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Intercontinental Exchange, Inc. (ICE)·Q1 2025 Earnings Summary

Executive Summary

  • Record quarter: net revenues $2.473B (+8% y/y), GAAP diluted EPS $1.38 (+4% y/y), adjusted EPS $1.72 (+16% y/y); operating margin 49% and adjusted margin 61% .
  • Results modestly beat Street: Q1 revenue $2.473B vs $2.466B consensus*; adjusted EPS $1.72 vs $1.703*; EBITDA modest miss vs consensus ($1.642B vs $1.662B*) — driven by mix and mortgage GAAP operating loss offset by exchanges strength*.
  • Q2 2025 guidance introduced: adjusted opex $980–$990M, non‑operating expense $175–$180M, diluted shares 573–579; opex higher sequentially due to FX, merit increases, and accruals, offset by revenue growth .
  • Catalysts: eighth straight record energy revenues (+23% y/y) and accelerating April volumes/open interest across energy and rates; dividend raised 7% to $0.48 per share .

What Went Well and What Went Wrong

What Went Well

  • Exchanges outperformed: net revenues $1.367B (+12% y/y); record energy revenues (+23% y/y), interest rate strength, NYSE cash equities/options revenue +21% y/y; exchange operating margin 74% (76% adj.) .
  • “Best quarter in ICE’s history” with record revenues, operating income and adjusted EPS; management highlighted the “all‑weather business model” and diversified global footprint .
  • Fixed Income & Data Services delivered record $596M (+5% y/y), recurring $471M (+5%), data/network technology +7% y/y; index AUM reached $684B with new licensing wins .

What Went Wrong

  • Mortgage Technology posted a GAAP operating loss with margin of (5)% despite $510M revenues; adjusted margin 40% but GAAP profitability still pressured .
  • Fixed Income & Data sequential decline vs Q4 linked to one fewer day, fewer bulky data sales, and equity market softness; sales cycles lengthen for multi‑product implementations .
  • Elevated transaction-based expenses (Section 31 fees $262M vs $67M y/y) continued to weigh on “net revenues” presentation .

Financial Results

Key P&L (sequential progression)

MetricQ3 2024Q4 2024Q1 2025
Net revenues less transaction-based expenses ($USD Millions)$2,349 $2,323 $2,473
GAAP Diluted EPS ($)$1.14 $1.21 $1.38
Adjusted Diluted EPS ($)$1.55 $1.52 $1.72
Operating Income ($USD Millions)$1,103 $1,077 $1,221
Operating Margin (%)47% 46% 49%
Adjusted Operating Margin (%)59% 58% 61%

Q1 2025 vs Wall Street consensus*

MetricActual Q1 2025Consensus Q1 2025*Surprise*
Net revenues less transaction-based expenses ($USD Millions)$2,473 $2,465.96*+$7.0M (+0.3%)*
Adjusted Diluted EPS ($)$1.72 $1.7032*+$0.017 (+1.0%)*
EBITDA ($USD Millions)$1,642.1*$1,662.1*−$20.0M (−1.2%)*

Values retrieved from S&P Global.*

Year-over-Year (Q1 2024 → Q1 2025)

MetricQ1 2024Q1 2025
Net revenues less transaction-based expenses ($USD Millions)$2,290 $2,473 (+8% y/y)
GAAP Diluted EPS ($)$1.33 $1.38 (+4% y/y)
Adjusted Diluted EPS ($)$1.48 $1.72 (+16% y/y)
Operating Margin (%)46% 49%
Adjusted Operating Margin (%)59% 61%

Segment Breakdown (Q1 2024 vs Q1 2025)

SegmentQ1 2024 Net Revenues ($MM)Q1 2025 Net Revenues ($MM)Q1 2025 Op MarginQ1 2025 Adj. Op Margin
Exchanges$1,223 $1,367 74% 76%
Fixed Income & Data Services$568 $596 39% 46%
Mortgage Technology$499 $510 (5)% 40%
Consolidated$2,290 $2,473 49% 61%

Exchanges Revenue by Product (Q1 2024 vs Q1 2025)

CategoryQ1 2024 ($MM)Q1 2025 ($MM)
Energy$457 $557
Ags & Metals$72 $64
Financials (rates & other)$135 $156
Cash Equities & Equity Options (net)$99 $119
OTC & Other$103 $103
Data & Connectivity Services$235 $246
Listings$122 $122

Selected KPIs

KPIQ1 2024Q1 2025
Recurring Revenues ($MM)$1,196 $1,236
Transaction Revenues, net ($MM)$1,094 $1,237
Operating Cash Flow ($MM)$1,009 $966
Adjusted Free Cash Flow ($MM)$877 $833
Unrestricted Cash ($MM) (period-end)$844 $783
Outstanding Debt ($B) (period-end)$20.4 (Dec-24) $20.3 (Mar-25)
Capital Returned ($MM)n/a$519 (incl. $241 buybacks; $278 dividends)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Operating ExpensesQ2 2025n/a$1.230B–$1.240B New
Adjusted Operating ExpensesQ2 2025n/a$980M–$990M New
GAAP & Adjusted Non‑Operating ExpenseQ2 2025n/a$175M–$180M New
Diluted Share CountQ2 2025575–581M (Q1 2025 guidance) 573–579M Lowered
FY Operating Expenses (GAAP)FY 2025$4.915B–$4.965B UnchangedMaintained
FY Operating Expenses (Adj.)FY 2025$3.915B–$3.965B UnchangedMaintained
CapexFY 2025$730M–$780M UnchangedMaintained
Effective Tax RateFY 202524%–26% UnchangedMaintained
Quarterly DividendQ2 2025$0.45 (Q2 2024) $0.48 Raised 7%

Management explained Q2 opex uplift primarily from FX (weaker USD vs GBP/EUR), full quarter merit increases and accruals for awards, offset by higher revenues .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
Energy marketsRecord energy revenues; +23% y/y in Q3; +16% y/y in Q4 Eighth consecutive record quarter; +23% y/y; April set all‑time records in oil/gas ADV and OI Strengthening
Interest rate franchiseRecord volumes; Euribor/SONIA strength in Q4 Highest quarterly volume; OI +21% y/y across global rates; April rates ADV +59% y/y Accelerating
Fixed Income & DataSteady growth (+3–5% y/y); ASV improvement Record $596M (+5% y/y); Data/network +7%; index AUM $684B; 2 new index licenses Improving
Mortgage TechnologyGAAP margin (11)% in Q3; (7)% in Q4; adj. margin ~35% GAAP margin (5)%; adj. margin 40%; 20 new Encompass clients; UWM MSP win Improving GAAP, strong adj.
Capital allocation/M&ADeleveraging; intent to resume buybacks $241M buybacks; preference to lean into buybacks vs M&A near term Shift to buybacks
NYSE/EquitiesRobust Q4 trading; listings backlog NYSE cash equities ADV +66% y/y in April; first NYSE Texas listing (TMTG); ETP listings functionality coming Expanding footprint
AI/tech initiativesWorkflow modernization references AI used across mortgage data/workflows; launch of ICE Voice integrated with ICE Chat Broadening use cases

Management Commentary

  • CEO: “In the first quarter, we delivered record revenues, record adjusted operating income and record adjusted earnings per share, marking the very best quarter in ICE’s history… our products, leading technology and mission‑critical data” .
  • CFO: Adjusted opex $964M “slightly below the low end of our guidance… better‑than‑anticipated savings and synergies primarily related to technology spend,” with Q2 opex uplift driven by FX, merit increases, and award accruals .
  • President (Ben Jackson): “Eighth consecutive quarter of record energy revenues, which increased 23% y/y… open interest continues to trend higher, up 8% y/y” .
  • Fixed Income & Data: “Data and network technology increased by 7%… index AUM to a record $684B” .
  • Mortgage: “20 new Encompass clients… significant new MSP client… United Wholesale Mortgage” and end‑to‑end platform integrating AI and data for lower origination/servicing costs .

Q&A Highlights

  • Mortgage competitive landscape: Management framed Rocket/Mr. Cooper as validation of ICE’s neutral, end‑to‑end approach; quantified exposure (Flagstar ~1% of IMT revenues; Rocket/Cooper <3%) and noted multi‑year MSP contracts limit near‑term impact .
  • Capital allocation: Deleveraging enables buybacks; M&A evaluated versus ROI of repurchasing “our own shares” given strong performance; leaning into buybacks near term .
  • Energy durability: Despite potential lower oil prices, multiple risk vectors (trade/tariffs, energy security, transition, supply chain interconnectivity) and growing power demand (e.g., AI) sustain hedging demand; open interest growth as key health indicator .
  • IMT guidance/detail: Onetime revenue ~$2–3M in servicing; full‑year origination volume scenarios unchanged; 10‑year modestly lower vs prior guidance backdrop .
  • Fixed Income & Data sequential cadence: Q1 softness vs Q4 due to one fewer day, fewer bulky dataset sales, and equity market pressure; ASV net‑new and retention improved y/y .

Estimates Context

  • Q1 2025 beat on revenue and adjusted EPS; modest EBITDA miss. Expect modest upward revisions to EPS driven by lower‑than‑guided Q1 adjusted opex and exchanges strength, partly offset by conservative stance on mortgage GAAP profitability*.
  • Target price consensus remained stable through the period at ~$192*, suggesting estimates broadly tracking fundamentals*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Exchanges momentum is the core driver: energy and rates delivered records, underpinned by rising open interest — supportive of sustained revenue and “all‑weather” margins .
  • Fixed Income & Data recurring growth and index AUM expansion provide durable compounding, with cross‑sell from NYSE and energy customer bases .
  • Mortgage Technology’s GAAP loss narrowed; adj. margins robust and sales wins (20 Encompass, UWM MSP) set up revenue ramp as implementations go live over 12–18 months .
  • Q2 opex guide higher on FX/merit/accruals; revenue strength expected to offset — watch FX and rate‑volatility path for margin trajectory .
  • Capital returns re‑accelerating: dividend up 7% to $0.48 and buybacks resumed ($241M in Q1), supported by leverage <3.2x EBITDA .
  • Near‑term trading: April volume/OI records across energy and rates are a positive setup into Q2; any macro/geopolitical spikes could further benefit transaction revenues .
  • Medium‑term thesis: diversified revenue mix (transaction + recurring), rising data/network monetization, and mortgage platform synergies support multi‑year EPS compounding with optionality from buybacks .