Intercontinental Exchange reports record 1Q 2018 revenues, up 5% YoY


Intercontinental Exchange (NYSE: ICE), the operator of global exchanges and clearing houses and provider of data and listing services, has reported financial results for the first quarter of 2018.

For the quarter ended March 31, 2018, consolidated net income attributable to ICE was $464 million on $1.2 billion of consolidated revenues less transaction-based expenses. First quarter GAAP diluted earnings per share (EPS) were $0.79. Adjusted net income was $525 million in the first quarter and adjusted diluted EPS were a record $0.90, up 22% year-over-year.

We are pleased to report on our first quarter performance, delivering strong results across our trading and clearing and our data and listings segments including record revenues,” said ICE Chairman and CEO Jeffrey C. Sprecher. “We completed our strategic acquisition of BondPoint while also generating solid organic growth, as customers’ demand of our comprehensive suite of multi-asset class workflow and risk management solutions continues to increase.

Scott A. Hill, ICE CFO, added:

Our first quarter performance produced revenue growth, margin expansion and strong cash flow allowing us to return nearly $540 million to stockholders through April, up 28% compared to the prior year. 2018 is off to a promising start and we are well positioned to build on our proven track record of growth, customer service and value creation for our stockholders.

First Quarter 2018 GAAP Results

First quarter 2018 consolidated revenues, less transaction-based expenses, were $1.2 billion. Trading and clearing segment revenues, less transaction-based expenses, were $596 million in the first quarter 2018, up 11% compared to the prior first quarter. Data and listings segment revenues were $629 million in the first quarter of 2018, including data services revenues of $520 million, and listings revenues of $109 million.

Consolidated operating expenses were $575 million for the first quarter of 2018. On an adjusted basis, consolidated operating expenses were $494 million. Consolidated operating income for the first quarter was $650 million and the operating margin was 53%. The effective tax rate for the first quarter was 23%.

Unrestricted cash was $523 million and outstanding debt was $6.9 billion as of March 31, 2018.

Financial Guidance

  • ICE’s second quarter 2018 GAAP operating expenses are expected to be in a range of $570 million to $580 million and adjusted operating expenses are expected to be in a range of $500 million to $510 million.
  • ICE’s full year 2018 GAAP operating expenses are expected to be in a range of $2.28 billion to $2.32 billion and adjusted operating expenses are expected to be in a range of $2.00 billion to $2.04 billion.
  • ICE’s interest expense is expected to be $55 million in the second quarter.
  • ICE’s diluted share count for the second quarter is expected to be in the range of 581 million to 583 million weighted average shares outstanding and 580 million to 585 million for the full year.

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)

Three Months Ended
March 31,
Revenues:20182017
Transaction and clearing, net$898$798
Data services520520
Listings109108
Other revenues5345
Total revenues1,5801,471
Transaction-based expenses:
Section 31 fees12191
Cash liquidity payments, routing and clearing234214
Total revenues, less transaction-based expenses1,2251,166
Operating expenses:
Compensation and benefits240247
Professional services3032
Acquisition-related transaction and integration costs1214
Technology and communication10598
Rent and occupancy1718
Selling, general and administrative3341
Depreciation and amortization138134
Total operating expenses575584
Operating income650582
Other income (expense):
Interest expense(52)(45)
Other income, net19188
Other income (expense), net(33)143
Income before income tax expense617725
Income tax expense143214
Net income$474$511
Net income attributable to non-controlling interest(10)(8)
Net income attributable to Intercontinental Exchange, Inc.$464$503
Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic$0.80$0.85
Diluted$0.79$0.84
Weighted average common shares outstanding:
Basic582594
Diluted586599
Dividend per share$0.24$0.20

Consolidated Balance Sheets

(In millions)

(Unaudited)

As ofAs of
March 31, 2018December 31, 2017
Assets:
Current assets:
Cash and cash equivalents$523$535
Short-term restricted cash and cash equivalents804769
Customer accounts receivable, net1,167903
Margin deposits, guaranty funds, and delivery contracts receivable53,97951,222
Prepaid expenses and other current assets161133
Total current assets56,63453,562
Property and equipment, net1,2351,246
Other non-current assets:
Goodwill12,51412,216
Other intangible assets, net10,32610,269
Long-term restricted cash and cash equivalents331264
Other non-current assets1,022707
Total other non-current assets24,19323,456
Total assets$82,062$78,264
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities$476$462
Section 31 fees payable120128
Accrued salaries and benefits104227
Deferred revenue468125
Short-term debt2,6231,833
Margin deposits, guaranty funds, and delivery contracts payable53,97951,222
Other current liabilities176178
Total current liabilities57,94654,175
Non-current liabilities:
Non-current deferred tax liability, net2,2922,298
Long-term debt4,2694,267
Accrued employee benefits240243
Other non-current liabilities309296
Total non-current liabilities7,1107,104
Total liabilities65,05661,279
Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Common stock66
Treasury stock, at cost(1,448)(1,076)
Additional paid-in capital11,42811,392
Retained earnings7,1826,858
Accumulated other comprehensive loss(190)(223)
Total Intercontinental Exchange, Inc. stockholders’ equity16,97816,957
Non-controlling interest in consolidated subsidiaries2828
Total equity17,00616,985
Total liabilities and equity$82,062$78,264

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Intercontinental Exchange reports record 1Q 2018 revenues, up 5% YoY

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