-current deferred tax liability,
net
3,855
4,080
Long-term debt
18,581
20,659
Accrued employee benefits
178
193
Non-current operating lease liability
318
299
Other non-current liabilities
434
441
Total non-current liabilities
23,366
25,672
Total liabilities
107,928
110,298
Equity:
Intercontinental Exchange, Inc.
stockholders’ equity:
Common stock
7
6
Treasury stock, at cost
(6,381
)
(6,304
)
Additional paid-in capital
16,226
15,953
Retained earnings
17,632
16,356
Accumulated other comprehensive loss
(251
)
(294
)
Total Intercontinental Exchange, Inc.
stockholders’ equity
27,233
25,717
Non-controlling interest in consolidated
subsidiaries
40
69
Total equity
27,273
25,786
Total liabilities and equity
$
135,201
$
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
Nine Months Ended September
30,
Nine Months Ended September
30,
Nine Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
2024
2023
2024
2023
Total revenues, less transaction-based
expenses
$3,723
$3,304
$1,719
$1,668
$1,514
$815
$6,956
$5,787
Operating expenses
989
944
1,087
1,057
1,648
1,017
3,724
3,018
Less: Amortization of acquisition-related
intangibles
51
49
114
127
593
316
758
492
Less: Transaction and integration
costs
—
—
—
—
88
201
88
201
Less: Regulatory matter
—
11
10
—
—
—
10
11
Less: Other
11
6
20
—
—
—
31
6
Adjusted operating expenses
$927
$878
$943
$930
$967
$500
$2,837
$2,308
Operating income/(loss)
$2,734
$2,360
$632
$611
$(134)
$(202)
$3,232
$2,769
Adjusted operating income
$2,796
$2,426
$776
$738
$547
$315
$4,119
$3,479
Operating margin
73%
71%
37%
37%
(9)%
(25)%
46%
48%
Adjusted operating margin
75%
73%
45%
44%
36%
39%
59%
60%
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 September
30,
Three Months Ended September
30,
Three Months Ended September
30,
Three Months Ended September
30,
2024
2023
2024
2023
2024
2023
2024
2023
Total revenues, less transaction-based
expenses
$1,254
$1,114
$586
$559
$509
$330
$2,349
$2,003
Operating expenses
307
313
376
358
563
487
1,246
1,158
Less: Amortization of acquisition-related
intangibles
17
16
37
42
198
133
252
191
Less: Transaction and integration
costs
—
—
—
—
37
155
37
155
Less: Regulatory matter
—
—
10
—
—
—
10
—
Less/(Add): Other
(19)
—
6
—
—
—
(13)
—
Adjusted operating expenses
$309
$297
$323
$316
$328
$199
$960
$812
Operating income/(loss)
$947
$801
$210
$201
$(54)
$(157)
$1,103
$845
Adjusted operating income
$945
$817
$263
$243
$181
$131
$1,389
$1,191
Operating margin
76%
72%
36%
36%
(11)%
(48)%
47%
42%
Adjusted operating margin
75%
73%
45%
44%
35%
39%
59%
59%
Adjusted Net Income
Attributable to ICE and Diluted EPS
(In millions)
(Unaudited)
Nine Months Ended September
30, 2024
Nine Months Ended September
30, 2023
Net income attributable to ICE common
stockholders
$
2,056
$
1,995
Add: Amortization of acquisition-related
intangibles
758
492
Add: Transaction and integration costs
88
201
(Less)/Add: Litigation and regulatory
matters
(150
)
11
Add: Net losses from unconsolidated
investees
63
91
Add: Loss on sale and fair value
adjustments of equity investments and dividends received
1
7
Less: Net interest income on
pre-acquisition-related debt
—
(12
)
Add: Other
31
22
Less: Income tax effect for the above
items
(199
)
(178
)
Less: Deferred tax adjustments on
acquisition-related intangibles
(26
)
(131
)
Less: Other tax adjustments
—
(81
)
Adjusted net income attributable to ICE
common stockholders
$
2,622
$
2,417
Diluted earnings per share attributable to
ICE common stockholders
$
3.57
$
3.55
Adjusted diluted earnings per share
attributable to ICE common stockholders
$
4.55
$
4.30
Diluted weighted average common shares
outstanding
576
562
Adjusted Net Income
Attributable to ICE and Diluted EPS
(In millions)
(Unaudited)
Three Months Ended September
30, 2024
Three Months Ended September
30, 2023
Net income attributable to ICE common
stockholders
$
657
$
541
Add: Amortization of acquisition-related
intangibles
252
191
Add: Transaction and integration costs
37
155
Add: Regulatory matter
10
—
Add: Net losses from unconsolidated
investees
18
26
(Less)/Add: Loss on sale and fair value
adjustments of equity investments and dividends received
(2
)
7
(Less)/Add: Other
(13
)
16
Less: Income tax effect for the above
items
(74
)
(66
)
Add/(Less): Deferred tax adjustments on
acquisition-related intangibles
9
(46
)
Adjusted net income attributable to ICE
common stockholders
$
894
$
824
Diluted earnings per share attributable to
ICE common stockholders
$
1.14
$
0.96
Adjusted diluted earnings per share
attributable to ICE common stockholders
$
1.55
$
1.46
Diluted weighted average common shares
outstanding
577
565
Adjusted Free Cash Flow
Calculation
(In millions)
(Unaudited)
Nine Months Ended September
30, 2024
Nine Months Ended September
30, 2023
Net cash provided by operating
activities
$
3,103
$
2,573
Less: Capital expenditures
(212
)
(104
)
Less: Capitalized software development
costs
(264
)
(222
)
Free cash flow
2,627
2,247
Add: Section 31 fees, net
4
205
Adjusted free cash flow
$
2,631
$
2,452
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031546804/en/
ICE Investor Relations Contact: Katia Gonzalez +1 678 981 3882
katia.gonzalez@ice.com
investors@ice.com
ICE Media Contact: Damon Leavell +1 212 323 8587
damon.leavell@ice.com
media@ice.com
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