Intercontinental Exchange Reports Strong Second Quarter 2024
Intercontinental Exchange (NYSE: ICE): Record 2Q24 net revenues of $2.3 billion, +23% y/y 2Q24 GAAP diluted earnings per share (EPS) of $1.10, down 23% y/y 2Q24 adj. diluted EPS of $1.5...
ATLANTA & NEW YORK: Intercontinental Exchange (NYSE: ICE):
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| Jeffrey C. Sprecher, ICE Chair & Chief Executive Officer, said, "We are pleased to report our second quarter results that extend our track record of growth. Our customers continue to access our networks to manage risk, consume our mission-critical data and drive workflow efficiencies across asset classes and through an array of macroeconomic environments. As we look to the second half of the year and beyond, we will continue to leverage our data, technology and network expertise to deliver innovative solutions for our customers and drive growth for our stockholders." |
Intercontinental Exchange (NYSE: ICE), a leading global provider of technology and data, today reported financial results for the second quarter of 2024. For the quarter ended June 30, 2024, consolidated net income attributable to ICE was $632 million on $2.3 billion of consolidated revenues, less transaction-based expenses. Second quarter GAAP diluted EPS were $1.10. Adjusted net income attributable to ICE was $876 million in the second quarter and adjusted diluted EPS were $1.52. 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 half of 2024, we have generated record revenues and record operating income, while also continuing to make progress towards achieving the leverage and synergy targets related to our 2023 acquisition of Black Knight. As we turn to the second half, we expect to continue to invest in opportunities to drive future growth and to create value for our stockholders."
Second Quarter 2024 Business Highlights
Second quarter consolidated net revenues were $2.3 billion including exchange net revenues of $1.2 billion, fixed income and data services revenues of $565 million and mortgage technology revenues of $506 million. Consolidated operating expenses were $1.3 billion for the second quarter of 2024. On an adjusted basis, consolidated operating expenses were $947 million. Consolidated operating income for the second quarter was $1.1 billion, and the operating margin was 46%. On an adjusted basis, consolidated operating income for the second quarter was $1.4 billion, and the adjusted operating margin was 59%.
$ (in millions) | Net Revenues | Op Margin | Adj Op Margin |
| 2Q24 | ||
Exchanges | $1,246 | 71% | 75% |
Fixed Income and Data Services | $565 | 37% | 45% |
Mortgage Technology | $506 | (6)% | 36% |
Consolidated | $2,317 | 46% | 59% |
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|
|
|
| 2Q24 | 2Q23 | % Chg |
Recurring Revenues | $1,206 | $955 | 26% |
Transaction Revenues, net | $1,111 | $933 | 19% |
Exchanges Segment Results
Second quarter exchange net revenues were $1.2 billion. Exchange operating expenses were $356 million and on an adjusted basis, were $311 million in the second quarter. Segment operating income for the second quarter was $890 million, and the operating margin was 71%. On an adjusted basis, operating income was $935 million, and the adjusted operating margin was 75%.
$ (in millions) | 2Q24 | 2Q23 | % Chg | Const Curr(1) |
Revenues, net: |
|
|
|
|
Energy | $469 | $355 | 32% | 33% |
Ags and Metals | 71 | 77 | (8)% | (8)% |
Financials(2) | 132 | 104 | 26% | 26% |
Cash Equities and Equity Options, net | 111 | 96 | 16% | 16% |
OTC and Other(3) | 101 | 104 | (3)% | (3)% |
Data and Connectivity Services | 240 | 231 | 4% | 4% |
Listings | 122 | 126 | (3)% | (3)% |
Segment Revenues | $1,246 | $1,093 | 14% | 14% |
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|
|
|
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Recurring Revenues | $362 | $357 | 1% | 1% |
Transaction Revenues, net | $884 | $736 | 20% | 20% |
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2Q23, 1.2522 and 1.0893, respectively. | ||||
(2) Financials include interest rates and other financial futures and options. | ||||
(3) OTC & other includes net interest income and fees 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, 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 $565 million. Fixed income and data services operating expenses were $357 million, and adjusted operating expenses were $311 million in the second quarter. Segment operating income for the second quarter was $208 million, and the operating margin was 37%. On an adjusted basis, operating income was $254 million, and the adjusted operating margin was 45%.
$ (in millions) | 2Q24 | 2Q23 | % Chg | Const Curr(1) |
Revenues: |
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|
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Fixed Income Execution | $30 | $28 | 3% | 3% |
CDS Clearing | 78 | 84 | (6)% | (6)% |
Fixed Income Data and Analytics | 293 | 277 | 6% | 6% |
Other Data and Network Services | 164 | 157 | 5% | 5% |
Segment Revenues | $565 | $546 | 4% | 4% |
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Recurring Revenues | $457 | $434 | 5% | 5% |
Transaction Revenues | $108 | $112 | (4)% | (4)% |
(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2Q23, 1.2522 and 1.0893, respectively. | ||||
Mortgage Technology Segment Results
Second quarter mortgage technology revenues were $506 million. Mortgage technology operating expenses were $538 million, and adjusted operating expenses were $325 million in the second quarter. Segment operating loss for the second quarter was $32 million, and the operating margin was (6)%. On an adjusted basis, operating income was $181 million, and the adjusted operating margin was 36%.
$ (in millions) | 2Q24 | 2Q23 | % Chg |
Revenues: |
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|
Origination Technology | $180 | $178 | 1% |
Closing Solutions | 52 | 47 | 9% |
Servicing Software | 212 | — | n/a |
Data and Analytics | 62 | 24 | 165% |
Segment Revenues | $506 | $249 | 103% |
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Recurring Revenues | $387 | $164 | 137% |
Transaction Revenues | $119 | $85 | 39% |
Other Matters
- Operating cash flow through the second quarter of 2024 was $2.2 billion and adjusted free cash flow was $1.8 billion.
- Unrestricted cash was $885 million and outstanding debt was $21.8 billion as of June 30, 2024.
- Through the second quarter of 2024, ICE paid $519 million in dividends.
Updated Financial Guidance
- ICE's full year 2024 GAAP operating expenses are expected to be in a range of $4.90 billion to $4.93 billion. Adjusted operating expenses(1) are expected to be in a range of $3.79 billion to $3.82 billion.
- ICE's third quarter 2024 GAAP operating expenses are expected to be in a range of $1.22 billion to $1.23 billion. Adjusted operating expenses(1) are expected to be in a range of $955 million to $965 million.
- ICE's third quarter 2024 GAAP non-operating expense(2) is expected to be in the range of $200 million to $205 million. Adjusted non-operating expense is expected to be in the range of $190 million to $195 million.
- ICE's diluted share count for the third quarter is expected to be in the range of 573 million to 579 million weighted average shares outstanding.
(1) Full year and 3Q 2024 non-GAAP operating expenses exclude amortization of acquisition-related intangibles, duplicate rent expenses, valid claims made following an equity trading issue at NYSE, 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, August 1, 2024, at 8:30 a.m. ET to review its second quarter 2024 financial results. A live audio webcast of the earnings call will be available on the company's website at www.ice.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 916348 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 2024 earnings has been scheduled for October 31st, 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) | ||||||||||||
| Six Months Ended | Three Months Ended | ||||||||||
Revenues: |
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
|
Exchanges | $ | 3,560 |
| $ | 3,214 |
| $ | 1,826 |
| $ | 1,541 |
|
Fixed income and data services |
| 1,133 |
|
| 1,109 |
|
| 565 |
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| 546 |
|
Mortgage technology |
| 1,005 |
|
| 485 |
|
| 506 |
|
| 249 |
|
Total revenues |
| 5,698 |
|
| 4,808 |
|
| 2,897 |
|
| 2,336 |
|
Transaction-based expenses: |
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Section 31 fees |
| 205 |
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| 175 |
|
| 138 |
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| 56 |
|
Cash liquidity payments, routing and clearing |
| 886 |
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| 849 |
|
| 442 |
|
| 392 |
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Total revenues, less transaction-based expenses |
| 4,607 |
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| 3,784 |
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| 2,317 |
|
| 1,888 |
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Operating expenses: |
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Compensation and benefits |
| 935 |
|
| 703 |
|
| 473 |
|
| 351 |
|
Professional services |
| 74 |
|
| 57 |
|
| 38 |
|
| 29 |
|
Acquisition-related transaction and integration costs |
| 51 |
|
| 46 |
|
| 15 |
|
| 25 |
|
Technology and communication |
| 419 |
|
| 345 |
|
| 214 |
|
| 173 |
|
Rent and occupancy |
| 59 |
|
| 45 |
|
| 30 |
|
| 25 |
|
Selling, general and administrative |
| 178 |
|
| 137 |
|
| 100 |
|
| 63 |
|
Depreciation and amortization |
| 762 |
|
| 527 |
|
| 381 |
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