Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Intercontinental Exchange Reports Strong Third Quarter 2023 By: Intercontinental Exchange via Business Wire November 02, 2023 at 07:30 AM EDT Intercontinental Exchange (NYSE: ICE) Record 3Q23 net revenues of $2.0 billion, +11% y/y 3Q23 GAAP diluted earnings per share (EPS) of $0.96 3Q23 adj. diluted earnings per share of $1.46 3Q23 operating income of $845 million, (7)% y/y; adj. operating income of $1.2 billion, +10% y/y 3Q23 operating margin of 42%; adj. operating margin of 59% Completed the strategic acquisition of Black Knight on September 5, 2023 Jeffrey C. Sprecher,ICE Chair & Chief Executive Officer, said,"We are pleased to report our third quarter results, which 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 through an array of macroeconomic environments, reflecting the all-weather nature of our business model. In addition, in early September, we completed our strategic acquisition of Black Knight, expanding our mortgage network while also enhancing the resiliency of our long-term growth profile. As we look to balance of the year and beyond, we remain focused on continuing to drive innovation, deliver workflow efficiencies, and deliver value to our stockholders." Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported financial results for the third quarter of 2023. For the quarter ended September 30, 2023, consolidated net income attributable to ICE was $541 million on $2.0 billion of consolidated revenues, less transaction-based expenses. Third quarter GAAP diluted earnings per share was $0.96. Adjusted net income attributable to ICE was $824 million in the third quarter and adjusted diluted EPS was $1.46. 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 third quarter, we once again generated revenue and earnings per share growth, driven by a continuation of robust trading results across our commodity complex and compounding growth in our recurring revenues. Our strong results are a testament to the power of our diverse business model and, as we approach the end of 2023, we are focused on extending our track record of growth and creating value for our stockholders." Third Quarter 2023 Business Highlights Third quarter consolidated net revenues were $2.0 billion including exchange net revenues of $1.1 billion, fixed income and data services revenues of $559 million and mortgage technology revenues of $330 million. Consolidated operating expenses were $1.2 billion for the third quarter of 2023. On an adjusted basis, consolidated operating expenses were $812 million. Consolidated operating income for the third quarter was $845 million and the operating margin was 42%. On an adjusted basis, consolidated operating income for the third quarter was $1.2 billion and the adjusted operating margin was 59%. $ (in millions) Net Revenue Op Margin Adj Op Margin 3Q23 Exchanges $1,114 72% 73% Fixed Income and Data Services $559 36% 44% Mortgage Technology $330 (48)% 39% Consolidated $2,003 42% 59% 3Q23 3Q22 % Chg Recurring Revenue $1,031 $930 11% Transaction Revenue, net $972 $881 10% Exchanges Segment Results Third quarter exchange net revenues were $1.1 billion. Exchange operating expenses were $313 million and on an adjusted basis, were $297 million in the third quarter. Segment operating income for the third quarter was $801 million and the operating margin was 72%. On an adjusted basis, operating income was $817 million and the adjusted operating margin was 73%. $ (in millions) 3Q23 3Q22 % Chg Const Curr(1) Revenue, net: Energy $384 $266 45% 42% Ags and Metals 61 57 7% 6% Financials(2) 112 122 (8)% (13)% Cash Equities and Equity Options 93 88 5% 5% OTC and Other(3) 104 121 (15)% (16)% Data and Connectivity Services 236 219 8% 8% Listings 124 128 (4)% (4)% Segment Revenue $1,114 $1,001 11% 10% Recurring Revenue $360 $347 4% 4% Transaction Revenue, net $754 $654 15% 13% (1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q22, 1.1774 and 1.0071, respectively. (2) Financials include interest rates and other financial futures and options. (3) 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 Third quarter fixed income and data services revenues were $559 million. Fixed income and data services operating expenses were $358 million and adjusted operating expenses were $316 million in the third quarter. Segment operating income for the third quarter was $201 million and the operating margin was 36%. On an adjusted basis, operating income was $243 million and the adjusted operating margin was 44%. $ (in millions) 3Q23 3Q22 % Chg Const Curr(1) Revenue: Fixed Income Execution $29 $26 10% 9% CDS Clearing 94 88 6% 5% Fixed Income Data and Analytics 279 273 2% 2% Other Data and Network Services 157 147 7% 6% Segment Revenue $559 $534 5% 4% Recurring Revenue $436 $420 4% 3% Transaction Revenue $123 $114 7% 6% (1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q22, 1.1774 and 1.0071, respectively. Mortgage Technology Segment Results Third quarter mortgage technology revenues were $330 million. Mortgage technology operating expenses were $487 million and adjusted operating expenses were $199 million in the third quarter. Segment operating loss for the third quarter was $157 million and the operating margin was (48)%. On an adjusted basis, operating income was $131 million and the adjusted operating margin was 39%. $ (in millions) 3Q23 3Q22 % Chg Revenue: Origination Technology $172 $197 (13)% Closing Solutions 48 56 (14)% Servicing Software 69 — n/a Data and Analytics 41 23 76% Segment Revenue $330 $276 20% Recurring Revenue $235 $163 44% Transaction Revenue $95 $113 (16)% Other Matters Operating cash flow through the third quarter of 2023 was $2.6 billion and adjusted free cash flow was $2.5 billion. Unrestricted cash was $837 million and outstanding debt was $23.3 billion as of September 30, 2023. Through the third quarter of 2023, ICE paid $713 million in dividends. Updated Financial Guidance ICE's fourth quarter 2023 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 $955 million to $965 million. ICE's fourth quarter 2023 GAAP non-operating expense(2) is expected to be in the range of $240 million to $245 million. Adjusted non-operating expense is expected to be in the range of $225 million to $230 million. ICE's diluted share count for the fourth quarter is expected to be in the range of 572 million to 576 million weighted average shares outstanding. ICE's full year capital expenditures is now expected to be in the range of $500 million to $525 million; includes four months of Black Knight. (1) 4Q23 non-GAAP operating expenses exclude amortization of acquisition-related intangibles, 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, November 2, 2023, at 8:30 a.m. ET to review its third quarter 2023 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 746760 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 2023 earnings has been scheduled for February 8th, 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) Nine Months Ended September 30, Three Months Ended September 30, Revenues: 2023 2022 2023 2022 Exchanges $ 4,754 $ 4,824 $ 1,540 $ 1,577 Fixed income and data services 1,668 1,555 559 534 Mortgage technology 815 880 330 276 Total revenues 7,237 7,259 2,429 2,387 Transaction-based expenses: Section 31 fees 231 332 56 158 Cash liquidity payments, routing and clearing 1,219 1,403 370 418 Total revenues, less transaction-based expenses 5,787 5,524 2,003 1,811 Operating expenses: Compensation and benefits 1,103 1,058 400 344 Professional services 88 101 31 32 Acquisition-related transaction and integration costs 201 81 155 19 Technology and communication 529 513 184 169 Rent and occupancy 65 63 20 22 Selling, general and administrative 196 166 59 54 Depreciation and amortization 836 768 309 258 Total operating expenses 3,018 2,750 1,158 898 Operating income 2,769 2,774 845 913 Other income/(expense): Interest income 287 42 94 33 Interest expense (557 ) (440 ) (206 ) (176 ) Other expense, net (121 ) (1,132 ) (51 ) (1,097 ) Total other income/(expense), net (391 ) (1,530 ) (163 ) (1,240 ) Income/(loss) before income tax expense 2,378 1,244 682 (327 ) Income tax expense/(benefit) 330 186 123 (152 ) Net income/(loss) $ 2,048 $ 1,058 $ 559 $ (175 ) Net income attributable to non-controlling interest (53 ) (37 ) (18 ) (16 ) Net income/(loss) attributable to Intercontinental Exchange, Inc. $ 1,995 $ 1,021 $ 541 $ (191 ) Earnings/(loss) per share attributable to Intercontinental Exchange, Inc. common stockholders: Basic $ 3.56 $ 1.83 $ 0.96 $ (0.34 ) Diluted $ 3.55 $ 1.82 $ 0.96 $ (0.34 ) Weighted average common shares outstanding: Basic 561 559 563 558 Diluted 562 561 565 560 Consolidated Balance Sheets (In millions) As of September 30, 2023 As of (Unaudited) December 31, 2022 Assets: Current assets: Cash and cash equivalents $ 837 $ 1,799 Short-term restricted cash and cash equivalents 471 6,149 Restricted short-term investments 730 — Cash and cash equivalent margin deposits and guaranty funds 79,297 141,990 Invested deposits, delivery contracts receivable and unsettled variation margin 1,899 5,382 Customer accounts receivable, net 1,422 1,169 Prepaid expenses and other current assets 741 458 Total current assets 85,397 156,947 Property and equipment, net 1,918 1,767 Other non-current assets: Goodwill 30,463 21,111 Other intangible assets, net 17,595 13,090 Long-term restricted cash and cash equivalents 190 405 Long-term restricted investments 199 — Other non-current assets 1,260 1,018 Total other non-current assets 49,707 35,624 Total assets $ 137,022 $ 194,338 Liabilities and Equity: Current liabilities: Accounts payable and accrued liabilities $ 964 $ 866 Section 31 fees payable 18 223 Accrued salaries and benefits 377 352 Deferred revenue 334 170 Short-term debt 2,257 4 Margin deposits and guaranty funds 79,297 141,990 Invested deposits, delivery contracts payable and unsettled variation margin 1,899 5,382 Other current liabilities 136 184 Total current liabilities 85,282 149,171 Non-current liabilities: Non-current deferred tax liability, net 4,210 3,493 Long-term debt 21,042 18,118 Accrued employee benefits 177 160 Non-current operating lease liability 306 254 Other non-current liabilities 493 381 Total non-current liabilities 26,228 22,406 Total liabilities 111,510 171,577 Equity: Intercontinental Exchange, Inc. stockholders’ equity: Common stock 6 6 Treasury stock, at cost (6,278 ) (6,225 ) Additional paid-in capital 15,837 14,313 Retained earnings 16,225 14,943 Accumulated other comprehensive loss (331 ) (331 ) Total Intercontinental Exchange, Inc. stockholders’ equity 25,459 22,706 Non-controlling interest in consolidated subsidiaries 53 55 Total equity 25,512 22,761 Total liabilities and equity $ 137,022 $ 194,338 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, 2023 2022 2023 2022 2023 2022 2023 2022 Total revenues, less transaction-based expenses $ 3,304 $ 3,089 $ 1,668 $ 1,555 $ 815 $ 880 $ 5,787 $ 5,524 Operating expenses 944 904 1,057 1,029 1,017 817 3,018 2,750 Less: Amortization of acquisition-related intangibles 49 50 127 137 316 271 492 458 Less: Transaction and integration costs — — — — 201 79 201 79 Less: Other 17 — — — — — 17 — Adjusted operating expenses $ 878 $ 854 $ 930 $ 892 $ 500 $ 467 $ 2,308 $ 2,213 Operating income/(loss) $ 2,360 $ 2,185 $ 611 $ 526 $ (202 ) $ 63 $ 2,769 $ 2,774 Adjusted operating income $ 2,426 $ 2,235 $ 738 $ 663 $ 315 $ 413 $ 3,479 $ 3,311 Operating margin 71 % 71 % 37 % 34 % (25 )% 7 % 48 % 50 % Adjusted operating margin 73 % 72 % 44 % 43 % 39 % 47 % 60 % 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, 2023 2022 2023 2022 2023 2022 2023 2022 Total revenues, less transaction-based expenses $ 1,114 $ 1,001 $ 559 $ 534 $ 330 $ 276 $ 2,003 $ 1,811 Operating expenses 313 301 358 337 487 260 1,158 898 Less: Amortization of acquisition-related intangibles 16 17 42 44 133 91 191 152 Less: Transaction and integration costs — — — — 155 19 155 19 Adjusted operating expenses $ 297 $ 284 $ 316 $ 293 $ 199 $ 150 $ 812 $ 727 Operating income/(loss) $ 801 $ 700 $ 201 $ 197 $ (157 ) $ 16 $ 845 $ 913 Adjusted operating income $ 817 $ 717 $ 243 $ 241 $ 131 $ 126 $ 1,191 $ 1,084 Operating margin 72 % 70 % 36 % 37 % (48 )% 6 % 42 % 50 % Adjusted operating margin 73 % 72 % 44 % 45 % 39 % 46 % 59 % 60 % Adjusted Net Income Attributable to ICE and Diluted EPS (In millions) (Unaudited) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Net income attributable to ICE $ 1,995 $ 1,021 Add: Amortization of acquisition-related intangibles 492 458 Add: Transaction and integration costs 201 79 Add/(Less): Net interest (income)/expense on pre-acquisition-related debt and debt extinguishment (12 ) 79 Less: Gain on sale of Euroclear equity investment and dividends received — (41 ) Add: Net losses from and impairment of unconsolidated investees 91 1,152 Add: Other 40 9 Less: Income tax effect for the above items (178 ) (478 ) Less: Deferred tax adjustments on acquisition-related intangibles (131 ) (3 ) Less: Other tax adjustments (81 ) — Adjusted net income attributable to ICE $ 2,417 $ 2,276 Diluted earnings per share $ 3.55 $ 1.82 Adjusted diluted earnings per share $ 4.30 $ 4.06 Diluted weighted average common shares outstanding 562 561 Adjusted Net Income Attributable to ICE and Diluted EPS (In millions) (Unaudited) Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Net income/(Loss) attributable to ICE $ 541 $ (191 ) Add: Amortization of acquisition-related intangibles 191 152 Add: Transaction and integration costs 155 19 Add: Net interest expense on pre-acquisition-related debt and debt extinguishment — 31 Add: Net losses from and impairment of unconsolidated investees 26 1,095 Add: Other 23 — Less: Income tax effect for the above items (66 ) (355 ) Less: Deferred tax adjustments on acquisition-related intangibles (46 ) (18 ) Adjusted net income attributable to ICE $ 824 $ 733 Diluted earnings/(loss) per share $ 0.96 $ (0.34 ) Adjusted diluted earnings per share $ 1.46 $ 1.31 Diluted weighted average common shares outstanding 565 560 Adjusted Free Cash Flow Calculation (In millions) (Unaudited) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Net cash provided by operating activities $ 2,573 $ 2,462 Less: Capital expenditures (104 ) (125 ) Less: Capitalized software development costs (222 ) (200 ) Free cash flow 2,247 2,137 Add/(Less): Section 31 fees, net 205 (1 ) Adjusted free cash flow $ 2,452 $ 2,136 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, 2022, as filed with the SEC on February 2, 2023. 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. Category: Corporate SOURCE: Intercontinental Exchange ICE-CORP View source version on businesswire.com: https://www.businesswire.com/news/home/20231102440277/en/Contacts 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 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Intercontinental Exchange Reports Strong Third Quarter 2023 By: Intercontinental Exchange via Business Wire November 02, 2023 at 07:30 AM EDT Intercontinental Exchange (NYSE: ICE) Record 3Q23 net revenues of $2.0 billion, +11% y/y 3Q23 GAAP diluted earnings per share (EPS) of $0.96 3Q23 adj. diluted earnings per share of $1.46 3Q23 operating income of $845 million, (7)% y/y; adj. operating income of $1.2 billion, +10% y/y 3Q23 operating margin of 42%; adj. operating margin of 59% Completed the strategic acquisition of Black Knight on September 5, 2023 Jeffrey C. Sprecher,ICE Chair & Chief Executive Officer, said,"We are pleased to report our third quarter results, which 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 through an array of macroeconomic environments, reflecting the all-weather nature of our business model. In addition, in early September, we completed our strategic acquisition of Black Knight, expanding our mortgage network while also enhancing the resiliency of our long-term growth profile. As we look to balance of the year and beyond, we remain focused on continuing to drive innovation, deliver workflow efficiencies, and deliver value to our stockholders." Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported financial results for the third quarter of 2023. For the quarter ended September 30, 2023, consolidated net income attributable to ICE was $541 million on $2.0 billion of consolidated revenues, less transaction-based expenses. Third quarter GAAP diluted earnings per share was $0.96. Adjusted net income attributable to ICE was $824 million in the third quarter and adjusted diluted EPS was $1.46. 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 third quarter, we once again generated revenue and earnings per share growth, driven by a continuation of robust trading results across our commodity complex and compounding growth in our recurring revenues. Our strong results are a testament to the power of our diverse business model and, as we approach the end of 2023, we are focused on extending our track record of growth and creating value for our stockholders." Third Quarter 2023 Business Highlights Third quarter consolidated net revenues were $2.0 billion including exchange net revenues of $1.1 billion, fixed income and data services revenues of $559 million and mortgage technology revenues of $330 million. Consolidated operating expenses were $1.2 billion for the third quarter of 2023. On an adjusted basis, consolidated operating expenses were $812 million. Consolidated operating income for the third quarter was $845 million and the operating margin was 42%. On an adjusted basis, consolidated operating income for the third quarter was $1.2 billion and the adjusted operating margin was 59%. $ (in millions) Net Revenue Op Margin Adj Op Margin 3Q23 Exchanges $1,114 72% 73% Fixed Income and Data Services $559 36% 44% Mortgage Technology $330 (48)% 39% Consolidated $2,003 42% 59% 3Q23 3Q22 % Chg Recurring Revenue $1,031 $930 11% Transaction Revenue, net $972 $881 10% Exchanges Segment Results Third quarter exchange net revenues were $1.1 billion. Exchange operating expenses were $313 million and on an adjusted basis, were $297 million in the third quarter. Segment operating income for the third quarter was $801 million and the operating margin was 72%. On an adjusted basis, operating income was $817 million and the adjusted operating margin was 73%. $ (in millions) 3Q23 3Q22 % Chg Const Curr(1) Revenue, net: Energy $384 $266 45% 42% Ags and Metals 61 57 7% 6% Financials(2) 112 122 (8)% (13)% Cash Equities and Equity Options 93 88 5% 5% OTC and Other(3) 104 121 (15)% (16)% Data and Connectivity Services 236 219 8% 8% Listings 124 128 (4)% (4)% Segment Revenue $1,114 $1,001 11% 10% Recurring Revenue $360 $347 4% 4% Transaction Revenue, net $754 $654 15% 13% (1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q22, 1.1774 and 1.0071, respectively. (2) Financials include interest rates and other financial futures and options. (3) 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 Third quarter fixed income and data services revenues were $559 million. Fixed income and data services operating expenses were $358 million and adjusted operating expenses were $316 million in the third quarter. Segment operating income for the third quarter was $201 million and the operating margin was 36%. On an adjusted basis, operating income was $243 million and the adjusted operating margin was 44%. $ (in millions) 3Q23 3Q22 % Chg Const Curr(1) Revenue: Fixed Income Execution $29 $26 10% 9% CDS Clearing 94 88 6% 5% Fixed Income Data and Analytics 279 273 2% 2% Other Data and Network Services 157 147 7% 6% Segment Revenue $559 $534 5% 4% Recurring Revenue $436 $420 4% 3% Transaction Revenue $123 $114 7% 6% (1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q22, 1.1774 and 1.0071, respectively. Mortgage Technology Segment Results Third quarter mortgage technology revenues were $330 million. Mortgage technology operating expenses were $487 million and adjusted operating expenses were $199 million in the third quarter. Segment operating loss for the third quarter was $157 million and the operating margin was (48)%. On an adjusted basis, operating income was $131 million and the adjusted operating margin was 39%. $ (in millions) 3Q23 3Q22 % Chg Revenue: Origination Technology $172 $197 (13)% Closing Solutions 48 56 (14)% Servicing Software 69 — n/a Data and Analytics 41 23 76% Segment Revenue $330 $276 20% Recurring Revenue $235 $163 44% Transaction Revenue $95 $113 (16)% Other Matters Operating cash flow through the third quarter of 2023 was $2.6 billion and adjusted free cash flow was $2.5 billion. Unrestricted cash was $837 million and outstanding debt was $23.3 billion as of September 30, 2023. Through the third quarter of 2023, ICE paid $713 million in dividends. Updated Financial Guidance ICE's fourth quarter 2023 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 $955 million to $965 million. ICE's fourth quarter 2023 GAAP non-operating expense(2) is expected to be in the range of $240 million to $245 million. Adjusted non-operating expense is expected to be in the range of $225 million to $230 million. ICE's diluted share count for the fourth quarter is expected to be in the range of 572 million to 576 million weighted average shares outstanding. ICE's full year capital expenditures is now expected to be in the range of $500 million to $525 million; includes four months of Black Knight. (1) 4Q23 non-GAAP operating expenses exclude amortization of acquisition-related intangibles, 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, November 2, 2023, at 8:30 a.m. ET to review its third quarter 2023 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 746760 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 2023 earnings has been scheduled for February 8th, 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) Nine Months Ended September 30, Three Months Ended September 30, Revenues: 2023 2022 2023 2022 Exchanges $ 4,754 $ 4,824 $ 1,540 $ 1,577 Fixed income and data services 1,668 1,555 559 534 Mortgage technology 815 880 330 276 Total revenues 7,237 7,259 2,429 2,387 Transaction-based expenses: Section 31 fees 231 332 56 158 Cash liquidity payments, routing and clearing 1,219 1,403 370 418 Total revenues, less transaction-based expenses 5,787 5,524 2,003 1,811 Operating expenses: Compensation and benefits 1,103 1,058 400 344 Professional services 88 101 31 32 Acquisition-related transaction and integration costs 201 81 155 19 Technology and communication 529 513 184 169 Rent and occupancy 65 63 20 22 Selling, general and administrative 196 166 59 54 Depreciation and amortization 836 768 309 258 Total operating expenses 3,018 2,750 1,158 898 Operating income 2,769 2,774 845 913 Other income/(expense): Interest income 287 42 94 33 Interest expense (557 ) (440 ) (206 ) (176 ) Other expense, net (121 ) (1,132 ) (51 ) (1,097 ) Total other income/(expense), net (391 ) (1,530 ) (163 ) (1,240 ) Income/(loss) before income tax expense 2,378 1,244 682 (327 ) Income tax expense/(benefit) 330 186 123 (152 ) Net income/(loss) $ 2,048 $ 1,058 $ 559 $ (175 ) Net income attributable to non-controlling interest (53 ) (37 ) (18 ) (16 ) Net income/(loss) attributable to Intercontinental Exchange, Inc. $ 1,995 $ 1,021 $ 541 $ (191 ) Earnings/(loss) per share attributable to Intercontinental Exchange, Inc. common stockholders: Basic $ 3.56 $ 1.83 $ 0.96 $ (0.34 ) Diluted $ 3.55 $ 1.82 $ 0.96 $ (0.34 ) Weighted average common shares outstanding: Basic 561 559 563 558 Diluted 562 561 565 560 Consolidated Balance Sheets (In millions) As of September 30, 2023 As of (Unaudited) December 31, 2022 Assets: Current assets: Cash and cash equivalents $ 837 $ 1,799 Short-term restricted cash and cash equivalents 471 6,149 Restricted short-term investments 730 — Cash and cash equivalent margin deposits and guaranty funds 79,297 141,990 Invested deposits, delivery contracts receivable and unsettled variation margin 1,899 5,382 Customer accounts receivable, net 1,422 1,169 Prepaid expenses and other current assets 741 458 Total current assets 85,397 156,947 Property and equipment, net 1,918 1,767 Other non-current assets: Goodwill 30,463 21,111 Other intangible assets, net 17,595 13,090 Long-term restricted cash and cash equivalents 190 405 Long-term restricted investments 199 — Other non-current assets 1,260 1,018 Total other non-current assets 49,707 35,624 Total assets $ 137,022 $ 194,338 Liabilities and Equity: Current liabilities: Accounts payable and accrued liabilities $ 964 $ 866 Section 31 fees payable 18 223 Accrued salaries and benefits 377 352 Deferred revenue 334 170 Short-term debt 2,257 4 Margin deposits and guaranty funds 79,297 141,990 Invested deposits, delivery contracts payable and unsettled variation margin 1,899 5,382 Other current liabilities 136 184 Total current liabilities 85,282 149,171 Non-current liabilities: Non-current deferred tax liability, net 4,210 3,493 Long-term debt 21,042 18,118 Accrued employee benefits 177 160 Non-current operating lease liability 306 254 Other non-current liabilities 493 381 Total non-current liabilities 26,228 22,406 Total liabilities 111,510 171,577 Equity: Intercontinental Exchange, Inc. stockholders’ equity: Common stock 6 6 Treasury stock, at cost (6,278 ) (6,225 ) Additional paid-in capital 15,837 14,313 Retained earnings 16,225 14,943 Accumulated other comprehensive loss (331 ) (331 ) Total Intercontinental Exchange, Inc. stockholders’ equity 25,459 22,706 Non-controlling interest in consolidated subsidiaries 53 55 Total equity 25,512 22,761 Total liabilities and equity $ 137,022 $ 194,338 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, 2023 2022 2023 2022 2023 2022 2023 2022 Total revenues, less transaction-based expenses $ 3,304 $ 3,089 $ 1,668 $ 1,555 $ 815 $ 880 $ 5,787 $ 5,524 Operating expenses 944 904 1,057 1,029 1,017 817 3,018 2,750 Less: Amortization of acquisition-related intangibles 49 50 127 137 316 271 492 458 Less: Transaction and integration costs — — — — 201 79 201 79 Less: Other 17 — — — — — 17 — Adjusted operating expenses $ 878 $ 854 $ 930 $ 892 $ 500 $ 467 $ 2,308 $ 2,213 Operating income/(loss) $ 2,360 $ 2,185 $ 611 $ 526 $ (202 ) $ 63 $ 2,769 $ 2,774 Adjusted operating income $ 2,426 $ 2,235 $ 738 $ 663 $ 315 $ 413 $ 3,479 $ 3,311 Operating margin 71 % 71 % 37 % 34 % (25 )% 7 % 48 % 50 % Adjusted operating margin 73 % 72 % 44 % 43 % 39 % 47 % 60 % 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, 2023 2022 2023 2022 2023 2022 2023 2022 Total revenues, less transaction-based expenses $ 1,114 $ 1,001 $ 559 $ 534 $ 330 $ 276 $ 2,003 $ 1,811 Operating expenses 313 301 358 337 487 260 1,158 898 Less: Amortization of acquisition-related intangibles 16 17 42 44 133 91 191 152 Less: Transaction and integration costs — — — — 155 19 155 19 Adjusted operating expenses $ 297 $ 284 $ 316 $ 293 $ 199 $ 150 $ 812 $ 727 Operating income/(loss) $ 801 $ 700 $ 201 $ 197 $ (157 ) $ 16 $ 845 $ 913 Adjusted operating income $ 817 $ 717 $ 243 $ 241 $ 131 $ 126 $ 1,191 $ 1,084 Operating margin 72 % 70 % 36 % 37 % (48 )% 6 % 42 % 50 % Adjusted operating margin 73 % 72 % 44 % 45 % 39 % 46 % 59 % 60 % Adjusted Net Income Attributable to ICE and Diluted EPS (In millions) (Unaudited) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Net income attributable to ICE $ 1,995 $ 1,021 Add: Amortization of acquisition-related intangibles 492 458 Add: Transaction and integration costs 201 79 Add/(Less): Net interest (income)/expense on pre-acquisition-related debt and debt extinguishment (12 ) 79 Less: Gain on sale of Euroclear equity investment and dividends received — (41 ) Add: Net losses from and impairment of unconsolidated investees 91 1,152 Add: Other 40 9 Less: Income tax effect for the above items (178 ) (478 ) Less: Deferred tax adjustments on acquisition-related intangibles (131 ) (3 ) Less: Other tax adjustments (81 ) — Adjusted net income attributable to ICE $ 2,417 $ 2,276 Diluted earnings per share $ 3.55 $ 1.82 Adjusted diluted earnings per share $ 4.30 $ 4.06 Diluted weighted average common shares outstanding 562 561 Adjusted Net Income Attributable to ICE and Diluted EPS (In millions) (Unaudited) Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Net income/(Loss) attributable to ICE $ 541 $ (191 ) Add: Amortization of acquisition-related intangibles 191 152 Add: Transaction and integration costs 155 19 Add: Net interest expense on pre-acquisition-related debt and debt extinguishment — 31 Add: Net losses from and impairment of unconsolidated investees 26 1,095 Add: Other 23 — Less: Income tax effect for the above items (66 ) (355 ) Less: Deferred tax adjustments on acquisition-related intangibles (46 ) (18 ) Adjusted net income attributable to ICE $ 824 $ 733 Diluted earnings/(loss) per share $ 0.96 $ (0.34 ) Adjusted diluted earnings per share $ 1.46 $ 1.31 Diluted weighted average common shares outstanding 565 560 Adjusted Free Cash Flow Calculation (In millions) (Unaudited) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Net cash provided by operating activities $ 2,573 $ 2,462 Less: Capital expenditures (104 ) (125 ) Less: Capitalized software development costs (222 ) (200 ) Free cash flow 2,247 2,137 Add/(Less): Section 31 fees, net 205 (1 ) Adjusted free cash flow $ 2,452 $ 2,136 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, 2022, as filed with the SEC on February 2, 2023. 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. Category: Corporate SOURCE: Intercontinental Exchange ICE-CORP View source version on businesswire.com: https://www.businesswire.com/news/home/20231102440277/en/Contacts 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
Intercontinental Exchange (NYSE: ICE) Record 3Q23 net revenues of $2.0 billion, +11% y/y 3Q23 GAAP diluted earnings per share (EPS) of $0.96 3Q23 adj. diluted earnings per share of $1.46 3Q23 operating income of $845 million, (7)% y/y; adj. operating income of $1.2 billion, +10% y/y 3Q23 operating margin of 42%; adj. operating margin of 59% Completed the strategic acquisition of Black Knight on September 5, 2023 Jeffrey C. Sprecher,ICE Chair & Chief Executive Officer, said,"We are pleased to report our third quarter results, which 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 through an array of macroeconomic environments, reflecting the all-weather nature of our business model. In addition, in early September, we completed our strategic acquisition of Black Knight, expanding our mortgage network while also enhancing the resiliency of our long-term growth profile. As we look to balance of the year and beyond, we remain focused on continuing to drive innovation, deliver workflow efficiencies, and deliver value to our stockholders." Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported financial results for the third quarter of 2023. For the quarter ended September 30, 2023, consolidated net income attributable to ICE was $541 million on $2.0 billion of consolidated revenues, less transaction-based expenses. Third quarter GAAP diluted earnings per share was $0.96. Adjusted net income attributable to ICE was $824 million in the third quarter and adjusted diluted EPS was $1.46. 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 third quarter, we once again generated revenue and earnings per share growth, driven by a continuation of robust trading results across our commodity complex and compounding growth in our recurring revenues. Our strong results are a testament to the power of our diverse business model and, as we approach the end of 2023, we are focused on extending our track record of growth and creating value for our stockholders." Third Quarter 2023 Business Highlights Third quarter consolidated net revenues were $2.0 billion including exchange net revenues of $1.1 billion, fixed income and data services revenues of $559 million and mortgage technology revenues of $330 million. Consolidated operating expenses were $1.2 billion for the third quarter of 2023. On an adjusted basis, consolidated operating expenses were $812 million. Consolidated operating income for the third quarter was $845 million and the operating margin was 42%. On an adjusted basis, consolidated operating income for the third quarter was $1.2 billion and the adjusted operating margin was 59%. $ (in millions) Net Revenue Op Margin Adj Op Margin 3Q23 Exchanges $1,114 72% 73% Fixed Income and Data Services $559 36% 44% Mortgage Technology $330 (48)% 39% Consolidated $2,003 42% 59% 3Q23 3Q22 % Chg Recurring Revenue $1,031 $930 11% Transaction Revenue, net $972 $881 10% Exchanges Segment Results Third quarter exchange net revenues were $1.1 billion. Exchange operating expenses were $313 million and on an adjusted basis, were $297 million in the third quarter. Segment operating income for the third quarter was $801 million and the operating margin was 72%. On an adjusted basis, operating income was $817 million and the adjusted operating margin was 73%. $ (in millions) 3Q23 3Q22 % Chg Const Curr(1) Revenue, net: Energy $384 $266 45% 42% Ags and Metals 61 57 7% 6% Financials(2) 112 122 (8)% (13)% Cash Equities and Equity Options 93 88 5% 5% OTC and Other(3) 104 121 (15)% (16)% Data and Connectivity Services 236 219 8% 8% Listings 124 128 (4)% (4)% Segment Revenue $1,114 $1,001 11% 10% Recurring Revenue $360 $347 4% 4% Transaction Revenue, net $754 $654 15% 13% (1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q22, 1.1774 and 1.0071, respectively. (2) Financials include interest rates and other financial futures and options. (3) 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 Third quarter fixed income and data services revenues were $559 million. Fixed income and data services operating expenses were $358 million and adjusted operating expenses were $316 million in the third quarter. Segment operating income for the third quarter was $201 million and the operating margin was 36%. On an adjusted basis, operating income was $243 million and the adjusted operating margin was 44%. $ (in millions) 3Q23 3Q22 % Chg Const Curr(1) Revenue: Fixed Income Execution $29 $26 10% 9% CDS Clearing 94 88 6% 5% Fixed Income Data and Analytics 279 273 2% 2% Other Data and Network Services 157 147 7% 6% Segment Revenue $559 $534 5% 4% Recurring Revenue $436 $420 4% 3% Transaction Revenue $123 $114 7% 6% (1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q22, 1.1774 and 1.0071, respectively. Mortgage Technology Segment Results Third quarter mortgage technology revenues were $330 million. Mortgage technology operating expenses were $487 million and adjusted operating expenses were $199 million in the third quarter. Segment operating loss for the third quarter was $157 million and the operating margin was (48)%. On an adjusted basis, operating income was $131 million and the adjusted operating margin was 39%. $ (in millions) 3Q23 3Q22 % Chg Revenue: Origination Technology $172 $197 (13)% Closing Solutions 48 56 (14)% Servicing Software 69 — n/a Data and Analytics 41 23 76% Segment Revenue $330 $276 20% Recurring Revenue $235 $163 44% Transaction Revenue $95 $113 (16)% Other Matters Operating cash flow through the third quarter of 2023 was $2.6 billion and adjusted free cash flow was $2.5 billion. Unrestricted cash was $837 million and outstanding debt was $23.3 billion as of September 30, 2023. Through the third quarter of 2023, ICE paid $713 million in dividends. Updated Financial Guidance ICE's fourth quarter 2023 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 $955 million to $965 million. ICE's fourth quarter 2023 GAAP non-operating expense(2) is expected to be in the range of $240 million to $245 million. Adjusted non-operating expense is expected to be in the range of $225 million to $230 million. ICE's diluted share count for the fourth quarter is expected to be in the range of 572 million to 576 million weighted average shares outstanding. ICE's full year capital expenditures is now expected to be in the range of $500 million to $525 million; includes four months of Black Knight. (1) 4Q23 non-GAAP operating expenses exclude amortization of acquisition-related intangibles, 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, November 2, 2023, at 8:30 a.m. ET to review its third quarter 2023 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 746760 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 2023 earnings has been scheduled for February 8th, 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) Nine Months Ended September 30, Three Months Ended September 30, Revenues: 2023 2022 2023 2022 Exchanges $ 4,754 $ 4,824 $ 1,540 $ 1,577 Fixed income and data services 1,668 1,555 559 534 Mortgage technology 815 880 330 276 Total revenues 7,237 7,259 2,429 2,387 Transaction-based expenses: Section 31 fees 231 332 56 158 Cash liquidity payments, routing and clearing 1,219 1,403 370 418 Total revenues, less transaction-based expenses 5,787 5,524 2,003 1,811 Operating expenses: Compensation and benefits 1,103 1,058 400 344 Professional services 88 101 31 32 Acquisition-related transaction and integration costs 201 81 155 19 Technology and communication 529 513 184 169 Rent and occupancy 65 63 20 22 Selling, general and administrative 196 166 59 54 Depreciation and amortization 836 768 309 258 Total operating expenses 3,018 2,750 1,158 898 Operating income 2,769 2,774 845 913 Other income/(expense): Interest income 287 42 94 33 Interest expense (557 ) (440 ) (206 ) (176 ) Other expense, net (121 ) (1,132 ) (51 ) (1,097 ) Total other income/(expense), net (391 ) (1,530 ) (163 ) (1,240 ) Income/(loss) before income tax expense 2,378 1,244 682 (327 ) Income tax expense/(benefit) 330 186 123 (152 ) Net income/(loss) $ 2,048 $ 1,058 $ 559 $ (175 ) Net income attributable to non-controlling interest (53 ) (37 ) (18 ) (16 ) Net income/(loss) attributable to Intercontinental Exchange, Inc. $ 1,995 $ 1,021 $ 541 $ (191 ) Earnings/(loss) per share attributable to Intercontinental Exchange, Inc. common stockholders: Basic $ 3.56 $ 1.83 $ 0.96 $ (0.34 ) Diluted $ 3.55 $ 1.82 $ 0.96 $ (0.34 ) Weighted average common shares outstanding: Basic 561 559 563 558 Diluted 562 561 565 560 Consolidated Balance Sheets (In millions) As of September 30, 2023 As of (Unaudited) December 31, 2022 Assets: Current assets: Cash and cash equivalents $ 837 $ 1,799 Short-term restricted cash and cash equivalents 471 6,149 Restricted short-term investments 730 — Cash and cash equivalent margin deposits and guaranty funds 79,297 141,990 Invested deposits, delivery contracts receivable and unsettled variation margin 1,899 5,382 Customer accounts receivable, net 1,422 1,169 Prepaid expenses and other current assets 741 458 Total current assets 85,397 156,947 Property and equipment, net 1,918 1,767 Other non-current assets: Goodwill 30,463 21,111 Other intangible assets, net 17,595 13,090 Long-term restricted cash and cash equivalents 190 405 Long-term restricted investments 199 — Other non-current assets 1,260 1,018 Total other non-current assets 49,707 35,624 Total assets $ 137,022 $ 194,338 Liabilities and Equity: Current liabilities: Accounts payable and accrued liabilities $ 964 $ 866 Section 31 fees payable 18 223 Accrued salaries and benefits 377 352 Deferred revenue 334 170 Short-term debt 2,257 4 Margin deposits and guaranty funds 79,297 141,990 Invested deposits, delivery contracts payable and unsettled variation margin 1,899 5,382 Other current liabilities 136 184 Total current liabilities 85,282 149,171 Non-current liabilities: Non-current deferred tax liability, net 4,210 3,493 Long-term debt 21,042 18,118 Accrued employee benefits 177 160 Non-current operating lease liability 306 254 Other non-current liabilities 493 381 Total non-current liabilities 26,228 22,406 Total liabilities 111,510 171,577 Equity: Intercontinental Exchange, Inc. stockholders’ equity: Common stock 6 6 Treasury stock, at cost (6,278 ) (6,225 ) Additional paid-in capital 15,837 14,313 Retained earnings 16,225 14,943 Accumulated other comprehensive loss (331 ) (331 ) Total Intercontinental Exchange, Inc. stockholders’ equity 25,459 22,706 Non-controlling interest in consolidated subsidiaries 53 55 Total equity 25,512 22,761 Total liabilities and equity $ 137,022 $ 194,338 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, 2023 2022 2023 2022 2023 2022 2023 2022 Total revenues, less transaction-based expenses $ 3,304 $ 3,089 $ 1,668 $ 1,555 $ 815 $ 880 $ 5,787 $ 5,524 Operating expenses 944 904 1,057 1,029 1,017 817 3,018 2,750 Less: Amortization of acquisition-related intangibles 49 50 127 137 316 271 492 458 Less: Transaction and integration costs — — — — 201 79 201 79 Less: Other 17 — — — — — 17 — Adjusted operating expenses $ 878 $ 854 $ 930 $ 892 $ 500 $ 467 $ 2,308 $ 2,213 Operating income/(loss) $ 2,360 $ 2,185 $ 611 $ 526 $ (202 ) $ 63 $ 2,769 $ 2,774 Adjusted operating income $ 2,426 $ 2,235 $ 738 $ 663 $ 315 $ 413 $ 3,479 $ 3,311 Operating margin 71 % 71 % 37 % 34 % (25 )% 7 % 48 % 50 % Adjusted operating margin 73 % 72 % 44 % 43 % 39 % 47 % 60 % 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, 2023 2022 2023 2022 2023 2022 2023 2022 Total revenues, less transaction-based expenses $ 1,114 $ 1,001 $ 559 $ 534 $ 330 $ 276 $ 2,003 $ 1,811 Operating expenses 313 301 358 337 487 260 1,158 898 Less: Amortization of acquisition-related intangibles 16 17 42 44 133 91 191 152 Less: Transaction and integration costs — — — — 155 19 155 19 Adjusted operating expenses $ 297 $ 284 $ 316 $ 293 $ 199 $ 150 $ 812 $ 727 Operating income/(loss) $ 801 $ 700 $ 201 $ 197 $ (157 ) $ 16 $ 845 $ 913 Adjusted operating income $ 817 $ 717 $ 243 $ 241 $ 131 $ 126 $ 1,191 $ 1,084 Operating margin 72 % 70 % 36 % 37 % (48 )% 6 % 42 % 50 % Adjusted operating margin 73 % 72 % 44 % 45 % 39 % 46 % 59 % 60 % Adjusted Net Income Attributable to ICE and Diluted EPS (In millions) (Unaudited) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Net income attributable to ICE $ 1,995 $ 1,021 Add: Amortization of acquisition-related intangibles 492 458 Add: Transaction and integration costs 201 79 Add/(Less): Net interest (income)/expense on pre-acquisition-related debt and debt extinguishment (12 ) 79 Less: Gain on sale of Euroclear equity investment and dividends received — (41 ) Add: Net losses from and impairment of unconsolidated investees 91 1,152 Add: Other 40 9 Less: Income tax effect for the above items (178 ) (478 ) Less: Deferred tax adjustments on acquisition-related intangibles (131 ) (3 ) Less: Other tax adjustments (81 ) — Adjusted net income attributable to ICE $ 2,417 $ 2,276 Diluted earnings per share $ 3.55 $ 1.82 Adjusted diluted earnings per share $ 4.30 $ 4.06 Diluted weighted average common shares outstanding 562 561 Adjusted Net Income Attributable to ICE and Diluted EPS (In millions) (Unaudited) Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Net income/(Loss) attributable to ICE $ 541 $ (191 ) Add: Amortization of acquisition-related intangibles 191 152 Add: Transaction and integration costs 155 19 Add: Net interest expense on pre-acquisition-related debt and debt extinguishment — 31 Add: Net losses from and impairment of unconsolidated investees 26 1,095 Add: Other 23 — Less: Income tax effect for the above items (66 ) (355 ) Less: Deferred tax adjustments on acquisition-related intangibles (46 ) (18 ) Adjusted net income attributable to ICE $ 824 $ 733 Diluted earnings/(loss) per share $ 0.96 $ (0.34 ) Adjusted diluted earnings per share $ 1.46 $ 1.31 Diluted weighted average common shares outstanding 565 560 Adjusted Free Cash Flow Calculation (In millions) (Unaudited) Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Net cash provided by operating activities $ 2,573 $ 2,462 Less: Capital expenditures (104 ) (125 ) Less: Capitalized software development costs (222 ) (200 ) Free cash flow 2,247 2,137 Add/(Less): Section 31 fees, net 205 (1 ) Adjusted free cash flow $ 2,452 $ 2,136 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, 2022, as filed with the SEC on February 2, 2023. 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. Category: Corporate SOURCE: Intercontinental Exchange ICE-CORP View source version on businesswire.com: https://www.businesswire.com/news/home/20231102440277/en/
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