Intercontinental Exchange Reports Strong First Quarter 2024
|
|
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." |
First Quarter 2024 Business Highlights
First quarter consolidated net revenues were
$ (in millions) |
Net
|
Op
|
Adj Op
|
||||
|
|
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
$ (in millions) |
|
1Q24 |
|
1Q23 |
% Chg |
Const
|
||
Revenues, net: |
|
|
|
|
||||
Energy |
$ |
457 |
$ |
345 |
33 |
% |
32 |
% |
Ags and Metals |
|
72 |
|
70 |
3 |
% |
2 |
% |
Financials(2) |
|
135 |
|
128 |
6 |
% |
3 |
% |
|
|
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 |
||||||||
Fixed Income and Data Services Segment Results
First quarter fixed income and data services revenues were
$ (in millions) |
1Q24 |
1Q23 |
% Chg |
|
||||
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
$ (in millions) |
1Q24 |
1Q23 |
% Chg |
|||
Revenues: |
|
|
|
|||
Origination Technology |
$ |
174 |
$ |
174 |
— |
% |
Closing Solutions |
|
44 |
|
41 |
9 |
% |
|
|
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 ofMarch 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,
The conference call for the second quarter 2024 earnings has been scheduled for
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
|
|||||
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 |
$ |
767 |
|
$ |
655 |
|
|
|
|
||||
Earnings per share attributable to |
|
|
||||
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 |
|
||||
|
|
As of |
||||
|
(Unaudited) |
|
||||
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: |
|
|
||||
|
|
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: |
|
|
||||
|
|
|
||||
Common stock |
|
7 |
|
|
6 |
|
|
|
(6,375 |
) |
|
(6,304 |
) |
Additional paid-in capital |
|
16,047 |
|
|
15,953 |
|
Retained earnings |
|
16,865 |
|
|
16,356 |
|
Accumulated other comprehensive loss |
|
(305 |
) |
|
(294 |
) |
|
|
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
|
|
Mortgage Technology
|
|
Consolidated |
||||||||||||||||||||||||
|
Three Months
|
|
Three Months
|
|
Three Months
|
|
Three Months
|
||||||||||||||||||||||||
|
|
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
|
|
Three Months
|
||||
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
|
Three Months Ended
|
||||
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
Trademarks of ICE and/or its affiliates include
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
SOURCE:
ICE-CORP
View source version on businesswire.com: https://www.businesswire.com/news/home/20240502627760/en/
ICE Investor Relations Contact:
+1 678 981 3882
katia.gonzalez@ice.com
investors@ice.com
ICE Media Contact:
+1 212 656 2490
josh.king@ice.com
media@ice.com
Source: