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Intercontinental Exchange Reports Strong Full Year 2023 Results

Intercontinental Exchange (NYSE: ICE): 2023 net revenues of $8.0 billion, +10% y/y 2023 GAAP diluted EPS of $4.19, +62% y/y 2023 adj. diluted EPS of $5.62, +6% y/y Record 2023 operating income o...

Business Wire

18th consecutive year of record revenues

ATLANTA & NEW YORK: Intercontinental Exchange (NYSE: ICE):

  • 2023 net revenues of $8.0 billion, +10% y/y
  • 2023 GAAP diluted EPS of $4.19, +62% y/y
  • 2023 adj. diluted EPS of $5.62, +6% y/y
  • Record 2023 operating income of $3.7 billion, +2% y/y; Record adj. operating income of $4.7 billion, +9% y/y
  • 2023 operating margin of 46%; adj. operating margin of 59%
  • Nearly $1 billion returned to stockholders through dividends in 2023
  • 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 18th consecutive year of record revenues and another year of earnings per share growth. A dynamic macro environment and strong secular tailwinds across our business continue to drive customers to our diverse, liquid markets and our mission-critical data and SaaS technologies to manage risk and capture efficiencies. As we look to 2024 and beyond, we remain focused on innovating across asset classes to serve the needs of our customers and deliver growth for our stockholders."

Intercontinental Exchange (NYSE: ICE), a leading global provider of technology and data, today reported financial results for the fourth quarter and full year of 2023. For the quarter ended December 31, 2023, consolidated net income attributable to ICE was $373 million on $2.2 billion of consolidated revenues less transaction-based expenses. Fourth quarter GAAP diluted earnings per share (EPS) was $0.65. Adjusted net income attributable to ICE was $760 million in the fourth quarter and adjusted diluted EPS was $1.33.

For the full year of 2023 consolidated net income attributable to ICE was $2.4 billion on $8.0 billion of consolidated revenues less transaction-based expenses. Full year 2023 GAAP diluted EPS was $4.19, up 62% year-over-year. On an adjusted basis, net income attributable to ICE for the year was $3.2 billion and adjusted diluted EPS was $5.62, up 6% year-over-year.

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 2023, we once again generated record revenues and record operating income. This performance is a clear testament to the strength of our strategically diversified business model, which, through an array of macroeconomic environments, continues to deliver consistent and compounding growth for our stockholders. As we enter 2024, we remain well positioned to benefit from numerous cyclical tailwinds and secular trends."

Fourth Quarter and Full Year 2023 Business Highlights

Fourth quarter consolidated net revenues were $2.2 billion, up 25% year-over-year, including exchange net revenues of $1.1 billion, fixed income and data services revenues of $563 million and mortgage technology revenues of $502 million. Consolidated operating expenses were $1.3 billion for the fourth quarter of 2023. On an adjusted basis, consolidated operating expenses were $952 million. Consolidated operating income for the fourth quarter was $925 million and the operating margin was 42%. On an adjusted basis, consolidated operating income for the fourth quarter was $1.2 billion and the adjusted operating margin was 57%.

Full year 2023 consolidated net revenues were $8.0 billion, up 10% year-over-year, including exchange net revenues of $4.4 billion, fixed income and data services revenues of $2.2 billion and mortgage technology revenues of $1.3 billion. Consolidated operating expenses were $4.3 billion for 2023. On an adjusted basis, consolidated operating expenses were $3.3 billion. Consolidated operating income for the year was $3.7 billion and the operating margin was 46%. On an adjusted basis, consolidated operating income for the year was $4.7 billion and the adjusted operating margin was 59%.

$ (in millions)

Net
Revenue

Op
Margin

Adj Op
Margin

 

Net
Revenue

Op
Margin

Adj Op
Margin

 

Full Year 2023

 

4Q23

Exchanges

$4,440

71%

73%

 

$1,136

70%

72%

Fixed Income and Data Services

$2,231

36%

44%

 

$563

36%

43%

Mortgage Technology

$1,317

(21)%

39%

 

$502

(15)%

39%

Consolidated

$7,988

46%

59%

 

$2,201

42%

57%

 

 

 

 

 

 

 

 

 

FY23

FY22

% Chg

 

4Q23

4Q22

% Chg

Recurring Revenue

$4,138

$3,721

11%

 

$1,199

$940

28%

Transaction Revenue, net

$3,850

$3,571

8%

 

$1,002

$828

21%

Exchanges Segment Results

Fourth quarter exchange net revenues were $1.1 billion, up 16% year-over-year. Exchange operating expenses were $337 million and on an adjusted basis, were $321 million in the fourth quarter. Segment operating income for the fourth quarter was $799 million and the operating margin was 70%. On an adjusted basis, operating income was $815 million and the adjusted operating margin was 72%.

$ (in millions)

4Q23

4Q22

% Chg

Const
Curr(1)

Revenue, net:

 

 

 

 

Energy

$414

$278

48%

46%

Ags and Metals

63

56

13%

12%

Financials(2)

116

100

16%

11%

Cash Equities and Equity Options

99

92

7%

7%

OTC and Other(3)

89

103

(13)%

(14)%

Data and Connectivity Services

234

226

3%

3%

Listings

121

127

(4)%

(4)%

Segment Revenue

$1,136

$982

16%

14%

 

 

 

 

 

Recurring Revenue

$355

$353

1%

1%

Transaction Revenue, net

$781

$629

24%

22%

(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 4Q22, 1.1737 and 1.0211, respectively.

(2) Financials include interest rates and other financial futures and options.

(3) OTC & other primarily 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.

Full year exchange net revenues were $4.4 billion, up 9% year-over-year. Exchange operating expenses were $1.3 billion and on an adjusted basis, were $1.2 billion for the full year. Segment operating income for 2023 was $3.2 billion and the operating margin was 71%. On an adjusted basis, operating income was $3.2 billion and the adjusted operating margin was 73%.

$ (in millions)

FY23

FY22

% Chg

Const
Curr(1)

Revenue, net:

 

 

 

 

Energy

$1,498

$1,162

29%

28%

Ags and Metals

271

235

15%

15%

Financials(2)

460

475

(3)%

(3)%

Cash Equities and Equity Options

383

378

1%

1%

OTC and Other(3)

398

429

(7)%

(7)%

Data and Connectivity Services

933

877

6%

6%

Listings

497

515

(4)%

(4)%

Segment Revenue

$4,440

$4,071

9%

9%

 

 

 

 

 

Recurring Revenue

$1,430

$1,392

3%

3%

Transaction Revenue, net

$3,010

$2,679

12%

12%

(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2022, 1.2376 and 1.0540, respectively.

(2) Financials include interest rates and other financial futures and options.

(3) OTC & other primarily 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

Fourth quarter fixed income and data services revenues were $563 million, up 5% year-over-year. Fixed income and data services operating expenses were $363 million and adjusted operating expenses were $322 million in the fourth quarter. Segment operating income for the fourth quarter was $200 million and the operating margin was 36%. On an adjusted basis, operating income was $241 million and the adjusted operating margin was 43%.

$ (in millions)

4Q23

4Q22

% Chg

Const
Curr(1)

Revenue:

 

 

 

 

Fixed Income Execution

$35

$35

—%

—%

CDS Clearing

81

79

5%

4%

Fixed Income Data and Analytics

286

274

4%

4%

Other Data and Network Services

161

149

8%

7%

Segment Revenue

$563

$537

5%

4%

 

 

 

 

 

Recurring Revenue

$447

$423

5%

5%

Transaction Revenue

$116

$114

4%

3%

(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 4Q22, 1.1737 and 1.0211, respectively.

Full year 2023 fixed income and data services revenues were $2.2 billion, up 7% year-over-year. Fixed income and data services operating expenses were $1.4 billion and on an adjusted basis, were $1.3 billion for the year. Segment operating income for the full year was $811 million and the operating margin was 36%. On an adjusted basis, operating income was $979 million and the adjusted operating margin was 44%.

$ (in millions)

FY23

FY22

% Chg

Const
Curr(1)

Revenue:

 

 

 

 

Fixed Income Execution

$124

$101

23%

23%

CDS Clearing

360

305

18%

18%

Fixed Income Data and Analytics

1,118

1,098

2%

2%

Other Data and Network Services

629

588

7%

7%

Segment Revenue

$2,231

$2,092

7%

6%

 

 

 

 

 

Recurring Revenue

$1,747

$1,686

4%

3%

Transaction Revenue

$484

$406

20%

19%

(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2022, 1.2376 and 1.0540, respectively.

Mortgage Technology Segment Results

Fourth quarter mortgage technology revenues were $502 million. Mortgage technology operating expenses were $576 million and adjusted operating expenses were $309 million in the fourth quarter. Segment operating loss for the fourth quarter was $74 million and the operating margin was (15)%. On an adjusted basis, operating income was $193 million and the adjusted operating margin was 39%.

$ (in millions)

4Q23

4Q22

% Chg

Revenue:

 

 

 

Origination Technology

$170

$181

(6)%

Closing Solutions

43

44

(2)%

Servicing Software

219

n/a

Data and Analytics

70

24

192%

Segment Revenue

$502

$249

102%

 

 

 

 

Recurring Revenue

$397

$164

144%

Transaction Revenue

$105

$85

22%

Full year mortgage technology revenues were $1.3 billion. Mortgage technology operating expenses were $1.6 billion and adjusted operating expenses were $809 million in 2023. Segment operating loss for the full year was $276 million and the operating margin was (21)%. On an adjusted basis, operating income was $508 million and the adjusted operating margin was 39%.

$ (in millions)

FY23

FY22

% Chg

Revenue:

 

 

 

Origination Technology

$694

$798

(13)%

Closing Solutions

179

239

(25)%

Servicing Software

288

n/a

Data and Analytics

156

92

69%

Segment Revenue

$1,317

$1,129

17%

 

 

 

 

Recurring Revenue

$961

$643

50%

Transaction Revenue

$356

$486

(27)%

Other Matters

  • Operating cash flow for 2023 was $3.5 billion and adjusted free cash flow was $3.2 billion.
  • As of December 31, 2023, unrestricted cash was $899 million and outstanding debt was $22.6 billion.
  • ICE paid $955 million in dividends in 2023.

Financial Guidance

 

GAAP

Non-GAAP

2024 Exchange Recurring Revenue (% growth)

Low-single digits

2024 Fixed Income & Data Services Recurring Revenue (% growth)

Mid-single digits

2024 Mortgage Technology Revenue (% growth)

Low-to-mid single digits

2024 Operating Expenses

$4.775 - $4.820 billion

$3.81 - $3.86 billion(1)

1Q24 Operating Expenses

$1.175 - $1.185 billion

$930 - $940 million(1)

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