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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 | |
---|---|---|---|---|---|---|---|---|
-0.21 | -0.15% | 137.66 | 138.50 | 137.33 | 137.81 | 911,436 | 19:12:36 |
Jeffrey C. Sprecher,ICE Chairman & Chief Executive Officer, said,"We are pleased to report our strong third quarter results which extend our track record of growth. Our customers continue to rely on our mission-critical data and technology to provide transparency and efficiencies across asset classes and through an array of macroeconomic environments. We remain focused on collaboration and innovation to serve our customers, generate growth 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 2021. For the quarter ended September 30, 2021, consolidated net income attributable to ICE was $633 million on $1.8 billion of consolidated revenues, less transaction-based expenses. Third quarter GAAP diluted earnings per share (EPS) were $1.12. Adjusted net income attributable to ICE was $735 million in the third quarter and adjusted diluted EPS were $1.30. 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: "In the third quarter, we generated double-digit revenue, operating income and earnings per share growth. This strong performance, including double digit growth in our recurring revenues, was driven by contributions from all three business segments and is a testament to the power of our diverse business model. Additionally, our strong cash flows and strategic capital allocation will enable us to accelerate capital return to our shareholders while also continuing to invest."
Third Quarter 2021 Business Highlights
$ (in millions)Net Revenue
Op Margin
Adj Op Margin
3Q21
Exchanges
$959
66%
68%
Fixed Income and Data Services
$477
29%
39%
Mortgage Technology
$366
30%
58%
Consolidated
$1,802
49%
58%
Third quarter consolidated net revenues were $1.8 billion, up 28% year-over-year including exchange net revenues of $959 million, fixed income and data services revenues of $477 million and mortgage technology revenues of $366 million. Consolidated operating expenses were $924 million for the third quarter of 2021. On an adjusted basis, consolidated operating expenses were $755 million. Consolidated operating income for the third quarter was $878 million and the operating margin was 49%. On an adjusted basis, consolidated operating income for the third quarter was $1.0 billion and the adjusted operating margin was 58%.
Exchanges Segment Results
Third quarter exchange net revenues were $959 million. Exchange operating expenses were $330 million and on an adjusted basis, were $309 million in the third quarter. Segment operating income for the third quarter was $629 million and the operating margin was 66%. On an adjusted basis, operating income was $650 million and the adjusted operating margin was 68%.
$ (in millions)
3Q21
3Q20
% Chg
Revenue, net:
Energy
$316
$229
38%
Ags and Metals
56
54
5%
Financials(1)
93
76
24%
Cash Equities and Equity Options
79
74
7%
OTC and Other(2)
84
73
14%
Data and Connectivity Services
208
201
3%
Listings
123
111
10%
Segment Revenue
$959
$818
17%
(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
Third quarter fixed income and data services revenues were $477 million. Fixed income and data services operating expenses were $338 million and adjusted operating expenses were $293 million in the third quarter. Segment operating income for the third quarter was $139 million and the operating margin was 29%. On an adjusted basis, operating income was $184 million and the adjusted operating margin was 39%.
$ (in millions)
3Q21
3Q20
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$12
$15
(18)%
(18)%
CDS Clearing
51
47
9%
9%
Fixed Income Data and Analytics
272
259
5%
5%
Other Data and Network Services
142
129
10%
9%
Segment Revenue
$477
$450
6%
6%
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q20, 1.2916 and 1.1691, respectively.
Mortgage Technology Segment Results
Third quarter mortgage technology revenues were $366 million. Mortgage technology operating expenses were $256 million and adjusted operating expenses were $153 million in the third quarter. Segment operating income for the third quarter was $110 million and the operating margin was 30%. On an adjusted basis, operating income was $213 million and the adjusted operating margin was 58%.
$ (in millions)
3Q21
3Q20
% Chg(1)
Revenue:
Origination Technology
$245
$67
n/a
Closing Solutions
88
67
31%
Data and Analytics
19
5
n/a
Other
14
4
n/a
Segment Revenue
$366
$143
n/a
(1) Percentage changes in the table above deemed "n/a" are not meaningful due to the acquisition of Ellie Mae in September 2020.
Other Matters
Financial Guidance
(1) 2021 and 4Q21 non-GAAP operating expenses exclude amortization of acquisition-related intangibles and transaction & integration costs.
(2) Non-operating income / expense includes interest income, interest expense and net other income. Non-GAAP non-operating expense excludes the equity earnings from unconsolidated investees and the expected gain on Bakkt merger.
Earnings Conference Call Information
ICE will hold a conference call today, October 28, 2021, at 8:30 a.m. ET to review its third quarter 2021 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 844-512-2926 from the United States or 412-317-6300 from outside of the United States. Telephone participants are required to provide the participant entry number 8624010 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 2021 earnings has been scheduled for February 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/home/default.aspx.
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)
Nine Months Ended
September 30,
Three Months Ended
September 30,
Revenues:
2021
2020
2021
2020
Exchanges
$
4,376
$
4,406
$
1,434
$
1,337
Fixed income and data services
1,403
1,360
477
450
Mortgage technology
1,061
245
366
143
Total revenues
6,840
6,011
2,277
1,930
Transaction-based expenses:
Section 31 fees
204
465
38
145
Cash liquidity payments, routing and clearing
1,330
1,181
437
374
Total revenues, less transaction-based expenses
5,306
4,365
1,802
1,411
Operating expenses:
Compensation and benefits
1,093
849
374
298
Professional services
124
100
43
37
Acquisition-related transaction and integration costs
42
90
14
76
Technology and communication
495
388
168
131
Rent and occupancy
61
59
20
19
Selling, general and administrative
163
132
52
43
Depreciation and amortization
759
494
253
180
Total operating expenses
2,737
2,112
924
784
Operating income
2,569
2,253
878
627
Other income (expense):
Interest income
—
9
—
1
Interest expense
(321
)
(245
)
(108
)
(89
)
Other income, net
1,341
75
54
44
Other income (expense), net
1,020
(161
)
(54
)
(44
)
Income before income tax expense
3,589
2,092
824
583
Income tax expense
1,049
512
187
189
Net income
$
2,540
$
1,580
$
637
$
394
Net income attributable to non-controlling interest
(9
)
(17
)
(4
)
(4
)
Net income attributable to Intercontinental Exchange, Inc.
$
2,531
$
1,563
$
633
$
390
Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic
$
4.50
$
2.85
$
1.12
$
0.71
Diluted
$
4.48
$
2.83
$
1.12
$
0.71
Weighted average common shares outstanding:
Basic
563
549
563
548
Diluted
565
552
566
551
Consolidated Balance Sheets
(In millions)
As of
September 30, 2021
As of
(Unaudited)
December 31, 2020
Assets:
Current assets:
Cash and cash equivalents
$
618
$
583
Short-term restricted cash and cash equivalents
1,045
1,000
Customer accounts receivable, net
1,327
1,230
Margin deposits, guaranty funds and delivery contracts receivable
108,698
84,083
Prepaid expenses and other current assets
1,032
323
Total current assets
112,720
87,219
Property and equipment, net
1,723
1,713
Other non-current assets:
Goodwill
21,309
21,291
Other intangible assets, net
13,928
14,408
Long-term restricted cash and cash equivalents
398
408
Other non-current assets
584
1,161
Total other non-current assets
36,219
37,268
Total assets
$
150,662
$
126,200
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities
$
696
$
639
Section 31 fees payable
14
207
Accrued salaries and benefits
275
346
Deferred revenue
322
158
Short-term debt
1,831
2,411
Margin deposits, guaranty funds and delivery contracts payable
108,698
84,083
Other current liabilities
196
155
Total current liabilities
112,032
87,999
Non-current liabilities:
Non-current deferred tax liability, net
3,689
3,563
Long-term debt
12,394
14,126
Accrued employee benefits
200
206
Non-current operating lease liability
274
320
Other non-current liabilities
394
359
Total non-current liabilities
16,951
18,574
Total liabilities
128,983
106,573
Commitments and contingencies
Redeemable non-controlling interest in consolidated subsidiaries
87
93
Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Common stock
6
6
Treasury stock, at cost
(5,269
)
(5,200
)
Additional paid-in capital
14,019
13,845
Retained earnings
13,009
11,039
Accumulated other comprehensive loss
(206
)
(192
)
Total Intercontinental Exchange, Inc. stockholders’ equity
21,559
19,498
Non-controlling interest in consolidated subsidiaries
33
36
Total equity
21,592
19,534
Total liabilities and equity
$
150,662
$
126,200
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
Nine Months Ended September 30,
Nine Months Ended September 30,
Nine Months Ended September 30,
Nine Months Ended September 30,
2021
2020
2021
2020
2021
2020
2021
2020
Total revenues, less transaction-based expenses
$2,842
$2,760
$1,403
$1,360
$1,061
$245
$5,306
$4,365
Operating expenses
977
919
1,010
987
750
206
2,737
2,112
Less: Amortization of acquisition-related intangibles
56
53
136
144
277
38
469
235
Less: Transaction and integration costs and acquisition-related success fees
12
10
—
—
28
76
40
86
Less: Accrual relating to a regulatory settlement
—
—
—
8
—
—
—
8
Adjusted operating expenses
$909
$856
$874
$835
$445
$92
$2,228
$1,783
Operating income
$1,865
$1,841
$393
$373
$311
$39
$2,569
$2,253
Adjusted operating income
$1,933
$1,904
$529
$525
$616
$153
$3,078
$2,582
Operating margin
66%
67%
28%
27%
29%
16%
48%
52%
Adjusted operating margin
68%
69%
38%
39%
58%
62%
58%
59%
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,
2021
2020
2021
2020
2021
2020
2021
2020
Total revenues, less transaction-based expenses
$959
$818
$477
$450
$366
$143
$1,802
$1,411
Operating expenses
330
297
338
331
256
156
924
784
Less: Amortization of acquisition-related intangibles
19
18
45
48
92
28
156
94
Less: Transaction and integration costs
2
—
—
—
11
76
13
76
Less: Accrual relating to a regulatory settlement
—
—
—
3
—
—
—
3
Adjusted operating expenses
$309
$279
$293
$280
$153
$52
$755
$611
Operating income
$629
$521
$139
$119
$110
$(13)
$878
$627
Adjusted operating income
$650
$539
$184
$170
$213
$91
$1,047
$800
Operating margin
66%
64%
29%
26%
30%
(9)%
49%
44%
Adjusted operating margin
68%
66%
39%
38%
58%
64%
58%
57%
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
Nine Months Ended September 30, 2021
Nine Months Ended September 30, 2020
Net income attributable to ICE
$
2,531
$
1,563
Add: Amortization of acquisition-related intangibles
469
235
Add: Transaction and integration costs and acquisition-related success fees
40
86
Add: Accelerated unamortized costs related to the early payoff of the June 2023 floating rate senior notes
4
—
Add: Extinguishment of December 2020 Senior Notes
—
14
Add: Pre-acquisition interest expense on debt issued for Ellie Mae acquisition
—
5
Add: Accrual relating to legal settlement
16
—
Add: Accrual relating to regulatory settlement
—
8
Add: Impairment of CAT promissory notes
—
2
Less: Gain on sale of Coinbase equity investment
(1,227
)
—
Less: Gain on value of equity investment
(34
)
—
Less: Gain related to the settlement of an acquisition-related indemnification claim
(7
)
—
Less: Net income from unconsolidated investees
(42
)
(84
)
Add/(Less): Income tax effect for the above items
204
(62
)
Add: Deferred tax adjustments on acquisition-related intangibles
196
33
Adjusted net income attributable to ICE
$
2,150
$
1,800
Basic earnings per share
$
4.50
$
2.85
Diluted earnings per share
$
4.48
$
2.83
Adjusted basic earnings per share
$
3.82
$
3.28
Adjusted diluted earnings per share
$
3.80
$
3.26
Basic weighted average common shares outstanding
563
549
Diluted weighted average common shares outstanding
565
552
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
Three Months Ended September 30, 2021
Three Months Ended September 30, 2020
Net income attributable to ICE
$
633
$
390
Add: Amortization of acquisition-related intangibles
156
94
Add: Transaction and integration costs
13
76
Add: Accrual related to legal settlement
16
—
Add: Accrual related to regulatory settlement
—
3
Add: Accelerated unamortized costs related to the early payoff of the June 2023 floating rate senior notes
4
—
Add: Pre-acquisition interest expense on debt issued for Ellie Mae acquisition
—
5
Less: Gain on value of equity investment
(34
)
—
Less: Net income from unconsolidated investees
(8
)
(49
)
Less: Income tax effect for the above items
(44
)
(29
)
Add/(Less): Deferred tax adjustments on acquisition-related intangibles
(1
)
43
Adjusted net income attributable to ICE
$
735
$
533
Basic earnings per share
$
1.12
$
0.71
Diluted earnings per share
$
1.12
$
0.71
Adjusted basic earnings per share
$
1.31
$
0.97
Adjusted diluted earnings per share
$
1.30
$
0.97
Basic weighted average common shares outstanding
563
548
Diluted weighted average common shares outstanding
566
551
Free Cash Flow Calculation
(In millions)
(Unaudited)
Nine months ended September 30, 2021
Nine months ended September 30, 2020
Cash flow from operations
$2,130
$1,815
Less: Capital expenditures and capitalized software development costs
(328
)
(268
)
Add: Section 31 fees, net
193
85
Free cash flow
$1,995
$1,632
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 here. 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, 2020, as filed with the SEC on February 4, 2021. 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/20211028005374/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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