07.30.2021

ICE Q2 Net Revenues Rise

  • 2Q21 net revenues of $1.7 billion, +22% y/y

  • 2Q21 GAAP diluted EPS of $2.22, +134% y/y

  • 2Q21 pre-tax gain of $1.23 billion related to the full divestment of stake in Coinbase

  • 2Q21 adj. diluted EPS of $1.16, +12% y/y

  • 2Q21 operating income of $799 million, +7% y/y; adjusted operating income of $963 million, +17% y/y

  • 2Q21 operating margin of 47%; adj. operating margin of 56%

Jeffrey C. Sprecher, ICE Chairman & Chief Executive Officer, said,

“We are pleased to report our second quarter results that extend our track record of growth. Amidst a dynamic macroeconomic backdrop, customers continue to access our networks to manage risk, consume data and drive workflow efficiencies. As we look to the second half of the year and beyond, we will continue to leverage our data, technology & network expertise to deliver innovative solutions for our customers and drive growth for our stockholders.”

Intercontinental Exchange, a leading global provider of data, technology and market infrastructure, today reported financial results for the second quarter of 2021. For the quarter ended June 30, 2021, consolidated net income attributable to ICE was $1.3 billion on $1.7 billion of consolidated revenues, less transaction-based expenses. Second quarter GAAP diluted earnings per share (EPS) were $2.22. Adjusted net income attributable to ICE was $657 million in the second quarter and adjusted diluted EPS were $1.16. 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 second quarter, we once again grew revenues, operating income, earnings and cash flow. Our performance is a testament to the power of our diverse business model, which, through an array of macroeconomic environments, continues to deliver consistent and compounding growth for our stockholders.”

Second Quarter 2021 Business Highlights

$ (in millions)

Net Revenue

Op Margin

Adj Op Margin

2Q21

Exchanges

$909

64%

67%

Fixed Income and Data Services

$458

26%

36%

Mortgage Technology

$340

28%

56%

Consolidated

$1,707

47%

56%

Second quarter consolidated net revenues were $1.7 billion, up 22% year-over-year including exchange net revenues of $909 million, fixed income and data services revenues of $458 million and mortgage technology revenues of $340 million. Consolidated operating expenses were $908 million for the second quarter of 2021. On an adjusted basis, consolidated operating expenses were $744 million. Consolidated operating income for the second quarter was $799 million and the operating margin was 47%. On an adjusted basis, consolidated operating income for the second quarter was $963 million and the adjusted operating margin was 56%.

Exchanges Segment Results

Second quarter exchange net revenues were $909 million. Exchange operating expenses were $326 million and on an adjusted basis, were $302 million in the second quarter. Segment operating income for the second quarter was $583 million and the operating margin was 64%. On an adjusted basis, operating income was $607 million and the adjusted operating margin was 67%.

$ (in millions)

2Q21

2Q20

% Chg

Revenue, net:

Energy

$274

$276

—%

Ags and Metals

62

59

3%

Financials(1)

83

76

8%

Cash Equities and Equity Options

85

101

(17)%

OTC and Other(2)

78

75

4%

Data and Connectivity Services

208

195

7%

Listings

119

111

8%

Segment Revenue

$909

$893

2%

(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

Second quarter fixed income and data services revenues were $458 million. Fixed income and data services operating expenses were $337 million and adjusted operating expenses were $291 million in the second quarter. Segment operating income for the second quarter was $121 million and the operating margin was 26%. On an adjusted basis, operating income was $167 million and the adjusted operating margin was 36%.

$ (in millions)

2Q21

2Q20

% Chg

Const
Curr(1)

Revenue:

Fixed Income Execution

$13

$20

(33)%

(33)%

CDS Clearing

38

47

(19)%

(21)%

Fixed Income Data and Analytics

268

252

6%

5%

Other Data and Network Services

139

127

9%

7%

Segment Revenue

$458

$446

3%

1%

(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 2Q20, 1.2413 and 1.1011, respectively.

Mortgage Technology Segment Results

Second quarter mortgage technology revenues were $340 million. Mortgage technology operating expenses were $245 million and adjusted operating expenses were $151 million in the second quarter. Segment operating income for the second quarter was $95 million and the operating margin was 28%. On an adjusted basis, operating income was $189 million and the adjusted operating margin was 56%.

$ (in millions)

2Q21

2Q20

% Chg

Revenue:

Origination Technology

$241

$—

n/a

Closing Solutions

69

54

26%

Data and Analytics

18

n/a

Other

12

2

n/a

Segment Revenue

$340

$56

n/a

Other Matters

  • The effective tax rate for the second quarter of 2021 was 35%.
  • Operating cash flow through the second quarter of 2021 was $1.6 billion and free cash flow was $1.4 billion.
  • Unrestricted cash was $602 million and outstanding debt was $14.5 billion as of June 30, 2021.
  • Through the second quarter of 2021, ICE paid $374 million in dividends.
  • ICE recorded a pre-tax gain of $1.23 billion related to the full divestment of its stake in Coinbase in the second quarter of 2021.

Financial Guidance

  • ICE’s third quarter 2021 total recurring revenues are expected to be in a range of $870 million to $885 million.
  • ICE’s third quarter 2021 GAAP operating expenses are expected to be in a range of $930 millionto $940 million and adjusted operating expenses(1) are expected to be in a range of $770 million to $780 million and include $55 million related to Bakkt.
  • ICE’s full year 2021 GAAP operating expenses are expected to be in a range of $3.610 billionto $3.640 billion and adjusted operating expenses(1) are expected to be in a range of $2.950 billion to $2.980 billion to include third quarter Bakkt expense of $55 million.
  • ICE’s third quarter 2021 GAAP non-operating expense(2) is expected to be in the range of $110 million to $115 million and adjusted non-operating expense is expected to be in the range of $100 million to $105 million.
  • ICE’s full year 2021 capital expenditures are expected to be in a range of $430 million to $450 million.
  • ICE’s diluted share count for the third quarter is expected to be in the range of 563 million to 569 million weighted average shares outstanding.

(1) 2021 and 3Q21 non-GAAP operating expenses exclude amortization of acquisition-related intangibles and transaction & integration costs.

(2) Non-operating expense includes interest income, interest expense and net other income. Non-GAAP non-operating expense excludes the equity earnings from unconsolidated investees.

Source: ICE

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