- Record 1Q21 net revenues of $1.8 billion, +15% y/y
- 1Q21 GAAP diluted EPS of $1.14
- 1Q21 adj. diluted EPS of $1.34, +7% y/y
- Record 1Q21 operating income of $892 million; record
adjusted operating income of $1.1 billion, +11% y/y
- 1Q21 operating margin of 50%; adj. operating margin of
59%
- Q2 2021 pre-tax gain of $1.23 billion related to the full
divestment of stake in Coinbase
- Launched ICE Futures Abu Dhabi on March 29, 2021
Jeffrey C. Sprecher,ICE Chairman & Chief Executive
Officer, said,
"We are pleased to report strong first quarter
results that extend our track-record of growth. As we emerge from
the COVID-19 pandemic, never have our digital networks proven more
needed and resilient. We are grateful to our customers that
continue to rely on our technology, data and market infrastructure,
and we remain focused on innovating across asset classes to drive
greater efficiency and transparency."
Intercontinental Exchange (NYSE: ICE), a leading global provider
of data, technology and market infrastructure, today reported
financial results for the first quarter of 2021. For the quarter
ended March 31, 2021, consolidated net income attributable to ICE
was $646 million on $1.8 billion of consolidated revenues, less
transaction-based expenses. First quarter GAAP diluted earnings per
share (EPS) were $1.14. Adjusted net income attributable to ICE was
$758 million in the first quarter and adjusted diluted EPS were
$1.34. 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
free cash flow.
Scott A. Hill, ICE Chief Financial Officer, added: "In the first
quarter, we once again grew revenues, operating income and cash
flows. This performance reflects a strong balance of compounding
recurring revenues and diverse transaction-based revenues. We are
excited about the many growth opportunities that lie ahead, and we
remain focused on prudent capital management to deliver value to
our stockholders."
First Quarter 2021 Business Highlights
$ (in
millions)
Net
Revenue
Op
Margin
Adj
Op Margin
1Q21
Exchanges
$974
67%
69%
Fixed Income and Data Services
$468
28%
38%
Mortgage Technology
$355
30%
60%
Consolidated
$1,797
50%
59%
First quarter consolidated net revenues were $1.8 billion up 15%
year-over-year including exchange net revenues of $974 million,
fixed income and data services revenues of $468 million and
mortgage technology revenues of $355 million. Consolidated
operating expenses were $905 million for the first quarter of 2021.
On an adjusted basis, consolidated operating expenses were $729
million. Consolidated operating income for the first quarter was
$892 million and the operating margin was 50%. On an adjusted
basis, consolidated operating income for the first quarter was $1.1
billion and the adjusted operating margin was 59%.
Exchanges Segment Results
First quarter exchange net revenues were $974 million. Exchange
operating expenses were $321 million and on an adjusted basis, were
$298 million in the first quarter. Segment operating income for the
first quarter was $653 million and the operating margin was 67%. On
an adjusted basis, operating income was $676 million and the
adjusted operating margin was 69%.
$ (in
millions)
1Q21
1Q20
%
Chg
Revenue, net:
Energy
$310
$353
(12)%
Ags and Metals
59
84
(29)%
Financials(1)
105
123
(14)%
Cash Equities and Equity Options
102
113
(10)%
OTC and Other(2)
77
71
9%
Data and Connectivity Services
207
193
7%
Listings
114
112
2%
Segment Revenue
$974
$1,049
(7)%
(1) Financials include interest rates and
other financial futures and options.
(2) 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
First quarter fixed income and data services revenues were $468
million. Fixed income and data services operating expenses were
$335 million and adjusted operating expenses were $290 million in
the first quarter. Segment operating income for the first quarter
was $133 million and the operating margin was 28%. On an adjusted
basis, operating income was $178 million and the adjusted operating
margin was 38%.
$ (in millions)
1Q21
1Q20
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$14
$21
(32)%
(32)%
CDS Clearing
55
72
(25)%
(26)%
Fixed Income Data and Analytics
264
245
8%
7%
Other Data and Network Services
135
126
8%
6%
Segment Revenue
$468
$464
1%
—
(1) Net revenues in constant currency are
calculated holding both the pound sterling and euro at the average
exchange rate from 1Q20, 1.2794 and 1.1025, respectively
Mortgage Technology Segment Results
First quarter mortgage technology revenues were $355 million.
Mortgage technology operating expenses were $249 million and
adjusted operating expenses were $141 million in the first quarter.
Segment operating income for the first quarter was $106 million and
the operating margin was 30%. On an adjusted basis, operating
income was $214 million and the adjusted operating margin was
60%.
$ (in millions)
1Q21
1Q20
% Chg
Revenue:
Origination Technology(1)
$254
$—
n/a
Closing Solutions(1)
70
44
61%
Data and Analytics
18
—
n/a
Other
13
2
614%
Segment Revenue
$355
$46
680%
(1) Origination technology revenues
include those related to our ICE Mortgage Technology network
(previously reported in closing solutions revenues) and closing
solutions revenues now include registration revenues related to
MERS (previously reported in other revenues).
Other Matters
- The effective tax rate for the first quarter of 2021 was
22%.
- Operating cash flow in the first quarter of 2021 was $734
million and free cash flow was $702 million.
- Unrestricted cash was $562 million and outstanding debt was
$16.2 billion as of March 31, 2021.
- Through the first quarter of 2021, ICE paid $187 million in
dividends.
- Expect to record a pre-tax gain of $1.23 billion related to the
full divestment of our stake in Coinbase in the second quarter of
2021.
Financial Guidance
- ICE's second quarter 2021 total recurring revenues are expected
to be in a range of $844 million to $859 million.
- ICE's second quarter 2021 GAAP operating expenses are expected
to be in a range of $895 million to $905 million and adjusted
operating expenses(1) are expected to be in a range of $742 million
to $752 million.
- ICE's full year 2021 GAAP operating expenses are expected to be
in a range of $3.545 billion to $3.595 billion and adjusted
operating expenses(1) are expected to be in a range of $2.880
billion to $2.930 billion to include incremental Bakkt expense and
increased FX.
- ICE's second quarter 2021 GAAP non-operating expense(2) is
expected to be in the range of $97 million to $102 million and
adjusted non-operating expense is expected to be in the range of
$105 million to $110 million.
- ICE's diluted share count for the second quarter is expected to
be in the range of 562 million to 568 million weighted average
shares outstanding.
(1) 2021 and 2Q21 non-GAAP operating
expenses exclude amortization of acquisition-related intangibles
and transaction & integration costs. 2021 non-GAAP operating
expenses also exclude acquisition-related success fees.
(2) Non-operating expense includes
interest income, interest expense and net other income. Non-GAAP
non-operating expense excludes the equity earnings from an
unconsolidated investee.
Earnings Conference Call Information
ICE will hold a conference call today, April 29, 2021, at 8:30
a.m. ET to review its first quarter 2021 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
888-317-6003 from the United States, 866-284-3684 from Canada or
412-317-6061 from outside of the United States and Canada.
Telephone participants are required to provide the participant
entry number 9642702 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 second quarter 2021 earnings has
been scheduled for July 29th, 2021 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:
http://ir.theice.com/investors-and-media/supplemental-volume-info/default.aspx
Consolidated Statements of
Income
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended March
31,
Revenues:
2021
2020
Exchanges
$
1,606
$
1,605
Fixed income and data services
468
464
Mortgage technology
355
46
Total revenues
2,429
2,115
Transaction-based expenses:
Section 31 fees
125
166
Cash liquidity payments, routing and
clearing
507
390
Total revenues, less transaction-based
expenses
1,797
1,559
Operating expenses:
Compensation and benefits
354
278
Professional services
44
29
Acquisition-related transaction and
integration costs
18
12
Technology and communication
162
131
Rent and occupancy
21
21
Selling, general and administrative
51
49
Depreciation and amortization
255
157
Total operating expenses
905
677
Operating income
892
882
Other income (expense):
Interest income
—
6
Interest expense
(107
)
(72
)
Other income, net
48
20
Other income (expense), net
(59
)
(46
)
Income before income tax expense
833
836
Income tax expense
183
178
Net income
$
650
$
658
Net income attributable to non-controlling
interest
(4
)
(8
)
Net income attributable to
Intercontinental Exchange, Inc.
$
646
$
650
Earnings per share attributable to
Intercontinental Exchange, Inc. common stockholders:
Basic
$
1.15
$
1.18
Diluted
$
1.14
$
1.17
Weighted average common shares
outstanding:
Basic
562
552
Diluted
565
555
Consolidated Balance
Sheets
(In millions)
(Unaudited)
As of
As of
March 31, 2021
December 31, 2020
Assets:
Current assets:
Cash and cash equivalents
$
562
$
583
Short-term restricted cash and cash
equivalents
1,065
1,000
Customer accounts receivable, net
1,530
1,230
Margin deposits, guaranty funds and
delivery contracts receivable
85,608
84,083
Prepaid expenses and other current
assets
410
323
Total current assets
89,175
87,219
Property and equipment, net
1,731
1,713
Other non-current assets:
Goodwill
21,304
21,291
Other intangible assets, net
14,242
14,408
Long-term restricted cash and cash
equivalents
398
408
Other non-current assets
1,195
1,161
Total other non-current assets
37,139
37,268
Total assets
$
128,045
$
126,200
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued
liabilities
$
673
$
639
Section 31 fees payable
123
207
Accrued salaries and benefits
136
346
Deferred revenue
523
158
Short-term debt
2,068
2,411
Margin deposits, guaranty funds and
delivery contracts payable
85,608
84,083
Other current liabilities
271
155
Total current liabilities
89,402
87,999
Non-current liabilities:
Non-current deferred tax liability,
net
3,527
3,563
Long-term debt
14,131
14,126
Accrued employee benefits
203
206
Non-current operating lease liability
306
320
Other non-current liabilities
391
359
Total non-current liabilities
18,558
18,574
Total liabilities
107,960
106,573
Commitments and contingencies
Redeemable non-controlling interest in
consolidated subsidiaries
91
93
Equity:
Intercontinental Exchange, Inc.
stockholders’ equity:
Common stock
6
6
Treasury stock, at cost
(5,265
)
(5,200
)
Additional paid-in capital
13,908
13,845
Retained earnings
11,498
11,039
Accumulated other comprehensive loss
(184
)
(192
)
Total Intercontinental Exchange, Inc.
stockholders’ equity
19,963
19,498
Non-controlling interest in consolidated
subsidiaries
31
36
Total equity
19,994
19,534
Total liabilities and equity
$
128,045
$
126,200
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 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
Three Months Ended March
31,
Three Months Ended March
31,
Three Months Ended March
31,
Three Months Ended March
31,
2021
2020
2021
2020
2021
2020
2021
2020
Total revenues, less transaction-based
expenses
$974
$1,049
$468
$464
$355
$46
$1,797
$1,559
Operating expenses
321
322
335
330
249
25
905
677
Less: Amortization of acquisition-related
intangibles
18
17
45
48
95
5
158
70
Less: Transaction and integration costs
and acquisition-related success fees
5
10
—
—
13
—
18
10
Adjusted operating expenses
$298
$295
$290
$282
$141
$20
$729
$597
Operating income
$653
$727
$133
$134
$106
$21
$892
$882
Adjusted operating income
$676
$754
$178
$182
$214
$26
$1,068
$962
Operating margin
67%
69%
28%
29%
30%
45%
50%
57%
Adjusted operating margin
69%
72%
38%
39%
60%
55%
59%
62%
Adjusted Net Income
Attributable to ICE and EPS
(In millions)
(Unaudited)
Three Months Ended March 31,
2021
Three Months Ended March 31,
2020
Net income attributable to ICE
$
646
$
650
Add: Amortization of acquisition-related
intangibles
158
70
Add: Transaction and integration costs and
acquisition-related success fees
18
10
Less: Net income from unconsolidated
investee
(25
)
(17
)
Less: Income tax effect for the above
items
(40
)
(17
)
Add/(Less): Deferred tax adjustments on
acquisition-related intangibles
1
(1
)
Adjusted net income attributable to
ICE
$
758
$
695
Basic earnings per share
$
1.15
$
1.18
Diluted earnings per share
$
1.14
$
1.17
Adjusted basic earnings per share
$
1.35
$
1.26
Adjusted diluted earnings per share
$
1.34
$
1.25
Basic weighted average common shares
outstanding
562
552
Diluted weighted average common shares
outstanding
565
555
Free Cash Flow
Calculation
(In millions)
(Unaudited)
Three months ended March 31,
2021
Three months ended March 31,
2020
Cash flow from operations
$734
$520
Less: Capital expenditures and capitalized
software development costs
(116
)
(59
)
Add/(Less): Section 31 fees, net
84
(27
)
Free cash flow
$702
$434
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 here. 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, 2020, as filed with the SEC on February
4, 2021. 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
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version on businesswire.com: https://www.businesswire.com/news/home/20210429005374/en/
ICE Investor Relations Contact: Mary Caroline O'Neal +1
770 738 2151 marycaroline.oneal@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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