• Earnings Per Share (EPS): $1.72, up 16% year-over-year.
• Net Revenue: $2.5 billion, an 8% increase year-over-year.
• Adjusted Operating Expenses: $964 million, below the low end of guidance.
• Adjusted Operating Income: $1.5 billion, up 11% year-over-year.
• Capital Returned to Shareholders: $519 million, including $241 million in share repurchases.
• Leverage: Ended the quarter under 3.2 times EBITDA.
• Exchange Segment Net Revenues: $1.4 billion, up 12% year-over-year.
• Transaction Revenues: Nearly $1 billion, up 16% year-over-year.
• Recurring Revenues: $368 million, up 3% year-over-year.
• Fixed Income and Data Services Revenues: $596 million, with transaction revenues of $125 million.
• ICE Bonds Revenue: Increased by 16% year-over-year.
• Recurring Revenues in Fixed Income: $471 million, up 5% year-over-year.
• Mortgage Technology Revenues: $510 million.
• Recurring Revenues in Mortgage Technology: $397 million.
• Transaction Revenues in Mortgage Technology: $113 million.
• Energy Revenues: Increased 23% year-over-year.
• Interest Rate Business Growth: 18% increase year-over-year.
• NYSE Cash Equities and Options Revenues: 21% growth year-over-year.
• ETF AUM: Reached a record $684 billion.

• Warning! GuruFocus has detected 7 Warning Sign with ICE.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Intercontinental Exchange Inc (NYSE:ICE) reported record first-quarter earnings per share of $1.72, up 16% year-over-year.
• Net revenue increased by 8% to a record $2.5 billion, with growth across all three operating segments.
• The company returned $519 million of capital to shareholders, including $241 million in share repurchases.
• Record transaction revenues of nearly $1 billion were driven by significant growth in interest rate, NYSE cash equities, options, and energy markets.
• The fixed income and data services segment achieved record revenues of $596 million, with strong growth in the muni and corporate bond trading businesses.

Negative Points

• Second quarter adjusted operating expenses are expected to increase to between $980 million and $990 million, driven by currency fluctuations and merit increases.
• The mortgage technology segment faces potential risks from the Rocket purchase of Mr. Cooper, which could impact future business.
• There are concerns about the impact of geopolitical changes, such as a potential Ukraine-Russia peace, on energy market volumes.
• The fixed income data line experienced a sequential decline due to fewer onetime revenues and equity market pressures.
• The company faces challenges in maintaining growth amidst macroeconomic uncertainties and potential delays in bank implementations.

Q & A Highlights

Q: How does ICE view Rocket's acquisition of Mr. Cooper, and what impact might it have on ICE's business? A: Benjamin Jackson, President, explained that the acquisition validates ICE's strategy of building a comprehensive end-to-end mortgage platform. ICE remains a neutral third-party provider, not competing with its clients, which is a key differentiator. Warren Gardiner, CFO, added that Rocket/Cooper represents less than 3% of ICE's mortgage technology revenues, and any potential impact would take years to materialize due to existing contracts.

Q: What are ICE's current thoughts on mergers and acquisitions (M&A) given recent deleveraging and share buybacks? A: Jeffrey Sprecher, CEO, stated that ICE is focused on share buybacks due to strong company performance and cash flow. While ICE is open to M&A opportunities, they are evaluated against the potential returns from share buybacks. The company has built a robust mortgage platform, and any future acquisitions would likely be smaller, bolt-on additions.

Q: How does ICE view the current dynamics in the energy markets, and what impact could a change in geopolitical environment have? A: Benjamin Jackson, President, noted that ICE's energy markets are robust due to a variety of risks that clients need to manage, such as trade dynamics and energy supply security. Even if geopolitical tensions ease, other factors like energy demand growth and supply chain changes will continue to drive market activity.

Q: Can you provide more details on the recent index wins in the fixed income data segment? A: Christopher Edmonds, President of Fixed Income and Data Services, highlighted that ICE's ability to customize indices for clients' investment strategies is driving growth. One recent win involves $10 billion in assets under management moving to ICE's index family.

Q: How is ICE's mortgage technology segment performing, and are there any changes to the guidance? A: Warren Gardiner, CFO, stated that the guidance remains unchanged, with expectations of mid-teens growth in origination volumes. The segment is benefiting from new client implementations, and recent wins like United Wholesale Mortgage are expected to contribute positively.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.