Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Q2 2023 Earnings Presentation
26 slides from Intercontinental Exchange's earnings presentation, Aug 3, 2023
Slide 1: 2Q23 Earnings Supplement
2Q23 Earnings Supplement August 3, 2023 1
Slide 2: Cautionary Statement Regarding Forward Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS This presentation may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding ICE’s business that are not historical facts are forward-look
Slide 3: ICE Second Quarter 2023 Earnings Call Participants
ICE Second Quarter 2023 Earnings Call Participants Jeff Sprecher Ben Jackson Warren Gardiner Lynn Martin Katia Gonzalez Chair & CEO President Chief Financial Officer President, NYSE Manager, Investor Chair, ICE Mortgage Chair, Fixed Income Relations Technology & Data Services 3
Slide 4: Record 2Q23 ICE Performance
Record 2Q23 ICE Performance in millions except per share amounts Income statement highlights 2Q23 2Q22 % Chg, CC +4 % Net revenues, CC Revenues, net $1,888 $1,814 4% Recurring Revenues 955 930 2% Transaction Revenues, net 933 884 5% Adj. Op Expenses Adj. Op Income Adj. Op Margin(1) $756 $1,132 60% $
Slide 5: 2Q23 Exchanges Performance
2Q23 Exchanges Performance in millions Revenues, net Energy 2Q23 $355 2Q22 $265 % Chg 34% Const Curr 33% +52 % Global gas revenues, CC Ags 77 61 27% 27% Financials 104 123 (16)% (16)% Cash Equities & Equity Options, net 96 99 (3)% (3)% OTC & Other Data & Connectivity Services Listings 104 231 126 10
Slide 6: 2Q23 Fixed Income & Data Services Performance
2Q23 Fixed Income & Data Services Performance in millions +17 % ICE Bonds revenues, CC Revenues 2Q23 2Q22 % Chg Const Curr Fixed Income Execution $28 $25 17% 17% CDS Clearing +9 84 66 26% 25% Fixed Income Data & Analytics 277 274 1% 1% % Other Data & Network Services 157 147 7% 7% Other data & netwo
Slide 7: 2Q23 Mortgage Technology Performance
2Q23 Mortgage Technology Performance Top 5 global bank expands Encompass in millions relationship Revenues 2Q23 2Q22 % Chg Origination Tech $170 $196 (13)% Closing Solutions 47 66 (28)% Data & Analytics Other Total Revenues 24 8 $249 24 11 $297 (5)% (32)% (16)% ~66 % Mix of recurring revenues Recurr
Slide 8: Record 1H23 ICE Performance & 2023 Guidance
Record 1H23 ICE Performance & 2023 Guidance Revenue in millions except per share amounts ▪ Updated: FY2023 Mortgage Tech recurring: Low-single digits Income statement highlights YTD '23 YTD '22 % Chg, CC ▪ Prior: Mid-to-high single digits Revenues, net $3,784 $3,713 2% Recurring Revenues 1,908 1,851
Slide 9: Secular Tailwinds Driving Growth Across Asset Classes
Secular Tailwinds Driving Growth Across Asset Classes Secular Tailwinds Growth Across ICE Platform ICE TTM Rev • Global energy markets with key benchmarks and emerging markets across all key • Growing demand for energy energy products Energy • Clean energy transition & growing complexity • Global ga
Slide 10: Optimal Blue Transaction Overview
Optimal Blue Transaction Overview • Under terms of the divestiture agreement, Constellation will acquire Black Knight’s Optimal Blue business for $700 million. • The structure of the proposed transaction includes a payment by Constellation of $200 million in Price cash, with the remainder financed b
Slide 11: Consistent Track Record of Growth
Consistent Track Record of Growth $5.30 1H23 Highlights $5.06 Record net revenues +2% y/y, CC Record adj. op income +3% y/y, CC $4.41 Record adj. free cash flow +18% y/y Record adj. EPS +3% y/y $3.77 $3.51 $2.93 $2.76 $2.84 $2.42 $1.93 $1.68 $1.50 $1.38 $1.07 $0.83 $0.85 $0.68 $0.48 2006 2007 2008 2
Slide 12: Appendix
Appendix 12
Slide 13: Adjusted Operating Expense
Adjusted Operating Expense Three Months Ended Three Months Ended Six Months Ended Six Months Ended in millions June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 GAAP Adjusted GAAP Adjusted GAAP Adjusted GAAP Adjusted Compensation and benefits $ 351 $ 351 $ 355 $ 355 $ 703 $ 703 $ 714 $ 714 Tec
Slide 14: Adjusted Non-Operating Income/Expense Reconciliation
Adjusted Non-Operating Income/Expense Reconciliation in millions 2Q23 1Q23 4Q22 3Q22 2Q22 Other Income / (Expense), net $(35) $(35) $(190) $(1,097) $23 Less: Gain on sale of equity investments — — — — (41) Add: Net losses from and impairment of unconsolidated investees 30 35 188 1,095 15 Total Adjus
Slide 15: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation Three Months Three Months Six Months Six Months In millions Ended 6/30/2023 Ended 6/30/2022 Ended 6/30/2023 Ended 6/30/2022 Income before income taxes $847 $739 $1,696 $1,571 Income tax expense 32 173 207 338 Effective tax rate 4% 23% 12% 22% Income before
Slide 16: Adjusted Free Cash Flow Calculation
Adjusted Free Cash Flow Calculation Six Months Ended Six Months Ended in millions June 30, 2023 June 30, 2022 Net cash provided by operating activities $1,805 $1,725 Less: Capital expenditures (61) (70) Less: Capitalized software development costs (142) (134) Free cash flow 1,602 1,521 Add/(Less): S
Slide 17: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twelve Months in millions Ended 6/30/2023 Adjusted net income(1) $3,024 Add: Adjusted interest expense(1) 479 Add: Adjusted income tax expense(1) 919 Add: Adjusted depreciation and amortization(1) 443 Adjusted EBITDA from Continuing Ops $4,865 Debt, as reported $18,128
Slide 18: ICE Summary Balance Sheet
ICE Summary Balance Sheet in millions BALANCE SHEET 06/30/2023 12/31/2022 CHANGE Assets Unrestricted Cash $2,877 $1,799 $1,078 ▪ $2.9B unrestricted cash Other Current Assets 96,345 155,148 (58,803) ▪ Total debt of $18.1B; Adj. Debt-to- Current Assets 99,222 156,947 (57,725) EBITDA(1) of 2.7x PPE (ne
Slide 19: Fixed Income & Data Supplemental Data
Fixed Income & Data Supplemental Data Annual Subscription Value (ASV) in millions 2Q23 1Q23 4Q22 3Q22 2Q22 ASV(1) $1,724 $1,708 $1,682 $1,643 $1,660 Adjusted for: FX — 3 5 23 6 ASV, CC $1,724 $1,711 $1,687 $1,666 $1,666 19 (1) ASV is defined as the annual value of subscriptions under contract for th
Slide 20: Average Daily Volume & Rate Per Contract (RPC) Trends
Average Daily Volume & Rate Per Contract (RPC) Trends lots in thousands Energy ADV & RPC Ags ADV & RPC ADV RPC ADV RPC ADV RPC ADV RPC Interest Rates ADV & RPC RPC ADV Total Financials ADV & RPC RPC 20 ADV RPC ADV RPC
Slide 21: Average Daily Volume & Open Interest (OI) Trends
Average Daily Volume & Open Interest (OI) Trends lots in thousands Energy ADV & OI Ags ADV & OI ADV OI ADV OI ADV OI ADV OI Interest Rates ADV & OI OI ADV Total Financials ADV & OI OI 21 ADV OI ADV OI
Slide 22: ICE Mortgage Technology
ICE Mortgage Technology ICE Mortgage Tech Revenues Transaction Recurring 9% CAGR 156 1% CAGR $ in millions 14% CAGR 146 329 173 Pro Forma YTD'18 YTD'23 Closed Loans (mm) 1.3 1.2 22
Slide 23: 2Q23 GAAP Results
2Q23 GAAP Results INCOME STATEMENT HIGHLIGHTS in millions except per share amounts GAAP 2Q23 GAAP 2Q22 % Chg Net Revenues $1,888 $1,814 4% Operating Expenses $933 $945 (1)% Operating Income $955 $869 10% Operating Margin 51% 48% 3 pts Net Income attributable to ICE $799 $555 44% Diluted EPS $1.42 $0
Slide 24: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation Fixed Income and Data Services Mortgage Technology in millions Exchanges Segment Segment Segment Consolidated Six Months Ended Six Months Ended Six Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2023 20
Slide 25: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation Fixed Income and Data Services Mortgage Technology in millions Exchanges Segment Segment Segment Consolidated Three Months Ended Three Months Ended Three Months Ended Three Months Ended June 30, June 30, June 30, June 30,
Slide 26: Adjusted Net Income & EPS
Adjusted Net Income & EPS Three Months Ended Three Months Ended Six Months Ended Six Months Ended in millions except per share amounts June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Net income attributable to ICE $ 799 $ 555 $ 1,454 $ 1,212 Add: Amortization of acquisition-related intangibl
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