- 1Q22 net revenues of $1.9 billion, +6% y/y
- 1Q22 GAAP diluted EPS of $1.16, +2%
y/y
- 1Q22 adj. diluted EPS of $1.43, +7%
y/y
- 1Q22 operating income of $992 million,
+11% y/y; adjusted operating income of $1.2 billion, +8%
y/y
- 1Q22 operating margin of 52%; adj.
operating margin of 61%
- 1Q22 operating cash flow of $756
million; $689 million returned to stockholders through dividends
and stock repurchases
Jeffrey C. Sprecher,ICE Chairman & Chief Executive
Officer, said,"We are pleased to report our first quarter results
including another quarter of revenue and 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 technologies to manage risk and
capture efficiencies. Importantly, the "all-weather" nature of our
business model enabled us to grow through geopolitical unrest,
inflationary concerns and rising interest rates. We remain focused
on innovating across asset classes to serve the needs of our
customers and deliver growth for stockholders."
Intercontinental Exchange (NYSE: ICE), a leading global provider
of data, technology and market infrastructure, today reported
financial results for the first quarter of 2022. For the quarter
ended March 31, 2022, consolidated net income attributable to ICE
was $657 million on $1.9 billion of consolidated revenues, less
transaction-based expenses. First quarter GAAP diluted earnings per
share (EPS) were $1.16. Adjusted net income attributable to ICE was
$804 million in the first quarter and adjusted diluted EPS were
$1.43. 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.
Warren Gardiner, ICE Chief Financial Officer, added: "In the
first quarter, we once again grew revenues, operating income and
cash flows. This performance was driven by compounding recurring
revenue growth across segments combined with growth in our diverse
transaction-based businesses. Additionally, our strong cash
generation enabled us to return $689 million to stockholders while
continuing to invest in the future growth of our business."
First Quarter 2022 Business Highlights
$ (in millions)
Net Revenue
Op Margin
Adj Op Margin
1Q22
Exchanges
$1,083
72%
74%
Fixed Income and Data Services
$509
30%
40%
Mortgage Technology
$307
17%
49%
Consolidated
$1,899
52%
61%
1Q22
1Q21
% Chg
Recurring Revenue
$921
$845
9%
Transaction Revenue, net
$978
$952
3%
First quarter consolidated net revenues were $1.9 billion, up 6%
year-over-year including exchange net revenues of $1.1 billion,
fixed income and data services revenues of $509 million and
mortgage technology revenues of $307 million. Consolidated
operating expenses were $907 million for the first quarter of 2022.
On an adjusted basis, consolidated operating expenses were $746
million. Consolidated operating income for the first quarter was
$992 million and the operating margin was 52%. On an adjusted
basis, consolidated operating income for the first quarter was $1.2
billion and the adjusted operating margin was 61%.
Exchanges Segment Results
First quarter exchange net revenues were $1.1 billion. Exchange
operating expenses were $299 million and on an adjusted basis, were
$283 million in the first quarter. Segment operating income for the
first quarter was $784 million and the operating margin was 72%. On
an adjusted basis, operating income was $800 million and the
adjusted operating margin was 74%.
$ (in millions)
1Q22
1Q21
% Chg
Revenue, net:
Energy
$353
$310
14%
Ags and Metals
61
59
3%
Financials(1)
130
105
24%
Cash Equities and Equity Options
99
102
(3)%
OTC and Other(2)
97
77
25%
Data and Connectivity Services
214
207
4%
Listings
129
114
13%
Segment Revenue
$1,083
$974
11%
Recurring Revenue
$343
$321
7%
Transaction Revenue, net
$740
$653
13%
(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 $509
million. Fixed income and data services operating expenses were
$354 million and adjusted operating expenses were $305 million in
the first quarter. Segment operating income for the first quarter
was $155 million and the operating margin was 30%. On an adjusted
basis, operating income was $204 million and the adjusted operating
margin was 40%.
$ (in millions)
1Q22
1Q21
% Chg
Const Curr(1)
Revenue:
Fixed Income Execution
$15
$14
9%
9%
CDS Clearing
72
55
32%
33%
Fixed Income Data and Analytics
277
264
5%
5%
Other Data and Network Services
145
135
7%
8%
Segment Revenue
$509
$468
9%
9%
Recurring Revenue
$422
$399
6%
6%
Transaction Revenue
$87
$69
27%
28%
(1)
Net revenues in constant currency are
calculated holding both the pound sterling and euro at the average
exchange rate from 1Q21, 1.3792 and 1.2060, respectively.
Mortgage Technology Segment Results
First quarter mortgage technology revenues were $307 million.
Mortgage technology operating expenses were $254 million and
adjusted operating expenses were $158 million in the first quarter.
Segment operating income for the first quarter was $53 million and
the operating margin was 17%. On an adjusted basis, operating
income was $149 million and the adjusted operating margin was
49%.
$ (in millions)
1Q22
1Q21
% Chg
Revenue:
Origination Technology
$203
$254
(20)%
Closing Solutions
70
70
—%
Data and Analytics
20
18
6%
Other
14
13
13%
Segment Revenue
$307
$355
(13)%
Recurring Revenue
$156
$125
24%
Transaction Revenue
$151
$230
(34)%
Other Matters
- The effective tax rate for the first quarter of 2022 was
20%.
- Operating cash flow in the first quarter of 2022 was $756
million and free cash flow was $660 million.
- Unrestricted cash was $638 million and outstanding debt was
$14.2 billion as of March 31, 2022.
- Through the first quarter of 2022, ICE repurchased $475 million
of its common stock and paid $214 million in dividends.
Financial Guidance
- ICE's second quarter 2022 GAAP operating expenses are expected
to be in a range of $900 million to $910 million. Adjusted
operating expenses(1) are expected to be in a range of $740 million
to $750 million.
- ICE's second quarter 2022 GAAP non-operating expense(2) is
expected to be in the range of $135 million to $140 million.
Adjusted non-operating expense is expected to be in the range of
$100 million to $105 million.
- ICE's diluted share count for the second quarter is expected to
be in the range of 558 million to 564 million weighted average
shares outstanding, excluding the impact of any potential share
repurchases.
(1)
2022 and 2Q22 non-GAAP operating expenses
exclude amortization of acquisition-related intangibles and Ellie
Mae transaction and integration costs.
(2)
Non-operating income / expense includes
interest income, interest expense and net other income. Non-GAAP
non-operating expense excludes the equity earnings from
unconsolidated investees.
Earnings Conference Call Information
ICE will hold a conference call today, May 5, 2022, at 8:30 a.m.
ET to review its first quarter 2022 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 844-512-2926
from the United States or 412-317-6300 from outside of the United
States. Telephone participants are required to provide the
participant entry number 9429379 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 2022 earnings has
been scheduled for August 4th, 2022 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)
Three Months Ended
March 31,
Revenues:
2022
2021
Exchanges
$
1,643
$
1,606
Fixed income and data services
509
468
Mortgage technology
307
355
Total revenues
2,459
2,429
Transaction-based expenses:
Section 31 fees
51
125
Cash liquidity payments, routing and
clearing
509
507
Total revenues, less transaction-based
expenses
1,899
1,797
Operating expenses:
Compensation and benefits
359
354
Professional services
34
44
Acquisition-related transaction and
integration costs
9
18
Technology and communication
175
162
Rent and occupancy
21
21
Selling, general and administrative
55
51
Depreciation and amortization
254
255
Total operating expenses
907
905
Operating income
992
892
Other income (expense):
Interest income
1
—
Interest expense
(103
)
(107
)
Other income, net
(58
)
48
Other income (expense), net
(160
)
(59
)
Income before income tax expense
832
833
Income tax expense
165
183
Net income
$
667
$
650
Net income attributable to non-controlling
interest
(10
)
(4
)
Net income attributable to
Intercontinental Exchange, Inc.
$
657
$
646
Earnings per share attributable to
Intercontinental Exchange, Inc. common stockholders:
Basic
$
1.17
$
1.15
Diluted
$
1.16
$
1.14
Weighted average common shares
outstanding:
Basic
561
562
Diluted
564
565
Consolidated Balance
Sheets
(In millions)
As of
March 31, 2022
As of
(Unaudited)
December 31, 2021
Assets:
Current assets:
Cash and cash equivalents
$
638
$
607
Short-term restricted cash and cash
equivalents
1,101
1,035
Cash and cash equivalent margin deposits
and guaranty funds
161,147
145,936
Invested deposits, delivery contracts
receivable and unsettled variation margin
3,776
4,493
Customer accounts receivable, net
1,696
1,208
Prepaid expenses and other current
assets
1,020
1,021
Total current assets
169,378
154,300
Property and equipment, net
1,733
1,699
Other non-current assets:
Goodwill
21,141
21,123
Other intangible assets, net
13,576
13,736
Long-term restricted cash and cash
equivalents
405
398
Other non-current assets
2,255
2,246
Total other non-current assets
37,377
37,503
Total assets
$
208,488
$
193,502
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued
liabilities
$
733
$
703
Section 31 fees payable
50
57
Accrued salaries and benefits
148
354
Deferred revenue
589
194
Short-term debt
1,777
1,521
Margin deposits and guaranty funds
161,147
145,936
Invested deposits, delivery contracts
payable and unsettled variation margin
3,776
4,493
Other current liabilities
259
153
Total current liabilities
168,479
153,411
Non-current liabilities:
Non-current deferred tax liability,
net
4,011
4,100
Long-term debt
12,401
12,397
Accrued employee benefits
195
200
Non-current operating lease liability
288
252
Other non-current liabilities
411
394
Total non-current liabilities
17,306
17,343
Total liabilities
185,785
170,754
Commitments and contingencies
Redeemable non-controlling interest in
consolidated subsidiaries
—
—
Equity:
Intercontinental Exchange, Inc.
stockholders’ equity:
Common stock
6
6
Treasury stock, at cost
(6,064
)
(5,520
)
Additional paid-in capital
14,153
14,069
Retained earnings
14,793
14,350
Accumulated other comprehensive loss
(221
)
(196
)
Total Intercontinental Exchange, Inc.
stockholders’ equity
22,667
22,709
Non-controlling interest in consolidated
subsidiaries
36
39
Total equity
22,703
22,748
Total liabilities and equity
$
208,488
$
193,502
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,
2022
2021
2022
2021
2022
2021
2022
2021
Total revenues, less transaction-based
expenses
$
1,083
$
974
$
509
$
468
$
307
$
355
$
1,899
$
1,797
Operating expenses
299
321
354
335
254
249
907
905
Less: Amortization of acquisition-related
intangibles
16
18
49
45
88
95
153
158
Less: Transaction and integration
costs
—
5
—
—
8
13
8
18
Adjusted operating expenses
$
283
$
298
$
305
$
290
$
158
$
141
$
746
$
729
Operating income
$
784
$
653
$
155
$
133
$
53
$
106
$
992
$
892
Adjusted operating income
$
800
$
676
$
204
$
178
$
149
$
214
$
1,153
$
1,068
Operating margin
72
%
67
%
30
%
28
%
17
%
30
%
52
%
50
%
Adjusted operating margin
74
%
69
%
40
%
38
%
49
%
60
%
61
%
59
%
Adjusted Net Income
Attributable to ICE and EPS
(In millions)
(Unaudited)
Three Months Ended March 31,
2022
Three Months Ended March 31,
2021
Net income attributable to ICE
$
657
$
646
Add: Amortization of acquisition-related
intangibles
153
158
Add: Transaction and integration costs
8
18
Add: Accrual relating to legal
settlement
9
—
Add/(Less): Net losses (income) from
unconsolidated investees
42
(25
)
Less: Income tax effect for the above
items
(58
)
(40
)
Add/(Less): Deferred tax adjustments on
acquisition-related intangibles
(7
)
1
Adjusted net income attributable to
ICE
$
804
$
758
Basic earnings per share
$
1.17
$
1.15
Diluted earnings per share
$
1.16
$
1.14
Adjusted basic earnings per share
$
1.43
$
1.35
Adjusted diluted earnings per share
$
1.43
$
1.34
Basic weighted average common shares
outstanding
561
562
Diluted weighted average common shares
outstanding
564
565
Free Cash Flow
Calculation
(In millions)
(Unaudited)
Three Months Ended March 31,
2022
Three Months Ended March 31,
2021
Cash flow from operations
$756
$734
Less: Capital expenditures and capitalized
software development costs
(103
)
(116
)
Add: Section 31 fees, net
7
84
Free cash flow
$660
$702
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 at
http://www.intercontinentalexchange.com/terms-of-use. 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, 2021, as filed with the SEC on February
3, 2022. 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/20220505005414/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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