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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 | |
---|---|---|---|---|---|---|---|---|
0.65 | 0.50% | 131.15 | 131.78 | 130.39 | 131.78 | 678,475 | 17:52:11 |
Intercontinental Exchange (NYSE: ICE):
Jeffrey C. Sprecher,
ICE Chair & Chief Executive Officer, said, "We are pleased to report strong third quarter results that extend our track record of growth. Amidst a backdrop of continued geopolitical and macroeconomic uncertainty, our strong third quarter performance reflects the "all weather" nature of our business model. Our customers continue to rely on our mission-critical data, technology, and liquid markets through an array of macroeconomic environments. As we look to the balance of the year and beyond, we remain focused on driving innovation, helping to serve our customers' risk management needs and delivering 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 2022. For the quarter ended September 30, 2022, consolidated net loss attributable to ICE was $191 million on $1.8 billion of consolidated revenues, less transaction-based expenses. Third quarter GAAP diluted loss per share was $0.34, primarily due to net losses from Bakkt. Adjusted net income attributable to ICE was $733 million in the third quarter and adjusted diluted EPS was $1.31. 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: "Through the first nine months of the year, we have grown revenues and operating income. This strong performance, including compounding growth in our recurring revenues across all three business segments is a testament to the power of our diverse business model. As we approach the end of 2022, we remain focused on extending our track record of growth and creating value for our stockholders."
*Constant currency (CC) percentage changes are calculated holding both the pound sterling and euro at the average exchange rate from 3Q21, 1.3784 and 1.1788, respectively.
Third Quarter 2022 Business Highlights
Third quarter consolidated net revenues were $1.8 billion, up 1% year-over-year including exchange net revenues of $1.0 billion, fixed income and data services revenues of $534 million and mortgage technology revenues of $276 million. Consolidated operating expenses were $898 million for the third quarter of 2022. On an adjusted basis, consolidated operating expenses were $727 million. Consolidated operating income for the third quarter was $913 million and the operating margin was 50%. On an adjusted basis, consolidated operating income for the third quarter was $1.1 billion and the adjusted operating margin was 60%.
$ (in millions)
Net Revenue
Op Margin
Adj Op Margin
3Q22
Exchanges
$1,001
70%
72%
Fixed Income and Data Services
$534
37%
45%
Mortgage Technology
$276
6%
46%
Consolidated
$1,811
50%
60%
3Q22
3Q21
% Chg
Recurring Revenue
$930
$888
5%
Transaction Revenue, net
$881
$914
(4)%
Exchanges Segment Results
Third quarter exchange net revenues were $1.0 billion. Exchange operating expenses were $301 million and on an adjusted basis, were $284 million in the third quarter. Segment operating income for the third quarter was $700 million and the operating margin was 70%. On an adjusted basis, operating income was $717 million and the adjusted operating margin was 72%.
$ (in millions)
3Q22
3Q21
% Chg
Const Curr(1)
Revenue, net:
Energy
$266
$316
(16)%
(13)%
Ags and Metals
57
56
1%
2%
Financials(2)
122
93
30%
46%
Cash Equities and Equity Options
88
79
13%
13%
OTC and Other(3)
121
84
45%
53%
Data and Connectivity Services
219
208
6%
6%
Listings
128
123
3%
3%
Segment Revenue
$1,001
$959
4%
8%
Recurring Revenue
$347
$331
5%
5%
Transaction Revenue, net
$654
$628
4%
9%
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q21, 1.3784 and 1.1788, 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 $534 million. Fixed income and data services operating expenses were $337 million and adjusted operating expenses were $293 million in the third quarter. Segment operating income for the third quarter was $197 million and the operating margin was 37%. On an adjusted basis, operating income was $241 million and the adjusted operating margin was 45%.
$ (in millions)
3Q22
3Q21
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$26
$12
121%
122%
CDS Clearing
88
51
72%
75%
Fixed Income Data and Analytics
273
272
—%
2%
Other Data and Network Services
147
142
4%
6%
Segment Revenue
$534
$477
12%
14%
Recurring Revenue
$420
$414
1%
3%
Transaction Revenue
$114
$63
81%
84%
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 3Q21, 1.3784 and 1.1788, respectively.
Mortgage Technology Segment Results
Third quarter mortgage technology revenues were $276 million. Mortgage technology operating expenses were $260 million and adjusted operating expenses were $150 million in the third quarter. Segment operating income for the third quarter was $16 million and the operating margin was 6%. On an adjusted basis, operating income was $126 million and the adjusted operating margin was 46%.
$ (in millions)
3Q22
3Q21
% Chg
Revenue:
Origination Technology
$187
$245
(24)%
Closing Solutions
53
88
(39)%
Data and Analytics
22
19
22%
Other
14
14
(8)%
Segment Revenue
$276
$366
(25)%
Recurring Revenue
$163
$143
14%
Transaction Revenue
$113
$223
(49)%
Other Matters
Updated Financial Guidance
(1) 4Q22 non-GAAP operating expenses exclude amortization of acquisition-related intangibles, pending Black Knight acquisition costs, and Ellie Mae 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, November 3, 2022, at 8:30 a.m. ET to review its third 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 047703 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 2022 earnings has been scheduled for February 2nd, 2023 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:
2022
2021
2022
2021
Exchanges
$
4,824
$
4,376
$
1,577
$
1,434
Fixed income and data services
1,555
1,403
534
477
Mortgage technology
880
1,061
276
366
Total revenues
7,259
6,840
2,387
2,277
Transaction-based expenses:
Section 31 fees
332
204
158
38
Cash liquidity payments, routing and clearing
1,403
1,330
418
437
Total revenues, less transaction-based expenses
5,524
5,306
1,811
1,802
Operating expenses:
Compensation and benefits
1,058
1,093
344
374
Professional services
101
124
32
43
Acquisition-related transaction and integration costs
81
42
19
14
Technology and communication
513
495
169
168
Rent and occupancy
63
61
22
20
Selling, general and administrative
166
163
54
52
Depreciation and amortization
768
759
258
253
Total operating expenses
2,750
2,737
898
924
Operating income
2,774
2,569
913
878
Other income/(expense):
Interest income
42
—
33
—
Interest expense
(440
)
(321
)
(176
)
(108
)
Other income/(expense), net
(1,132
)
1,341
(1,097
)
54
Other income/(expense), net
(1,530
)
1,020
(1,240
)
(54
)
Income/(loss) before income tax expense/(benefit)
1,244
3,589
(327
)
824
Income tax expense/(benefit)
186
1,049
(152
)
187
Net income/(loss)
$
1,058
$
2,540
$
(175
)
$
637
Net income attributable to non-controlling interest
(37
)
(9
)
(16
)
(4
)
Net income/(loss) attributable to Intercontinental Exchange, Inc.
$
1,021
$
2,531
$
(191
)
$
633
Earnings/(loss) per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic
$
1.83
$
4.50
$
(0.34
)
$
1.12
Diluted
$
1.82
$
4.48
$
(0.34
)
$
1.12
Weighted average common shares outstanding:
Basic
559
563
558
563
Diluted
561
565
560
566
Consolidated Balance Sheets
(In millions)
As of
September 30, 2022
As of
(Unaudited)
December 31, 2021
Assets:
Current assets:
Cash and cash equivalents
$
1,183
$
607
Short-term restricted cash and cash equivalents
6,032
1,035
Cash and cash equivalent margin deposits and guaranty funds
156,789
145,936
Invested deposits, delivery contracts receivable and unsettled variation margin
7,902
4,493
Customer accounts receivable, net
1,248
1,208
Prepaid expenses and other current assets
558
1,021
Total current assets
173,712
154,300
Property and equipment, net
1,720
1,699
Other non-current assets:
Goodwill
21,075
21,123
Other intangible assets, net
13,210
13,736
Long-term restricted cash and cash equivalents
405
398
Other non-current assets
1,170
2,246
Total other non-current assets
35,860
37,503
Total assets
$
211,292
$
193,502
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities
$
788
$
703
Section 31 fees payable
58
57
Accrued salaries and benefits
274
354
Deferred revenue
315
194
Short-term debt
7
1,521
Margin deposits and guaranty funds
156,789
145,936
Invested deposits, delivery contracts payable and unsettled variation margin
7,902
4,493
Other current liabilities
188
153
Total current liabilities
166,321
153,411
Non-current liabilities:
Non-current deferred tax liability, net
3,565
4,100
Long-term debt
18,113
12,397
Accrued employee benefits
189
200
Non-current operating lease liability
267
252
Other non-current liabilities
417
394
Total non-current liabilities
22,551
17,343
Total liabilities
188,872
170,754
Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Common stock
6
6
Treasury stock, at cost
(6,224
)
(5,520
)
Additional paid-in capital
14,269
14,069
Retained earnings
14,731
14,350
Accumulated other comprehensive loss
(403
)
(196
)
Total Intercontinental Exchange, Inc. stockholders’ equity
22,379
22,709
Non-controlling interest in consolidated subsidiaries
41
39
Total equity
22,420
22,748
Total liabilities and equity
$
211,292
$
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 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,
2022
2021
2022
2021
2022
2021
2022
2021
Total revenues, less transaction-based expenses
$3,089
$2,842
$1,555
$1,403
$880
$1,061
$5,524
$5,306
Operating expenses
904
977
1,029
1,010
817
750
2,750
2,737
Less: Amortization of acquisition-related intangibles
50
56
137
136
271
277
458
469
Less: Transaction and integration costs
—
12
—
—
79
28
79
40
Adjusted operating expenses
$854
$909
$892
$874
$467
$445
$2,213
$2,228
Operating income
$2,185
$1,865
$526
$393
$63
$311
$2,774
$2,569
Adjusted operating income
$2,235
$1,933
$663
$529
$413
$616
$3,311
$3,078
Operating margin
71%
66%
34%
28%
7%
29%
50%
48%
Adjusted operating margin
72%
68%
43%
38%
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
September 30,
Three Months Ended
September 30,
Three Months Ended
September 30,
Three Months Ended
September 30,
2022
2021
2022
2021
2022
2021
2022
2021
Total revenues, less transaction-based expenses
$1,001
$959
$534
$477
$276
$366
$1,811
$1,802
Operating expenses
301
330
337
338
260
256
898
924
Less: Amortization of acquisition-related intangibles
17
19
44
45
91
92
152
156
Less: Transaction and integration costs
—
2
—
—
19
11
19
13
Adjusted operating expenses
$284
$309
$293
$293
$150
$153
$727
$755
Operating income
$700
$629
$197
$139
$16
$110
$913
$878
Adjusted operating income
$717
$650
$241
$184
$126
$213
$1,084
$1,047
Operating margin
70%
66%
37%
29%
6%
30%
50%
49%
Adjusted operating margin
72%
68%
45%
39%
46%
58%
60%
58%
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
Nine Months Ended September 30, 2022
Nine Months Ended September 30, 2021
Net income attributable to ICE
$
1,021
$
2,531
Add: Amortization of acquisition-related intangibles
458
469
Add: Transaction and integration costs
79
40
Add: Accelerated unamortized costs related to the early payoff of the June 2023 floating rate senior notes
—
4
Add: Impairment on Bakkt equity method investment
40
—
Add: Accrual relating to legal settlement
9
16
Add: Net interest expense on pre-acquisition-related debt
49
—
Add: Extinguishment of 2022 and 2023 Senior Notes
30
—
Less: Gain on sale and fair value adjustment of Euroclear equity investment and dividends received
(41
)
(94
)
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
1,112
(42
)
Add/(Less): Income tax effect for the above items
(478
)
216
Add/(Less): Deferred tax adjustments on acquisition-related intangibles
(3
)
196
Adjusted net income attributable to ICE
$
2,276
$
2,102
Basic earnings per share
$
1.83
$
4.50
Diluted earnings per share
$
1.82
$
4.48
Adjusted basic earnings per share
$
4.07
$
3.74
Adjusted diluted earnings per share
$
4.06
$
3.72
Basic weighted average common shares outstanding
559
563
Diluted weighted average common shares outstanding
561
565
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
Three Months Ended September 30, 2022
Three Months Ended September 30, 2021
Net income/(loss) attributable to ICE
$
(191
)
$
633
Add: Amortization of acquisition-related intangibles
152
156
Add: Transaction and integration costs
19
13
Add: Accrual relating to legal settlement
—
16
Add: Net interest expense on pre-acquisition-related debt
31
—
Add: Accelerated unamortized costs related to the early payoff of the June 2023 floating rate senior notes
—
4
Add: Impairment on Bakkt equity method investment
40
—
Less: Gain on sale and fair value adjustment of Euroclear equity investment and dividends received
—
(64
)
Add/(Less): Net losses/(income) from unconsolidated investees
1,055
(8
)
Less: Income tax effect for the above items
(355
)
(38
)
Less: Deferred tax adjustments on acquisition-related intangibles
(18
)
(1
)
Adjusted net income attributable to ICE
$
733
$
711
Basic earnings/(loss) per share
$
(0.34
)
$
1.12
Diluted earnings/(loss) per share
$
(0.34
)
$
1.12
Adjusted basic earnings per share
$
1.31
$
1.26
Adjusted diluted earnings per share
$
1.31
$
1.26
Basic weighted average common shares outstanding
558
563
Diluted weighted average common shares outstanding
560
566
Adjusted Free Cash Flow Calculation
(In millions)
(Unaudited)
Nine Months Ended September 30, 2022
Nine Months Ended September 30, 2021
Cash flow from operations
$2,462
$2,130
Less: Capital expenditures and capitalized software development costs
(325)
(328)
Add/(Less): Section 31 fees, net
(1)
193
Adjusted free cash flow
$2,136
$1,995
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/20221103005548/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
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