Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Q3 2023 Earnings Presentation
24 slides from Intercontinental Exchange's earnings presentation, Nov 28, 2023
Slide 1: 3Q23 Earnings Supplement
3Q23 Earnings Supplement November 2, 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 Third Quarter 2023 Earnings Call Participants
ICE Third 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 3Q23 ICE Performance
Record 3Q23 ICE Performance in millions except per share amounts Income statement highlights 3Q23 3Q22 % Chg, CC % Chg Pro forma, CC +11 % Record adj. diluted EPS(1) Revenues, net $2,003 $1,811 9% 4% Recurring Revenues 1,031 930 11% 2% Transaction Revenues, net 972 881 8% 6% Adj. Op Expenses Adj. Op
Slide 5: 3Q23 Exchanges Performance
3Q23 Exchanges Performance in millions Revenues, net Energy 3Q23 $384 3Q22 $266 % Chg 45% Const Curr 42% +10 % Record net revenues, CC Ags 61 57 7% 6% Financials 112 122 (8)% (13)% Cash Equities & Equity Options, net 93 88 5% 5% OTC & Other Data & Connectivity Services Listings 104 236 124 121 219 1
Slide 6: 3Q23 Fixed Income & Data Services Performance
3Q23 Fixed Income & Data Services Performance in millions +9 % ICE Bonds revenues, CC Revenues 3Q23 3Q22 % Chg Const Curr Fixed Income Execution $29 $26 10% 9% CDS Clearing 94 88 6% 5% Fixed Income Data & Analytics Other Data & Network Services 279 157 273 147 2% 7% 2% 6% +7 % Other data & network s
Slide 7: 3Q23 Mortgage Technology Performance
3Q23 Mortgage Technology Performance in millions ~80 % Pro forma mix of recurring Revenues 3Q23 3Q22 % Chg % Chg, Pro forma revenues Origination Tech $172 $197 (13)% (14)% Closing Solutions 48 56 (14)% (18)% Servicing Software 69 — n/a (1)% Record full year new Data & Analytics 41 23 76% 4% Encompas
Slide 8: A Diverse and Balanced Business Model
A Diverse and Balanced Business Model Energy Fixed Income & Data Services Mortgage Technology YTD’23 Energy Revenue Mix Total Revenues +7% y/y, CC 5 year CAGR +17% ~$14 Billion Global Nat Gas + Environmentals 292 368 Total $ in millions 43% Addressable Market 1,263 1,300 ICE ICE Other Energy Mortgag
Slide 9: Over Two Decades of Innovation & Growth
Over Two Decades of Innovation & Growth The GFC fractures Operation Iraqi global CDS Freedom is clearing launched Dodd-Frank Act European energy infrastructure Leveraging trading crisis & clearing With ICE’s fixed ICE adds to its infrastructure, ICE income pricing & energy futures ICE acquires the e
Slide 10: Consistent Track Record of Growth
Consistent Track Record of Growth $5.30 YTD Highlights $5.06 Record net revenues +5% y/y, CC Pro forma net revenues +3 y/y $4.41 $4.30 Record adj. op income +5% y/y, CC Record adj. free cash flow +15% y/y $3.77 $3.51 Record adj. EPS +6% y/y $2.93 $2.76 $2.42 $1.93 $1.68 $1.50 $1.38 $1.07 $0.83 $0.85
Slide 11: Appendix
Appendix 11
Slide 12: Adjusted Operating Expense
Adjusted Operating Expense Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended in millions September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP Adjusted GAAP Adjusted GAAP Adjusted GAAP Adjusted Compensation and benefits $ 400 $ 400 $ 344 $ 344 $ 1,1
Slide 13: Adjusted Non-Operating Income/Expense Reconciliation
Adjusted Non-Operating Income/Expense Reconciliation in millions 3Q23 2Q23 1Q23 4Q22 3Q22 Other Income / (Expense), net $(51) $(35) $(35) $(190) $(1,097) Add: Net losses from and impairment of unconsolidated investees 26 30 35 188 1,095 Add: Other 23 — — — — Total Adjusted Other Income / (Expense),
Slide 14: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended in millions September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Income/(loss) before income taxes $682 $(327) $2,378 $1,244 Income tax expense/(benefit) 123 (1
Slide 15: Adjusted Free Cash Flow Calculation
Adjusted Free Cash Flow Calculation Nine Months Ended Nine Months Ended in millions September 30, 2023 September 30, 2022 Net cash provided by operating activities $2,573 $2,462 Less: Capital expenditures (104) (125) Less: Capitalized software development costs (222) (200) Free cash flow 2,247 2,137
Slide 16: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twelve Months Ended in millions September 30, 2023 Adjusted pro forma operating income (1) $4,842 Add: Adjusted pro forma depreciation and amortization (1) 535 Add: Adjusted non-operating income less adjusted interest expense 128 Less: Net income attributable to non-co
Slide 17: ICE Summary Balance Sheet
ICE Summary Balance Sheet in millions BALANCE SHEET 09/30/2023 12/31/2022 CHANGE Assets Unrestricted Cash $837 $1,799 $(962) ▪ $837M unrestricted cash Other Current Assets 84,560 155,148 (70,588) ▪ Total debt of $23.3B; Adj. Debt-to- Current Assets 85,397 156,947 (71,550) EBITDA(1) of 4.3x PPE (net)
Slide 18: Fixed Income & Data Supplemental Data
Fixed Income & Data Supplemental Data Annual Subscription Value (ASV) in millions 3Q23 2Q23 1Q23 4Q22 3Q22 ASV(1) $1,722 $1,724 $1,708 $1,682 $1,643 Adjusted for: FX — (7) (5) (2) 15 ASV, CC $1,722 $1,717 $1,703 $1,680 $1,658 18 (1) ASV is defined as the annual value of subscriptions under contract
Slide 19: 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 RPC ADV RPC Interest Rates ADV & RPC Total Financials ADV & RPC 19 ADV RPC ADV RPC
Slide 20: 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 20 ADV OI ADV OI
Slide 21: 3Q23 GAAP Results
3Q23 GAAP Results INCOME STATEMENT HIGHLIGHTS in millions except per share amounts GAAP 3Q23 GAAP 3Q22 % Chg Net revenues $2,003 $1,811 11% Operating expenses $1,158 $898 29% Operating income $845 $913 (7)% Operating margin 42% 50% (8 pts) Net income/(loss) attributable to ICE $541 $(191) n/a Dilute
Slide 22: 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 Nine Months Ended Nine Months Ended Nine Months Ended Nine Months Ended September 30, September 30, September 3
Slide 23: 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 September 30, September 30, Septemb
Slide 24: Adjusted Net Income & EPS
Adjusted Net Income & EPS Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended in millions except per share amounts September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income/(loss) attributable to ICE $ 541 $ (191) $ 1,995 $ 1,021 Add: Amortization o
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