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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Intercontinental Exchange Inc | NYSE:ICE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.12 | -0.09% | 131.70 | 132.30 | 130.89 | 131.86 | 2,406,708 | 01:00:00 |
Jeffrey C. Sprecher,ICE Chair & Chief Executive Officer, said,"We are pleased to report our second quarter results, which were highlighted by continued revenue and operating profit growth. Amidst a backdrop of continued volatility and uncertainty, our strong second quarter performance reflects the value of our markets, technology and data services. Our strategic diversification across asset classes and geographies enables us to better innovate for customers and drive growth across an array of macro environments. As we look to the second half of the year, we remain focused on connecting customers to data and technology and extending our track record of growth."
Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported financial results for the second quarter of 2022. For the quarter ended June 30, 2022, consolidated net income attributable to ICE was $555 million on $1.8 billion of consolidated revenues, less transaction-based expenses. Second quarter GAAP diluted earnings per share (EPS) were $0.99. Adjusted net income attributable to ICE was $739 million in the second quarter and adjusted diluted EPS were $1.32. Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted EPS and free cash flow.
Warren Gardiner, ICE Chief Financial Officer, added: "Through the first half of the year, we have grown revenues, operating income and cash flow. Recurring revenues, which account for roughly 50% of our total revenue, continue to compound alongside growth in our diverse transaction-based businesses. This performance reflects the “all-weather” nature of our business model, and as we move into the second half of 2022, we are well-positioned to benefit from near-term cyclical tailwinds as well as longer-term secular trends and remain focused on creating value for stockholders."
Second Quarter 2022 Business Highlights
Second quarter consolidated net revenues were $1.8 billion, up 6% year-over-year including exchange net revenues of $1.0 billion, fixed income and data services revenues of $512 million and mortgage technology revenues of $297 million. Consolidated operating expenses were $945 million for the second quarter of 2022. On an adjusted basis, consolidated operating expenses were $740 million. Consolidated operating income for the second quarter was $869 million and the operating margin was 48%. On an adjusted basis, consolidated operating income for the second quarter was $1.1 billion and the adjusted operating margin was 59%.
$ (in millions)
Net Revenue
Op Margin
Adj Op Margin
2Q22
Exchanges
$1,005
70%
71%
Fixed Income and Data Services
$512
34%
43%
Mortgage Technology
$297
(2)%
46%
Consolidated
$1,814
48%
59%
2Q22
2Q21
% Chg
Recurring Revenue
$931
$870
7%
Transaction Revenue, net
$883
$837
6%
Exchanges Segment Results
Second quarter exchange net revenues were $1.0 billion. Exchange operating expenses were $304 million and on an adjusted basis, were $287 million in the second quarter. Segment operating income for the second quarter was $701 million and the operating margin was 70%. On an adjusted basis, operating income was $718 million and the adjusted operating margin was 71%.
$ (in millions)
2Q22
2Q21
% Chg
Revenue, net:
Energy
$265
$274
(3)%
Ags and Metals
61
62
(1)%
Financials(1)
123
83
50%
Cash Equities and Equity Options
99
85
17%
OTC and Other(2)
108
78
39%
Data and Connectivity Services
218
208
4%
Listings
131
119
10%
Segment Revenue
$1,005
$909
11%
Recurring Revenue
$350
$327
7%
Transaction Revenue, net
$655
$582
13%
(1) Financials include interest rates and other financial futures and options.
(2) OTC & other includes physical energy, interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, technology development fees, exchange member fees, and agriculture grading and certification fees.
Fixed Income and Data Services Segment Results
Second quarter fixed income and data services revenues were $512 million. Fixed income and data services operating expenses were $338 million and adjusted operating expenses were $294 million in the second quarter. Segment operating income for the second quarter was $174 million and the operating margin was 34%. On an adjusted basis, operating income was $218 million and the adjusted operating margin was 43%.
$ (in millions)
2Q22
2Q21
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$25
$13
84%
85%
CDS Clearing
66
38
72%
76%
Fixed Income Data and Analytics
274
268
3%
4%
Other Data and Network Services
147
139
6%
8%
Segment Revenue
$512
$458
12%
13%
Recurring Revenue
$421
$407
4%
5%
Transaction Revenue
$91
$51
75%
78%
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2Q21, 1.3985 and 1.2054, respectively.
Mortgage Technology Segment Results
Second quarter mortgage technology revenues were $297 million. Mortgage technology operating expenses were $303 million and adjusted operating expenses were $159 million in the second quarter. Segment operating loss for the second quarter was $6 million and the operating margin was (2)%. On an adjusted basis, operating income was $138 million and the adjusted operating margin was 46%.
$ (in millions)
2Q22
2Q21
% Chg
Revenue:
Origination Technology
$196
$241
(19)%
Closing Solutions
64
69
(6)%
Data and Analytics
24
18
37%
Other
13
12
4%
Segment Revenue
$297
$340
(13)%
Recurring Revenue
$160
$136
18%
Transaction Revenue
$137
$204
(33)%
Other Matters
Updated Financial Guidance
(1) 2022 and 3Q22 non-GAAP operating expenses exclude amortization of acquisition-related intangibles and Ellie Mae transaction and integration costs.
(2) Non-operating income / expense includes interest income, interest expense and net other income. Non-GAAP non-operating expense excludes equity earnings from unconsolidated investees, net interest expense on pre-acquisition-related debt and costs associated with re-financing existing debt.
Earnings Conference Call Information
ICE will hold a conference call today, August 4, 2022, at 8:30 a.m. ET to review its second quarter 2022 financial results. A live audio webcast of the earnings call will be available on the company's website at www.theice.com in the investor relations section. Participants may also listen via telephone by dialing 844-200-6205 from the United States or 929-526-1599 from outside of the United States. Telephone participants are required to provide the participant entry number 093622 and are recommended to call 10 minutes prior to the start of the call. The call will be archived on the company's website for replay.
The conference call for the third quarter 2022 earnings has been scheduled for November 3rd, 2022 at 8:30 a.m. ET. Please refer to the Investor Relations website at www.ir.theice.com for additional information.
Historical futures, options and cash ADV, rate per contract, open interest data and CDS cleared information can be found at: https://ir.theice.com/investor-resources/supplemental-information/default.aspx
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)
Six Months Ended June 30,
Three Months Ended June 30,
Revenues:
2022
2021
2022
2021
Exchanges
$
3,247
$
2,942
$
1,604
$
1,336
Fixed income and data services
1,021
926
512
458
Mortgage technology
604
695
297
340
Total revenues
4,872
4,563
2,413
2,134
Transaction-based expenses:
Section 31 fees
174
166
123
41
Cash liquidity payments, routing and clearing
985
893
476
386
Total revenues, less transaction-based expenses
3,713
3,504
1,814
1,707
Operating expenses:
Compensation and benefits
714
719
355
365
Professional services
69
81
35
37
Acquisition-related transaction and integration costs
62
28
53
10
Technology and communication
344
327
169
165
Rent and occupancy
41
41
20
20
Selling, general and administrative
112
111
57
60
Depreciation and amortization
510
506
256
251
Total operating expenses
1,852
1,813
945
908
Operating income
1,861
1,691
869
799
Other income/(expense):
Interest income
9
—
8
—
Interest expense
(264
)
(213
)
(161
)
(106
)
Other income/(expense), net
(35
)
1,287
23
1,239
Other income/(expense), net
(290
)
1,074
(130
)
1,133
Income before income tax expense
1,571
2,765
739
1,932
Income tax expense
338
862
173
679
Net income
$
1,233
$
1,903
$
566
$
1,253
Net income attributable to non-controlling interest
(21
)
(5
)
(11
)
(1
)
Net income attributable to Intercontinental Exchange, Inc.
$
1,212
$
1,898
$
555
$
1,252
Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic
$
2.17
$
3.38
$
0.99
$
2.23
Diluted
$
2.16
$
3.36
$
0.99
$
2.22
Weighted average common shares outstanding:
Basic
560
562
558
563
Diluted
562
565
560
565
Consolidated Balance Sheets
(In millions)
As of
June 30, 2022
As of
(Unaudited)
December 31, 2021
Assets:
Current assets:
Cash and cash equivalents
$
830
$
607
Short-term restricted cash and cash equivalents
6,045
1,035
Cash and cash equivalent margin deposits and guaranty funds
164,483
145,936
Invested deposits, delivery contracts receivable and unsettled variation margin
3,189
4,493
Customer accounts receivable, net
1,371
1,208
Prepaid expenses and other current assets
457
1,021
Total current assets
176,375
154,300
Property and equipment, net
1,703
1,699
Other non-current assets:
Goodwill
21,106
21,123
Other intangible assets, net
13,397
13,736
Long-term restricted cash and cash equivalents
405
398
Other non-current assets
2,221
2,246
Total other non-current assets
37,129
37,503
Total assets
$
215,207
$
193,502
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities
$
719
$
703
Section 31 fees payable
172
57
Accrued salaries and benefits
220
354
Deferred revenue
473
194
Short-term debt
4
1,521
Margin deposits and guaranty funds
164,483
145,936
Invested deposits, delivery contracts payable and unsettled variation margin
3,189
4,493
Other current liabilities
162
153
Total current liabilities
169,422
153,411
Non-current liabilities:
Non-current deferred tax liability, net
3,945
4,100
Long-term debt
18,109
12,397
Accrued employee benefits
191
200
Non-current operating lease liability
267
252
Other non-current liabilities
412
394
Total non-current liabilities
22,924
17,343
Total liabilities
192,346
170,754
Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Common stock
6
6
Treasury stock, at cost
(6,223
)
(5,520
)
Additional paid-in capital
14,201
14,069
Retained earnings
15,135
14,350
Accumulated other comprehensive loss
(305
)
(196
)
Total Intercontinental Exchange, Inc. stockholders’ equity
22,814
22,709
Non-controlling interest in consolidated subsidiaries
47
39
Total equity
22,861
22,748
Total liabilities and equity
$
215,207
$
193,502
Non-GAAP Financial Measures and Reconciliation
We use non-GAAP measures internally to evaluate our performance and in making financial and operational decisions. When viewed in conjunction with our GAAP results and the accompanying reconciliation, we believe that our presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparison of results because the items described below as adjustments to GAAP are not reflective of our core business performance. These financial measures are not in accordance with, or an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We use these adjusted results because we believe they more clearly highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our core operating performance. We strongly recommend that investors review the GAAP financial measures and additional non-GAAP information included in our Quarterly Report on Form 10-Q, including our consolidated financial statements and the notes thereto.
Adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common stockholders, adjusted diluted earnings per share and free cash flow for the periods presented below are calculated by adding or subtracting the adjustments described below, which are not reflective of our cash operations and core business performance, and their related income tax effect and other tax adjustments (in millions, except for per share amounts):
Adjusted Operating Income, Operating Margin and Operating Expense Reconciliation
(In millions)
(Unaudited)
Exchanges Segment
Fixed Income and Data Services Segment
Mortgage Technology Segment
Consolidated
Six Months Ended June 30,
Six Months Ended June 30,
Six Months Ended June 30,
Six Months Ended June 30,
2022
2021
2022
2021
2022
2021
2022
2021
Total revenues, less transaction-based expenses
$2,088
$1,883
$1,021
$926
$604
$695
$3,713
$3,504
Operating expenses
603
647
692
672
557
494
1,852
1,813
Less: Amortization of acquisition-related intangibles
33
37
93
91
180
185
306
313
Less: Transaction and integration costs
—
10
—
—
60
17
60
27
Adjusted operating expenses
$570
$600
$599
$581
$317
$292
$1,486
$1,473
Operating income
$1,485
$1,236
$329
$254
$47
$201
$1,861
$1,691
Adjusted operating income
$1,518
$1,283
$422
$345
$287
$403
$2,227
$2,031
Operating margin
71%
66%
32%
27%
8%
29%
50%
48%
Adjusted operating margin
73%
68%
41%
37%
47%
58%
60%
58%
Adjusted Operating Income, Operating Margin and Operating Expense Reconciliation
(In millions)
(Unaudited)
Exchanges Segment
Fixed Income and Data Services Segment
Mortgage Technology Segment
Consolidated
Three Months Ended June 30,
Three Months Ended June 30,
Three Months Ended June 30,
Three Months Ended June 30,
2022
2021
2022
2021
2022
2021
2022
2021
Total revenues, less transaction-based expenses
$1,005
$909
$512
$458
$297
$340
$1,814
$1,707
Operating expenses
304
326
338
337
303
245
945
908
Less: Amortization of acquisition-related intangibles
17
19
44
46
92
90
153
155
Less: Transaction and integration costs
—
5
—
—
52
4
52
9
Adjusted operating expenses
$287
$302
$294
$291
$159
$151
$740
$744
Operating income/(loss)
$701
$583
$174
$121
$(6)
$95
$869
$799
Adjusted operating income
$718
$607
$218
$167
$138
$189
$1,074
$963
Operating margin
70%
64%
34%
26%
(2)%
28%
48%
47%
Adjusted operating margin
71%
67%
43%
36%
46%
56%
59%
56%
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
Six Months Ended June 30, 2022
Six Months Ended June 30, 2021
Net income attributable to ICE
$
1,212
$
1,898
Add: Amortization of acquisition-related intangibles
306
313
Add: Transaction and integration costs
60
27
Add: Accrual relating to legal settlement
9
—
Add: Net interest expense on pre-acquisition-related debt
18
—
Add: Extinguishment of 2022 and 2023 Senior Notes
30
—
Less: Gain on sale of Euroclear equity investment and dividends received
(41
)
(30
)
Less: Gain on sale of Coinbase equity investment
—
(1,227
)
Less: Gain related to the settlement of an acquisition-related indemnification claim
—
(7
)
Add/(Less): Net losses/(income) from unconsolidated investees
57
(34
)
Add/(Less): Income tax effect for the above items
(123
)
254
Add: Deferred tax adjustments on acquisition-related intangibles
15
197
Adjusted net income attributable to ICE
$
1,543
$
1,391
Basic earnings per share
$
2.17
$
3.38
Diluted earnings per share
$
2.16
$
3.36
Adjusted basic earnings per share
$
2.76
$
2.47
Adjusted diluted earnings per share
$
2.75
$
2.46
Basic weighted average common shares outstanding
560
562
Diluted weighted average common shares outstanding
562
565
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
Three Months Ended June 30, 2022
Three Months Ended June 30, 2021
Net income attributable to ICE
$
555
$
1,252
Add: Amortization of acquisition-related intangibles
153
155
Add: Transaction and integration costs
52
9
Add: Net interest expense on pre-acquisition-related debt
18
—
Add: Extinguishment of 2022 and 2023 Senior Notes
30
—
Less: Gain on sale of Euroclear equity investment
(41
)
—
Less: Gain on sale of Coinbase equity investment
—
(1,227
)
Less: Gain related to the settlement of an acquisition-related indemnification claim
—
(7
)
Add/(Less): Net losses/(income) from unconsolidated investees
15
(9
)
Add/(Less): Income tax effect for the above items
(65
)
288
Add: Deferred tax adjustments on acquisition-related intangibles
22
196
Adjusted net income attributable to ICE
$
739
$
657
Basic earnings per share
$
0.99
$
2.23
Diluted earnings per share
$
0.99
$
2.22
Adjusted basic earnings per share
$
1.32
$
1.17
Adjusted diluted earnings per share
$
1.32
$
1.16
Basic weighted average common shares outstanding
558
563
Diluted weighted average common shares outstanding
560
565
Free Cash Flow Calculation
(In millions)
(Unaudited)
Six Months Ended June 30, 2022
Six Months Ended June 30, 2021
Cash flow from operations
$
1,725
$
1,607
Less: Capital expenditures and capitalized software development costs
(204
)
(240
)
Add/(Less): Section 31 fees, net
(115
)
44
Free cash flow
$
1,406
$
1,411
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at http://www.intercontinentalexchange.com/terms-of-use. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in Intercontinental Exchange, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 3, 2022. We caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of an unanticipated event. New factors emerge from time to time, and it is not possible for management to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
SOURCE: Intercontinental Exchange
ICE-CORP
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005386/en/
ICE Investor Relations Contact: Mary Caroline O'Neal +1 770 738 2151 marycaroline.oneal@ice.com
investors@ice.com
ICE Media Contact: Josh King +1 212 656 2490 josh.king@ice.com
media@ice.com
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