Intercontinental Exchange reported record third-quarter results, with revenue, operating income and earnings per share all rising at double-digit rates from a year earlier. The exchange operator’s businesses generated $2.765 billion in net revenue, led by its exchanges, while fixed-income and data services and mortgage technology also contributed substantially.
ICE also said it had returned $2.5 billion to shareholders through Sept. 30, including $1.6 billion in share repurchases. The company said it plans to continue returning capital while pursuing a deleveraging plan following the close of its MarketAxess transaction.
Key details
- Revenue rose 15% year over year. Third-quarter net revenue was $2.765 billion, or about $2.8 billion. The company reported $940 million in net income attributable to ICE.
- Earnings increased on both reported and adjusted measures. Diluted earnings per share were $1.67, up 18% from a year earlier. Adjusted diluted EPS was $2.02, also up 18%; adjusted net income was $1.1 billion.
- Operating income grew faster than revenue. GAAP operating income was $1.4 billion, up 20%, with a 51% operating margin. Adjusted operating income was $1.7 billion, up 19%, and the adjusted margin was 61%.
- Exchanges were the largest revenue segment. The business generated $1.542 billion in revenue and reported a 75% operating margin, or 76% on an adjusted basis.
- Fixed-income and data services produced $674 million in revenue. Its operating margin was 36% on a reported basis and 46% adjusted.
- Mortgage technology generated $549 million in revenue. Its reported operating margin was 2%, compared with an adjusted margin of 40%.
- Expenses were $1.4 billion overall, compared with adjusted operating expenses of $1.1 billion. ICE presents adjusted figures as non-GAAP measures; they exclude certain items and are not directly equivalent to the company’s reported results.
- Capital returns were substantial through the first nine months. ICE returned $2.5 billion to shareholders, including a record $1.6 billion in share repurchases. The company said strong cash flows supported those returns while it continued investing in growth initiatives.
- ICE described year-to-date results as records for revenue, adjusted operating income and adjusted EPS. Chief Executive Jeff Sprecher said the company entered the fourth quarter with strong momentum.
What changes for investors
The quarter showed growth across ICE’s reported earnings measures, alongside a large return of capital through buybacks and other shareholder distributions. The company also tied its plans for continued capital returns to a deleveraging effort following the close of MarketAxess.