Intercontinental Exchange (ICE 0.49%), best known for operating global exchanges and clearinghouses, said third-quarter earnings rose 6% from a year earlier, matching Wall Street estimates.
The company, often referred to as ICE, reported adjusted earnings per share (EPS) of $1.55. The company also reported record total revenue of $2.3 billion, representing a 17% increase over the previous year’s third quarter, and also in line with analyst forecasts.
| Metric | 3Q24 Result | Analyst Estimate | 3Q23 Result | % Change Y/Y |
|---|---|---|---|---|
| Total Revenue | $2.3 billion | $2.353 billion | $2.003 billion | +17% |
| Adjusted EPS | $1.55 | $1.54995 | - | +6% |
| Operating Cash Flow (YTD) | $3.1 billion | - | - | - |
| Exchanges Segment Revenue | $1.3 billion | - | $1.114 billion | +13% |
| Mortgage Technology Revenue | $509 million | - | $330 million | +54% |
Source: Analyst estimates for the quarter provided by FactSet.
Company Overview
ICE operates businesses in three main segments: exchanges, fixed income and data services, and mortgage technology. Its foundational business of exchange operations provides a platform for trading across energy, equity, and other asset classes.
The company prioritizes growth in technological and data services, underlining its commitment to remain competitive through innovation. Risk management and regulatory compliance specialists, ICE, maintains financial market integrity globally with extensive clearinghouse operations.
NYSE: ICE
Key Data Points
Quarterly Achievements and Developments
During the third quarter, ICE's Exchanges segment earned $1.3 billion in revenue, a 13% increase from the previous year, driven by energy and financials growth of 23% and 26%, respectively, while its operating margin was 76%. This segment remains a reliable revenue generator, highlighting the importance of diversified market presence.
The fixed income and data services segment delivered revenue of $586 million, a 5% rise year-over-year, boosted by contributions from fixed income data and analytics and credit default swap (CDS) clearing and analytics services. The adjusted operating margin was 45%, showing operational improvements.
In mortgage technology, revenue surged 54% to $509 million, benefiting from the inclusion of mortgage data and analytics provider Black Knight, which ICE acquired last year. Yet, this segment faced a $54 million operating loss, suggesting integration challenges.
Capital expenditures throughout the quarter were consistent, with further investment planned, particularly within the mortgage technology segment, aiming for heightened digital capabilities and market presence. ICE declared dividends totaling $780 million year-to-date, underlining its commitment to returning value to shareholders.
Looking Forward
Management anticipates strategic growth particularly through the integration of Black Knight, projecting annualized synergy savings of over $150 million by the end of 2024. It underscores a proactive approach to enhancing the company's technological footprint in mortgage technology.
In its forward guidance, ICE outlined expected fourth-quarter GAAP operating expenses of between $1.23 billion and $1.24 billion, and adjusted operating expenses ranging from $977 million to $987 million.
